Wrapping It Up: Making the Most of Your Dollars
My last two posts (here and here) have talked about fundraising service providers (FSPs), an all-encompassing term I coined to discuss the many (and mostly great) people who provide specific services to help you raise more money for your cause. 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.
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 (see my first article on this subject to learn some of the options), mostly perfectly legitimate. But some may make more sense for your nonprofit or be better aligned with your board members' expectations. Make sure you know, understand the terminology used and are comfortable with the compensation you are paying to an FSP.
Bringing in the right FSP can be very beneficial to your nonprofit
Some of us like to be martyrs. "I can do it myself!" is our battle cry. But sometimes, we can't. There may be an area that holds a great deal of promise that we aren't (yet) proficient in. Or, if we take on anything else, we risk mistakes that ultimately can backfire on us.
Another reality in fundraising is turnover. As professionals, committed to a mission, I believe we have an obligation to document important pieces of the job so if we aren't around one day, the nonprofit can continue. I once had a boss who constantly asked me to document things "in case you are hit by a bus tonight." Not a happy thought (at least not for me — for him, who knows?!), but very valid. Finding time to ensure your programs can continue almost without a hiccup if you are gone for any reason may be resolved by turning some work over to an FSP.
If an FSP isn't returning value to your nonprofit, find an alternative solution
Don't keep wasting money — but also don't terminate an arrangement with an FSP unless you have a plan in place to continue that program via another means. Not recontracting with the FSP that is writing, designing, printing and mailing your monthly direct-mail appeals (for example) without having a solid strategy for continuing to get direct mail of the same (or better) quality out without missing a beat isn't thrifty — it's organizational suicide. The same applies to your e-mail provider, website manager or any other task you are using an FSP to complete.
Find an alternative (or know how you are going to get it done with your existing staff) before terminating an FSP. The money you raise is about your mission; your decision needs to be based on how you can return more money for mission. That's our bottom line as fundraisers.
Regardless of what we were promised 30 years ago, we are far from a paperless society (something this old dog whines about daily). We still get massive proposals from FSPs and equally massive contracts, often in a font size that we all know would be death to a direct-mail appeal. Understanding what you are paying and the products and services that will be delivered for your investment demands an investment of time — something fundraisers have far too little of. But truly understanding how an FSP is being compensated matters. Don't be wowed by flashy presentations and overpriced meals; you owe it to your donors to invest their dollars in FSPs who will help you return more dollars to your nonprofit for accomplishing the mission. And that requires comprehending the profit model of your FSPs.