The Ten Immutable Laws of the (Fundraising) Universe
by Carl Richardson
In my years of working with a wide range of nonprofit organizations, I've learned that the universe of fundraising can be described by certain "laws," much as the physical universe is described by certain provable statements. Tested by experience, observation, and results, these laws of fundraising determine to a large extent the success of our efforts. If your capital campaign has stalled, your funding proposals routinely go unfunded, or your board has stopped working effectively, the laws described below may point you toward a solution.
Law #1: No group of individuals is waiting to give (also known as the Law of the Nonexistent They).
The idea of such a group is a legend raised to the status of myth among board members, executive management, and volunteers. Capital campaign planning meetings, program development meetings, and fund development committee discussions are frequently dominated by the refrain "They will give."
Unfortunately, this myth is dangerous to sound organizational and fundraising practice because it leads to two misconceptions: 1) prospect research, identification, cultivation, and solicitation are not necessary because they will give out of the goodness of their hearts; and 2) although we are too _______________ (poor, overcommitted, overworked, fill in the blank) to contribute to our cause, they are perfectly positioned with abundant resources, time, and energy to ensure its success.
Implicit in the Law of the Nonexistent They is a simple fact: Anonymous individuals who have little or no connection to your organization are not waiting in line to give you money. Yes, many people will invest in your organization - if you give them reason. But the mysterious they are not among those prospects. Instead, organizations must rely on "we" - that is, you and I and those willing to join us. And if we have only ourselves and those whom we can convince to join us, then we had better get started. The best place to begin is with our second law.
Law #2: Fundraising is a conversation between funded and funder.
Marketing, in its purest form, is a conversation between someone with something to offer and someone who is interested in the thing that's being offered. And fundraising is simply a form of marketing in which the conversation is expressed in actions rather than words. The funder participates in this conversation by providing financial resources, credibility, and, sometimes, social or political connections. The nonprofit organization seeking funding participates by providing something of value, be it a social service, a solution for a critical community need, or a seat at the policy table. Either side may discontinue the conversation at any time.
As we have seen, the Nonexistent They are not party to the conversation between organization and funder. People who do not know your organization and are not known by it will not invest in your mission. This is why fundraisers identify prospects, cultivate their interest, develop their connection to the organization, and, last but not least, ask for that investment.
Moreover, the conversation between funders and fundraisers is how communities hold nonprofit organizations to account. The community, represented by individual donors or institutions, directs its philanthropic resources to organizations it deems to be effective and accountable and withholds its resources from those it deems to be less effective or accountable. That's why it is so important to heed our third law.
Law #3: Effective fundraising is a result of telling your story.
Funders invest in nonprofit organizations able to make a well-conceived case for support that includes clear goals and measurable outcomes.
Telling your story involves more than making the case in a funding proposal or during a funder visit. Our third law tells us that we must take advantage of every opportunity to enhance the visibility of our organizations. And visibility, in this context, is just another word for publicity. There's a saying among professional fundraisers: "You can have publicity without fundraising, but you can't have fundraising without publicity." Publicity includes press releases, newsletters, annual reports, annual appeals, audio-visual aids, and every other form of printed or produced collateral. But other forms of publicity are also important. Having your board chair call a foundation to introduce your nonprofit is a form of publicity; arranging to have exhibiting artists meet your supporters at the local art event is a form of publicity; getting your supporters to tour the new hospital wing is a form of publicity. Any activity that puts a face on a community need, illustrates your mission in human terms, or otherwise imbues your organization with a personality can be considered publicity. Our fourth law tells us why the ability to "personalize" your organization dramatically increases its chances of success.
Law #4: People give to people.
Rare is the seasoned fundraising professional who has not observed this law in action. Fundraisers know that worthy causes alone - "feed the hungry," "shelter the homeless," "care for the sick" - do not raise money. Presented as abstractions, they often raise more questions than they answer. That's why we say that people give to people.
A word of caution. Humans are inherently social animals; we care about and spend enormous amounts of time and energy creating and maintaining social networks. If people give to people, then the role of the fundraiser is to create relationships. However, fundraisers must be careful. Friendships between fundraisers and prospects are usually fleeting, lasting only as long as the fundraiser is employed by that organization. Indeed, professional ethics dictate that the organization's prospects and donors stay with the organization, not with the fundraiser. The truly successful fundraising professional is able to establish relationships on behalf of the organization that continue well beyond his or her departure from the organization. Once a relationship has been established, it's time to move to the next step.
Law #5: Someone must ask for the money.
Gifts are solicited; they do not come in over the transom. And yet this simple fact often is the hardest one for fundraisers to accept. Indeed, we will do practically anything to avoid asking for the money. Sitting at the table with a prospect, having worked hard to make a compelling case for support, many a clear-headed fundraiser will neglect to say, "Now, Harriet, we're talking about $50,000 a year for the next five years. Can you do that?" Or a grantwriter will submit an elaborately detailed proposal without including a statement that says "We are seeking an award of x dollars for y purposes," leaving the reviewer to scratch her head and wonder, "How much do they want and for what?"
It bears repeating: The individual prospect or foundation will rarely venture an offer of a gift. It is the role of the fundraiser to seek the gift. And the key to success is to ask in a manner that respects both the donor and the gift, which brings us to our sixth law.
Law #6: An organization cannot thank a donor enough.
Expressions of gratitude are expressions of respect. Every appeal letter, every funding proposal, every individual solicitation to a recurring donor should include a reference to his or her previous contributions of time, money, and advice. Many organizations establish hard-and-fast policies governing gift acknowledgements. A good one is to send at least initial acknowledgement of a gift within forty-eight hours of its receipt. Another good one is to require more than one thank-you for gifts over a certain amount. For larger gifts, the development officer should send the initial typed response, followed by a thank-you from the CEO a few days later; for really significant gifts, the chair of the board might send a third thank-you a day or so after the CEO. Overkill? Perhaps, but ask yourself this: "If this donor stops giving, can we replace the gift?" In cases where the answer to that question is "no," then earnest and sincere gratitude is not overkill.
In the for-profit world, good customer-relations managers are famous for their maniacal devotion to the words "thank you." They understand that their costumers usually have a plethora of options from which to choose. The same holds true for funders. And that brings us to law number seven.
Law #7: Seek investments, not gifts.
Making a gift to a nonprofit organization is nearly always seen as an investment by the funder or donor and almost never understood as such by the organization. When an organization asks for a gift - "Please give us a grant to accomplish such-and such an outcome" - the organization, whether it knows it or not, is seeking a one-sided exchange of values. In contrast, when an organization seeks an investment - "Please invest in our organization so that together we can accomplish such-and-such an outcome" - it invites the funder or donor to share responsibility for the desired outcome. By changing the paradigm, the organization alters both the perception of the ask and, as our eighth law tells us, the manner in which funders and donors are treated.
Law #8: Donors are developed, not born.
All donors have three characteristics in common: a connection to your organization, interest in its success, and the ability to give. The process of nurturing these three characteristics is called "donor development." That's why most fundraising functions in nonprofit organizations are grouped under the rubric of "development." And the best way to describe the process of moving an individual to the point of making a gift is using a model known as the "Five Eyes of Donor Development."
To fully appreciate the power of the "Five Eyes" - Identification, Information, Interest, Involvement, and Investment - you need to think about individuals as operating within Circles of Influence. The closer to the center of the circle a person gets, the greater the influence that person may have on an organization and, conversely, the greater the influence the organization may wield over that person. To illustrate, draw a small circle on a sheet of paper. Next, draw three concentric circles around that circle. Now imagine a core group of people within the smallest circle. Those are your stakeholders - so called because they have a personal stake in the success of your organization. The second circle is occupied by donors - people or institutions that have a connection to your organization and contribute regularly to its mission. The third circle is occupied by prospects - individuals or institutions that have shown interest in supporting your organization. And the last circle is populated by "possibilities" - so called because you believe those individuals have possibilities for becoming prospects and donors.
Now, the world is full of possibilities. To turn them into prospects, however, you have to identify their connection to, interest in, and ability to give to your organization. Prospects, in turn, need information about your organization as much as you need information about them. From information comes interest - that with which we become familiar. People tend to become involved in that which interests them. And investment follows involvement as surely as night follows day. Thus, the "Five Eyes" remind us to focus our efforts on moving each occupant of a "circle" closer to the center. In this way, possibilities become prospects who become donors.
Here's the interesting thing: As donors move closer to the "inner circle," their gifts will grow. No one invests all of his or her money in a single stock or company; by the same token, no donor makes his or her largest investment in a nonprofit with his or her first gift. By establishing a strong connection with donors, we develop their interest in our organization's success and enhance their ability (desire) to give. And as we continue to match the needs of our organization with their needs, our donors will continue to make larger gifts, until they make the ultimate gift. Then our attention turns to stewardship and maintaining their satisfaction with and involvement in our organization. This leads us to our ninth law.
Law #9: Fundraising out of desperation is futile.
Contrary to what many people believe, contributions of cash are rarely offered because an organization is desperate. Desperate organizations are often perceived to be unstable, incapable of doing the work, and just plain bad investments. The successful organization, in contrast, is able to tell a story characterized by accomplishment, sound financial management, and visionary leadership.
Of course, all organizations raise money out of need. By itself, however, "We need money" is rarely compelling enough to convince a prospect to offer his or her support. Instead, your grant proposals, appeal letters, and kitchen conversations must say in no uncertain terms, "We're winners! We can do the job! Back us!"
Our ninth law holds true not only for desperate organizations but also for desperate causes. A case for support that speaks only to the misery of your constituency will often backfire. People, being people, tend to become resentful when they're made to feel guilty. Take care that your prospects do not become so numbed by the magnitude of the problem that they miss the real improvements created by your efforts. Donors will give year after year, in increasing amounts, if you can convince them that you have a plan and the leadership and financial means to execute that plan.
Law #10: In the best of circumstances, people will do what they please (also known as the Law of Uncertainty).
As I hope I've been able to show, fundraising is the art of establishing and strengthening relationships between prospective donors and your organization. But because humans just may be the most unpredictable species in the world, fundraising is anything but an exact science, and its immutable laws are, well, mutable. To quote one of my mentors, Sy Seymour: "On your best day, when you've spoken all the golden words you know, when you've matched the right gift to the right prospect for the right cause and had the right person ask...people will do what they please." Given this most basic fact of the fundraising universe, our only recourse as fundraisers is to "keep on keeping on." Perseverance, not speed, will win this race.
The Law of Uncertainty helps even the most seasoned fundraisers and development officers accept the rejections that are an inevitable aspect of their job. In fundraising, such rejections are rarely, if ever, personal. In fact, "no" is often a veiled request for more information. If a prospect says "no," don't be afraid to ask "Why?" Knowing the reasons behind that "no" will prove invaluable the next time you make your case to that donor.
I hope the laws described above provide you with some insights into the unique and always fascinating dynamics of fundraising. A solid understanding of those dynamics will help you to develop fundraising programs that bear fruit and secure a strong financial future for your organization. In future columns, I will consider many other aspects of the sustainable nonprofit, including strategic planning, fundraising campaigns, and executive leadership transitions. If you have a specific question or topic you'd like to discuss, don't hesitate to send me an email at: email@example.com. I look forward to hearing from you.
With twenty-seven years of experience in nonprofit management, fundraising, and organizational development, Carl Richardson has served a broad range of charitable organizations, from federal and state agencies to small grassroots organizations. In addition, he has taught board development, strategic planning, fundraising, grantwriting, and other nonprofit management topics for the Universityof New Hampshire Continuing Education Services, Brown University Learning Communities, the American Association of Grants Professionals, and the National Society of Grant Writing Professionals. If you have a question about nonprofit management or fundraising, you can ask Carl and other nonprofit professionals on the PND Talk message board. Or contact Carl directly at firstname.lastname@example.org.