We’ve moved! Check out our new website at www.lbbizjournal.com

The Third Sector Report By Jeffrey Wilcox

The Science Of Raising Money: The New Normal
Jeffrey Wilcox - The Third Sector Report

July 16th, 2013 – When the telephone rang, I didn’t expect that this old fundraiser was about to experience a new reality.

“Uncle Jeff,” said a very familiar six-year-old voice, “could I interest you in joining with me to help other little girls who are just like me?”  She, then, said, “In return, I have some sweet treats that I know you’ll like.”

In that moment, the days of, “How many boxes of cookies can I put you down for this year?” came to an end.

When the bottom fell out of the economy, the fundraising scene across the country created two types of organizations: Experimental and entrepreneurial; or, desperate, angry, and entitled.

Five years later, the results of such reactions are in. And, the stats aren’t looking very good for those who believe that the only proven ways to raise real money are best handled by holding the staff’s feet to the fire, finding a few sugar daddies and angels, badgering government, and beating up boardmembers to aggressively raise the quid pro quo with their friends.

In the last month, three studies have painted the picture of fundraising reality. This first, a report by Campbell and Company, reveals that more than half of all chief development officers served less than two years in their most recent positions. If that level of attrition were occurring in business, somebody would surely be on their way to the woodshed.

The second report is this year’s release of Giving USA, the annual scorecard of charitable giving across the country, which reports that contributions in 2012 increased by only 1.5 percent over 2011. At this growth rate, predictions are that it will take until 2018 for giving to return to its 2007 levels. The years of 2007 to 2017 are now being called “The Lost Decade” in American philanthropy.

The third finding: The most cautious group and the slowest to grow in their giving are those considered upper middle class. While the stock market may have rebounded, pre-recession salaries, bonuses and other cash incentives have not.

Charles Darwin would have called the last six years for the nonprofit sector, “The Survival of the Fittest.” And, in the evolutionary process, a new species of fundraising leaders have adapted to the environment. Their results have laid the foundation for the new normal. Their secret: Capitalize on the psychology of giving. In business, it would be called, “Focus on the consumer rather than the product.”

People want to be connected with those things that are important to them. Consequently, the new normal begins with seeking monthly, on-going gifts as the preferred contributor relationship. Minnesota Public Radio, in the face of a halt to government support for national public television and radio, reports that 80,000 monthly donors now constitute 60% of their total $10 million in annual gifts.

The new normal adamantly defends overhead rather than apologizes for it. In the end, people appreciate results more than ratios. Organizations that proudly invested in themselves during tough times to make a measurable impact on the community are now bringing forth substantial demonstrated results as the way to thank their contributors and ask for more.

The days of selling programs as though they were appliances are gone. The new normal focuses on the cause of the organization rather than soliciting for the organization itself. The most successful fundraising campaigns are giving people a chance to be in conversation about issues and their resolutions through smaller private events, larger public rallies and online forums; and, presenting people with options to have a hands-on experience that makes a difference.

The bottom line in the new normal is about engagement. And, the fundraising “ask” is soliciting contributions to do something with people rather than for people.

A curious feature among the nonprofits who are pioneering the new normal in fundraising: Each decided to establish audacious goals based on the realities of need rather than the reality of the economy.

The one thing that remains unchanged between the old and the new, however, is the required personal touch. A six-year-old demonstrated that timeless truth using new normal psychology. In the end, I couldn’t say no to her invitation. Could you?

(Jeffrey R. Wilcox, CFRE, is president and chief executive officer of The Third Sector Company, Inc. Join in on the conversation about this article on Facebook or drop us a line at jwilcox@thirdsectorcompany.com)