Fundraising Needs to Change

by Todd Cohen

The charitable marketplace is undergoing dramatic change, a transformation that demands nonprofits change the way they raise money.

Driving the change are the deeply troubled economy, sweeping shifts in the makeup of the population, rapid technological advance, and radically different ideas among donors about giving and getting involved.

As a result of those converging forces, nonprofits face higher operating costs and demand for services, rising anxiety and expectations among donors, and critical choices about how to be more strategic and innovative in the way they do business.

So rethinking the way they raise money is critical for their survival.

Nonprofits traditionally have treated fundraising as a business transaction that involves matching donor supply with charitable demand.

They have viewed a gift as a transaction, the end-product of a sales cycle that includes research on donors, calling on them, cultivating them, asking them for a gift, then thanking them and “stewarding” them for the next gift.

In recent years, that approach has included a greater focus on the donors themselves, on knowing more about them than just the facts of their assets and interests, and on engaging them in the work of the nonprofit.

But in the new charitable marketplace, nonprofits need to do a lot more.

Donors want and expect more than transactions in which they simply dispense funds in response to a request from a nonprofit to meet its needs.

And they want to be more than simply the object of pandering.

They now want to get involved, truly involved, to make a difference, to have an impact that is “transformational, not transactional.”

So nonprofits need to shift the focus of their charitable brokering by truly getting to know donors and helping them understand their community, the role the nonprofits play, and the impact a gift can have in helping the nonprofit address urgent community needs.

Nonprofits need to help donors see that making a gift will help fix a community problem they care about and get them more involved in making sure their investment makes a difference.

That new approach, in which donors become investing and participating partners of the nonprofit rather than simply its absentee underwriters, applies whether the donor is an individual, a foundation or a corporation.

It also requires that nonprofits become more innovative and strategic in the way they use technology.

That means making sure they use their websites, email, social media and mobile devices to tell a clear and simple story about who they are and the impact they have, to reach the audience they want to reach, and to prompt that audience to take some kind of action, such as becoming a member of the nonprofit, making a donation or advocating for a cause.

A growing number of nonprofit leaders and experts are calling for charities to make a big shift in their fundraising role from simply securing gifts to “enabling” philanthropy, helping donors see the interests and aspirations they share with nonprofits, and forming partnerships in which donors become investors who participate in the change they want to see.

At a recent fundraising conference in North Carolina, Andrew Watt, the new president and CEO of the Association of Fundraising Professionals, said fundraisers should serve as a “gateway” for philanthropy, while Tammy Zonker, who last year secured a $27.1 million gift from GM to United Way for Southeastern Michigan to help transform low-performing schools, said fundraisers should be a “conduit” between people with resources and people in need.

Adrian Sargeant, who recently began a two-year break from his job as an endowed fundraising professor at the Center on Philanthropy at Indiana University, says donor “identity” is becoming a critical element of fundraising.

So fundraisers need to understand what donors say about themselves when they make a gift, and how they identify with the nonprofit they support, so the nonprofit can raise more money while helping donors feel better about themselves.

And Karla Williams, a national fundraising consultant based in Charlotte, N.C., who is director of the Leadership Gift School, a local effort to build the fundraising capacity of nonprofits in the region, says fundraisers need to create a “culture of philanthropy” in their organizations and communities that helps donors see that supporting a particular organization gets them involved in helping to address community problems they care about.

Nonprofits are heroes in our society because, despite escalating and seemingly overwhelming odds, they continue to strive to learn, lead and grow so they can better help people and places in need.

By better understanding donors and enlisting them in the job of improving our communities, nonprofits can be more effective as organizations and as a strategic force for good.

Todd Cohen is editor and publisher of Philanthropy Journal; reprinted with permission.