BUILDING A CULTURE OF PHILANTHROPY

MPS 519, Resource DevelopmentDePaul University School of Public ServiceMeagan Downey, CFREApril 20, 2013

Definition• Culture of philanthropy: a set of organizational values and

practices that support and nurture development within a nonprofit organization

In Practice• Most people in the organization act as ambassadors and

engage in relationship building.• Everyone promotes philanthropy and can articulate a case

for giving.• Fund development is viewed and valued as a mission-

aligned program of the organization.• Organizational systems are established to support the act

of giving.• The executive director is committed to and personally

involved in fundraising.

Climate: Instability in the Development Director Role

Under $1M Between $1-5M Between $5-10M

Over $10M0%

10%

20%

30%

40%

50%

60%

Anticipate Leaving the Organization within 2 YearsAnticipate Leaving the Field of Development within 2 years

Underdeveloped: A National Study of Challenges Facing Nonprofit Fundraising, Bell and Cornelius, CompassPoint, 2013

Development Directors Leaving the Organization or Field by Organizational Budget Size

Climate: Executive Directors Dissatisfied and Unprepared

Underdeveloped: A National Study of Challenges Facing Nonprofit Fundraising, Bell and Cornelius, CompassPoint, 2013

Under $1M Between $1-5M Between $5-10M Over $10M0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Executives Very Satisfied With De-velopment Director Performance

Climate: Executive Directors Dissatisfied and Unprepared

Underdeveloped: A National Study of Challenges Facing Nonprofit Fundraising, Bell and Cornelius, CompassPoint, 2013

Love

s ask

ing fo

r gifts

Skilled

at se

curin

g gifts

Previou

s dev

elopm

ent e

xperi

ence

0%10%20%30%40%50%60%70%80%90%

100%

Executive Director Fundraising Capacity

High-Performing OrganizationsRest of Sample

Climate: Board Members Not Sufficiently Engaged In Philanthropy

Underdeveloped: A National Study of Challenges Facing Nonprofit Fundraising, Bell and Cornelius, CompassPoint, 2013

Under $1M Between $1-5M Between $5-10M Over $10M0%

5%

10%

15%

20%

25%

30%

35%

40%

SufficientVery Sufficient

Board Member Engagement as Reported by Executive Directors by Organizational Budget Size

Climate: A Vicious Cycle• High turnover rate of development staff, due to

dissatisfaction and termination• Misunderstanding about the development profession

leads to unrealistic expectations of fundraising staff• Fundraising becomes “a necessary evil” instead of an

opportunity for engagement • Donors lack meaningful relationships to the

organizations they care about, or worse, they lack trust in organizational leadership and fundraising staff

Breaking the Cycle• Continual education• Creating and communicating opportunities for

engagement• Communicating impact

Education and Training Resources• Association of Fundraising Professionals• BoardSource• Donors Forum• Chronicle of Philanthropy• Fundraising and board development consultants• Executive coaching• CFRE International• IUPUI School of Philanthropy• Integration of training in basic staff and board orientation• Harvard Business Review• Donor surveys and focus groups

Engagement: Demystifying the Donor

DONOR

Engagement: Demystifying the Donor

• Board members• Former board members• All staff• Leadership• Volunteers• Activists• Members/subscribers• Beneficiaries• Audience goers/attendees• Grateful patients• “Family” friends

Engagement: Demystifying the Donor

Successful fundraising professionals develop close relationships with all staff and volunteers who have contact with these constituencies. They make fundraising success everyone’s success, and fundraising challenges everyone’s challenges.

Impact: Fundraising Metrics

Development raised $XX,XXX,XXX!

Impact: Fundraising Metrics• Metrics are ideally represented in fund development plan

and integrated into organizational strategic and operational plans

• Metrics address costs (hard and soft), revenues and health of donor base

• Targeted improvements in metrics are closely tied to budgetary needs/budgetary cuts (staffing, technology, prospect research, etc.)

• Relevant metrics are regularly communicated to staff and volunteers who are not development professionals

• Metrics inform rather than overwhelm.

Impact: Fundraising MetricsMetrics can show what is happening, but not necessarily why. Discussing the why can be a valuable engagement exercise for executive directors, board members and fellow staff, and help to create buy-in for fundraising strategies undertaken by the organization.

Impact: Fundraising Metrics

Average lifetime valueAttrition rate

Cost per dollar raised

# of meaningful contacts

% board giving

Renewals

Net ticket revenue

Response rate

# of face-to-face solicitations

# of event attendees

Email open rate

Email click-through rate

Upgrades/downgrades

What is “good”?

Impact: Fundraising Metrics

Good is better.

Cost Per Dollar Raised• Often an oversimplified metric, at times sensationalized by

the media and misunderstood• Considerations include type and age of the organization

and mix of fundraising programs• Returns on investment in fundraising programs don’t

necessarily show up in the same fiscal year• Generating $4M at a cost of $1M (25% CPD) is preferable

to $3M at a cost of $600K (20% CPD) because the end result is $600K more to spend on mission

Association of Fundraising Professionals Resource Center; Hot Topic: Fundraising Costs

Cost Per Dollar Raised

Dan Pallotta: The Way We Talk About Charity Is Dead Wrong; Ted; http://www.youtube.com/watch?v=bfAzi6D5FpM

Impact: Fundraising Metrics• Identify who needs to know what• Give partners simple benchmarks that they can follow

over time• Communicate trends• Engage partner stakeholders in determining the why, then

test assumptions together• Never underestimate anecdotal feedback to weave into

metrics to create a compelling narrative• Succeed together, fail together, innovate together• Institutionalize opportunities for communicating impact

Discussion