Why the Science of Fundraising Makes for Better Fundraising

by | May 8, 2024

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Over twenty years of my nonprofit career, I drove or flew home from meetings and conferences, wondering how to replicate great ideas and model programs. I faced the reality of fewer resources and the need to get creative to make it work for my organization in my community.

Often, I lacked important data that could have helped me design better plans or articulate my ideas to the board of directors, staff, and volunteers. I wish I had the kind of survey Kenny Sigler and Brandon Crist of Sigler Crist Agency have just spearheaded, with responses collected from 100 nonprofit agencies.

While the survey described below focused on East Texas, I believe the results could have come from any corner of Texas or this vast country with millions of nonprofit organizations.

If you’re a board member, executive director, fundraising professional, or volunteer staff member, use the survey data to improve your conversations at the board table or create your fundraising plans.

Excerpted from the Tyler Morning Telegraph – Sigler: The First East Texas Fundraising Results Are In – April 25, 2024

The Art and Science of it All

There’s a common saying in the industry that there is an art and a science to fundraising. The art reflects attributes such as the ability to connect with people, listen carefully, and build trust among many others. You may already associate these skills with an effective fundraiser.

The science of fundraising is less obvious. However, it is just as important. The most recent Giving USA Report conducted by the IUPUI Lilly Family School of Philanthropy reported almost $500 billion in contributions in 2022, $499.33 billion to be exact. Additionally, sources such as the Association of Fundraising Professionals provide fundraising data on a national and international level.

While there are sources for fundraising data at the national level, there was no local source for nonprofits in East Texas with similar information reflecting local trends and activities in the fundraising sector.

In February, we launched the East Texas Fundraising Survey. The purpose is to provide board members, nonprofit executives, and fundraising professionals with data they can use to see how their organization compares to the results and make more informed decisions about their own activities.

Survey Details

The survey closed with exactly 100 unique participants. After an initial review of the data, a couple of things begin to stand out.

The first is how nonprofits performed in 2023. 39% of survey participants indicated their organization did not hit its fundraising goal, and 24% said it was “well short” of its goal. Organizations that fell short of their fundraising goals tended to be smaller, with annual operating budgets under $500,000.

Nonprofits have a big heart but still face the financial realities of the world. When resources become less available, they must make difficult decisions that affect those who depend on their services and our community as a whole. We all benefit when local nonprofits have adequate resources to support their mission and meet the needs of our community.

We can also start to see evidence of the famously high turnover rate in the nonprofit sector. The survey found 63.3% of CEO’s or executive directors have been in their roles less than five years, with 42.9% being in their roles less than three years.

Those numbers increase when we look at fund development. Over half, 54.6%, of chief development officers and development directors have been in their positions for less than three years. That number jumps up to 77% within five years.

Turnover Explained

So, why is turnover so high in the nonprofit sector and particularly within fundraising?

One of the most common reasons is the reluctance of nonprofits, including their boards, to invest in the organization’s infrastructure. It’s mostly in a good faith effort to allocate as much as possible to the “mission” of the organization. Thus, money spent on overhead and administration is kept as minimal as possible. However, providing competitive compensation and investing in the administration of an organization is essential to having a growing and sustainable nonprofit. Constantly cutting corners in the operations of the organization while maintaining high expectations can lead to the burnout and frustration we see in the nonprofit sector.

General Operating Expense Critical to the Heart of the Mission

When you support an organization’s general operating fund, you support the mission. You are allowing the organization to make the right investments that support and grow the mission in a sustainable manner. To current and future board members in the community, ensure you are adequately valuing the people and systems that need to be in place for the organization to thrive over many years.

Get the Full Report

A full and detailed report is available for download at www.siglercrist.com.

How to Contact Kenny Sigler

Kenny Sigler, Partner at Sigler Crist Agency, helps nonprofits build meaningful relationships with donors through hands-on consulting services. He offers a free newsletter at www.siglercrist.com.

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