Success Attracts Success: Bigger Gifts Come to Financially Resilient Organizations

Burned Before

“I just don’t want to throw good money after bad.” 

Such was a major donor’s comment, minutes before she committed $50,000 to my client’s capital campaign. This smart philanthropist began volunteering for the nonprofit a few months before. She had not yet made her gift. 

She continued, “Some charities are bad at managing their finances.” She had been burned before. 

I talked her through the steps that are taken every month at our client’s nonprofit to ensure financial responsibility.

  1. A years’ worth of operating reserves are maintained
  2. Monthly budget reviews are made, and cuts are made when necessary
  3. No new program is started without a way to pay for it

 

Turning Point

She wanted to know more: “How much have you raised for the campaign so far?”

And more: “How will you ensure that you can pay for expanded programs once the campaign is complete?”

My prospect research (all publicly available information) showed that she had a history of giving to larger institutions but rarely to smaller, local charities. Proof of financial resilience is what made her ‘stop and think’ about a gift of significance to our small but growing client.

Our Learning

Sophisticated philanthropists lead with their heart, but their head is also close by.

Bigger gifts come to financially resilient organizations.

Think of your own investments. You will invest more in companies that have sound business practices, great leadership, and good financial management. Donors are the same.

Success attracts success. Money follows money. And smart donors like to give to financially smart institutions.

Could your financial resilience (or building it up) be your secret sauce? A nonprofit best practice is to have reserves up to three times your annual budget.

 

I welcome your feedback on our blog.

Click here to learn more about LAPA’s reserve campaign services.

Andrew is LAPA’s Director of Campaigns and Major Gifts and provides strategic fundraising counsel to many of LAPA’s clients.

Related Posts

Let Your Donors Know – 2021 Tax Incentives

Here are SPECIAL 2021 TAX INCENTIVES FOR GIVING for you to let your donors know. Congress has provided several economic incentives to help address the far-reaching effects of the COVID-19 pandemic, including additional tax incentives to encourage charitable giving. These incentives are temporary and are scheduled to expire at the end of 2021.

Read More »

Recent Trends On Desk Studies & Grant Assessments

At LAPA Fundraising we conduct many desk studies each year to help nonprofits assess the value of their fundraising program, and how to grow it. Some call the desk study an assessment. Nonetheless, the desk study is a seminal moment of high level planning, usually taking 90 days, and can be an opportune time to take a step back and see where your program priorities align with segments of foundation funders.

Read More »

Children’s Defense Fund Finds 44 New Funding Opportunities

LAPA Fundraising is expert in fundraising services (campaigns, annual funds, planning services, and grants). We conduct desk studies to identify new funders and donors. These research exercises have proven to be an excellent first step and a tremendous benefit to our clients because they lay a proper foundation from which to build.

Read More »

Stop The Postal Rate Hike

This is an urgent postal alert. If your organization uses the U.S. Mail for fundraising, membership development, or communications you should be taking action today. Let me explain. The United…

Read More »