Blog - Page 6 of 9 - Sara Jane Lowry

Hiring a development director won’t relieve you of fundraising

July 20, 2017 by Sara Jane Lowry

Before hiring a development director on top of a grove of trees in sunlight

Recently I was talking with a board member of a nonprofit who was considering hiring a development director. This board member has been on several nonprofit boards, and worked on some capital campaigns as well. So, imagine my surprise when he said:

“Our executive director is wonderful but doesn’t have a background in fundraising. Or much time to focus on it. Most of the board don’t have friends with money. Most of them are uncomfortable with fundraising. So, we need to hire a first-rate fundraiser. But we don’t have a lot of money to hire one.”

Sure, there is plenty of evidence that small nonprofits have a hard time finding and keeping skilled development directors. Why? They say it’s because they don’t have the money to pay competitive salaries.

But is the issue salary?

No, the issue is that they need:

a fundraising plan
to hire a development coordinator first that can ASSIST the executive and board with the activities that support fundraising.
a fundraising consultant to help them think through the strategy they need through a two-year plan tied to the strategic plan.
a budget for some software tools, and creation of donor materials.

Unfortunately, the Executive Director and Board often don’t see it as bringing on expertise to help them get better at their role in fundraising: they see hiring a development director as a way to avoid or minimize their involvement even further.

Many Executive Directors are program experts and either loathe fundraising or simply avoid it other than grants. That’s an attitude problem that is indefensible. If you are passionate about your mission, you’re eager to talk with donors and funders about how you’re achieving it.

In our conversation, I learned that this same executive director is willing to write grants, but sees the Board as the one who should be doing individual fundraising. Based on what? Is there a plan? A donor list and giving history? Donor communication pieces? A case for support?

My advice to this board member was this:

Put together a job description for the development coordinator (or associate). Hint: You need realistic performance expectations on the part of the executive director and board as what can reasonably happen if it’s a one-person development office.
Hire a fundraising consultant to help create a plan.
Get a commitment from the executive director to grow skills in this vital area.
Give the development consultant permission to have input on budgets and fundraising goals. The consultant will be more reasonable on what is possible to raise over time and based on the organization’s strategic plan.
Invest in software systems and infrastructure to support fundraising. And you might need time to get all that giving history changed over from a spreadsheet or a database.

silhouette of heads and gears working together as a team Most importantly, you need an understanding among all staff (and that includes program people) that fundraising and relationship building are part of everyone’s job! It’s not the responsibility of one person. Fundraising is important programmatic work.

Newsflash: hiring a development director still won’t relieve you of fundraising

Even at small organizations with budgets around $600,000, hiring a development director won’t relieve the board and ED of fundraising. If you already have a development coordinator, a good development director will be able to create more opportunities for board engagement in fundraising, rather than lessening the board’s involvement. What I see is that too many executive directors and boards have unrealistic expectations about what a development director could accomplish without a team and the right tools in place.

If the following things are in place, a development director can be successful:

· compelling mission and a strong strategic plan

· the leadership, vision, and skill of the executive director;

· an engaged, committed, and high-functioning board

· development tools that are effective and efficient to use

· support staff that can manage the details (fundraising is all about the details)

· a strong working partnership between the board and the executive director.

Be smart. Start small and grow. Prepare for bringing on a development director. And when you do, know that the fundraising work you do will really begin to pay dividends that lead to greater impact.

Do you want to raise more money? Fundraising plan steps to success [Part 2]

July 14, 2017 by Sara Jane Lowry

This is the second part of a posting on fundraising plan steps to success. Go back and read part one so you can understand the income reliability buckets referenced below.

Now, if you’re ready to start thinking about your fundraising plan steps, here is how to get started:

Figure out what areas of your funding pie chart you want to grow.

Individual giving:

First of all, be reasonable. If you’re only raising $10,000 in individual giving, don’t set an unrealistic goal for what you can achieve in one year. Be creative, but put it in historical context. Donor acquisition is challenging. So, begin by looking at your current donors and developing a list of key attributes that will help you think through where to reach people who might also have those attributes. Please don’t read the list of attendees of a major fundraiser event by another charity and assue they will care about your mission. Your fundraising plan steps should include spending some time looking at lapsed donors – and considering why they have lapsed. Review your donor data for the last three years:

Revenue by category (annual fund, major donors, corporate contributions, corporate sponsorships, grants,memberships, events, planned giving, etc.). Then, figure out your numbers so you know your trends:

Total number of donors for each year
Calculate the number of new donors from previous year (this is important – what’s the plan to keep them?)
Review the number of donors that lapsed from the previous year
Total revenue from online giving for each year

Your fundraising plan steps should also include ways to interact with donors through your thank you letters and notes, online stories, newsletters, annual reports and more (see communication below).

Grants

Hopeing to win a grant is not a planned approach. You are probably already writing grants, but planning this part of your plan will make it more strategic. Some steps to consider:

Create a prioritized project list that you are seeking funding for.
Target prospect research to those projects. Make sure the match between your program and funder is a good one. Don’t waste time with a scattershot approach to funders.
Quality writing. Less is more in making your case. Answer the questions succinctly. Get a fresh eye to read it.
Develop a relationship with your funders. Let them see you as their partner in solving the community needs.
Plan out your year with grant deadlines and report deadlines for the funders you will be approaching.
Prepare ahead with organizational documents that most funders require like organizational and project budgets, plans for evaluation, board lists, etc.
Gather data related to the need you are addressing, and data on what other nonprofits are doing and what is unique about your methodology. If collaboration makes sense, begin that process in advance, and get an MOU in place or letters of support.
Strategize your evaluation methodology, and ask for funding to implement it.
Lastly, think though how you will sustain the project after the end of the grant funding.

Fee-for-service:

If you want to look at fee-for-service, you need a business plan. Consider what you have to offer and who might be willing to pay. Best if the service ties to your mission to avoid paying taxes. You may need support in conducting a market analysis to decide how much to charge at the nonprofit level (IRS rules). You might start with suggested donations, a sliding scale, or membership fees. Make sure you know what your break-even point is. Determine roles and responsibilities, and what human and other resources you need.

Corporate Charitable Contributions (not sponsorships):

Why not sponsorships? It’s a low-level income reliability factor. Corporations are interested in building their brand and making sales. It’s marketing dollars, and most small-to-mid-sized nonprofits can’t deliver a big enough audience. But there are ways to engage corporations in giving, and you can research and make a plan:

Most corporations have employee matching programs, and volunteer matching programs. Do you remind your donors or volunteers regularly about matching gifts? Also, do you have board members who work at corporations with matching policies?
Corporate contributions are also more likely if they have selected ways in which they want to invest in solving community problems, or building community. Before asking, research their corporate giving page to see what their guidelines say.
Get employees involved with your organization’s activities in a meaningful way.

Fundraising plan steps also include these essential tactics:

Infographic showing 12 elements of nonprofit management — Click on image to see larger

Write your case statement.

What’s a case statement? It’s your opportunity to sell hope. What donors really want to see is hope and how you’re making the world a better place.

It’s probably not the one you have been using in your grants. Definitely not the one you’ve been using to please an internal audience of board members, or anyone else in a position to approve since they are NOT your target audience. Your target audience is your donor. In other words, it’s written as a story about how your donors are changing the lives of your clients through you. Your work is secondary.

Your case answers the questions “Why should I give you money? What will happen to those in need if I do?” Will it make a difference?

It’s full of the stories that feed your fundraising communications. Bring everyone in the organization into the idea of capturing your best stories.

Create good internal systems

You will need processes for soliciting gifts, managing gifts when they arrive, thanking people, and tracking relationships. Donors need to be thanked multiple times and in multiple ways before they are asked for a second gift. Your systems should include ways to do that.

Please invest in a good fundraising database system, there are many good ones out there now that don’t cost a fortune. You want a system that can grow with you, and allows you to save important information about your donors as you get to know them better.

Begin to create a workflow chart so everyone understands what needs to be done, when and who will do it. Fundraising plan steps include on on building accountability into your structure. How long does it take you to thank your donor, and how do you do it?

Communicate more often and in a way that appeals to donors

Donor engagement can and should happen in multiple ways. But it’s not just you talking at (or writing at) your donors. Consider ways you can listen too. Get out and talk to donors, or consider a donor survey of current donors on how they want to communicated with.

Donor communications is a system of communication, not just “a newsletter when you can get to it” or an email appeal.
Remember your case for support? Are you focusing on stories of donors and how they are making a difference in the lives of the people you serve? How are you using them in a strategic way?
Fundraising plan steps include budgeting for freelancers to help you build out content for your social media calendar, or e-newsletters. And, when was the last time you updated your website?
Face-to-face is most effective in building relationships with donors, and sharing successes. How about a cultivation-only event like a house party that’s more intimate to get to know them?
Your focus on relationship building will help donors become part of your team. Show them how they can help you create a new future, invite them to share their thoughts.
Donor communications include how you ask for their investment in the work. Please don’t say “Dear Friend” in an appeal. Take the time to set up your appeal to include the right salutation. You can learn more about donor-centered communications here.
Have you called your donors just to say “thanks?” This is an easy way for board members to build relationships with donors.
Make a plan for meeting with people who might be interested. Fundraising plan steps include individualized strategies for cultivation. Treat them as human beings, not checkbooks. Identify your most passionate donors and spend more time with them.

There is so much more to building a fundraising plan. You don’t want donors to give once and go away. You need a program that grows and succeeds each year because it’s well-planned, and sufficiently-resourced (Board, staff, volunteers).

If you need help, let’s talk!

Do you want to raise more money? You need a fundraising plan. [Part 1]

July 14, 2017 by Sara Jane Lowry

white dandelions in field: want to raise more money? Fundraising plan.

A fundraising plan takes your income from wishing to reality. Is this you?

You do the same things you did before and expect different results
Your fundraising is “from afar” without meetings with donors and funders
You’ve been getting by (for years) with only government or foundation funding
A a few major donors are keeping you afloat
You are one or two funding rejections away from disaster
You can’t grow or meet more needs

If this sounds like you, you have lost your way in building a robust and diversified fundraising program. One that’s more than a wish and will sustain you in tough times. One that will help you grow to achieve more mission.

Now is the time to create a fundraising plan. And, you can start today.

A fundraising plan includes not just institutional support. That means it considers the full spectrum of resources available. According to the Reliability-Autonomy Matrix, there are three levels of income reliability:

High reliability: United Way support, rental income, advertising, small-medium sized individual contributions (especially sustaining donors), endowments, memberships.

Medium reliability: Ongoing government contracts, third-party reimbursements, major individual contributions, fees for services, corporate charitable contributions.

Low reliability: Government project grants, foundation grants, corporate sponsorships

I work with many nonprofits that don’t have a plan. The bulk of their funding comes from the Low Reliability level. Small nonprofits scale up using foundation grants and neglect to build other revenue streams.

So, where are you today, and where do you need/want to be?

You and your board should be asking these questions:

What percentage of your ongoing costs are covered by reliable funding sources (as referenced above)?
How many decision makers are in control of revenue sources? In other words, having a greater number of consistent funders increases the likelihood that revenue will continue even if one funder chooses to exit.
What restrictions have donors have placed on their funding? When donors restrict funding to certain programs, organizations are not free to allocate money where they need it most.
How many types of funding do you have?
Do you have a cash reserve (3 months minimum)? How liquid is it or is it reserved for program?

Why is this important?

Piktochart showing 12 elements of nonprofit management with Resource Development (Fundraising) highlighted — Click on image to see it larger

Because when you have a wider base of support, you can absorb funding losses more easily. And when you build a cash reserve, you can weather funding delays.

But how do you get there?

Commit. Commit (money + time) to earn a financial return. In other words, invest in your future.

All nonprofits are in two “businesses”—one related to their program activities and the other related to raising charitable “subsidies” or philanthropy.

You can do this! You already know how to create logic models. And, you already invest in strategic planning and program pilots. So, create your funding model. Invest time and money on your “business side.” That means funding diversification, marketing, and communication.

Also, there’s no one-size-fits-all fundraising plan. Each nonprofit has unique opportunities. But most benefit from development strategies that fit in the three levels of funding reliability listed above. Therefore, grants require a strategy plan. Fee-for-service/earned revenue requires a strategy plan. And individual donors/major gift giving requires a strategy plan.

Fundraising planning includes building systems to address:

Communication – how and how often will you communicate with donors. Do you nvite them to join your cause or celebrate what they’ve made possible with support? What I often see is that it’s not seen as a priority so it’s inconsistent and not intentional. And it focuses on what you did, not what the donor did.
Staffing – is your executive director is the only one focused on fundraising? If so, your focus is most likely on low level funding reliability areas like foundations and corporate sponsorships. Why? Because you are not prioritizing revenue generation. No business can operate this way. Or you have no staff and the board is acting as staff and are not trained in fundraising and their focus is on events.
Record keeping – how will you discover who your best donors are if you keep your donor records in spreadsheets? And if you have a donor system, recordkeeping is spotty so you don’t have the full picture. Do you know how to leverage the information in your database for planning? Or, have you cleaned the database of lapsed donors, or looked at characteristics of your primary donors that help you understand your “donor avatar” to acquire new donors to replace those who have dropped off? Do you have a list of your top 20 donors on your desk?

If this sounds like you, please know you are not alone. And you can change it with an investment of time and money. [Click here to read Part 2 on how to get more focused in donor-based fundraising.]

Six steps to creating a high-performing board and board culture

June 5, 2017 by Sara Jane Lowry

A high-performing board is an entity nonprofits dream of having. Is your nonprofit’s board of directors living up to expectations? And, are your expectations appropriate for them?

When staff and board leadership are disappointed in their board’s performance, it’s often because they have not made their expectations clear – particularly in fundraising. High-performing boards build a culture that everyone works within and understands. What’s yours?

High-performing boards have a strong board culture

When there is a reluctance to truly share the culture and expectations of board members during the interview process, you know that you are setting up a culture that won’t serve you well. I’ve heard about why from governance committees: Fear. Fear that a potential board member will be scared away. But in worrying about scaring them off before they join, you’re forgetting one very important factor. And that factor is the passion they feel for your sector. And that they believe you have the solution to an important community issue. But, that’s just the beginning. A strong board culture includes:

sharing a set of values that includes doing the right thing for the right reason,
encouraging questions and avoiding “group think,”
being willing to challenge management when making strategic decisions.

Therefore, to build a high-performing board of directors, you must be intentional with whom you choose. Start with how you present the opportunity and responsibilities, from the earliest stages of the recruitment process.

Ensure the nominating committee is considering your nonprofit’s unique needs at this point in its organizational development.

I’m not a big supporter of a board “matrix” in governance recruitment, unless it focuses on whether they can help you achieve your strategic goals over the next 2-3 years. For most nonprofits, fundraising is a constant need. So your matrix can include networks you’re trying to reach into, new partnerships, leadership skills, or special talents that help you achieve mission. Be careful in assigning skills to your matrix – if you need a financial person because you’re trying to figure out your earned revenue model, make sure it’s one that has skills in that specific area, and that they really want to help you figure that out.

Talk through responsibilities – including fundraising – during first meeting with potential board members.

You should have written statement of roles and responsibilities, They should include expectations for engagement, giving and fundraising. Other questions include: are board members also expected to participate in events? Attend a certain percentage of meetings? Serve on committees or task forces? Talk through each of these points with potential members so expectations are well-defined.

Explain the three legs of good governance: fiduciary, strategic, and generative.

Many boards get stuck in the weeds of fiduciary oversight of your assets. Get a board treasurer they trust to report out on the important stuff. Make sure you’re looking at funding diversity and sustainability (see my post on financial sustainability). Strategy, the second leg, includes setting priorities for your organization, developing and improving various strategies you’re using to meet your mission, and then monitoring their performance. This is often delegated to staff to monitor with very little board oversight. Spend at least 20 minutes of your board meeting on strategic discussion. The third leg of good governance is generative: not just doing work better; but ensuring your organization does better work. Generative thinking includes probing assumptions held in how you decide things, and living the organizational values that should be driving strategy and tactics. Generative mode is often where board members spend the least amount of time, and yet that’s where real governance truly happens. It’s how you make leaps forward. Remember, boards exist to supplement management expertise by asking a different set of questions. High-performing boards spend time in generative mode.

Make it clear during board member orientation that fundraising is a priority.

Leadership staff should discuss and share fundraising goals and challenges with new board members. We can’t expect board members to excel at something unless we give them the appropriate training. Even if they’re more experienced as a board member, they may need a refresher in major gift fundraising. Once onboard, have them meet one-on-one with development staff to discuss strategies.

A high-performing board supports and guides new members in their role.

Staff and veterans of the board should assist new members in focusing on strategic priorities. Create a plan to help them to do so. Start a buddy system with the new member where they can ask questions with a more seasoned member. A high-performing board always seek third-party training on good governance. Try bringing someone in to help the board develop their fundraising skills.

Have board members evaluate themselves – and set goals.

Led by the board chair or vice chair, it’s a good idea to ask each member – and the board as a whole – to evaluate their goals and performance. In addition, having them set thoughtful goals on how they’d like to engage in the coming year gives you something to work with as you strive to keep them involved. A high-performing board ensures that this role be led by their board peers on the governance or nominating committee annually.

By strategically recruiting the right people for your board, making your expectations clear and helping them hold themselves accountable, you will be well on your way to a high-performing board strategy.

Sara Jane Lowry is a local consultant and coach to nonprofits. Reach her at [email protected] or (412) 821-0242.

Building trust when you are an organization’s new executive director

May 23, 2017 by Sara Jane Lowry

Building Trust

How do you go about building trust? I’m currently working with two executive directors who are new at their organizations, one small and one mid-sized. Both are exceptional leaders, excellent with donors, and have led other organizations. Building trust is at the top of their agenda. Their first task is to quickly build trust with board and staff, funders and donors, clients, partners, and stakeholders to effectively lead the organization through a transition that can shake an organization.

As executive directors, they feel that past behaviors that have proven successful will again carry them into this new organization. They know that leading others requires that they first trust you. Take action to overcome distrust: as Stephen Covey says, “My experience is that significant distrust doubles the cost of doing business and triples the time it takes to get things done.”

Building trust: Potentially turbulent waters

Your board of directors are the ones most likely to champion you. After all, they interviewed you and had an opportunity to get to know you and choose you to lead the organization. In fact, they are often excited about your vision, or your strengths in improving programs or fundraising.

But staff is often another story, especially if they are attached to the previous executive. Trust begins when you recognize that they want (and deserve) to be listened to, and be acknowledged for their work in the trenches. Remember, learning to interact productively with new people who have diverse ideas, styles, and preferences is a difficult challenge for everyone. Here are some things to consider:

They might not tell you everything because knowledge is power. If possible, take the time to get to know them, and don’t start changing things immediately. Also remember, that staff might feel threatened by these requests and resist requests for information. They might resent changes to schedules and new meetings. Instead, ask how they would solve the problem of scheduling to bring you up to speed.
Rather than giving them orders, give suggestions such as “you might consider . . .”
They have “habit” patterns of doing things that work for them. Seek to understand why and how, and if change is really needed.
Sometimes, its a simple difference of style between the previous director and you. Let’s face it, sometimes executives are ineffective at networking with those below them because they’re focused on the board and donors.
Staff might not have been made accountable, or they may not have had annual goes tied to the strategic plan. So, suggestions for change from you need to aligned to how they are integral to achieving the mission, to living their own potential. What does success look like to them?

You can become the person who helps promote, accept, and make change happen. Your leadership effectiveness begins with you.

Building trust is a critical competency of leadership.

It is the one leadership trait that you need first, before anything else – your future depends on it. And, it’s a skill that can be learned, applied, and understood. It is something that each leader can get good at, measure and improve. You’ll need to build trust when you start, and you’ll need it to grow, change and lead into the future.

There are two ingredients to creating trust: character and competence.

Character means you have integrity, and you show others respect. And it also means you are responsible for your words and actions; you treat people fairly. Most people can immediately intuit your motives and intent with them. Thus, the foundation of trust is your own credibility. A person’s reputation is a direct reflection of their credibility, and it precedes them in any interaction.

How do you know you’re not trusted ?

Staff withhold information: They may do this for several reasons. However, it’s most likely that they’re withholding information because they are fearful of your reaction.

Solution: hold a team meeting or one-on-one meeting, make it clear what you need to know and why. Openly ask if there any concerns they have in disclosing information to you. Give them an example of a recent incident where information was not disclosed. Then, ask them what would have to change to make it easier for them to disclose information when you need it. Reinforce that want to build strong open relationships with everyone and that you are always open to feedback. This is step one in building trust.

They are disrespectful: Staff show this by not following direct orders; or they don’t complete tasks on time; worse, they try to discredit you; or they completely ignore your requests.

Solution: hold a team meeting. Tell them you’ve observed behaviors from the staff that is really impacting achieving results, and you’d like to understand why. Ask to hear their solutions. Allow them to talk. Stay calm. Don’t interrupt or get defensive. When you decide what you will implement, share your decision with them. You don’t have to agree with all of them. You will build trust quickly when you show that you have listened to them, you have taken their opinions into account, and are implementing the solutions they have suggested. [You also might not implement their suggestions – make sure to thank them, and let them know what your concerns are about their solutions. They will still feel heard.]

The staff is guarded and keep to themselves.

Solution: Actually, this is pretty normal. So, make the first move – they’re waiting for it. Be personable and friendly – smile and find opportunities to chat, have lunch, and give them an opportunity to get to know you.

So, how might you approach building trust?

Talk straight – be transparent – clarify expectations
Demonstrate respect – listen and clarify – extend trust first
Right wrongs as you become aware of them
Keep commitments and walk the talk
Show loyalty to staff when tough situations arise
Be accountable.
Recognize and celebrate achievement.
Be willing to talk about the importance of learning and that we learn from our mistakes.
Remember that you can’t do it alone. Keep focused on getting to know each of them better.
Keep showing that you are there for them and want them to succeed.

I’d be interested in knowing what ways you are building trust with your staff. Please share in the comments below!