Setting a Course for Growth
It's one of my favorite seasons of the year — the release of the annual Chronicle of Philanthropy Philanthropy 400 listing. I always enjoy browsing the report to see who's on, who's off and who's gaining ground.
But let's face it. That report is about 400 nonprofits; that leaves 1,079,700 more in the United States alone that didn't make the list. Yet, the work they are doing is important.
Regardless if your goal is to break into the 400 listing or not, we all know that more net income would be a great assistance to our programs. And, we also know that these massive nonprofits didn't get that big just by wishing on a star. So consider the following strategies that are "best practices" for many large nonprofits. Are there some you need to implement to help you have your best year ever in terms of income?
Successful nonprofits don't say 'goodbye' easily
The 2012 Fundraising Effectiveness Survey Report from the Association of Fundraising Professionals and the Urban Institute found that in 2011, every 100 donors gained through acquisition was offset by 107 donors lost through attrition. Yes, that's an industry average, but I dare say some of your 2010 donors failed to give in 2011. Did you just accept that as "the way it is," or are you fighting to win them back?
Of course, some donors stop giving because of death or a change in income; it's hard to argue with those causes. But what really bothers me are those donors who stopped giving because they just didn't think their gifts were really making a difference or doing what was promised.
If we want to grow our income, one of our deliberate strategies has to be donor renewal and donor recapture. Battle for those donors; you need their ongoing support if your organization is going to grow.
Growing nonprofits invest in acquisition
Yes, acquisition is an investment. You will (in most cases) lose money acquiring new donors. Contrary to what some (often those who have never done any fundraising) believe, simply having a Web presence is not a guarantee that new donors are going to flock to your cause
Acquiring donors — in a significant enough quantity to offset those lost through attrition — takes an ongoing strategy; testing to find the best audiences, offers, messages and creative; and a financial investment.
If you aren't willing to spend money to get a new donor — and then work like crazy to get a second gift, and then a third — you won't grow. In fact, you'll probably shrink, and eventually you may even cease to exist.
Effective nonprofits take calculated risks
This is not an argument for coming up with crazy plans and implementing them with donor money. But nonprofits that want to grow know they can't keep simply doing the same thing and expect improved results. Instead, they keep doing the same thing, but they also try new things that, after careful study, look like they have the potential to work.
It's hard to invest in an unproven strategy when every dollar spent will be one less dollar for programs. But how do you plan to find the "next big thing" if you never try anything different? Thank goodness someone took a risk and developed computers, or we'd all still be pecking away on our IBM Selectrics.
Come up with some potential ideas; a good source is to look at what the big nonprofits are doing. (Start by taking an hour this week, and look at the websites of the top 25 or 50 organizations in the 400 listing.) Examine each of your potentials from all angles, and set aside the ones "least likely to succeed." Then put together a budget and a strategy for testing the one or two ideas that look most promising.
This list is not exhaustive, and I'll add some more to it next week. But if you take nothing else away from this article, remember that if you do nothing differently, you'll be at the same place this time next year as you are right now — or worse, you'll be smaller because you lost 7 percent more donors than you gained.
If you didn't make it in the Philanthropy 400 this year, you're in good company. But that's no reason to be content. What are you going to do differently this week to put (or keep) your nonprofit on a path to growth?