It’s so common as a non-profit ED to have a board member (or a vendor, or an active donor) approach you with some “ideas” for fundraising.
The phrase “What if we …” can be very scary if what comes after it is a fundraising idea!
The problem with most new fundraising ideas is that they are almost always:
- more work then they are worth
- involving the sale of someone else’s product
- confusing when you should be asking and when you should be selling
There’s a reason for this: most board members (like most people, really) are afraid of actually sitting someone down and simply asking them for money. So they invent “schemes” as opposed to “plans.”
What does a “plan” look like?
I know that’s a subtle distinction, but if an idea seems too clever by half, it’s probably a “scheme.” A fundraising plan, however, is rooted in a simple annual cycle:
- Ask major donors for a major gift, slightly higher than the year before.
- Conduct an annual appeal for everyone else.
- Steward those donors throughout the year.
- Ask everyone to give once more with a breakfast or lunch fundraising event (and use that event to bring in new donors, who expand the base for the next cycle).
That’s an over-simplification of the concepts I describe in The Little Book of Gold, but representative enough to give you the gist of why a scheme like “What if we sold everyone in town a candy bar?” is not a good plan of action.
If you are a volleyball team, church group on a mission trip, or other loosely affiliated group that may or may not be together next year, then by all means get creative in your fundraising and brainstorm crazy ways to make money.
But if you are a real non-profit, a real 501(c)3, even with the smallest of budgets, you owe it to yourself and your mission to not cast about looking for new ideas that ignore the basics of fundraising described above. Or, to attempt to model how big non-profits raise money in their area. “Well, St. Anthony’s Hospital has a successful auction, so I bet we could have a successful auction too.”
The Trap of Big Non-Profit Fundraising Plans
Some ideas are legitimate “plans”… for organizations twenty times bigger than yours.
Having worked at both large and small non-profits, I know what works at both. Yes, there are some things that large non-profits do that should be emulated: professional asks, quick thank you letters, and 100% board giving. But a lot of what the large non-profits do only works at their scale.
An auction, for example, is much more difficult to make profitable for small non-profits. At the very least, you should have a large volunteer committee to run it — otherwise you’re spending too much paid staff time on it. But even then, consider what those volunteers could do if they were focused on asking major donors, not trying to procure items or sell tickets. All their energy could be toward much larger donations, and without the cost of an auction, would probably be more effective.
Remember, small non-profits are limited by their resources:
- they can’t afford expensive fundraising events, which always carry a certain risk if you don’t sell enough tickets (they carry many other risks as well, actually)
- they can’t afford to invest personnel without seeing fairly immediate benefits (a development director will usually take at least two years to pay for the staff time invested)
- they (likely) have fewer potential donors, since their small size often means they don’t have name recognition with the wider public
So all fundraising efforts will involve either volunteers or the Executive Director, which means they have to be cheap to conduct and have a high rate of return. They can’t carry too much up-front risk. And they have to be professional enough that you can ask those same people for money the next year (after all, if you only have a small number of people who have heard of you, you don’t want to alienate them with an unprofessional ask).
This still leaves us with the question… what do you do when a board member approaches you with “an fundraising idea” that you think is a waste of time?
If you don’t have a fundraising plan
My recommendation: use the opportunity to leverage their enthusiasm into something bigger. If your board member “Fred” comes to you with an idea, suggest that it’s a good opportunity to look at your nonprofit’s fundraising in the big picture. Try to answer the questions “How many donors do we have?” “What is their average gift?” “How are we currently getting new donors?” “Does the board have 100% giving?” and you will likely have a better handle on your nonprofit’s fundraising plan than most Executive Directors do (unfortunately). Evaluate the donor cycle described above and think about how your nonprofit could emulate it.
Present those findings to Fred (and the whole board) and recommend a course of action. This is not about brainstorming with the board (again, that’s how you’ll end up with time-intensive low-dollar fundraising “ideas” that we’re trying to avoid).
If you already have a solid fundraising plan in place
When you do have a working fundraising plan in place, and “Fred” still approaches you with an idea, you may need to rely on his fellow board members to help kill it. It’s always awkward to tell a board member (who partially employs you) that you think their idea is a bad one. So use other board members to review it. For example, the finance committee could review his idea and determine that it’s not feasible because it’s too time-intensive, too expensive to start up, or takes up too much of your valuable time. Put some numbers in front of the committee (your expectations of time needed, hourly costs, a range of possible return) and most likely they will see the same thing you do: too much work, not enough money.
And afterwards, it may be a good time to get the board up to speed on how things are going and the improvements you’ve made.
In short
Avoiding the shiny new “schemes” and “ideas” (and yes, the ALS Ice Bucket Challenge probably falls into this category) will help you focus on building the basics of a good fundraising plan.
