A tale of two nonprofits

It was the best of times, it was the worst of times….

I have two friends who raise funds for social service agencies that are 90% dependent on government grants and contracts.  One of them learned that her boss had never in her 25 year tenure launched a new program.  She confronted the executive director, and said, “We need to do something differently.”  The ED talked to her coach, and then said to the fundraiser, “You are right.  It is going to take some patience, but there is no one I would rather have guide that transition than you.”  So fundraising is starting to change at that organization, from galas and grants to mission-focused conversations with donors.

My other friend has been banging her head against “we have always done it this way”. She just told me she thinks she is ready to move to someplace her talents can be put to better use.

We see organizations thrive or fail all the time, but it is a little startling to see the early sprouts of success and doom so vividly.

Who owns income projections

Who owns the income projections for your organization?

“We just make up the income projections to match the expense projections.  All non profits do it that way.”

“When I was hired as the first fundraiser, they told me that my goal was to raise $200,000 in my first year.  But then when I reached that target, I was told that the REAL gap between income and expenses was $500,000.”

These are actual quotes.  From smart people, at competent organizations.  But each indicate a blind spot, and in my experience, this blind spot is one of the most crushing frustrations of development officers.

It’s a simple truth, but one that evades many: income projections should be based on capacity, not need.

My friend Steve Haddad, a top-notch fundraising consultant in Baltimore, describes the ideal scenario.  The fundraiser figures out what is possible, based on a number of factors (the likelihood of major donors and foundations to increase their gifts incrementally or dramatically, the track record of event and mailings, and the odds of miraculous intervention.)  The head of finance figures out what the organization needs to accomplish its mission.  The two meet, slide their opening bids across the table, and then discuss how to bridge the difference.

The most significant thing about this drama is that the two characters are meeting as equals.  Respectfully.  No one is bandishing ultimatums.

Fundraisers are often described as having “responsibility without authority.”  In other words, they have to accomplish things that are out of their control.  Top-down or arbitrary income targets epitomize that trap.  Fundraisers, say it with me – “I am not going to take it any more!  I own the income projections!”

How long does it take to thank a donor?

How much time elapses between the arrival of a check and the departure of the thank mailmanyou letter?  I have heard many grand reasons for delays: the mail is delivered to a different building than the development office, thank you letters are done by a volunteer who only comes in once a week, the database makes it complicated, the finance department hogs the checks, the executive director wants to sign all the acknowledgements and sometimes they sit on her desk.  And on and on.  But the donor is not thinking about any of that.  Here is what the donor may be thinking:

 If you get the thank you letter out in less than 1 week – “Wow, this is an efficient organization that really noticed when I sent a check.  Maybe I will send a bigger one next time.”

If you get the thank you letter out in 1 to 2 weeks – “This is an organization with an average level of competence and donor appreciation.”

If it takes more than 2 weeks – “Did they get the check?  Do they care?  I should call, but I don’t want to call.  I know they are working hard, but I wish…”

What do your donors think about your thank you time line?

What’s the best way to engage donors?

Cultivation.  It’s a word that fund raisers toss around as if everyone knows what it means.  But cultivation is different in every organization.  Before you ask someone for a large contribution you want her to feel how great and critical your work is.  Here are a few examples of exquisite ways different organizations have done that.

sproutAn international development organization has staff from all over the world come to the US for a week of donor visits.  Visits with foundation officers, one on one conversations with major donors and prospects, and house parties organized by board members, are all crowded onto the schedule.  It’s a logistical nightmare, but it is a very effective way of making a faraway program feel real.  They call it “BlitzCraig” because Craig is the staff member who organizes it.

A charter school for girls has a day every year called “Cool women, hot jobs” when they invite women entrepreneurs and professionals to come talk to their classes.  Many of the visitors are impressed enough by the students that at the end of the day, sign up to provide internships for the students in their offices.  And many write checks on the spot.

A neighborhood performance center has a board member who keeps a list of 10 prospective supporters.  “Every time I decide to go to an event at the center,” she told me, “I call them all and leave messages asking if they want to come with me.”  Simple, right?

What are the best examples of donor cultivation you have seen?