SuddesGroup

Trends v. Fundamentals in Nonprofit Funding

November 26, 2008 | Nick Fellers

We’re asked to talk about ‘trends in philanthropy’ or ‘trends in fundraising’ which troubles me because the social sector needs more discussion about fundamentals – not trends. If you ask me to talk about ‘trends’ I will use this as a lens to highlight the lack of fundamentals – think of it as me spinning the conversation – it’s all good.

Every business in and sector lives and breaths by fundamentals, first.

• A clear vision/direction (illustrated a clear MESSAGE).
• A clear revenue MODEL.
• A clear PLAN including an understanding of the MATH (impact math and income math) to get there (e.g. goals, levels, etc.)

As I’m writing this to compare and contrast trends and fundamentals I realize most of the trends (that get discussed) are really fads because too often they’re ‘the next big thing’ and don’t have staying power. These could include:

• Earned Income (Social Enterprise)
• Lance Armstrong’s bracelets
• 5K races
• Social Networking Funding (The Obama effect)

Maybe if they were backed on a case-by-case basis with fundamentals they would be true trends and not fads.

Example - Earned Income: I went to a Social Enterprise Alliance gathering four years ago. What I witnessed were some orgs starting earned income ventures without attention to fundamentals, no clear plan and no willingness to do the math to see that they were losing $50 on every widget they produced. On top of that, one speaker cautioned, “It’s hard enough to start a business with people that have their lives together let alone those that don’t.” Four years later 16 out of 17 orgs I interviewed abandoned the earned income stream – each for the lack the fundamentals outlined above.

The reason most small businesses fail is because they don’t have a grasp on fundamentals. Nonprofits often don’t ‘fail’ in the same sense that for-profit businesses do [running out of money]. Instead, they limp along for years longer, subsidized by passion, volunteerism and employees on the fast-track to burnout (human capital model)… this unique resource model is often a masking agent for a lack of fundamentals.

If you’re a board member, a senior staff person or development officer you can do a great service to your organization, your team and your cause by leading a discussion on the fundamentals… by leading a discussion to clarify the direction or purpose of the organization, by clarifying the model and by working through the math. This discussion is simple, not easy.

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No More Peer-to-Peer Solicitations

January 17, 2007 | Tom Suddes

I know you have been taught (brainwashed???) to believe that Major Gift “ASKS” are best if done “peer-to-peer”.

Don’t send someone else out to HUNT ANTELOPE!!!

Read these ten reasons … and see if it helps change the way you THINK!!

TEN REASONS WHY PROFESSIONAL STAFF ACHIEVE BETTER RESULTS

1. DESIRE Volunteers: How many of your volunteers really, reeeally, REEEALLY like to ask people for money? If they don’t, they most likely lack 3 key ingredients for sales success — passion, presentation skills and persistence.

   Staff: It’s your mission and responsibility to Present the Opportunity … to Qualified Prospects. Therefore, you should have the passion to present and to be persistent. Plus, Presenting the Opportunity is fun and satisfying if you know what you’re doing.

2. DEALING WITH OBJECTIONS Volunteers: Most fold after the first “no”, stumbling block, question or challenge.

   Staff: Professionals realize any objection is not personal, that true selling begins after you hear a “no”, and that dialogue is better than debate!

3. ENTHUSIASM Volunteers: They are enthusiastic about your institution or program … but certainly not about asking their friends for money.

   Staff: Your attitude is directly proportionate to your sense of impact on your institution, and your value to it. Your enthusiasm builds as you ask and receive.

4. TIMEVolunteers: They have none. They have many other priorities and obligations that come before their volunteer duties.

   Staff: Major Gifts / Sales solicitation should be your number-one priority.

5. ACCOUNTABILITY/FOLLOW-UPVolunteers: There isn’t any “I saw so-and-so at a party … and I think they probably could do something.”

   Staff: Professionals do a Memo for the Record on every call. They send a great follow-up letter summarizing the request. They make a phone call on a specific date to determine the level of commitment and finalize details with the investor.

6. TRAININGVolunteers: Most volunteers did not take Major Gift Solicitation 101. Many don’t understand “sales.” Few have the time to become properly knowledgeable about your For Impact Organization/Institution and the investment opportunities available.

   Staff: Professional staffs should be well trained. Whether they read, listen to tapes, or attend training camps and seminars … great development professionals are knowledgeable about their field and their institution … and are constantly learning more.

7. PREPARATION Volunteers: ‘Asking their secretary for directions on their way out the door’ is their idea of preparing for the call.

   Staff: Professionals prepare by reviewing the Strategy Checklist … and completing a Presentation Checklist (who, what, when, where, why, how) for every call, properly researching the prospect relative to the level of request.

8. THE CALL ITSELF Volunteers: “So, how’s your family? Your golf game? ‘Hem, haw’ … I got your (3×5) card… ‘they’ want money … just do what you can.” Volunteers rarely request a specific amount for a specific project.

   Staff: Great development professionals know the six essential requirements for Major Gift solicitation. They ask questions … listen intensely … respond to the investor’s feelings … react with flexibility, creativity and speed … deal with challenges.

9. TRADING DOLLARS Volunteers: Volunteers know that whatever they ask of one of their peers this week will be asked of them for that prospect’s favorite cause next week!!!. This “chit” system, or “trading dollars,” does not allow for aggressively MAXIMIZING relationships and commitments!

   Staff: Professionals can be objective, equitable and professionally aggressive in helping the prospective investor feel great about maximizing their commitment.

10. SKILL Volunteers: Most are amateurs (at development/fundraising).

    Staff: You’re professionals. As one of the all-time great solicitors, J. Barry McGannon (former Chancellor of St. Louis University) asks, “Would IBM, or any major business, entrust its biggest customers to an amateur?” Of course not. IBM wants more quality control than that, and so should we! Now, more than ever, development is a sophisticated, challenging and competitive profession that requires total commitment.

Special Note: This is not meant to be a “Bash the Volunteer” list. Rather, it’s an attempt to help you RETHINK/REINVENT the role of your volunteer leaders.

They are your best resource!

Use them as part of TEAM SELLING! As PREDISPOSITION! At a MEMORABLE EXPERIENCE.

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Return On Energy

November 20, 2006 | Nick Fellers

Here is a simple idea you can use to frame your thinking around your funding plan:

.

This seems to be especially big for organizations trapped in a transaction-based system of special events (life-sucking, volunteer-draining) with often and incredibly low RETURN ON ENERGY.

If that describes your organization then think about this rhetorical question: What would happen if you did away with one event. Then, you focused all that energy (time, urgency, people, resources) on building a great relationships with one or two prospects that could invest $1Million in your vision?

Remember:

• Special Events As Fundraisers Stink- they’re not special.
• Major Gifts: Raise the most money at the least cost.
• 97/3: 97% of the money/investments comes from 3% of your family … focus on the 3%

Story:

Last week I was with a school in Albuquerque. The bulk of the funding strategy revolved around special events … in fact, they were running FIVE events. The board was drained. It made a commitment to CHANGE the way it FUNDED the VISION. In only one week so far, the board has generated more than $80,000 to fund student scholarships by working only a few key phone relationships. To really see the ‘WOW’ you need to know that they these events were consuming hundreds of volunteer hours and netting an average of $30K - $50K each (with a funding cost as high as 70 cents to raise a dollar - yikes).

To me, this is a wonderful example of stopping to think about the RETURN ON ENERGY, making a commitment to change and enjoying IMMEDIATE RESULTS.

Final Note: This applies to EVERYTHING you’re doing. Take a moment this Friday morning to think about your RETURN ON ENERGY.

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Culture for a High Performance Sales Team

September 1, 2006 | Tom Suddes

This nugget may be geared more towards the SALES MANAGERS in the For Impact world. But, I love the closing chapter of Wilson’s CHANGING THE GAME.

Wilson’s definition of a HIGH-PERFORMING WORK TEAM:

“A group of committed people who, by working and sharing together, are getting optimal results over a long period of time because they are doing they want to do and being who they want to be.”

WOW!

Wilson closes with his FIVE FACTORS OF HIGH PERFORMANCE TEAMS, listed in order of importance:

Wilson and Suddes agree that you need to write out the following and put it where you can see it every day.

“YOUR RESULTS ARE BASED ON WHAT YOU PAY ATTENTION TO.”

–Larry Wilson

“YOUR ACCOMPLISHMENTS ARE A RESULT OF YOUR FOCUS.”

–Suddes

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We Get What We Measure

January 8, 2006 | Tom Suddes

“We almost always get what we measure.”

This is particularly true in nonprofit organizations, although I believe it is just as prevalent in the for-profit world.

A simple question:
How do we train, measure and reward our Development Staff, be they Income Development, DOD’s, Major Gift Officers, Planned Gift Officers, or whatever the title?

For most organizations, the measurement is activity (busy work). I have actually worked with large and very successful nonprofit organizations whose “measurement,” and I’m talking about actual evaluations, were based upon number of phone calls … number of letters sent out … number of “moves.”

Specific and personal: We just had a great young potential development superstar say, “I can’t find the time to do Major Gifts because I am measured on the number of grant proposals that I submit!”

So, what’s the answer? IF … the goal of the For Impact Development Operation is to write a net, net, net (triple net) check to the organization (to fund the vision)…

THEN … the goal and measurement of the development staff should be tied directly to that net, net, net check! If you’re a volunteer leader or senior staff/administrative leader of a nonprofit organization, you should expect results from your development team. However, you cannot give them the old “pat on the back” and “go get money” Knute Rockne half-time locker room speech!

Your Development Staff should be measured on three things:

1. Total net dollars raised
2. Number of quality ASKS
3. Number of one-on-one visits

We use these GREEN SHEETS to MEASURE sales activity/productivity. Feel free to reproduce/use/expand.

To succinctly summarize and re-emphasize the point: Your development team needs to be working directly and specifically on things that raise the most amount of money at the lowest cost!

That’s how they should be trained. That’s how they should be measured. And that’s how they should be rewarded!

Special Note: Og Mandino has a wonderful message in the Spellbinder’s Gift about busy work. In Step 6 of Patrick Donne’s Send the Instructions for Your New Life, Og through his character states very clearly: Never hide behind busy work.

“It just takes just as much energy to fail as it does to succeed. You must constantly guard against the trap of falling into a routine of remaining busy with unimportant chores that will provide you with an excuse to avoid meaningful challenges or opportunities that could change your life for the better. Your hours are your most precious possession. This day is all you have. Waste not a minute. Never hide behind your busy work!“

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