Sunday, February 10, 2013

Nonprofit Knowledge Matters | Fundraising Flu

Diagnosis: Serious Illness.
Rx: Manage Expectations and Change the Culture
A new report on fundraising has uncovered a serious issue regarding the health of charitable nonprofits. Like the flu, it’s contagious, spread by mismatched expectations. But, unlike the flu, no immunization shot is available. Instead, staff leaders and board members who are anxious to avoid this debilitating condition can take some basic precautionary measures to recognize the symptoms and commit to re-thinking the organization’s culture.
Like influenza, the diagnosis and consequences can be quite serious: Let’s call it, “the Fundraising Flu.” When it hits, nonprofits are so weakened and fatigued that they lack the basic elements necessary to successfully raise money. We’ve all seen it happen. It starts with the germ of mismatched expectations, which leads to disappointment and frustration that weaken relationships and prevent a positive culture surrounding fundraising at the nonprofit.
Symptoms of the Fundraising Flu include:
  • Board members who expect executive directors to raise all the money.
  • Executive directors often don’t have a background in fundraising and view it as geting in their way of doing the “real work” of the organization, and therefore expect their boards and development directors to raise all the money.
  • Development directors who feel unsupported by executive directors and boards who are not engaged with fundraising activities.
Fortunately, we can now view the recent insightful report by CompassPoint, Underdeveloped: A National Study of Challenges Facing Nonprofit Fundraising, as a physician's desk reference on the health of nonprofits. The report's prognosis is that charitable nonprofits large and small can suffer from this affliction. While examining the reasons why there is such high turnover and so many vacancies in the development director position throughout the charitable nonprofit community, the report recognizes that it’s more than just the germ of mismatched expectations that leads to Fundraising Flu. It’s also the absence of technology or strategic thinking. Indeed, almost a third of smaller nonprofits who responded to the survey – those with budgets of less than $1 million  reported that they did not have sufficient tools in place, such as either a database to track donor information  or a fundraising plan. In their weakened conditions, without technology or key staff, fundraising, delivery of mission, and eventually sustainability, all suffer.
How can we all keep the Fundraising Flu at bay?
The Rx: Recalibrate expectations and change the culture. The report explores the causes of high vacancies that exist for the position of development director: survey data show that a significant number of development directors are being asked to leave because they are not raising enough money or are judged as not well suited for the job. These findings point to mismatched expectations that we see over and over again. Do these scenarios sound familiar to you? Executive directors wish that board members would be more active in raising money; the board expects the executive director to pull millions out of a hat. Meanwhile, the development director is pulling out his/her hair trying to get the executive director to pick up the phone to call a donor, while the board is skeptical whether the development director’s high salary is a worthwhile investment. Obviously there is a disastrous mismatch of expectations going on (everyone thinking that it is everyone else’s fault that the nonprofit is not bringing in more contributions). It’s unfair to expect a development director to succeed at fundraising without the support of the board or executive director (21% of the development directors surveyed characterized their relationship with the executive director as “weak or nonexistent,” and three out of four executive directors characterized their board’s engagement as “insufficient”). It’s also unfair to hire someone who is not experienced or skilled at fundraising and expect money to flow in the door (one in four executive directors reported that their development directors were “novices” in various basic fundraising activities). Executive directors who don’t like to pick up the phone to speak with a donor should not expect their board members or development directors to pick up their slack. And board members who think the reason why the development director was hired is to pick up their slack should step off the board! What jumps out from the report is that development directors are not sticking around when they don’t have the resources to succeed, and those resources includeengaged leadership. The report points out that fundamentally, in order to avoid Fundraising Flu, charitable nonprofits need inspired and engaged leadership around financial sustainability.
The report’s experienced authors note that we need a “’fundamental shift in thinking and action across the nonprofit sector” in order to embrace a culture that supports fundraising and is more donor centered. We think that what’s also needed is a dose of better managed expectations. With fundraising, the devil is in the details: not the details of a grant proposal, but the details that keep a nonprofit on track with follow-up, thank you notes, deadlines, and putting all those business cards that are stacked up on your desk into a database. These administrative details are not necessarily most efficiently accomplished by a high level development director. Before hiring a development director, consider whether a development assistant is more appropriate. As played out in this Blue Avocado article, the lack of a development director may not be fatal if what really is needed is a detail-oriented staff member who can keep the fundraising activities on track. But success will only be achieved when there is an overall strategy in place that supports fund development, championed by an executive director and board both willing to provide leadership for the organization’s fund development activities.
At its essence the report’s cry for charitable nonprofits to embrace a “culture of philanthropy” (we prefer “culture of sustainability”) is the recognition that charitable nonprofits can’t be successful in fundraising even if they are fortunate enough to hire a dynamite development director  unless there is fundraising leadership in place (a triad of engagement between the executive director/development director/board of directors) as well as a supportive culture for fundraising. To read more about how to combat the Fundraising Flu, we refer you to CompassPoint's full report, especially the Call to Action that identifies 10 steps for charitable nonprofits to take to immunize themselves from what the authors characterize as the “passive, apologetic, and siloed” nature of fundraising today.

And, for training and peer learning about leadership and fund development, don’t forget to check the calendar of events of your state association of nonprofits. Engagement in fund development is too important not to make it one of the highest priorities for the leadership of your organization.

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