I’m in the process of writing a book about Fundraising the SMART Way, the methodology I developed for sustainable fundraising based on the continuous improvement model. While working on the last chapter, it occurred to me that I’m advocating a revolution in the way we manage the discipline of fundraising. While we see growth in the industry - at least in terms of available books, graduate degree programs, and software applications - available research continues to demonstrate a significant gap between the real and the ideal. AFP’s Fundraising Effectiveness Project, Giving USA’s annual Report on Charitable Giving, and our own Leaky Bucket Study show troubling evidence: flat or declining levels of income, size of donor base, lack of adoption of metrics and other methods for managing development performance; all of which paint a picture of an industry in trouble.
Now if the industry in question were the makers of typewriters or vinyl LP’s, we might simply say “the market has disappeared” and move on.
But the “market” for human services, education, behavioral health, medical research, conservation, sea-level rise, the disappearance of Arctic ice and the preservation of musical instruments of the Renaissance isn’t going away any time soon. Market demand for the “products” of the nonprofit industry is growing, not shrinking. A growing market with a declining funding stream? That’s not only a troubling picture; it violates basic rules of the market-driven economy, which is based on the relationship between demand and supply. In the market economy, when demand is up, suppliers thrive. By the way, that’s the same economy in which nonprofits operate. If demand for our programs and services is up, yet we can’t fund the “supply” side, what are we doing? Cui bono?
It’s time for us to answer the question that Lenin so famously posed back in 1902, the one that led to the Russian Revolution: “What is to be done?”
Lenin wanted to depose the czarist regime and provide better economic conditions for the majority of Russians, mostly serfs living in grinding poverty, without any rights to property or even, in some cases, to their own lives. Talk about the need for human services! Too bad the Russian Revolution was such a bloody mess. There are varying opinions as to whether it succeeded in its aims of redistributing wealth and providing equality of opportunity.
The Fundraising Revolution I envision is a bloodless one, with more benevolent, lasting outcomes. It will facilitate ways for the nonprofit sector to build more sustainable organizations, organizations that enjoy more predictable, consistent financial support.
The tools of this revolution have been accepted and leveraged effectively for decades in the for-profit sector. They have improved working conditions for millions of workers. They have also produced phenomenal benefits for us consumers as well. Without the disciplines of continuous improvement, you and I would not own smartphones or tablet PCs. It took decades of continuous improvement in information technology to create these tiny devices, which have as much computing power as the mainframes of the 1980’s and ‘90’s, and far less likelihood of component failure.
It might seem as if smartphones just somehow sprang into being overnight, but in reality their origins go back nearly 60 years, to the time of the first computers. Those puppies were enormous, hugely expensive, difficult to operate without all kinds of specialized training, and prone to component failure. In fact, one of the places we first saw the emergence of Six Sigma was in the manufacturing of electronic components like computer chips. Six Sigma is the level of quality management that reduces failure rates to about 3.4 in one million opportunities. That means if you make a million computer chips, you’ll only have three or four that don’t work and have to be thrown away. Imagine the amount of time, money and lost-opportunity cost saved by such rigorous management.
So why not use these same techniques to improve fundraising results? Why not develop quality-management techniques that improve the fundraiser’s success rate from one donor out of ten prospects to one out of one and a half? Why not reduce the costs of engaging those donors from the hundreds of dollars per you’d probably spend to get them to your luncheon, down to the three or four pennies it costs you to get them to “like” you on Facebook?
Think about it. Imagine how great it would be if you could raise much more money, with much less effort. That’s the revolution I’m talking about, a revolution in the way we manage and control fundraising that just might produce revolutions in the ways we serve the greater good.
This post is an excerpt from my forthcoming book Fundraising the SMART Way™, to be published by John Wiley and Sons, Inc., currently slated for April 2014.