Sunday, May 12, 2013

Fundraising - Even More To Think About


Good morning.
“And the beat goes on................”

Fundraising.  Yikes.  It’s taking more time, often yielding weaker returns.  The challenges are daunting.

Consider these factors we face:
  • A continuing weakened economy.
  • A decline in the percentage of the total of all philanthropic donations going to arts organizations.
  • Increased competition from other worthy causes for scarce donor dollars.
  • Declining audiences and corresponding revenue.
  • A generation whose philanthropic priorities and preferred means of donating remains unclear.
  • Anemic success in expanding corporate or business support.
  • Stalled earned income from ancillary sources such as merchandising, and a failure to make meaningful inroads into those revenue streams.
  • A culture wherein fundraising is the most territorial of all endeavors by an individual organization, and wherein there often isn’t even consideration of whether or not some collaborative effort might yield greater returns for all the participants.
  • Limited foundation dollars and changing priorities.
And now more troubling news:

A recently released joint report from Compasspoint and the Evelyn and Walter Haas Jr. Foundation entitled UnderDeveloped - a National Study of Challenges Facing Nonprofit Fundraising, describes the challenges as follows:            
“For years now, there has been widespread concern in the nonprofit sector about premature turnover of development directors, lengthy vacancies in the role, and the seemingly thin pool of qualified candidates from which organizations can choose. The development director is commonly labeled a “revolving door” position, and “the hardest to fill and retain” by executives, board members, funders, and capacity builders alike. Moreover, the challenge of assessing development director performance when so many factors influence an organization’s fundraising success can leave executives and board members suspecting—but uncertain—that they could raise more money with someone else in the role. At the same time, development directors frequently lament the lack of consistent attention to fund development from executives, staff, and board members, rendering their job a frustrating set-up.”
The report goes on to note that:
“Development experts have long cautioned that having a skilled development director is not enough. Beyond creating a development director position and hiring someone who is qualified for the job, organizations and their leaders need to build the capacity, the systems, and the culture to support fundraising success.” 
 Further, the report notes that too many organizations do not have:
  • Skilled, trained Executive Directors that are active critical participants in the ongoing fundraising process.
  • Boards that appreciate, and accept their role as fundraisers.
  • A culture of philanthropy that transcends the entire organization.
  • An investment in technology and other resources enabling it to function at a high level in the fundraising arena.
In a separate study: Time, Treasure, Talent:  Priority Confusions on Nonprofit Boards, posted by Colleen Dilenschneider conducted by the private company Impacts, at which she works,  on the role of Boards and Staff in the discharge of fundraising responsibilities comes this key finding, echoed by Executive Directors interviewed in the UnderDeveloped report above:
“Nonprofit board members grossly overestimate the importance of their own time and talent, and believe personal philanthropy to be the least of their responsibilities in the “time, treasure, talent” continuum.”
"Grossly overestimate the importance of their time and talent."  Bottom line: Too often Boards don’t want to be actively involved in, let alone accept responsibility for, raising funds.  In my opinion, all of the other issues attendant to Boards are frankly secondary to the Board’s fiduciary duty to insure the financial health of the organization, and that means they must be part of the development process (not just oversee it).  But too often they aren’t.  THAT is a major problem for the whole sector.

So here is a summary of the state of the fundraising operations in our field:
  • A pervasive attitude that fundraising isn’t really part of the mission of our organizations.  
  • The erroneous belief that all we have to do is hire a good Development Director and that absolves anyone / everyone else in the organization from worrying about raising funds.  Too many organizations never even bother to identify the realistic source(s) of new cash flow and support.  Hiring a Development Director whom you believe is highly experienced and skilled in writing and securing grants from foundations may be useless, if your organization is already near the maximum grant awards it can likely receive (and, yes there usually is a ceiling beyond which it is highly probable that there simply isn’t more foundation money for your organization). If there is more potential in expanding the pool of big donors, then what you ought to be looking for in a Development Director is someone with experience and skills, as well as a successful track record, in developing that source of income.  We don’t think like that.  We think more in general and generic terms of what we look for in a new hire.  Wasteful.
  • We eschew realistic job performance measurements in evaluating Development Directors.  And we make the mistake of thinking that the more we can offer in compensation, the better candidate we will attract.  Irrespective of how much they are paid, an increasingly higher percentage do not meet expectations (which is very likely not entirely their fault as those expectations are unrealistic).
  • A false belief that the pool of talented Development Directors is ample to meet the demand.  Look at the Jobs sites -- endless seeking of Development Directors, too few to meet the demand.
  • The belief that the pool of Development Executives is actually more skilled and talented than in fact, it may be.  Two or three years experience, a degree, and all the enthusiasm in the world, does not make for a successful performance.  
  • High turnover and long term vacancies in the post, and increasingly dissatisfied and frustrated people in those positions.  How can we expect to have happy, satisfied performers in these positions when essentially we say:  “Here Sisyphus - push this rock up to the top of the hill.  No actually, push it over the hill
  • Boards of Directors are unclear on their role as fundraisers and frequently unwilling to accept that role in any event.
We need to look at the whole (and big) picture in order not to come up with band-aid, piecemeal solutions.  We need to question every component in the whole food chain of the fundraising process:
We need to take a new and different approach to Development Directors:
  • How we train them.
  • How we support them.
  • How we recruit and retain them.
  • Defining more precisely where each of our organizations has the greatest potential for adding revenue streams, and hiring to those challenges rather than hiring to some nonexistent generic ideal.
  • What we look for in a candidate. 
  • How we measure their performance. 
  • How we integrate the fundraising function into the whole fabric of the entire organization and into the process of raising funds.
  • How Boards can (finally) accept a fully responsible role in the process.  
We need to look long and hard at:
  • Our historical dependence on both public and foundation support.  Our advocacy efforts have, at  best, kept us alive, and not much more.
  • Whether or not we can reliably count on our past earned income sources as audiences and donor giving declines. 
  • How we manage competition within our sector and what unbridled growth vs.  managed shrinkage of the sheer numbers of our organizations may mean.  We can’t just continue to allocate an inadequate pie to ever more people in line.
  • Whether or not real collaboration in fundraising efforts has a place or is a waste of time.  If we aren’t willing to work in concert to address some of these problems, and everyone is to be essentially on their own, let’s just say so, and stop wasting time living a fantasy that we are in this together.
There are no easy answers to any of this.  But we need to spend more time examining the whole process and facing some hard realities.  And we probably need to re-consider some fundamental changes in the basic assumptions underlying our approaches.

Have a good week.

Don’t Quit.
Barry

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