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Nonprofits + Fundraising
03.19.11

 

I was at an LASVP event earlier today called "Fast Fix for Fundraising" -- basically the theme of the event was to help nonprofits address their issues around fundraising.
 
Obviously when you work with nonprofits, the #1 problem is fundraising -- everything else is dwarfed by it. I haven't seen the full continuum in terms of nonprofits + fundraising -- mainly those nonprofits that are really tight year to year to those with some buffer (but rarely those that are awash in funds.)
 
As people spoke throughout the morning, I did notice 2 recurring themes in terms of the questions posed:
 
1. I have [          ]. Where [          ] is access to wealthy individuals, celebrities, foundations, etc. How do I get them to give me more $?
 
2. How do I get my board to either donate more money or fundraise more actively for my nonprofit?
 
I have somewhat strong feelings on both topics so I figured I would write a blog post about it. (By the way, my background is I used to be on the board of a nonprofit and a philanthropic organization and currently advise a non-profit. Over the years, I've worked with 10+ non-profits in various consulting/advisory capacities.)
 
It was fascinating to me hearing how much access these nonprofits had. I should set the stage a little by giving a little background on these nonprofits -- this isn't true for all the nonprofits, of course, but certainly seemed to be broadly the case:
 
1. The nonprofits were run by good people / passionate people. (at least on a very superficial level when you meet them, hear them speak, etc.)
 
2. The nonprofits all had a good "story" -- maybe not right for everyone, but easily understood mission and way of helping people.
 
3. The nonprofits were externally validated -- award winners, recognized by local/state/federal government, received grants from major foundations, support from major corporations / brands, celebrity endorsers, etc.
 
Add in the fact that they have access -- which is obviously a difficult thing to get -- and it theoretically should just be a matter of converting that into $, yes? Apparently, no -- or at least much more difficult than they expected.
 
The initial consensus around the room was when they had access to a particular [wealthy] person -- that the correct tactic was to ask, ask big, and ask repeatedly. After all, you don't get anything if you don't ask, right? I think this is wrong. Let me explain my thinking.
 
I think people are people. They're complex creatures who have their own reasons for supporting or not supporting a particular cause. One person may be willing to spend a ton of time with an ED on a board / advisor / volunteer level and give very little $ yet support other nonprofits with a lot of $. Another person may not spend any money with the nonprofit yet anonymously write them a check. Why?
 
The short answer is I don't know -- but I think that's the wrong question to be asking. I think the better question to be asking is who is this person? Here are some very broad classifications of people I know associated with nonprofits. (and obviously some people play multiple roles)
 
1. The money guy (or gal). This is the person that writes checks. Period. 
 
2. The connector. This is the person who knows lots of people who writes checks or lots of people in a particular industry. They may or may not have the means (or interest) in personally supporting the organization. It doesn't matter! Their value is so high because rather than them writing 1 check, they can introduce you to 20 people who could write checks. Which is better?
 
3. The fundraiser. These are the people who get other people to write checks, come to events, have parties, etc. This is a very specific skill set. If you had a fancy nonprofit event and someone had to sell a table for 10 people at $150/head -- who would be the best person to call? This is that person.
 
There are many permutations of each of these people (and many more people too) -- but my main point here is the danger of confusing one person with another. For example, if an ED is dealing with a connector -- don't keep pounding on them to make a $5,000 donation. This will make them uncomfortable and they'll likely just close their network. Instead, let them do what they're good at and seemingly enjoy doing. Or the example of the money person. The money person may not want to buy a table at your next event. Why? Because then they have to figure out which 8 friends they're going to bring or invite or resell those tickets to and for a lot of people, that's really uncomfortable. So uncomfortable that they'd rather just make a single donation and be done with it. Or do it once and be done with the organization. My point here is to let donors interact with the organization on their terms, not yours.
 
Let's go back to the earlier example of the person who spends lots of time with the nonprofit and clearly has the means to support the nonprofit but does not. I have a suspicion about what's happening in this case but before I lay out, I want to throw something out there. I think people should be able to contribute to a nonprofit, in whatever capacity they're comfortable with, irrespective of who they are or how much money they have. In other words, if Bill Gates wanted to volunteer at a local soup kitchen, he should be able to do that without being hounded for money. That's just the way I feel. I realize people might read this and go, "Well, that's a huge missed opportunity." Really? You don't think Bill Gates knows that the soup kitchen could benefit from a donation from the Gates Foundation? You don't think Bill Gates is working at the soup kitchen thinking whether or not this is a soup kitchen he wants to financially support or not? More importantly, doesn't the value of his time -- in whatever capacity he's spending his time -- mean enough, on its own?
 
With that aside -- here's my suspicion on what's happening here. An ED at my table talked about the importance of vision when raising money. I couldn't agree more. The list I mentioned above (good people, good story, externally validated) -- that's something that was probably shared by ALL the non-profits in the room. All. However, what I suspect was not shared by all the nonprofits was a very clear sense of where they were going, what they needed to do to get there, and how much money they needed. How much more compelling would it be to show donors a 3-year roadmap, a clear roadmap in terms of what was expected to be accomplished in that time, and how the money being raised would be used to achieve those goals? And then a specific timeline for that period of fundraising to close? This would be as compared to, "Donate to us because we do good work." The latter works to some extent -- but I just don't think it's as compelling. I think what happens with these types of donors is the end of the year comes, they think of a nonprofit, they have good feelings about the nonprofit, so they give the nonprofit some money. If the nonprofit gets in trouble, they rally. In the other situation though, there's so much more shared investment in the vision of where the nonprofit is going and it feels like a collective action to get there -- not a one-off as an outsider.
 
So the second question that was posed was around how to get board members to more actively support the nonprofit financially or to fundraise. Most nonprofits I know treat their board of directors as either a piggy bank or fundraising committee. I think this is a terrible idea.
 
Definitionally, a board of directors is supposed to oversee the organization -- governance, strategy, financials. I think most nonprofits / EDs turn to the board for $ because they don't know how to get the $ otherwise (or are in a particularly perilous position at that point in time) -- but this is something that has to be fundamental to the nonprofit. Fundraising for the nonprofit is the equivalent of, "How will you make money?" to a startup. Eventually it has to be able to sustain itself and this is something a nonprofit has to be good at. 
 
So what happens is first off, the nonprofit becomes robbed of time / expertise of its board members in the areas its supposed to be helping in (governance, strategy, finance, etc.) because it pushes them towards donations / fundraising. Secondly, and this is the thing that's crazy to me, it's trying to turn people into something they're not. Most people are not fundraisers. Of all the people I know, a small fraction, I think, are both qualified and interested in being fundraisers. Then when the ED discusses the reaction to getting the board to fundraise, it's usually along the lines of, "The board says they're uncomfortable fundraising." Of course! They're not fundraisers and people who aren't fundraisers don't like hitting up their friends for money! But there are people out there that are both good at this and socially intelligent enough to know how to do this. These people should be cultivated and brought onto the nonprofit -- maybe in a board capacity, but why not on some sort of fundraising committee? Their expertise is raising money, not running a nonprofit. They're both very valuable skills.
 
At the core of it though, fundraising has to be fundamental to a nonprofit -- for better or worse. Nonprofits are good at what they're good at -- helping inner city kids, homeless children, environmental protection, etc. -- but that's really the fun (if you can call it that), the work is getting the money to be able to do what they do.

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