Recently, my team had the pleasure of creating a webinar and article about the future of fundraising. (Get your free webinar content and deck from this Dropbox folder). Paul D’Alessandro is a buddy of mine, and he’s also the founder of High Impact Nonprofit Advisors. In short, Paul’s been in the business of fundraising for a long time. And nonprofit leaders should listen to what this guy has to say. If I were still leading a nonprofit, I’d pay attention to a guy who raised more than $1 billion in his career!
Look, it doesn’t take a rocket scientist for any nonprofit leader to know that things changed. Last year, nonprofits moved headlong into virtual fundraising to try to shore up their revenue. Many executive directors thought long and hard about what they needed to do. And, in some cases, it meant going against the grain and hiring fundraisers—not laying them off. Leaders with foresight understood that to remain afloat, they had to kick fundraising into high gear.
The best leaders went to their major donors and asked them for special gifts. Last year, the wealthy millionaires and billionaires made out quite well, despite the pandemic. What I’m saying is not a political statement one way or the other. It’s just a statement of fact and the reality of what happened. Smart nonprofit leaders went to wealthy donors and asked for investments into their fundraising teams. As a result, they positioned themselves well for recovery. Let’s take a look at those 3 takeaways to ensure your fundraising goes from just surviving to thriving.
1. You Must Create a Reserve Fund
For anyone who knows me in business, you know I’m really good at making money. But, I’m also someone who understands that you have to have planned contingencies. If anything happens to me, my team knows how to continue. So, now let’s take this to your nonprofit. As we know, 2020 was not kind to nonprofits and fundraising efforts. Still, if there’s one thing you take away from this article, it’s that your nonprofit needs to have a reserve fund.
In the webinar material, you’ll see that creating a reserve fund is essential. We live in a time of massive uncertainty, and that means anything could happen at any time. Countless businesses and nonprofits shut their doors for good because they didn’t have a 6-to-12-month reserve fund. Now is the time to start creating one or replenishing the one you have at the bank. Start a unique campaign through major gift fundraising. The reality is the people you serve need you to make sure you keep your doors open!
2. Take Another Look at Your Fundraising Priorities
Sure, fundraisers always want to raise money for innovative programs. But, sometimes, moments of retrenchment arrive, and this is one of those times. One of the things that happened in the closing of businesses and nonprofits last year is that many were overextended. Moreover, one of the dirty little secrets in the nonprofit sector is that sometimes groups accept donors’ money to fund their priorities—not those of the organization.
2021 is a time of recovery and retrenchment. And that means that you and your board of directors have a lot to consider. I always tell my team to stay in their lanes. By that, I mean that everyone has to excel at what they do best. By overextending themselves, they diffuse their focus, and it could hurt an organization. Instead, think about what you do best and sharpen your focus on those programs supporting those efforts. Everything else, get rid of it, at least during your reconsolidation.
3. Not Everything You Read or See is True
Finally, there’s a skill that everyone has to master, and that’s critical thinking. Last year, nonprofit headlines screamed the end of fundraising. You would have thought it was the end of the world, and it was a total collapse. However, as things unfolded and shook out, virtual fundraising took hold. And guess what happened? A lot of organizations lowered their fundraising costs. Also, virtual fundraising allowed them to raise funds beyond their local communities.
So, when we look at the news and things on social media, we have to be mindful of clickbait headlines. Unfortunately, artificial intelligence allows for more of these kinds of headlines to spread. But, know this: many donors understood that great need came to our communities in 2020. And, I think when all’s said and done, the sky didn’t fall, and many people stepped up to the plate to support good causes through fundraising.
In sum, while these take-aways may seem obvious, they’re easy to forget. It’s easy to get caught in the day-to-day and set aside the rainy-day fund for another time. But that time is now. It’s easy to accept fundraising dollars and ignore the fact that the donor-funded program adds more strain to your other core programs. So, it’s time to have that hard conversation. And, no, unlike what you see on social media or lots of news, not everything is a catastrophe. Everyone has to be a bit more critical of the information they read and share. In short, I hope these takeaways serve as a reminder to stay with the basics. Uncertain times call for thoughtful and steady nonprofit leadership.
© 2021 Wayne Elsey. All Rights Reserved.