Do you think board members need to know about fundraising?
As a board member, you are voting to support (or not support) various fundraising strategies. You are probably allocating resources and making investment decisions about fundraising, too.
So why not know learn as much as you can about fundraising?
Here’s what board members need to know about fundraising:
1. How Fundraising Really Works Today.
You might be surprised to find that fundraising is pretty well researched and professionalized these days. There’s lots of data now about what works and what doesn’t work to raise money.
Fundraising is no longer a guessing game driven by people’s personal ideas and preferences. It’s now based on data and planning.
Many board members think that fundraising is “asking people for money.” That has all changed.
Now we’re much more sophisticated in how we build long term relationships with supporters . . . . so that the asking is really easy.
2. Where Sustainable Fundraising Comes From
Every smart board member wants to see reliable cash flow from fundraising.
- Where does this magic manna from heaven come from?
From developing die-hard loyal supporters who will stick with you in the long run.
- How do you develop these amazing long-term donors?
By giving them wonderful “customer service” after they make a gift. Why? So they will give again.
- What’s customer service to donors?
Well it’s outreach. . . invitations . . . . happy newsletters . . . . fun events for them. It’s cheerful personal thank you’s that open their heart. It’s something I call “Donor Love.”
Tending to CURRENT DONORS after they give is often the last thing on anybody’s list. But all the numbers are showing that it should be the FIRST thing on everybody’s list.
3. Where the Easy Money Is in Fundraising Today.
Learn the new language of donor retention and donor attrition. This is the new language of fundraising 2.0 today.
The data show that most nonprofits are losing about 50% of of their donors each year. !!!! (that’s Donor Attrition)
But your nonprofit is probably also bringing in tons of new donors. So your reports show that the number of donors is stable.
Nobody even sees the huge problem that is happening in your fundraising program!
Renewing current and lapsed donors is the easiest money you’ll ever raise.
Busting your butt to bring in new donors is the hardest money to raise.
4. Profit from Different Fundraising Strategies
Your organization probably employs several different fundraising strategies. They are not all equally profitable!
Events, for example, are the least efficient way to raise money. They’re least effective use of your volunteer and staff resources.
Why? Because costs eat up about fifty cents out of every dollar you bring in.
Your mailing program is more profitable than your events. It will cost you about 20 cents of each dollar raised.
The most profitable fundraising strategy of all is face-to-face asks of individuals, corporations, foundations, or organizations.
That’s where the big money is today.
Many organizations are more comfortable with events and less comfortable with the personal networking required by major gift fundraising. Where does your nonprofit stand?
5. Fundraising has a Significant Return on Investment
This means that your organization’s fundraising staff and programs are NOT a “cost center.” Instead they are a “revenue generating machine.”
What’s best, when you invest more dollars in your fundraising program – by hiring extra front line fundraising staff, and investing in the back office, professional direct mail writers and designers, or an upgraded data base system – you can expect to see an increase in new revenue.
You should be able to predict what your ROI will be from new investments in fundraising.
6. Your Own Organization’s Fundraising Strategy
Every organization has its own unique fundraising program, based on its culture, its history, and its opportunities.
One organization may be oriented towards corporate sponsorships, another towards grants.
What strategy does your nonprofit follow?
It’s vital for you to understand which strategies your own nonprofit is employing to bring in the funds.
- How does your fundraising program work?
- What’s the ROI of each different fundraising strategy?
- Where are your challenges?
- Where are your fundraising opportunities?
- How much money are you leaving on the table each year because you don’t have the infrastructure to go after it?
7. Why It’s Important for You to Make Your Own Annual Gift and Planned Gift
Board members need to put their money where their mouth is.
If they don’t support fundraising for their organization, you have absolutely no credibility to ask others for gifts. Period.
Every board member needs to make their own proud, personal gift each year.
And they need to include a bequest in their will – or make their nonprofit a partial beneficiary of their IRA. Right now.
8. Your Level of Responsibility.
As a board member, you are legally responsible for your organization (!). You do need to educate yourself thoroughly.
Be willing to ask the tough questions – especially when it comes to finances.
9. Whether Your Organization Has a Culture That Supports Fundraising (or Not)
I’m always surprised to find pervasive attitudes against fundraising inside the organization.
Often these notions are held by long time staffers on the program or financial side. Or even board members. And they are totally debilitating to your fundraising staff. These attitudes wipe out motivation and energy for fundraising.
Wouldn’t it be wonderful if your entire organization supports philanthropy joyfully?
What could you accomplish if every single person thought that your donors were the most wonderful people on earth and did everything they could to do love them?
What would it take to accomplish this?
BOTTOM LINE: What board members need to know about fundraising.
Fundraising is a fascinating subject. There’s much to learn.
You can refer to research studies and data to make thoughtful decisions about how and where to invest in your fundraising program. And you’ll see significant profit from those investments. Good luck!