Break your fundraising paradigm with these SMART tools
“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,” says fundraising consultant and author, Ellen Bristol.
Why is it so hard to measure and manage fundraising?
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 staff meetings dedicated to reporting out on fund raising 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.
Create a shared context
This week, 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 marketing and outreach. Bristol assures you that if you begin with a more thoughtful pre-prospecting approach, your solicitations will yield better results and you will have a shared context from which to measure and manage 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.
Next week, I’ll talk about Bristol’s Prospect Scorecard, which is a critical tool for protecting your scarce fundraising time for the most rewarding prospects. Stay tuned.
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.
Image credit: foreseeblog.com, sallyjoseph.com