It’s difficult to boil down to a few paragraphs how to apply Lean Six Sigma principles to create fundraising processes that are more effective and eliminate wasted effort. But, to get started, here are a few basic tips.
- Use high-cost, scarce resources to do only high-value work. Good development officers are truly a scarce resource. They should focus on cultivating prospects, not on making database entries. Can a clerical staffer input the data instead? What about things such as routine reporting, other paperwork and thank-you letters? Routine stewardship activities. What can you do to increase the number of true prospect-facing meetings per week?
- Develop high-volume, point-of-entry activities and programs to create abundant prospect flow into the “pipeline.” For example, in one model the initial connector, often a board member, brings people to interesting events where they learn about new initiatives or treatment advances. Some become qualified prospects and move through the process. A good metric is, for every 10 people brought in by the initial connector, one gives a gift at the target level.
- Set multiple process measures, with emphasis on cycle time. How many prospecting events will you hold each month? How many connections should you make at each event? How many prospects should you be cultivating at each stage? You must establish criteria to let you know how you’re doing, as well as a system for alerting you when a particular measure is or isn’t being met. For example, you can use a “dashboard” system where green means you’re on track, yellow is the continuous improvement zone, and red calls for immediate attention because you’re seriously behind where you need to be.
- Measure early, measure often and use metrics that correlate with success. Instead of simply measuring things at the end, such as how much money was raised or the total sum each development officer brought in, use measures that help you see at key points whether you are on track for a positive outcome. Not only will you get what you measure, you will build a reliable forecasting system. Your CFO will love you.
- Maintain a constant effort to eliminate out-of-bounds process variance. Create your “way” of fundraising, so you have a tried-and-true baseline process that is ingrained in your culture. In other words, if you have four — or 14 — gift officers, you will still have one consistent way your organization goes about acquiring gifts, instead of four different ways, with numerous variations from each. That one way should allow for a clearly limited degree of variance to allow your front-line people to apply their experience and creativity to specific situations. You can then continuously improve that one way.
- Focus on major gifts. A basic principle of Lean is flexibly placing resources where they will generate the most value. Of course, you need a complete pyramid of fundraising strategies and methods, but if you focus on maximizing your major gifts program you can significantly increase your ROI. A mark of a high-performing operation is a revenue mix of about 80% major gifts, which in number make up about 20% of total gifts.
Have you applied any Lean Six Sigma principles to your fundraising process? Let us know in the comments below