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What is the difference between nonprofit marketing and nonprofit fundraising? Can the same person do both jobs?
Let us define both activities so that we have a common base for the discussion.
Marketing – Raising awareness in the community of the existence of a nonprofit and the promotion of that nonprofit to those who will benefit from its services
Fundraising – Engaging individuals willing to make a gift (time, talent, or treasure) to ensure clients receive services the clients need
In junior high school, the science teacher often does it all (biology, chemistry, physics, etc.). In high school, the process becomes more specialized. In college, the specialization becomes more pronounced. Beyond that, the specialization becomes intense (graduate school, research, government agencies, and industry).
Let us relate the analogy to a nonprofit. Marketing and fundraising are both promotional activities. What level of expertise (junior school teacher to specialist) do you need to ensure the success of your nonprofit?
Your clients are special people with special needs. Your organization provides unique services.
What level of specialization is appropriate for the special people you serve and the uniqueness of your services?
What level of specialization is necessary to become the organization you want to be in 5 years?
Having both a marketing specialist and a fundraiser is the ideal solution. However, most small nonprofits can only afford one person, if that. Who should it be?
That depends on the funding structure of the nonprofit.
If most of your income is from fee for services, in most cases it makes sense to place the emphasis on marketing and hire a marketing specialist.
If most of your income is from donation, it makes sense to hire a fundraiser. However, again specialization is important. If individual donations are the dominate source of income or you want them to be, hiring a fundraiser makes sense. Otherwise, it is best to hire a grant writer.
Next Step:
Decide which area of specialization is the most important to the success of your organization and mission
Create a transition plan, if necessary, that allows you to transition to having a specialist in your most important area
Invest heavily in training the person you have today to become the specialist you need for a strong future
Specialization makes sustainability easier. It is best to use a specialist to create a sustainable funding stream or a sustainable stream of clients. Which specialist do you need most?
Does every contact your organization has with a donor start with a short story about one of your clients who was successful?
Your donors give because they care about the clients. Donors like to hear stories about client successes and the triumph of the mission. Stories humanize the donor’s gift and reinforce the emotional connection between the donor and the client. There is a direct link between the donor’s emotional connection and his or her generosity.
We call the short client-focused story a ‘Mission Minute’. It is a short 1 – 5 minute story about a client and how the mission meaningfully, measurable, and durably changed the client’s life. Ideally, it is told by the client (digital is good, in person is great). A good alternative to the client sharing the story is one of the caseworkers, client advocates, or someone else who works directly with clients sharing the story.
Every time there is a donor in the room, the gathering should start with a Mission Minute. The Mission Minute should connect directly and clearly to the reason for the gathering.
Remember who the donors are:
Volunteers give their time and money to the mission – Start every meeting and volunteer opportunity with a Mission Minute
Board members are volunteers – Start every board meeting or committee meeting with a Mission Minute
Special events (a gathering place for donors and prospective donors) – Start the event with a Mission Minute and include a different Mission Minute in the program folder if there is one
Donor event (thank you dinner, solicitation event, etc.) – Start the event with a Mission Minute that expresses gratitude for the help received
Donor communication (one-on-one meeting, newsletter, solicitation letters/emails, thank you note, annual report, etc.) – Start the communication with a Mission Minute that expresses gratitude for the help received
Foundations – Start each grant application with a Mission Minute that relates to the purpose for the grant
Clients – It would be nice to have every client become a donor someday, additionally each client will do better if they know that others experienced success (reinforces the client’s hope) and starting each client contact with a Mission Minute can make this happen
You and other staff members donate your time and money to the mission – Start every staff meeting, project meeting, etc. with a Mission Minute
Next Step:
Continuously collect Mission Minutes
Make the Mission Minutes available to anyone who has contact with clients, volunteers, donors, or prospective donors
Keep the Mission Minutes fresh and relevant by trying to prevent them from being reused
Match the Mission Minute to the donor’s interests and the theme or purpose for the gathering
A strong emotional connection with everyone is a significant aid to sustainability. Our emotional connection to others is one of our major sources of support during tough or turbulent times. Each Mission Minute shared adds depth to the emotional connection between your organization and the listener.
Mission Minutes are free and easy to collect and share. Can you think of anything that has a better short-term and long-term return for a minimal investment?
Resourcing and focusing the fundraising office of a nonprofit are critical to success.
The purpose of fundraising is to provide resources, which enable the clients to succeed. The funding strategy determines which source of funds should dominate the funding stream. It also outlines the connection between the sources of funds and use of funds (meeting client needs).
The funding strategy also guides the hiring and sizing of the fundraising staff/development office. However, before you use your fundraising strategy (formally or informally developed) ask your board to review it. We all know that grants can be as risky (hard to renew) as they are helpful (large gifts with minimal work per dollar raised). Therefore, as part of its risk management responsibilities, the board needs to decide if the organization is overly dependent on grants for the support of critical functions.
Assuming the board has reviewed the funding strategy and prioritized the growth of funds from each of the funding streams, it is time to develop a plan for the development office. There is a temptation to want to hire a generalist. Hiring someone who can talk with donors, run fundraising events, and write grants seems like the ultimate fundraiser. If they can also do a great job with donor tracking, grant reporting, and writing appeal letters, newsletters, and the yearend report to funders, they might qualify as a superhero.
Unfortunately, attempting to hire a superhero results in a disappointing experience for everyone (donors, staff, management, the board, and the clients). Hiring a MVP is a much better approach.
As an example, if the board’s priority is to increase individual donor contributions, it is important to hire someone who fits the profile in Hiring and Keeping a Fundraising Professional. The right person in that job can become a MVP. The MVP will be able to generate the support necessary to hire other professionals to write grants, track grants, run fundraisers, or write various articles.
Regardless who the board picks as the priority individual, if they are a MVP or become a MVP they will fund the growth of the fundraising staff. It is a much better strategy to build a staff of MVPs than try for a superhero.
Next Step:
Review your fundraising strategy with the board
Use the board’s priorities to define the next hire for the fundraising staff
Commit to having realistic goals and the appropriate training for the new hire to ensure they become the MVP you clients need
Use the success of the first MVP to facilitate the funding and hiring of the remaining MVPs
MVPs are hard to find. If the primary hiring criteria is their passion for the mission and their concern for the clients, their skills are easy to develop and they are more likely to stay. Retaining the MVPs is important to having a sustainable funding stream. The sustainability of the funding stream ensures the sustainability of service to the clients.
You care deeply about your clients. When your fundraising team cares just as deeply, fundraising is more successful, more enjoyable for the funders, and more beneficial to the clients.
Which of your current fundraising generalists can you easily convert to a specialist MVP?
Knowing when to hire the director for the development office is the next step. Guidance for that decision can be found in “The Right Person Leading”.
For nonprofits of all types, fundraising is critical to sustainability. There are simple ways to make fundraising more robust.
Fundraising plays an important role in the lives of the clients. Without fundraising, most nonprofits would find it impossible to provide client services. In addition, many or all of the employees would be out of work.
Something that important should only be trusted to someone who is passionate about the mission, cares deeply about the clients, loves people, clearly understands what is expected, and is well-managed.
Passionate for your Mission – When you see a fundraising professional moving from the local animal shelter to an arts organization, it looks like something other than passion for a specific mission is driving their career. It could be passion. However, it is more likely the size of the paycheck, potential for success, or some other factor. In any case, the donors will know. The donors are passionate and want to work with someone who shares their passion.
Cares about Clients – It is true that a good sales person can sell anything. Your donors would rather talk with a sincere client advocate rather than a good salesperson. A salesperson will tell you how much the organization needs your support. A client advocate will tell you what your support can do to help a client in need. Donors care about clients.
Loves People – Fundraising is about more than money. Fundraising links people together. Fundraising connects one person’s heart to another person’s needs. It is often hard, time-consuming work to find the connection that is the right size for the giver’s resources and provides meaningful assistance to those in need. It takes a very loving person to be willing to do the work necessary to make the match.
Understands Expectations – Bringing in donations or raising income are vague expectations at best. They also fail to inspire someone to do their best work. Like everyone else, good fundraisers need clear goals and expectations to focus their work. Knowing how much is expected from e-donations, fundraisers, corporate accounts, individuals, grants, and other sources as well as the timeframe for each is important.
Good Management – Superior performance depends on superior guidance and leadership. We all know what good management looks like. Something as important as fundraising deserves good management. Yet, it is often treated as if it was only slightly more important than bookkeeping. However, it should receive the time, attention, and resources necessary to ensure the clients receive the services they deserve and need.
Next Step:
Decide which of the five preceding areas needs your attention based upon your current level of success
Outline the way your planned changes will improve the services the clients receive
Discuss your planned changes with the board to ensure they are willing to give fundraising the support it deserves
The ultimate goal of fundraising is to provide a sustainable funding stream. That is a hard goal to reach when the staff in the development office is constantly turning over or performing below expectations. Passionate people stay around and learn to be successful because the work is as important to them as it is to you and your nonprofit.
What changes are you going to make in the next 3 months to raise the effectiveness of your fundraising?
When is the right time to hire someone to lead the development office? Who should you hire?
From your client’s perspective, the development office is second only in importance to delivery of your services. Without the development office doing a great job of raising funds, service delivery must be scaled back or suspended. There is no reason for a nonprofit to exist without service delivery.
For the purpose of this article ‘hire’ means finding the right person whether by hiring someone from the outside or promoting from within. Mission Enablers has a bias for promoting from within because you know the level of passion each of your staff members has for the mission and the needs of the clients.
Before we make the right decision, we often have to experience a missed opportunity. Missing the opportunity raises our awareness of when conditions are right to take a step forward.
Knowing when to hire a director of development is similar. As soon as your organization realizes it has missed a valuable opportunity, it is the time to hire a director. Your organization will have already missed enough opportunities to more than pay for the director’s salary.
Missing a valuable opportunity is an indication that everyone in the development office is too busy. Being strategic (anticipating), planning for, and reacting to prospective opportunities are jobs of the development director. The director will then prevent new opportunities from being lost.
The full value of past lost opportunities will probably never be known. However, the realization that a loss occurred should provide everyone with confidence that the organization can afford the additional staff member.
It is sometimes difficult to wait until you have a missed opportunity before you start looking for a director. However, it is important to remember that it is easier to do without money you never had than to spend money you need before there is a solid justification.
Beyond the demonstrated need, the requirement that the director be a strategic thinker, and the need for mission and client passion, the director also needs to have the potential to be a good leader (not just a manager). Ask the board to make a list of the attributes they associate with great leaders. Remember that most Nobel Prize winners, great artists, spiritual leaders, scientists, and inventors were never managers but share many traits which we admire and which contributed to their success.
In addition, the director needs to have operational skills that are comparable to his or her strategic skills. A great strategist who is unable to implement his or her strategy will never be able to capitalize on opportunities. A great functional leader who is unable to think strategically will miss the opportunities he or she was hired to find. Balance is critical. You can teach the skills. Since it is difficult to teach balance, it is better to hire someone with balance.
Next Step:
Wait until you have missed an important opportunity before you discuss the need for a development director
Work with the board to identify the attributes your organization needs in a great leader
Hire someone who fits with the culture, has the passion for the mission and clients, and possess a balance of strategic thinking and operational excellence
Hiring a director for the development office is a very important decision. A misstep in the hiring process can cause the loss of some of the superstar fundraisers, adversely affect the performance of the development activities, affect the sustainability of the funding stream, and adversely affect organizational sustainability.
Caution – The dumpster of failed nonprofits contains many nonprofits who promoted their top fundraiser to the director’s job because of seniority and success. As a result, they suffered a tragic drop in income and the rest of the staff was led in the wrong direction, which compounded the disaster. Specialists seldom make good leaders because the skills that make them specialists are incompatible with good leadership.
Because of the importance of the development function, who you hire matters.
Donors give because they want to help the clients. Sometimes the donor’s gift is more helpful than the donor realizes.
Sometimes a donor’s passion for helping the clients will result in a designated or restricted gift. Let us assume that your donor only wants her gift to be used to grow your organization. Assuming the direction of growth fits with the nonprofit’s plans for growth and the mission, it is a wonderful gift.
Accepting the gift creates a commitment to use it only to grow the organization. However, the board and staff may feel disappointed if everyone was hoping to use new money for staff raises.
Our recommendation is to use some of the gift to hire a development person. The board may be concerned that hiring a new person without giving the existing staff a raise will create problems.
However, hiring the development person makes sense because:
Cash Flow – The funds designated for growth will help to cover the development person’s salary until his or her fundraising success exceeds his or her salary.
Staff Raises – One way staff raises will be possible is if the organization has more income and the development person’s success can be that source of sustainable income.
Increased Expenses –If the gift successfully creates the desired growth, it also creates a need for additional funds to support the expanded activities. Without a development person to provide ongoing income, the growth will be hard to sustain.
Matching Funds – The first appeal from the new development person can be for matching funds even if matching funds are unnecessary to fulfill the donor’s intent. In addition, matching funds appeals are one of the easier goals to reach. Starting a new person off with a success is a great way to boost confidence.
Of course, some of the funds should be used to increase services for the clients. It is best to use the majority of the funds to expand client services. Creating a matching funds appeal allows the majority of the donor’s gift to be used for client services and the matching funds to be used in other ways.
Next Step:
Ask the board to create a plan for the use of any significant gift, regardless of its restrictions, before accepting the gift
Discuss with the donor your plans for using the gift to ensure the donor is supportive of your use of the funds (some growth and some investments to ensure the sustainability of the growth in the case of the preceding example)
Create a plan to engage the other donors in support of the significant gift regardless of the purpose of the gift (every major gift is a matching opportunity)
It is important for the matching funds donors to understand they are committing to ongoing support. The sustainability of the growth depends on their ongoing support.
In addition to extra help for you clients, a significant gift can be used strategically to help your board think about the needs of your nonprofit, encourage all donors to be more generous (matching gifts), and increase the sustainability of your organization.
Some grants are more trouble than they are worth.
Grants can be good or harmful. When a grant is harmful, is it the grant or is it the funding strategy?
Grants are harmful when:
It is necessary to bend the mission ‘a little’ to fit the grant parameters or to add or subtract something from the programing to fit the grant.
Grants are used for operating expenses. A natural dependence develops around the grant. Nothing lasts forever and usually ends at the most inopportune time. When the grant ends, it disrupts programming, creates a budget crisis, hurts the clients, and threatens the staff’s job security.
It is necessary to achieve goals to match the grants parameters. Agreeing to meet someone else’s goals in essence gives the grantor a voice in your planning, performance review, strategy setting, and programing activities. In addition, when the goals are someone else’s goals there is a risk that the goals will be lower than your normal standard of excellence. In short, it reduces your control over your organization, quality, and the service delivery model.
Grants add to your reporting and tracking processes. Time spent on administration, bureaucracy, and tracking data is less time spent on serving clients.
Grants reduce your competitive advantage by requiring you to do what others are doing. In essence, your services become a commodity.
Grants are great when:
They provide funds to start a new program, open a branch office, provide new or enhanced skills, build or refurbish a building, buy new equipment, pay for consulting services or other onetime expenses
Before applying for a grant to do any of the things a grant is good for it is important to know if your donors are willing to sustain your purpose for the grant. If the donors lack the heart to provide ongoing support after the grant expires, the clients will suffer when the funding is exhausted.
Next Step:
Before you apply for a grant, ensure your donors will fund the endeavor after the grant ends
Ensure that you retain unaffected control of your mission, programming, goal setting, and outcomes before you apply
Have a contingent plan to implement your idea if the grant request is denied or funding is reduced
Without a contingent plan to implement the idea, it looks like there is a lack of commitment to the idea behind the grant request.
If a program is unsustainable, it threatens the sustainability of your organization. When a program is dependent on a grant or multiple grants, it is unsustainable over the long-term which of course means the long-term sustainability of your nonprofit is at risk.
Since you care deeply about your clients, it makes sense to only applying for ‘good’ grants and protect your clients from a disruption in services.
Do you know what your donors are thinking? Do you know how to find out?
Several of the nonprofits we work with are surprised when they discover what their donors are thinking and how their donors evaluate performance. This is because the nonprofit is reluctant to ask.
There are two reasons nonprofits are reluctant to ask:
Unsure what questions to ask
Concern the conversation might end badly
It is always possible for a conversation to end poorly or to go through an awkward period. It happens to each of us from time to time even with our best friends. When it happens with a good friend, there is no permanent damage. The next time you see your friend it only takes a moment or two to patch things up.
Donors are dear friends of your nonprofit. They believe in what you do. They became friends because they wanted to be associated with your nonprofit and its mission.
Treat your donors like friends. Talk with them like you would any valued friend and they will move closer to your organization and become more generous. Trust the friendship and all will be well.
The questions you ask are less important than taking the time to ask. Like any friend, your donor will be happy you asked. It demonstrates you value them for more than their money. It also demonstrates how much you trust and like them.
Focusing the questions on the donor will significantly increase the value of the questions. Asking the donor a question says, “I value your opinion.” Asking a question about the donor’s interests or soliciting feedback adds an exclamation point (“I value your opinion and your experience is important to us!”). Some sample questions you might use are:
Which of the stories you heard at the recent fundraiser did you think best expresses what we do?
When you talk to your friends about our organization, what do you tell them?
What do you think is the most important thing we do?
What suggestions do you have for us?
Of the things we do, which one is has the greatest emotional connection with you?
Of course, the preceding is only a starting point for your thinking. If you have a favorite question, please share it as a comment below.
Next Step:
Talk to your donors as if they are your friends
Gather donor feedback frequently
Talk with every donor at least once a year (personally or through a volunteer) without discussing money
Be diligent about providing feedback to a donor when appropriate
Donors are important to sustainability. They are especially important during times of economic weakness and when your organization is in turmoil. Since it is hard to predict when the next downturn will occur, now is the best time to cultivate donors.
Your donors love your organization. Do they know how much you love them?
A common question we hear is, “Should I ask for money in general or a specific amount?”
The first part of the answer is a specific amount. The temptation to ask for a gift rather than a specific amount suggests that you are rushing forward. When you take the time to cultivate the relationship, you will know the donor’s:
Capacity to Give – How much money they have available to give or how much money their heart is encouraging them to give
Desire to Give – Is now the right time for them to make a gift or are their funds fully committed (maybe a pledge is better than a gift at the moment)
Depth of Interest – How deeply do they care about the way the money will be used
When the cultivation is working smoothly, the donor will ask how they can help. This opens the door for you to tell them about both a volunteer opportunity and financial gift. If you know your donor’s capacity, desire, and depth of interest, you can suggest a specific amount that is comfortable for your donor.
The second part of the answer relates to why you are soliciting the gift.
Ice Breaker – This is their first gift to the organization
Extra Gift – They have a multi-year pledge and this is an opportunity for them to make a special gift for a special purpose
Pledge – This is the opportunity for them to make a multi-year pledge and deepen their commitment to the mission
Special Gift – This is the donor’s opportunity to recognize someone (family member’s birthday, memorial gift, honor a loyal volunteer or staff member, recognize a special accomplishment by a client, etc.)
Step Up – This is an opportunity for the donor to increase their giving to a higher level
Ensure it is the right time for the donor to give as well as an optimal time for your nonprofit to engage the donor. Put another way, you have an opportunity for them to give that is important to the donor’s heart.
The third part is being able to tell the donor what their gift will do. Of course, this means you must know how much it costs to provide afterschool care for one student, a wheelchair for a patient, transportation for a client, or housing for a battered spouse.
Let us assume that a wheelchair costs $450. However, the donor only offers $400. This offers the opportunity to tell the donor what a wheelchair costs and ask if they want to give a wheelchair to one of the clients.
It is rare for a donor to decline. Giving a wheelchair makes their gift tangible to them even if they never see the actual wheelchair. In addition, they are able to visualize how their gift is helping someone. In order words, they will probably increase their gift sufficiently to pay for the wheelchair. Their proposed gift is what their head wanted ($400). The wheelchair (specific help for someone in need) is what their heart wants.
Next Step:
Cultivate the donor until they express a willingness to help
Ensure that you are matching the timing of your need and the donor’s desire and capacity to give
Have something specific for them to give to
Generous donors are an important part of a nonprofit’s sustainability. When all of the stars line up (right time, right reason, and right purpose) you have maximized donor generosity. Being patient will maximize this year’s gift as well as maximize the value of the relationship to both the donor and your organization.
Are you willing to be patient and ensure that all of the stars align before pursuing a gift?
There once was a donor named Lenny,
Who refused to give more than a penny.
‘Till a priest gave him pause,
Matched his heart with a cause.
Now Lenny gives big checks to many!
While working with a Catholic church, the priest present us with this problem:
One of the parishioners became upset because his favorite Sunday service was canceled due to a lack of interest on the part of the parish. In response each week, he taped a penny to a 3×5 card and indicated his gift would return to its previous level (rather generous) after the restoration of the Sunday service.
The priest decided to use the following plan:
Recognize that the parishioner has a need to give
Visit the parishioner
Remind the parishioner why the service was discontinued but that the parishioner’s concerns are understood and appreciated
Help the parishioner discover other charities to support
It is important to note that the priest was helping the parishioner find an outlet for giving without soliciting a gift for the church. The goal was to serve the needs of the parishioner.
As a result of the priest’s visit, the parishioner began giving to a few worthwhile charities. A while later, the parishioner began giving again to the church. Initially, the gifts were less than before. However, over time the donor fully restored his giving level and continued to support the other charities.
A by-product of the priest’s visit was an increase in generosity on the part of the donor. Everyone wins when a donor’s generosity is cultivated.
Next Step:
Examine your donor list and identify the donors who will benefit from cultivation
Develop a specific strategy for each donor
Remember that as a fundraising specialist your goal is to help the donor find an outlet for their gifts without regard for how it will help your organization
An additional by-product is that the donor is now a strong supporter of the parish and the priest, even though it is the priest who decided to discontinue the service. The donor’s strong support has helped other members of the parish increase their generosity. In short, cultivating the donor has significantly increased the sustainability of the organization.
Among your donors, who is most likely to respond positively to cultivation?
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