| How do I figure out why my organization isn't raising enough money? | Look at each stage of your fundraising process to see why you are missing your targets. When you can pinpoint the issue, the solutions look easier. |
Fundraising and budgeting sound dull and bureaucratic to outsiders — but when it comes to mission work, they are surprisingly emotional. That’s why your fundraising process matters.
To you, a fundraising target isn’t a number. A fundraising target represents a program, a change in the community, a client, or someone’s job. A fundraising target tells a story — and when they miss targets, leaders often feel loss and grief. They know what’s been lost.
There will always be uncertainty in fundraising. You can never know for sure how much you will raise or when the money will arrive. It’s the nature of the work.
It still hurts when you see a big gap between your fundraising target and your bank account. You know it means more work is coming and difficult decisions are looming. But it’s also better to see it coming than to be shocked when you find out you’re out of money.
When you follow a fundraising process, you give yourself a guide to help you navigate the year. You can use that guide to track progress during the year and to keep the shock — and the heartache — at bay.
Here’s how you do it.
When you think of “fundraising” as a single activity, you measure success by the amount of money you raise. The problem with this approach is that you don’t know if you’re off track until it’s too late to do anything about it.
The money you raise is what’s called a “lagging” indicator: it only measures the results of your work after the fact.
To reach your fundraising targets more consistently, you need some “leading” indicators, too: things you can measure before the year is over. If you don’t like what you see, you still have time to make changes improve your results.
Start by managing the stages of your fundraising process individually.
Whether you get money from grants, sponsors, or individual donors, the fundraising process is generally the same:
When you only monitor how much money has been raised, you are only paying attention to Step 4. That doesn’t help if you are struggling to reach your goals.
Fundraisers and leaders should be measuring Steps 1,2,3 and 4. Here’s how to do it.
Prospects (or “leads” as sales people like to call them), are people who could theoretically give you money. They might be foundations, individuals, or corporate sponsors. You might know them personally, by reputation, or you might have purchased their contact information.
As a general rule, the less money you expect from each supporter, the more supporters you need on your list. If your fundraising target is $100,000 and your best prospects all give $100,000, then you don’t need very many prospects; one successful ask could meet your budget for the year. On the other hand, if your best prospects give $10, then you need a lot more prospects to reach your target.
If the total giving potential of your prospects is more than your fundraising target, you’re ready for Step 2 in the fundraising process.
Check your list of prospects from time to time. If their giving potential is less than your target, then you already know you will not meet your fundraising goal.
Example:
> You need to raise $100,000.
> You have a list of 10 prospects (potential donors).
> Each prospect is likely to give $100 or less.
> The maximum value of your prospect list is $1,000 (10 people x $100). That’s $99,000 less than your fundraising goal.
You are need to identify more prospects or adjust your current fundraising goal.
There are usually more names on your prospect list than you will ever actually reach. That’s okay. What you really want to do is raise as much money as possible by doing as little fundraising work as possible, so that you can focus on your mission. After all, you can only write so many proposals and contracts.
When you “qualify” your prospects, you look at their interests and their capacity to give. You find the prospects who are most likely to share your interests and values and who have the financial capacity to fit with your needs.
You can qualifying donors using data and methodical evaluation, like poring through grant databases. Or you can qualify based on personal impression, getting to know funders personally and feeling for the best fit. Most successful organizations do a little bit of both. Qualifying can be done from a distance, by trial and error, or through personal interactions.
Ultimately, qualifying identifies the prospects who are most likely to give you the most money for the least amount of work. It tells you who to ask, when to ask, and what to ask for.
If you haven’t met your fundraising goals yet, make sure you know who you are approaching next. If you don’t know who your best matches are, spend some time qualifying.
This step will always be harder for young organizations or organizations expanding into new areas. You don’t have a lot of historical data to work with. That’s normal. Qualifying is important, but you don’t need to overthink it. When in doubt, the best way to generate insights is through Step 3 in the fundraising process.
At some point, you do need to ask people for money. The amount you ask for should also be higher than your fundraising target, because not every ask is successful.
You should always have a sense of the value of the “asks” your organization has sent out into the world. You can track this information in a spreadsheet or in your fundraising database.
If you need to raise $100,000 and you have $200,000 in asks out, great. If you only have $10,000 in asks out, then you know you need to focus on asking more people for more money.
This basic formula tells you where you need to focus your fundraising efforts long before the end of the year. It’s simple, but it’s hugely helpful.
If you are asking enough people for enough money, look at Step 4 in the fundraising process.
Every time you get a “no” (or you hear crickets), it’s time to get more asks out into the world. Go back to your qualified list of prospects and move onto the next person or group of people.
If you are hearing no a lot, you should also look at the quality of your asks. Are your fundraising proposals compelling? Do you make a good case for your cause and for your organization?
If your asks are great, look at your qualifying process. Are your prospects really as strong as you think they are? Do they know and trust your organization, or do you need to spend more time building relationships?
It’s disappointing to hear no, but try to figure out if the prospect said “no, for now” or “no, not ever”. If the answer came down to something simple, like timing, make sure you pop those prospects back onto your qualified list and reach out again when the time is right.
Think of your fundraising process as a circle, not a straight line. When someone agrees to fund your work, you’ve reached the beginning of a new funding relationship, not the end. Don’t take the money and rush off into the night. Your current donors are also your future donors. The best way to secure the next donation is to blow supporters away with your current work.
(Side note: Integrity is important, too. Don’t just do the work in the hopes of getting more money later. Do it because you designed a project that will make a difference in the world. Do it because you gave your word.)
If you find that your donors never renew their support, look at the quality of the work you are doing. Look at your communications and stewardship habits. Talk to them. If your donor base is shrinking, you can anticipate that prospecting, qualifying, and asking are going to take more work in the future. It’s normal for funding relationships to end, but it should happen at different times and for different reasons.
Fundraising is like filling up an old bucket. You are trying to get the water to come up to the brim, but inevitably there will be some leaks along the way. Not every prospect will be asked and not every ask will result in a donation. Not every donor chooses to donate again.
Your job is to figure out where the biggest leaks are and to patch them. The only way to do that is to pour water into the bucket and watch what happens. No fundraising strategy is ever perfect, so get on with the work and embrace the leaks.
Instead of seeing fundraising leaks as problems, see them for what they are: information you need to strengthen your fundraising efforts and increase your organization’s success.
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