If you thought the phrase “Culture of Philanthropy” was a vague concept, the Covid-19 pandemic has shown that it’s real and tangible. The pandemic has been a microscope showing us which nonprofits have a strong philanthropic culture and which nonprofits need work. The nonprofits with a defined Culture of Philanthropy are weathering the pandemic and generally raising significant revenue.
Cultures of Philanthropy can be buds or full bloom. Where is your organization in this development?
Founded in a previous pandemic, the HIV/AIDS pandemic, Bridging Access to Care (BAC) was just awarded $260,000 in private foundation funds to respond to Covid-19. The revenue came fast because they had the fundraising infrastructure in place. Specifically, Bridging Access to Care had outsourced grant writing capacity, illustrated a plan for emergency response, joined a coalition of like nonprofits that had organized well as soon as the news hit about Covid-19, and BAC had been defining their program impact.
These four attributes made their culture of philanthropy more robust and ready to respond.
BAC’s fundraising counsel, Michael Taylor, CFRE, observed that, “The nonprofits with stronger Cultures of Philanthropy are also generally more responsive to the needs of their clients. We all know that without revenue you cannot deliver your mission; yet BAC shows us how important it is to plan for that success.”
What It Takes
Please do not feel bad if your Culture of Philanthropy needs improvement. Instead of lamenting, reflect, make a plan and take action. In my new book, Fundraising 401, I describe what it takes to have a stronger Philanthropy Culture. I invite you to read it and apply the ideas to deepen your own Culture of Philanthropy.
In order to strengthen your Culture of Philanthropy, here are three advanced fundraising tips that would likely benefit you:
- More than your Revenue Sources: A Culture of Philanthropy is more than your revenue sources. To determine if your Culture of Philanthropy is more than your revenue sources, consider these questions. If you answer ‘no’ to any of these questions, then that’s an area to work on right now.
- Does your CEO see him or herself as the Chief Fundraiser?
- Is the Chief Development Officer empowered to lead?
- Can you spend budgeted funds on postage or to use a direct mail house when you need to?
- Does your board see fundraising as a profit center?
- Does your board know how to evaluate your revenue program?
How many ‘no’s’ did you have? Write your suggestions for what to do about them.
- Underfunding the Development Program: Our sector must fund revenue development programs sufficiently. The Better Business Bureau’s standards recommend that at least 65 percent of the nonprofit’s total expenses should be for program expenses and not more than 35 percent for fundraising. That’s the broad standard.
Charity Navigator, one of the major nonprofit rating services, sets a goal of less than 10 percent of the nonprofit’s budget for fundraising expenses and considers an organization that spends less than one-third of its budget on program expenses to be failing in its mission.
The standard that fundraisers use when identifying an appropriate cost per dollar raised for annual fundraising is often 25 percent, or $0.25 for every dollar raised. This number has its origins in James Greenfield’s Fund Raising: Evaluating and Managing the Fund Development Process (1999), which, at that time, noted a 20 percent cost basis.
- Wanting a Fast Return: My broader view about organizational culture and fundraising can be read here and here.
Development. Have you ever asked yourself why our field is called that? I’ve long been curious about it, especially because so many nonprofit executives want to rush the development process. They want revenue faster than the process can possibly deliver, so they’re frustrated to learn that it takes time. In many instances, it takes a long time. The cultivation of real relationships with donors and funders is central to higher-level fundraising. In a digital age where personal interaction takes a back seat, the traditional fundraising process is often judged as pokey, or worse, that we’re making excuses for not performing.
By definition, a process is the nuanced, cumulative steps you take to move closer to your goal. If the goal is increasing revenue and the revenue is elsewhere, we have to build a relationship with the sources of revenue to convince them that they should share their resources with us. Fundraising has a lot in common with romantic dating. In both, the “convincing” aspect requires care and attentiveness; that’s how real relationships grow.
Admittedly, many donors and funders want at first to keep us at a distance. Timing is everything. If you pick the fruit too soon, it won’t taste good; if you wait too long, you won’t like the result either.
We welcome your comments about this post on the LAPA blog.