Fundraising PLAYBOOK: How to Grow a Nonprofit During Tough Times (What I Learned During the Last Recession)
The year was 2010, and I had just left my established corporate career to work at a nonprofit.
For 13 years, I’d worked in the corporate world doing work I’d loved. But like so many of you, I was moved by a mission and had to be part of it. So I jumped into the world of nonprofit, with little network or connections.
Even though I was super passionate about the mission, I realized pretty quickly that just exposing everyone to our work (through emails, campaigns, events, 5Ks, etc) wasn’t enough to fully fund where we wanted the organization to go.
The nonprofit was not short of passion or vision but did need more money and larger donations.
But I didn’t know how to get those because . . . well, I hadn’t ever needed to know how to do that in my previous career.
If you were around the nonprofit sector in 2010 and 2011, you’ll remember that this was a time when everybody said, “Individuals can’t give right now.”
So to recap: I was inexperienced with nonprofits, didn’t know how to fundraise large gifts, and it was arguably the worst possible time to try to learn how. That’s where I started my journey to learn how to truly grow a nonprofit’s unrestricted funding.
But I had a secret advantage that even I didn’t know about: I’d never worked in the nonprofit sector before.
At the time, I thought that was a disadvantage, but looking back I realize it was a gift. I had a total beginner mindset. I didn’t know about the myths that govern how so many organizations operate and fundraise, so they didn’t get in my way.
I never bought into the idea that “nonprofits should be able to do more, with less.” I came from the corporate world, where companies know that if they’re going to grow, they have to invest. Nonprofit concepts like “scraping by on the bare minimum/refusing to spend on admin or overhead/ or not drawing a full salary” simply did not make sense to me. So I never subscribed to those ideas.
Here’s what we did instead:
↗️ We embraced risk and tried new things
↗️ We spent money on things that helped us make more money
↗️ We didn’t subscribe to the traditional “don’t invest in overhead” fear
↗️ We established and operated off of a growth-mindset budget
↗️ We disagreed that nonprofits should do more, with less
↗️ We transitioned from an over-dependence on volunteers to paid roles
And it worked - the organization 3X funding in 18 months...all in a seemingly “impossible” environment.
You Can Get Those Results, Even Now
My results weren’t a fluke. I know this because when I teach other people what I did, they tend to get the same results. My methodology continued to work beyond the recession, and it’s the same one I teach every day.
One of the key ways I learned to fundraise was to prioritize investment-level donors, today what I call your ‘Top 30’.
I recorded the questions investment-level donors were asking. I carefully watched how donors were making decisions when making larger gifts. And I learned the fundraiser actually had way more control of the gift size and gift regularity than they knew.
These are the same strategies that my current students are using to secure the largest gifts of their careers… RIGHT NOW.
The last 2 months, I’ve been hearing stories of my clients I work with:
👊 Securing a $250,000 gift from an individual donor who’d only given $10,000 in the past
👊 A FULLY FUNDED budget at month 6 of their fiscal year
👊 Giving UP from individuals by 25% per month this year after years of decline
None of these examples are organizations on the “front line” of the current crises
...and they’re doing it in a time when many people say it’s not possible.
RISK = REWARD
At this point you might be thinking, “What’s the catch? If growing fundraising is so possible, why doesn’t everybody do it?”
To that I ask:
How do you feel about risk? [Silence]
That’s really the only catch. Most nonprofits don’t grow because they’re intensely risk-averse.
Have you ever said, “We really want to grow”?
Do you also follow up every new idea with, “We can’t do that because it’s not in the budget”?
That doesn’t add up.
A lot of things feel risky, but those are often the most rewarding.
Things like:
Asking if your business model is outdated
Admitting your fundraising is on auto-pilot
Embracing a new mentality about fundraising and your organization
Shifting to a new mindset for exponential results
Those risks? Those are what comes between you and your potential growth. Are you willing to risk investing resources to move into a different future of funding?
If your budget feels more like handcuffs than momentum, you need to make a shift.
Your budget is a tool to plan out your time, energy, and money. So, if your budgeted income isn’t being raised at the rate you wish, then change something. Don’t wait for a new fiscal year or a new strategic plan to start making those necessary changes.
Don’t Maintain the Status Quo
Speaking of budgets...would you invest less than 2% of your annual budget on learning how to raise between 50-75% of your annual revenue from 30 individuals?
Seems like an easy decision, right?
Well, that’s the big decision nonprofits face when they consider working together.
But, it might surprise you to know I get more nos than yesses.
You see, my biggest competitor is not another person. Organizations aren’t choosing another consultant or a different program.
My biggest competitor is the organization choosing to ‘not change’ . . . just continuing to try the same things that aren’t propelling them to grow. Changing feels too risky.
For decades, nonprofits have been conditioned to avoid risk. It’s not always their fault - sometimes it’s driven by funders.
But, I’m convinced this fear of risk is why 91% of nonprofits haven’t hit this elusive $5M threshold. [The Urban Institute’s Center on Nonprofits & Philanthropy (2018)]
I don’t mean to be rough - but I’ve seen it over and over again.
Organizations who embrace risk, are open to change, and learn new things . . . they grow their funding. Organizations that maintain the status quo...don’t.
I see so many organizations whose funding has plateaued because they are afraid to spend money. Your mission won’t be successful without it. So, bravely put it in the budget and create a plan to propel your organization forward.
Invest in Yourself
Last year, what did 55% of my clients have in common?
The Executive Director wasn’t taking 100% of their board-approved budgeted salary.
This is not right. It’s not good for executive directors, or their organizations. How long do you expect to be able to pursue your mission and run your organization when you’re not getting adequately paid?
If this is you, ask yourself these questions:
✔️ Did I put my full approved salary in the budget?
✔️ Did I put a true income plan in place to reach that budget with my full salary?
✔️ Did I also invest in learning HOW to raise more money rooted in a high ROI?
If you answered no to these, then it’s time to do two things:
Plan for and raise toward a real budget need. Fundraising has more to do with budgeting than you know, and I’d love to chat with you about it.
Create a real Financing Plan to help you raise more money every month
Can I be real? The truth is that most nonprofits spend tons of time figuring out every little penny they’ll spend and don’t take the time to figure out every single dollar they’ll raise.
And when you don’t do that, you never feel like enough is coming in and you allocate time and resources to the activities that don’t bring in the size donations you need. This is how you get trapped in a small gift spin cycle that will never get you where you want to go.
Risks Pay Off
About a month ago, I tuned in to a great webinar that Justin Wheeler (Funraise) hosted featuring Vik Harrison, Co-Creator of charity: water. It’s really stuck with me.
Vik was super open about the early days and how they tested fundraising strategies. These were ground-breaking. But two things in her descriptions of approach and strategy really struck me:
They tried things. There was a risk element. It hadn’t been done before, so they tried it.
They invested money in trying things. They invested in highly amazingly talented people to do so. They didn’t expect to be able to do more with less.
So, why am I still thinking about this?
I find that everyone wants to be charity: water.
They want their innovation, their acclaim, and especially their results.
But when it comes down to it, very few organizations want to take risks like charity: water.
They don’t try the things they pioneered or invest financially at the level they did to reach success.
My take away? We don’t look at charity: water as too risky. We honor their brilliance for standing out, pushing against the traditional fundraising tide, and looking great while doing it.
You Need a Mindset Shift?
You know how people pick a word for the year? Well, I tell people that last year my word was “mindset.” But I didn’t pick that word, it sort of picked me.
I was working with my business coach and she identified a few game-changer shifts for me that shifted my mindset 100%. I see those results in my business every single day. It became the theme of my 2019, and beyond.
Ironically, for 2020 I selected the word Risk. (I never could have imagined what 2020 looked like!) But I hoped the word would inspire me to take chances, push into fear, learn new things, and stop playing it safe.
It’s a good taste of my own medicine.
You see, when nonprofit leaders come to me, they are often a bit stuck. Maybe their funding has plateaued, too dependent on events, or they simply know there’s a better way to fund their organization than the spin-cycle they’re on.
I often encourage them to shift their mindset and embrace risk. You’ll hear me say:
“Break out of your comfort zone . . .”
“You’ve got to start doing something new to get different results . . .”
“Get comfortable with feeling uncomfortable . . . “
As I’ve researched the topic and talked to nonprofit leaders who dread or even hate fundraising, I’ve found there is a step-by-step path to achieving a new mindset that embraces trying new things, dealing with problems head on, and overcoming the lack of confidence that has you frozen.
What I find is people don’t hate fundraising as much as they thought they did. It was that they were stuck bouncing between the comfort zone and fear zone.
That’s why this graphic is posted in my office - it’s as much for me as for my clients.
Breaking out of your comfort zone is a step towards achieving things you never thought possible. I love it for myself and for the nonprofit leaders I coach.
Here’s the progression I often see in nonprofit leaders:
⬇️ Comfort Zone (Where you feel safe & in control)
“Let’s submit for more grants”
“Our new board member is in PR, so more people will know about us and give.”
⬇️ Fear Zone (Lack of confidence & making excuses)
“I hate asking for money.”“My board doesn't know any large donors.”
⬇️ Learning Zone (Gaining new skills)
“I’d never needed to know how to ask for large gifts in my past career, so I invested in myself to learn how to do that.”
⬇️ Growth Zone (Dreams a reality)
“We are fully funded, with a strong reserve fund, & donors who WANT to give.”
What zone are you in? What would your organization’s funding look like if you could get into a new zone?
INVESTING IN GROWTH (VS. SCARCITY MINDSET)
What if you came out of this pandemic-life with new clarity about how your nonprofit’s funding could look going forward?
The hope of being able to fully fund your nonprofit year after year would be real! Here’s what I mean:
What have you needed more of since around mid-March?
More unrestricted & accessible cash in the bank or reserve
Ability to keep and pay your creative and nimble staff who just pivoted their entire worlds
Access to donors who wanted to give large gifts
An ‘eager-to-help-with-fundraising’ board
But, I talk to Executive Directors all the time who have tried every single way of fundraising to obtain more of this and can’t figure out why it’s not working.
Here’s the tough love: If you struggle with this every year, it’s likely a combination of things. And until you’re ready to take some risks and change your mindset, funding model, and support activities, it will be hard to get more of these things and fully fund your mission year after year.
Early last month, my colleague Jay Frost hosted Dan Pallota on his fantastic Unbound Series. I ordered Dan’s new book while I was on the webcast because I’ve been a big fan since his infamous TED talk. I didn’t have to wait long for Dan to address what I had hoped:
The question arose about whether fundraisers in the sector are getting the support they need right now in regard to what needs to be done.
As usual, Dan nailed it.
In summary, he said that if we want to solve large problems (literacy, homelessness, etc) at the scale at which they exist, it is absolutely possible-- the nonprofit sector can do this.
How? The only way you solve large scale problems is if you have a program methodology that works and then you scale it to the size of the problem.
The only way to do that is with MONEY. The only way to get more money is to FUNDRAISE.
Seems simple, right?
But it’s not a simple shift when the industry default has been to invest in programs over fundraising. The problem is, that approach doesn’t work. If an organization isn’t growing, I go straight to the numbers. 9/10 times it’s because they aren’t spending enough money on fundraising and admin.
That old assumption that nonprofits should do more with less is where we get stuck.
When I say you need to move from scarcity to investing in your growth, what do I literally mean? When your board says “We want to invest more money in our programs”, what should your admin and fundraising percentages look like on your Form 990? Less than 10%? Less than 5%?
My answer might surprise you:
If you want to grow your programs, you may need to invest anywhere from 10% - 20% of your expenses toward fundraising or Admin/Ops.
Why? Because you are investing in your growth.
How do I know this? Because I did this. Here’s the percentages of an organization I worked for that 3X in 18 months.
BEFORE: Scarcity Approach
91% Program
4% Admin
5% Fundraising
DURING/AFTER: Growth Mindset
76% Program
9% Admin
15% Fundraising
“But programs are the reason we exist!” you may be saying. Correct! That’s why you need to raise as much money as possible to fully fund them. Today the organization invests 3X into programs. Don’t buy into the fear of the percentages - allocate expenses in your budget that will lead to you raising more money that you can then spend on programs.
I see so many organizations stuck and not growing because they’re afraid to spend money on anything but programs. It’s a backward approach and a bad misconception in nonprofit. Throw it out!
Really, You Can Do It
The organization I worked for grew 3X in 18 months during a rough time for nonprofits, but I can’t stress enough that wasn’t really about me or the organization, it was about our choices. Nonprofit leaders who make similar choices get similar results.
Consider my LET’S GROW student, who finished the 90-Day program in November 2019.
Here’s what the challenge was:
His organization had lost an annual gift that made up 25% of their 1M+ budget, and he was reeling.
He knew he had donors with the ability to give larger gifts but didn’t know the next steps to take.
He was the only staff member in the states of an international mission - so he wasn’t doing solicitations.
He’s a pastor by training, so super-relational, but was just guessing when it came to individual major-gifts fundraising.
He went from saying “I don’t know what I don’t know,” to “I can’t wait to share success stories with you tomorrow when we talk!”
So, how’d he do it?
He invested in learning a skill he’d never needed to know how to do before (asking for major gifts)
He learned how to plan and budget in a way that leads to securing larger gifts
He learned how to ask for what his organization needs
He learned how to lead the donor to saying ‘yes’
Instead of committing to what wasn’t working, he knew he had to take a risk to grow. He invested in himself, learned how to fundraise, and started trying something new.
When you take a risk, try new things, and shift your mindset, you’ll be ready to grow, too. Even in “impossible” times.
-Sherry
P.S. Whenever you’re ready, here are 3 ways I can help you grow your nonprofit revenue:
1. Follow me on LinkedIn for content and resources first
I give away trade secrets and insider info every week - the same lessons I teach my clients about what they can do to start attracting larger dollars and generate more unrestricted money for your nonprofit.
2. Read my WHITEPAPER to see if your overall approach to financing your mission every year might be keeping you from growing.
Here you’ll learn THE BIG FUNDRAISING SECRET that keeps organizations from having the funds to achieve what’s in their strategic plans. Click here to get it.
3. Work with me to reimagine your overall approach to revenue generation
If you'd like to add 7+ figures of charitable revenue to your nonprofit, just send me an email at Sherry@QuamTaylor.com with the subject line “grow.” Tell me a little about your nonprofit and what you need to raise this year. I’ll get you the details! 🎯
