Prioritize stewardship, invest in capacity, energize operating appeals

Published in Issue 4 – 2009 of the Alliance for Children & Families Magazine

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These are daunting times for most child and family service providers. My agency, like many others, has had significant revenue reductions that may result in program or staff retrenchments.

It is too easy to allow ourselves and our agencies to be defined by these cuts, shortfalls, and the sense of resource depletion. Yet, hope and positive energy remain the lifeblood of our agencies and are critical to ultimate success.

Managing the mood, mitigating the fear, and providing a positive vision of tomorrow is essential to sustain and nurture the morale of the staff and volunteers who make mission a reality.

What follows is a review of some of the development basics for surviving in tough times. As with any review of fundamentals, there is no rocket science involved, just a gentle reminder to hold fast to the core principles of development, as well as validation that you are not alone.

Deliver a Clear and Compelling Message

There’s a delicate communication balance in today’s environment. On one hand, organizations must articulate the urgent needs of clients and communities, as well as the meaningful and timely outcomes delivered by the agency. But they must not cross the line by implying an organizational crisis.

Donors want to invest in organizations that are making a positive difference for their community; they do not want to put money into a sinking ship. They need a clear portrait of the difference their donations are making. Furthermore, they need to have confidence in prudent management of limited resources. Any evidence of excess or irresponsible spending can be quite deleterious.

Invest in Organizational Capacity

In times of scarcity there is a tendency by some program staff, managers, board members, and even executives to begin to question, even to begrudge, development staff about the level of resources necessary to maintain donor relations and community partnerships. This is particularly true during a time of less return on that investment.

Internal fiscal tensions can play out as competition between organizational core capacity services and program commitments; the latter is often cloaked in the mantle of “mission” while the former is often seen as a kind of organizational indulgence. No one doubts that communities need more resources, and 
that programs are facing escalating demand in the face of less support. Ironically however, now more than ever is when organizational investments in capacity are needed, particularly in development and communications functions.

The most devastating mistake an agency can make in these times is to pull back from these investments. Stewardship of current relationships is the core ingredient to survival and ultimate recovery. Cutting capacity to support donors and community relationships, and cutting the ability to drive home a clear message to the community, is a reactive yet frequent impulse, as well as a tragic mistake.

Protecting and investing in the organization’s communication and development capacities often takes administrative courage. It is therefore comforting to know that research demonstrates its effectiveness. The Association of Healthcare Philanthropy reported on a study in the September/October 2009 edition of Advancing Philanthropy that found the highest returns from annual gifts and special events were earned by organizations that invested the most in fundraising staff and resources.

It is painful to cut mission commitments. However, the board and management must balance mission commitments with current revenues and also understand their responsibility to ensure that the agency maintains its “capacity to deliver” on the mission both currently and in years ahead. The revenue generating aspects of the agency must be identified, and investments in those capacities will be essential.

Prioritize Stewardship

Stewardship of current relationships is the most important activity to engage in. It may be difficult to find new donors, but current donors already have a relationship with the agency. That relationship needs to be actively nurtured. Failure to do so in tough times will result in lost relationships and lost future opportunities.

Communicate with current donors, acknowledge their realities, thank them for what they have done, and recognize that many of them have changed circumstances. It is important to realize that some still have the ability to give, even give more, and they must be informed of the agency’s need for support.

Keep in mind that among the most important factors in giving is an individual’s prior giving history with an organization. That is great news because it reflects how success is rooted in effective stewardship of the relationship. Best of all, it costs little and has incredible return on investment.

Do not neglect current or recently lapsed donor relationships in order to seek new donors. In this economic environment, that tactic will probably result in a net loss from current donors and at best a marginal acquisition of new donors at great expense.

Studies have demonstrated that when organizations do engage a new donor it is most likely due to pre-existing relationships with current supporters. Most donors rely on peers and social contacts much more than rating entities such as GuideStar or Charity Navigator.

Thus, engaging current donors, regardless of their current giving capacity, in spreading the word about the agency is a rich opportunity. Engage them in the ambassadorial efforts; it gives them an equity stake in the agency and its success.

Seek Board Engagement

Donors are flooded with communications from a myriad of entities. There is fierce competition for limited financial resources. Differentiating the organization in this crowded marketplace is essential. Celebrating the mission, sharing the stories, and even flat out bragging about the agency are critical activities for board members.

Board members are the best possible ambassadors to the larger community. They have networks and spheres of influence to which agency staff cannot connect otherwise. Enable and invite board members to share the message, to make it clear and compelling, and to take the mission to their community in every way they can.

(More information about the importance of board engagement in fundraising success is detailed in an article from Issue 4 – 2009 of the Nonprofit Director.)

Energize Operating Appeals

Research has demonstrated that challenge and matching gift programs add excitement and vigor to annual giving. Donors are attracted to the leveraging spirit of a challenge or a match.

Yet, the data suggests that there is no significant difference in the return based on the actual size of the match (e.g. $1, $2, or $3 to $1 donated). Therefore, stretch challenge or matching gifts as far as possible. Consider inviting board members, senior staff, or a select group of donors to create a challenge pool.

Mission-Focused Special Events

The success results for special events seem mixed recently; some agencies report best-ever results and others have had disappointing experiences. A common thread on the success side seems to be two elements: scaling back so as not to be overly lavish and tying the theme or event as closely as possible to mission.

Seek Planned Giving

A recessionary bear market presents many challenges for philanthropy, but it is also the best environment in which to seek planned gifts. In difficult times donors are focused on their estate and the immediate impact of the downturn. They are rethinking their overall plan.

A deferred planned gift allows donors to be engaged with organizations they care about in a significant way. These gifts strengthen the relationship by allowing donors to make a delayed, yet significant, difference. As a benefit, these gifts do not require donors to dip into current assets or cash.

Stay Balanced, Stay Connected

It is all too easy to fall into the trap of a depressive, internally focused, deficit-based thinking process with cost-cutting strategies as the only emphasis and solution. That mindset increases the risk of organizations becoming isolated and overwhelmed by the challenges of surviving. Maintaining a sense of balance and hope, and engendering that in others, are essential components of managing successfully in this tough philanthropic environment.

Staying connected with colleagues has never been more important. There is much strength and power in relationships, and a good deal of shared knowledge and wisdom within the Alliance for Children and Families network. The collegial relationships maintained and developed through this network are tremendous assets. You—we—are not alone. I guarantee that whatever you are facing, one of us out here is also struggling with the same challenge. Reach out, get and 
stay connected.

Bob Jones is chair of the Alliance’s Resource Development Services Advisory Committee. He is president and CEO of Alliance member Children’s Aid and Family Services, Paramus, N.J., and a member of the Alliance Board of Directors.