Wouldn’t you like to have an easier time raising money?
Isn’t it time you started getting solutions to the serious problems that are holding you back in fundraising?
Coming to Ellen Bristol’s session at the Nonprofit Leadership Summit can help you get the metrics and tools you need to get way better fundraising results, even if you’re getting grants or sponsorships!
Here’s a peek at what you’ll learn, in a lively video interview with Ellen Bristol talking about the 5 key ways you can start measuring your fundraising progress.
She shares the groundbreaking concept of measuring based on the Grantor or Donor’s state of mind, NOT what you’re doing.
— The Do we like them moment-do they fit our qualifications for a good donor match?
— Do they like us?
— Do they know why to give?
— Have they validated the offer?
— Considered the gift?
— Negotiated the offer?
— AND finally, have we gotten the gift?
What a concept! This explodes traditional moves management.
Listen to the interview for more!
MT: Everybody, welcome. This is Mazarine Treyz with Wild Woman Fundraising and I am so grateful today to be introducing you again to Ellen Bristol, who is the author of Fundraising the Smart Way, which is an excellent book, and co-author with Linda Lysakowski of Leaky Bucket: What’s Wrong with Your Fundraising and How You Can Fix It. Ellen, so excited to talk with you because these concepts that you talk about in these books are just mindblowingly fascinating for nonprofits that really want to take their fundraising to the next level.
At the Nonprofit Leadership Summit where you’re speaking at the end of September, you’re going to be telling us about some of these concepts. Can you tell us a little bit more about you and why people should listen to you?
EB: Sure. Well, when you’ve been around as long as I have, you have a little wisdom. I spent a very long time in corporate sales before I opened my own business, and I’ve been running this consultancy for 23 years. I began to develop the methodology that you referred to around the time that I opened the consulting practice. Largely because, my corporate career, I was a sales representative. Most of my corporate career was involved in selling multimillion dollar projects involving high end information technology, mainframe computers in those days. Projects that cost millions of dollars.
Long term sales are very difficult. There’s a lot of competition. It’s a very intimate project to convince a corporation to commit capital funds to your brand, which people don’t think about. A lot of folks in the fundraising department have some misunderstandings about what that kind of selling is all about. Shortly after I opened the practice, I became fascinated by the similarities and differences between sales and fundraising. I discovered a great following in the local community in South Florida, where I live.
People who were desperate to simplify and clarify what it was that was holding them back from successful fundraising in their nonprofit initiatives. So not only have I done a great deal of work to attempt to fix these problems on the ground for our clients, but did a lot of research on what it is that makes successful teams able to acquire revenue successfully. Then I started the Leaky Bucket research. That’s the book that you just showed our audience. It was the first major book about our Leaky Bucket assessment for effective fundraising. At the time Linda and I wrote it, we had about 400 responses. At this point we’re up to 1400 responses.
I’ll make some references, but essentially unlike most other popular studies of fundraising performance in the US, this one doesn’t have any references to what donors do. It looks at how well equipped a fundraising team is to do its work at the highest level of productivity. Just as a quick reminder, productivity measures a combination of efficiency, how fast you can do it, and at how low a cost you can do it, and effectiveness. Is the finished product acceptable? Will it hold up to use, so to speak?
So I’ve got 45 years of field experience in the acquisition of income, and a couple of masters degrees worth of research and exploration. So I think I really have something meaningful to say about this stuff.
MT: I agree.
EB: That doesn’t mean that I don’t get people telling me I’m full of bologna.
MT: Well, your leaky bucket assessment has found that, I think you told me 84% of people who take it or more are just losing donors like crazy. One of the few people that are not losing it is because they actually take steps to retain. There are concrete steps you can do to retain, which you talk about as well in this.
EB: Correct, and that’s one of the many tricks we’re going to be discussing.
MT: Excellent. So we are going to talk about that and then we’re going to talk about that in your session at the Nonprofit Leadership Summit. But for a lot of us in the fundraising sector, and I’m going to speak for myself personally. But also people that I’ve met in Minnesota and Atlanta recently. We are not getting managed. We are not getting metrics for our jobs about how well we can do our jobs. How we can do them better.
We are not really getting the resources that we need to do our jobs well, like investment in a database or investment in coaching for us, or a sense of who we’re going to be learning from. So those are just some things that I noticed when I was working full time in fundraising. So before we started recording, you mentioned that Jeanne Bell of Compass Point said we spend a lot of time in the sector investing in leadership, but virtually none talking about management. I don’t think I was ever managed as a fundraiser.
So you’re interested in managing the fundraising team. What does it take to be a good manager of a fundraising team?
EB: Well, it takes the same thing that it takes to be a good manager of any business function. This is why we don’t talk about this enough. A lot of us have an unspoken assumption that the manager’s job is to make your life miserable. You know. But amongst great managers – PS, here is some research about the difference between managers who are merely good and managers who are great. Among great managers, the understanding is that the manager’s job is to remove obstacles to success for the people being managed.
One of the obstacles removed is lack of resources. So I know you and I have talked about a book that I consider a bible for human resources management, which is First Break All the Rules by Marcus Buckingham. Not a new book – it came out in ’99. But the very first thing that he asks managers to give feedback on from their direct reports is, do you know what’s expected of you at work every day? And unfortunately the answer too often in the nonprofit sector is, uhhhh, huh? Make money. Duh.
But it’s not as simple as that, as most of us know. The war stories I usually refer to, the same 100 war stories told by 100 different people, 100 different days, 100 different ways. Mazarine, your job is to raise a lot of money and grants. Oh, and I see you have time to go to the bathroom. So I’m now going to ask you to also run our social media program and write a direct mail newsletter and help Mary out because the receptionist is busy building a file cabinet or some whacky thing. You didn’t expect that to happen when you came in that day.
In other words, you didn’t know what was expected of you that day. I hope that analogy rings a bell with you.
MT: Oh, yeah. Definitely. It was like every day a new fire to be put out.
EB: Right. So another thing that I think is really important here is that – so there’s two pieces. Remove obstacles to success. Provide resources to ensure success. Well, some of those resources you just referred to. Do we have access to the foundation directory? Do we have a decent prospect research service? A lot of smaller organizations might come back to us and say, those things are really expensive. How can we, our little teeny organization running on a quarter of a million dollars a year, how can we afford them?
My answer is that the most important management resources are free. Does the person you report to meet with you at least once a week and discuss your progress with you? Not in a punitive way. More in a, how are you doing? Are you sure this makes sense? Would it help you if – fill in the blank. That your manager provides clear, documented performance expectations. That’s in broad terms, what’s referred to by metrics. Sitting down and telling somebody, our experience suggests that we need to have so many active grants in the works at any point in time. That’s likely to guarantee our success.
Instead of waiting until the end of the year and hitting you over the head with a frying pan and saying, well, you flunked, Mazarine, because you didn’t raise enough money, and it was your fault that you didn’t have enough active grant applications in the works. Go away with your tail between your legs. So I believe in well run organizations, the management position is one of great inestimable value at making sure you can retain the talent you spent so much trouble hiring, and make those people happy and deeply engaged with your mission. If you don’t have that, you have nothing.
MT: Yes. Your nonprofit is a machine made of people. Absolutely.
EB: 100%, and people who are unhappy in their revenue generating position are going to signal, even if they’re not aware of it. They don’t like the organization that they work for and they don’t really endorse the organization’s mission. So how are those people really going to persuade donors to fork over their charitable investments?
MT: Pretty much. I mean, if your people are resenting you because you’re punishing them instead of rewarding them. You’re looking for things they are doing wrong, not doing right. You’re not giving them enough resources to do their job well and you’re pulling them in a dozen different directions. They are just going to feel like their job is really too stressful and they are not getting paid enough to be this stressed. They’ll start looking for a new job.
EB: Exactly, and you’ve touched on a hot button of mine. Our cousins in the for-profit world have a better grasp and less fear around asking for money than we do in the nonprofit sector. There’s a recognition that if you consistently underpay your people, they’re go to leave. In the nonprofit sector, so many of us are so devoted to the mission. We’ve failed to leave until we keel over from stress related diseases and burnout. But that’s another story. What I always want to say, and I sometimes get a slap in the face for this is, for heaven’s sake. Raise more money so you can pay your people better because the investment in these very, very precious resources that drive your mission – because they fund it for you.
You can’t overestimate the importance of that stuff. So I hope I’ve said enough about the value of managing. But I want to add one critical factor, especially speaking to smaller grassroots and startup organizations, and organizations serving diverse marginalized communities – people of color, primarily. It’s harder for those organizations to get money in the first place. Let’s face facts. It’s not desirable, but it’s harder. So I can hear some of those people saying, oh, yeah? Nice idea. Where are we going to find the money to hire all these layers of management? I think that’s a legitimate objection. So I want to make sure folks understand, we’re talking about management practices, not people with the title manager.
If you’ve got an organization with one executive director and a half time administrative assistant and everything else is done by volunteers, that doesn’t mean you can’t have management practices in place. In fact, you’re far better off having management practices in place. Even solopreneurs like you and me understand, sometimes we spend our time doing deep thinking about the direction of our practices, which is a leadership act. Sometimes we school ourselves to say, am I doing my bookkeeping in a timely manner? Am I up to date on my marketing in a timely and effective manner? That’s management.
So these management practices can exist anywhere. Practicing them doesn’t cost anything.
MT: Right. Well, that actually leads us right into our next question which is, your session is about tackling unwarranted assumptions that make life difficult for nonprofit employees, especially a fundraising team. That sounds like one of those unwarranted assumptions.
MT: Can you tell us more about that?
EB: Yeah. One of the other unwarranted assumptions is, well, we hired Fred Fundraiser. We don’t have to work with him. He already knows what he has to do.
MT: Oh, God. That’s so common.
EB: We hired Gloria Grant Writer. We don’t have to tell her anything. She knows what she has to do, right? Catherine Corporate Relations, she knows what she has to do. Sorry, folks. Just because you have the skills doesn’t mean you already understand the mission, the organization’s business model, performance expectations and the like. It’s a failure of both leadership and management if they haven’t sat down and spelled out these details for the people who sit in certain seats, including volunteers. So it’s really easy to make the unwarranted assumption that because you hired an experienced person, or you were lucky enough to get an experienced volunteer who said, I’ll do it.
It doesn’t mean that have the skills, their resources, the time or understand what’s expected of them. Which I think is one of the reasons there’s constant frustration and an unhealthy dynamic between smaller organizations and their governing boards, where fundraising becomes a game of hot potato. The board thinks it’s the staff’s job to raise the money. The staff thinks it’s the board’s job to raise the money. Nobody ever sits down and develops management practices that say we volunteers will do these things. You staff will do those things. So that’s the first of the assumptions.
MT: That’s a big one.
EB: It’s a huge one. Another unwarranted assumption is that there are things that the nonprofit sector, the fundraising sector, is so unusual that there are no lessons to be learned from the for profit sector in the sales department. We don’t have the time in this interview to talk about all the ways in which that is an unwarranted assumption. The critical things we have to remember are that like I described in the opening to this interview, in my experience in major account selling, mission, purpose, fit between the values of the buyer and the seller. The ability to gain rapport.
The understanding of the buyer’s needs and preferences and what your organization and its mission are going to do to satisfy their organizational missions and values. That’s virtually identical to the issues that prevail in major funding, major gifts, major corporate sponsorships, even major grants. I’d go further to say that the same values and charitable motivations that drive major funders also drive smaller, individual donations. So you would use the same influential or persuasive language in your marketing to attract those donors to you. Guess what. If we look over in the retail space in the for profit industry, similar things are happening.
So too many fundraising professionals and nonprofit leaders have a major negative reaction about sales professions and about excellent management practices in the sales profession. I think that keeps our sector underfunded. So I think this is a good point at which to bring up the topic of the pipeline. Does that make sense to you?
EB: Because this is one of the most – the richest area of unwarranted assumptions.
MT: Yes, and when I tell people about the pipeline – I was doing this just a couple weeks ago in Minnesota at my fundraising planning presentation. People were like, could you tell me what that is again? I don’t understand. I understand that, because no one ever taught me how to fundraise. Also I learned how to make a fundraising plan at a workshop like 15 years ago. It never included the concept of a pipeline.
EB: Well, this is one of the beneficial sales disciplines that I would like to see the nonprofit sector adopt wholeheartedly this afternoon. Forget tomorrow.
MT: Right now.
EB: Like now. Okay, so what is a pipeline? Basically a pipeline is a very simple concept. It’s a checklist. All that it is, is a way to keep track of all the potential funding opportunities that are currently active in your portfolio. I use that word advisedly. So the company’s, the nonprofit’s overall portfolio might be blah blah, number of major donor opportunities, corporate sponsorship opportunities, grant opportunities and expectations about how much we’re going to raise from the crowdfunding campaign and the direct appeal campaign and the annual event. Now, does that make sense to you, Mazarine?
EB: It’s pretty straightforward. It isn’t how many donors are in the donor base, and it isn’t how many donors gave to us. If I wake you up at 3:00 in the morning I want you to be able to tell me how many active proposals or grant applications are you pursuing where you’re open to the opportunity but the donor hasn’t said yes, so far. The grant application hasn’t received approval. Now, in the world of sales, that concept has been current probably for at least 100 years. It’s not a new idea. It’s not a groundbreaking idea. It’s Fred, what are you working on and when do you expect it to come in?
Back in the eighties, when I was still selling mainframe computers. For those of you who are millennials, a mainframe computer is hard to describe. Imagine your PC on steroids in a sterile room with a million guys who couldn’t interact with it. But back in those days we first started to see the introduction of CRM software, primarily in the for profit sector. One of the first things you see in CRM software for sales, where it’s called customer relationship management, is what are described as opportunity stages. An opportunity stage, there are five, seven, eight of them. It tells you where the opportunity lies along the arc of cultivation.
I did bring some innovation into that concept, because invariably, nonprofit and for profit CRMs look at the activities of the fundraising professional or team. Did you have the discovery call? Did you give the facility tour? Did you whistle the university fight song? There are many activities. I decided partly because I’m lazy, and partly because I can’t handle too much detail. It occurred to me that if we were constantly measuring the same things different ways, we couldn’t analyze them.
Does it really matter to me as a professional fundraiser whether or not I sent out birthday cards? Does it matter to all of my donors whether they got a birthday card? I have said many times in public, I don’t even send my grandchildren birthday cards. That’s not a metric that means anything to me. The metric that means something to me is, hey, did you follow up? Oops. Better do something. So I took a crazy wild guess and I said, what if we measured the donor’s activity or the prospect’s activity, not our activity?
That allowed me to boil down my opportunity stages to only five. By the way, there are actually eight, but three of them come after the gift is approved and have to do with stewardship.
MT: I’m going to pause right there for a second because a pipeline, just in case anyone missed it. Her answer to that question was, you basically have to have three times as many people in your pipeline as you need to say yes.
EB: Correct. Thank you.
MT: You’re welcome. So now, what we’re talking about is, exactly how you can figure out where people are in that pipeline based on what’s called these five opportunity stages that Ellen is about to tell you.
EB: Thank you. I know that some of you out there have said, ah, moves management. It was inspired by moves management. It was inspired by my experience in sales and my observation of literally thousands of sales people, hundreds of CRMs. We in corporate sales have always been managed by what’s in our pipeline and where is it in the process of converting from a prospective sale to an actual sale? Or a prospective gift to an actual gift. So that three times pipeline number is a really good one. If we’re expected to raise $100,000 then we should have a pipeline that includes about three times the number of gifts and three times the financial value of the gifts we’re looking for.
We don’t want to let our pipeline be we have $80,000 opportunity from one donor and two donors for $20,000. Because guess what. Need I say it? The $80,000 donor is the one who’s going to say, well, I changed my mind. So nobody has a baseline on this. Nobody has a baseline of experience. We’ve just started to use this model with our few clients who have really adopted the model and started to use our software. They even don’t have a baseline even though we’ve worked with them for years. So we say if you don’t have a baseline, let’s use an artificial baseline of three times your desired income target. That allows you to know, you can afford to lose $2 out of every $3 and still make your income target. I’ve worked with organizations who never establish an income target. I’m here to tell you, that puts the entire organization in jeopardy.
MT: Also, don’t just look to fill the hole in your budget because that’s also a problem.
EB: Oh my God. What you need in the nonprofit sector, even more than the for profit sector, is the ability to have robust cash reserves. So if your target is $100,000, how much is that is going to go into cash reserves? Probably not much. So when suddenly your computer technology falls apart, you’re up the creek without a paddle. You don’t have money to reroof your building after a hurricane. I’m not talking disasters. I’m talking about reasonable financial vulnerability. Let’s put it in a happier mode. It’s not a disaster but a great opportunity comes along that you can’t invest in because you can’t go outside the budget and invade the cash reserves.
Which obviously you would only do with board approval, but you get the idea. So in our pipeline model, this goes to the metrics you talked about. In the Smart Way model in general, we’re motivated to produce superior great management practices in every nonprofit we can work with, which means removing obstacles to success including confusion. So some of the metrics are – first of all, if you don’t have an ideal donor profile or a series of ideal donor profiles, like an ideal grant maker, ideal corporate sponsor, ideal major donor profile. Then you can’t figure out whether your donor base is adequately distributed among high potential, moderate potential, and low potential donors. So that’s the first metric. How carefully is your donor base segmented among donors who have both the interest in giving and motivation to give, and the capacity to give?
Second, it makes sense to ask your development team, including an all volunteer army, to put enough potential gifts into the works to equal three times your income target. By the way, doing that drives a lot of innovation and creativity amongst the development team. Finally, we establish performance targets for how many times in a year or in a month should the team achieve each of these opportunity stages? PS, we call them donor moves. We do that because one of the great unexamined problems I’ve found through observation is that we constantly uncover development teams whose pipelines have stalled.
So six out of ten opportunities have been sitting at stage three for three months. Hello. This is the kind, gentle and loving version of a dope slap, where the person who’s in a position to coach can say, let’s figure out what’s holding us back. How do we tear this apart to figure out why our pipeline is stalling here? No harm, no foul. There’s probably a root cause that we can engineer in. I have a feeling I’m going in too deep.
MT: Yes, let’s bring it back out a little bit.
EB: Thank you.
MT: So the opportunity stages are, number one, do we like them, and then do they like us?
EB: Yes, we find that out by asking them certain questions. So that’s why we like them describes the donor’s behavior. Do they like us enough for us to decide? They asked us enough for us to figure out how they felt.
Number one, do we like them?
Number two, do they like us?
The third is, did they show they’re willing to consider making a contribution? In language or in writing.
The fourth stage is, did they agree to review our proposal or to negotiate the terms and the scope of the gift? This is invaluable because you’re not asking for the gift. You’re asking, did our proposal make sense to you? Is this a chance? This gives the donor a chance to negotiate. Well, I meant to give you more. You’re not going to say no to that. No, I have to give you less. Graciously accept, right?
The last of the five is, they made the gift, or at least they made the pledge.
So those are metrics that actually help you monitor your behavior, because the way you interact with a donor differs depending on the stage that they’re in. It also means, you have a chance to sit down with yourself if you’re a one man shop, or a one person shop. Pardon my sexism. Or it’s the board chair or the chair of the development committee, or the CEO or chief development officer, and say, I’m stuck here. Help me talk this through.
MT: Wonderful, and you know, that actually leads me to what people are going to say to me. Mazarine, you know, that’s great for Ellen. Whatever. She’s not in my office. My board would never agree to this or my boss would think this is a waste of time. They’re really stuck in the old model of moves management. Plus, how do we track this in our database? That just seems like a heck of a lot of work. You have an answer to this question.
EB: I do. I have a new app.
MT: Tell us about it.
EB: I’m pretty excited about this. One of the problems with the kind of management practices I am describing is that you have to automate the process of keeping track, because people just aren’t going to do it unless you really are breathing down their necks. It’s very difficult to keep track of this stuff manually. Some of our clients are doing it. They use a spreadsheet which we designed. But last year, we worked on creating an app that would gather the details easily.
MT: Of these stages for each donor.
EB: Of these particular stages and of your score cards. Your ideal donor profiles. We did it in a way. We just introduced it this month, September. A piece of the app goes in your donor management database. Now, I have to be honest. So far the only one that’s up is Neon CRM.
MT: But you’re working on other ones.
EB: Eventually our objective is to get into all of the familiar ones. Bloomerang, Donor Perfect, Salesforce.com, Virtuous Software, Kindful Software. Bring us a platform. We’ll work with you. But all it does is says, here. Here is the data you want to keep track of. You’re keeping track of it anyway. Then the Smart Way Analytics app – its current name. We may change the name. You click a button and it shows you where your entire pipeline is, where you’re running into obstacles, what’s the distribution of your donor segmentation, and even such useful productivity analysis like what is the average cycle time to win a major gift?
How long does it really take you from hello to here’s my check? Or break it down by campaign. Are some campaigns producing desired philanthropic income faster than other campaigns? The slower campaigns might be producing more. It’s not prescriptive. It just says here’s what is happening.
MT: Right. Exactly. So all of this said, what will you be talking about at the Nonprofit Leadership Summit?
EB: I really want to explore the great lessons to be learned from corporate management, because so many of them can be applied immediately. I’ll be showing how we learned how to employ those models in training and now in technology.
MT: So the benefits of coming to your session are people will learn how to manage their fundraising staff better, which means they will keep their good fundraising staff, which means we’ll be wasting less money hiring, firing and training people. They’ll also be learning about potentially this metric to measure people that will allow them to be more successful.
EB: The objective of the whole thing is having the knowledge and the courage to look at the way you manage your nonprofit, especially fundraising, in order to get best performance from your staff including volunteers, so that you can do the most good. Which means you are always raising enough money to drive your ability.
MT: I love that. I love that. Ellen, I cannot wait for people to come to your session at the Nonprofit Leadership Summit. I know I’m learning a lot. This is something that would be good for development directors, executive directors. I mean, anyone who wants to lead a nonprofit. Board chairs, people who are all volunteers.
EB: Yeah. It takes a lot of the mystery out of what is otherwise kind of mysterious and invisible. Why aren’t our people performing to our standards? Why are they quitting? Why are they posting sob stories on social media about how much they hate their jobs and how bad they feel? It’s really breaking my heart to read those, and they are too common. It drives me to distraction that so much of these problems have been solved in corporate organizations who recognize the value of deeply engaged, retained staff.
MT: That’s what we’re going to be talking about at the Nonprofit Leadership Summit. So come to the Nonprofit Leadership Summit.
Another great interview, Mazarine! I’m adding Ellen’s book to my Fall reading list.