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When Individual Donor Fundraising Goes Well

By Nell Edgington



Fundraising Bright SpotsThis week the Evelyn and Walter Haas, Jr. Fund released the second in their series of reports about fundraising.  Their Fundraising Bright Spots report, by Kim Klein from Klein & Roth Consulting and Jeanne Bell from CompassPoint, joins their Beyond Fundraising report, released last month.

These two reports are part of the Haas, Jr. Fund’s larger “Resetting Development” effort “to ‘learn out loud’ about how to…help put the sector on a surer path to sustainability and long-term success.” Given my concerns about their Beyond Fundraising report, the Haas, Jr. Fund very graciously asked me to review this latest report.

This new report analyzes 16 social change organizations that have been successful at individual fundraising to determine what the sector can learn from them.

I am always a huge fan of case studies. I think there is much to be gained by looking at others who have done things well, so I applaud the Haas, Jr. Fund for moving from theory into practice to see what is working in individual fundraising.

But first, we have to understand this report for what it is. This report only looks at nonprofits that have been successful with individual donor fundraising, which is just one of several ways that nonprofits bring money in the door. And the report only looks at “progressive organizations with limited budgets and small staffs.” So I would argue that this report and the case studies contained within it will only be applicable to similar types of nonprofits that have individual fundraising as part of their financial model.

Nevertheless, the report finds four themes present in these 16 social change organizations, which are that fundraising:

  1. Is core to the organization’s identity
  2. Is distributed broadly across staff, board and volunteers
  3. Succeeds because of authentic relationships with donors
  4. Is characterized by persistence, discipline, and intentionality

Many, if not all, of these themes make up the “culture of philanthropy” that the Beyond Fundraising report described.

There were several things I liked about the Bright Spots report.

First, I love the report’s focus on making fundraising part of the job of an entire organization’s board and staff. Two case studies in particular, Jewish Voice for Peace and Mujeres Unidas y Activas, demonstrate how major donor fundraising should be shared among senior staff and board members. For example Jewish Voice for Peace “has 57 portfolio managers from across the staff, board, and volunteers who together manage 600 major donor relationships in addition to other roles they play within the organization.”

Indeed the report points out that in these 16 organizations the head fundraiser’s role is to marshal staff, board and other organization resources toward fundraising, which I love: “Time and again, we heard from the development directors at these organizations that their job is to coordinate, to teach, to coach, and to inspire. The individuals in this role are highly relational and they take deep satisfaction in enabling staff, board, volunteers, and members to be successful fundraisers.”

Second, I really appreciate the Breast Cancer Action case study, which emphasizes creating a give/get fundraising requirement for the entire board:

At Karuna [Jaggar]’s first in-person board meeting as the new executive director, she laid out her desire to establish a board give-and-get policy to her board members, each of whom had been told explicitly upon recruitment that they did not have to participate in fundraising…After an in-depth discussion, they set a give-and-get policy of $10,000 per board member. “Maybe we lost some potential board members who felt they couldn’t do it,” said [board chair] Tracy [Weitz], “but only in the first year. Now, our veteran board members can share their fundraising stories with prospective members and say, ‘I’ve been fine, and you’re going to be fine.’” It’s important to note that BCAction does not prioritize personal wealth now more than it did before this policy change, but rather invests the time to support board members’ success, regardless of personal financial capacity, in the fundraising program.”

Yes! That’s exactly the way to get every board member involved in fundraising, of which I am a huge proponent.

Third, the Bright Spots report points out the need to fully integrate marketing and fundraising in a nonprofit: “A critical aspect of building and refining an individual donor program is tending to the intersection of communications and fundraising…development and communications are inextricably linked and staff driving these efforts work extremely collaboratively.” Agreed, fundraising can not sit on the sidelines of anything an organization does, but must be fully integrated throughout the organization.

Now, let’s get to where I think the report falls short.

First, I would have liked to understand better how these 16 organizations were selected as “bright spots.” I think in holding up organizations as exemplars it is critical to understand in what ways they are exemplars. While the beginning of the report describes what these organizations have in common: “a deep commitment to and strong track record with raising money from individuals,” and “individual support is a consistent part of their overall revenue strategy,” and the report highlights some of their individual donor fundraising successes, it is unclear why these 16 organizations in particular are held out as bright spots.

In my mind, I would select case study organizations that achieved: individual giving growth year over year, and/or higher than average donor retention rates, and/or more profitable than average fundraising activities, and/or demonstrated long-term financial viability. While some of the 16 organizations had significant individual donor growth, not all of them did, so I’m not sure what selection metrics were used. I would like to understand how the Bright Spot organizations’ fundraising metrics compare to their most fundraising-successful peers.

It is particularly important to understand what makes these organizations bright spots when the report points out that some of the 16 social change organizations are struggling with scaling or making sustainable their individual fundraising efforts:

“We heard from the Bright Spot leaders who want to grow their organizations that they are grappling with how to scale this organizational highly relational approach to fundraising. And many of them acknowledge how dependent their success is on long-time leaders, despite their distributed approach to fundraising…Many of the Bright Spots will soon have to adapt to very long-time leaders moving on.”

Second, the report does not make a clear distinction between small donor fundraising (one-to-many cultivation and solicitation of donors) versus major donor fundraising (one-to-one cultivation and solicitation). I wonder if the four themes that the report uncovers differ, and if so how, between fundraising activities targeting many small donors versus fundraising activities targeting a few large donors.

Third, the report touches briefly on the 16 organizations’ fundraising systems and use of data and metrics, but not in a robust way. I would have loved to understand better the kinds of systems these bright spot organizations use and what metrics they are tracking and trends they are seeing. While I understand the report’s overall emphasis on some of the “soft” skills of fundraising (“authentic relationships with donors,” “culture of philanthropy”) I also think that understanding the “hard” skills (systems, metrics) is key to replicating fundraising success (and overall financial sustainability).

Fourth, just as the Beyond Fundraising report did, the Bright Spots report continues to leave the problems (and in this case, the successes) with fundraising largely in the hands of individual nonprofits and their leaders. I am still hungry for case studies and research about how nonprofits (and their funders) can overcome the more systemic financial flaws inherent in our social change sector.

In the end, I would say that the Bright Spots report gives us a glimpse into a piece of what works to bring money in the door. For social movement, individual donor fundraising at small nonprofits, the Bright Spots report provides some important and useful insights. But for more broadly understanding what contributes to overall financial sustainability in the nonprofit sector, this report falls short.

But as I have said before, I don’t fault the Haas, Jr. Fund for exploring these issues. Indeed, they are one of very few funders contributing to the knowledge base about what creates a more financially sustainable nonprofit sector. We just need more of them.

Photo Credit: Evelyn and Walter Haas, Jr. Fund

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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.


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4 Comments to When Individual Donor Fundraising Goes Well

Linda Wood
April 15, 2016

Nell, many thanks for reviewing and sharing your thoughts about our Fundraising Bright Spots report. I really appreciate your holding the big picture on financial sustainability challenges facing nonprofits. You’re right that we have chosen to focus our initial interest on one source of revenue, individual donors–just one factor, among many, that influences nonprofit financial stability.

Why our focus?

Many of the Haas, Jr. Fund’s grantees are social change organizations. Most social change organizations are heavily dependent upon foundation funding because they do not deliver the kinds of services that generate revenue or are eligible for government funding.

Helping social change organizations like these develop their individual donor capacity offers a range of important benefits including spending flexibility, year-over-year budget reliability, and constituent engagement, to name just a few. But getting from a non-existent or chronically fledgling individual giving program to one that is central to the organization’s business model and identity has proved daunting to thousands upon thousands of organizations.

This report holds up the practices of a set of social change organizations that have succeeded in growing their individual donor program or sustaining an already-robust program.

We’ll be curious to learn whether other kinds of organizations find these bright spots examples useful. Perhaps other funders might consider commissioning similar research focused on other fields. For example, what might we learn from arts organizations or youth development programs that are bright spots in individual fundraising? Do they engage their donors differently? Do they share responsibility for fundraising broadly across the organization like the bright spots examples in our report?

Jeanne Bell
April 15, 2016

Dear Nell, thank you so much for your coverage of the report. I was deeply inspired by the leaders of the organizations you lift up in your blog (BCAction, Jewish Voice for Peace, and Mujeres Unidas y Activas); my beliefs about fundraising are forever shifted by the experience of this research.

My comment is about your reference to “hard” and “soft” skills and it’s a conversation much bigger than this particular research that I have been wanting to have for a long while with fellow capacity builders and funders. In short, I think it’s time for those of us in the leadership and organizational development space to put those terms and their accompanying assumptions about how people learn and execute successfully to rest. When we hear the terms “hard” and “soft,” our minds cannot help but infer that the “hard” skills are more difficult to obtain, more ‘expert,’ and more essential than the “soft” ones, no matter how much we may profess that they are both important. “Soft” seems to suggest easier to obtain, and really nice-to-have, but not essential. Obviously there are also gendered connotations to the two terms. Most importantly, this dichotomy of “hard” and “soft” is not supported by research in cognitive, behavioral or neural sciences. (See endnote for reference.) In fact, adults create positive change in organizations through a powerful, simultaneous, and inextricable mix of motivation, knowledge, sense-making, communication and more. I believe it undermines the success of leaders and the efficacy of those of us designing leadership/organizational development programs to allow this invalid distinction to persist.

The Fundraising Bright Spots report was inspired by UnderDeveloped: A National Study of the Challenges Facing Nonprofit Fundraising. The pain and frustration we heard from so many leaders through that research, it seems to me, is exactly the result of people buying into the false binary of “hard” and “soft.” Too many groups trying to “hire” or “manage” or “measure” their way to fundraising success—falsely believing that so-called “hard skills” actually function independently and that a process as complex and relational as growing a passionate cadre of life-long donors could be reduced to strong systems and rigorous metrics.

1. http://dusseldorp.org.au/on-the-non-existence-of-hard-and-soft-skills-by-dr-tyson-yunkaporta/

Nell Edgington
April 18, 2016

Linda,

Thanks so much for your comments. Yes, I would love to see more funders doing more research on what works to create financial sustainability in different areas of the nonprofit sector. Let’s hope that you all can be an example for others to continue to explore these very necessary topics.

Nell Edgington
April 18, 2016

Jeanne,

Thanks so much for your thoughts and the important research you are doing in these areas.

I hear what you are saying about the negative connotations to “soft” versus “hard” skills, and it may be that those terms are the wrong ones. But I do think that both sets of skills and experience are necessary to success in bringing money in the door. Perhaps there is a better way to characterize the different types of skills/experience necessary, but I do think it’s important to make a distinction. I have seen fundraisers who are excellent at building strong relationships with donors and prospects, but not as good at tracking the progress of those relationships, or understanding where their time is best spent, or creating an overall fundraising plan, or holding themselves and others accountable to dollar goals. So I do think you need both sets of skills present in an organization in order to achieve financial sustainability. And you need a way to analyze whether both sets of skills are present and being used effectively.

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