I'm glad to introduce you to Tom Harrison, the CEO of Russ Reid. Tom and I are members of the FundRaising Success Editorial Advisory Board and were able to present at a recent conference in Philadelphia. He has an amazing mind for nonprofits and a good sense of humor, as can be seen in this post. In this post, which originally appeared in FundRaising Success Magazine, he shares 15 fundraising mistakes your team doesn't have to make. #6 mystifies me. And I commit #11 far too often! Tom can be reached at email@example.com
15 Mistakes That Have Already Been Made for You
You can go ahead and make them again, or you can take heed here and avoid them
by Tom Harrison, CEO of Russ Reid
It’s been said that good decisions come from experience, and experience comes from bad decisions. There’s a lot we can learn from some of the really bad decisions that have been made — so we can make better ones. Or at least we can make our own mistakes rather than simply repeating these whoppers.
Here are 15 mistakes we all wish we had known about without having to actually make them!
Cutting acquisition quantity to improve fundraising ratios but destroying your future revenue stream in the process. If you cut back on acquisition, you’ll have fewer current donors to cultivate next year and will start a downward revenue spiral that’s difficult to reverse.
Lazy cultivation. It’s not worth all the time, money, blood, sweat and tears we invest to acquire new donors if we’re not going to cultivate them right. Thank them. Segment them carefully. Thank them. Be relevant to them. Thank them. Show them the significance of their gifts. Don’t let that file go cold. Reactivate them. Retention. Retention. Retention.
Letting brand dictate fundraising messages instead of mandating that brand reinforce fundraising messages.
Being seduced by a consultant who claims to be able to acquire “higher value donors” and ending up getting too few donors to sustain your organization. The lesson is you need a program that acquires those higher value donors plus all the other donors.
Setting a target for your capital campaign but forgetting to include two years of operating budget in the total. The new building or new programs always cost more to operate than your current budget. By raising two years of operating costs up front, it gives you time to increase your revenue stream to meet the new operating budget.
Cutting revenue-producing programs to address a budget shortfall. A wise accountant serving as a new board member addressed a nonprofit’s $100,000 budget shortfall. He suggested actually spending more money on revenue-producing activities. He correctly noted that the direct-response (DR) program raised $3 for every $1 spent. Increasing the DR budget by $50,000 raises $150,000 — with a net of $100,000 to solve the revenue shortfall.
Accepting watchdog standards. Don’t brag about your stars. Instead, teach donors to judge you by the impact of your programs, not by arbitrary — and often misleading — cost ratios.
Chasing blindly after the next big thing. The fear of being left behind can cause us to leap before we look. Protect your core revenue streams, and budget separately for research and development with dollars you can afford to lose.
Making it look too easy. If people take your fundraising programs for granted, they’ll be tempted to water them down by mistakenly cutting frequency or insisting on more stories of success and less emphasis on need and urgency. Worse still, when the resulting fundraising efforts fail — they will — it will be blamed on the channel, the donors or your department, rather than on the dilution of the strategy.
Forgetting to test. Why would anyone abandon a control for something new without testing? Maybe these people are afraid to be proven wrong, or because testing is difficult, or testing costs more, or maybe they just can’t imagine that their idea could fail. Always test.
Believing that you are the target audience. Meet the donors where they are, rather than where you wish they were. Make it easy for donors to financially support programs that they are passionate about, not programs that you (or your program people) wish donors were passionate about.
Being so afraid of being called a micromanager that you don’t manage enough. It’s irresponsible to stand by and watch your people make mistakes that you know, from experience, will damage your organization. Sure, you sometimes need to allow them to learn from their own mistakes — on the small stuff. But on important matters, you owe it to your organization, your people and yourself to teach your staff the right things to do and the right way to do them.
Hiring the wrong major-gift leader. You don’t want a major-gift leader who meddles with your successful direct-response program instead of visiting with donors. Or one who tries to restrict direct-response communication with donors based on how much they’ve given rather than based on who can actually be personally cultivated. Major-gift officers should generate major gifts.
Putting all your eggs in one basket. Just like with your retirement account, diversify your fundraising program. You need different offers/products (sustainer program, regular giving, middle-donor campaigns, major gift, capital campaign, gifts-in-kind, government funding) for different audiences and different channels (digital, mail, DRTV, face-to-face, radio, events).
Being afraid to fire someone. If someone is not succeeding in his position, he is hurting the cause you represent and likely demoralizing other employees. Your organization deserves top-performing employees. If someone isn’t cutting it, even after you’ve worked to help her improve, let her go. It will allow you to hire someone better and the exiting employee to find a position where she’ll contribute more and be more highly valued.
What would you add?
There may only be seven deadly sins, but there are myriad marketing missteps. If you have others to add, we’d love to hear from you!