Bad News and Bold Honesty: Building Donor Relationships Through Tough Times

Let’s get one thing straight right out of the gate: your donors know when something’s wrong.

They’re smart. They’re paying attention. And while they may not know every nuance of your fiscal year forecast or the backstory on your latest leadership shakeup, they know when things feel off. And do you know what breaks trust faster than bad news?

Pretending there is no bad news.

We’ve been trained—whether by cautious boards, cautious lawyers, or cautious culture—to avoid sharing too much, too soon. Or to wrap tough updates in such a thick layer of positive spin that donors can barely find the truth inside it. But when hard times hit—and they will hit—it’s not the glossed-over version that builds trust.

It’s the truth. It’s the vulnerability. It’s the message that says: “We value you enough to tell you what’s really happening.”

I’ve said this in rooms of thousands and in one-on-one coaching calls: transparency is the currency of donor trust. Especially in crisis.

It doesn’t matter if the tough time is financial (cue the dreaded budget shortfall), organizational (like a change in leadership, vision, or program structure), or global (hi there, Covid pandemic). What matters is how you communicate through it.

Some of the most enduring, most loyal, most generous donor relationships are forged in seasons of hardship—not because the donor was shielded from the problem, but because they were included in the solution.

I want to share an example. A few years ago, I worked with a mid-sized nonprofit whose executive director was stepping down under less-than-ideal circumstances. Not scandalous, just messy. Staff morale was low. Board confidence was shaky. Fundraising? Let’s just say the numbers were...not stellar.

Everyone’s instinct was to “wait until the new person is in place” to communicate anything meaningful to donors. “Let’s not rock the boat,” one well-meaning staff member said. “Let’s just stay quiet for now.”

Stay quiet? That’s like telling a donor, “We’ll call you when we need a check, but otherwise, pretend we don’t exist.”

Hard pass.

Instead, I pushed them—gently, but firmly—to get in front of it. We crafted a letter from the board chair that told the truth with grace. It acknowledged the transition. It named the uncertainty. And most importantly, it thanked the donors—not just for their gifts, but for their belief in the mission beyond any one person.

It didn’t sugarcoat. It didn’t spin. It was direct. Respectful. Human. And the response?

Overwhelming support.

One major donor wrote back: “I’ve never received something like this. Thank you for being honest. Let me know how I can help.”

That’s the power of transparency.

But here’s the twist: you can’t only show up when things are good and expect donors to feel invested when things go sideways. Relationship-building in philanthropy isn’t seasonal. If you’ve treated donors like ATM machines during the good times, don’t be surprised when they decline your call during the bad ones.

That’s why donor relations is not a luxury; it’s a lifeline.

It’s what makes the call about a budget cut feel like a conversation instead of a confession. It’s what makes the update about a postponed project feel like shared disappointment instead of betrayal. It’s what makes the gap between “where we are” and “where we hoped to be” something donors are willing to help bridge—because they feel like partners, not piggy banks.

And yes, it takes courage. It takes courage to say, “We’re closing a beloved program.” It takes courage to say, “We messed up.” But I promise you this: it is always better to say something imperfect than to say nothing at all.

Donors are not expecting perfection. They’re expecting connection.

They want to know you’re thinking about the future. They want to know their previous support mattered. They want to know that you’ll steward their relationship, not just their gift.

I once talked to a donor who had supported a scholarship fund for over a decade. When the school shifted its funding model and phased out the program, no one told him. He found out from a student who mentioned it in passing. His response?

“I didn’t mind that they changed course. I minded that no one thought to tell me.”

Ouch.

Donors don’t need to agree with every decision. But they do need to be informed about the decisions that impact their giving.

And when you’re the one to deliver bad news, the way you do it matters more than ever. Be empathetic. Be clear. Be willing to say, “We don’t have all the answers yet, but here’s what we’re working on.” That’s not weakness—it’s wisdom.

And please, don’t underestimate your donors. Some of them have led teams, companies, entire communities through crisis. They know leadership is hard. They know plans change. What they want is to be treated like adults. Like insiders. Like investors in something that matters.

Bad news doesn’t break donor relationships. Silence does.

Tough times don’t repel generosity. Distance does.

So, the next time your organization is bracing for impact—whether from an external shock or an internal shift—don’t put your head down and hope your donors won’t notice. Raise your head. Pick up the phone. Write the letter. Call the meeting.

Let your donors be part of the journey, not just the destination.

And who knows? That budget crisis you’re dreading might lead to the most meaningful conversation of the year. That program closure might lead to an unrestricted gift from a donor who now understands your deeper vision. That leadership transition might spark a wave of renewed investment from people who are excited to shape what’s next.

Because when donors feel seen—especially in hard moments—they stay. They don’t stay because you’re perfect. They stay because you’re real.

And in a world full of curated communications and carefully spun narratives, being real? That’s the rarest—and most radical—donor relations strategy of all.

Written by Lynne Wester