Good news…bad news.
Increasingly in today’s world of development and fundraising, people want to support projects, not organizations. Projects they can see, taste and feel. Not organizations and structures that infer bureaucracy and unspecified overhead costs. “Lean and mean” appeals over “carefully researched and thoughtfully planned” in many people’s minds.
The 2010 State of the Nonprofit Industry Survey by Blackbaud reported that 42% of nonprofits responding said that their donors asked to be updated on how their contributions were spent. That’s up from 30-33% in a 2008 study. Even more significant, 60% of respondents indicate that donors asked that their contribution be restricted for a certain purpose. That number jumped from 36-42% in the 2008 study.
Consequently, 34% of organizations reported having trouble raising funds for general operations. But for some, an even greater concern is pressure from the organization’s finance department to do more general offers in fundraising appeals so that they can avoid the pervasive audit procedures that question where every penny goes.
This problem has been around for a long time. But with the increasingly skeptical environment of both the public sector and watchdog agencies, the negative impact is mushrooming.
What can be done?
First, start by cultivating trust relationships between development and financial staff. Nobody is the bad guy. We fundraisers just know that specificity wins over generality every time.
So, how can we raise maximum dollars while maintaining unquestioned integrity?
Don’t abandon the tried and true. In the past, response devices almost always had an option so donors could check a box that said “Use my gift where needed most.” A decade ago we would get up to 50% of dollars from higher-level donors designated to this general category as well as significant funds from general donors. With the multiple offers and limited space on today’s response devices, this option is often eliminated. Test it. See how it does. Your finance people will love it.
Be totally transparent. Feature the amount needed for the specific project boldly. Then explain what will happen if additional funds are received. “We need $XX,XXX to feed these 500 starving children. If more funds are received, we’ll put them to use where needed most toward other urgent needs.” Funds for general operations are urgent needs. If your headquarters closes down, no specific projects will happen — no children will be fed.
Avoid doing everything, everywhere. Even if you’re shipping medications all over the world, talk in graphic detail about the “polio meds you need to supply in the Southern jungles of Kerala state in India.” Broaden the offer at the end, but just briefly, and again, name specific regions.
You can also test an Emergency Response appeal for both overseas staff facing emergencies and natural disasters. Don’t forget, the industry standard is that up to 30% of all funds raised for a specific project can be devoted to fundraising and other general operations costs. Over the year, that number can be significant.
And, the best way to build credibility with donors is to report back on what their dollars have accomplished. When you tell donors over and over again that they made a good investment last time, the next gift will come much easier. Who knows, eventually they may even trust you with some undesignated giving. Cultivate that trust. It’s a pathway to developing Donors for Life®.
Senior Vice President, Account Services