“Getting Real” with Donors: Creating a Culture of Philanthropy for Securing Unrestricted Gifts
A new building, a new program, a new artistic endeavor – all exciting opportunities to raise more donor dollars!
But what do you do when your organization does not have plans for a new building project or plans to institute a new program?
What do you do if your organization simply wants to expand its reach, take better care of its staff, maintain a building, or try to cover general operating expenses? Or better yet, improve its financial health? These do not seem like sexy, glamorous opportunities for donors, but that does not mean they are not worthy. In fact, I would argue they are the ideal opportunity for a donor to prove his or her commitment to your organization’s mission and these sorts of gifts should be celebrated and recognized to the utmost extent.
Too often nonprofits cloak fundraising for general operating funds with fundraising in the name of a new building or a new educational program. This is not only untruthful, but also perpetuates funders’ dislike for providing donations towards general operating expense. Do not get me wrong, new buildings and new programs are great, but maintaining the scope of such projects is tough for already struggling nonprofits. A new building brings new costs, and often, nonprofits underestimate construction and maintenance costs. New education programs require trial and error, curriculum and evaluation, and staff expertise. They also require an organization to reallocate human capital, creating a disregard for more established programs and perhaps calling for increased staffing.
Does a nonprofit organization need to invest in a new dog and pony show every year? Is this what has come to be expected?
Nonprofits no doubt have to be proactive and evolve to meet the changing needs of their communities. But what if there was a way to inspire donors to make unrestricted gifts? And by unrestricted I mean that the donor has not designated the gift to be used in any specific way and that leadership can use the gift as needed. This sort of generosity is unique, and demonstrates the fact that giving really offers intrinsic rewards.
So what can your organization do to inspire such generosity?
Explain to donors your organization’s needs in terms they can understand. Because our organizations operate as not-for-profits, people wrongfully assume our business’ needs are different. Nonprofits have had to embrace many for-profit firms’ business strategies in order to survive a tough economy. With limited resources, efficiency and lean operations are key. Be real with your donors about what your organization needs to fulfill its mission in your community.
Recognize that donors are investors.
Donors, like investors, deserve your due diligence. They deserve honesty, transparency and autonomy in making the decision to donate. Provide donors with the resources they need to properly make an investment decision – speak to them openly, share your organization’s audited financial statements and avoid sugarcoating information. This will create an open dialogue between you and your donor population which will be beneficial in meeting both parties’ needs.
Your organization’s financial health is absolutely necessary.
An organization’s not for-profit status should not dissuade its leadership from considering its financial health. If there is no money for operations, we cannot fulfill our missions. Unrestricted funds allow nonprofit leaders to allocate funds towards their organizations’ most important needs. Achieving long-term financial health should be a future goal for your nonprofit. This is precisely why we see many nonprofits rebuilding endowment funds and investing in the technology and staff they need to perform better. Discuss these goals with your donors.