Why Do You Need To Raise Money?
How your organization raises and spends money is knowledge a successful fund-raiser must also have at his or her fingertips. You need to know and understand your organization’s budget so that you can delineate the cost of operation and how the money to cover that cost is to be generated. Nearly all non-profits are, by their nature, limited in their capacity to increase earned revenues, and many are unable to produce any earned income because they serve groups that cannot afford to pay.
The inability to produce enough earned income to cover the cost of doing business is why non-profit organizations must be fund-raisers. However, understanding your organization’s capacity to produce earned income, knowing where such income comes or could come from, and maximizing it, are essential to developing a successful fund-raising campaign. If your prospective donors believe you could be producing more earned income, they will be far less likely to give of their limited philanthropic resources.
No matter what your role in a fund-raising campaign—be it organization director, development director, campaign chairperson, or solicitor—to operate at optimum effectiveness you need to be convinced your organization is maximizing its potential to produce earned income—within the confines of its mission. That last part is very important. There are things non-profit organizations simply cannot do which are second nature to businesses seeking to improve their bottom line.
At the Cleveland Orchestra, when we were subjected to questions regarding our profit-making capabilities, we responded half-jokingly that we could not increase our productivity even if we played a Beethoven symphony faster than it was played 200 years ago. We could not speed up our assembly line, nor could we reduce the number of violinists required through automation. If the “widget” we produced was symphonic music, we could not cut costs by turning ourselves into a chamber orchestra and still produce our symphonic-music “widget.”
On the other hand, we did need to demonstrate constantly improving efficiency in other areas of our operations. For a non-profit, being perceived as a lean, mean fighting machine is critical to optimizing the results of a fund-raising campaign. But budget cuts must not come at the expense of maintaining and improving service to the community and program quality. A non-profit that cuts back on the quality of its services will diminish its fund-raising appeal.
Before You Ask For Money, Know Your Organization
To summarize: If you are to raise money, you need to know your organization. There is no faster way to lose prospective donors than by being unable to answer questions and remove objections to giving. You need to know the organization’s reason for being, its goals and objectives, its beneficiaries, and its operational and financial efficiencies. Know those things, and you know the organization. That knowledge will do more than prepare you to answer questions. It will give you the confidence and composure to pick up the telephone or knock on a door, and ultimately to sit in someone’s office or living room and ask for money.
Knowing the organization is crucial to fund-raising, but without commitment, knowledge is worthless. There is a terribly hollow ring to words spoken in support of a cause in which the speaker does not believe. Volunteers occasionally find themselves pressed into service for an organization that their company or their boss supports but to which they have no real commitment. Keep in mind that, while these people can be effective fund-raisers, they do it by forcing themselves to “meet their quota.” High on their list of priorities is figuring out a way to avoid the assignment next time. You will not be developing a pool of volunteers from which you can draw to staff future campaigns if your solicitors have been forced into service.
Knowledge and commitment are the two strongest tools a fund-raiser can have. Without knowledge, you cannot present your case to prospective donors. Without true commitment, you will not maximize the results of your efforts. If you are to raise money for an organization, know that organization and be committed to its cause.
Check Out How Well You Know Your Organization
- We have a clearly defined, fully understood, and completely accepted mission statement that addresses the difference our organization will make for those it serves, rather than merely describing what it does.
- We are certain that our services are different from others, are not duplicated in the same service area, and that they are needed. If we are planning a new organization, we should conduct a “market study” to be certain our services are, in fact, needed.
- We take advantage of our strengths as we make our case for support, letting none of the good things we do be “well kept secrets.”
- We turn our weaknesses into strengths by first identifying those we are handling in a defensive way or ignoring, and then developing a plan of action to change them.
- We have full access to information about what our organization is, what it does, and why money is needed in the furtherance of what goals. We have a “full disclosure” policy in effect at all times.
- We can readily identify our principal support base from those personally touched, inspired, or motivated by what we do, and from those not directly involved, but who are influenced and impressed by what we do.
- We know exactly what our operational budget numbers are. When it comes to raising money, if we do not know our expenses, we can neither set fund-raising goals, nor let prospects know our needs.
- We can demonstrate constantly improving efficiency in all our areas of operation. But, we don’t make budget cuts at the expense of maintaining and improving our service to the community and program quality.
- We maximize earned income and constantly assess whether more can be obtained by increasing charges for services in order to lessen fund-raising pressure.
Read part 1 here & part 2 here
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