In the movie, No Country for Old Men, Tommy Lee Jones Character, Sheriff Ed Tom Bell, laments to Ellis that he is feeling outmatched. Barry Corbin’s character, Ellis then retorts, “What you got ain’t nothing new. This country’s hard on people. You can’t stop what’s coming, it ain’t all waiting on you, that’s vanity.”
Are you feeling outmatched these days when it comes to fundraising? Reports show that since the late 1990s nonprofit fundraising has stagnated unable to break 2% of GDP, and while the stock market has grown to new heights giving creeps along. Sure, you might be having a banner year this year, but what if a market downturn is right around the corner. Are you able to engage the donor of today in a donor-centric way or is your organization experiencing breakdowns?
- Where few in your organization understand what it is that development does, and fewer understand that there are an art and science to raising funds and engaging with donors
- goals are set arbitrarily, by the immediate need, or budget shortfall, and are not based on the donor pipeline and data analysis
- meeting year-end goals hinge on a mail piece or a last-minute blitz due to ineffective fundraising tactics or unrealistic goals
- events drive your revenue, and or board fundraising is essential to success
- online giving technology such as crowdfunding, social engagement, inbound fundraising, seem out of grasp and daunting to implement let alone far from being budgeted
If you answered yes to one or more of the above, your organization probably has a legacy fundraising operation. An operation that is utilizing out of date strategies and tactics that are not engaging the donor of today. Today’s donor is much more sophisticated and has an abundance of information at her/his fingertips. The donors of today are searching for meaningful stories and engagement, want to be listened to, and need to understand how they can make an impact.
Do you want to change your organization’s development efforts from the tactical to the transformation? From having your hand out to inspiring people to join you in fulfilling your mission. From uncertain to predictable revenue, and to a program that engages donors in meaningful ways? Do you want to embrace what is coming and build the fundraising operation of today and be prepared for tomorrow?
Let’s look at the critical factors of a Legacy Fundraising Operation and how to build a donor-centric operation.
1. An Organizational View that Fundraising is Not My Job:
Or no Culture of philanthropy, or whatever you want to call it: Bottom line, a majority of your organization needs to accept and embrace best practices and commit to a donor-centric approach. Yes, this takes work and time, however, the return on the investment of time and sweat will yield greater revenue and a better understanding around goals and expectations.
Most importantly, your organization needs to have a belief in a donor-centric approach and creating awareness around what can be accomplished through philanthropy. This commitment to philanthropy will increase the desire to be involved, provide a better experience for the donor and staff, and aligns your organization with a common goal when engaging with donors.
2. Unrealistic Goals:
Goals should be built around data and through a process to minimize risk. Goal setting needs to be based on realism. Too often I see smart, experienced, well-intentioned leaders creating arbitrary fundraising goals. As noted in the book Execution the Discipline of Getting Things Done, by Ram Charan and Larry Bossidy, “The wrong goals can be disastrous…too often the wrong goals are set because the leader isn’t realistic about the ability of the people to achieve them…. You have to know what parts of the business will generate how much cash, how they will do it, who is accountable, and how to follow through...”
Developing fundraising revenue projections for the year should be built on careful analysis of historical data, giving trends, donors (individual, corporate, and foundation) in the pipeline, have a proposal in their hands, or you are considering asking. Additionally, it is critical to understand the risks in trying to achieve goals, and the ability and experience of the development team and who else within the organization (and board) will be involved in raising funds and their role.
3. Trepidation Towards Digital Fundraising:
According to the 2017 Blackbaud Charitable Giving report, online giving grew 12.1% in 2017 compared to 2016. That’s significant as overall giving grew by only 4.1% from 2016 to 2017. If you think crowdfunding and or peer to peer fundraising are some shiny objects or new fad not be bothered with, think again. Crowdfunding is booming and there a lot of companies providing platforms specifically for nonprofit fundraising. My favorite is Community Funded (full disclosure I serve as a senior advisor), as their ability to create both an amazing donor experience and organizational experience through technology is like no other. Regardless almost all solution providers get how to make it work for organizations of all sizes - they are the experts. With crowdfunding the more you do it, the better you get, and the returns of increased participation, revenue, donor relationships, and marketing, continue to grow. Crowdfunding is a proven way to grow your donor base and produce major gift leads.
The digital philanthropy revolution is just beginning. The power of online engagement is astronomical. Inbound fundraising will create new and exciting ways to engage all levels of donors, and AI technology for raising funds is in its nascent stages.
4. Fundraising Galas, Massive Fundraising Events, Golf Tournaments:
Are you holding a gala year after year and spending countless hours of staff and leadership time, creating all sorts of headaches, heat aches, and stress while draining funds on guest speakers, venues, dinners, drinks? Are you growing your donor base or do the same donors attend every year and for the most part this is the only interaction they have with your organization? Do companies sponsor tables because of a favor to a board member or volunteer and that’s where the relationship begins and ends with your organization?
If so you might want to reassess your strategy and redistribute resources. You could put all of that time, money, passion, energy, into building relationships throughout the year engaging with donors in person, and through digital activities, then celebrate with a big thank you dinner as they give more because of deeper meaningful experiences with your organization.
5. Overreliance on Board Fundraising:
There is an expectation that boards should raise the majority of dollars for an organization, but I often see boards and staff struggling to achieve this goal. Sure, all board members should give what they can, and it should be relative to one of their top charities. The real issue is when 1) there is an expectation that this giving will account for a majority of the budget, and 2) board members are expected to solicit and bring in dollars. For point one, that’s too few people to rely on for your organization’s revenue, and there needs to be more diversification. Additionally, it’s a lot of pressure for board members, and that could lead to them running away from your organization
For point two, I’m going to go out on a limb and say most board members don’t like to ask people for money and don’t know how to really do it. I would also argue they struggle with the concept of securing true major gifts, and most of their efforts end up being transactional, limited to selling tables for events and auction items. Leave the major gift work to the fundraisers. This really should be an internal function where the board can still provide recommendations of potential donors, help with introductions, and build relationships, and the professionals and executive of the organization make the asks and close gifts.
Summing It Up
Fundraising strategies have been slow to change. Aversion to risk runs high with outside pressures, fixation on a cost to raise a dollar, and skewed public perception of accountability for nonprofits. With little innovation over the last 20-30 years, coupled by stagnant growth that hasn't exceeded 2% of GDP, it’s time for organizations to try new approaches and abandon out of date strategies that are no longer effective. It’s time for development departments to take the reins back and focus on the latest practices and move away from traditional activities where ROI and donor connection continues to decrease.
The stakes are too high. We cannot continue to do what we have done and experience less than stellar results because it has “always been done this way." Your work is needed more than ever to change and improve lives, make a difference, and create a positive impact on the communities we deeply care about.
These are just some of the methods in which you can begin to improve your development efforts, and I invite you to comment on other ideas and experiences that you feel would be effective.