Making the Most of Your FSP Investment
The most important thing to remember is that when it comes to hiring FSPs, clear communication is critical. You need to understand their strengths and limitations as well as their pricing structures, and the FSP needs to understand your organization’s needs and what you want to accomplish from the relationship.
Otherwise, the relationship is headed for failure.
Getting the best value
There is simply too much to do in fundraising today — personal visits, legacy societies, direct mail, e-mail campaigns, newsletters (on- and offline), events, websites, telemarketing … and the list can go on and on.
Very few of us can be experts in all of these. The smart professional knows when to ask for help rather than trying to do it all alone. But the smartest professional makes sure that the money being spent on FSPs — and yes, internal-only projects, too — is a good investment that ultimately raises money to carry out the mission.
I use the word “ultimately” deliberately because we learn early in our fundraising careers that acquiring new donors most often is done at a net loss. But over time, the donors who continue to give pay back our initial investment and provide a steady stream of ongoing income to fund programs and overhead. (That’s why calculating the long-term value of donors by acquisition source matters.)
So to bring this all together, here are some reminders as you work with FSPs to increase your income and ultimately further advance your mission.
1. If it seems too good to be true, it is. Remember that FSPs are generally for-profit companies. That means they are making a profit. You need to understand their profit models. There are many models, but some may make more sense for your nonprofit or be better aligned with your board members’ expectations. Make sure you know and understand the terminology used and are comfortable with the compensation you are paying to an FSP.