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Spotting Fundraising Investment Opportunities

I know so many talented fundraisers of all kinds. From boisterous major-gift-raising extroverts to wicked-smart grantwriters who can kick the heck out of a logic model.

But there’s a common thread running through the most successful, longest-serving fundraisers. They know how to secure investment in fundraising.

You know the old adage – it takes money to make money. It’s no less true in fundraising. Investment is critical.

But, one of the most challenging things a fundraising director will ever have to do is put together a case for investment and sell it. It takes a lot of analysis, a keen eye for opportunity, and the guts to go out on a limb.

If you’ve got a specific, fleshed-out idea for investment (like starting a planned giving program or investing in online fundraising expertise) and want to know more about making the case to your CEO or board, stay tuned! We’ve got a post coming your way right behind this one.

If you’re wondering where in the world to start looking for investment opportunities, you’re in the right place. Below we’ve listed some steps that we recommend:

Start with your objectives: As always, begin with your fundraising goals. What are you trying to accomplish? Is your objective to get more donors and build your base? Are you starting a major gift campaign? Is your goal to increase donor retention? (Hint: just making more money is not a specific-enough goal.)

Do the math: If you are looking for right place to invest for fundraising return, you’ve got to start with the numbers. Do a cost-per-dollar-raised analysis (the inverse of return on investment) on your programs and see what stands out as a solid return. Calculate your retention rate and upgrade statistics. What do they tell you?

Look for trends: Don’t just look at your current year numbers. Go back several years and compare results. What has grown over time in terms of net income? What programs have delivered the most new donors? Where have you seen donor retention hold up and increase?

Focus on life-time value: Don’t focus on short term results! You’re looking for growth over the long-term. While adding another event might yield an increase in net income next year, is it the best way to meet your objective? Be sure to consider long-term stalwarts like monthly giving, planned giving, and major gifts. And most of all – look at retention first. Improving your retention rate is the best way to increase long-term value. (Get our Leaky Bucket interactive workbook to learn how.)

Canvass your front-line fundraisers, volunteers, and donors: Ask your development committee and the people working on your team what they would invest in if they had a pile of money. We also recommend that you ask your donors what they think. I’ve done this several times over my career and not only have I gotten great ideas, I’ve also gotten their endorsement, support, and involvement.

Know what’s out there: Meet with other fundraisers in sister organizations, go to fundraising conferences, and tap a mentor for experience and guidance. Larger organizations are taking investment leaps all the time. Learn from their successes and mistakes!

Build support for your case from within: Once you’ve got some ideas, advocate for your investment plan with your fundraising team and peers in your organization. Particularly include the CFO in your thinking because she/he will be the first one to poke holes in your case if you don’t. Test your assumptions and adjust with the feedback that you get. You don’t want your investment plan to come out of the blue at budget time.

Now I can hear you saying, “There’s no money in our budget for any kind of investment.” That may be true, but I implore you not to make assumptions. I’ve seen organizations use reserves for a good case for investment, plan annual budgets around an investment opportunity, and inspire grantors and donors to step up and give challenge grants and capacity building money for a fundraising investment. Don’t come from a place of scarcity. Come from a place of opportunity!

Advocate for investment even though you might not think the money is there. We know it’s taking a leap of faith, but the risk is worth it. Having gone through this journey you will emerge a much more experienced fundraiser with an invaluable skill set. And if you’re successful, your organization will have more resources to make a greater impact on the world.

And if you’re not successful? If the board turns you down? Please don’t give up. I’ve put many, many investment proposals in front of CEOs and boards and was only successful about half of the time. Some years I hit the jackpot and got the green light to do something big. Some years I got some investment – but not all I requested – and some years I got nothing. Often, I didn’t get as much as I originally wanted in the first year, but secured subsequent support after making the case again with early results.

Start slow, build your case, look outside, and garner support. You can do this! And if you need some help, remember we are always here!

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