Most giving comes from fundraising.
Doesn’t that sound like a commonsense statement? Like something 14-year-olds would roll their eyes at, accompanied by an impatient, “Duh!”
But despite all the recent handwringing over decreased giving, most grant makers and nonprofit leaders devote little attention to making fundraising more effective. A new report from the Generosity Commission, comprising leaders from across the charitable sector, acknowledges the problem. It calls for “significantly more funding from organized philanthropy for the fundraising capacity of their grantees,” including more training and increased efforts to address burnout.
In my experience, few foundation leaders make the connection between the professional fundraisers working behind the scenes and the long-term sustainability of their grantees’ programs. While many rightly express alarm over the decline in giving, they rarely link the problem to fundraising. In fact, most know little about the state of fundraising.
I’ve worked in fundraising for 39 years and now run Somos El Poder, which provides professional development to fundraisers in the Latinx community. I recognize that it’s hard to understand the intricacies of the profession if you’ve never worked in it. But more grant makers need to try — and they need to be open to providing the support fundraisers need to do their jobs better.
Fundraisers, for their part, need to be bolder about speaking up about their challenges. Fundraising is a silent and often denigrated profession. Many nonprofit leaders I’ve encountered consider it a necessary evil, even slightly distasteful. That’s why staying silent can seem like the best option for fundraisers, especially when jobs feel tenuous and there’s rent to pay and kids to support.
An Unequal Profession
But given the large recent drops in giving, it’s time for fundraising professionals to raise their voices — and for funders to start listening. Here’s what they need to know:
- Fundraising is a profoundly unequal and overwhelmingly white profession in which rich organizations get richer and small nonprofits stay poor. Nearly 70 percent of fundraisers are white, and 97 percent of nonprofits have budgets under $5 million.
- Fundraisers are often subjected to intolerable levels of stress, with 51 percent saying they plan to leave their organization within two years and many blaming the job’s “unrealistic” expectations.
- Fundraising is one of the few professions managed and evaluated by people who know little about the work involved and what’s realistic. At least a fourth of executive directors have self-identified as having no knowledge of fundraising, and 55 percent of fundraisers say they feel underappreciated.
To change these patterns, foundations and major donors need to do much more to strengthen the fundraising infrastructure at the nonprofits they support. They should start by asking themselves the following questions about a grantee’s fundraising:
How many fundraisers has the nonprofit had in the past five years? Regular turnover could be a sign of dysfunction and likely means the development staff lacks the resources and support to do their jobs effectively.
Has the organization’s revenue grown consistently during that five-year period? Even small gradual growth indicates they’re doing something right.
Does most of the grantee’s fundraising come from an annual gala? Galas are popular but generally poor at building the donor relationships necessary to sustain a major giving program. Time and again I’ve seen donors spend $1,000 to attend a gala and then not give a penny more to the organization. Pulling off a successful gala is also expensive and takes a huge toll on the same fundraising staff that is responsible for writing grants, developing a major gifts program, sending out donor mailings, and maintaining a donor database.
Is the organization overly dependent on grants? If the nonprofit is just relying on investments from your foundation and perhaps two others, it could be one grant away from going under. Healthy organizations have multiple sources of revenue, including from individual small and large donors and corporate investments.
Funds for Fundraising
The answers to these questions will tell funders if their grant dollars are going to an organization that is on a path to grow or one that’s struggling to stay afloat and needs a significant investment in fundraising. In the latter case, grant makers need to consider directing money specifically to fundraising operations. Providing general infrastructure support is unlikely to help since too many executive directors will be tempted to spend it elsewhere, such as on leadership training and marketing.
Grant makers can support nonprofits’ fundraising in several ways, but the most important is by investing in more training. Fundraisers, especially at small organizations led by people of color, are generally left to sink or swim. Foundations can help significantly by bringing grantees together for regular fundraising training sessions and convenings. Board members should be encouraged to take part as well. Far too many are ignorant about the fundraising process and why they need to be involved.
Additionally, foundations should invest in strengthening grantees’ digital fundraising tools and other vehicles for reaching donors. That might include upgrading donor prospect research software, hiring a consultant to identify wealthy donors, and providing a travel budget for fundraisers to meet face-to-face with current and prospective donors and attend fundraising conferences.
Admittedly, this isn’t sexy stuff. Most people who work at foundations got into that line of work because they want to support innovative and effective programs that can bring about real change — not the fundraising needed to sustain those programs.
But helping organizations strengthen their fundraising so they can stand on their own two feet, grow, and not depend on foundation grants alone is the only way those seeking social change can continue the fight.
All of this is more dire for organizations serving communities of color, which receive far fewer grant dollars and generally have weak fundraising operations. Nonprofits serving Latinx communities, for example, receive just 1.3 percent of foundation grants even though more than 19 percent of the U.S. population is Hispanic — a number that is expected to grow to nearly 27 percent by 2060. Of the thousands of Latinx-focused nonprofits I’ve encountered through my work, I can think of just three that have something resembling a major giving program.
How can crippling problems such as racial injustice and inequity be addressed by underfunded organizations with rudimentary fundraising? They can’t.
Let’s challenge the notion that fundraising is something to hide, ignore, or feel uncomfortable about. Let’s say out loud, with no sarcasm, that fundraising is beautiful. Let’s raise up fundraising as a cause unto itself. It’s the engine of philanthropy. We need to help it run.
