A (0:00)

So I get it all across the nonprofit sector, development directors and their teams, if they're lucky enough to have them, are in a state of angst with a new administration that has put the nonprofit sector right smack in the crosshairs with many organizations, their clients and the communities they serve right in the target. Many fundraisers are staring at those budget numbers they have like deer in headlights. One day, a relatively new nonprofit was just beginning to hit its stride, and the next day government funding it relied on for 70% of its budget was gone, just like that. For some organizations, corporate money was a reliable source of revenue. But if the mission was seen as too hot to handle, development directors are left wondering how to fill the gap. Nonprofits that have billed individual giving program at the tail end of their three year strategic plan are playing coulda, woulda, shoulda, wishing they had started that process two, three years ago. In many cases, development directors who always seem to be able to pull rabbits out of hats, right? No rabbits, no hats. They are instead facing the fact that the organization will actually not hit its fundraising goal this year. Fundraisers don't ever want to believe that, but this year, for many, it's actually a reality. That brings us to the topic of today's podcast, the Case of the Defeated Fundraisers. Today, I'd like to share with you what I'm seeing with clients and our thousands of members of the Nonprofit Leadership Lab. I'm going to dig into the root causes and implications, and because this is how I roll, I'll offer some thoughts on how leaders, board and development staff can all climb out of the dark.

B (1:59)

Welcome to Nonprofits Are Messy with Joan, Gary and Experts. This podcast is your go to space for insights, advice and inspiration designed to help nonprofit leaders overcome challenges and drive impact. Whether you're navigating small beginnings or leading a larger organization, we're here to support you every step of the way. Together with Joan and a diverse group of expert guests, we tackle the big questions nonprofit leaders face and offer actionable advice to fuel your leadership journey. A special thank you to donorperfect for sponsoring this episode and supporting supporting nonprofits that we love. Now let's jump in.

A (2:50)

We don't want defeated fundraisers, do we? And yet they're out there. I see it. And what I'm seeing and hearing is a certain amount of panic, a certain amount of fear and tons of of anxiety. I see development directors who are imagining that their jobs could be at risk, who are figuring if expenses are going to be cut, we're not going to cut programs so we have to cut development. They're not really seeing a way out. Now, what are the implications of all of this? Well, think panic, anxiety, fear, defeat. There are four big, juicy words, right? I dare you to be innovative when you're in panic mode. I dare you to be creative when you're feeling defeated. And I dare you to ask for money when your amount of worry is greater than your enthusiasm for the work. And this is what I'm seeing and what I'm worried about, the implications of how development directors are feeling. These implications are real. They can be thwarting your ability to look creatively at both sides of your P and L, the expenses and the revenue. So why is it that development directors are feeling defeated or panicked or filled with angst when so much of these fundraising challenges are out of their control? In most cases, EDs are not pointing at development directors and saying, this is because of you. These things are out of their control. And yet I see day after day development directors that feel like failures. So how can that be? I think the answer is remarkably simple. What do you think it is? Why do they feel like failures? Yeah, maybe they're accustomed to hitting their targets. They like to get as on their book reports. Yeah, I'm hearing all that. But I think the answer is actually remarkably simple and slightly different from those answers. You see for a development director hitting their revenue target, that is success, regardless of the circumstances. Development directors see their goal singular, as clear, and they are single minded in purpose. If I'm supposed to hit a 2 million, a 4 million, a $10 million revenue number, and if I don't hit it, I have failed. Now, I have seen lots of development directors and they can be kind of dogs with bones, right? I've got to hit that number. I got to get an AMI book report. I got to meet my goal for the year. And if I do not, I failed. I'm afraid we may need to build a new revenue stream I have no prior experience with, or I feel incredibly guilty because we're going to have to cut muscle in our organization, cut programs. It's going to impact the clients we serve, the communities we advocate for, and I have let them down. Or if I don't hit my numbers, I'm out. These are real feelings that real development directors have. And you can actually, as an executive director listening, you can say, but they shouldn't feel that way. Yeah, they shouldn't. Recently a friend of mine said to her aging mother, I worry about you all the time. And her mom said, well, you don't need to worry about me. Why don't we spend a week and I won't call you or bother you and you can just not be worried about me. Not a good plan. So the mom can't keep my friend from worrying about her. You can't keep your development director from feeling this way, but you can make some big shifts. But before I get to this shift, let me tease something up for you. There's something fundamentally wrong that's causing development directors to feel this way. It's simple. We are defining development director success with one metric. We are not looking at success from a higher altitude and setting an array of goals for development directors so that they see their job as broader. They see themselves as quarterbacks of a team of board and staff that are working together to raise the necessary fuel to drive the impact your organization desperately needs to have. We're going to take a short break and when I come back, we're going to talk about what those kinds of goals might look like. Because your development director isn't thinking like that. So it's time for the organization to start thinking with them about. About what success really looks like. We'll be right back. Are you a staff or board member of a small to mid sized nonprofit? Now, you might feel alone, but trust me, you are not. I built the nonprofit Leadership Lab for the millions who are just like you. You'll find time saving resources when your pants are on fire, opportunities to uplevel your skills, and a warm, nurturing, private community of what we call superheroes. Thousands of board and staff leaders call the lab home and we'd love for you to join us. Learn more@nonprofitleadershiplab.com podcast and now we're back. Okay, so you have a development director that believes my job is to hit number X. And if I don't hit number X, I have not met my goal. I didn't do my job. I'm guilty. All the things we talked about, right? These emotional things, these things that are real truths for current development directors. We need different goals. We need broader goals. Okay, so what do I mean by that? I'll give you a couple examples that you can kick around with your development director with the board development committee, and I'll come back to them in a minute. Here's an example. In no priority order, I want one of the goals of my development director to demonstrate and execute a strong stewardship of our current donor base. I want them to work in partnership with the board and the development committee to make sure that our current donor base is Informed and continues to be ignited and enthusiastic about the work of the organization so that when it is time for renewal, you'll have them at. Hello, I would like there to be a metric that I believe that boards I don't pay significant enough attention to. My friend Alison Fine of every.org, you should check that out, by the way. Calls it the leaky bucket. We care about the total number of dollars that are raised, but do we tease that out and say how much of that is new money and how much of that is renewing money? We don't. We lose a lot of donors and we have to replace them. That is leaky bucket. What if one of the success metrics of your development director is the retention rate of your donor base and as a result, one of the tactics that development director might actually employ is a campaign to bring back lapsed donors. Let's see another goal. Develop a real partnership with the board members development chair, be involved in who gets that job and work with them in partnership to create a real charge for the development committee and work in partnership to bring to life the role of board members in development work writ large. What do I mean by that? Well, let's talk about. I think a great success metric is I as a development director worked with the development committee to create a new charge for our development committee where they are helping the organization to hold the board members accountable to their development obligations that the development committee is asking for things they might need in order to be effective ambassadors for the organization. I believe that if your board members are more effective ambassadors, it should be as a result of this relationship between the development chair and the development director. I would like to see a goal going back to stewardship for a moment that I as the development director instituted with the board development committee a stewardship program for current donors. Each board member gets a portfolio. Doesn't have to be a lot, three, four. And their job is to have high touch with them a couple times during the year so that when it comes time to renew, the board member might be able to do the renewal because they've established a relationship. But I as the donor feel like more than just oh, the only time they ever call me is to renew. And during the course of the year I've actually learned more about how my investment has helped the organization and I feel even better about renewing and maybe upgrading. Another goal. See, they just keep coming, don't they? Another goal. I as a development director was instrumental in building a culture of philanthropy in our organization. And I did that by Building a culture of storytelling. Because when the people who are closest to the organization can tell a kick ass story, they are compelling messengers because of their role, they tell a kick ass story. They say for that one story, there are dozens of others. Would you like to hear more? Bam. That's what a culture of philanthropy looks like. So are there storytelling practices at board meetings? Could be. Should be. How about a goal that says I, as a development director, nurtured a great relationship with the fundraiser in chief, the executive director, and because of our partnership, the following new donors came to the table. We cultivated these high level corporate sponsors, whatever it may be. Are you hearing what I'm talking about here? Are you picking up what I'm putting down? There are a vast number of ways to measure the success of a development director that will lead you to being more likely to hit your numbers. How about this one? I, as a development director reached out to a number of people I know in the community who are also development directors about how they started earned income programs, how they tapped into corporate fundraising. I learned, I explored and I brought those learnings back. And we are now driving down that new road to establish several new, more diverse revenue streams. I really hope you see the difference. Here it is. What kind of ownership can I, as a development director take in building this culture of philanthropy, in looking at our vast array of metrics and of seeing myself as a quarterback of a team? So that's number one. Sorry I went off for a while there, but just kept coming up with goals. Number two, invest in your development, folks. So we said earlier, right, that someone might be anxious that I've never built an individual giving program before. And if that's going to be the key to our success long term, then I might not be the right person for this job. How can the executive director and the development director work together on some kind of a professional development plan that helps our development director learn and grow in new ways? Good for the organization, it's good for retention, it's good for job satisfaction, and it's smart. Number three. Now this was a subset of number one, but I'm pulling it out as a leader drive in the direction of a culture of philanthropy. I would like to see every executive director preacher to the board about what a culture of philanthropy is, that the development director is the quarterback of a team and that they are essential members of that team, that they need to be ambassadors that are in the invitation business. They need to be champions who are excited about talking about the organization and inviting people to come closer and they will also need tools which the executive director needs to commit to providing. So the executive director has a very significant role in this. I'm calling it a sermon to the board to say we are in unique times, but we always live in some kind of crisis mode. It's kind of how we roll. It's what we do when we work with clients who are struggling or communities who are marginalized or when the economy hampers ticket sales of an orchestra, of a theater production. We need this army of ambassadors. So, Ed using bully pulpit to call the board to action to build a culture of philanthropy. Number four, appreciate them. Appreciate your development directors. We spend a lot of time in this moment thinking about not hitting our numbers. Please name this, put it in the room. We know that our development team has been blindsided by this loss of federal funding. Let's give them some grace. This situation sucks for everyone. Our development team is probably feeling anxious, maybe a little guilty like all the feels. Honor these people by naming it so they're not holding on to all of that all by themselves. Appreciate the small wins and the medium ones, not just the large ones. Number five. So I've got broader goals, lots of them, for your development director. Number two is invest in your development folks. Grow their skills. You need them to have different skills. Go help them get those. It helps the organization. It helps the job satisfaction and the retention of your development director. Number three. EDs preach and drive a culture of philanthropy. Number four, appreciate your development team. They are uniquely hit by this. Yes, I know the program folks are thinking, oh my gosh, I'm not going to be able to do X, Y and Z. But the people who provide that fuel are having a lot of feelings. Number five, please, please, please do not tie compensation bonuses if you are in that kind of space, to dollars raised. It amplifies, perpetuates the notion that its success is measured solely by dollars raised. I have seen executive directors whose comp or bonuses are tied to total dollars raised. If 70% of my money just went out the door because government funding got pulled, now there may not be any money for bonuses, right? But should I be penalized for that? Should I get a ding on my annual review? Absolutely not. So do not tie my success and how I am compensated treated how I might get a bonus to that dollar amount. Remember? And I'm a big Yankee fan. Maybe not this year, but when a baseball team goes to the world Series, everybody gets a ring. Think about it that way. So I hope this advice is helpful. I feel like this is a really Important topic. And I want to go back to something I said before. Innovation and creativity, trying new things, piloting, being creative. The moment is calling for that. And if your development director is feeling defeated, anxious, guilty, it is very difficult to fire up those engines. When a development director is up to the challenge, what will it look like? You might have a stewardship program. You might have a campaign to bring back lapsed donors. You'll have a development director and an ED that are talking to other colleagues about earned income. Maybe you can encourage a development director to join some kind of a learning community, either locally, in person or. Or online, so that they can actually glean good ideas about new revenue streams from others. You're going to get a development director who's re energized, who comes up with an idea and says, well, why don't we just try that? This is what you want, and this is what your organization desperately needs to meet this moment and what your organization desperately needs to shift how we think about fundraising, how we think about success. And we absolutely need this kind of shift in order to ensure the sustainability of all of your nonprofits that are doing remarkable work. It makes me sad when a development director says, well, I just hope Mackenzie Scott has our organization's name on the top of their list. That, too, is a little bit out of your control, right? I mean, not entirely, but we need development directors to own their success. We need to clarify and define it more broadly. And it makes me sad to see development directors who are usually just like dogs with bones, who are enthusiastic about asking people to come closer and give donations because they understand a the program, money equals programs. And they also understand that when you give a donation, you yourself feel good. You have a sense of meaning and purpose that you didn't before. It's time for us to bolster our development directors and to think differently about their goals. It's essential to the retention of great development directors, to building a culture of philanthropy, and to the sustainability of the nonprofit sector. So that's my story, and I'm sticking to it. Until next time. Thank you. Thank you. Thank you for everything that you are doing. These jobs are hard on the best of days. We are not going through the best of days. We've got turbulent waters that have sharks, maybe even pirates. Let's be there for each other. Take good care of yourself. I'll see you next time.