Fundraising hasn’t been this hard since the Great Recession.
It seems like just about everyone, everywhere is exhausted by the two pandemics facing our country, coronavirus and racism. There is an underlying sense that we are in the midst of a great shift in mindset and values. All while the global economy wobbles wildly and American unemployment approaches levels not seen since the Great Depression.
So, yeah. Fundraisers have their work cut out for them these days.
Bloomerang posted some great data recently about the effectiveness of personal outreach (phone, email, in person) on donation revenue. The results shouldn’t be surprising – we know that philanthropy is all about relationships. What if those relationships were paired with strategic financial knowledge? How much more effective could fundraising asks be?
Here are four ways financial data can help fundraisers find success in a post-pandemic world:
1. Know Your Burn Rate.
Can you speak to your organization’s burn rate or run rate? Do you know how much money it takes to sustain your nonprofit’s operations on a weekly or monthly basis? Can you articulate that at the programmatic level? If you can speak to the sustainability that will be ensured by a large gift, savvy donors will respond.
If you want to take this concept to the next level, work with your finance team to understand the burn rate of your signature programs (or whatever you are fundraising for in particular). Let’s say we’re talking about a food bank with a weekend pickup program where 200 families are served. Let’s say that program costs the organization $10,000 a month. Armed with that information, you can further frame the costs as $50/month feeds a family for a weekend. Or perhaps even more powerfully stated: $12.50/week provides 6 meals for a family in need.
2. Be Transparent & Fluent in Financial Data.
Studies show that financial transparency leads to higher donation revenue and higher levels of donor trust. Are your financials available (easily and readily) on your website? Can donors look at your 990 and annual audit? At the very least these should be available at Guidestar.org. At the very best they can be showcased at your website as an indicator of your commitment to transparency.
3. Demonstrate Financial Resilience.
This is particularly powerful. How has your organization proven over time that it is financially responsible and/or sustainable? In times of crisis, how does the organization react? If you make changes and pivot to adjust, adapt, and improvise your way to fiscal salvation, are you telling that story? Do your donors know what you have done to bootstrap or cut costs in tough times? Do they understand how you have made adjustments to the way you do business to increase organizational resilience? If you can share this information and tell this story alongside stories of how you are building stakeholder resilience, well that my friends is a home run.
4. Understand How to Frame Overhead as Programmatic Support.
Donors or funders who LOVE to talk about overhead. We all know them and have them, don’t we? How do you respond? Are you adept at illustrating how your organization’s overhead is directly related to programmatic support? Can you turn the conversation about overhead, if adversarial, into a more productive and compelling discussion about how effective your programs are from a financial perspective? Can you speak to how the administrative staff spends their time on program activities or support?
Savvy fundraisers and philanthropy staff know that overhead is a fallacy. But until there is broad acceptance of that on the funder side of the table, we must all do our best to frame the overhead conversation in terms of programmatic support.
Of course, you can only leverage financial data for fundraising success if you have access to it and you trust its accuracy.
At Blue Fox, we put together a handy financial checklist for fundraisers to make sure your financial house is in order. (Especially helpful if you’re new to the nonprofit or fundraising space.) You might also be interested to read this recent article from Forbes – it’s a great short list of 13 ways to adapt fundraising strategy in tough times.
Does your organization consider finance information to be a tool that’s leveraged for fundraising success? We’d love to hear your comments.