Blog

How to Screw Up Your Fundraising – Easy Steps to Financial Ruin

9946635_sCould the greatest challenges to fundraising success be coming from INSIDE your organization?

The nonprofit world has been abuzz recently about a disturbing report detailing many internal challenges facing many nonprofit fundraising programs.

The report examined what we might call “pre-conditions” for fundraising success – what needs to be in place in order to achieve successful, sustainable fundraising results.

The study revealed that many nonprofits are stuck in a “vicious cycle that threatens their ability to raise the resources they need to succeed.”

And it’s all self-inflicted from the inside!

The institutional and strategic support for philanthropy and fundraising is just often missing.

Organizational leaders say they want big time fundraising results but they don’t want to take time to understand what it takes  — or spend money to make it happen.

You really need to check it out! CompassPoint: “Underdeveloped: Challenges Facing Nonprofit Fundraising Today.”  Share it with your board and leaders – and then ask innocently – “what are your impressions of these ideas?”  You might just create a helpful discussion!

What’s Really Going On Inside Many Fundraising Programs

Here are some of the report’s findings:

  • Organizational leaders often expect their development directors to be magicians who can instantly make money appear (without help from leadership.)
  • Leaders are often reluctant to invest in the systems, technologies and staff that will create a sustainable fundraising program.
  • Fund development and philanthropy are not understood or valued across the organization.
  • 23% of nonprofits say they have no fundraising plan.
  • One in three executives are lukewarm or dissatisfied with the performance of their fundraising staff.
  • Only 9% of those surveyed said their organization had sufficient capacity to achieve fundraising goals.
  • 43% of development directors characterized their own fundraising program as “not at all” or only “somewhat” effective.  (Executives and boards think their fundraising is more effective than the staff thinks it is.)
  • 3 our of 4 executives say board member engagement in fundraising is insufficient. (I can help with this as you know!)
  • Half of development directors are planning to leave their current jobs in 2 years or less.
  • One in four nonprofit executives report that they lack the skills and knowledge to secure gifts.
  • Executives and development directors disagree about whether their organizations have a supportive culture for fundraising.
  • Less than half of development directors said they had a strong relationship with their executive director. (Executive directors typically say the relationship is stronger than the staff says it is.)
  • Nearly one third of development directors in this study reported that they have been charged with unrealistic performance goals.

Screen Shot 2013-02-08 at 1.00.23 PM

 Recipe to Quickly Screw Up Your Fundraising

Based on the research data in this article, and on my own experience, I humbly offer this recipe to create a fundraising effort that won’t succeed.

Here’s how to demoralize the staff, distract them from agreed-upon goals and plans, and undercut your fundraising in every way.

  • Expect the fundraising team to produce miracles. (without investment, systems, and help.)
  • Take a “hands-off” approach to fundraising. (it’s dirty work and it’s somebody else’s job.)
  • Set a fundraising goal for your team, and then run like hell.  (don’t help out. “We are NOT all in this together.”)
  • Make sure that everybody else in the organization don’t understand, value or support fundraising.
  • Distract your FR team with additional projects and responsibilities, but keep their dollar goals unchanged.  (and watch staff burn out and results go down.)
  • Cut your fundraising staff but still expect them to exceed last year’s results. (and watch your staff start to turn over.)
  • Say “we can’t afford it” when considering a fundraising project that will bring in far more than it costs. (and watch your organization never grow beyond its current scope.)
  • Consider fundraising expenses as a black hole of costs rather than as investments that pay for themselves quickly – (with a nice multiple return, no less!)
  • Don’t invest in fundraising capacity, technologies and other fund development systems needed to support fundraising. (and watch your FR results decline.)
  • Have an Executive Director who dislikes fundraising and refuses to serve as an ambassador or solicitor. (and watch your development director lose her optimism.)
  • Isolate your staff into “silos” with fundraising cut off from marketing, PR and other communications. (and watch your communications undercut your fundraising effort).
  • Keep your development director away from the organizational planning and strategy process. (and watch your fundraising effort become disempowered and isolated.)
  • Cut your fundraising staff and budget because of $ shortfalls. (and watch your revenue shrink slowly and surely.)
  • Hire a novice with limited experience and expect her to deliver terrific fundraising results quickly.   (and watch sometimes shaky fundraising results.)  26% of development directors overall—and 38% among the smallest nonprofits— have no experience or are novice.
  • Allow the FR position to remain open for months at a time. (and watch your donors drift away because no one is keeping them connected to your org.)
  • Let people who don’t understand fundraising make decisions about strategies, messaging and investments.  (and watch those decisions bring in failure.)
  • Don’t insist on a carefully thought out fundraising plan that everybody agrees on and supports.  (More than one in five nonprofits (23%)—and 31% of organizations with operating budgets of under $1 million—have no fundraising plan in place.)
  • Downplay board members’ fundraising responsibilities.  (Three out of four executive directors (75%)—and 82% of executives among organizations with operating budgets of under $1 million—call board member engagement insufficient. )
  • Set unrealistic FR expectations, while “poor-mouthing” fundraising. (we all know the results of this!)

Screen Shot 2013-02-08 at 1.01.33 PM

And You Said About This:

And just for fun, here are direct quotes from my Fundraising INSIDERS and my recent survey of your biggest concerns.

  • “High fundraising goals set by VP, these goals are more than double what we raise annually, and we lack a funding priority.
  • “Got an unsolicited $25k gift and the ED won’t make a phone call to follow-up!
  • “Every time we are in a financial crisis, they cut the areas that make money for them.
  • “Saddle the FR team with more projects, events and still expect them to do all the other stuff too.
  • “Micromanage your fundraiser and bring the program to a screeching halt.

YOUR THOUGHTS?

Leave a comment and let’s start a provocative discussion!

 

Categories
  • Emily

    My executive director is implementing nearly every single point you made. As a result, I am leaving for a (hopefully) better position. I have struggled to figure out how I could encourage change within the organization but in reality, it feels like am epidemic that can only be changed by a management shift.

  • Susan Sachs

    spot on! great piece Gail – I’m sharing this w/my immediate universe.

  • carolteal1954@gmail.com

    Great article Gail. I’m forwarding this to my board.

  • Lucydj

    How would you suggest we address this if we see it happening with our ED ad board? Since they could fire me I am not sure how to address it without putting myself in an awkward position.

  • Cathy

    Gail: as usual, spot-on. Here’s another take on the point regarding
    silo-ing development staff from the PR/marketing functions. How about
    ASSIGNING the additional goals & expectations of the organization’s PR/marketing & communications functions to the development staff on top of the fundraising functions? This might fall into the one point about distracting your
    FR team with additional projects but one-off projects (ex: preparing the
    annual staff meeting) is different than the ongoing and full-time scope
    of the communications responsibilities. And I see this
    double-assignment as often as seeing communications as a separate
    operation, which seems to be the basic assumption of your other very
    valid observations. Perhaps this can be considered one of the types of
    resources that development staff needs (a communications function that
    is connected to but separate in staffing resources) in order to be more
    effective?

  • gailperry

    Thanks Susan! Appreciate it!

  • gailperry

    Hi Carol. hope is it a reminder for us all!

  • gailperry

    Cathy, I’ve seen the fund development groups get saddled with odd PR and marketing projects that don’t fall anywhere else – like the annual staff meeting that you mentioned above. Certainly a distraction!

  • gailperry

    Hi Lucy – You may be discovering that there is little support for fundraising and philanthropy at your organization, If so, you need to carefully consider whether the conditions are present to enable you to succeed or whether you are set up to fail. Then make a decision with your eyes wide open. Good luck!

  • gailperry

    Hi Emily, Like I suggested above, you need to consider whether the pre-conditions for fundraising success are present at your organization. If not, and if you can’t change things, you are being smart to realize that you probably will not be successful no matter how hard you work.

  • Kelly V.

    The comment about an ED refusing to make a thank you call for 25k is unconscionable. We make phone calls for *every* gift we receive that we have a number for! DODs cannot be micromanaged, as we are often making minor shifts in the overall plan as we go along. Been there and done that. Not good! Hire talented staff and support their efforts and relationship building.

  • gailperry

    Hi Kelly – its a tough world out there with lots of people in decision making positions who really don’t understand fund development! GP

  • enderspath

    Absolutely. Any organization that receives a gift should acknowledge immediately. If they do not….do not send them money again because these people have no brains.

  • Megan

    Gail–could you perhaps have a future column on how best to learn the culture when interviewing? What questions should we ask to make sure the internal climate is what we need for success? Thank you for a fantastic article!

  • gailperry

    Great idea Megan. I’m thinking about creating a checklist of pre-conditions for fundraising success. One that everybody can use and it can become a guidebook perhaps. what do you think? Gail

  • Margaret Battistelli Gardner

    Great points, Gail! And outlining the “don’ts” the way you did was brilliant! Sometimes it sinks it faster and deeper that way. Like we discussed last week, the CompassPoint report can seem gloomy and doomy, but it really provides a lot of opportunity for fixing things.

  • gailperry

    HI Margaret! Thanks so much for your thoughts and for running the post in Fundraising Success yesterday. I think we need to launch an industry-wide discussion about the “pre-conditions” for fundraising success.
    I’m gonna work up a checklist for my blog post this week. Maybe we can get this to be widely discussed – hope so!

  • http://twitter.com/TravisPrinslow Travis Prinslow

    It’s this post and articles like it around the web that both frighten me and inspire me as I begin my journey into the nonprofit sector. I am scared that unrealistic expectations will be placed on me by a board or ED; at the same time I am inspired to transform a board into active members of the nonprofit and teach them that fundraising isn’t just the dreaded ask for money. I am inspired to share my passion for making the ask, and building the connections within my community so that I can make the ask. Sure I’m being an optimist as I go into the field, but damn it if I’m not optimistic about the changes I can make thanks to the insights of Gail, and Katya, Kivi and all the other wonderful resources on the wed then who will be, and who will create and be the change I want to see.

  • gailperry

    Hi Travis. Congrats for wanting to change the world. Just go into a nonprofit with your eyes open. Look for leaders who are open and innovative and who get it. Stay away from groups who have their heads in the sand. You’ll be fine!

  • http://www.facebook.com/profile.php?id=7933750 Allison Landry

    Another GREAT way to undercut fundraising success… hire someone with no experience to run your fundraising database, don’t offer them any training, and treat them as lowly support staff instead of an integral part of the Development team! (And watch your retention numbers go down as donors get frustrated with misspellings, duplicate accounts, mailings to deceased spouses, missing acknowledgment letters, screwed up pledge payments, etc.)

  • http://www.facebook.com/gailperry.nc Gail Perry

    Wow Allison, you are so right. We don’t give the database people the support and training they deserve and then blame them when our data is screwed up!

  • http://www.facebook.com/profile.php?id=7933750 Allison Landry

    As a database person who loves data cleanup, I have seen a lot of these situations. It’s also really hard to make the case for hiring someone experienced (and paying them what they’re worth) because it’s hard to quantify the database manger’s impact on the bottom line. But we do have an impact.