Tuesday, December 21, 2010

Is the Donor Always Right?

A few years back I had the pleasure of having Penelope Burk (of Donor-Centered Fundraising fame at http://www.cygresearch.com/) consult with the team I was on over a period of time.  If you haven't read her work I highly recommend it, and if you can afford her in person I recommend that even more highly, but her focus on doing right by the donor, and adhering to their wishes makes eminent sense.

Or does it?  Maybe not all the time, or at least not if the donor doesn't have the full picture...

I had a chat last week with someone who works at a large university, in a faculty that has a large number of affluent graduates.  Her lament was that funds were going to "naming this wing" or "supporting that special project", but the basic infrastructure of the department, the tools that the students use and the ability of administrators to efficiently do their work, was woefully underfunded.  Her phrase was, "we don't see a dime".

It's easier to fundraise when you can sell the naming rights or have a sexy special project, but fundraisers do their organizations a disservice if they also don't have a strong Case for support for all aspects of their organizations.  I know first-hand that unallocated funds are hard to raise, but if the only thing the prospective donor is aware of is the hot new project then my friend and her department ultimately suffer.

And if that's the case the donor really isn't right, even if it's not their fault.

Saturday, December 11, 2010

Time in the Charitable World

Most charities are lean to the point of anorexia, driven in large part by a legitimate desire to fund their Mission but compounded in an unhealthy way by a fear that donors will revolt if "too much" is spent on staff, systems and back-of-house activities to support their Mission.  This paradox would be bad enough on its own, but can actually be compounded by the drive to be more like for-profit organizations.

Charities and their Boards often admire good for-profit concepts and want to adopt them, but end up misusing or misapplying them.  First, what sounds like a good idea may simply not translate well into a world of philanthropic giving.  Second, given a lack of experience or misunderstanding with the concept may result in damaging outcomes.

A great example is the for-profit mantra of quarterly results, and being driven by short-term payback.  ROI is valuable concept, but one to be used with great caution in the charitable world.  Simply put, the problems that most charities are seeking to address took generations to create, and likely won't be solved by the end of Q3.  But Boards and inexperienced leaders (particularly ones newly arrived from the for-profit world) may be tempted to treat their charity this way.  After all, they reason, it's a good concept for the for-profit world, and if the pay back doesn't come within 12 months it likely isn't worth doing...

So investments in resource development or fundraising can have unreasonably or even unattainably short payback time-frames associated with them, or the investments don't get approved at all.  Which inevitably leads to the further "starvation" of the organization.

In the end, a longer term view, a little patience, and some courage to make smart investments with some carefully considered risk can have huge benefits.