by Andy Canada

Does the old adage “you’ve got to spend money to make money” really hold true in fundraising?

The Nonprofit Research Collaborative (NRC) released its 2010 Nonprofit Fundraising Study earlier this year that found that generally speaking organizations that increased their investment in fundraising last year also raised more money. 

While it’s not breaking news to hear that you need to spend money to raise money, the study also concluded that any increased financial investment also increased the likelihood that an organization would meet its fundraising goals – whether those goals increased in proportion to that investment or not.

Does this mean that everyone looking to improve their fundraising should just throw money at the problem?  Definitely not! 

The same study showed 24 percent of organizations that increased their investments in fundraising by 15 percent or more actually saw their giving stay the same or decrease.  Not exactly the bulletproof evidence you want to take to your board if you are looking for a blank check for new fundraising initiatives!

So what should you make of these statistics? 

In our work with clients we regularly see organizations that haven’t invested enough resources in their development programs, but I also see organizations that are over-invested, and others that have allocated the right level of resources but are using them inefficiently. 

The key to improving any of these situations is to be strategic in your future investments.

While mission-related expenses will generally take priority over fundraising investments, nonprofit executives and boards should take note of the stats from the NRC. 

Just like the stock market, there is no risk free investment in fundraising, but if you take the time to analyze your situation and invest confidently in a proven course of action, more likely than not, you’ll reach your fundraising goals. 

As you look at your own operations, where do you fall on the scale?  Are you spending a lot and not seeing a good return? Hoping that a minimal investment will beat the odds? Or have you found a good balance?

by Ted Grossnickle

Sometimes the best conversations in a consulting practice happen when you have a group of colleagues together and a topic arises unexpectedly— and it causes all of us to think about an issue facing a client.

This certainly provides a glimpse into what values drive our practice and it also makes us realize we are often hearing or dealing with the same issues across a wide range of non-profit clients.

Recently at JGA, one of those issues popped up. We have a client near the end of a significant capital campaign. The campaign leadership faces a set of big challenges in terms of building a strong volunteer and staff team and a big goal in terms of dollars to be raised. They also face the challenge of creating a sense of ownership and participation among their constituents and the community.

As they celebrate the success of the campaign and near the dollar goal ahead of schedule, many campaign volunteers have suggested they should immediately “declare victory” and end the campaign early.

After all, they reasoned, “we will have raised the initial dollar goal we set out to achieve, that is what we told everyone for this phase and why should we go on after that?”

There was just one problem. The amount to raise wasn’t the only goal. Another critical goal was to make everyone feel a part of this very public effort — and to help everyone see that they could play a role in making something very important in the region happen. And not everyone had been given a chance to make a gift.

We often make the case to our clients that philanthropy is about more than just raising money – it is an opportunity for us to allow others to become involved and demonstrate support. Donors want to feel that they have a role in accomplishing something for the organization. They want a chance to participate.

Holding true to those values, our counsel to the client was to continue to conduct the campaign and to make clear that everyone should be given an opportunity to make a gift.

Campaigns are about more than a goal; if we believe in the common work we do in philanthropy, we surely believe that gifts at the lower end of the gift table are just as important as those at the top — and that those donors need to express their generosity as well.

I’m proud of my colleagues and proud of our client for upholding those values so well.

By Kris Kindelsperger

The recent announcement of a $23.7 million gift by Lilly Endowment to Ivy Tech Community College in Indianapolis for the purchase of a building which will be renovated into new facilities to house Workforce Development operations bucks the trend of what would seem to be a declining interest among funders in investing in facilities.

Recent experience with comprehensive capital campaigns with three of our clients revealed that funding for new programs and endowment proved far more attractive to donor prospects than did science buildings, student unions and performing arts buildings. 

It wasn’t that many years ago that many fundraising professionals touted the adage that building money was easy to raise, but endowment funding was much more difficult. 

The 2008 CASE Campaign Report provides statistical results that showed a 27  percent decline in donor interest to fund facilities and a 19 percent increase in their desire to fund programs and endowment from 2006 to 2008.

What’s behind these trends? 

Clearly sophisticated donors are gaining an appreciation for the importance and value of endowments.  And, funding to support the introduction of new programs that deal directly with emerging issues and challenges can certainly peak donor interest.

But, it’s less clear why donor interest appears to be leaning away from facilities.  The anecdotal evidence is there, the study evidence is there, but evidence of why this is happening is less clear.

What’s been your experience with funding major facilities?  What works?  What’s not working as well today and what trends do you see?

by Ted Grossnickle

It’s no revelation that our very tough economy is causing many nonprofits to have to deal with a range of issues and decisions that are new for them.

As we work with our clients, those of us at JGA occasionally hear something like this:

“Look, we know that there is a right way to do a campaign, but we need funds now. Why not just go out and start campaigning right now?” 

This impulse is one that has organizations willing to ignore:

• the lack of readiness of their donors
• uninformed and disengaged staff or volunteers; and,
• their own half-completed planning and preparation.

The implicit trade off is to sacrifice preparation and “just go raise funds…”

Activity associated with a campaign often seems to suggest progress, to create enthusiasm and excitement and to hold promise of better days and more resources. And we all know that sometimes activity is a terrific camouflage for not dealing with the real issues. It is an understandable impulse.

What we can say in our experience over many years is that the track record for campaigns which had their genesis in a hurried up idea without adequate preparation is lousy. Some of the best known campaign failures are those which got their start in this fatally flawed manner.

A successful campaign must be rooted in:

• a sound business model and strategic plan
• board and staff leadership on the same page with regard to a Case for Support
• volunteers and staff oriented and trained to get the most from prospective donors
• a sense that you are ready for whatever the world may throw at you.

When hit by tough issues or economic hard times, campaigns that have done the right stuff up front respond and respond well and go on to succeed. Properly planned campaigns take the time to get it right so that when the inevitable uncertainties and problems arise, they know what they are doing and have thought about contingencies and can move ahead with dispatch, confidence and some elan’.

We have an old carpenter’s saying here in the JGA culture: “measure twice and cut once.” It’s even more important in bad times than it is in good ones.

Despite the pressure, stick to your guns and do it the right way….