Principles of Fundraising, IMHO (Part 3)

For the last two weeks, I have been writing about the principles of fundraising that I give to my students in their last class. These are the “big ideas” I have learned over my career. To recap, the first eight are:

  • Principle 1: You are NOT the target audience. So figure out who is.
  • Principle 2: You have to spend money to raise money.
  • Principle 3: You have to ask to receive.
  • Principle 4: Use multiple fundraising tools for balance.
  • Principle 5: Good programs need good fundraising. Good fundraising needs good programs.
  • Principle 6: Don’t mix your messages. When asking for a gift, leave it at that.
  • Principle 7: Ask your donors for three things throughout the year: A gift. Referrals. A bequest.
  • Principle 8: A nonprofit is not a business. But if you don’t run it like a business, you will go out of business.

Until earlier this week, I only had three more principles, but being a person who likes symmetry in life, I gave some thought to what my 12th principle might be. And while attending the AFP 2013 International Conference on Fundraising in San Diego earlier this week, I had an epiphany. So, here are my now final four principles of fundraising. (Check out Part 1 here and Part 2 here.)

Principle 9: If you don’t invest in acquiring new donors, you will run out of donors.
Attrition is a fact of life. Figure out how to minimize it and offset the loss. This has definitely been the topic de jour in recent days. You may be tired of hearing it. But it’s a fact that gets proven over and over, and yet some fundraisers are still standing with their fingers in their ears, whistling and pretending that they have somehow received a vaccination against donor attrition.

Your donors are leaving you. They are dying, moving away, growing disinterested, running out of money … . Some loss is inevitable, but your job is to stop as much as you can — through a great new donor conversion program (to get that all-important second gift), lapsed recovery and an ongoing cultivation program that keeps donors excited about giving and informed about what impact their gifts are having.

I had a conversation with someone at the AFP conference that went something like this:
Other person: We don’t do direct-mail donor acquisition any more. It doesn’t work for us.
Me: So what are your sources of income these days?
Other person: Major donors.
Me: How did those major donors initially come on your donor file?
Other person: Through direct-mail acquisition.

Enough said.

Principle 10: You have to watch your numbers, and course-correct when necessary.
Ignorance of the numbers is not acceptable. Many donor-management systems have reports built in; the problem is, there are so many we don’t know where to begin. At a minimum, I suggest you review these reports monthly:

  • Income, expense, net income, average gift and percent response of all mailings and e-appeals;
  • First-time donors: total, number giving a second gift within six months;
  • Donor file (mailing list) growth;
  • Major donor activity;
  • Recovery of lapsed donors, and methods that are most effective for reactivation;
  • Sources of new donors;
  • Attrition rate;
  • Lifetime (or long-term) giving by acquisition source.

Principle 11: Donors care about overhead. So you’d better care, too.
Despite the articles and videos making the rounds and some well-grounded rationale that an over-emphasis on overhead can hold a nonprofit back from doing the maximum amount of good work, the reality is that many donors — individuals, foundations and corporations — will not support nonprofits that have overhead above a certain percentage.

You may consider this short-sighted or just plain wrong, but it’s the reality we live with. Are you prepared to explain your overhead percentage to a donor in a factual, non-defensive manner?

Principle 12: When you stop learning, you may as well stop.
Whether it is attending a conference, reading this blog (yea, you!), picking up the latest book on fundraising, viewing a webinar (and paying attention to it), pursuing formal education, or talking to fundraisers who are more experienced … keep learning. If what you learn doesn’t relate specifically to fundraising, ask yourself if there is any takeaway that you can apply.
I’ll let Mark Twain have the last word: “Supposing is good, but finding out is better.”

Originally published in NonProfit Pro.

Author: PJBarden

With a professional career in strategic fundraising that spans more than 35 years, Pamela brings a wealth of experience and knowledge to working with nonprofit organizations. She specializes in writing fundraising copy, grant proposals, P.R. materials, instructional articles and blog entries, as well as developing and executing fundraising strategy for her clients. Pamela is a Certified Fundraising Executive (CFRE); an instructor for UCLA Extension School’s Fundraising Certification Program and the University of La Verne, College of Business and Public Management; a frequent webinar speaker; and author of two online courses for UCLA Extension. Pamela earned a Doctorate of Business Administration in 2015; her doctoral project (dissertation) was entitled “Nonprofit Organizations’ Awareness of and Preparation for Legislation, Regulation, and Increasing Scrutiny.” She is a past winner of a Gold Award for Fundraising Excellence and an ECHO Award from DMA; recipient of a Distinguished Instructors Award from UCLA Extension; a weekly columnist for NonprofitPRO (formerly Fundraising Success); and a monthly contributor to Blackbaud’s blog, npEngage.

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