Fundraising Horses and Scarcity Mentality

Posted by on Nov 7, 2017 in Featured, Plans and Budgets | 2 comments

Fundraising Horses and Scarcity Mentality

I made an interesting connection the other day, and it feels important. I would be interested in your thoughts.

For years, I’ve been preaching that so-called “support services,” including fundraising, should be separated from mission work in the Strategic Planning process. But the failure to do so may be connected to scarcity mentality and may even feed the concern about overhead.

First – strategic planning. The mental model Nancy Moore and I (working as Conservation Consulting Group) use to guide organizations through strategic planning is based on the simple idea that you need to define where you want to go before you can determine the appropriate strategies to get you there. Where you want to go is not limited by available resources, but rather by vision.

I will acknowledge that not everyone accepts this idea. Some argue that “pie-in-the-sky” thinking can lead to false hopes and demoralized leaders. I respectfully disagree. I believe it is important, every once in a while, to quantify where we think we’re going in the long view and build consensus around that.

Once we agree on what the horizon looks like and the general direction we need to go to get there, we can determine how far we might be able to get in the next five years. And we can budget for that.

This budget thing is a difficult but important final step. Budgets inform the various players what the timing expectations will be for revenue generation, including fundraising. Until you have a five-year budget vision – a fundraising destination – you can’t know whether the horses you are riding will get you there.

The vision, strategy development, goal-setting, and budgeting for mission work all needs to come before the strategy development, goal-setting, and budgeting for support work. The five-year budget NEED determined by the strategic planning process for mission work becomes the five-year VISION for the support services work.

In the absence of a five-year mission budget, the supporting goals have no context. As a result, Communications, Membership, and Fundraising goals often end up vague, arbitrary, and insufficiently supported themselves.

I’ll give you an example: One Strategic Plan I recently reviewed proposed a membership goal of 450 members. Why 450? No one could answer. It was arbitrary. And because it was arbitrary, the current strategies for recruiting and renewing members were never questioned, the annual investments were never increased – and the organization never moved from the 280 members they started with.

Many fund development strategies take several years to develop (membership growth and capital campaigns, for example), and both staff and board need time and resource investment to build appropriate capacity. But without the clearly articulated mission need, the organization is less likely to make that investment.

And arbitrary goals disconnected from mission are rarely taken seriously. The horses themselves are rarely questioned, and further investments in support services are considered only in direct competition with investments in mission. Instead of saying this is what we need to spend NOW on fund development so that we can meet the needs of mission five years from now, we end up squabbling about how the various departments can cut annual work to balance the budget.

And here’s the connecting leap I made the other day:

  • When the fundraising goals are arbitrary,
  • When the strategies (horses) are never questioned,
  • When short-term investments in capacity are considered competitive with mission work,

Then organizational leaders can only manage how much is available for mission work by squeezing what they allow to be spent on support work. The insidious thing is that it feels good – like we’re being fiscally prudent.

This leads to squeezing a sixth year out of a four-year computer, not replacing decrepit furniture when it can be duct-taped, replacing paper communications with electronic, and asking part-time employees to volunteer extra hours. Doing more with less – and eroding our ability to accomplish our mission in the meantime.

It leads to scarcity mentality and debilitating pride in keeping the overhead low so that more money can flow to mission work.

Why is this important?

Donors give money because of their belief in the mission and their belief that the organization can actually get it done. Efficiency rarely trumps actual results in donors’ decision-making. Projecting a successful organization will raise more money from more donors than projecting an efficient organization. This is a variation on the same logic that people use when paying $4.50 for a $1.25 cup of coffee and $6.00 for a $2.00 beer.

Scarcity mentality, and the associated pride in “doing more with less,” may seem prudent in the moment, but has the potential to sap organizational energy away from more important activities – like building an organization that can actually get more of the mission work done and attracting donors who share that bigger vision.

So go back to your Strategic Plan. Ask yourself, “If we are to get all this mission work done, how much will we need to raise in capital and operating funds?” Then make a plan for raising that much money, and make sure you also budget appropriately for that vision.

Cheers,

 

-da

 

Photo courtesy of Stocksnap.io.

2 Comments

  1. Hi David,
    Good points. We did an Impact Map (which starts with the difference you want to make in the world). The “resources” portion of that process revealed a great need for a large software upgrade. The justification was so evident in the map, that our board approved the largest infrastructure expense we have ever invested in (over $100k). If we had just budgeted for it without the whole picture, it probably wouldn’t have happened. We have not had a typical strategic plan for years, though it is time to refresh the Impact Map. We really like it!

    • I love this story and I love Impact Mapping. Board members need help getting out of the weeds and looking holistically – strategically – at the whole field (we all do). Impact mapping is one tool that can help them do that. Seeing and understanding the larger picture can help with consensus decision-making, ownership, and ultimately willingness to help (including with fundraising!).

      Thanks for the comment. -da

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