Troubling findings on the state of fundraising
The new report from CompassPoint and the Evelyn and Walter Hass Jr. Fund titled Underdeveloped: A National Study of Challenges Facing Nonprofit Fundraising, has the fundraising profession all abuzz on social media.
The study surveyed more than 2,700 development directors and executive directors from nonprofits big and small across the US.
Troubling findings. But alas, not shocking.
I urge you to read the report as there isn’t a lot that is pretty in here. Though to someone who has been in this sector for a long time, I can’t say the findings are at all shocking. For example:
• 50% of development directors expect to switch jobs in the next two years.
• Nearly a third of executive directors are dissatisfied or lukewarm at the performance of their development directors.
• 25% of executive directors report that their previous development director was fired, largely for poor performance.
• 23% of nonprofits have no-fundraising plan (remember, these are the ones with a development director position).
• Less than half of development directors said they had a strong relationship with their executive director.
And the most disturbing finding of all to me:
• 43% of development directors characterized their own fundraising program as “not at all” or only “somewhat” effective!
The report pointed to many things, including a lack of a culture of philanthropy among these nonprofits, the stiff competition from the largest nonprofits to recruit talented fundraisers, a lack of support from the leadership of the organization for fundraising and a lack of tools for fundraisers in organizations.
In my own experience working with dozens of nonprofit organizations, here are a few of the problems I’ve seen:
• Hiring the wrong people: I’ve written about this before (see The Ten Worst Reasons for Hiring Your Director of Development). Executive directors with little background in fund development don’t know what they are looking for or how to ferret it out in their hiring process.
• Hiring junior people and not training them: Because the competition for development directors is so stiff, many organizations are in the position of hiring people without fully developed skills. That’s how I started! But luckily, my first employer invested heavily in my training and I had senior level people on staff to work with, which is a rarity among so many nonprofits.
• Hostile or ambivalent Executive Directors: I’ve seen organizations where the Executive Director hires a fundraiser, but due to their own fear of fundraising, makes it impossible for the fundraiser to do their job but putting so many constraints around that individual.
• Blaming others for your own lack of success: I’ve ranted about this before and so did many of my Twitter buds, but your lack of success is not because your board won’t solicit their friends for money. (Unfortunately the report reinforces this widespread belief – see my concern below). It is your job as the professional to create the plan, lobby for the resource you need, coach your Executive Director (with a bow to the problem mentioned above), find , train and support the leadership volunteers who will work with you, and do it yourself.
My concerns about the study:
Unfortunately, one downside of this report is that it is underrepresented in responses from hospitals, universities and large national nonprofits. I worry that we draw too many conclusions about board members when many of the most successful fundraising operations are missing, and those are the ones which rely almost entirely on professional staff for their success.
I also don’t see data that compares the size and budget of the fund development department to some measure of performance – but we might glean some sense of that when high performing organizations are excluded, only 9% of the rest of the organizations felt they had sufficient fundraising capacity (different from fundraising plans or databases which were also lacking).
So my recommendation for the next bit of research, an examination of the capacity that does exist at the biggest public charities where the top 4% by size account for 64% of all contributions, gifts and grants.
But even with these gaps, many kudos to the report’s authors for providing data that demands significant self-reflection and a lively discussion to come.
Other thoughts on this subject:
A fundraiser’s guide to working with board members
Board members as fundraisers? It’s okay to have just a few
I agree with your analysis, with one quibble about your concerns. I personally don’t believe that board function or development effectiveness is correlated with organization size or scope.
In other words, the large national charities have many of the same challenges. I see large hospital systems with almost no history of fund development apart from capital campaigns. Some universities have successful campaigns and endowments, while others fail to meet goal for a variety of reasons.
There’s a temptation to believe that organizations with larger budgets and larger staffs and more resources are using that capacity to build stronger systems, when there are too many cases to argue the point.
Michael, Thank you for your comments. What I was referring to is that many large organizations are quite successful in their fundraising without any expectations of engaging their boards in fundraising (I’m not talking about giving here). For many, fundraising is done by professional staff, including the CEO.