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Financing not Fundraising: How to Rebut Crazy Donor Demands

By Nell Edgington



One of the biggest challenges the nonprofit sector faces is the sometimes dysfunctional relationship between nonprofits and their donors. I’ve talked before about how nonprofits should stop lying to their donors. But today, in this month’s post in the on-going Financing Not Fundraising blog series, I want to discuss the flip side of the issue–how to respond to some of the crazy things donors demand.

In case you are new to the series, it discusses how nonprofits must break out of the FUNDRAISING (individual donor appeals, events, foundation grants) box and instead create a broader, more strategic approach to securing the overall FINANCING necessary to create social change. You can read the entire series here.

I firmly believe that nonprofits should no longer sit idly by when donors make crazy demands or give impossible instructions. It is the responsibility of a strong nonprofit leader to stand up to their donors and help educate them about the realities of the sector.

So the next time one of your donors throws one of the below at you, here’s how you can respond:

When a donor says: “Don’t spend any of my money on fundraising or infrastructure.”

Respond with:

“It might seem more effective to have all of your gifts go to support direct services, but actually those services will be stronger and more sustainable if there is a healthy, effective organization behind them. That means our organization needs a capable, well-trained and paid staff; a sustainable revenue engine; adequate equipment, systems and space; and efficient technology. Occasionally you might think about supporting those infrastructure items so that your program gifts can go even further.”

When a donor says “I want to know exactly how every penny of my money was spent.”

Respond with:

“I hope that you are investing in our program and our management team because you believe ours is the right solution to this social problem, and we are the right team to execute on that solution. We will be happy to provide you, on a regular basis, results about how the program grows and the impact it achieves, but the kind of extensive, detailed, and funder-specific reporting that you are requiring would take us away from delivering the program and creating impact, and I know you don’t want to do that.”

When a donor says “I won’t fund your program without proven results, but I won’t fund an evaluation study.”

Respond with:

“When you say that you are putting our organization into a catch-22 of needing a key element to get funding, but not having the funding to get the key element. It’s an unwinnable situation. We would love to be able to demonstrate the kind of results you are requesting. However, we have not yet identified a donor or group of donors who is willing to fund that kind of project. Would you be willing to lead an effort to get a small group of funders together to fund such an important evaluation study?”

When a donor says “I want your nonprofit to make huge changes from my $10,000 gift.”

Respond with:

“We agree that the change you would like to see is very exciting. We have done our research on the type of change you would like to see and it would cost approximately $100,000 [insert the correct figure] to bring to fruition. Is $100,000 a gift you would like to make to our organization? If not, would you be willing to identify a group of funders who could join you to fund this change? And if not, then we would gratefully accept your $10,000 gift to support our regular program operations.”

We have to create the nonprofit donors we want to see in the world. When a donor makes an unrealistic demand, use it as an opportunity to educate them about the reality of the nonprofits they support. In so doing, you are creating a better donor for the whole sector.

If you want to learn more about applying the concepts of Financing Not Fundraising to your nonprofit, check out our Financing Not Fundraising Webinar Series, or download the 27-page Financing Not Fundraising e-book.

Photo Credit: lovell.com

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.



6 Comments to Financing not Fundraising: How to Rebut Crazy Donor Demands

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Tina Crouse
April 18, 2012

Hi Nell:
Thanks for trying to give us some tips for a response and re-direct to the donors. I think the real problem rests with the ‘muck media’ – purveyors of the un-truths about non-profits shovelled to the general public. Why else would a donor think to say “Don’t spend any of my money on fundraising or infrastructure” ? Previously, it was only about ‘Can it only go to my favourite program?’

I believe we should issue a challenge ourselves –

‘Find us a business that spends NO money on operations.’

We should demand it; command them to it. “Name the business that makes profit but spends zero dollars.”

Then we might have a fair comparison.

It can’t be done but somehow in the non-profit sector, it’s DEMANDED.

Pat Jones
April 19, 2012

Absolutely right and some very valuable rebuttals here.

The hours and hours I’ve spent filling in long, complex and detailed evaluation forms from funders, repeating what we’ve already reported elsewhere but in the format and tailored detail each specific funder requires. Where we had more than one funder for a particular project, these took almost as long as managing the project itself! That’s not value for money.

I’ve found that the very worst of these are the corporate funders and their desire for lots of PR around the project they’re funding. They have huge PR departments themselves but often don’t involve (and won’t allow) these staff in the project through advice, contacts, training etc. The corporate funder still wants a huge PR impact, forgetting that the charity only has one person and a bunch of hard-working but pr-inexperienced volunteers to do that promotional work. They just don’t seem to get it.

I would LOVE to see my fundraising colleagues build more realistic expectations into their funding negotiations and not simply say yes to every demand made by the funder. At the end of the day, charities are set up to serve their cause, not to serve the whims of funders.

Maile
April 23, 2012

Thanks for these “scripts,” Nell. I feel such a mix of emotions when funders say these things that I’m often at a loss for words (at least compelling ones). I’m going to stencil your suggestions on my palm so I can surreptitiously jog my memory the next time I need them!

[...] In the following article at Social Innovation, there’s a nice give-and-take about how to respond to your donors when they push back and make unreasonable demands.  Financing not Fundraising: How to Rebut Crazy Donor Demands | Social Velocity. [...]

[...] flip side of the issue–how to respond to some of the crazy things donors demand. (read more from Social Velocity) Like this:LikeBe the first to like this post. Search old news [...]

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