Measurable Fundraising Efforts Begin with a Shared Context
Denise McMahan is a guest contributor for Nonprofit Hub, and is the founder and publisher of CausePlanet.org where nonprofit leaders devour Page to Practice™ book summaries, author interviews and sticky applications from the must-read books they recommend.
In spite of the intense focus we put on fundraising, it suffers from so many performance maladies. So you can imagine my surprise when I picked up Fundraising the SMART Way™ and discovered a variety of truly legitimate and robust remedies.
Author and consultant Ellen Bristol does an excellent job of adapting highly effective performance measurement tools for the fundraising process. Yes, I said “performance measurement” and “fundraising” in the same sentence.
Ellen Bristol’s insightful command of the performance measurement discipline and her genuine desire to see nonprofits succeed creates a uniquely informative and inspired custom fundraising process. No doubt a resounding response to her sentiments surrounding fundraising today:
Why is it So Hard to Manage and Measure Fundraising?
“On the whole, I would argue, the entire nonprofit sector suffers from our collective difficulty with measuring, managing and improving fundraising through the use of certain business disciplines and management controls considered mission-critical by successful commercial companies. Too bad those disciplines seem to have bypassed the nonprofit sector overall.”
No one feels the absence of these business disciplines and management controls Bristol mentions more acutely than those of us in development. We’ve all been there—especially in the staff meetings dedicated to reporting out on fundraising progress. The time passes with a lot of questions and answers wrapped up in fuzzy anecdotal information, but strangely, no sense of tangible progress toward the much-needed big gifts.
There is a Way Out of This Paradigm
In Fundraising the SMART Way™, Ellen Bristol argues the only way out of this paradigm is to improve the management of the development shop. She adds that while you might get a bump in your results by adding new tactics such as another event or online giving module, it’s difficult to figure out what’s working and what’s not sustainable. The solutions are further upstream, connected to the mission and embedded in fundraising process management. One of those solutions is the preparatory work you do before prospecting.
Creating a Shared Context
In this post, I want to introduce Bristol’s management process with a focus on her recommended tools to help you select funders that will exchange value with you and assist with targeting your outreach. Bristol assures you that if you begin with a more thoughtful pre-prospecting approach, you’ll accomplish two goals: Your solicitations will yield better results and you will have a shared context from which to evaluate fundraising in your nonprofit.
Bristol suggests the following tools, most of which have templates on the book’s website, but I’ve provided links to her consulting site when available:
Take the Leaky Bucket Assessment where you assess how your fundraising is going, including such measurements as qualifying prospects, acquiring and retaining funders, upgrading donors, etc.
Perform a Cost Assessment in which you try to increase your income rather than cut your budget. You can’t figure out which funders are right for you if you don’t understand what it costs to achieve your mission.
Calculate your Opportunity Risk Factor: “the amount of potential income you put at risk for every hour invested in fund development,” which involves subtracting your non-development hours from your total hours and dividing your annual fundraising target by the number of hours available for fundraising. If your risk factor is $1000 or more, you need to carefully decide which prospects justify your time.
Complete a Value-Sought Analysis in which you ask your best donors (individual, grant-makers and corporate sponsors) what they want to achieve and avoid with their money and how they know if they’re choosing the right charity. Then, match these motivations with your value-added, resulting in an exchange of value.
Carry out a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of your organization to determine which strengths most appeal to donors and comprise your UVP or unique value proposition.
Once you’ve completed these pre-prospecting exercises above, look into Bristol’s The SMART Way™ Prospect Scorecard, which is a critical tool for reserving your scarce fundraising time for the most rewarding prospects. Thereafter, Bristol walks her readers through the development pipeline, setting performance targets and how to generate continuous improvement with a breakthrough cycle and analysis.
Having lived through many development meetings that Bristol is trying to help us avoid, I’m delighted to report that her book is a must-read for fundraisers and nonprofit leaders alike. I found her approach refreshing, well-researched and grounded in time-tested principles.