Dear nonprofit EDs and Board members,
You have taken on some of the most important responsibilities in guiding us all toward a saner, more just, sustainable and decent world. You deserve our gratitude and our respect.
While I have your attention, I’d like to pinpoint a challenge facing all nonprofits and their funding strategies. Because, with all the best of intentions, some of you are making a difficult situation worse. This open letter seeks to offer insight into how the fundraising world has changed and how your leadership needs to evolve accordingly.
Like so many aspects of our lives, fundraising has become much, much more complex. Complexity has a specific meaning. It refers to situations where outcomes are neither entirely predictable nor entirely controllable. You might want to take a peek at this earlier post for more on complexity and fundraising.
We believe if you account for the following undeniable realities in your thinking and in your leadership, you’ll be doing your organization and the wider world a huge service.
Undeniable Reality 1: The past is no longer a reliable predictor of the future. Budgeting needs to reflect that reality.
What does this mean? It means that fundraising projections are at best guesses and need to be managed as guesses. It means focusing on overall income instead of looking closely at money by channel or by giving level. The more granular you get, the more likely it is that the projection/guesses will be wrong. Perhaps even worse, your fundraisers will be so focused on their particular lanes that they will miss big and unpredictable opportunities when they arise.
In a similar vein, imposing ‘stretch’ fundraising goals probably won’t raise more money but probably will have bad side effects. One side effect that’s been well-documented is high staff turnover. It’s not uncommon for a fundraiser to be given an unrealistic and unattainable income goal and then punished when they don’t reach it. Many respond by leaving their jobs.
This may sound harsh but they are being punished for your lapse in leadership. It doesn’t make you less awesome, but it’s a blind spot that needs your attention.
By the way if you happen to be a foundation program officer, your obsession with measurable outcomes is having an equally perverse effect on organizational performance.
Even if your fundraisers don’t leave, unrealistic budget projections still have side effects. It’s not unusual in our experience for a results-oriented fundraiser (which describes the vast majority) to go to all sorts of extremes to make their monthly nut. That might include flooding the email list with desperate pleas for donations. That can and often does work in the short term, but may also be contributing to an overall downturn in email fundraising performance.
In complexity, the answer is to look at income as one big bucket.
Undeniable Reality 2: Maximizing income is in tension with other organizational values.
Another feature of complex environments is the presence of polarities. Maximizing dollars in the door has to be balanced against important values that are equally important. Combatting the fundamentally white nature of most fundraising programs is one such value. Upholding a certain brand identity is another. Treating your donors as true partners in the work is yet another.
Pretending you can maximize income and meet these competing objectives is a fantasy. In complexity it has to be about striking a balance. That will almost certainly affect the bottom line.
Undeniable Reality 3: Fundraising is a team sport.
If you’re sitting on the bench or worse, not showing up for the game, you’re not doing your job.
We get this question from new EDs all the time: “I just hired a new development director. How long before they bring in a million dollars.”
The fact that you’re asking that question suggests you probably don’t know enough about how fundraising works to hold up your end of the deal. By the way the question is unanswerable.
In a healthy and successful culture of philanthropy, everyone from the Board on down has a role to play in fundraising. Board members and EDs are essential partners in leading the work. Development directors are not bounty hunters. You don’t send them out to ‘bag a donor.’
So What To Do?
I know you want to do the right thing. That’s especially true if you’re still reading this post. Here are some thoughts on how to lead effectively in a complex environment.
- Book a long meeting, ideally out of the office, with your development director. Ask them what they need to succeed. Listen. Listen. Listen. Try not to be defensive. End with a few mutually agreed action steps. Book a follow up meeting before completing. Hold yourself accountable for following through.
- Practice complexity fitness. Start by reading this blog post by complexity guru Carolyn Coughlin.
- Understand your personal gaps. Our brains are not wired for the world we’ve created. They’re wired for a simpler more straightforward world. Jennifer Garvey Berger’s short yet monumental book Unlocking Leadership Mindtraps should be at the top of your summer reading list.
- Don’t be discouraged. We’re all in over our heads right now. The only sin at this moment is denying it.
And please don’t give up. The world needs you now more than ever.