The Leaky Bucket Nonprofit Blog

What's the Deal with Development Audits?

Posted by Ellen Bristol on Wed, Jun 28, 2017 @ 10:57 AM

list-1.pngWhy conduct a development audit? What is it anyway?

Development audits are in-depth analyses of what's happening in your fundraising shop - and what some people in the organization think is happening (or not). Opinions about such audits run the gamut from hate, fear and distrust to enthusiasm and delight at insights gained. We recently launched our new SMART Way Development Audit, and tailored it to respond to both the "delight" party and the "hate, fear and distrust" party. 

Since we're addicted to research, we surveyed nonprofit professionals about their opinions on audits. Here's what we discovered:

  • The two things people FEAR THE MOST about Development Audits 
  • WHY people want to conduct Development Audits, in spite of their fears
  • Whose voices SHOULD BE HEARD when doing these audits, and...
  • Are Development Audits just another way for fundraising consultants to wangle more money out of their clients?? 

If you'd like to see our video series on this topic, check it out here.

Thoughts About Development Audits

If you want to know why people do or don't do something, you ask them, right? So that's what we did. Here's what we learned..

1. The two things people FEAR THE MOST about Development Audits.

Well, you'll never guess the biggest fear. It's cost. About 59% of our respondents said they thought any money_down_the_drain-resized-600.jpgdevelopment audit would be more expensive than they could manage. And that's no surprise to us. In our decades (and decades) of collective experience, the cost of a development audit seems to start at $25,000 and go up from there. Plus, there will be a zillion hours of interviews, strange people (i.e. consultants) hanging around looking at your files, and a whole lot of other distractions.

How we solved the cost issue: Use technology to gather data, significantly lowering the cost and disruption of the hours and hours of consulting time required to interview many people and interpret what they said.  

The SECOND biggest fear, at about 19% was "we're afraid we'll fail"! It's not reallyfearfailue.jpg possible to fail a development audit. Your audit isn't reported to the authorities or the Thought Police. You might discover some stuff you're not thrilled to learn, but that's how you'll grow and improve. Now if you need a hug when you're doing our  audit, that's OK with us, but honestly, it's not really possible to "fail" an audit. Well, maybe a financial audit. But we're not talking about that.

How we solved it: There is NO WAY to fail this audit. All data gathered for the audit is confidential; we only show collated data. Hugs and reassuring remarks available on request at no charge.

2. WHY people want to conduct Development Audits, in spite of their fears.

trendy.pngWe got three interesting responses: about 53% said they wanted to improve fundraising performance overall; about 52% said they wanted to improve specific aspects of fundraising performance; and about 37% said they wanted to be sure they were ready to conduct a major or capital campaign. We liked those answers! They are great reasons for doing a development audit.

What we did: Allow you to use the audit to assess readiness for such campaigns. You can use it to analyze all aspects of development, or just concentrate on those relevant at a particular time.

3. Whose voices SHOULD BE HEARD when conducting these audits?

The overwhelming response here (over 67%) was "everybody!" People want to hear from the development staff, team.pngthe executive team, the board, program, admin and anyone else who's relevant to the process, which makes complete sense to us. A teeny-tiny minority said either "just the development director" or "just the development staff."  

How we solved it: Provide access to an UNLIMITED number of participants. It's just as easy for our database engine to analyze 57 (or 157) responses as it is to analyze six.

4. Are Development Audits just another way for consultants to WANGLE MORE MONEY out of their clients?

Ouch. We didn't ask this question in our survey, so we weren't expecting the few comments we got stating this notion. So let's bring this out in the open. Do consultants promote development audits as a ruse to win more contracts? It's a distressing thought, and we prefer to believe most of our peers don't work that way. There may be greater danger in audits conducted in an unscientific or non-sytematic manner. Effective audits can be invaluable - especially when the provider follows a carefully thought-out process and concentrates on the data. 

How we addressed it: We concentrate on the data. Our approach gathers lots of insights from lots of people. The data shows great insights, not only into what's happening, but also into the differences of opinion and understanding among participants. We collate and interpret the data so it makes sense. What you do with the report is up to you, including sharing it with your favorite consultant.

The SMART Way Development Audit complements Fundraising the SMART Way and the Leaky Bucket Assessment of Fundraising Effectiveness, our primary solutions for improving fundraising results. Any nonprofit earning at least half its income from private philanthropy can benefit from one. 

Thoughts About Development Audits


Tags: Board, fundraising productivity, development audits

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