Are Your Fundraising Expectations Unrealistic?
Guest Blog by Elise Saltzberg, CFRE, Saltzberg Consulting
Nonprofits need money to fulfill their missions, and for most this requires fundraising. Everyone in our sector knows raising money is challenging. In an effort to help nonprofits be as successful as possible, I want to share some of what I’ve learned during more than three decades of fundraising experience.
Development Professionals & The Revolving Door
Here are two familiar scenarios:
- A nonprofit isn’t raising enough money, so they fire their development director and hire someone new. When that doesn’t work out, they hire someone else.
- A development director takes a new position and leaves after 18 months. The same thing happens at her next two jobs.
It takes time and expertise to achieve fundraising success. Yet the tenure for many fundraising professionals is between 18-30 months. According to a 2013 study* conducted by Campbell & Company, a Chicago-based consulting firm that works exclusively with nonprofits, 75% of Chief Development Officers (CDOs) and 62% of CEOs attributed high development director turnover to unrealistic expectations.
Creating Realistic Expectations
How can nonprofits create more realistic expectations? One approach is to look at the return on investment (ROI) in fundraising that other organizations are achieving. According to research by Benefactor, a Columbus, Ohio fundraising consulting group, the average yield is one dollar of funding for every 24 cents spent on fundraising activities (roughly an ROI of 4:1).
If your organization has never calculated your ROI in fundraising, this is a good first step towards more realistic expectations.
My Clients’ ROI
In 2007 I began tracking the returns that clients were seeing by investing in my services. Since then, on average, my clients have had
of $12.76. That means for every dollar they invested in Saltzberg Consulting, they secured almost $13 in funding, which is more than three times the national average. My clients average ROI for 2015 was even better: $22.87 for every dollar invested.
I’d love to say that my clients have done so well because I’m a spectacular fundraiser, but here’s the truth: ROI is high for my clients because I only work with organizations that have strong and effective programs that make a difference — programs that funders want to support.
I sometimes turn down potential clients because I know they won’t be successful at fundraising. Many of these organizations have wonderful missions and caring, dedicated staff, but that’s not enough. Funders need to know that the organizations they support have the capacity to use grant money wisely — from program design to implementation to evaluation
and that their funding will make an impact.
If Fundraising is Lackluster, Look at Your Programs
I frequently talk to nonprofit leaders who are having a hard time raising money. Here’s some of the advice I give them:
1) Do a self-audit: Talk to your staff at every level (not just senior managers) and clients. Ask what they see as the strengths and weaknesses of the organization.
2) Contact funders that have turned down your request for support and ask why. This feedback can help you make important changes.
3) Think about combining forces with other organizations doing similar or complementary work. Funders like collaboration.
4) Consider these key questions about your programming:
- Does your programming meet a genuine need in the community?
- Do your programs have unique benefits — that no one else in your area is offering?
- Do your programs have specific, measurable goals?
- Do you have a way to evaluate success?
Funders want to see tangible results. This is particularly true of younger philanthropists, who take a more businesslike approach to funding. They genuinely want to help, but they also want to know what they are getting for their money.
If your organization isn’t seeing a healthy return on your fundraising investment, the problem may not be your development staff or consultants.
Maybe your organization isn’t offering funders a good enough return on their investment.
* Report: “CDO Confidential”