Pressure Test Your Nonprofit’s Fund Development Efforts

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Pressure Test Your Nonprofit’s Fund Development Efforts

By: Eugene Fram

It’s no secret that nonprofits do not excel in the craft of fundraising. A 2015 study reported that 65% of CEOs gave their boards academic grades of “C” or below for efficacy on this front. Yet most will agree that without the continuous influx of financial support, the mission to which the directors have committed themselves will fail!

I clearly remember examples of this deficit from my own board experience—one in which I served on the fund development committee for a small nonprofit which met monthly for about a year. A sincere and hardworking board chair headed it, but the meetings took place without the presence of the CEO.   Many ideas with merit were exchanged such as developing a reserve fund, “get or give” board requirements etc. There was a lot of talk but no implementation, and after a year of pure discussion, a new president, who convened a new committee, disbanded the group.

A review of the pressure points in key fundraising activities would have taken the group from talk to action and further implementation. Here are three activities and their variations that I consider most critical to nonprofit development processes:

Board-CEO Partnership:

  • To be successful in fundraising, both the board and CEO must be active partners. Board members cannot fundraise alone as in the above example.
  • Directors will never have the required depth of organizational knowledge to demonstrate nonprofit outcomes and impacts. Also the CEO and/or development director, if there is one, will be needed to build proposals for grants or awards. In addition, the CEO should have access to foundations in the mission field, so that appropriate responses can be initiated.
  • Although this is not always the case, the CEO needs to have the ability to interact with senior business and foundation executives. Where the CEO lacks these capabilities, the board has an obligation to offer the services of a management coach to help him/h to acquire such skills. Expenses involved can yield substantial returns!
  • Hypothetically, the board must be continually seeking donors who will be interested in the nonprofit’s mission, quickly involving the CEO when an opportunity is identified. Similarly, the CEO has an obligation to agree with the board about what funding proposals should be pursued from foundations and individuals.

Board Readiness:

  • While the board is one partner in the development effort, not all board members should be required to be active in fundraising. At a minimum, all should be asked to report donor opportunities as they arise.
  • For nonprofits that have a diverse board, some training on how to seek and address opportunities will be necessary. These topics can range from knowing that their employers have a matching gift policy to recognizing something they see in a newspaper/magazine that might be reviewed as a funding opportunity
  • Three or four board members, willing and able to drive the effort, should shoulder major funding activity. Many of the others will be unable or unwilling to become involved, except to provide lead information. (A recent study shows although 90% of nonprofit directors believe fundraising is an important obligation, only 45% of organizations require directors to fundraise.) *
  • The board members focusing on development need to be able to be persistent and constantly on the lookout for new sources.   As one volunteer said to me, “ I’ll keep after the opportunity until the donor tells me to “go away!”  He was directly responsible for a $1 million donation to his university.

Organizational Support: As part of the partnership, the board and CEO will have to determine how much time and resources need to be given to fund development. This can become a difficult discussion because many CEOs will want to direct more of the budget to targeted mission projects. In some cases where an unusual opportunity arises, the CEO may have to expend substantial amounts of his/h personal time to be successful. He/she may also have to redirect staff time and resources to the project.

* https://www.gsb.stanford.edu/faculty-research/publications/2015-survey-board-directors-nonprofit-organizations

 

 

 

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2 comments

  1. Eugene, I encourage you to look into the literature on culture of philanthropy which clearly includes the pressure points you identified but has a much broader look at factors that ignite and stimulate fund development.

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    1. I agree. The purpose of the post was only to show examples of pressure points on which I could comment. A whole literature review could be developed on the topic. Thanks for enhancing the discussion.

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