The Sky is Falling

Gloom and doom. The sky is falling. Budgets are bad. We need to cut back. It’s time to do even more with even less.

Sound familiar? If you work in the nonprofit or educational sector, it should. It seems like every few years we go through this cycle—and every few years, we react in the same way.

I’m fond of quoting Albert Einstein’s definition of insanity where he pointed out that if you keep doing things in the same way it is simply not rational to expect that you will get a different outcome. And yet that is exactly what we do.

The prevailing logic says, we have no money, therefore, we have to downsize our Development Department. More insidiously (and, alas, more commonly), Boards or Presidents proclaim that things are even worse than before, so we still can’t afford to hire a Development officer

In other words, we have no money so we certainly can’t hire the very person or persons who will change that dynamic. The variation on this theme is that we will hire a development person—but we’ll save money by hiring someone with not enough experience or skills to get out there and raise money quickly.

The fact that in ongoing, sustainable fund development programs, you can expect to raise $5 for every $1 spent, seems to be something that only Development professionals understand. And no one in charge is listening to us.

To some degree, we—development professionals—are to blame. Too many fundraisers don’t. Raise money, that is. They (and note the arms length here, which I’m sure you share) are too busy going out to lunches, having “meetings,” complaining about the database, to be productively cultivating, soliciting and stewarding donors.

Many of us, of course, do do ours job. And we do them well. We bring needed money into our organizations and help move our missions forward. But we also let Board members, EDs, Presidents, Deans…whoever we report to, take all the credit. And that is how it should be—publically. Privately, however, we have to make a very different case.

What percentage of those gifts would have come in if the Board member had only invited his friend to the event? If the CEO only went that that lunch? If you didn’t make the appointment and the arrangements, followed up with the prospect, wrote those thank you notes, pulled together all the information the prospect wanted and continued to connect the prospect to your organization more and more and more until he/she/it (as in corporation or foundation) turned into a donor. And knowing that your best donor is an existing one, who is keeping that donor involved?

Beyond documenting the dollars raised and the costs to raise those dollars, we must be persistent (and professional) in showing how much we do and why it pays to invest in development. We are the best defense in keeping the sky from falling.

Janet Levine is a fundraising consultant. She can be reached at jlevine@levinemorton.com. Her online grantwriting class is available at www.levinemorton.com/classes.html.

Fundability 101

When I was 8 or 9, I would often watch old Mickey Rooney movies (and if you are asking Mickey WHO, you know just how old those movies are). In them, a group of kids would face a problem where they needed some money. “I know,” Mickey would inevitably say, “let’s put on a show.” And in quick order, a very professional production would premiere and all problems solved.

A lot of people who work in the nonprofit or educational sectors seem to think that they are Mickey Rooney. Instead of putting on a show, however, the think that the answer is to have an event or—better still-- write a grant.

As someone who makes a regular portion of her income by teaching grant writing, I often find myself in the strange position of convincing people that a grant may not be the best solution. Sometimes this is because grants require fair amount of managing, and not all organizations have the wherewithal to do that. They simply are not (yet) grant ready. More often, however, it is because what is being sought simply is not grant fundable.

Just because you think you need something, it doesn’t follow that anybody will want to provide the funding so you can get it. “They (the ubiquitous—presumably some foundation, corporation or the government) should fund this,” the logic seems to go, “ because I need it.”

Even assuming there were to be some truth to this logic (there isn’t), the first question that comes to mind is do you truly need this or do you simply want it? The second, closely related question is does the grant maker care?

I know. I know you care. This is something that matters to you. But does it matter to your clients or constituents or your students? Will it make a difference to their lives? Funders, you see, want to have a sense that whatever they are funding is important and the best way to make someone think that something is important is to convince them that their support (funding/investment, however you want to to describe it) will make a difference. One really important way to make a difference is to change something from what is to what it should be.

If what you want won’t change anything for the better for the people you are supposed to be serving (and no, that’s not you, your office, your boss or your secretary), then you do not have a fundable project.

Words Count

Fundraising, as we all know, is the right person asking the right prospect for the right amount of support for the right project at the right time. It’s also asking for that support in the right way.

What that way is depends, in part, on who you are asking. A direct mail piece will make the case differently than a grant proposal, even when you are requesting support for the same project. Likewise, a 30-year-old technology billionaire prospect should be approached one way, while his 60-something boomer dad will require a different method.

Sometimes, though, the issue isn’t who but what, and here words really are all.

"Hey, I need you to fund my salary,” just doesn’t resonate nearly as well as “Support for our organization helps us to provide food and shelter for the homeless.”

That the unrestricted support your organization raises may actually go to pay your salary doesn’t negate this. The homeless—or whoever your clients may be—cannot, in fact, be served unless there is appropriate staff and resources.

Making your case also means positioning yourself in such a way that people will want to support you. That means showing off successes and minimizing those things that don’t shed light on your better side. Or, as the keychain a former employee gave me states, “No Kvetching.”

The importance of this really struck me about a week ago. I received a direct mail appeal from an organization where I have been a small annual donor for several years. I had become a donor because I liked what they were trying to accomplish. So I opened the envelope, expecting to read about their accomplishments, find out about new initiatives, generally feel good because I was a supporter.

Instead, what I found out was that a large grant they had been getting for many years was being discontinued. “We need you to make up this loss,” the letter said, then went on to tell me that they couldn’t survive without this support.

Did that case make me reach for my checkbook? Not at all. In fact, my first thought was, “Ummm, wonder what that funder knows that I don’t?” The second was to seriously consider following that funders lead and pull my support.

Why? First off, it made me feel that they weren’t handling their business very well. And making sure that you have enough funds to run your programs is a major part of a nonprofits business.

Secondly, I don’t like feeling like a loser—and I don’t like supporting losing organizations. I want to put my money where I think it will make a difference and not just keep an organization from closing its doors.

Telling me about their successes this past year, and showing me that I was making a difference, would have kept me as a donor. The fact that I’ve been a regular, albeit small, donor for some time should have also triggered some special attention. A phone call, personal note from the executive director or president of the board, asking me to increase my support and help make a bigger difference, would have had the right kind of impact.

Actions may speak louder than words, but never lose sight of the fact that words do count, and make sure you use them wisely.

Janet Levine is a fundraising consultant. She can be reached at jlevine@levinemorton.com. Her online grantwriting class is available at www.levinemorton.com/classes.html.

Indirectly Costly

It’s that time of the year (well, one of two) when nonprofits are busily engaged in their annual or semi-annual “fundraiser.” It won’t surprise those who know me to read that using special event and fundraiser in the same sentence is an oxymoron or that I believe that the two are anything but synonyms. It’s not that I’m against special events…exactly. I just don’t think they are cost effective ways to raise money.

Events, to my way of thinking, are wonderful for bringing people to your organization’s table, to thank donors, to gain recognition. And if you are going to have a special event, I think it makes sense to try to earn some money from it. But I think that organizations are fooling themselves if they think that an event is a great, or even a good, way to raise significant amounts of money.

“But we do well,” I am constantly being told by organizational leadership. “Our events bring in…..” and then some amount, generally a sizeable percent of the operating budget, is mentioned.

“Net or gross,” I always ask, though I know the answer will always be “net” even if the person with whom I am speaking doesn’t have a clue. So my next question is: “That’s net of your direct costs, right? What about your indirects?” And generally I get a blank stare.

Which is why so many otherwise intelligent people really believe that special events are a good way to raise funds.

Direct costs are those that are directly and only connected to your project, which in this case, is your event. It’s what you pay for invitation design and printing, the flowers on the table, room rent, the meal, the honorarium for your emcee. If you’ve hired a consultant to work only on this event, whatever you pay that consultant is a direct cost. And typically, nonprofits add all these expenses up, subtract that total from the total of what was brought in and voila, you have your net profit.

But as we all know, the devil is in the detail, and the detail that most nonprofits ignore is the indirect costs of their “fundraiser.” Just as you would assume, these are costs that cannot be laid solely at the feet of this event. So, the salary of your executive director, who does so much more than this one event, isn’t counted. Not even the percent of time she spends on the event. Likewise for every other staff member in your organization. But the truth is, these are real costs of your event and to your organization. And if you want a real accounting of your special event, you must include these expenses.

Salaries (and benefits, by the way) aren’t the only indirect costs you are incurring. Do you use the office phones, copier, printers? Don’t think , “Oh, we are already paying for these things so they don’t count.” Couldn’t you be using all these for other purposes?

Which brings us to another, very real and generally uncounted cost of all special events—opportunity costs. In economics, this refers to the cost (or the benefit) of what you might have chosen to do instead of what you did chose. Figuring out that cost is extremely difficult. Perhaps you could realize more dollars by focusing on major gifts, but perhaps, also, you will have lost some very real benefits of bringing new people to your table.

The point is not so much to make an exact accounting, but to be aware of your options and to consider them from all sides. Just because you’ve been doing an event doesn’t mean you must always do one. Or that you must always do it in the same way.

The point is to know what your real costs are, and to make decisions that pay for your organization.

Janet Levine is a fundraising consultant. She can be reached at jlevine@levinemorton.com. Her online grantwriting class is available at www.ed2go.com/courses/ggr.

Failing the Grade

A survey of 1,001 Americans commissioned by New York University’s Organization Performance Initiative should give all of us in the nonprofit sector pause. While a majority of Americans had a “great deal” or “fair amount” of confidence in charitable organizations, only 25% believe that charities do a “very good” job of helping people. The percentage of people who believe that charities waste a “great deal” or fair amount” of money is a staggering 70%, with only 10% of the mind that we are very good” at spending wisely.

Popular wisdom likes to point the blame at others…particularly the very public meltdowns of some very large organizations. Think Red Cross or United Way. But I think the truth is that these very visible scandals simply make the case or “prove” what so many Americans feel. And what they feel is that most nonprofits simply are not doing a very good job at doing good.

It’s not that we are bad or venal people. But too often, we are trying to do our jobs with too little resources and, in many areas, too little knowledge of what needs to be done. Our leaders and our board members don’t understand nonprofit law, what makes a gift, how nonprofit accounting works. Worse, there is little understanding of what our responsibilities to our donors should be.

I frequently speak at service clubs on how to make wise charitable choices. I always ask how many of them have ever made a gift to a nonprofit and never received a thank you letter or tax receipt. I don’t care who I am talking to, or where the club is, at least twenty-five percent of the audience raises their hand. One quarter of every random group I speak with does not believe that they have been properly thanked for a gift.

The number of people who raise their hands when I ask how many have NEVER been told how their donations were spent is even larger. Generally, one-half to two-thirds of the audience feels that the nonprofits by and large ignore them once a gift has been secured.

Less quantifiably, but equally disturbing are the knowing looks and little laughs that I get when I talk about nonprofits who never remind donors of their pledge payments. When we do that, we not only write off the pledges themselves, but we too frequently also write off the donors who made those pledges in the first place.

If we simply thanked, and then thanked again, every single donor for his or her gift, and made an effort to personally let them know how their gift benefitted the organization, I believe that perceptions would begin to change. And as those perceptions change, more people would be willing to reach into their pockets and support the organizations for which we work.

Janet Levine is a nonprofit consultant and trainer. She can be reached at jlevine@levinemorton.com. Her online grantwriting class is available at www.ed2go.com/courses/ggr.

Board Biz

Much of my professional life has been working with Boards, helping them to define and be successful in their roles. Almost unanimously, the role of fundraising is the one that causes most concern.

”If I ask my friends and colleagues for support,” I am told over and over again, “then I know that the next step is they will ask me to support their organization.” It’s a fair, and probably true, statement.

These musical dollars really don’t benefit anyone, and they cause more than a few Board members to practice fundraising avoidance tactics at all costs.

This, in turn, causes staff to grumble. “The Board isn’t doing its job,” is a typical refrain. “They are not raising any money.”

But, should they?

I think that a better, more realistic, job for Board members is to create an environment where fundraising can occur. What I really want my Board members to do is to introduce me to people they believe have the ability and the interest in supporting my organization.

Mind you, I don’t want just any introduction. I want my Board member to set the stage so that we can turn his or her contact into a viable prospect (and eventually, donor) for my organization.

Set the stage how? Get me in front of the prospect with my Board member. At that meeting, I want my Board member to talk about his or her commitment to my organization and tell the contact how gratifying and important that commitment has been.

What happens at the meeting will, of course, vary, depending on a host of things. What really matters is that I-- and by extension, my organization--will now have a connection with this prospect. My ultimate goal, of course, is to turn the prospect into a donor, but I want a committed, in-love-with my organization and a frequent donor, not just a single gift.

Beyond introductions, I want my Board members to thank our donors for their generosity. A personal, handwritten note or a phone call to those they know and those we want to know better from a Board member can be extremely meaningful, both to the recipient and the writer. Personal invitations to events can get otherwise hard to meet people close to the organization.

Speaking of events, I expect my Board members to attend events…and to be working the room, not just sitting or standing there.

In other words, I want my Board members to think more about development than fundraising as a prime responsibility. I want them to develop, grow, widen and expand the number of people closely involved with our organization. And I want my Board members to create a culture of philanthropy among those who they are helping to connect with our organization.

Janet Levine is a fundraising consultant. She can be reached at jlevine@levinemorton.com. Her online grantwriting class is available at www.ed2go.com/courses/ggr.

What to Say? Part 3

Meetings. You have meetings. Lots and lots….but still, you are not raising lots and lots of money. Why is that?

It’s such a duh question with an equally obvious answer, but since (a) it is at the heart of our failures and (b) I am the Queen of Obvious, here goes:

Either you are meeting with the wrong people and/or you aren’t actually asking them for a gift. For many of us, that is the rub. How do you get from talking about the family, their home, the latest vacation, the program or your organization to what fundraisers love to call (with a bugle blare) “The Ask.”

Clearly, just jumping in and demanding that they “Gimme Money,” to paraphrase that greatest of all rock n’ roll bands, isn’t a cool move. But ask you must, and you must NOT be too subtle about it.

Lest this concern you, here’s a news flash: In over 90% of the cases, the person sitting across from you knows the purpose of your meeting—and they accepted anyway. So subtlety is not needed.

Indeed, on occasion, as you are telling the about your project, the prospect will ask, “What can I do?”

If this has ever happened to you, did you blow it? Be honest now. I know I have. Instead of giving a straight forward, “We need your financial support” answer, too often we beat about the bush and speak vaguely about involvement or “helping us” in some undefined way.

If you are at the point of qualifying someone or meeting to ascertain the level at which you can expect support, you might consider whipping out a gift table—either one that shows levels of gift clubs with the benefits attached to each level, or the kind you put together that shows how many gifts at the various levels you need to reach a certain goal. Then ask, “Where do you see yourself on this chart?”

There’s an old saw in development that says if a prospect whips out his or her checkbook and writes a check for the amount you requested, you’ve left money on the table. Perhaps. I’ve always believed that it gave you the starting point for the next ask. Nevertheless, there is good reason to find out what the prospect is easily willing to entertain as a possible gift.

This, at least, tells you the lowest level you should request. When you finally get to the actual gift ask, it should be somewhat higher than this first indication.

Sometimes, though, you are not ready to ask for the gift. Ask for introductions to their friends or colleagues. Ask if they would be willing to host a reception at their home (and then make sure you follow up and havethe reception). Ask them to come and talk with your students, or clients. Invite them to a special event. Ask if you can send them some additional information.

At this point, you are asking for things that will bring them closer to the organization and, more importantly, you are getting them in the habit of saying “yes” to you.

Umm….maybe I should try this technique on my husband.