There are many questions about fundraising strategy that we ask our clients.
For example, when we ask people, “What is your funding model?” they are often unsure how to respond. So we try another approach: “What is the fundraising strategy that undergirds your annual operations, bringing in the funding for your nonprofit?”
For example, does your annual budget rely more on grants and public funding? Or do you fund your operations via many smaller donors who come in via direct mail and digital email?
As fundraising consultants, we like to go deeper with our clients. In order to help an organization stage an aggressive capital campaign or dramatically ramp up its fundraising, we need to understand the opinions and underlying assumptions about fundraising.
This is the way we can open the door to hugely productive discussions – and stronger fundraising results.
Do you and your team want to raise the kind of money that not only funds your work — but also actually transforms your organization’s mission potential and reach?
If so, what would it really take to pull mega fundraising results? We could ask, why can some organizations tackle huge goals, aspire to incredible heights – and actually reach them?
On the other hand, why are other organizations content with just limping along, aspiring for only small, incremental increases in revenue?
It’s so important to remember that transformational results really are possible. You have to make the leap from good to great fundraising. And – to be frank – be willing to call a spade, a spade.
Your organization’s future depends to a large extent on the decisions you make about fundraising strategy.
Here are the cage-rattling questions about fundraising strategy that we ask our clients:
1. Can we be honest about what’s working and what’s not working in fundraising?
Many organizations are actually quite set in their ways. In these situations, it seems that everyone — staff and board — are in their comfort zone. Change feels disturbing.
For example, there may be fundraising programs that are simply not productive – eating up valuable time, resources, and effort. But no one is willing to be honest about what’s working and what is not working. Or it could be that honesty is not rewarded.
Protecting special programs – even if they are unproductive – holds everyone back. You lose the opportunity for creativity, innovation, and stronger fundraising results.
Creating an atmosphere of openness and honesty is essential if you want creativity and new ideas – and mega fundraising success.
2. Can we make fundraising decisions based on data and not personal opinions?
We find, unfortunately, that many fundraising teams and even boards make decisions based on personal opinions or preferences, not on facts or data.
This is no way to run a nonprofit business. When this happens, people are not using the tools of analysis, return on investment, profitability, or cost/benefit. Instead, their personal feelings are driving their decisions.
We see this most often when board members lobby for more fundraising events, at the expense of more productive, and more profitable ways to raise money. Or a board member will say, “I hate emails,” and suddenly the funding for digital appeals is in jeopardy.
In some cases, there’s too much weight given to the opinions of the most powerful person in the room. Sometimes it seems that decision-makers have their pre-set opinions about what they want to do, and that’s that.
Set your fundraising strategy based on data and research. This is a must if you want to reach new, mega fundraising goals.
3. Are we willing to ditch unproductive fundraising programs?
Often there are special fundraising programs (especially events) that are no longer worth the time and effort to put them on.
But they may be protected by powerful board members or top leaders, who enjoy the limelight and glamour of a big gala. even if it loses money.
Where are the time-wasting, unproductive fundraising programs in your organization? Can you and your team speak honestly and create a discussion about eliminating them? Can you create an atmosphere where open questioning is welcomed?
This is a rule that fundraising consultants often play. We’re often called in to evaluate development programs, find new revenue opportunities and suggest programs that probably should be eliminated.
Be willing to eliminate fundraising programs that don’t pull their weight. Never waste your organization’s precious resources of time, energy and money in places where it doesn’t pay off.
4. Are we willing to set dollar goals that are backed up with a plan?
Sometimes fundraising dollar goals are estimated, guessed at, or even pulled out of the air. We see both large and small organizations setting goals that seem to be full of smoke and mirrors.
Sometimes, we are astonished to find out that the fundraising goal is merely a figure that balances the budget. When this happens, there is no plan at all to actually reach the dollar goal. What good is the goal then?
The way to achieve fundraising growth is through a thoughtful annual fundraising plan. Too many organizations want more out of fundraising but they do not take the time to craft a plan.
It’s impossible to achieve great results without a detailed, calendared plan and strategy.
5. What would happen if we invested more in our fundraising program?
If your organization invested more in fundraising, you would raise more money to fund your mission. The ROI of fundraising is well established.
When organizations invest, the money raised will pay back the investment plus bring in a significant return.
Fundraising is not a cost center. Instead, it generates revenue.
This is a hard concept for many people to understand and apply. For example, cutting your fundraising budget will result in less money coming in to fund mission work.
I once volunteered with a religious-based organization that was slowly building a productive fundraising program. They were spending about $60,000 to raise around $200,000.
But the monks discussed this, and decided it was not appropriate to spend their resources on fundraising. So, they eliminated the entire program budget. Alas, all the donors who had given before were never asked again. And the monies that were raised (annually $200,000) never came in the door again.
Invest more in fundraising, and you’ll see an exponential return.
6. Could we possibly encourage risk-taking with a fundraising venture fund?
Some organizations set aside funding just for new fundraising ventures that offer promise. With all the innovation in social media, marketing, and the entire digital world, there are many new ways to find and engage new supporters.
In addition, consider that most fundraising programs yield a return on investment of 300-400%. For example, if you spent $300k on fundraising, you would expect to raise a million or even more. And that’s an annual return that’s repeated every year.
Consider that your endowment is earning an annual 4% return back to your organization. Compare that to the 300-400% return on fundraising expenses.
If you borrowed from your endowment and invested in expanding fundraising – you’d see a significant return, plus you’d pay the principal back into your endowment.
Venture investing in fundraising can be a smart strategy that yields substantial revenue.
7. Can our entire organization embrace fundraising as a mission goal?
The nonprofits that integrate fundraising into their core mission goals are the ones who achieve maximum fundraising results. This is a classic culture of philanthropy – when everyone is supportive of fundraising.
It takes every single person in the organization to be on board — from the folks answering the phones, to the CEO, to the board.
Everyone needs to celebrate fundraising as an integral part of their mission. Even more, every single person in the organization celebrates reaching out to donors as a special and honorable endeavor.
What would it be like if every one of these people all worked together on a plan that they supported? You’d see transformational results.
8. Can our entire organization embrace and honor donors as important to our mission?
Does your organization honor its donors as an important organizational asset? This is the first step toward a true organizational culture of philanthropy.
When an organization celebrates and honors donors, then maximum fundraising is truly possible.
This is what a true culture of philanthropy is — when every single person in the organization embraces their donors and supporters as important, valued, and worthy of attention and honor.
Your leaders may be nervous about the idea of fundraising, but they CAN get excited about your donors.
An organization-wide commitment to your donors will lead you to transformational fundraising results.
9. Could we possibly set aggressive, breathtaking goals?
Aggressive goals force everyone to shift and work differently – from the administrative staff to the board members.
This is what a capital campaign does for an organization – it shifts the energy level, raises the stakes, and focuses everyone on an exciting path ahead.
Aggressive goals get attention. The status quo is just the same old, same old.
What could we accomplish if we marshaled everyone’s energy into a new set of transformational goals?
10. What would this take from everyone to make it happen?
When it comes to fundraising, honoring your donors, and building a sustainable base of revenue for your mission – what’s everyone’s responsibility?
This is a question we fundraising consultants often ask when an organization wants to step out into the unknown with a capital campaign initiative.
We like to ask every single person: “what would it take from you personally to create the change you want to make?” This deeper conversation encourages self-reflection, and challenges old thinking and habits. This question opens the door for true change and innovation.
What is each person committed to create?
Bottom line: Ask These Honest Questions About Fundraising Strategy
These seem like huge questions to think about. That’s because they are huge. They get down, underneath the day-to-day, to underlying organizational culture and history.
But if your leaders can be honest about addressing these issues, you’ll foster an innovative, supportive environment. And, you’ll be on your way to amazing fundraising results that can transform your organization’s work out in the world.
What do you think? Can you and your team ask the tough questions?
As always, it is a pleasure to share our weekly insights with you as we cover important fundraising strategies. If your organization is planning a capital campaign or expanding your major gifts program – we can help. Send an email to firstname.lastname@example.org if you’d like to schedule a free strategy call with us.