The perfect fundraising storm and how to protect yourself

Fundraising organizations are running with constant resource deficits which is causing significant loss of donations. In this blog we explore this issue and suggest some inexpensive solutions.

Roman Kordasiewicz
Share:

Modern-day fundraising with the exception of some notably large organizations is facing serious challenges. As COVID stressed many organizations to the limit, the ever prevalent deficit in resources has crippled many charities which is negatively and disproportionately impacting the vulnerable. In this blog I will discuss this deficit, its symptoms, consequences and possible solutions.

The fundraiser’s Achilles heel

The general public evaluates charities by the percentage of donation dollars going to their programming versus to their administration. This is a very crude metric but it’s easily understandable and widely accepted. Moreover, most people in the fundraising space are altruistically motivated, leading with great hearts but relying on volunteer power. As a consequence most not-for-profit organizations do not have the financial resources to hire experienced staff, obtain the necessary training, or purchase the appropriate technology resources. In effect, this creates under-resourced organizations whose minimal resources are stretched to the limit.

How do you know the storm is approaching?

Warning signs such as stress, juggling too many priorities, lack of resources, and high turnover have become commonplace in the philanthropic industry. However, we offer another perspective from a technology company trying to help this sector. The anecdotal evidence from consultants and our own experience indicate that donor and prospect databases are generally in bad shape. Inconsistent, inaccurate, missing, duplicate and fragmented data is constantly being reworked (“cleaned”) by the valiant efforts of the database administrators, if the organization has staff resource. In most cases, staff or contracted fundraisers are unable to help with this problem as they are juggling many priorities. Here are some testimonials we heard from our customers which raise red flags for us:

“My predecessor was using a spreadsheet to track her portfolio but I don’t know where the latest version is”

“Actions in the database are unclear, and inconsistent. I often need to check with the fundraiser what the status is”

“One of my fundraisers is a great people person but just fails to use the database”

“Our prospect meetings take a long time since we end up updating actions instead of reporting progress and discussing strategy”

“I have a hard time getting my board members to enter prospect meeting notes into the database”

The perfect storm

Now consider that a fundraiser switches jobs on average every 12 to 16 months, or is let go due to COVID or other crises. Now consider also that for most not-for-profit organizations the majority of total donations come from major gifts and that most major gifts come from a small minority of donors following a Pareto distribution. These high value donors often require special attention and understanding. These circumstances create a key person risk in the organization and put a significant amount of funding at risk! We have heard repeatedly from fundraisers that at least once in their career they had to rebuild a an entire donor portfolio upon starting at a new organization. An equivalent of this perfect storm in a for-profit organization would be an insurance company losing track of customers when their key agent leaves and a new agent takes over. Imagine your favorite cause helping 5,000 individuals in a year, now helping 2,000 individuals less because information on just a dozen donors was lost. The impact is huge!

The solution

Clearly, each organization has its own data challenges and opportunities but there are many inexpensive things one can do to improve the situation. Here are some principles that could guide your solution:

  • Establish one central location for prospect and donor information. Typically this should be a database if you already don’t have one. There are plenty of inexpensive solutions available like Keela.
  • Establish a mutually agreed to and simple process for all fundraisers to record their notes and actions. The process should include some templates and examples of what to capture (see what to capture blog)
  • Establish metrics to measure progress and to set some goals (see what to measure blog)
  • Coach your team to build strong habits of communication and data capture

Here are a few more ideas that can help. Consider hiring a full-time or part-time database administrator . Make sure that their mandate includes establishing and championing effective data habits. Consider hiring a consultant like Daniel Hussey for your next campaign, as fundraising professionals will be instrumental in helping you secure more donations. The cost of not revitalizing your data management far outweighs the cost of retaining professional assistance.

As you consider all of this you may think that fundraisers simply do not have the time to make all the necessary notes and that there is no money to hire more resources and purchase appropriate technologies. Yes, that is likely true, but what if there were an inexpensive scalable technology based solution that saves you time and protects you against the perfect storm? The solution is DexManus. DexManus helps your team capture information on the run in real time and it is immediately exported into your database in an easy and consistent manner. With DexManus, you can capture a note as you drive from meeting to meeting. Not only that, but the DexManus automated debriefs ensure that all of the critical information that relates to funding your organization and its mission is captured and actionable. Let DexManus help protect your organization against data loss and mismanagement and trigger the release of fundraising dollars that lie within your organization’s dormant and misplaced data!

Roman Kordasiewicz
Share: