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Who Sets the Tone?

The financial teams at most nonprofits have a simple and practical view of the world: Our nonprofit needs money to continue to do the good works our mission promises.  If the nonprofit is able to charge for its services, the plan is usually to raise fees and serve more clients.  In all cases, the plan is to recruit more donors and ask current donors for bigger gifts.

There is nothing wrong with the financial teams’ view.  It is their job to ensure the bills are paid and the nonprofit remains healthy.  However, when that view dominates the board’s thinking and decision-making, it promotes short-term thinking and diminishes the value of the donors.

Pressing your donors for more funds will work once or twice.  It works because the donors care about your mission and clients.  They will do what they can to help you out in a pinch.  However, after the second or third time, the donors realize it is becoming a way of life and most stop responding.  Then instead of eagerly looking forward to your newsletter or next communication, they ignore them.  Giving becomes a habit.  When that happens, the donor’s generosity often declines or stagnates.  Your nonprofit’s sustainability declines when donors’ generosity is taken for granted.

The only way to reverse the decline is to cultivate the donors.  When the purpose of cultivation is to reengaged donors, it is slow, hard work.  Since cultivation focuses on what each donor wants, it must be done at each donor’s pace.  Taking the long-view is critical to success and it is counter to what the finance teams wants.

Before the cultivation can begin, the board must agree that cultivation is the solution.  This means reversing the board’s current thinking.  Taking the long-view when funds are scarce requires everyone to take a leap of faith.  Taking that leap of faith when your nonprofit lacks a long and storied history of successful donor cultivation requires courage.  When the old ways fail, taking a leap of faith is often the only way forward.

Of course, money is the solution.  However, the donors are the gatekeepers.  Therefore, nonprofits must cater to the donors.  Put another way, give the donors what they want and they will give you what you need.

The best way to know what the donors want is to talk to them (cultivation).  It is easy to assume that what the donors want is a greater emphasis on the mission and its promise to help clients, and less emphasis on money.  However, each donor will express that differently and measure it differently.  Therefore, it is impossible to have a quick, one-size-fits-all solution.  The board must be willing to accept a slow and steady resolution rather than the quick fix the finance team wants.  The donor-driven process creates a higher level of sustainability and more predictable income.

When you provide a clear description of the path forward, it will be easier for the board to be patient.  You must be able tell the board what the milestones will be.  As part of creating a more donor-driven board culture, the milestones must primarily focus on the donors (increasing engagement, loyalty, and generosity).  The milestones must be quantifiable.  There also needs to be a timeline for the increase in generosity and a measurable definition in dollars.  Some milestone examples might be:

3 months – a measurable reduction in the rate of donor attrition

6 months – a measurable increase in new donors who make more than one gift in a 12 month period

9 months – a measurable increase in donor generosity (some current donors increasing their annual giving)

The board will be uncomfortable with ‘a measurable increase’.  They will want a firm commitment (3%, 5%, etc.).  However, without a history of cultivation success and a quantitative understanding of the donors’ current attitudes toward giving, it is impossible to make a realistic commitment.  The finance team, understandably, wants to build a funding model and adjust the budget.  After 9 to 12 months, it will be possible to quantitatively define ‘a measurable increase’ and ‘some current donors’ and be held accountable for reaching the goals.

Next Step:

Develop a plan to help create a board cultures that places an emphasis on long-term thinking and making donors second only to the mission

Ask the board to adopt the fruits of donor cultivation (increase in new donors and increase in donor engagement, loyalty, and generosity) as success measures for fundraising

Develop quantitative measures that will help the finance team with budgeting and cash planning

Success measures are the quantification of priorities.  Just making the fruits of cultivation your success measures will increase donor engagement.  It sends a clear message to your donors that you understand their importance.  It also tells them that you regard them as critical partners in the success and sustainability of your mission.  It reinforces your commitment to your mission, which will help to attract additional community support.

Take It Further:

Start your donor cultivation with your board (it is a good group to practice on and will provide an early indication of how quickly you can increase donor engagement, generosity, and loyalty)

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