Navigating the Road Ahead with Sufficient Financial Resources

Fundraising professionals are an optimistic bunch, but at some point we must acknowledge that attaining a specific dollar goal is dependent upon the cultivation of a constituency with sufficient financial resources.  Fundraisers must be more strategic in their work than simply believing that the money is out there.  It is incumbent upon every organization to define what cultivation means relative to its relationship with donors – and education must be part of this process.  Receiving a significant gift from a donor that we do not yet know, and that does not yet know our organization and purpose, is very remote. 

Availability of Sufficient Financial Resources

Our fundraising industry has grown, evolved, and changed dramatically in the last 10 to fifteen years in response to national crises such as 9/11, the Great Recession, and now the pandemic.  Technological advances and cultural shifts have further impacted our approach to the essential elements of success fundraising.  However, we believe this constant holds true, regardless of the size of your campaign or the nature of your program or project: successful fundraisers must understand the dynamics of their funder constituencies – who they are, what type of relationship they want, and what impact they hope to have – in order to realize their funding goals.

The fourth essential element of successful fundraising speaks to the importance of identifying the interest and capacity of your current and likely future donors.

Element #4. Availability of sufficient financial resources

For a campaign to have a reasonable expectation of success there must be sufficient financial resources available to fund the development program. By “available,” we mean those prospective donors (individuals, corporations and foundations) who have at least a philosophical rationale for supporting the organization and the development program, if not an active interest in and relationship with the organization.

Specifically, there must be a sufficient number of major gift prospects to initiate campaign activities at a substantial and meaningful level. While some of these prospects might be members of the internal organizational family, others might only have a cursory relationship to your organization.  The challenge, in both instances, is to create a clear pathway to creating a collaborative and meaningful relationship.

Applying Element #4 requires that we also follow the objectives presented in our case for support, and apply the campaign principle to raise a specific amount of money for a specific purpose within a specific time frame.  Therefore, defining your constituencies of likely donors will depend on your case and your methods and resources for raising money.  Are you trying to raise many, many smaller gifts of less than $100 to support annual operations, or are you looking to secure a select number of $1,000,000 multiyear gifts to achieve your major capital and/or endowment funding goals?

It quickly becomes obvious that defining your constituencies will depend on the depth and scope of the actual relationships that exists between your organization and your current and future donors.  Today, nonprofit organizations and their fundraisers have an incredible number of tools and resources available for communicating with and potentially expanding their field of supporters.  In the name of cultivation and stewardship, most nonprofits use databases of varying levels of sophistication to manage points of donor communications and gift tracking.  Larger organizations, with greater resources, often employ relationship managers to specifically oversee this process.  Yet despite these powerful tools, there are signs in our sector that we are not, in fact, creating stronger constituent relationships at all.

The Fundraising Effectiveness Project, established in 2006 by the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute, conducts research on fundraising effectiveness and specifically reports on the rates of donor renewal from year to year.  While the number of donors and the total dollars given increased dramatically in 2020, this growth was fueled by new donors most likely reacting to the extraordinary pandemic and lapsed donors who came back into the fold, probably for the same reason.  Ironically, our ability to retain current donors fell to a new low of 44 percent.  For every 100 donors on our rolls we are, in effect, waving goodbye to 56 of them.

Successful major gift fundraisers will typically appeal to existing donors (those that have a greater knowledge and affinity for our organizations), but if we are only retaining 44 percent of our constituents from year to year, this donor churn demands that we dedicate precious time and resources trying to replace departing donors rather than developing deeper and more meaningful relationships with our existing donor constituents. 

Most organizations will engage volunteers to advocate for their mission and to expand their constituency of likely donors through peer relationships.  But cultural and societal changes are changing the way that community leaders and volunteers participate with nonprofits.  Fundraisers must also deal with increasing challenges related to the cancellation of social events and group meetings, our opportunities to network and to benefit from the social aspect of giving have also diminished. 

The technological advances of our industry have benefited many organizations and allowed for the growth in the numbers of new donors, but these advances have not typically deepened our resolve to find out who our donors are, what type of relationships they want, and what impact they hope to have.  Successful fundraising, and the attainment of gifts that drive the success of comprehensive campaigns, remains an intensely personal endeavor.

In the end, fundraising leaders must balance their organization’s efforts to retain their current donor constituents (as many as possible!) from year to year with the need to create and sustain more meaningful relationships with constituents at multiple levels of giving.    

Links to previous Road Ahead Blog posts: