Taking Care of Business

We all know them—those nonprofits that have a wonderful mission, really good programs, but the operations side of the house is run so unprofessionally and so poorly that we are constantly amazed they make it through yet another week.

I’m not talking here about the organization that struggles to make ends meet, though the places I am talking about do that, too. I am talking about places that simply do not take care of business.

Too many nonprofit organizations like to protest that they are not, really, businesses at all. They are mission-driven. They are good people doing good works. But if you don’t do well at doing good works you won’t be doing anything much at all for long.

And besides, non-profits arebusinesses. After all, most are 501(c)(3) corporations. Like all businesses, there are rules and regulations that must be met. This is not a bad thing. On the contrary, most of the time I think it is something very good.

Picture your favorite on-the-edge nonprofit. Think about the work it does, the clients it serves. Now picture it as a well-run organization, with policies and procedures that are in place and actually followed. How many of these would neglect to send appropriate thank you letters to donors? And now, picture those donors. Instead of complaining they are happy and happy to give follow on (and perhaps larger) gifts.

In this organization, budgets matter. Staff (and the board!) knows what it can spend and for what. Programs can grow and flourish; more clients can be serviced.

And staff….they know the job they are to perform and whether they are accomplishing what they are supposed to accomplish.

All right, I admit it. I do have a rich fantasy life. And even most for profit businesses don’t reach those standards of excellence, or even of okay. But that’s not a good excuse for us not to do better.

One problem is that too many nonprofit leaders, and development directors, don’t ever educate themselves on the legalities and, yes, the niceties of running a nonprofit. They don’t know when they have to send substantiation or quid pro quo statements or what the difference is between the two.

Staff and board members don’t understand nonprofit accounting rules, and therefore, are too often confused about when and for what purpose they can touch certain pots of money. And they don’t, therefore, understand what kind of gifts they need to raise and what kind of donors they should cultivate.

While it is good to be passionate about the mission of your organization, it just isn’t enough. We all need to be professional and insist on a level of knowledge and proficiency in every aspect of what we do.

Janet Levine is a consultant who works with nonprofits and educational organizations. She can be reached at janet@janetlevineconsulting.com. Her online grantwriting class is available at www.janetlevineconsulting.com/classes.html.

Wise Investing

The question was how would you invest a $5 million gift given to expand your organization's base of individual donors? One respondent said that after he thanked the donor, he would “put the money to good use within the charity to do good. I would then continue what I was doing knowing that as a Charity I did what my mantra was- help others, as opposed to becoming a charity burdened with administrative costs. “

Besides, he said, a lot of good pr comes from the announcement of such a large donation and that “ just promoting the donation will lead to growing your donor base without having to invest in it. “

This answer bothered me on two counts. The first was the smug naïveté of it all. It’s the “people should support us—after all, we do good work,” nonsense so many nonprofit folk spout. Here’s a news flash: No one “should” or even will support you merely because you think you are doing good.

The larger concern, however, was this person’s clear unconcern for what the donor wanted, and frankly for the legal restrictions this donor’s gift put on the organization.

If a donor wants a gift to be used for a specific purpose, and you accept that gift, you must use the gift for that specific purpose. Period. You may not decide that you have a better use for that money.

You can, of course, discuss the matter with the donor before you accept the gift. On a couple of occasions during my fundraising career I thanked a donor for his or her good thoughts and tried to direct them to make the gift in a manner more fitting to our needs.

Once it worked out wonderfully. They actually liked the new idea better—twice as much in fact, as reflected by the twice as large gift we received.

Several times it worked out fine. They agreed that they would give the gift for our requested purpose.

And twice the donors said no thank you and took their money elsewhere. One of the donors did give us a smaller gift for our purpose and then continued to be a regular and major donor. The other time, well to be honest, we never heard from that donor again.

Most of the time, however, nonprofits simply take the money and try to meet the donor’s wishes. Sometimes that works; sometimes not. It never works if you take the money for one purpose and use it for another. Donors have brought lawsuits over this very practice.

So what would you do if someone were to give you $5 million to expand your base of individual donors? I know exactly what I would do. I’d use that money to ensure that development and communications had the resources—human and otherwise—to identify, cultivate and steward donors. I’d make sure that staff had the tools, which includes appropriate training, to do their jobs well. I’d make sure that my development managers were coaching staff and using regular evaluations to ensure that good actions were being reinforced and bad ones replaced by good ones via training.

I’d get the Board involved. They are a major key to building up your individual donor pool. But it doesn’t always come naturally, so I’d make sure that they had the training they needed to be part of the solution.

I’d bring my individual prospects and donors in to my organization, so they could see first hand how their generosity was being used and how it (and they) were making a difference. I’d ensure that we were hearing from them about how they felt about their involvement and what else they would like to see.

And I would thank (and thank and thank) that original donor over and over again for understanding that it truly takes money to make money, and that with enough money we really can build a better mousetrap and be far more successful.

But first I’d spend time with that donor, brainstorming ideas on what would be a good use of the funds for our organization and create a comprehensive plan to build a sustainable development program that would ensure we never needed another infusion of funds just to build up our prospect pool.


Janet Levine is a consultant who works with nonprofits and educational organizations. She can be reached at janet@janetlevineconsulting.com. Her online grantwriting class is available at www.janetlevineconsulting.com/classes.html.

Why Johnny or Jane Can’t Fundraise

Lately, it seems, I’ve been writing a lot about why fundraisers can’t actually fund raise. There are lots of reasons—from Board members who won’t carry their share of the load to other staff members who don’t carry theirs.

This is not to say that all fundraisers would be raising funds if it weren’t for all those other people. Much of the problem is within ourselves. But a bigger problem is the lack of understanding by the various and sundry powers that be of what it takes to actually raise money.

I know this not just because I’ve worked for over 25 years in this field and you’d have to have your head hidden in the sand not to recognize that fact, but because I tend to read job descriptions.

Here’s part of one that recently came across my desk or rather, computer (and yes, this is just copied and pasted from the actual ad with the organization’s name expunged).

ESSENTIAL DUTIES AND RESPONSIBILITIES:
Regular duties include the following. Other duties may be assigned on an
on-going basis:

1. Fund Raising - Establishes short and long-range plan for meeting Organization’s budget needs. Organization’s current goal is to raise at least $3 million per year. Researches, strategizes and orchestrates methods of approach to individuals, corporations, foundations, government agencies, planned giving as well as hosting events. Works with program staff and Board of Directors to develop and implement the strategy.

2. Database and Records Management - Oversees and implements maintenance
of database. Maintains security and quality controls. Generates queries,
reports, exports and any other collection data as needed. Manage any related vendors.

3. Development & Public Relations - Supervises most development and communications matters, for example the creation of various
communications such as the annual report, marketing packets, PowerPoint
presentations, and government and donor relations.

4. Financial Reporting - Interface with team to fulfill information
requests and maintain reporting accuracy.

I might mention that this particular organization has a staff of…are you ready? Three. That means that the development director ends up “supervising” him or herself. Ummm. But even if there is staff—and I’ve been in both places—the person managing all this does not have time to actually do much fundraising. There must be other people dedicated to going out and nurturing the relationships that will result in the funds being raised.

Board members and CEO’s must get regular reality checks so that, perhaps, overtime they will understand that hiring a development director and foisting all manner of related (and sometimes, unrelated) other duties on that person will not result in success. Fundraising is a full time job. Someone needs to oversee all the people involved—those running events, managing the database, writing the communication pieces. And, while I think this person should also be fundraising, he or she should have a small book of business, primarily the largest donors to the organization. The other pieces of fundraising should be handled by development officers dedicated to this or that area.

OK, I’m hallucinating. These organizations are too small to have such a large staff. But here’s the killer: They will remain small if they don’t invest in fundraising.

Studies show that mature development organizations increase fundraising five times with each new dedicated development staff person. The key is the word mature. So start with one dedicated fundraiser and when he or she raises two times his or her salary, add another fundraiser. In this way, your organization can and will grow and flourish. But a second key here is the word dedicated.

One person cannot oversee, manage, plan and implement it all. If you are that one person, you need to document how you are spending your time and make sure that your board and CEO understand what you do and why, and what it would take to raise that $3 million (or whatever fundraising goal your organization has). If you are hiring or managing that one person, understand that you are setting them and your organization up for failure.

Janet Levine is a consultant who works with nonprofits and educational organizations. She can be reached at janet@janetlevineconsulting.com. Her online grantwriting class is available at www.janetlevineconsulting.com/classes.html.