The Nonprofit Fundraising Solution
Powerful Revenue Strategies to Take You to the Next Level
Author: Laurence A. Pagnoni
Pub Date: October 2013
Print Edition: $19.95
Print ISBN: 9780814432969
Page Count: 240
Format: Paper or Softback
e-Book ISBN: 9780814432976
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I never set out to be a fundraiser; I became one of necessity. I began my career as an executive director, working for nonprofit organizations in Virginia, California, and eventually New York City. During my time as an executive director, I managed every facet of the organizations I led, including all aspects of their fundraising. I soon came to realize how essential adequate revenues were to ensuring a nonprofit mission. Without them, our visions for a better civil society amount to little more than pie in the sky.
Mark Twain once advised people to be careful about reading health books because “you might die of a misprint.” I’m a big fan of Twain’s poignant humor, and so when writing this book about nonprofit fundraising, I tried to keep his advice in mind and convey vital information carefully. I can assure you that nothing you’ll read in this book will kill you or your organization. Chances are, though, that you are already experiencing something like stagnation, which, for those of us who have dedicated ourselves to “changing the world” through nonprofit work, can sometimes feel like its own sort of death. You dream, you sacrifice, you persist, and yet all too often you come up against a brick wall in trying to achieve real success for your mission. The issue isn’t that you lack the requisite desire or dedication to excel. The problem is you lack the money to implement your vision. It’s a lament that is so common in the nonprofit sector that I sometimes think I hear it in my sleep.
Subsequent to my time as an executive director, I’ve served nonprofit clients as a fundraising counsel for more than eighteen years in my capacity as chairman of LAPA Fundraising, an organization I founded in 1995 in New York City. I’ve had the privilege of offering or participating in countless conferences, seminars, workshops, and panel discussions aimed at helping nonprofit organizations raise more money. What I’ve noticed is that although the venues and the audiences change, the questions people ask rarely do. Whether we’re in a house of worship, a university, or a conference center, in front of big audiences or tiny conclaves, someone inevitably steps forward and asks: How can I get to the next level? That is, how can my nonprofit raise more money and create the conditions for sustainable success and high impact?
“Good question,” I usually say, although a more accurate response might be, “Good and very popular question.” The issue of how to get a nonprofit to the next level is nearly ubiquitous because most nonprofits in the United States are small or midsize organizations, and some 87 percent of them are trying to change the world on annual revenues of less than $1 million. Fully 73 percent exist on less than $250,000 per annum. Many of these organizations ended their last fiscal year with deficits.1 These numbers aren’t just sobering; they indicate quite clearly that unless these trends are somehow reversed, the future effectiveness of nonprofits in America looks gloomy indeed.
Fortunately there are a number of tried-and-true ways to get you to the next level you seek. The book you are about to read is my attempt to show you how to do so, and to help you answer that seminal question for yourselves, your donors, your constituents, your boards of directors, your communities, and most importantly, your clients. I like to say that a nonprofit is making progress when each day it gets to confront a better set of problems than it had the day before, or, in this case, better questions. My hope is that once you’ve implemented the ideas and tactics I’ve outlined, you’ll never again need to ask, “How do we get to the next level?”
We all know your nonprofit requires funding to operate. A limited ability to secure revenue means a meager chance to fulfill your mission. But your success at fundraising is more complex than a simple discussion of dollars and cents because it communicates a profound message about your organization’s health and well-being.
Through your fundraising program, you inform members of the community about your moral imperative and your impact on their lives, and you inspire donors to work on your behalf. Most of all, your fundraising program reflects the effectiveness of your overall organization. It’s a litmus test of your viability.
The central premise of The Nonprofit Fundraising Solution is that organizational development and successful fundraising are inextricably linked. Married, if you will. Your organization will do better by seeing itself as a multifaceted entity with fundraising entrenched firmly at its center. Why? Because the barriers to better fundraising performance are, so often, the same obstacles to organizational growth. The task for your nonprofit on its way to the next level is to approach fundraising with as much passion as you have for ameliorating the social problem to which you’ve dedicated your mission. Getting to the next level has as much to do with organizational development as it does with the fundamentals of fundraising. These two elements need to work in lockstep. The tendency in the past has been to treat fundraising as if it existed in a vacuum, separate and distinct from the other parts of your organization.
A 2013 report released by San Francisco–based CompasPoint found:
[H]alf the chief fundraisers … expected to leave their current jobs within two years due to an assortment of pressures, including a frequent feeling that they’re out on a limb because they’re expected to produce results without having enough backup from bosses and boards that haven’t managed to put effective, systematic fundraising plans and approaches into place.2
Too often, fundraising programs exist in a silo. The fundraiser works in isolation, and the fundraising program is not integrated into the day-to-day activities of the organization. This is a pervasive and grievous condition.
A large number of the individuals asking how they can get to the next level come from nonprofits that might be described as high-performing, underrecognized, and underresourced. In some cases, their agency has relied on one dominant funding source for too many years. In others, their private foundation grants program is rudimentary or largely inactive. Their individual donor program, if they even have one, may also be weak, while they usually have no planned giving program whatsoever. In all probability, their organization has no staff members focused entirely on fundraising, and their board of directors isn’t working efficiently as a team and maximizing its strengths, nor is it very knowledgeable about its role in fundraising.
Make no mistake, I’m not trying to be Jim Collins, author of Good to Great,although I am trying to pick up where he leaves off. Many nonprofit leaders buy and refer to works by Collins and authors like him, yet they are baffled as to how to apply these theories to their real-world dilemmas. They want to use Collins’s research, they know it’s the right stuff, but they lack the revenue to implement the theory. They don’t know how to raise all the money needed to, in Collins’s words, go from good to great. They have figured out how to raise enough money to remain in existence, but they lack the tools to get to the much-desired-but-just-out-of-reach next level.
The revenue program of the typical nonprofit needs more love and care than most executives admit because without a robust revenue engine, the best ideas or strategies wither on the vine. This book aims to fill the important gap between theory and the practical methods used to secure that needed revenue—down-to-earth, detailed steps that can be implemented immediately.
How to Use This Book
Fundraising is a practitioner’s craft. It requires the intuition of the artist and inquisitiveness of the scientist. It needs flexibility to pilot new approaches and time to gauge their effectiveness. It’s neither primarily theory (although good theory is required), nor wishful thinking or magic. It’s not a matter of manipulating your address book. Fundraising is grounded in hard reality, and central to the task is building thoughtful relationships with prospective donors who are value aligned, meaning they care about what you do and do not want to live in a world where what you do is absent.
There is no one-size-fits-all method of organizational development or fundraising, either. Every nonprofit organization has a unique mission and strategy for supporting that mission.
The Nonprofit Fundraising Solution is divided into two parts. The four chapters in Part One, “What Getting to the Next Level Really Means,” articulate my theories about some of the key aspects of organizational development and explain how to focus on getting your organization ready to execute a robust fundraising program. The ideas that they contain lay the mental groundwork for what advanced fundraising requires. Written from the perspective of the fundraiser, Part One looks at how the issues of organizational culture, leadership, board governance, and higher-level thinking are fundamentally tied to fundraising.
In Part Two, “Advanced Fundraising Tactics to Raise Revenue,” the tactical aspects of fundraising that I’ve utilized and refined the most are addressed. These chapters cover the nuts and bolts of advanced fundraising. Each of the nine chapters addresses a particular fundraising tactic that you can use. Some of the topics may be familiar to your own fundraising activities, but my take on them may provide a new perspective. Depending on your organization’s unique personality, you can modify all of these tactics to accommodate your particular needs. It may require considerable work on your part, but it’s also what will bring you greater revenue.
At the end of many chapters you’ll find a Casebook, in which I use a real-life story to illustrate the subject at hand. “At the End of the Day,” which is the designation used to close each chapter, emphasizes that chapter’s main points as you move to the next one. All the organizations and cases referred to in this book are real, though most names have been changed.
The development of relationships is central to fundraising, be it a relationship to a group of donors, to the community, corporations, service providers, your peer nonprofits, or the world at large through social media. These kinds of relationships build the profile of your organization. The tactics used to foster relationships create confidence in your agency; they attract financial support and, most importantly, they enable your nonprofit to deliver its mission as effectively as possible.
I strongly urge you to read Part One as a whole before you turn to Part Two. To get to the next fundraising level, it will take more than a few clever “modifications” to set you on the right course. The correlation between fundraising performance and organizational development is too often overlooked, yet that’s precisely what getting to the next level is all about. Your organization and your way ot thinking about it inevitably have to change. You may have to become better at documenting the impact of your programs. You may have to generate better client or program outcomes. Your leadership or your board may need some redirection. Or you may have to alter your culture to become more amenable to the fundraising process.
The chapters in Part Two are designed as stand-alone topics and can be read in whatever order you choose. They are chock-full of real stories that come out of my fundraising experience. Some may make you laugh, others might cause you to cry, but hopefully all contain nuggets of road-tested knowledge to help you on the way to truly achieving your mission.
My own expertise as a fundraiser is in addressing these issues from the perspective of someone who understands how money propels mission into action and has a real impact on the quality of life of the individuals and communities that nonprofit organizations serve. Once you understand the issues of organizational culture, leadership, board governance, and higher-level thinking, and see how they are related to fundraising success, implementing the tactics in Part Two will come naturally.
There is never one moment when we arrive at being the best fundraisers we can be. It’s an ever-evolving and unfolding process where continuous education and reflection on our experiences are required. Having lived them myself, I understand the stresses and challenges you face in building capacity and growing your organization, and I have the experience to help guide you toward that goal. I’ve worked with my clients to build effective revenue engines within their nonprofits, and I want to do the same for you in this book.
What I Won’t Be Covering and Why
Finally, a mention about what won’t be covered: fee-for-service income by nonprofits. At first blush, the idea of a nonprofit earning income might seem like an oxymoron, but earned income(fees paid to a nonprofit for services rendered to you and me, plus governmental fees, or the money a nonprofit charges government for delivering services) accounts for 73.5 percent of total nonprofit revenue for U.S. charities.3 The estimated percentage of fee-generated income varies somewhat according to how one classifies different revenue sources. This book only addresses contributed income; that is i
ncome donated by individuals, foundations, corporations, and other potential givers. I made that choice because I’m not an expert on earned income and many good books have already covered the subject. A colleague once said to me, “I hate when I go to conferences where they talk about nonprofit fundraising and act like the 26.5 percent that’s contributed income is the entire picture.” His words are especially prescient given the new models of social venture hybrids. Earned income is now the primary revenue engine of the U.S. nonprofit sector and numerous international growth models. I don’t deny it. I just want my readers to know there are greater authorities on that subject than me.
I think we can all agree that one of the most wonderful aspects of nonprofit work is how much potential it has to truly change the lives of others in a meaningful way. Through the work of nonprofits, enormous social problems, as well as smaller, more personal ones, can be rectified, mitigated, and eliminated as society itself is advanced as a whole. I know you’ve come to this book with most of the key ingredients to make that happen, like a stalwart ship on a great ocean of possibility. All that remains is to summon some powerful, long-lasting wind for your sails.
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