It was a disturbing conversation. The donor had made a significant gift and was now asking what had resulted – what had actually happened – from that gift. A simple question.
The Director of Development was caught in the corner. Anticipating a grilling from the donor, she had spent a great deal of time with program and finance to answer the question that she knew was coming. But she had failed to get the information and was now face-to-face with a donor who required it.
Here’s what happened. It finally dawned on the donor that the information he wanted was not going to be delivered so he stood up and said: “Well, Ann (the DOD and not her real name), if you can’t tell me what you did with the money then I can’t give you any more until you can.” And he walked out.
Sadly, Jeff and I and our associates run into this kind of situation every week. And it is a very real problem that most MGOs face in their quest to fulfill donor interests and passions. They are routinely failing to deliver on the basic promise of major gifts, which is simply this: “If you give, this is what will happen.” Simple, isn’t it? Basic.
By the way, this question “what did you do with my money” is different from the question I will deal with in my next post, which is “did your approach or solution actually work?”
This information is often so very hard to deliver. Why is this true? There are several reasons:
- Overhead expenses are not tied to program categories, so unrestricted money must be raised – causing the very problem we are addressing here. In this situation, it is impossible to tell the donor what you did with her money because what you did with it, according to finance, is fund “general overhead.” This is a serious problem in nonprofit accounting and finance management that could easily be remedied. Everyone needs to understand that a nonprofit organization exists to deliver a solution to a problem, and overhead is an integral part of delivering the solution. It’s not an undesired appendage – it’s crucial. We have a solution to this program packaging problem, and we would be happy to share it with you.
- Some folks outside of fundraising and major gifts don’t get that the money they manage and spend comes from donors who want to know where it went. This is a management and leadership problem which can be easily changed if the leader/manager constantly, in every meeting, reminds all staff that (a) donors are the source of the money they are spending (these includes institutional donors like government, business or other institutions), and (b) that those donors need to know where the money went. Most people in a nonprofit who manage government or selected foundation grants understand this – they just don’t translate this over to individual donors.
- Some aren’t aware that they MUST satisfy the donor’s need to have their hearts connected to the cause. The donor transaction is not about the money. Few people behave as if they understand this. A donor needs to KNOW where the money went so their heart is connected to the cause, and their deep need to do good can be fulfilled.
If you take nothing from this post, please just take this. A donor, at her core, wants to know that something good has been done as a result of her gift. She needs to know that something actually happened because of her gift. You need to tell her that and be able to back it up. If you can’t, then you need to set about changing the system that is preventing you from doing this.
It is not easy, and Jeff and I know this. But it is worth working on, because ultimately your work as a MGO is to satisfy the passions and interests of every donor on your caseload. And that will be good for the donor, the organization and you.
Read the whole series: