Doing Development Differently

 A post from James V. Toscano

In a rich and thoughtful study, UNDERDEVELOPED: A National Study of Challenges Facing Nonprofit Fundraising, authors Jeanne Bell and Marla Cornelius report on a study done electronically among nonprofit senior development staff and executive directors.  A small number of focus groups were also conducted that included board members along with development people and executive directors.

CompassPoint and the Evelyn and Walter Haas Jr. Fund jointly sponsored the study.  Approximately 1850 senior development staff responded to the survey as well as 870 executive directors. The results document the instability in development in many of our nonprofit organizations in the country, especially among the smaller ones.

Quoting the authors, “Our data suggest a high level of instability and uncertainly in the director of development position in nonprofit organizations.  Among the concerns: high turnover, long vacancies, performance problems, and the fact that large numbers of development directors are not committed to careers in fundraising. Most concerning is the combination of long-term vacant positions—especially among smaller organizations—and high rates of anticipated departure among current development directors.”

The Vicious Cycle

After a litany of negative responses from both executive directors and development directors, we read of what is termed “The Vicious Cycle,” describing the endless chain moving from the inability to create and sustain conditions for success in an organization, to actual lack of success, to premature development director leaving, to continuing short tenures in the role of development director.

The pathology is stunning, even to those of us who have seen this for years, yet encouraging our graduate students and interns to go into development for the rewards and satisfactions of a job well done.

Clearly, we all know there is a problem, and this systematic exposition of the many aspects of it helps us understand what must be done.

The authors are quite explicit in their analysis:

“Creating the conditions for success—at both the organizational and sectoral levels—requires nonprofit staff, executives, boards, funders and capacity builders to make small and large changes in belief and practice. Fundamentally, it requires all of us in the sector to adopt a profoundly different stance toward fundraising—moving away from an approach  that is passive, apologetic, and siloed in nature, to an integrative approach that  deeply values donors and constituents and puts them right in the center of our organizations and movements.”

Ten Recommendations

Ten recommendations follow:

1. Embrace Fund Development—A mental model shift across the sector
2. Elevate the field of fundraising
3. Strengthen and diversity the talent pool
4. Train boards differently
5. Apply the transition management framework to the director of development position
6. Invest strategically in grantee fundraising capacity
7. Leverage technological innovation—embrace creativity
8. Set realistic goals for development
9. Share accountability for fundraising results
10. Exercise fundraising leadership

Well-stated yet obvious, these recommendations have been repeated and reiterated many times before, but there are few real followers. The idea of donor-centeredness has been with us for many years.

The report also stresses the necessity for a culture of philanthropy throughout the organization.  That has also been with us for a long time, yet we still have a long way to go. The best thing about these recommendations is the call for more resources – human, organizational, financial – to be invested in the development function. How realistic is this at a time of intense competition for resources?

In a previous posting, “We’re All Development Officers Now,”  I point out the need for development, in its truest sense, to be an organizational-wide effort. This culture of philanthropy not only is necessary for effectiveness but for longer-term survival. So we agree on this need, so well stated in their recommendations.

Other Alternatives

What we all recognize is that current fundraising performance can’t, will not go on for much longer. Here, in this report, we have a comprehensive set of ideas, good ideas for a nonprofit. However, what other alternatives are out there, especially for small nonprofits? Alternatives that may not use additional resources?

One might be the sharing of resources, or combining of resources for a truly professional development effort.

What, sharing the development function among agencies?

Yes, with almost all of the various functions brought to scale.

What about the holy of holies, the donor list? You mean the one you publish each year in your annual report? Actually, names can be segmented electronically so that no one peeps.

We go to big, for-profit firms for all sorts of things, including telemarketing, wealth engine research, websites, annual reports, design, planning, feasibility studies, direct mail appeals and, lately, social media fundraising.

A Multi-agency Development Function?

Why not bundle all of these functions into a development group that gains familiarity with the agencies and donors over time and can do front office as well as back office work? Results are bound to go up, with costs leveling, possibly going down.

If we agree that a good fundraising effort, long-term, will amount to 10% of all expenses, then getting five to ten agencies together will afford them a finely tuned, professional, advanced team, headed by seasoned professionals and much more specialized staff than any one agency can afford. Better revenue results should follow.

Perhaps this can be organized by a firm, or a co-operative, or by the agencies themselves. It is well worth the try, along with incorporating all of the many good ideas in the UnderDeveloped report.

Should Toscano Advisors kick it off? Let me know if you are interested in discussing this more. jim(@)ToscanoAdvisors.com

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