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Seven Factors to Consider for Fundraising Success
Alyce Lee Stansbury, CFRE, Notes on Nonprofits
One of the biggest challenges facing nonprofits is achieving a sustainable fundraising program that produces reliable, renewable revenue. Some of the factors that contribute to long-term fundraising success may be hidden or just below the surface. Here are seven factors to consider.
1. 100% Board member giving
Individual giving by every member of the board is an important first step before asking others to give. It tells prospective donors and funders you are buying what you are selling. Many funders, foundations, and individual philanthropists will ask about board giving and include it on their grant request form because they consider it a prerequisite for grant making and personal giving. This is the bedrock of a successfully fundraising program and I urge every nonprofit to make personal giving a perquisite for board service.
2. Board term limits
According to Leading with Intent, 2017 Index of Nonprofit Board Practices, 72% of nonprofit boards have term limits which are considered a building block of effective governance. In addition to bringing new people, perspectives, skills, and ideas to the organization, it gives seasoned board members a break before deciding to seek reelection. This process breathes new life into the organization and strengthens board engagement, important prerequisites for fundraising success.
3. Written, board-adopted fundraising plan
One way to establish and build a successful fundraising program is for the board to adopt a written fundraising plan. Development staff, or, in their absence, the Executive Director, are typically the initial architect of the plan which should include feedback and input from the board’s fundraising committee. The draft plan should be presented by the fundraising committee to the full board for their review and approval.
This process helps to ensure it is the organization’s fundraising plan rather than one person’s plan. Here are a few recommendations of what to include:
- realistic goals based on the size and giving capacity of the current donor base and previous results;
- opportunities to give at all levels and in a variety of ways;
- strategies to educate and engage people in the mission to deepen their interest;
- appropriate, timely methods to acknowledge gifts, recognize donors (with their permission), and provide authentic stewardship to all contributors and funding partners;
- tangible methods to recognize donor loyalty; and
- various ways to report on results and let donors know how their last gift made a difference before asking again.
4. Cost per dollar raised
In addition to net amount raised, consider the cost per dollar raised when evaluating the efficiency of a fundraising strategy. The formula to calculate cost per dollar raised is gross – net = cost ÷ amount raised.
I recently evaluated three special events hosted annually by a nonprofit and determined two of the three were costing the organization well over $2 per dollar raised which is very high. James Greenfield, ACFRE, in his book, “Fund-raising: Evaluating and Managing the Fund Development Process,” recommends an average cost of .50¢ of gross proceeds for special events but there is no consensus within the nonprofit sector as to the ideal cost to raise a dollar.
This is due, in part, because many factors contribute to cost per dollar raised including age and maturity of the nonprofit and its fundraising program, overall budget, strategies being used, skills of the fundraising staff, and use of volunteers.
In addition to cost per dollar raised, nonprofits can evaluate average gift size, percentage rate of return, and average cost per gift to help determine fundraising effectiveness and ensure donor trust and confidence.
5. Culture of philanthropy
A national report titled, “Underdeveloped: A National Study of Challenges Facing Nonprofit Fundraising,” a joint project of CompassPoint and Hass Jr. Fund, defined a culture of philanthropy as, “Most people in the organization (across positions) can articulate the case for giving; view fundraising as a mission-aligned program; organizational systems are established to support donors; and the CEO is committed and personally involved in fundraising.”
A culture of philanthropy exists when board, staff and volunteers understand philanthropy and fundraising are integral to organizational health; willingly serve as community ambassadors, and recognize how various roles create a strong, integrated team. Nonprofits who embrace this concept, rather than considering fundraising a necessary evil, are more likely to achieve sustainable fundraising results.
6. Unified vision
In his book “Mega Gifts,” fundraising icon and author Jerold Panas asserts this tenant: to attract and inspire transformational gifts, nonprofits must advance bold dreams and soaring aspirations. It is incumbent on a Board of Directors to identify a bold vision to advance the organization’s mission and inspire giving. When board, staff, donors, and stakeholders are united in support of a shared vision, fundraising thrives.
Ultimately, the success of a nonprofit’s fundraising program rests on the willingness and ability of board and staff members to ask for a gift. In addition to asking for annual gifts through direct mail, online campaigns, ticket sales and sponsorships of special events, fundraising should include one-on-one asking for larger, transformational gifts that align with the mission and a donor’s philanthropic interests, giving priorities, and capacity to give. This requires making relationship building an integral part of the fundraising effort.
Notes on Nonprofits is a column in the Tallahassee Democrat produced by Alyce Lee Stansbury, CFRE, President of Stansbury Consulting, and includes resources, responses to reader questions, guest columns, and timeless topics. This column first appeared on Sunday, April 3, 2022. Please send your comments and questions to email@example.com.