Nation’s Nonprofits Caught in a Fundraising Whirlpool

Under Developed 2013Many executive directors aren’t happy with their development directors and many development directors aren’t happy with their jobs–the result is an inability to adequately raise funds for the nation’s non-profit organizations and deliver much-needed community services and benefits.  That’s one of the findings of Under Developed, a recently released national study by Compass Point.  In a nutshell, “many nonprofit organizations are stuck in a vicious cycle that threatens their ability to raise the resources they need to succeed.”  Their findings and recommendations come from 2,700 surveys of both executive directors and senior development staff, and focus group discussions with 53 executives and board members across the country.

I always assumed that the “revolving door” in the fundraising office was a result of better opportunities (in my ten years at the National Trust, the development department turned over completely nearly three times) but the Compass Point report suggests there are more serious issues at work:  a lack of resources and organizational commitment to raise funds.  According to their research, organizations that successfully raise funds have certain common traits:

  1. The organization invests in its fundraising capacity and in technology and other fund development systems it needs
  2. The board, executive director, and staff are all deeply engaged in fundraising as ambassadors and in many cases as solicitors
  3. Fundraising and philanthropy are understood and valued across the organization
  4. The development director is viewed as a key leader and partner in the organization and is integrally involved in organizational planning and strategy

Vicious-cycleWithout these characteristics, organizations fall into a vicious cycle:  “The lack of a favorable climate for fundraising leads to premature development director departures.  These departures, in turn, disrupt the relationship building that is key to individual donor cultivation, and prevent organizations from developing and sustaining the conditions for development success.  This, in turn, makes it harder for an organization to recruit and retain its next development director, and so on.”  To break this cycle, they recommend:

  1. Embrace philanthropy and fundraising (it can’t be an unpleasant distraction)
  2. Elevate the field of fundraising (talking about money isn’t a bad thing)
  3. Strengthen and diversify the talent pool (most development directors are over 40, female, and white)
  4. Train boards differently (talk about creating a culture of philanthropy, not just techniques)
  5. Apply the transition management framework to the development director position (before hiring, assess your fundraising strategy and capacity)
  6. Leverage technological innovation (look to social media, online fundraising, and other technologies that are changing the means for cultivating and retaining donors)
  7. Set realistic goals for development (goal-setting should be collaborative)
  8. Share accountability for fundraising results (the success–or failure–of fundraising is the responsibility of the development director, executive director, and the board)
  9. Exercise fundraising leadership (executive directors and development directors both play roles in breaking the vicious cycle)

You can read the report for more details but what jumped out at me is that the symptoms of the vicious cycle are worst for organizations with budgets of less than $1 million (those are small museums and most historic sites):

  • when the development director leaves, it usually takes 12-21 months to fill the position (two to ten times longer than larger organizations)
  • development directors are more likely to leave a small organization and go into a different line of work within two years, than if they were at a large organization
  • executive directors at small organizations are the most dissatisfied with their development directors
  • small organizations pay development directors 25-50% less than larger organizations
  • small organizations are less likely to have a fundraising plan or database of donors and their giving history.

If you find yourself in the vicious cycle and want to break out, you’ll want to read this report.  For specific advice on your situation, I suggest training from your local chapter of the Association of Fundraising Professionals or BoardSource, or developing a fundraising plan (and if you need help, talk to consultants with experience in this type of planning, like Anita Durel or Barry Goodinson in Maryland or Christopher Mekal in Massachusetts).