Chapter 2 from: Help! They Want Me to Fundraise! A Nonprofit Fundraising Manual for Beginners
Editor's Note: We are pleased to share with you Chapter Two of Susan Black’s book, Help! They Want Me to Fundraise! A Nonprofit Fundraising Manual for Beginners, published by CharityChannel Press. Our hope is that sharing this free chapter will help you discover how valuable the book will be to your success or the success of someone you know. You can pick up your copy at leading booksellers, including Amazon.
The First of the Four Building Blocks of Fundraising Success
Before a house is built, a foundation must be laid. That foundation must be strong, watertight, and made with high-quality materials. The same thing is true for your nonprofit organization as it begins a fundraising program.
- organizational readiness;
- fundraising goals and plans;
- primary fundraising vehicles; and
- communications and community relations.
All four of these building blocks are important components of any successful fundraising venture and are important for your organization to understand and invest in. Simply put: your efforts may not be successful if one of these building blocks is missing. So let’s get started!
Building Block One: Organizational Readiness
Organizational readiness is the foundation of fundraising success, like the foundation of a house. A nonprofit with critical deficits, just like a house with a cracked foundation, will find it very challenging to build a successful organization. Financial stability, a board of trustees with high capacity that is prepared to fulfill its duties, a CEO with an understanding of fundraising and good connections in the community, a well-prepared and seasoned development staff, and sufficient backroom operations are the hallmarks of organizational readiness.
The very first thing you must know in order to be successful at fundraising is that you cannot put more water into a leaky bucket.
What I mean by this is that before attempting to raise funds, you need to be sure that you are already as financially secure as you can be. The business side of your organization must be running, if not ideally, then to the best of its ability, before you ask the community to invest in your organization. Donors and funders want to see that you have done everything you can to create sustainable programs with sufficient revenue streams, lean but effective operations, and— if applicable—a safe and well-maintained physical plant. In other words, fundraising cannot be your saving grace.
If at all possible, your goal should be self-sustainment for all programs. Fundraising dollars should be used as “icing on the cake” for program expansion, unmet needs, or capital improvements. You may be able to attract donations for an emergency need, but emergency fundraising cannot be your modus operandi long term.
To get a feel for where your organization stands in this area, complete the worksheet below. This may require a conversation with your CFO. (Note: if you don’t have the information to complete the worksheet or this information doesn’t exist, consider that a red flag. This kind of information is crucial for strategic planning and should be readily available, at least to your CFO and CEO.)
On the left column, list all your current programs, i.e., the services you provide to the community. For each program, consider its primary income source. Is it a reliable source? How much do you receive versus how much it actually costs to run the program? What percentage of the costs, if any, are not covered? Now, if there are uncovered costs, what are they? Are they administrative costs, such as salaries, benefits, or overhead? Are they direct costs, such as supplies and materials?
Based on this assessment, can you determine any untapped sources that might cover those costs? Knowing which of your programs are running in the red helps you identify your fundraising needs, but it also indicates how big the “hole” is in your “bucket.” If the “hole” is significant, stop here. Before you begin fundraising, you need to plug the hole and undertake the hard work of becoming financially stable.
Becoming financially stable may require you or your organization’s leadership to make difficult choices. It may require cutting poor-performing programs, increasing expectations around staff productivity, moving into a smaller or more affordable location, or any of a number of other decisions.
But in the end, your organization must be able to show that it is doing all it can to continue to fulfill its mission in the most efficient and effective way possible. Donors need to see that your leadership is strong and capable of taking bold steps to ensure the organization’s future. Then and only then will others want to invest their philanthropic dollars in your organization.
Board of Directors Capacity/Preparedness
The second and equally important part of organizational readiness is the capacity and preparedness of your board of directors or trustees. (You should refer to your board depending on how it is described in your bylaws.)
There are many resources available to help organizations strengthen their boards, and I have recommended some of these in Appendix B. Here again is the bottom line: the stronger your board, the stronger your ability to raise funds.
So what does a good fundraising board look like? It is composed of people of influence and/or affluence, is diverse in age, gender, race, and skill set, and—depending on your organization’s mission—is diverse in socioeconomic status. (You should have some client representation on your board if possible.) They should believe fiercely in your mission, be able to articulate the mission and the vision as ambassadors in the community, and be willing to extend both their personal finances and their social capital to assist the organization. Finally, as a group, they must spend time and energy on the big picture, “steering the ship” of the organization and assisting the CEO in making strategic decisions.
If that description sounds exactly like your board or even something like your board, great! Probably with a few improvements, you’ll be well on your way to fundraising success.
If it sounds nothing like your board, then my suggestion is that you create a governance committee to review the board’s structure and performance and arrange for board training as soon as possible. Many community foundations and some private foundations provide funding for just that type of capacity-building activity.
CEO Fundraising Knowledge and Community Connectedness
Your board is crucial to fundraising success. Yet in many ways, the community will judge your organization by your CEO, not by your board. It’s for this reason that your CEO must be a competent, credible, highly moral person who represents your organization in a positive way in the community and who is “seen.”
In other words, your CEO must spend at least 30 to 40 percent of the workweek being involved in the community on committees, civic groups, etc., that benefit the organization and make it more visible.
Why is this important to your fundraising success? Because if your CEO is spending too much time putting out fires in the organization and working in the office, then your organization’s chief fundraiser is not out in the community building relationships that will benefit the organization. And if that isn’t happening, your organization isn’t on the radar of people who give.
Development Staff Preparedness
There are many organizations that do not have full-time fundraising staff. Some organizations have development staff that previously served as administrative staff or social workers/program staff. You may be just such a person. There is nothing wrong with this choice as long as these individuals receive training in professional fundraising techniques and best practices.
An organization cannot expect anyone who does not know how to do the job effectively to be successful in the job—and that goes for fundraising too. If you want your organization to be successful at fundraising, then fundraising cannot be a last-minute, low-priority activity done by people who don’t know what they are doing. It requires an investment of time and talent, plain and simple, just like any other part of your organization.
If you are the person who has never raised funds but is now expected to do so, the first thing you should do is connect with your local chapter of the Association of Fundraising Professionals. This group offers ongoing educational seminars, training, and conferences, as well as ready-reference materials and personal support from colleagues.
Secondly, check out the fundraising titles available through CharityChannel Press or For the GENIUS Press. Well-known, seasoned fundraising professionals from around the country write these books.
Another way to get the talent you need for less money is to hire a consultant or contractor. You can hire someone with a great deal of experience on a project or retainer basis for much less than a full-time staff person or even a part-time person with limited or no experience. You can also hire that person to train or coach your CEO or staff so that they can be more successful without a huge outlay of expenses for training.
The last piece of the puzzle for fundraising readiness is your backroom operations. What do I mean by that? I’m referring to the tasks that must be covered by staff or volunteers, such as processing checks, writing thank-you notes, and maintaining the donor database. Here is a list of what you need for your back room:
- A donor database. This can be as simple as an Excel file or as elaborate as licensed software or anything in between. Whatever you use, just remember: junk in equals junk out. Your data must be clean, coded in a simple and consistent way, and updated regularly. A database is more than just a list. It’s your “institutional memory,” allowing you to work more efficiently and effectively to build successful donor relationships.
- Someone in charge of the database who is zealous about the cleanliness of the data. In other words, database management can’t be left to an administrative worker with too many additional duties. Ideally, this job is given to someone as that person’s primary work.
- A process for acknowledging gifts within twenty-four to forty-eight hours of receiving them. Sometimes this is harder for small shops because it doesn’t seem like it’s worth the effort to write thank-you letters one or two at a time. Make it a priority to respond as quickly as you can, with the goal of forty-eight hours maximum. Believe me, donors are impressed by this small act!
- Written fundraising policies and procedures. Chief among these is a check-processing procedure that ensures more than one person sees or handles the checks for auditing purposes. Another important one is a gift-acceptance policy detailing what the organization will or won’t accept in the way of gifts and why. This is normally developed by staff and approved by the board.
- Good, reliable donor reports. You must be able to create reports on who has given, how much, and when, and they must be accurate so that donor lists can be made for your annual report. This is where “the rubber meets the road” for database cleanliness. If your database if full of junk, you’ll know it when you run a report.
- Organizations must be financially stable in order for donors to feel comfortable giving.
- Your board must be diverse, understand its fiduciary duty, and embrace its role as chief ambassador for the organization.
- Your CEO must spend time cultivating relationships in the community.
- Your development staff needs to be qualified and trained.
- A reliable donor database and backroom procedures are more important than you realize.