Ellen Bristol, author of The Leaky Bucket and Fundraising the SMART Way, shares in this 30 minute interview, WHY you’re not succeeding in fundraising and what to do with it.
Imagine if you had more donor, sponsor, and grant opportunities than you knew what to do with!
This is Fundraising the SMART Way!
Why should you listen to this interview? Because:
1. 78% of over 1,200 nonprofits (of all sizes, from every continent) in the leaky bucket research shows that we are being extremely sloppy and lax in our measurement of fundraising productivity.
2. You’ll learn more about this radical concept of the opportunity pipeline-and why you need to apply it to EVERY aspect of your fundraising!
3. For many of us, different streams of government funding are going away. How are nonprofits responding?
4. Why “we have a funding crisis” is not a compelling proposition for donors-and what you should say instead!
5. Building your donor pipeline-How to find new people who are going to support you.
6. UNCONVENTIONAL WISDOM: Do NOT approach the wealthiest people (AND MORE!)
You can learn more from Ellen Bristol at the Nonprofit Leadership Summit this September 18, 20 and 22nd.
She will be teaching you how planning and tracking tactical performance can provide a container for everything else you do to bring revenue in the door for your organization-and how it can be transformational for your fundraising success.
It’s online, so you can watch the sessions over and over again, with the recordings available to you forever.
This 3 day online summit has over 10 presenters helping you not just survive but thrive during this time of economic turmoil, creating the world we want.
Don’t just try harder doing the same thing-exhausting yourself trying to fundraise HARDER in a tactical frenzy-finding new funders and improving your value proposition is what you should be doing now. And Ellen Bristol will be showing exactly how to stop exhausting yourself and getting you to replace those lost funding sources.
Learn how to build that crucial pipeline with Ellen Bristol at the Nonprofit Leadership Summit.
Here’s the transcript:
Oh my gosh. Everybody, hey. Welcome. This is Mazarine Treyz of Wild Woman Fundraising and today I am so happy to have with me for the first time ever in person, Ellen Bristol, who is author of Fundraising the Smart Way and the principal of the Bristol Strategy Group. Also, Ellen, you’ve also written The Leaky Bucket.
EB: What’s wrong with your fundraising and how you can fix it.
MT: Yes. So tell us a little bit more about you. What makes you so unique and different?
EB: Besides that I’m older than everybody? I got a bee in my bonnet after 20 years of working in corporate America. My job finally came to an end and I decided to open a consulting firm. Although I had a lot of ideas about what the consulting gig was going to be about – excuse me. What I wanted to do was answer the question – we may have to start over again. What’s wrong with sales? Because I had been quite a successful sales professional but there were so many things that bothered me.
It seemed like this terribly important business function was handled like a tactical afterthought. So I decided to marry the disciplines of business process management. We’ve all heard of them. Total quality management. Six Sigma. Lean. There’s a million of them. But in this day and age they’re just refereed to collectively as performance excellence, or commercial excellence disciplines. This was 22 years ago. There were very few such disciplines that impacted the sales department.
So I opened my little teeny consulting practice, and boom. All the nonprofits in the area said, me too. After a while I realized such a large part of our practice was in the nonprofit sector. Why not concentrate on that sector altogether? Especially after I launched our leaky bucket research which is really interesting. The research itself evaluates the maturity of nine fairly simple business disciplines, or I, in my naïveté, believed they would be fairly simple and fairly familiar.
These are disciplines that are more or less common in commercial sales operations. What did I come to discover? Virtually nobody had been doing research on the productivity of the fundraising staff. There has been tons and tons and tons of very sophisticated research about how donors and grantors and corporate sponsors behave, respond, what it take to find them, recruit them, retain them. But there’s very little stuff out there that allows managers to tell the difference between a high performing representative, one that’s performing moderately, and one that’s not performing at all.
Other than how much have you raised. Which turns out to not be a very good indicator of productivity. So poof. I decided, let’s do that research. We now have 1250 responses and ever since we had 70 responses, the data has been very consistent. Only 3% of the respondents score at the highest level of productivity. There’s a very simple assessment. 78% score below the midpoint. So the actual median score is D+. Dreadful. We’ve gotten assessments from every continent on the globe. We’ve gotten a report from the Galapagos Islands where nobody lives.
We’ve gotten reports from every sector of the nonprofit industry, every size and shape of development organization, every size of total income generated from philanthropy. The statistics remain extremely consistent. Large organizations tend to have larger development shops but their levels of productivity are not significantly better than the productivity that we measure in the smaller, grassroots organizations. The larger organizations can get away with it because they have more margin for error. They just have more money.
But as you well know, Mazarine, out of the 1.5 million nonprofit organizations in the US, fewer than 200,000 of them are making more than $20 million. So it’s a very small proportion of the industry as a whole that has the luxury to afford marginal or lousy productivity. The smaller you are, the more important it is that you operate systematically and paying attention to higher levels of productivity. So I’m an outlier and a lot of people think I’m a total whack job. Basically kind of annoying. But that’s their problem.
MT: You know, when you spoke last year at the Nonprofit Leadership Summit, people loved what you had to say. One of the things that I think specifically that people enjoyed about you was the concept that you had of feeding your pipeline. I think a lot of people, that was new information. When you look at making your fundraising goals for every year. I know it’s one piece of a leaky bucket that most people don’t think about, like how does my pipeline work for grants? I get that. But for individual donors. That’s a whole other ball of wax.
EB: Well, that’s a really provocative area to discuss. I just had the privilege of attending the Giving Institute’s summer symposium. I went last year. This year I was a speaker. Many moving objects were thrown at our presentation. The Giving Institute is a brilliant, wonderful organization. We all benefit from it every year. They publish Giving USA report. But it was just as big a surprise to them as it was to the members of the summit that, first of all, the emphasis on managing the opportunity pipeline, especially for larger organizations, tends to focus only on major gifts.
It doesn’t focus on individual giving, annual appeal production, grant seeking or corporate sponsorship. I won’t even mention the innovative technological mechanisms for acquiring income. But the key piece of info that’s always an aha moment for everybody is development officer, here’s your income target. Well, everybody gets that. But here’s your pipeline target is a very new idea. By the way, it’s not only new in nonprofits. It’s new in for profit sales.
So the third piece of this kind of innovation is we know what the income target is. We’re going to say we have to have at least three times as much potential income in our pipeline at all times as we’re trying to raise. Okay, two times as much. Two and a half times as much. Four times as much. But have some multiplier. Don’t only say to your staff or to yourself, if I need 100, I better have 300 opportunities. Ensure that you keep track of performance against the pipeline target.
So if the annual target is $100,000 and the pipeline target is $300,000 dollars or sheckles or lira, whatever. Euros. Then every time we win a gift or a grant, we have to debit that deal out of the pipeline and replace it with new opportunities.
EB: When we do that, people don’t freak out about where am I going to find the opportunity? We’re in Q3. We’re in Q4. We’re two weeks from the end of the fiscal year. So this notion of paying really serious attention to the pipeline. Another way to describe that is that it’s insurance for having sufficient capacity to bring in the money you want to bring in. If you only have 100 donors who have given you $50 a year, and this year you really need to double that. So we’d go from – what would that be? $5,000 to $10,000. Where is the other money going to come from? Right?
So we’re kind of killing this, belaboring this point. But you get the notion that you need to set actual income targets plus prospective or potential income targets so that you never run out of opportunities. You need to be doing it all year long so that you don’t start every year having exhausted every potential gift opportunity and then having to start from scratch.
MT: You know, Ellen, I love that. I can’t wait to hear more about how this has worked for nonprofits. But I know this is working in your personal business now and that you’ve got so much business that you’re taking on associates right and left. It makes me really intrigued about this whole thing. But I mean, I see how this could be useful for nonprofits that are thinking about the new funding reality right now. So one of the things that I would like to ask you, Ellen, and the nonprofits you work with is, what effects are you seeing right now on nonprofits in this economic climate?
EB: Remember, I’m only one person so I only have one set of opinions. So don’t hold me to this, members of the audience. But what I am seeing really troubles me because I’m seeing a combination of the following. Well, surely they’re not going to cut our funding. We’re too important.
EB: The second response after that is oh my God, they cut our funding. Now what do we do?
EB: So we want to be very, very careful about this. We’re trying to pull together a learning cohort of smaller arts organizations. Now, the national endowment for the arts has been shrunk for the past 10, 20, 25 years so that it probably has about 15 cents per arts organization throughout the country. So why it’s a surprise that the national endowment for the arts may have its door closed altogether in 2017 – this should not be a surprise to arts organizations.
Ditto for legal services corporation, for Medicaid.
EB: Funding for the environment and so forth, because so many foundations and public, private and even local and municipal government agencies. It’s federal money. They’re distributors. So I’ve been quite perturbed about the late response to the threat of lost government funding. These steps should have been taken under ideal circumstances three or four or five years ago because it’s not easy to change your funding mix.
A second response is oh, now what do we do? When we have an oh my God, now what do we do moment, especially in smaller organizations, there is a tendency to go for the big sale mentality. Let’s have events. Let’s pester our board. Let’s scramble around and look for other foundation grants. But what I see more of, and people don’t say this. I just observe it. Is let’s try harder to do more of the same thing.
Organizations and their participants, whether it be volunteer or staff, tend to exhaust themselves with anxiety. So my recommendation for solving this problem is to focus on two things. Finding new funders and improving your value proposition. This is time for a nonprofit organization to really pay attention to the way business in general makes their products and services attractive. It’s not in a nonprofit’s interest to run out there and say, you need to help us because without your help we’ll go out of business.
MT: So what?
EB: Yeah, I mean, if you tried to think as if you were an investor or if you were about to buy from a major corporation, a big, fat, multi million dollar project. Would you want to hear or see news about that organization that said they’re losing money? Their staff is leaving? Blah blah. No, the answer is you wouldn’t. So instead of publicizing how great the need is, you really need to start publicizing how wonderful the impact is. Even if your impact is difficult to measure. How many people you’ve served. What a difference it has made, even if the anecdotes are few and far between.
Why it is such a wonderful thing. In the Jewish religion, there’s a philosophy called —– Tikkun Olam —- Our individual and community responsibility to assist in the repair of this world. Good deeds and good works matter.
Tikkun Olam is a combination of giving to charity and social justice. Both terms are smooshed together. So this is a time to practice that. It is wonderful for you, the donor, to invest in our mission because by becoming an investor in our mission, we’ll make the world a better place. This is a great thing. It dovetails right along with the wonder and joy of buying the next Apple brain electrode that gives you 24/7 access to all universal information in every language.
Why wouldn’t you take that step? So boards and senior management need to sit down together and ask the question, why is our mission so valuable? Who would be motivated to support our mission? By the way, standard answer to that is people who have experiences with the area we serve. If it’s conservation, if it’s animal welfare, if it’s the disease of the month club. Whatever it is, the first people who are going to support it are those people who have passion for it or personal experience with it.
But there are other people who will support it if you make a good case. I happen to know Vu Le, the wonderful author of the great blog formerly known as Nonprofit with Balls. They changed it because they didn’t want to be offensive. It’s now called Nonprofit AF. Vu is a proponent of a model he calls community centered fundraising where if it turns out that you support a local arts organization and donor X isn’t really interesting in the arts, but if you can make the case that by being interested in emerging arts organizations in your community will make your community a better place to live.
Hey, that might spring lose a $50 donation you weren’t thinking about, right? So Vu’s answer to this is why shouldn’t they give to your mission? Sort of go beyond.
MT: I see, yeah. So finding people who were never donors before. Making them become donors.
EB: Finding people who have never donated to your cause before. Ideally they’ve donated to something before so they get it.
MT: Right. So what you’re seeing nonprofits do to cope with these changes is either stick their head in the sand, or you’re seeing them be like oh crap, what do we do now?
EB: And they engage in a tactical frenzy.
MT: And they’re worn out and exhausted from trying to do the same thing all the time. So what you’re suggesting a nonprofit leader focus on in these times of upheaval and change is either find new donors, find a way to differentiate yourself, make yourself look happy and better than the other nonprofits that are competing with you, and really work your pipeline. Is that what you’re saying essentially?
EB: That’s what I’m saying. All of those things are highly strategic. So the board and the staff have to work together to give each other a lot of attaboys to avoid the tactical frenzy. You know what? This is a kind of cliché that comes out of NASA. If you only have ten minutes to do something, spend nine of them planning.
MT: I’ve never heard that before.
EB: It’s a great phrase. So if suddenly, or it feels like it’s sudden, the government is cutting funding to a whole sector and you have reason to believe that it’s going to catch up to you. This is a great time to put people in the room, lock the door and say, what makes us valuable? Who is most likely to give to us and we haven’t tapped? How do we start seeking reasonable grants that we haven’t pursued in the past? Reasonable corporate sponsorships that we haven’t pursued in the past. Change our messages so that we are attracting people who are not the usual suspects.
Another thing I want to throw in here is try to avoid the usual suspects. Every community has its list of big names, politicos, extremely wealthy people. There is always a line out their door for people begging for money. Leave them alone. They’ve already organized how they’re going to give. Include them in your mailings, in your social media and all that stuff. But I would go for a much larger number of modest gifts than try and replace large government or government funded chunks of money in the five, six and seven figure arena with lots and lots of smaller donors. Anyone whose gifts you can afford to lose.
MT: I love to hear you say that, Ellen, because we’re going to have not only one session on monthly giving. We’re going to have two sessions on monthly giving at the Nonprofit Leadership Summit and we’re also going to have a session on planning Plan B, C, and D when Plan A doesn’t work out.
MT: Which, often for us, Plan A is government funding and then whatever else we can scrape together. So I love that, Ellen. So what will you be teaching at the Nonprofit Leadership Summit?
EB: Well, I want to concentrate, first of all, on contributors and detractors to productivity. So I’m going to be touching on what The Leaky Bucket measures. But then I want to talk seriously about how to employ more sophisticated ways to manage the fundraising effort so that you can safely find new funding sources, upgrade current funding sources, replace lost funding sources. I’m also going to be showing some anecdotes and some charts demonstrating what our clients have done after having adopted this methodological approach.
The last thing I want to do is discuss how organizational leadership needs to look at fundraising as a highly strategic function. When we say the word fundraising, I get a little itchy because it tends to be a little teeny weeny box that says do an event. Apply for a grant. Blah, blah. It’s not looking at all the ways organizations can make money, make money make additional money, sell stuff through a social enterprise that’s part of the organization. Why do you think museums have gift shops?
Set up endowments or dissolve endowments which are often so small that the interest they throw off doesn’t make much of a difference. Look at the big picture of funding an operation. So when we say fundraising, we’re not talking about selling fish sandwiches and chicken dinners. We’re talking about capital F Financing. We’re talking about organic growth through philanthropy, partnerships that bring money, corporate sponsorships which are a marketing investment on the part of the corporation, and not there, there, dear, aren’t you sweet charity? And other mechanisms.
We can’t allow either the board or the staff only to focus on cost avoidance.
EB: It’s going to be a critical element in this year’s program. Cost avoidance is a great way to get yourself in a huge pickle.
MT: I love that. Thank you so much for saying that, Ellen. One of the things you and I talked about before this call was how in times of crisis, nonprofits tend to deinvest in staff and fundraising staff specifically, and how that can deeply hurt them.
EB: Right. My sense of this is that fundraising staff is the last staff you lay off. You can actually scrape by, skinnying down your program staff. Many a time, you can. But if you don’t have people out there acquiring income for the organization, you will hurt yourself.
MT: Yes, yes. Ellen, this sounds like a really interesting conversation to have. I love how it’s going to dovetail in so well with the planning we’re going to be doing, the monthly giving part we’re going to be doing, and even we’re going to have Bruce Burtch talking about partnerships and creating better [unintelligible 00:28:43] partnerships. So I can’t wait to see how what you’re saying kind of as an overview fits above as a container for all of these other tactical pieces.
EB: I’m so glad you used that phrase, fits as a container. That’s often a hard concept for me to get across to people. They say fundraising, give me a set of – what do I say first and what do I say second? When do I send them a birthday card? But it’s the container. It’s the how do we hold ourselves accountable to certain practices and performance targets and desired results? Then when we see the results we’re getting, do we freak out if we don’t like them or do we sit down and say, hmm. Let’s analyze this and figure out what we could have done differently. Not better, not worse. Differently.
So planning and tracking performance are really my cup of tea. They are a container for managing an organization beyond mere survival. For managing an organization for continuous growth and innovation, PS. That’s the name of the game.
MT: I love that. That reminds me of the Blue Ocean Strategy that we talked about last year and I feel like this is a continuation and a deepening of that idea.
EB: Thank you. Thank you.
MT: That’s exciting. So thank you so much for being here today, Ellen. I can’t wait for everybody to come join us at the Leadership Summit. It’s going to be so good.
EB: It’s going to be great.
MT: It’s going to be super fun. It’s in September. You can talk to Ellen and a whole bunch of other people and get your questions answered and your organization stabilized for this next key piece of uncertainty. Who knows how long that’s going to be?
EB: Exactly. But thank you so much for asking me to have this conversation with you, Mazarine. You’re always a treat to speak with.
MT: Oh, thank you so much, Ellen. All right, well, everybody. See you later. See you next time.