Plans and philanthropic culture – the essential ingredients for increased fundraising revenue
In the Spring of 2020, we were commissioned to conduct a survey on the topic of fundraising planning. The goal was to determine the extent to which nonprofits had adopted planning processes and how well supported these were across the organisation. Fundraising experts often reference the importance of having a plan in place, but — from an academic perspective — does a fundraising plan really make a nonprofit more effective and successful at generating income? And what other internal factors might influence that success?
The full report – Development Plans and Fundraising Performance – has been published today. In it, we investigate the attitudes, internal habits, beliefs and practices of fundraisers at nonprofits worldwide, and find a strong relationship between the formality of fundraising planning and success.
Our study underlines just how essential planning is for nonprofits, and finds that happily, most do engage in some form of planning. Where planning is absent, it is generally due to one of four broad themes; poor leadership, lack of time, perceptions that the charity is too small for a plan and a lack of planning expertise. However, the formality of that fundraising planning is widely variable across the sector.
philanthropic culture
In addition to the benefits of planning, we found a clear link between fundraising performance and philanthropic culture, which can be defined as the extent to which an organisation meets each of the following six elements:
a high degree of donor centricity
a philanthropic core to its value base
significant Board support for fundraising
respect for fundraising as a profession
an emotional and compelling case for support
an innovation orientation
In some areas of philanthropic culture — donor centricity, for example — the sector scores highly. And, around three-quarters of our sample were satisfied with the extent to which their organization viewed them as professionals. But scores for having a ‘philanthropic core’ were markedly lower, with only half of all fundraising professionals feeling they are adequately supported by their trustee boards.
Almost a third of respondents indicated that they did not have access to appropriate professional development opportunities to deepen their knowledge base and acquire new skills — this is likely to restrict the long term potential of the sector; an issue that should be considered and addressed by all fundraising organizations.
When it comes to the case for support, there is room for improvement. Respondents generally felt that they had a solid case for support, but our analysis revealed some concerns about the extent to which it might be distinctive, compelling and emotional. Only 40% of respondents indicated that all members of staff in their nonprofit could clearly articulate their case for support.
A lack of focus on innovation was also identified. Fewer than half of respondents believed that there were clear innovation goals articulated for fundraising or that innovation was a core value in their organization. This is significant, given the current performance of the sector in providing a high quality of service to donors.
The way these six culture elements interact is immensely important — philanthropic culture plays a crucial role in driving performance. Our key observation then, is that the development of a philanthropic culture should be an immediate priority for any organization looking to markedly increase its fundraising income.
How should a nonprofit go about this? It depends, to a large degree, on their needs. If donor retention is the aim, then donor centricity and the case for support are areas for immediate attention. But, if greater confidence among fundraisers is the priority, then factors like Board support and the extent to which fundraising is viewed as a profession are key.
Many of these aspects ring true for nonprofits of any size and irrespective of current needs. Involving the senior management team, fundraising team and board in the development of the fundraising plan is fundamental. Generally, the higher the level of involvement the more successful the fundraising program is. 88% of nonprofits report the involvement of the fundraising team, 75% report the involvement of the senior management team, but only 45% report the involvement of the Board.
in conclusion
Ours is the first study to examine in detail how planning is undertaken in the fundraising sector. It provides hard evidence on how planning can impact on success and the issues that need to be considered to make that success a reality. Crucially, our study finds that planning is happening in the sector – but there is significant scope for improvement in terms of how it is implemented.
Significantly, our research also draws important links between fundraising performance and a philanthropic culture, finding the latter to be a driver of revenue but establishing that a true philanthropic orientation – where all six attributes are met — is all too frequently lacking. Many organisations are looking to improve fundraising revenue — addressing philanthropic culture is a good place to start.