How to Save Money in Your Fundraising Office
We have a problem with money in our nonprofits.
When we have it, we spend it. When we don’t have it, we flail.
We have a problem with our beliefs about money.
Sometimes it comes from childhood. Like, how our caretakers just seemed to have money and it came from a magic place. And we didn’t know how to get that kind of power. But we were afraid they wouldn’t give it to us when we needed it. Jacob Needleman writes about this in his book, Money and the Meaning of Life.
Because we still have these attitudes in adulthood, this makes people treat fundraisers like magic money magicians (aka mom and dad). Program people distance themselves from us, so that they won’t “disturb” the moneymaking.
Which makes me SO FRUSTRATED! Because honestly it would be better if people helped us fundraise, and learned more about it! Imagine if everyone at your nonprofit was just as excited as you are about making money-and had tons of ideas to make more! That’s the entrepreneurial mindset.
We all need to get excited about making money at our nonprofits. Money isn’t magic. It’s just a tool that can help your cause succeed.
As a career fundraiser, I can tell you that people’s money concepts mess up their fundraising. AND their nonprofit careers.
When we don’t have money, we don’t necessarily try to look at the ways we’re bleeding money.
We think, okay, maybe I’ll stop working with that fundraising consultant. Or try to stop paying for our accountant and bring that back in-house. You look at your month to month costs.
But what if it’s not about those incidental expenses?
What if the biggest cause of the money worries was right under your nose?
When you lose a $45K/year fundraiser, you lose $50,000. And if you have turnover for 3 years running, that’s over $200,000 walking out the door. That’s calculated in lost staff time, lost donor relationships, and MORE. Cygnet Research has 30 years of research backing me up. Here’s more on these numbers. I highly recommend their book, Donor Centered Leadership. Give it to your favorite nonprofit leader with a bookmark in the cost of turnover page and watch their eyes get huge.
When we have fundraising staff turnover, it’s a HUGE expense that we never look at. So if you want to save money, hold onto your fundraiser.
It’s about more than just fundraising staff turnover though.
It’s about true management of your fundraising program.
Let me explain my dude.
I don’t know about you, but when I was a Development Associate, Development Manager and a Development Director, I was never really managed. I was told, “Get me a million dollar grant!” and never really given support to get there. I didn’t have a manager who understood fundraising. I worked hard and raised LOTS of money, but always in the dark.
After I left full time fundraising, I wrote my first book, The Wild Woman’s Guide to Fundraising, to help people who had been left to their own devices at least get their feet under them in a fundraising role, and not make the mistakes I made.
But as I kept working with organizations over the last 9 years, I realized that it was going to take more than just a book.
We need to actually manage what is really important in our programs. Not just calls or emails to donors. Not just the end of year appeal letter.
And we need to give fundraisers more tools and knowledge to actually raise this money.
What does that look like?
Why Trailing Metrics are Killing Your Fundraising
What’s a trailing metric? It’s when you look at your numbers at the end of the month and go oh crap, we can’t make payroll next month.
Or you look at your numbers at the end of the event and think, huh, we only made $2,000 for 6 months of work.
Or you look at your numbers at the end of the year and think, wow, how did we go so far under goal?
QUESTION: How can you stop doing this?
ANSWER: Actually manage your fundraising program effectively, and do leading metrics instead. Leading metrics? What is that?
It’s when you become more entrepreneurial at your nonprofit. It’s when you say OK, I’m going to face my fears, and look at my numbers every week, or every month, instead of just at the end of the year.
What’s a true leading indicator? Here are some examples:
- How many fundraising asks did we make this week?
- How many said yes?
- How many people are in our pipeline?
- Where are they in the fundraising ask cycle?
What’s the cycle? Check out this interview with Ellen Bristol, author of Fundraising the SMART Way, and The Leaky Bucket, for more on leading metrics and the 5 steps you should be tracking in your fundraising management.
You should be able to program your donor database to remind you about who needs to get a call from you, to help move them towards a deeper relationship with your cause, and your nonprofit. Your database should remind you to touch people. You can’t keep all of this info in your head! If you’re looking for a database that gives you reminders, check out Bloomerang!
So if you want to make more money, actually give people tools to manage their ask cycle, and then follow up to make sure people are making the asks.
What else goes into good fundraising management?
Biting the bullet, looking at your money, and saying okay, here’s where we are, and here’s where we want to go. To be more entrepreneurial, we need to plan for the future.
Fundraising is a real program. That means you need a fundraising plan. Don’t believe me? Planning your fundraising, according to the Individual Donor Benchmark Report, is the #1 thing that takes your program from surviving to thriving.
Because fundraising is a real program, this also means you need support and an actual budget for this program that is just as important as your other programs. This is the program that helps other programs exist! There’s a reason that big universities make millions every year. They have a fundraising office with hundreds of people! They spend thousands on their databases! And they know that investing in fundraising pays off.
If you are a smaller nonprofit, you might say, OK, Mazarine but how do we get from one fundraising staff person to three or four? Well, what about investing in training to increase your revenue streams?
We especially are bad at planning for how to increase our revenue streams.
That’s why Sarai Johnson of the Lean Nonprofit and I have gotten together to create The Entrepreneurial Nonprofit, to help you with all of these issues. We can train you how to make your programs more effective, and give you clear tools in many aspects of fundraising to take your revenue to the next level, and build your reserves. We can also help you by joining you in your office each month to help you take action on your biggest fundraising problems.
Bottom line: You are leaking money through turnover, through lost donor relationships, through not investing in your fundraising program. You can reverse this trend by looking at leading indicators, getting training, and becoming more entrepreneurial in your nonprofit.