Relationships count with budgeting

I spent many happy years where you sit now, running direct response fundraising programs for nonprofits I believed in. The experience helped me appreciate the organizational issues and challenges all fundraisers face.

One of them is budgeting. A process that is as much about relationships as it is about numbers. As the July 1st deadline approaches, here are a couple of principles that worked well for me that I hope will work for you too.

Speak finance – Familiarize yourself the language your financial team uses and what they mean. When you talk in terms of net revenue, return on investment and quarterly projections and truly understand them and how the performance of your program impacts the organization, you become an integral part of the process and everyone’s on the same page. Also, understand the metrics your finance director is using to measure success.

Be responsive – Your budget is only one of many that your finance department is responsible for. Realize where you fit in, and when you’re asked for information, be ready to provide it. If you are helpful to your finance team, they will help you when you need it. They can make you look good, or they can make your life really hard.

Show your hand – Can financial people ever truly understand what fundraisers are trying to do? Sure they can. But only if you take the time to help them see things from your point of view. Our realm of direct response is easy for finance teams to grasp with its concrete campaign plans, projectable revenue and predictable expenses.

No surprises – Nothing troubles a finance director more than the unexpected. Cultivate a year-round relationship with your colleagues in finance, keep them in the picture and let them know as soon as something unanticipated happens.

As everyone knows, budgeting is a bargaining process. Finding the sweet spot between all the money that’s needed and what you can realistically raise is something you can’t do alone. For the coming financial year, make it a team effort.


Your Brand Promise

We’re all guilty. That shiny new object looks just like a “silver bullet.” In our excitement, we forget what’s important in fundraising. Like your brand promise.

Why you exist, how you talk, what you believe, the impact you make, the feelings you stir… all these and more are wrapped up in your brand promise.

Everyone in your organization needs to understand, treasure and be true to your brand. Your leaders should grasp how it shapes fundraising. Development staff should be in tune with the organization’s mission, marketing, and financial goals and strategies (see our Balanced Scorecard for Nonprofits).

So repeat after me: If it doesn’t sound like you, don’t do it.

One way to live up to your brand promise is to invest more in front-end stewardship and cultivation instead of adding renewal efforts and mining your deep lapsed file on the back end. This way, your donors feel loved and your retention rates reflect it.

Some ways to improve on the front-end include:

  1. Develop a multi-channel welcome series. You can’t say thank you enough. But this also gives you a chance to deepen your donors’ understanding of what you do, why you do it, and how you do it.
  2. Ask for feedback. Surveys are a useful way to hear from your team (remember, donors are partners). Think about chat rooms on social media and give out a phone number specifically for donors to talk about issues, problems, or anything they want to get off their chest.
  3. Communicate more frequently and effectively. We often get asked how much communication is too much. Believe me, your donors will let you know. But too often nonprofits shut down communication with donors because a few of them may feel like you are over-communicating. Usually it means you are over-asking. Be creative in your messaging and don’t always ask for money! Rather, communicate more about the brand promise and the impact they are having. Giving away money is usually an irrational human behavior, so make them feel good about taking that action and demonstrate clearly the impact of what they are doing for your mission.

Sounds simple, but we know it isn’t. More effort in communicating and delivering on your brand promise, though, is sure to strengthen your donor relationships – and that’s what it’s all about in the end.

Proactive Planning & Budgeting

Fundraising Management, Tim Oleary

Ahh…Springtime. The flowers bloom, the weather warms, and development professionals come out of hibernation to work on the next fiscal year’s plan and budget.

Don’t get caught napping this year. Follow these tips for proactive planning and budgeting…

  1. Strategy First – Make tactics the servants of strategy. Begin by looking at how many donors and net dollars you need to achieve your revenue goals, then work backward on the tactics. Most organizations simply split their budget into lines like appeals, acquisition, lapsed, etc.  Look at the budget in its entirety and get out of the box to figure out how to reach your strategic goals.
  2. Net Efficiency – For a clearer picture, use key metrics like net cost to raise a dollar and net cost to acquire new donors rather than just focusing on gross revenue figures to meet a budget line.
  3. Micro-Segmentation – Where should your biggest investment be in the fiscal year ahead? If you said something like “lapsed” or “sustainers,” you have painted too broad of stroke. Today’s world consists of micro-segments, ones that require more personalization without the added cost. How will you address this?  For example, break “sustainers” up into current sustainers giving via credit card vs. EFT.  Go further with converted sustainers vs. directly acquired sustainers. You get the idea.
  4. Multi-Channel – Yes, budgeting for multi-channel campaigns can be more difficult, especially the more integrated they become. But that doesn’t mean you shouldn’t put in the work. After all, Blackbaud’s 2015 Charitable Giving Report tells us that online giving, mobile giving, and social media engagement are growing at a fast pace.
  5. Flexibility – Ever played dueling spreadsheets? Try mapping out a few budget scenarios that get you to the same goals. This gives you flexibility in ultimately deciding which is the best direction to take for your program and prepares you better for unforeseen challenges. Don’t get back-doored into just one approach simply because that’s how you’ve always done it.
  6. Testing – It always pays to put new offers, messages and creative in front of your donors. So set up a testing “slush” fund to drive your 12-month testing plan and constantly tune up the performance of your programs.
  7. Research – Lastly, include some research and modeling in your budget. Relationships matter in our world and the only way to truly get to know your donors’ their preferences, lifestyles, and giving habits is to invest in market research and modeling.

What we’re talking about here is spending a little extra time up front on a proactive budget—rather than scrambling midway through the next fiscal year. So shake off those winter blues and get to work on your plan and budget now!