Torpedo the Ratio
Yesterday I heard a highly respected peer-to-peer fundraising professional say out loud, "If we had $500 million I believe my organization could cure 'X' based on the research in our pipeline to fund."
My brain did a back flip.
My kid has "X." Seriously, she does. Suddenly, I don't care about the expense-to-income ratio of achieving $500 million in net income. I just want $500 million so my kid won't have "X" anymore. Launch the freaking torpedoes and to hell with GuideStar (just kidding).
I recognize the inherent risks associated with letting go of tight financial controls. I see the awkwardness of talking to donors about the cost of raising a dollar. I see our industry playing Twister—Semantic Version with expense allocation, coming out with legal structures that allow us to say, "100 precent of your donation goes to the cause." We all know that offices, desks, computers, employees, etc., are not free. We know a marketing-minded visionary donor agreed to "0 percent of your donation goes to the cause" to allow us to make that other statement legally, though not logically.
Maybe we need to talk to our donors a different way. Maybe we need to brace up and make a very educated projection on what it is going to take to achieve a mission goal and publish it. And, if we can't make that educated mission projection on what it is going to take, should we be taking anybody's money anyway? Should I take a donation because "I want the world to be free of "X"? No, I should take a donation because I have a plan to make the world free of "X" and my plan is going to cost this much.
Would a venture capitalist fund anything based on an entrepreneur's firm conviction that "somebody ought to buy my product"? Or, would the venture capitalist want to hear, "Here's what it is going to take to achieve $X million in sales"?
Newer charities like charity: water tell us what it is going to take to achieve a mission goal. This much money equals a well in this locality to be started on this date. And, we're going to tell you when that well is finished. The public loves it and supports it as evidenced by charity: water's success.
Why can't we all do that? We'd like to say "because curing 'x' is not as measurable as building a well." You might be saying that right now. Nothing worth doing is completely unmeasurable. Nothing. Your measurement may not be exactly the same, but it would be better than the milk-toast "... improve the quality of life ..." portion of most our mission statements that proves we are virtually directionless and without metrics for success.
If I am focused on raising my $500 million to achieve the cure my daughter needs, I am going to finance my fundraising department differently and measure the success of my mission delivery department differently. My fundraisers will be measured by the net they raise, not gross revenue with a tight fist around expenses. They will be managing portfolios to produce net revenue, without less constraint on how and at what expense. My mission delivery/program people have to tell us what it is going to take financially to achieve the goal and report regularly on how close we are.
And we would all have to accept being pariahs in our industry.
Katrina VanHuss has been instilling passion in volunteer fundraisers since 1989 when she founded Turnkey. Otis joined in the fun in 2013 as Turnkey’s resident human behavior expert. One thing led to another, and now as a married couple, they almost never stop talking about fundraising, volunteerism and human decision-making, much to the chagrin of most dinner companions.
Through their work at Turnkey, the pair works with the likes of the American Lung Association, Best Buddies, Leukemia & Lymphoma Society and the Cystic Fibrosis Foundation, using human behavioral tendencies and recognition to create attachment and high fundraising in volunteers.
Katrina and Otis present regularly at clients’ national conferences, as well as at BBCon, NonProfit Pro P2P and Peer to Peer Forum, and are the co-authors of the 2017 book, Dollar Dash. They live in Richmond, Va.