Fundraising and Sales: Short Versus Long-term Thinking
I was delighted to read a commentary by Alan Murray for Fortune, “Long-Term Thinking Is Best, New Study Shows” (February 8, 2017). Alan asks, does pressure to deliver short-term earnings undermine the long-term performance of U.S. companies?
“Companies with a long-term orientation have performed significantly better over the last decade on a host of measures—revenues, earnings, profit, and market capitalization. The report concludes that if all other firms had appreciated as fast as the long-term firms, ‘U.S. public equity markets could have added more than $1 trillion in incremental asset value from 2001 to 2014.’ Companies focused on the long-term also created, on average, 11,000 more jobs.”
In visiting with my nonprofit colleagues about what nonprofit leaders expect from fundraising professionals, I have noticed an increased push by executive directors to Get The Money (GTM) as quickly as possible, without thinking of the “churn and burn” that can result in staff and donor retention. Developing and managing long-term relationships with donors is overshadowed by the cry to get donations in the door. Now!
Fundraising professionals with years of experience, strong work ethics, deeply held commitments to the nonprofits for which they work and to the nonprofit sector as a whole should be respected and greatly valued. And often they are, thank heaven.
But some nonprofit organizations, particularly younger ones still learning what developing a solid donor base of support requires, want charitable donations and grants, but they do not want to bother with the stewardship that is traditionally required. In fact, the stewardship process frustrates them. They do not yet understand the more they steward and nurture their donors, the greater likelihood their nonprofit will receive donations again and again, and for years to come.
As the Association of Donor Relations Professionals notes in its document, “Donor Relations and Stewardship Defined”:
“Donor relations is the comprehensive effort of any nonprofit that seeks philanthropic support to ensure that donors experience high-quality interactions with the organization that foster long term engagement and investment.”
Nonprofits sometimes fear their nonprofit fundraisers are not making enough “calls,” and that they are not closing enough “deals.” Of course, fundraisers do need to track and document their research and ongoing solicitations closely, they must continually seek out potential donors, and they must be sure to keep their fellow employees informed of their progress. “Data” obtained can be kept using the most basic Microsoft Word and Excel spreadsheets, or by making use of more elaborate software constituent management systems. Each nonprofit and each employee is unique.
But still, patience is a virtue. Development as a comprehensive activity cannot always be measured by the immediate bottom line. The payoff sometimes comes later. Developing relationships and trust take time.
Years ago, I worked with a nonprofit whose Board President who was a broker with a prominent national firm. In brief, the broker felt one should “sell” nonprofits just like you sell stock, along the lines of the movie, The Wolf of Wall Street.
Yes, fundraisers must seek funding constantly, document progress, cultivate, solicit, follow-up, steward and more. The challenge comes in gauging the short and long-term value of these kinds of activities. More than once I have finished a relatively brief project of just a few months, and the results of my labors did not come to fruition until months later, and oftentimes dramatically.
Sasha Dichter draws parallels between selling and fundraising.
“So is fundraising selling? It’s tempting to say it’s not, because selling can appear to be about transactions, about pulling a fast one, about a sucker being born every minute. Selling is the guy with the big fake smile as you walk into a car dealership, it’s the manufacturer’s coupon that you can’t really redeem, it’s the spam that’s cluttering your Inbox, right?”
But Sasha notes that selling can be done more thoughtfully, along the lines of what we would consider a nonprofit approach.
“The point is, when you sell something in the right way, you are helping someone get more value from something (a product, an experience, a donation) than what she is paying. You are solving a problem for her. You are meeting a need that she has.”
Yes, fundraisers can learn from those who sell products. But caution is advised. Alan Murray’s commentary about what it takes to be successful in business rings true for nonprofit organizations, too. Look to the long-term and be cautious about short-term thinking.
Those nonprofits wanting quick money, to “close the deal,” and to simply get on with their missions would be wise to invest in developing meaningful long-term relationships with individuals, families, foundations, corporations and other entities. If they do, the odds are they will raise even more funding. And that will enable them to accomplish even more for their good causes over the long haul.
- I am a fan of Wall Street, unlike some of my nonprofit colleagues. In fact, for a brief time I worked on Wall Street (early in my career). I know many trustworthy, thoughtful brokers! But some can be harsh, and nonprofits are urged to be wary.
- By the way, if you do come across aggressive brokers such as I have discussed, consider putting them to work on tasks where “sales” make sense, where one receives tangible benefits in return for contributing: selling tables and tickets at galas, raffles and the like. But be sure they understand the IRS guidelines regarding the difference between an outright charitable donation, and a contribution where something has been received in return. They are not the same.
- You might also enjoy reading my article, “Are We Listening Only to Ourselves” for more about prospect research and Wall Street.