A dependable revenue stream that grows—ah, paradise!
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When I got off the phone with Denise recently, I immediately thought of something I heard Stephen Covey say. He said people often limit their effectiveness in life by being caught up in "the thick of thin things."
Denise is the executive director of a small organization that serves seniors in the Southeast. When we spoke, she got right to the point by asking me how to solve her fundraising problem.
Denise told me that her challenge is competition from a number of organizations in her area with similar missions. Fundraising totals for Denise's small organization have plateaued. Denise believes this is creating difficulty in generating financial support, subdividing the static pie.
Sound familiar?
Asking her a few questions pinpointed the real obstacle. What's really holding her organization back is something completely different.
Denise is blessed with a stalwart group of volunteers who work diligently on an annual charity auction. This event generates the vast majority of the revenue, which fuels the organization's work.
Like a lot of events, it's hit maturity. As fundraisers, we know that somewhere between three and five years is the cycle. Event costs are in the typical 50 cents to 75 cents per dollar raised range. It's an awful lot of effort for precious little.
There are many similar events in her area—for everything from cancer research to little league. Denise believes that's depressing her totals.
And it is. But not for the reasons she thought.
When you reduce philanthropy to a transaction, you've placed yourself in the pool with everyone. Your cause becomes identical to everyone else's. Giving as a quid pro quo definitely has its limits—in any community.
By appealing to potential investors on the basis of a shared vision, you set yourself apart. You also tap in to the synergy of philanthropy that expands as you engage those who would support you.
Denise's little organization is more than ready to build a fundraising program focused on direct giving. Her board members are, by and large, committed. They work their hearts out on this event. They even make voluntary, albeit small, gifts.
I explained to Denise the importance of two of The Eight PrinciplesTM: Principle 3, Leadership LeadsTM and Principle 4, Work from the Inside OutTM.
Principle 3, Leadership LeadsTM, says that donors follow wherever the leaders lead. By board members stepping up and making commensurate gifts they set the example for others to follow.
Principle 4, Work from the Inside OutTM, states that effective fundraising begins by reaching out to those who are closest to your cause by relationship and affinity. After board members make their own investments, reaching out to their networks in the community and asking others is the next step.
Denise and her board had never really thought of a different approach, however. No surprise here. You see, people do what they know to do.
Denise's board chair was also on the phone during our conversation. Our brief session really energized him. He wants to lead the charge in developing a stream of revenue from individual asks, beginning with his fellow board members.
Sounds like a plan.
I gave Denise direction on how to execute an effective peer-based gift program for her board. I also pointed the way on how to move outward from this. Based upon what she told me, I was confident enough to predict a four- to sixfold increase in revenue for her by year's end.
Denise and her board chair were most grateful for my counsel and were eager to tackle the challenge.
A couple of weeks later, I checked back with Denise to see how they were doing.
Yes, Denise told me, they are convinced that the approach I recommended would yield the results they are looking for. They're putting it on hold, however. In her words, they only have so much "bandwidth."
You see, they are too busy planning next year's auction—almost 10 months away—to work on it.
At the end of the year, they'll have their event ready to go. They'll struggle to raise what they did last year. They'll feel fortunate and a sense of relief that it's over-for the time being.
They also will have forfeited the four- to sixfold gains that are there for them.
My very best wishes to Denise and her organization, however. They do really great work.
Philanthropy is elastic. Nonprofits leave millions of dollars on the table each year. Why? Most are so focused on what they're doing they can't look what they could do.
Hmm. Being in the thick of thin things.
Let me hear from you. Please share your situation and the challenges you face in developing sustainable revenue streams. Email me (info@TheEightPrinciples.com), and I'll arrange a brief consult providing you with practical guidance. I'll choose some of these thorny obstacles to share, along with my insights, in upcoming columns.
Success is waiting. Go out and achieve it.
Larry believes in the power of relationships and the power of philanthropy to create a better place and transform lives.
Larry is the founder of The Eight Principles. His mission is to give nonprofits and philanthropists alike the opportunity to achieve their shared visions. With more than 25 years of experience in charitable fundraising and philanthropy, Larry knows that financial sustainability and scalability is possible for any nonprofit organization or charitable cause and is dependent on neither size nor resources but instead with the commitment to create a shared vision.
Larry is the author of the award-wining book, "The Eight Principles of Sustainable Fundraising." He is the Association of Fundraising Professionals' 2010 Outstanding Development Executive and has ranked in the Top 15 Fundraising Consultants in the United States by the Wall Street Business Network.
Larry is the creator of the revolutionary online fundraising training platform, The Oracle League.
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