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I’m finally getting this off my chest – the last thing that bothers me about our industry.  After this I can just let it go.
This is one that has angered and perplexed me for my whole career working with non-profits, that being the many non-profits who lose sight of the long term and only think about NOW!  When a non-profit starts to turn inward and forget about why they exist, they only think about their immediately survival.
When a non-profit only worries about their immediate survival they make really stupid decisions about fundraising and program development.  Here are some of them.

  1. They don’t invest in new donor acquisition—Because this proposition usually produces a negative net revenue situation, many non-profit leaders and boards choose to not invest in building their donor file.  Instead, they try to rely on board members to introduce them to “heavy hitters”, or worse, create “friend-raising” events that go nowhere.  Solution:  You have to invest in new donors.  They will be the life-blood of your organization 5, 10 and 15 years down the road.  If your mission is worthy of it, you have to invest in it.  If you don’t, you will become extinct.  Put together a 5-10 year revenue investment plan and get a donor who loves your mission to leverage his or her investment by funding that plan.
  2. Non-profits are so afraid of the “overhead” police that they don’t invest in good people—Non-profits are filled with people who have no business working for that organization.  It’s that simple.  Because the non-profit thinks they have to go cheap, they hire unqualified individuals who may have a heart for the mission, but don’t have the skills for the actual work.  Yes, your ratios might look better, but your effectiveness as an organization is in the toilet.  What good is that?  Solution:  Commit to hiring quality people by paying good salaries.  Spend a long time with your hiring process.  Treat people extraordinarily well so you can keep them.  This will lead to results and impact.
  3. You don’t try new things—So many non-profits are stuck doing the same thing over and over again, both in their approach to fundraising and in programs.  Fear of failure is pervasive in our industry. It’s the exact opposite for successful companies.  They invest in failure.  They don’t call it that, but R & D is essentially knowingly putting money into things that are mostly going to fail in order to discover something that will succeed.  They do this because they know that investing in this manner will lead to better ways of coming up with a great product.  This is what you and your non-profit have to do as well.  Solution:  Commit a certain percentage of your budget every year to testing new ideas, creating new programs and thinking outside the box.  This will lead to new ideas and, over time, more revenue and impact in your community.
  4. Non-profits fail to invest in their mid-level and major gift programs—Richard and I see so many non-profits spend the same amount of money on a $25 donor as they do a $2,500 and a $25,000 donor.  Your mail program is awesome, but you think that is all you have to do.  Guess what?  If it hasn’t already, that awesome direct-response program is going to start to crack and you are going to pay for it because you didn’t invest in your better donors.  Did I just say that?  Yes.  Not all donors are alike, therefore you shouldn’t treat them that way.  You can spend more on the $250, $2,500 and $25,000 donor respectively with the intention of gaining more NET revenue.  Solution:  Do a deep dive into your data and figure out the ROI of cultivating your donors.  Then come up with a plan to spend more on higher end donor segments that will help lift response, create higher average gifts and reduce attrition.  Do this same analysis with your major donor file.  Investing now will reap ROI’s in the 10-15 to 1 in the coming years. 

Is the short-term important?  Yes, it is.  But, not to the detriment of the long-term.  If you have a vision, you must support and invest in that vision.  If you don’t have a vision, perhaps you should close up shop right now.  Most struggling non-profits are in that situation because they failed to take risks and invest in the long-term.  Some are just barely getting by.  It doesn’t have to be that way.
Don’t be cheap, take a leap!
Jeff
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