"Time is Money" Was Never More True than in Fundraising

I had a call with a coaching client the other day who was fretting because her year-end appeal hadn’t gone out yet.  It’s been a few years since they’ve mailed an appeal, so the process was taking longer than it normally would; redesigning envelopes and buck slips, making the letter itself visually pleasing.  At my recommendation, they were segmenting their list into three groups so that was taking extra time as well.

This is a nonprofit that is fortunate enough to have 2.5 FTEs dedicated to fundraising, plus an Executive Director with a background in development.  On paper it would seem that they had plenty of staff resources to get this letter out the door.  As they say, if you don’t ask, you don’t get!  So why was it taking so long?

It seems that they had scheduled several events during this final quarter of the year and the staff was running around like crazy trying to make sure they all went smoothly. 

This is a case where it would be tremendously helpful to have a written fundraising plan where the activities for the year are selected on the basis of how much revenue they will generate compared to the resources they require.  It’s not uncommon to see someone spending over half their time working on events that only generate less than a quarter of their income.

Do you know the average cost per dollar raised for the various types of fundraising activities?  (HINT: special events yield one of the worst returns!)  James Greenfield provided the following answer in his book, Fund-Raising: Evaluating and Managing the Fund Development Process (1999):

1. Capital Campaign/Major Gifts $ .05 to $ .10 per dollar raised.
2. Corporations and Foundations (Grant Writing) $ .20 per dollar raised.
3. Direct Mail Renewal $ .20 per dollar raised.
4. Planned Giving $ .25 per dollar raised and a lot of patience!
5. Benefit/Special Events $ .50 of gross proceeds.
6. Direct Mail Acquisition $ 1.00 to $ 1.25 per dollar raised.

Take a look at how you are spending your time.  If you are raising the majority of your money from individuals (and you should be – according to GivingUSA’s 2017 study, 80% of private philanthropy comes from individuals!), it logically follows that you should be spending the majority of your time working on activities that generate individual donations.  And more specifically, those activities that are the most cost efficient (major gifts, planned giving, direct mail).

If you are spending more of your time on less effective methods of fundraising, give some thought as to why that might be.  Often people gravitate toward special events or grant writing because they are very concrete and measurable tasks, easily learned. 

Major gifts work is complicated and messy and takes a long time.  It’s a skill that can be taught, but it’s scary for many fundraisers so they avoid it.  I know from personal experience that it was something that I had to sometimes force myself to do because it was uncomfortable, but I knew it was important.  Picking up the phone and asking someone to meet with you can be daunting.  And facing possible, sometimes even likely, rejection by asking for a large donation can be downright terrifying.

If you are one of those people who is comfortable asking anyone for anything and you’re not actively working on building a major gifts program, ask yourself why not?  Is it a matter of training?  Motivation?  Or is something else holding you back?

I always advocate for the use of data to prioritize how you spend your time.  I remember only too well what it feels like to have all these competing demands on my time and not having the bandwidth to prioritize effectively.  It’s like you’re stuck on a treadmill that’s going slightly faster than you can handle, and it’s nearly impossible to evaluate what you are doing and why.

In fact, talking to this client was giving me flashbacks to when I worked as a full time Director of Development.  It was hard enough to keep your head above water, let alone complete a strategic thought. 

After the holidays are over, commit to carving out some time away from the office to assess your situation.  Prioritizing your time more effectively will lead to better fundraising results and ultimately more resources for your organization.