I recently stumbled upon a study that was jointly conducted by the Center on Nonprofits and Philanthropy at the Urban Institute and the Center on Philanthropy at Indiana University. Essentially, they revealed a vicious cycle that puts you, the fundraiser, in a real pickle every single day.
Here are three drivers of the circular situation:
Bridgespan Group’s nifty vicious cycle image
- Misleading reporting: The majority of nonprofits under-report overhead on tax forms and in fundraising materials.
- Unrealistic expectations: Donors tend to reward organizations with the “leanest” profiles. They also skew their funding towards programmatic activities.
- Pressure to conform: Nonprofit leaders feel pressure to conform to funders’ expectations by spending as little as possible on overhead, and by reporting lower-than-actual overhead rates.
So what can you do to break the cycle?
- Be candid about the vicious cycle with major donors
- Help them recognize infrastructure, administrative, and fundraising needs
- Remind them that businesses need investment to grow
- Invite them to decide with you how you, together, should measure performance (be specific)
- Make sure they trust you (and they will if you are open and transparent in steps 1 – 4 above)
- Then, ask them to support your mission with unrestricted dollars to allow for growth
- Inspire them to commit to paying for a greater share of administrative and fundraising costs
>> 5 Ridiculously Simple Steps for Fundraising Success
>> The Keys to Successful Fundraising
>> The Anatomy of Success in Planned Giving
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