Tuesday, December 25, 2012

I Resolve to...

A year ago January, the Advancement Best Practices LinkedIn Group asked their members to list their fundraising resolutions or goals for 2012. Here is what they answered:

42% Build a philanthropic culture
20% Link metrics to ROI
17% Engage trustees/ CEO
16% Identify new potential donors
5% Not one of the above

I think it is interesting that the top goal was to build a philanthropic culture. You would think that was a given for anyone working for a nonprofit. The fact that it was yet to be built, (not even simply improved), says something about the state of our business. If a nonprofit or charity doesn't have philanthropy at the core of what they do, how are they surviving? How are they connecting with and motivating their donors? By coercion? Yikes!

According to Guidestar, up to 60,000 nonprofits fail each year and in 2010 8% claimed they were in imminent danger of going under. Why?

I think the lack of a philanthropic culture is part of the problem. But more importantly, there is a fundamental misunderstanding as to how and why donors give. Here is what nonprofit leadership must understand:

  • The heart is more important than the head. Executive Directors and Boards are often embarrassed to present the emotional side of their story. They want to "convince" the donor that they are a good "investment". Leave the investment up to the bank. Your charity or nonprofit most likely grew our of a compelling need. Don't forget that. 
  • You must ask to receive. The classic "If we build it they will come" is hooey. If you don't ask, someone else will -- and they will get the donation.
  • Everyone in your organization must be comfortable with the fundraising process. I have heard some fundraisers say, "Everyone in our organization is a fundraiser". I don't buy that. Fundraising is a skill forged from experience and an art born of personality. Not everyone is good at it nor do they have to be. If this wasn't so, why would we hire fundraisers? But the entire staff should understand how it works, if only to support the efforts of the fundraising team. The one thing that can kill an organization is an employee who is constantly denigrating the fundraising process.
  • Take advantage of every avenue to raise funds. There are 1.5 million nonprofits in the US. That's a lot of competition. Make it easy for the donor to give to you through the channels they prefer. You must have an annual fund program, solicit major gifts, make use of social media and e-philanthropy, create profitable events, accept planned gifts, and keep abreast of whatever is working for other organizations.
  • Test, test, test. Be fiscally prudent but don't be afraid to take risks. Risk can often be reduced by testing. I am constantly astounded to find experienced nonprofits that fail to test fundraising approaches. 

There are certainly other elements of successful fundraising. As the survey identifies, link your metrics to return on investment. (This is especially true of events. I am sure many organizations would be shocked if they included direct and all indirect costs in their event profitability assessment.) Engaging trustees and all leadership in the mission as well as the fundraising process is helpful. And yes, finding new donors is important. But, I would have ranked "steward current donors exceptionally well" ahead of prospecting and that isn't even listed! Your most valuable donors are the ones who have already provided you with a gift.

What are your resolutions for 2013? I will list mine in my next post.

Saturday, December 1, 2012

Half of Nonprofits Say They Are Hurting

Half of the 500 nonprofits recently surveyed by Guidestar state that fundraising results have been very bleak this year. The percentage of charities reporting a decline was the second highest since the survey was started 11 years ago. Not only were the charities receiving fewer gifts, but even contributions received were smaller than before. Many institutions predict that the traditionally strong year-end gift giving period will not close the gap. Worse yet, this seems to be happening at the same time that many nonprofits state that their communities are requiring more of their charitable services.

Now, the recession has been dragging on for a number of years. Why has 2012 been so tough for charities? One fundraising professional speculates that many nonprofits have done a poor job of stewarding their donors and its "coming home to roost".

For me, stewardship is receiving a high priority. I have enlisted my Board to call all our donors and thank them for their past support. I have also engaged staff and volunteers to call unrenewed supporters. We are finding as many ways as possible to be donor-centric and share impact and outcomes of our donors' philanthropic support.

Take the time. Reach out. Touch your donors in an authentic, meaningful way. And make sure it is not just once a year but throughout the year. It may take a while to see results but it's worth it. The "new reality" is that it is going to take a lot of effort to retain and engage your supporters. But frankly, it's probably something we should have been doing all along - isn't it?