A recent report by TopNonprofits and Nonprofit Research Collaborative found that nonprofits in the U.S. were experiencing a decline in fundraising revenue in the most recent year reported over the previous year.
There was a 5 percent drop in the number of organizations achieving their fundraising goals in 2016 over 2015. Last year 68 percent of surveyed organizations met their fundraising goals. In the previous year, it was 73 percent.
I would like to unpack what may be happening, because this particular report is the only that "asks charities to report funds raised based on whether the organization met its fundraising goal." The fact that only 68 percent of nonprofits met their fundraising goal in 2016 as compared to the 73 percent in 2015 is a statistically significant drop. An additional important note is that in 2014, 73 percent met their fundraising goal, so achieving goal has been flat and then it fell last year.
The majority of the organizations not meeting their goal were the small ones with budgets of less than $500,000. And the primary reason cited by groups not achieving their targets was by far staff turnover (8 percent). Alternately, those organizations that reached their fundraising goal cited as the top reason staff and leadership for helping them succeed (22 percent).
Let's take those two points then and delve a little deeper.
Staff turnover: Mazarine Treyz wrote an excellent piece entitled, "What happens when you don't pay a living wage."
In it she writes, "The total cost to replace the fundraiser is $49,554. It actually costs the nonprofit 117 percent of salary to replace the $50,000 fundraiser. This is if that position is not filled after only one month. We all know that positions are typically filled after 3 months, or even more."
I am aware that small nonprofits with limited resources have to be careful how they spend their money. If you follow my writings, you know I've written in the past about hiring and retaining good fundraisers. I don't think the industry gives the "money people" enough of a chance--and the support they need--to achieve success.
I've seen it too many times that we have a philanthropic industry that has a revolving door of fundraisers. I've seen major gift officers on the job no more than three months before they're fired or pushed out the door because they haven't raised a significant amount of money. Of course, this is unrealistic when these fundraisers are expected to have it rain money with no support from the executive director or board. It doesn't happen.
I understand the challenges of small nonprofit organizations. There was a time when I created and founded a small nonprofit that I grew from zero to a budget of over $70 million. I understand the resource challenge of small nonprofits. But, I think one of the secrets to my success with that organization was that I stayed the course. I invested in my team of people, and we developed realistic expectations. Being realistic and investing in good people helped me retain talented individuals and within five years, we went from the kitchen table to a multi-million-dollar organization.
Leadership: In the TopNonprofit and Nonprofit Research Collaborative study, the primary reason, as I mentioned, for fundraising success were staff and leadership. My bet is that the people who surveyed viewed the relationship between the fundraisers, the board and the executive director as a team partnership.
In today's world, we have a lot of things distracting everyone. We all know that the fact that we have the entire library and history of human knowledge at our fingertips on the Internet is incredible, but it can be a distraction. Donors see thousands of images and calls to action for their attention. In other words, your nonprofit is not the only demand on their time nor the only appeal for help they see.
I think that one of the best investments that a charity can make is to professionalize their development team. If I were starting a new nonprofit again, one of the first people I would hire is a fundraiser with a proven track record. I would then give him or her the time and all the resources they need for success. One essential and necessary element is that board members and executive directors put an end to the idea that only fundraisers are the rainmakers.
The reality is that a fundraiser is only as good as the board and executive director that support the work. That means the fundraiser has to be able to rely on leadership to attend the meetings, pick up the phone for conversations with prospects and open doors that the fundraiser needs for major gift work in particular.
For the digital world, the fundraiser has to be able to rely on leadership to make sure he or she receives everything they need to be capable in that realm.
I have to admit that I wasn't surprised that the numbers were going down concerning nonprofits hitting their fundraising goals.
Success comes with strategy, focus, and consistency.
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