At some point in their evolution, all nonprofit start-ups are faced with the question of whether to hire professional development staff. How do you know if your organization is ready to take this leap? How can executive and volunteer leaders assess if the investment will pay off?
We’d like to offer some insights drawn from our work helping a range of clients grapple with these questions.
Has your fundraising program hit a wall?
Early on, many start-ups have extraordinarily successful fundraising programs that are driven, in large part, by the charismatic personalities of their founders and by the leadership of a few committed Board members. These programs operate with an organic, informal, ad hoc style, and donors are more likely to give because of their personal loyalties, not because of their commitment to the organization’s mission.
We have found time and again that this is not a sustainable fundraising model. Even the most committed volunteers can do only so much. And there is a limit to how many times the same core group of friends can be tapped for support. If there is any donor stewardship, it is haphazard. Eventually, fundraising dollars will not only plateau, they will actually decline.
If a nonprofit is to build on its success and significantly increase its contributed revenue, it must design and institutionalize standard procedures, organizational structures and assessment metrics that will drive focused, strategic activity. That can happen only under the direction of a dedicated fundraising professional. This professional can serve as the face of the organization to external audiences and expand donor loyalty beyond the founder or individual volunteers to the organization itself—an evolution which will be vital for long-term stability and growth.
Does your Board understand the importance of fundraising to the organization’s future?
More often than not, new nonprofits operate on a shoestring, so Board members must carefully consider how every dollar is allocated. They may ask, “Can we afford to spend money to hire fundraising staff?” The answer is that they can’t afford not to, for all of the reasons described above. Remember that fundraising is not about taking a piece of the pie away from the organization’s mission; it’s about making the whole pie bigger. Developing the relationships that lead to giving takes time, so Board members must understand that the return on their investment in fundraising will not happen overnight.
Of course, this does not have to be an “all or nothing” scenario. As a first step, the organization might hire a part-time fundraiser, either in a staff or consulting capacity, and establish measurements for evaluating success and determining next steps. It’s also worth exploring the availability of foundation “capacity-building grants,” which can be used as seed funding to get your development program off the ground.
Do you have a unique and compelling case for support?
There is no question that fundraising is highly competitive. In order to launch a successful, sustainable development program, a nonprofit must be able to articulate why it is in a unique position to address a recognized need. What are you doing that other organizations aren’t? Is there a good reason to operate as an independent charity? Or could your mission be better served by merging with another group? This type of honest, strategic conversation needs to happen before bringing on a development professional. It will require that staff (including the organization’s founder) and Board members put their egos aside and do what is best to advance the cause.
Keep in mind that there may be resources available to help you in this process. In the Philadelphia region, for example, the Nonprofit Repositioning Fund provides both exploratory and implementation grants to encourage and support mergers and other types of formal, long-term collaborations between nonprofit organizations.
Do you have an identifiable prospect pool?
Before hiring a professional fundraiser, you will want to be sure that you have an ample pool of prospects with the ability and inclination to support your organization, if appropriately cultivated. Some organizations, such as performing arts or membership-based groups, have an easily identifiable prospect base which they can vet through a wealth-screening service. For others, upfront research may be needed in order to identify individuals and institutions whose philanthropic interests align with the group’s mission. Depending on internal capacity, an organization may consider outsourcing this research.
If you responded “yes” to these four questions, chances are that you are well-positioned to bring on a development professional and raise your fundraising program to the next level.
Please feel free to contact me if you have any questions at: firstname.lastname@example.org
Founded in 1987, Schultz & Williams is a national consulting firm dedicated to helping nonprofits of every size and sector achieve financial stability, meet organizational goals and support greater mission impact. Headquartered in Philadelphia, PA, Schultz & Williams also has operations in Los Angeles, CA, San Francisco CA, and Washington, D.C.