Fixing the Root Causes of Failed Fundraising
As a nonprofit leader, how many times have you put weeks, maybe months, building out your strategic initiative and at the end of the day you didn’t have money to do them! The entire process didn’t live up to your expectations. Worse, it didn’t live up to your board’s expectations?
Frankly, this happens more often than you might think. Why?
Fundraising is strategic, yes. But unless you optimize the foundational elements of your fundraising plan (which really should be a financing plan), all of that “strategy” is for naught.
Sadly, unfulfilled Strategic Plans is one of the Top 3 reasons nonprofit CEOs reach out to me.
It Costs Money to Raise Money
I’ve previously talked about the idea of “irrational frugality,” a concept introduced to me by Bobbi Rebell. In the nonprofit sector, this mindset of not being able to spend money is effectively handcuffing organizations and preventing them from progressing their growth initiatives.
There’s no getting around the fact that it costs money to raise money. If we’re wanting to solve the most pressing problems at the community, state, national, or global level, we need to start being more comfortable with spending money where it needs to be spent. We have to ask ourselves, are we making $1,000 investment decisions and expecting massive results? Or, are we making $10,000 decisions or $100,000 decisions and achieving realistic results?
To grow, you need to be spending more on overhead.
What does that look like? Investing in the right staff—and the right skills to equip the staff to do the things that actually attract the overhead monies, the flexible funding, the unrestricted gifts… everything that actually allows you to put gas in your fundraising engine.
Budgeting: Front and Center
Oftentimes, when I meet with nonprofit CEOs and immediately broach the subject of budgeting, I get a curious look as if to say, “Wait… I thought she was the fundraising person.” But, budgeting is another foundational element that has to be ship-shape if true fundraising is to exist.
One of the first things I ask for when consulting with organizations is their P&L statement. So, for example, if the expense required is $5 million and the planned income is $4.2 million… Well, you can see the disconnect.
We already have a problem before the year starts. Nobody needs to plan to start in the red and hope that something changes during the year.
What I find is that organizations often spend 90% of their time nitpicking the little expenses and not even close to enough time assessing what needs to be done, month by month, to raise that $5 million goal.
When you can identify what those activities are, leadership, staff, and board members know how to align every hour with dollars.
You need a true financing plan to propels you to REACH or EXCEED your $5M need. This has WAY more impact on your board and staff’s revenue-generating attitude all year long than you may think!
Upending the “One Size Fits All” Donor Approach
So much of my work is helping teams understand what the path is to that $5M need and then HOW to have investment level conversations with donors. Even attract these donors. But, too often we’re still approaching donors as “one size fits all.”
Of course, we want every donor giving their best gift to the organization. If their best gift is $25, that’s remarkable. But, if you see a $25-level donor’s name on an annual report (or have done some Google sleuthing) and realize they’re giving $25,000 to another organization down the road—we have some work to do!
Unfortunately, I find so many people avoiding these conversations, because they're so worried they’re going to do it “wrong.” They don't want to be that pushy used car salesperson.
Here's the thing: You have to be able to sit down and share your strategic plan and share exactly how you're going to achieve those initiatives. Most of all, you have to be able to articulate the true financial need the organization has.
In essence, a conversation at the investment you’re asking them to make in your mission.
The mission, the crisis, the stories—those are all important, too. But, one thing major donors are dying to hear about is, “Do you need the money?” Your development teams must know how to sit down with individuals and ask/answer:
Can I share with you our $5 million need this year?
Can I share with you how we're growing?
Can I share with you how we're funded?
Can I share with you what your gift has done the last few years?
Can I share with you what your investment would look like this year?
It’s imperative to be able to sit at that table and know the answers to the financial questions we normally hope they don’t ask. Let them ask it. Because those questions are actually indicators of what's going to keep them from giving their best gift to your mission.
Again, I see teams avoid this every day. And there’s so much money left on the table as a result.
An investment-level donor? Remember, these are people who are also probably business owners, entrepreneurs in the community. They’ve had to sit down and ask for investments in their own company. So, sit down and have that business person-to-business person conversation with them, so they really understand how a major gift—an unrestricted gift—will allow your mission to succeed.
Shifting Model, Mindset, and Methodology
Making a fundamental shift in the nonprofit sector’s “traditional” model, mindset, and approach to revenue generation isn’t an overnight process. But it’s a shift that must be made in order to fully finance your organization’s mission.
My clients who embrace this shift regularly add 7 figures of money to their bottom line. Real talk.
Whenever you’re ready, here are THREE things you can do next:
👣 Follow me on LinkedIn where I share the same lessons I teach my clients about attracting larger gen-ops dollars so they can scale.
🍎 Read my GUIDE! THE TRUTH ABOUT GIVE/GETS :: Top 5 Reasons Your Board’s Give/Get Is Leaving Thousands (Sometimes Millions) on the Table. See how limiting board members to the Give/Get model keeps your staff from reaching their full fundraising potential. Here to get it.
📈 Work with me to fund your organization’s Strategic Plan and scale your budget by 2 - 5X // If you’re a business-minded CEO already raising MILLIONS but still need more general-operating revenue to invest in growth, you can apply to work with me here.
