Your case for fundraising goal better match your messaging and need

zikaThis morning, I was in my car driving down the interstate when National Public Radio (NPR) ran a story about UNICEF’s goal to raise $9 million to fight against the Zika virus. If you want to learn more about this new, you can click here and read more about it in the Washington Post. However, this isn’t really what today’s blog post is about . . . this morning I want to share with you my response to this story and how it applies to your non-profit organization.
In the three seconds after listening to this NPR story, here are the thoughts that raced through my mind:

  • Ugh! Not another scary disease story (e.g. Swine flu, bird flu, SARS, Ebola, etc) to whip up public fear and motivate action on any number of fronts. Here we go again. 🙁
  • Hmmmm, I wonder if little kids are still carrying UNICEF boxes collecting small change at Halloween? Is it possible for a simple “tin cup philanthropy” campaign to raise $9 million for this effort?
  • Barf . . . I think some of the U.S. Presidential candidates who lost last night’s Iowa Caucus could probably fund this $9 million UNICEF goal many times over. (If you doubt me, then you may want to click here and make sure you’re near a toilet for the post-article queasiness)

You’re probably wondering what any of this has to do with you and your non-profit organization?
Simply . . .

Make sure that your fundraising goal matches the size of your case for support!

If you are trying to do something BIG and you need your donors to understand how BIG it is as well as rise to the BIG occasion, then your fundraising goal better also be BIG. If you don’t live by this rule, then it is likely that your campaign will:

  • be seen as underwhelming
  • lack traction and volunteer support
  • attract fewer donors than anticipated
  • result in smaller average size gifts
  • run the risk of not meeting goal

I took a phone call the other day from a potential client wanting me to bid on a capital campaign. After asking a few questions, it was apparent they only wanted to set a six figure goal to do a little renovation. I encouraged them to go back to their boardroom, ask the following questions, and then we’ll talk again:

  • What other needs do your clients face in your community? How much money do you need to address those needs?
  • Are your physical plant issues perfect if you are successful with these small renovations? If not, then what more needs to occur and how much would that cost?
  • Is your endowment satisfactorily large enough to inspire confidence in your donors that you have the question of long-term sustainability addressed?
  • Look at this renovation campaign through the eyes of your donors. What do they see? What are their reactions?
  • Does your organization possess the internal organizational capacity to sustain what you’re building? If not, can that be built into this campaign? If so, what would that cost? (e.g. endowing staff positions, etc)

Please use the comment box to share your thoughts and experiences with goal setting and building a B-HAG (e.g. big, hairy audacious goal) type of campaign and case for support. Have you been in this position before? If so, what did you do and what did you learn? We can all learn from each other.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

Your agency needs to ask "What is my why?" every once in awhile

I recently saw a great YouTube video from Alease Michelle talking about how she found personal inspiration from Eric Thomas (aka ET The Hip Hop Preacher on Facebook). She put together a 5-minute online video all about the question: “What is my Why?” By the end of her video, I was thinking about non-profit organizations and their WHY, which is what inspired this morning’s post.
Before I start, I thought you might want to check out Alease’s YouTube video first:
The place that you and your donors go answer this question about your non-profit agency is your MISSION STATEMENT.
Mission statements are the most important tool in your organizational toolbox when it comes to explaining why you exist, with whom you work, and what you do. This is different from vision statements, which exist to tell the world where you are going and the vision you have for your community (or the world).
Mission statements are not static. This isn’t a “set-it-and-forget-it” kind of thing. As Alease talks about in her YouTube video, your WHY changes from time-to-time, which means your mission statement should evolve, too (albeit infrequently). For example, there was a non-profit in my hometown that started off more than 100-years ago as an orphanage. When those closed down, this agency evolved into an organization that provided a variety of services for kids with behavioral-issues. Finally, it expanded its scope to serve adults (e.g. those who they were previously serving and just aged out of the program but still needed assistance). With each evolution, their mission statement also evolved.
Another place where you will likely address the question of “What is my why?” is in your case for support document (aka case statement), which is the bedrock of your fundraising program. Simply stated . . . your internal and external case for support documents explain to fundraising volunteers (e.g. internal case) and donors (e.g. external case) what you do and how the dollars being solicited will support those efforts. In other words, it answers the question “what is the donor investing in?” which is essentially “what is my why?” Right?
This exercise is always timely when your board is going through a strategic planning process. However, it can be done at any time. Remember, this isn’t a role/responsibility for staff alone. It is the board of director’s responsibility to set the organization’s mission statement, vision, and case for support.
If your organization is looking at creating or revising its mission statement or case for support, the following are a few online resources that I dug up and think you might find helpful:

So, have you considered “What is your why?” I would love to hear what that is. I would also love to hear how you tell the world about “your why?“. Please scroll down and use the comment box below to share.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

Online videos offer endless opportunities to non-profits

Mission in Motion

By Rose Reinert
Guest blogger

rose1It was years into my role as Executive Director at a youth serving agency that it became crystal clear to me that helping people see could help them believe. Hands down, I encouraged board members to bring people in for tours, which often ended in an ask for an investment in our mission.

There is no argument that a story rich in description — sharing colors, smells, and sights — is gripping and engaging. There are countless opportunities for our beloved elevator speeches, and organization overviews, but there is no doubt, when you can provide someone the first hand look at the mission in motion, your sales pitch gets much easier.

This is the concept of Chapter 10 — “Got Video? (Video Sharing)” — in Lon Safko’s book, The Social Media Bible.

It is very easy nowadays to capture your “Mission in Motion” through various strategies. Consider utilizing some of these:

  • Client Testimonials
  • Board Member Orientation & Engagement
  • Donor Highlights
  • Organization Overview

It is sometimes difficult to get prospects for a tour or even to an event. So, why not utilize a short video via e-mail to share your mission and introduce them to your services? One of my favorite stories is a video that was made especially for a donor that highlighted a youth of the program thanking them for their investments.

How impactful!

Another great one was another youth agency that featured youth inviting guests to attend a benefit event through a short video invite.

Another great way to stand out to supporters!

Of course, the most simple online video is the simple case for support message like the one you see in the World Wildlife Fund (WWF) video about stopping the ivory trade and supporting their efforts to save the elephant population. Click here or on the video below to check-out this example.


In addition to reading Lon Safko’s book, here are a few additional links you might find helpful in developing your agency’s “picture” to share with prospects and donors:

So how can you capture your mission to share your story best? How have you used video to engage donors or volunteers?
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Donors remorse is real and easily avoidable

remorseTwas the day after Christmas and all through the house, everyone was sleeping except for me. The reality is that I’ve not blogged in two days because of a deadly combination of holiday festivities and a horrible case of bronchitis. So, this morning I’m sitting at my computer and cleaning out my email inbox looking for blog ideas. There are scraps of ideas everywhere I look, but nothing cohesive was coming together until I opened an email from Tom Ahern, who is one of the biggest and brightest names in the field of donor communications.
Tom’s email newsletter was all over the road. It was speed dating for fundraising professionals.
The one topic that jumped off the page at me was something he termed “Donors Remorse.”  Here is how he described it:

“But there is also a phenomenon let’s call ‘donor’s remorse.’  It’s just like buyer’s remorse: an oppressive feeling of disappointment and doubt that you’ve made a bad purchase decision. It’s a feeling of potential loss that happens immediately and automatically as soon as the first gift is completed.  I’m feeling it right now. I just gave $500 of my hard-earned income to a political candidate whom I trust and admire. And yet I wonder….”

Have you ever felt donors remorse? I have, but I’ve never really processed it this way. So, reading Tom’s words got my brain engaged this morning (which kind of felt nice after days of existing in a fuzzy cold medicine state of being).
beggingI’m not sure about you, but every time I’ve experienced donors remorse, it has been because I made a contribution out of a sense of obligation. Here are a few examples:

  • A friend asked me to make a donation to a charity because he serves on their board of directors
  • A friend asked me to make a political contribution because they were running for office
  • My neighbor’s son was selling stuff for his school’s fundraiser

The reason why donors remorse is a dangerous concept in fundraising circles is because it ties directly back to the idea of donor retention. When making a remorseful gift, the odds of the charity getting gift number two from me is extremely low. Since the non-profit organization most likely doesn’t know this (because they can’t read my mind), they are most likely about to embark on an expensive journey of trying to renew my support.
So, I’ve been thinking about ways to solve this problem this morning, and the answer surprised because it was remarkably simple.

Train your volunteers on how to use your case for support!

The reason why this work and does so every time is because it gets to the root of the problem.
In the three real-world examples I provided, the reason why I experienced donors remorse was because “The Ask” did not:

  • paint a picture of need
  • tell me how supporting the agency, school or cause would help address the need or make the world a better place
  • inspire me

We need to stop asking our volunteers to go out into the world with a fistful of pledge cards to ask their friends to support their cause without appropriate training and support. It also needs to be more than just a quick training on how to use the organization’s case statement.
I can’t tell you how many times I’ve facilitated a campaign kickoff meeting and walked volunteers through the case for support only to find out they don’t use it. They fall back on the familiar fundraising pitch where they ask their friends to do them a solid favor by supporting their favorite charity.
Let’s treat our volunteers like the adults they actually are. Let’s take our trainings a step further by talking about:

  • the concept of donors remorse
  • the reasons why this happens
  • the business costs associated with it happening
  • how to avoid it

If volunteers knew they could help you avoid spending lots of donor renewal dollars in a wasted effort by simply making the ask in the right way, I think many more of them would do so.
I dunno . . . what do you think? Has the cold medication rotted my brain?
I love Tom Ahern, and I think you will, too. If you want to check out his free e-newsletter, please click here and have a look around Tom’s site.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

A fundraising lesson in persistence and much more

university1I graduated from the University of Illinois Urbana-Champaign with my graduate degree in Urban Planning in 1994. In the summer immediately following graduation, I received my first fundraising appeal from the university. So, this story started almost 20 years ago, and it ended last night in an Applebee’s restaurant in Roswell, NM. In my opinion, there are lots and lots of little lessons throughout this story that every fundraiser should internalize.
I graduated at the height of the Chief Illiniwek controversy. For those of you who don’t know the story, it is akin to what the Washington Redskins are currently going through. It is simply a question of whether or not a sports team mascot can be a racist and insensitive symbol.
I came down on the side of the argument that “racial stereotypes dehumanize people“.
So, when my first fundraising letter came in the mail, I responded with a letter asking the university to stop soliciting me until the board of trustees addressed the Chief Illiniwek issue.
Believe it or not, the letters stopped.
university2Almost 13 years later, The Chief danced his last dance at a football or basketball game.
I couldn’t believe it when the fundraising letters started arriving in my mailbox again. Wow … 13 years later. I kinda thought they would’ve forgotten about me.
Not only did the letters start coming, but it felt like I got something every few months.
And then the phone calls started coming.
And then the email started coming.
I almost caved at first. After all, I kind of felt obligated to give to a fundraising solicitation that was 13 years in the making. Yet, I held off on making my first contribution. Our charitable giving budget was big back then and we had lots of charities we liked to support.
I decided that my alma mater would have to earn it just like the other charities did.
On September 17th of this year, I blogged about the Urban & Regional Planning Department at the University of Illinois and their 100th anniversary. I used their event to talk about how your agency should use anniversaries to engage donors as well as do some fundraising.
In that post, I shared some of the activities and communication strategies being employed by the university. I openly wondered if I would attend the big weekend celebration or make a contribution.
Fast forwarding to last night . . .
I am on the road for business and find myself in Roswell, NM. Across the street from my Holiday Inn Express is an Applebee’s restaurant, which is where I found myself for dinner eating alone and reading a white paper on monthly giving campaign best practices. (LOL . . . isn’t my life glamorous?)
While I’m on the road, I forward my home phone to my cell phone because I hate weeding through tons of voicemail upon returning from the road.
In the middle of my wedge salad, my phone rings. I didn’t recognize the number, but I answered it anyway. Of course, it was a student from the university asking if I would like to make a contribution to contribute to a scholarship fund as a tribute to the Urban Planning Department’s 100th anniversary.
Six years of countless mail . . . a steady stream of email . . . and diligent phone calls from students . . . and it finally happened last night.
She asked me specifically for $300. I declined, but countered with my first $100 contribution to the University of Illinois. It is perhaps the hardest earned $100 contribution any non-profit organization has ever received.
Why last night? I have no idea. The spirit moved me? The ambiance of Applebee’s set the stage? The case for support language included support of a scholarship fund and had a tribute angle? Who knows!
I think this story is ripe with lessons for fundraising professions. Here are just a few

  • Persistence is an important element for a successful fundraising program
  • Donor databases (when used appropriately) are powerful tools
  • Multi-channel communication is the wave of the future (e.g. mail, email, phone, etc)
  • The case for support is important
  • What your agency does on the front line impacts donor perceptions (e.g. Chief Illiniwek impacted my charitable giving; whereas, bad press or not offering certain programs may impact your donors’ appetite for giving)

For the record, I am excited to now see how the university stewards its donors. Stay tuned!  😉
Are there other lessons that you see from this story. Please use the comment box below to share. We can all learn from each other.
Here’s to your health! (And congrats to the university for a job well done)
Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

Are your non-profit agency's social media posts relevant?

Use social media to talk about your agency’s needs in a relevant way

By Rose Reinert
Guest blogger
rose1Last week I began this blog series by providing an overview of “What is Social Media” from the book “The Social Media Bible” by Lon Safko. In chapter 2, Safko starts to unfold terminology, tools and tactics for utilizing various social media tools.  So the big question remains . . . “What is in it for my organization?
Yes, we understand that Social Media is a strong tool. It is a free tool we could use to engage current and prospective donors, clients, and community members. But how impactful is it really?
Think about how many commercials, brochures, ads, and other marketing you see each day. Better yet, how many different marketing pieces and messages does your own organization have? How many other non-profit organizations have similar messaging as yours? When was the last time you were asked to make a donation to a very worthy non-profit when checking out at an area store?
We are undoubtedly overwhelmed with messages that ultimately turn into noise.
Safko challenges a transformation of engagement through the following excerpt of “Sales Manifesto” by James Burnes:

“We need to transform the way we touch our clients, and integrate ourselves into the very fabric of what they do every day. . . . We need to tell our story in a way that doesn’t just interrupt our clients, but engages them and gives them a reason to pass it along. . . . We’re going to build a culture where communicating, engaging and embracing the feedback, positive and negative, make us a better organization.”

How inspiring!
feedbackI read this and imagine my organization with engaged donors engaged in open communication, positive feedback, while building a better organization. Ahhhh, nirvana, but wait . . . did he say negative feedback, too?
Ahhh yes. There is always a catch.
The thought of having someone post a negative comment or negative feedback on your organization’s social media page can be scary. However, Safko challenges us to push through that initial reaction and think of it as an “opportunity” when he says:

“We need to take advantage of a new approach to selling where we are problem solvers and the “go to” team for our prospects whenever a project arises that we contribute to. Everyone sells [product]. We have to be bigger than our [product]. We have to solve our client’s pain points.”

Although this seems more relative to for-profit businesses, it proposes several opportunities.

  1. Every non-profit “has needs.  One of my mentors — Fred Paulke, who is the Vice President of Organizational & Executive Development  Services for Boys & Girls Clubs of America for the Midwest region — taught me much of what I know about resource development. For example, when talking about building an effective case for support, he would emphatically talk about how every non-profit has needs and needs money. For every need you have, there are a dozen other organizations that could line up with similar worthy needs. He would argue, the key is to demonstrate how you are meeting needs in the community. So, my question to you is “How are you demonstrating this to your prospective and current supporters via social media?
  2. Being relevant matters.  Last week, I talked about how social media is like entering a networking event. You first find a group of people and begin listening to the conversation and then provide relevant input. With this in mind, we need to ask ourselves how can you use social media tools to be strategic about being relevant? If you work for a youth service agency, design your posts around topics like childhood obesity or education. If your organization is a health organization post healthy recipes, address changes to health care or exercise tips.

Safko recommends you keep your page 85% informative and resourceful for “Like”-ers and 15% about your business. This sounds like a good rule of thumb to me!
What are some ways you engage your “Like”-ers on Facebook? What are some connections you have made through strategic posts that relate to your mission? What breakdown does your organization’s page reflect in regards to information and posts about your business?
Please use the comment box below to answer some of these questions.
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Did fundraising cause the recent government shutdown?

shutdown1In the weeks leading up to the government shutdown, I heard some rumblings via the news media that Senator Ted Cruz and those aligned with him were dragging things out in Congress to maximize their online and direct mail fundraising efforts. To be honest, I didn’t give much thought to those accusations. They sounded like sour grapes and something partisan opponents would say in the heat of the moment. And then . . . when the government actually shut down, I started receiving a flood of email from the Democratic Congressional Campaign Committee (DCCC). This is when my fundraising spidey-sense started to tingle, and I started paying attention because there must be lessons to be learned for non-profit organizations somewhere in this mess.

Here is what the most recent DCCC fundraising email said:

Dear Erik —

Boehner’s Tea Party majority is teetering on the edge:

A new poll shows that Democrats are leading SEVENTEEN Republican Congressmen after the Tea Party-inspired shutdown. Guess how many seats we need to win back a Democratic Majority? 17.

Voters are done putting up with the extreme Tea Party antics that have paralyzed the government. We have to act quickly to press our advantage in these crucial races. Will you help us raise $500,000 immediately to take on vulnerable House Republicans?

Donate $3 IMMEDIATELY to the Democratic Majority Rapid Response Fund.

This shutdown could spell the end of the Tea Party controlled Republican Majority.

But if we want that to happen, we have to act now.

DCCC Rapid Reponse

I purposely omitted the hyperlinks and website addresses because my intention is to evaluate language and strategy and not raise money for the DCCC.

So, let’s strip out the partisanship and set aside our personal political feelings. Let’s avoid the temptation to point fingers. Let’s just look at the circumstances, strategies and verbiage in the letter from a “Just the facts, ma’am” perspective.

What do you see? What do you sense?

shutdown3Here is what I’m seeing:

  • I see a misspelling in the signature block.
  • I see a case for support spelled out in five simple sentences.
  • I see emotionally charged words intended to poke and prod me into action (e.g. teetering, extreme, paralyzed, etc).
  • I see a fundraising goal clearly articulated (e.g. $500,000).
  • I see a specific ask (e.g. Donate $3.00 immediately).
  • I sense the strategy here is to set a very low barrier to entry to entice first time donors. In other words, they poke me, I get upset, and the solution is as simple as just giving $3.00 to make things right again.
  • I see an email with a small handful of carefully worded sentences fitting neatly on my computer screen. I don’t need to scroll down to continue reading.
  • I see short easy to read sentences. The longest sentence was 16 words long.

There is so much that you can learn if you just keep your eyes, ears and mind open. Professional fundraisers cram your mailbox and email inbox full of examples every day. Are you paying attention? Because with a little discipline you can teach yourself a lot in a short period of time.

Let’s circle back to the question I pose in the headline of this blog post:

Did fundraising cause the recent government shutdown?

I think a case can be made for the answer to this question being “YES”.

There is so much noise being made in our political arena on a daily basis that many people tune things out. I know that I am as guilty as others in this regard. So, when you have fundraising goals to hit, then your case for support needs to be very big and noisy in order to get people’s attention.

I believe the lesson to be learned here for non-profit organizations is that your case for support is powerful. It is the engine at the center of your resource development plan. It is the jet fuel for all of your fundraising appeals regardless of whether it is a direct mail appeal, email, social media, telephone solicitation, face-to-face pledge drive or special event.

shutdown2When crafting your case for support, this is what our friends in the political fundraising world seem to be telling their non-profit cousins:

  • Make it emotional
  • Focus on an issue that people care about
  • Choose an issue that donors and the media will talk about and magnify
  • Wrap marketing efforts around your fundraising efforts
  • Where possible, infuse advocacy into the appeal

For those of you who are skeptical and find yourself thinking at the end of this blog post that non-profit organizations can’t “manufacture” a crisis and weave it into a case for support like politicians, then let me suggest that you open your mind a little more.

I cannot tell you how many agencies I’ve seen neglect their buildings by minimally investing in maintenance and upkeep. In the final analysis, aren’t those agencies just slowly creating a powerful capital campaign case for support for down the road? Maybe it is purposeful and maybe it isn’t, but the fact that it is a manufactured crisis cannot be denied.

There are plenty of needs and gaps in our communities around which non-profit organizations can build a powerful case for support. We don’t need to manufacture crisis to raise money like our political counterparts, but it does happen more often than you think.

So, what are you waiting for?

It is the fourth quarter and year-end fundraising is one of the biggest shows on Earth. Start writing your case for support document today so you can transform it into an eloquent and powerful fundraising appeal in the next few weeks.

But whatever you do, please don’t “shutdown” your agency to make a buck or two. I suspect donors can only handle this strategy in small doses.  😉

And I am making a mental note to myself . . . perhaps, I need to stop tuning out politicians on a daily basis so they stop doing drastic things to get my attention.  😉   (Sorry, I just couldn’t help myself.)

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

Don’t set the bar too high for your next fundraising appeal

case2Hmmm? I must be on a Jeff Brooks kick because this is the second or third time I referenced his blog — Future Fundraising Now — in the last few weeks. LOL  Did you read his blog post titled “Pixar’s 22 rules of fundraising” from a guest blogger named Andrew Rogers? If not, then you have to find a few minutes to do so. Those 22 rules are awesome and should be part of every fundraising professional’s toolbox. Today, I’m focusing on “Rule 16: What are the stakes? Give us reason to root for the character. What happens if they don’t succeed? Stack the odds against.

When applying this Pixar rule to fundraising, Andrew Rogers says:

Rule for fundraisers: What happens if the need isn’t addressed? How are real people being affected? In our case, we should never “stack the odds” by exaggerating or otherwise being less than perfectly truthful. On the other hand, don’t tell less than the full truth either, and remember that the full truth often isn’t very pretty.”

I cannot tell you how many times I’ve seen a non-profit organization try to apply this rule by telling donors things like:

  • We’ll close our doors unless we meet this fundraising goal.
  • We’ll shut down a site if this campaign fails to hit goal.
  • We’ll eliminate this program if we’re not successful.

To be clear, I don’t think Rule 16 is a license to practice extortion or heavy-handed fundraising tactics.

In instances where I’ve seen agencies use urgency messages laced with “We’re gonna close or we’re going to eliminate programming,” two interesting things seem to happen every time:

  1. They usually get an initial bump in money coming in (e.g. donors respond), and
  2. The next time donors get solicited, the response is down again.

I believe there is a simple explanation for this phenomenon . . . donors don’t like to throw good money after bad.

Before you decide to hit that big red panic button on your fundraising dashboard and tell the entire community that you’re in trouble, I advise that you think twice about doing it. All you’re doing is setting the bar very high down the road, and what happens if you cannot get over that bar?

case1I suggest going back and doing exactly what Rule 16 tells you to do:

  • Write a case statement that tells a story about one of your clients (or a composite client).
  • Describe their needs. What is at stake if they don’t succeed?
  • Describe how you help them with those needs. Help me root for them!
  • Describe how a donor’s support will tip the scales in their favor of our main character.
  • Don’t make this story so dramatic that donors conclude that nothing they do will make a difference.
  • Be truthful and make it emotional. You are telling a story!

This case for support document is internal. Use this tool to:

  • develop your agency’s marketing materials and fundraising brochures,
  • write your direct mail and targeted mail letters,
  • write your website and social media copy, and
  • train your fundraising volunteers on how to turn it into a story that they share with donors during a cultivation, solicitation or stewardship visit with a donor.

Always remember . . . donors care about your mission, your clients, and the impact of their contribution. They don’t normally care about saving institutions and your sacred cows.

What does your case for support (e.g. case statement) look like? When was the last time your refreshed that document? How do you go about developing that document? Please share your thoughts in the comment box below.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

Fewer statistics and more stories, please?

dataAs someone who blogs every day, I find it necessary to read a lot of other people’s blogs, too. Every one in a while, I come across something that gets me thinking. If it is really good or cuts against the grain of something I believe, I might mentally chew on it for days. Two bloggers, who I respect and read a lot, are Jeff Brook at Future Fundraising Now and Marc Pitman (aka The Fundraising Coach). Both of these guys have had me chewing on something recently, and I must admit that my jaw hurts from all that macerating. The topic in question? Should you include statistics in your fundraising appeals?

In recent years, the non-profit sector has been hyper-focused on things like:

  • measuring program outcomes
  • measuring community impact
  • benchmarking projects
  • analytics

I must admit that I’ve bitten into this trend as hard as anyone. I am a bit of a data geek, and I love information. If I were being truthful, I’d even admit that sometimes the old expression “paralysis by analysis ” defines my work (even though I fight hard not to fall into this trap).

The logical extension of these tendencies is to include data and statistics in fundraising appeals, which is something I’ve done for years.

So, when I recently read Future Fundraising Now and The Fundraising Coach, it felt like nails on a chalkboard for a moment. However, I try to read with an open mind, and I must admit that they have a point. Here is how I did an about-face on this subject . . .

hurricane katrinaHurricane Katrina

 As I thought back upon this devastating  natural disaster, I remembered being glued to the radio listening to NPR deliver the blow-by-blow description of what was happening on the Gulf coast. I have very clear memories of my attention waning when the reporter started saying things like:

  • 1.2 million evacuees
  • $81 billion in damage
  • 1,833 deaths

I also remember being glued to my radio as the reporter interviewed individuals who had survived the storm as they told their stories:

  • I remember one woman telling a reporter about climbing into the attic with her family as she watched the water levels fill the first floor of her home and start to consume the second floor.
  • I remember a gentleman talking about how long he had to wait on his roof for rescuers and how hard that ordeal was.
  • I remember  a public official talking about the national guard’s efforts to evacuate trapped senior citizens from a nursing home.

Statistics . . . .Zzzzzzzzzzzzz.  Stories? Please continue … I’m listening!

campfireBefore the written word

There is a lot of debate about how long the written word has played a role in human culture; however, I think it is fair to say that literacy rates only started significantly climbing in the last few hundred years.

So, how did humans communicate to each other important things like:

  • How to appropriately behave?
  • What to value and what is important?
  • Who should do what and by when?

It was storytelling. Sitting around a campfire and telling stories. Passing lessons along from one generation to the next generation by word of mouth in the form of a story with a moral to every story.

Fundraising conclusions

I still believe that measuring community impact and program outcomes is important. Please don’t stop doing this hard and arduous work. It is important to measure for accountability, stewardship and quality control purposes, but . . .

Please stop sharing all of that data with me during the solicitation process.

I want to hear warm fuzzy stories about your clients and how my contribution has contributed to those success stories.

Please train your volunteers to be good storytellers because there is nothing worse that having to sit through lunch with someone who can’t tell a good story. This is an art form. For some people it comes naturally and for others they need substantial training on how to do this.

So where should you put all of your data?

Well, I still believe that this information is an important part of being a good steward of donor dollars.

  • Upload it to your website . . . those donors who love data can find it there, and this sends a strong message about your commitment to transparency.
  • Share some of it in your annual report.
  • Create an impact report and send it to your donors every quarter.
  • Sprinkle some of it into newletter stories.

BUT . . . whatever you do, please don’t share this with me when you’re asking for my money. And if you do, please forgive me for the yawning and vacant blank stare.

If I’ve intrigued you with today’s post, then you may want to check out the blog posts by Jeff and Marc at the following links:

What does your agency do with its data? How much to your share with your donors? How and when do you share it with your donors? Do you include it in your written case for support document and training your volunteer solicitors to use it when soliciting contributions? Do you include it in your direct mail appeal? What has been your experience when using a storytelling approach to fundraising?

Please share your thoughts and experiences in the comment box below. Why? Because we can all learn from each other!

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

How much money should your non-profit have in reserve?

operating reservesIdentifying blog topics can be hard. Sometimes you find a comfort zone and ideas flow freely. Other times, it is next to impossible and the writers block is crippling. So, I love it when readers sometimes email me on the side and suggest topics.

Yesterday, a reader did exactly that when she emailed me with the following request:

“Do you take requests?  If so,  I would love to hear your take on social service agencies that have more than 6 months of money on hand and the impact of that on fundraising.”

When I first read that email, I planned on squirreling the topic away for one of those days when topic ideas are difficult to come by. However, there was something about this topic that possessed me. I opened up a few Google searches, read a few white papers and blog posts, and found myself whipping out this post.

First, let me start with a very direct response to the question posed by the reader.

I have worked with a disproportionately large number of small non-profit organizations. Organizational capacity for these agencies is always an issue and the amount of cash on hand is typically very small. So, I’ve always advocated to CEOs and their boards that they put plans in place to build operating reserves equal to three to six months.

Only one client to my recollection every worked with more than a six month operating reserve, and I don’t think it impacted their fundraising efforts. If I were to speculate as to why that was, I think the explanation is simple . . . that agency did an excellent job with donor communications and made their case as to why operating reserves of that size were important.

uncharitableSetting this one example aside, I do generally believe that building large operating reserves larger than 6 months or one year causes problems with donors. I say this because of everything Dan Pallotta writes in his book Uncharitable and how donors hold the non-profit sector to a different standard than the for-profit sector.

In his book, Pallotta talks eloquently about how for-profit corporations are rewarded by investors for generating profits, banking cash and growing organizational capacity. He contrasts this point with how donors punish non-profit organizations for doing the same thing.

For actual examples and a better explanation, I encourage you to read his book. I promise that it will be an eye opening experience. Additionally, you’ll likely walk away from the exercise and find yourself muttering the words: “Damn Puritans!”

In my clicking around and Googling, I found a number of interesting facts including:

  • Charity Navigator reserves its top ratings for organizations with 12 or more months of working capital.
  • The Nonprofit Finance Fund reported in its 2012 State of the Sector Survey that only one-fifth of survey respondents said they felt their donors were comfortable talking about operating reserves.
  • In 2011, more than three-quarters of non-profit organizations had less than 4 months of expenses in operating reserves (60% reported less than 4 months and 28% reported one month or less).

I strongly urge you to click-through and read more startling statistics on this and similar subjects at:

I want to thank the reader who suggested this blog topic because they have caused me to change my thinking on this topic. From now on, when agencies ask my advice on what they should strive towards with regards to building an operating reserve, I plan on telling them . . .

12 months or more! ! ! !

With this Big Harry Audacious Goal (BHAG), the next words out of my mouth will be . . .

“Create a strong case for support or prepare to incur the wrath of donors.”

For those of you who don’t think this is possible, please take a moment to think about why that much cash on hand is important to your organization.

  • Many agencies are using their operating reserves as cash flow cushions as they wait for their accounts receivable from government grants. (Believe it or not some states are six to 12 months late in paying their bills.)
  • It is a sign of financial health to have operating reserves of this size.
  • One of the lessons learned from the recent economic recession is that larger rainy day funds are a necessity and not a luxury.
  • Stuff breaks and your organization needs to be in a position to fix the roof or replace a HVAC unit without running off to donors with an urgent case for support that sounds like a crisis or fire drill.

My advice to anyone who cares to hear it is:

  1. Set a goal to increase your operating reserves to 12+ months
  2. Work with the Finance Committee to develop a plan to achieve this goal (Yes, it will likely be a plan that spans many years). Perhaps, include in your plans to use a portion of your operating reserves to invest in organizational capacity building once certain targets are achieved.
  3. Work with the Resource Development Committee to write a case for support that supports these actions.
  4. Don’t hide from donors. Get out there and start talking to them. Weave the talking points from this new case for support focused on increasing reserve levels into your stewardship efforts. Donor engagement and education is the key to success.

So, I’m curious how many of you think I’m crazy? How big are your reserves? How big would you like them? What do your donors say about your reserves? Please use the comment box below to weigh-in on this discussion.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847