Some Fundraising Mistakes

How many times has a well-meaning board member or volunteer come to one of your board meetings and offered this sage advice—“We should do a (golf tournament, gala dinner dance, art auction, walkathon, etc, etc,) because (Girl Scouts, Boy Scouts, the Hospital, etc., etc.) did one and raised $100,000?”  Before the meeting ends, the whole board or committee is caught up in “event fever’ and has the invitations designed, the flowers ordered, and the T-shirt sponsors listed.  And there you are, the new development officer, trying to meet grant deadlines, straighten out the donor database that is a mess, and organize the other events that your organization is currently conducting. So what do you do when the board is bitten by the “event bug?” (Hint, it’s in the title of this article.)

Another fatal mistake that many organizations make is relying solely on a grant writer to raise all the money it needs for programs and operations. Given the fact that foundation grants only account for approximately 12 to 14 percent of all philanthropic giving in the United States, this approach seems equally as foolhardy as depending mainly on events to raise money for the organization. While both grants and events are important parts of a well-rounded development program, they should not be the only methods of fundraising used by nonprofits. So how does one handle these board suggestions, or (in some cases) mandates? (Another hint, you’ve already seen the answer.)

How to Avoid These Mistakes

Often boards and volunteers do not realize that events and grant research can be costly, not only in terms of hard costs but in “opportunity costs.”  In other words, what activities must you give up in order to focus your limited time on this proposed new activity? Your first reaction to the board or development committee that suggests either of these approaches should be, “Well, let’s pull out our development plan and see if this event/grant is part of our plan; if not, what other activities must we drop in order to concentrate on this event/grant?” However, many organizations do not have a development plan to reference. If your organization is one of those, this is one good reason why you should have a development plan. 

Organizations that have a development plan complete with timelines, areas of responsibility, and budgets, will be more successful at keeping the staff, board and volunteers focused on the activities that are most cost-effective and produce the best results. 

What Should the Development Plan Include?

The development plan should start with an analysis of current development activities. Some questions to ask:

• What has been the history of this activity; have results increased or decreased over the years?
• What are the costs of this event, both hard costs, staff time, and opportunity costs?
• Do we have the human resources to manage this activity?
• Do we have the technology needed to manage this activity?
• What are the subsidiary benefits of this activity, i.e., if the activity is a cultivation or awareness-raising event, should we continue the activity even if it does not raise money?
• How do current trends affect this activity?
• Are there ways we can increase the effectiveness of this activity?

Once the current activities have been analyzed, a decision should be made to keep the status quo, focus more time and energy on them, or drop them.

A solid development plan lists detailed goals for each activity. Goals do not always have to be monetary ones. For example, a goal might be to raise constituent participation by 5 percent this year, increase the size of the development committee by four people, to personally visit three major donors each month. Without specific goals, it will be impossible to measure the success of the plan next year. 

A development plan also helps the development office justify its budget, provides measurement tools to be used in performance appraisals and provides donors with a sense of confidence in the organization. So, is there any reason your organization does not need a development plan?

To learn more about development plans, sign up for the course Creating a Development Plan That Works.