Making Fundraising a Strategic Priority for your Organization

Presented by

Karen Rotko-Wynn, CFRE

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Objectives

• Gain a better understanding about strategic fundraising leadership and challenges facing nonprofit organizations

• Collective thinking and discussion around solutions to building a collaborative leadership triangle

• Success factors in making fundraising a strategic priority for your organization

• How to create a strong “culture of philanthropy” within the entire organization

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Strategic Fundraising Leadership

• Effective fundraising is a strategic priority for every NPO that depends on contributed support.

• Viewing fundraising through a strategic lens emphasizes achieving the mission and vision—not only meeting immediate dollar goals.

• Strategic fundraising requires a plan for the future: Building organizational fundraising capacity in order to achieve mission.

• Leadership for strategic fundraising is a shared responsibility.

EVIDENCE OF DYSFUNCTION

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“If good communication is the key to a successful relationship, it might be time for chief fundraisers and their institutional CEOs to consider couples counseling.”8

Mind the Gap

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Despite rising expectations, most board members are reluctant to participate in fundraising activities and identify potential donors. Fundraising continues to be the weakest area of board performance.5

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Where’s the evidence?

• 50% of higher ed CDOs leave because of poor relationships with presidents; another 25% leave because of poor relationships with boards1

• Just 43% of CDOs think partnership with CEO is strong; another 21% said partnership is weak or non-existent2

• Fundraising officers among the hardest NPO positions to retain3; Average tenure is 1.5 – 3 years.

• Nearly 1/3 of NPO CEOs are lukewarm about or dissatisfied with performance of development officer2

• 35% of gift officers underperform4

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Where’s the evidence?

• Fundraising ranks #1 among board areas needing improvement5

• CEOs overwhelmingly (75%) say board engagement in fundraising is lacking2

• 60% of Board members not involved in cultivating leads; 68% not involved in asking for contributions12

• One fourth of college presidents say they are unprepared for fundraising6,7

• Surveys reveal significant perceptual gaps regarding fundraising goals, resources, and respective roles between community college and independent school CEOs and CDOs8

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Where’s the evidence?

• Survey of Board members, CEOs and CDOs asked who was responsible for a list of fundraising activities by Cygnus Applied Research :

– “The most interesting finding was the extent to which the three

groups disagreed.”9

– Board members assume too little responsibility.

– Professional development staff assume too much.

– CEOs were most realistic.

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Perceptual apples and oranges

• Individual perceptions and preferences

• Conventional wisdom

• Other team members’ expectations

• Donor expectations

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What difference does it make? Some examples…

• Where community college presidents spent 25%+ time on fundraising8

– More likely to report giving totals of $1.5M+

• Where independent school heads spent at least 25% of time on fundraising8

– More likely to see year-over-year increases

• Where board members are involved in fundraising5

– 55% saw contributions increase year-over-year (compared to 45%)

– 60% reached their goal (compared to 53%)

• Involving Boards in a solicitation4

– Is associated with larger gifts • Involving Presidents in

cultivation and solicitation4

– Is associated with larger gifts • Engaged Boards give5

– Somewhere between 8% and 23% of total contributions

What’s the bottom line?

• Turnover

• Role confusion

• Under performance

• Ineffective relationships

• Lack of preparation

• Foregone revenue

• Negative impact on mission achievement

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Questions for discussion

• These issues appear to be wide spread, affecting all types of NPOs. Why have these issues arisen?

• Why do you think they persist even when they have a negative impact on mission achievement and fundraising?

• What if we resolve the issues: what will success look like?

SOLVING THE FUNDRAISING LEADERSHIP PUZZLE

Thinking about a Process

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Some thoughts from UnderDeveloped2

• Culture of philanthropy is valued across the organization.

• FR staff, CEO and Board are deeply engaged in fundraising.

• Development officer is included among key organizational leaders.

• The organization invests in fundraising capacity.

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Some thoughts on collaborative leadership

• “The effectiveness of most every ministry relies on the health and quality of the relationship between the Board Chair, the CEO, and the CDO. Raising funds needed to sustain and advance a ministry is, in its best configuration, a team effort involving all three people.”11

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Some thoughts on shared leadership

• Shared Leadership: “Sharing power but maintaining authority.”10

– Aligning values

– Clarifying accountability

– Communicating clearly

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Some thoughts on a team approach15

• A good team shares a common goal of achieving the NPOs objectives: – Agree on shared goals – Determine values of a

strong team: camaraderie, strategic thinking, trust respect

– Know each team member: what they know, what they do best, what position they “play” on the team

– Determine what “work” must be done by the team

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Questions for discussion

• These possible solutions emphasize shared, executive-level fundraising leadership.

– What advantages do you

see in this “team” approach?

– What challenges do you see associated with this?

SUCCESS FACTORS IN STRATEGIC FUNDRAISING

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Critical Success Factors16

Strategic Fundraising

Collaborative Leadership

Inspiring Vision

Community of Donors

Stewardship &

Performance

Investment

Culture of Philanthropy

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Creating a Culture of Philanthropy

• Shared values, norms, perceptions

• Transfers from generation to generation

• Shapes behavior and consciousness

• Body of learned behaviors

• Dynamic, not static

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Top Attributes of Philanthropic Culture

• Board selection considers philanthropy

• Board shares responsibility for fundraising goals

• Development is priority in strategic plan

• Engaged, active CEO

• Management leadership & buy-in

• Decisions begin with “what would our donors think?”

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Top Attributes of Philanthropic Culture (continued)

• Staff at all levels actively engaged; understand their roles

• Importance of philanthropy discussed openly, inside and outside

• Development is appropriately funded

• Development staff viewed as key to organization

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Top Attributes of Philanthropic Culture (continued)

• Everyone has contact with donors

• Donors are valued for expertise & input, not just $$

• Emphasis on building relationships, retaining current donors

• Organization’s clients are encouraged to give

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Achieving collaborative leadership

• Focusing on advancing the organizational mission and vision

• Acting horizontally rather than vertically

• Thinking about a continuum of responsibilities rather than functional silos

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Distinctive yet complimentary roles

Critical Roles

Board = Influence

CEO = Authority

CDO = Donors’

Trust

• “It takes the combined efforts of professional fundraisers, CEOs and leadership volunteers to maximize fundraising success.”9

– Penelope Burk, Donor Centered Leadership

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Some assumptions

• Fundraising is an organization-wide responsibility.

• Fundraising effectiveness depends upon a thoughtful strategy documented in a multi-year plan.

• Financial support for fundraising is an investment, not a cost.

• Development staff cannot accomplish fundraising goals alone.

• Neither can CEOs. • Neither can Boards. • Successful fundraising

is a team sport.

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Agreeing on strategic leadership for fundraising

• Commit to be an effective leadership team – Dedicate time to examining

and nurturing leadership relationships

– Define the purpose of fundraising leadership so it advances organizational vision and mission

– Eliminate the negative, accentuate the possible

– Agree on team values

• Discuss and decide which team members will assume what responsibilities – Analyze individual

strengths and weaknesses – Review/Revise/Replace

conventional divisions of roles and responsibilities

– Determine when additional knowledge and skill are needed to carry out roles and responsibilities

– Agree on who will do what

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Agreeing on strategic leadership for fundraising

• Write a leadership charter – Values to guide the team – Expectations for working

together effectively – Assignment of roles and

responsibilities – Regular team meetings – Methods for holding one

another accountable – Evaluating team

performance

• Accept responsibility for the critical success factors – Collective leadership – Inspiring vision – Community of donors – Stewardship and

performance – Investment – Culture of Philanthropy

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Agreeing on strategic leadership in fundraising

• Lead strategic planning for long-term and sustainable fundraising program – Environmental scan –

external influences – Assessment of organizational

culture of philanthropy – Analysis of donor segments – Strengths and weaknesses of

current fundraising strategies, staffing patterns, performance, resources

– Capability of measuring and demonstrating impact to donors

• Operationalize the strategic plan – Recommend annual goals – Establish performance

measures – Ensure adequate investment – Lead and motivate entire

board and staff – Document and communicate

impact of giving on mission and vision

– Evaluate organizational performance

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Assessing Your Organization’s Culture of Philanthropy

Fundraising as a Function?

OR

Philanthropy as a Culture?

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Assessing Your Organization’s Culture

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Board Leadership in Fundraising

• Does your board understand the fund raising and development process?

• Is your board knowledgeable about its role and expectations in the development process?

• Is your board representative of the constituencies you want to reach?

• Does your board approve your annual development plan?

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CEO’s Role in Philanthropy

• Set the stage, walk the talk

• Develop relationships in community

• Devote time to philanthropy

• View development as personal priority

• Expect same of management team

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The CDO’s Viewpoint . . .

• Regular, quality time on CEO calendar

• CEO provides ample lead time & resources for fundraising activities

• CEO attendance at key development functions & meetings

• CEO involved in key donor meetings

• CEO supports philanthropy inside & out

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Why is Culture Important?

• Dictates how people think and behave

• Brings attitudes and beliefs into sync

• Demonstrates a group’s internal spirit

• Can be seen and felt

• Bonds people together

Why is Culture Important?

• Last but not least:

Culture directly influences fundraising success!

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Structure an operational discussion with the leadership team

• Affirm your values and relationships as a fundraising team • Clarity and agree on the role contributions do/will play in total

revenue mix • Determine the proper level of investment necessary for

fundraising growth – and build consensus • Set organizational fundraising goals • Lead organizational fundraising performance • Clarify and communicate the division of roles and

responsibilities for each of you • Determine the amount of time each will devote to fundraising

in relation to other leadership responsibilities • Set performance goals as a team • Jointly develop major donor strategies • Identify and develop strategies for improvement

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Closing thoughts

“For fundraising to be successful, all members of the leadership team must: • Embrace fundraising • Advocate for it • Participate in it, and • Inspire it as a worthy

endeavor.”13 -Karla Williams

Thank You!

Karen Rotko-Wynn, CFRE Senior Vice President – West Division Manager

The Alford Group krwynn@alford.com

www.alford.com (206) 548-0451 ext. 12

References

• 1 “Initial Findings of Higher Education Chief Development Officer Retention,” Ruzanna Tantushyan, Campbell & Company, May 12, 2014.

• 2 “UnderDeveloped,” J. Bell & M. Cornelius, CompassPoint & Haas Fund, 2013.

• 3 “2014 Nonprofit Employment Practices Survey,” Nonprofit HR.

• 4 “Five Ways Advancement Leaders Can Make the Most of the Current Environment,” Eduventures, 2013.

• 5 “Special Report: Engaging Board Members in Fundraising,” Nonprofit Research Collaborative, September 2012.

• 6 “The American College President,” American Council on Education, 2012.

• 7 “A Study of Presidents of Independent Colleges and Universities, “ Council of Independent Colleges, 2012.

• 8 “Mind the Gap,” R. Goldsmith, Council for Advancement and Support of Education, Currents, November/December 2012.

• 9 Donor Centered Leadership by P. Burk. Cygnus Applied Research, 2013.

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References

• 10 “Doing More with More: Putting Shared Leadership into Practice,” by M. Allison, S. Misia, and E. Perry. The Nonprofit Quarterly, April 21, 2014.

• 11 “Managing the Relationship between the Board Chair, the Chief Executive Officer, and the Chief Development Officer,” by S. Rodin, Kingdom Life Publishing, January 2, 2012.

• 12 “Stigma, Staffing and Boards,” Mental Health and Addiction Network, March 2014.

• 13 “Executive Directors: What Energy Do You Have?” by K. Williams, Philanthropy Front and Center, July 22, 2013.

• 14 “Put Your Mouth Where Your Money Is—A Challenge to Hospice CEOs,” by K. Lee, Institute of Fundraising, January 8, 2014.

• 15 “Best Practices of Team-Based Organizations,” by L. Kricher, Development Dimensions International.

• 16 “Six Success Factors in Strategic Fundraising,” by M. Kirk, The Alford Group, February 2014.

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