Tag: fundraising

Fundraising math and electoral politics

~ Sasha ~ 2 Comments

When I first joined Acumen Fund in January 2007, our goal was to raise $100 million in philanthropy in 24 months.  Like lots of things in life, a little ignorance goes a long way – I didn’t have direct fundraising experience and basically had no idea what it meant to raise $100 million in philanthropy.

We split things down the middle and set a $50 million target for 2007, and it was my job to lead the team to hit this goal.  Most of my energy in the early days was on building the fundraising pitch, figuring out the systems we would use, putting in place the building blocks that would set us up for success.

But, as I said, I didn’t have direct fundraising experience and a big part of what I needed to do was to get out there and fundraise.

What I remember like it was yesterday was when, in the spring of 2007, I personally closed my first $100,000 donation.  This is a lot of money, and I felt pretty chuffed that I had pulled this off.  I got the confirmation of the donation in an email while I was heading home, and I recall thinking, kind of vaguely and absentmindedly: how many of these would I have to pull off for us to hit our $50 million goal?

It sort of seemed like the answer to that question should have been 50, but of course it wasn’t, it was 500.  I would need, in the coming 8 months, to get 500 people to commit to give $100,000 each to reach a $50 million goal.

This is elementary math, but as anyone with fundraising experience will tell you, with a small team and a small organization, getting 500 people to commit to giving $100,000 is nearly impossible – the only way you’re going to hit a $50 million goal is either by creating a machine that can raise, say, five-hundred thousand $100 donations OR you focus your greatest effort on getting a very small number of $1 million, $5 million, even $10 million donations.  (We did the latter).

While I’m positive that I could have successfully divided $50 million by $100,000 long before I had my job at Acumen (in second grade, say) until you’ve sat in a fundraising seat (CEO, head of development, Board member, political candidate, etc.) you won’t feel the reality of this math in your gut.

This brings me over to the Presidential election and Super PACs.   Until recently the most you could give was $2,300 to a candidate, $30,800 to the national party, $46,200 to all candidates and $70,800 to all PACs and parties.  Under the new rules, Harold Simmons, who was described yesterday by the NY Times as “a wealthy Texas businessman,” has personally given $14 million to a revolving door of Super PACs supporting various Republican presidential contenders (Perry, Gingrich and Romney).  Simmons and another two dozen individuals have given more than $1 million to Republican Super PACs – their collective contributions total more than $50 million so far making them “easily the most influential and powerful political donors in politics today.”

So let’s be totally clear: what the fundraising math tells us is that these 7- and 8-figure donors are the entire center of gravity, they are dominating the US political system, they will end up having undue influence over both over the outcome of the electoral process AND the future decisions of our elected officials.  The gravitational force of this group, on both the Republican and Democratic side, is a black hole in the democratic process, sucking up whatever light was left in a system that was already mostly broken.

My real hope is that what is going on today with Super PACs is so beyond the pale that it could actually create a whiplash effect and give momentum to campaign finance reform…but I color myself skeptical on that count.  Less outlandishly improbable, 2012 will be an aberration and we will soon revert back to the old, still-broken system we used to have that, at least, was better than this one.

20 questions every fundraiser must be able to answer

~ Sasha ~ 12 Comments

(subtitle: this is why I can’t for the life of me understand how “fundraiser” became synonymous with “not totally integrated with the core work of the organization”)

  1. What are your top three priorities right now?
  2. Where will the organization be in 5 years?
  3. What’s your annual operating budget?  Walk me through it.
  4. What does success look like for the organization?
  5. How will my donation make an impact?
  6. How much do you spend on overhead?
  7. What’s your long-term vision for sustainability?
  8. How much cash do you have on hand?  Is it too much or too little?
  9. What is your organization’s theory of change?
  10. What are your biggest challenges?
  11. How much cumulative funding has your organization raised since inception?
  12. Help me understand social impact and how you measure it?
  13. What else can I do to help you – I want to give more than money?
  14. Who are your competitors and how do you compare to them?
  15. Can I meet your CEO?
  16. How much did you grant/fund last year? How and why did that differ from prior years?
  17. If I support you, I’d like your organization to do ___________ [this project/in this geography/with these partners].  Will you?
  18. How can our organizations work together?
  19. Why are you passionate about this work?
  20. [ADD YOURS HERE]

[UPDATE: thanks to a copy-paste slip-up, two of the items on the list were the same.  So #20 is now blank so you can add your “best question” in the comments section!]

How do you find a great Head of Development?

~ Sasha ~ 7 Comments

I’ve been asked this question a lot, and was asked it again the other day by the CEO of a growing, successful nonprofit, so here are some thoughts.

First, let’s clarify who’s asking the question and what this means about what they’re looking for.

For a long time I’ve argued on this blog that the nonprofit sector has radically misunderstood what fundraising means, what fundraising jobs are, and, consequently, how to staff the fundraising (“development,” whatever) department.  To recap: it’s not separate from “the real work.”   It is core to your strategy, to who you are, and to how you deliver on your promise to the world.

There’s a lot of talk about what “traditional fundraising” is and isn’t, and whether in the brave new nonprofit world in which we live, we need to re-imagine fundraising (yes) and what a fundraiser looks like and does (probably).

I think part of the reason we’ve ended up walking down the wrong path is because professional fundraising was born in a university setting – which unfortunately is a poor model of what most nonprofit fundraising is really like.  Referring to the 2-by-2 matrix below, I’d describe university fundraising squarely in the bottom-left corner: “existing constituency” and “primarily execution.”  That is, there is an established constituency (alumni) with an existing ties to and strong relationships with the university, and the role of the professional university fundraiser is largely to execute on a set of giving targets for this constituency.  University fundraising for really big donations can certainly drift to the top left corner of the matrix – think new chairs, new fields of study, new departments – but by and large the ability of the Development team to regularly and significantly impact the overall university strategy in the short- to medium-term will, in most cases, be limited because of the sheer size and scope of the institution.

Contrast this with the world of the startup / growing nonprofit: it has no constituency and its strategy and aspirations are evolving, expanding, taking sharp turns.

Suddenly it’s obvious that you’re looking for a different set of skills than what’s needed in a big, established institution.  An organization in the top-right corner is mobilizing resources against an idea with no defined constituency in place, and it is going through a period of its evolution in which there will be a constant interplay between the financial resources that can be mobilized, the promises made to funders and the overall organizational strategy.

So how do you find a successful top-right corner fundraiser?  There are no simple answers, but I think that this role is different enough from the traditional nonprofit fundraising path that you don’t need to put “demonstrated track record” on the top three list of things you have to see (great if it’s on the list, but you have to decide in advance if the absence of that disqualifies folks.  I’d say it doesn’t).

This is a terrifying notion if you don’t know what you are looking for, so I put together this list of things I’d be on the lookout for when scouring those non-traditional resumes:

  • You want someone you want to be with, someone who has both the gumption and drive to get the first meeting and who is consistently interesting, personable and engaged enough that he’ll consistently get the second meeting.
  • You want someone who cares deeply about your organization’s mission, who has a personal reason for being there
  • You want someone who can tell the whole story of the organization, who can dive in and across the organization and get into the weeds with folks, but who naturally thinks in and talks in terms of narrative.  The person absolutely doesn’t need to be (and won’t be) an expert in everything you do, but they have to have the intellectual facility and curiosity to get their hands dirty.
  • Inevitably you will want someone systematic, because when you have a few people (your team) managing a lot of donor relationships, you’ll need to build some sort of systems to make the whole thing work.  The level of sophistication of these systems will vary, but if you want to build something lasting for your organization, you’ll need to build more than your funding base and your funds raised – you’ll need to build out HOW you do this in the long term.
  • Gumption (whoops I’ve said that twice now…maybe I should say it a third time), fearlessness, drive and passion go a long way
  • Obviously they have to be articulate
  • And finally, if you’re looking for nontraditional cues that might indicate success, you might look for people who have an element of performance / “it’s showtime” in their background.  This could be artistic, athletic or even military, but some element of: “the lights are on…now go!”

How did you raise all that money?

~ Sasha ~ Leave a comment

“I hustled.”

“Yeah, but what else?”

She already answered your question.

What your Board members are thinking

~ Sasha ~ 1 Comment

Here’s what people do in groups: they look around to figure out the normal way to behave.

Your Board members do it too.  They are looking around the Board room to figure out what’s normal – especially around giving and really especially around fundraising, since fundraising makes most people hugely uncomfortable.

So, unless yours is one of the 1% of Boards that is totally committed to giving and to fundraising, what you need to do is change what is normal when Board members look around the room.

Simple, direct, actionable

~ Sasha ~ 1 Comment

You can choose to do one of two things:

  1. Try to convince new people that they want to help you.
  2. Give people who are already convinced they want to help you a useful job to do.

The first one feels a lot more like productive work, because you’re churning away and shouting from the rooftops.

The second one will likely have more impact in the long run.

Too big

~ Sasha ~ Leave a comment

Of all the reasons cited to give or not to give a philanthropic donation, “you’re too big” is the one that I have the hardest time digesting.

First, a clarification.  In my experience, most people who say that they want the size of their donation to be significant relative to the size of the organization they’re supporting rarely say “I am really good at spotting great startups but don’t feel like my expertise extends to bigger organizations.”  Rather, the underlying message seems to be, “when you were smaller, I knew my gift made a difference.  Now that you’re bigger, I’m not so sure.”

Analytically, we can agree that size is a poor predictor of effectiveness (you can be big and effective or big and ineffective; small and effective and small and ineffective).  Yet the concern, more often than not, seems to be size itself.  There’s rarely any overt assertion that through growing the organization became less effective (to wit, often one would imagine that size provides some scope for efficiencies).

In the face of this critique, rather than take the question at face value and conclude that we are not as good as we could be at communicating our own effectiveness (read: we need better metrics), instead we slice and dice ourselves up programmatically to create a closer approximation of transparency and accountability.  We make the big black box of “what we do” smaller – so we communicate a sense of “this is where your money is going” – as a proxy for answering the real question – “how effective have you been?”

It’s true, we won’t persuade all the people all of the time.  Smaller just feels right to some people, and that’s going to be their (appropriate) choice no matter what we are able to show them.  Nevertheless, our job is to be able to answer, in a convincing and rigorous fashion, how much change we created with the money we were given.

I’m not talking about “for $20 you can ________” (fill in the blank).  I’m talking about real change at a big scale, shared with an educated, interested philanthropist who is open to a real conversation.

When have you seen this work best?  Worst?

Fundraising with Generosity

~ Sasha ~ 2 Comments

Katya Andresen, who writes the awesome Nonprofit Marketing Blog and is also one of my co-conspirators for Generosity Day, made a great point on last week’s generosity economy post:

I have been thinking a lot lately about the latest research on the mind – and our mirror neurons – which shows the extent to which we’re hard wired for empathy and, by extension, generosity…Yet giving to charity isn’t growing at the pace of other elements in our generosity economy.  I think one aspect is that many of the people in charge of unleashing generosity (fundraiser, namely) have failed to fully understand and embrace this landscape.  We as a sector must engage with supporters in a more meaningful, connected and GENEROUS way ourselves if we hope to inspire the generous actions that come to people naturally…rather than treating them like walking wallets.

In many ways, this observation was the nagging worry that led me, two years ago, to my generosity experiment: I was spending my days talking to people about connecting with their passion, about being bountiful in their thinking, about being generous, yet I hadn’t moved my own relationship with generosity forward much in the three years I’d been doing my job as a fundraiser.  And without that connection, I didn’t feel like I could do my job in an authentic way.

Sounds good, you may say, but let’s get real for a second.

OK let’s.  For example, I just talked to a colleague who is getting on an international flight on Monday for a fundraising trip.  If she doesn’t raise $400,000 next week, a branch of her nonprofit is going to be shuttered.  With that looming, how hard is it going to be for her to see those potential funders as anything but walking wallets?

The answer is that it’s hard.  Really hard.  But it’s the only way to be really successful.

The first thing we need to do is reframe what we’re doing here.  Last week I talked to the new class of Acumen Fund Fellows about how to mobilize resources behind their ideas.  I started the session with a a free association around the word “fundraising.”  They were wonderful and honest, throwing out words like “storytelling” and “connection” but also a healthy dose of “hitting up your friends,” “draining,” and “begging.”

But here’s the big secret: great fundraising is a fair deal for everyone involved.  You (the fundraiser) are connecting people to their passions and giving them an opportunity to do something great in the world.  You are helping them express their dreams and maybe, just maybe, connecting them with an organization that will be transformational in their lives.  You are giving them the chance to change the world.

Of course what you have on offer won’t be for everybody.  But that’s OK.  For the people who you do fundraise from, you are offering something of (at least) equal value to the donation they are giving.  In fact, by definition that’s what they’re saying by giving to you!

Approaching fundraising with generosity, to me, is about approaching each conversation with the attitude: “let’s figure out what great things we can do together.”  It’s not about your need, not about separating a well-meaning person from their money, and it’s definitely not a zero-sum game.

Best of all, it is incredibly empowering to wake up and realize that, as a fundraiser, you have something of great value to offer.  If you can couple that feeling of empowerment with a spirit of generosity, I promise it will transform your fundraising, transform how your donors experience you, transform your ability to connect great, meaningful, powerful ideas to the resources they need to come to life.

Thanks, Katya, for the inspiration.

 

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P.S. This post is about fundraising but there’s nothing special there – most of these conclusions apply to more traditional sales and business development when done the right way.  The greatest salespeople bring joy to their work, and the knowledge that they are making their customers’ lives better.  The thing they’re selling – and their attitude – is a gift to the customer.

To give (at all) or where to give?

~ Sasha ~ 1 Comment

When you’re talking to a philanthropist about giving to your organization, you’d better know what question they’re answering for themselves.

Are they deciding whether to give above and beyond what they had planned to give (…this year …in their lifetimes) or are they deciding where to give money that they’ve already (psychologically) pre-allocated as philanthropic money?

Because a conversation about a philanthropic allocation is very different than a conversation about overall level of giving: the allocation conversation is more straightforward, but also a lot more bounded; the conversation around total giving is much deeper, more profound, more personal and protracted, and potentially much more powerful.

Your organization is probably much better at one of these than at the other.  Both can work, you can excel at both, but first you have to know which conversation you’re having and which conversation you’d like to have.

The emotional chasm

~ Sasha ~ 4 Comments

“Fundraising is all about relationships,” we say.

Sure.

And then we churn through lists and count the level of activity for members of our team (how many calls, how many meetings, etc.), because actually measuring relationships and whether they’re being created is really, really hard.

Of course you must churn through the list.  You must reach out more.  It’s non-negotiable.  You don’t get to hide behind “I’m a relationship-builder so I don’t do proactive outreach” because the two aren’t mutually exclusive.

But you’ll be churning through lists forever, with the same disappointing effort-to-outcome ratio, if you don’t get more of your relationships to cross the emotional chasm.

You know it when it happens – those people with whom you made a genuine connection, those people who touched you as much as you touched them.  You know it because you understand these people in a different way – and they understand you in a different way – because you have shared something genuine about who you are, deep down in your soul.

I know.  It’s uncomfortable to actually say that kind of thing out loud.

But we’re in this because we actually want to make the world a better place, right?  There’s nothing more real, honest and vulnerable than that.  That’s why this job is so hard when you’re trying to protect yourself and keep things at arm’s length, and why it becomes natural when you allow real human connection to happen, even if just for an instant.