My Line of Thought…A Growing Culture of Youth Philanthropy

At the  Alliance of Girls’ Schools Australasia Conference in Adelaide — Fearless Girls. Strong Women. — I was struck by the growing culture of Youth Philanthropy that is developing in many girls’ schools. These girls are learning valuable philanthropic lessons through these programs: social awareness, leadership skills, civic engagement, team working skills, service learning, empathy, assessment tools, and the spirit and meaning of philanthropy. Many of these philanthropists, either today or in the future, won’t be in the headlines for making large multi-million gifts; however, by actively working to make their communities better and helping those who need help, they will become the next generation of strong, compassionate women.

Each school is unique, abiding by its own independent philosophy and mission. As a result, each social justice program (SJP) is varied, supported as they are by students, volunteers, teachers, and administrators. There is nevertheless a common theme: a growing number of schools are making a huge sacrifice by using the energy and limited resources to benefit others, not themselves.

This sacrifice is selfless and generous, but in some cases it isn’t necessarily the best way forward. Philanthropists are keen to support organisations making a difference in the lives of those they serve as well as the lives that these individuals touch in such a positive and helpful way. A good warm-hearted story goes a long way in motivating a philanthropist to make a gift. What better story than one of Youth Philanthropy and the impact these fearless girls are having on the lives of others?

If you aim to make a commitment to care for someone, then it is critically important that you first take care of yourself. The Alliance members are doing wonderful work in educating girls, but there is a need to look to the future and the role philanthropy can play. In many cases, a potential donor does not contribute to a worthy cause because they weren’t asked. Unfortunately, some of the schools are not asking for themselves and they need to start. A more overt focus by school leadership on philanthropy is a significant opportunity for any school to do more for others and do more for itself, because both pursuits ultimately benefit girls.

How does a school allocate the finances to invest in the personnel and tools needed to commence a sustainable, and beneficial, fundraising program given the pressures on the budget?

The answer is that the school leadership (board and executive) must find the will to act. Fundraising is a team sport. It can’t just be left to the fundraiser as the fundraiser needs the involvement of the board volunteers, the principals and deputy principals, the teachers, and other staff to promote and share the case for support. Further, fundraising is a profession and takes a dedicated budget that supports the professional(s) who are implementing a fundraising plan, putting a great deal of time into running fundraising activities and cultivating (along with others) high quality relationships.

A necessary fundamental tool to raise funds is a dedicated constituent relationship management (CRM) software system for fundraising. Fundraising is about relationships and without a fit-for-purpose CRM designed to support building lasting relationships, i.e. institutional relationships that continue from one principal to the next, the aspirational goals of raising significant dollars will be very difficult to realise. Over 60% of the schools reported not having a CRM to support their fundraising activities, i.e. activities raising monies for the benefit of their school, and yet the 2018 Fundraising and Alumnae Relations Alliance Survey clearly showed that schools that had invested in a CRM were achieving better results.

Schools must allocate staff time to work with the girls and volunteers to ensure that such activities are well-organised, are following the law (e.g. raffles), and are promoting the school appropriately along with the other good causes they have chosen to support. In addition to time, schools must find the will to set out the fundraising work as a strategic and operational priority and allocate sufficient human, marketing, and operational resources in the annual budget. Asking for a gift to benefit the school directly doesn’t have to been done at the expense the SJP. Quite the opposite.

My Line of Thought…A Culture of Philanthropy

A quick search using the key words “organization” and “culture” together on Amazon.com books returns over 8,000 results.  That is a significant amount of opinions, studies, and explanations on the subject. Some of these books are seeking the holy grail of the best organizational culture and advocating that all organizations should strive to achieve a particular culture.  Is there a “best” organizational culture?  No. The desired culture of an organization can very dependent on the mission of the organization and not all missions are the same. The culture of a creative ad agency, for example, may not work so well for a military squad steeped in battle.

Nonprofits relying on fundraising to help advance an overarching mission benefit from the instillation of a culture of philanthropy. Fundraising is a team sport. The culture of philanthropy within a nonprofit demonstrates a universal understanding, at all levels of the organization, of the connection between donors and their philanthropic investment. Further, there is staff willingness, regardless of title or job description, to participate in the process to secure and steward this investment though a shared understanding and respect for the donor giving cycle. To often the fundraising department is viewed by others that asking for money, stewarding a gift, or promoting gifting opportunities lies only with the advancement team and it’s their job alone to bring in gifts from individuals, companies, trusts or foundations.

It is the job of a fundraiser to secure gifts, but the attitude that it should only be left to the fundraiser is short-changing the organization. Should the players on a premiere sports team (select your preferred sport) work in isolation of the trainers, conditioning coaches, facilities personnel, the head coach? It is hard to fathom how athletes who take to the field without general support, without a game plan advocated and instructed by a coach, or without interaction with other members of the organization could  become a premiere sports team.

Within a non-profit organization’s overarching culture, the desired culture of philanthropy needs to be developed. Schein defines culture as “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as they correct way to perceive, think, and feel in relation to those problems.”[1]

Culture is deeper than the climate of an organization. Denison articulates the difference: “Climate refers to a situation and its link to thoughts, feelings, and behaviors of organizational members. Thus, it is temporal, subjective, and often subject to direct manipulation by people with power and influence.  Culture, in contrast, refers to an evolved contest (within which a situation may be embedded).” [2]  To be recognized as having a culture of philanthropy it must be embedded throughout the organization.

Sustaining this culture requires the embracement, and enhancement, by each new leader of the organization. Successful fundraising builds on itself as demonstrated by a plethora of organizations upon celebrating a successful campaign begin working on the next one. Although campaigns may have set shorter time frames, fundraising is ongoing and requires a vision looking beyond the horizon.

Having leadership connect the philanthropic dots for members of the organization is a critical component, along with leadership practicing what he/she preaches. Unfortunately, for some in an organization fundraising is a “dirty” word. Further, an individual not involved daily in fundraising may view a potential donor as a multi-millionaire so they should have no problem giving the organization (or a special project within the organization) $500K or $1M—after all they are multi-millionaires. This is not a culture of philanthropy as it lacks an understanding and respect for the donor giving cycle. The donor giving cycle works towards proposal alignment followed by an appropriate solicitation and sustainable stewardship. It is the right project, the right timing, the right amount with the right person asking.

The fundraiser must be able to articulate the mission along with the successes and remaining challenges to a potential donor.  Typically, the fundraiser is not in the trenches delivery the services of the nonprofit to the end user. This is an important factor and why creating a culture of philanthropy is critical to creating a high performing and sustainable fundraising program. The success of a particular fundraiser, or fundraising campaign, requires collaboration among fundraisers, along with the entire team in the fundraising portfolio, and the organization’s entire team.

Depending on the “maturity” of the fundraising and engagement program within an organization,  the time to achieve a culture of philanthropy can vary. What does the organizational structure look like?  Where does the office(s) of relations and fundraising sit on the organizational chart? Does the director (or organizational title used) report directly to the CEO/President of the organization? Is the position limited to the areas of relations and fundraising or is the position combined with communications, marketing, or another area that indirectly may help the fundraising unit, but takes time away from the core business of the relations and fundraising unit?

Budgeting.  When it comes to developing the organization’s budget is the fundraising KPI equal to the projected shortfall in the budget, i.e. fundraising needs to fill the gap. Or are the KPIs for fundraising more measured? Is there a director of fundraising in the room when the overall organization’s budget is developed?

Strategic plan. When the organization’s strategic plan is developed how is fundraising and external engagement included? It is part of the discussion at the highest level of the organization? Does the strategic plan incorporate the fundraising and engagement component?

The culture of philanthropy within an organization may develop organically over time, however, the opportunity cost while this is happening could be significant. Rather, it is worth exploring implementing an education and involvement program to speed up the process to help members of the team connect the important work they do to fundraising success. Everyone at the organization should be included—after all, it is a team sport.

[1] Schein, E. 1985. Organizational culture and leadership. San Francisco: Jossey-Bass. Schein, E. 1992. Organizational culture and leadership (2nd ed.). 

[2] Denison, D. 1996. What is the difference between organizational culture and organizational climate? A native’s point of view on decade of paradigm wars. Academy of Management.

 

My Line of Thought…Fundraising Will Get Done Last

Is fundraising at your organisation taken seriously? According to Philanthropy Australia 1 in 4 charities depend on philanthropy and giving for 50% or more of their total income. Therefore, one could surmise that at least a quarter of Australian non-profits are taking it very seriously. The latest statistics from Philanthropy Australia state individuals gave $12.5 billion, foundations and trusts (private and public ancillary funds) gave a combined total of $660 million, and businesses gave $6.2 billion. In the United States, Giving USA reports individuals gave $281 billion, foundations gave $59 billion, and corporations gave $18.5 billion. If your nonprofit is not taking fundraising seriously the numbers indicate perhaps it should, but a word a caution when doing so.

If you give someone more than one thing to do and one of those things involves fundraising, fundraising will get done last, if at all. I am baffled by an organization’s cry for more gifts, but see wisdom in assigning non-fundraising responsibilities to their fundraisers. For some smaller organizations, for example, the shear lack of resources requires a person to be a fundraiser and a non-donor related event planner. However, this practice is not limited to under-resourced organizations. Some chief fundraisers are also responsible for organizational marketing, public relations, communications, and/or government relations, etc. Is this doing the organisation a disservice?

It can be a blessing for the chief fundraiser to have access to marketing and public relations resources, but at what cost? Granted, fundraising requires excellent marketing and communication messages from the organization that are fundraising “friendly.” However, managing areas like marketing or communications responsible for messages not directly related to fundraising, e.g. future student recruitment or handling a ‘hot’ issue, takes focus and time away from fundraising. These areas contribute to the case for support for fundraising efforts, but managing them can spread the chief fundraiser too thin.

Fundraising is like a sales position, it is necessary to be out of the office to build relationships in order to close a sale. Granted there are those occasional bluebirds—when you happen to answer the phone and the prospect informs you they want to make a major gift—but these are few and far between.

What benefit is an organisation giving up by giving their fundraiser(s) more than direct fundraising duties? Ultimately, more financial resources. Fundraising is about the numbers: the number of contactable prospects to solicit, the number of mass appeals and response rates, the number of attempts to secure personally scheduled visits, the number of personal scheduled visits, the number of solicitations, the number of attendees at a fundraising event, dollars raised, dollars paid, etc.

I appreciate the chief fundraiser has necessary duties beyond chasing major gift prospects all day. However, these responsibilities are typically related to the fundraising operation: strategy development, budget, personnel matters, fundraising marketing and messaging, volunteer coordination, establishing KPIs, etc. Any additional responsibilities have a direct impact on the chief fundraiser’s personal prospect portfolio. More responsibilities equate to a smaller portfolio and less prospect visits as there is only so much time in the day.

Many academics, and university leadership who came up through the academic ranks, are not typically accustomed to chasing philanthropic prospects for appointments or making the fundraising ask. Students typically seek appointments with professors or conference organizers extend the invitation to speak. Academics who consult can appreciate the art of chasing prospects. Chasing prospects takes time, energy and an optimistic attitude. Additional clutter and noise gets in the way of effective prospecting.

The financial health of an organization can influence the allocation of duties. For many universities philanthropy is viewed as a means of maintaining or enhancing excellence. Securing a gift to endow a chair allows the university to attract top talent or endowed merit-based scholarship will increase the number of high performing students. However, philanthropy, for a university, doesn’t keep the doors open—that is tuition income. With multimillion dollar plus annual operating budgets philanthropy income is viewed as a drop in the bucket. Further, in some cases the donor’s restriction on the gift is not seen as helpful or making an impact.

A long-term view of philanthropy is required as it can become an incredible force in making a difference for a university. A combination of philanthropic gifts and investment returns over the years have allowed Harvard University to amass a US$37 billion endowment, Yale University a  US$27 billion endowment, Stanford University a US$24 billion endowment, The Ohio State University a US$4 billion endowment, Oxford University with a nearly £3 billion endowment and, in a much shorter time frame, The University of Melbourne with a AUS$745 million trust. And these universities are not letting up with ongoing massive (1 billion dollar plus) fundraising campaigns executed by professional fundraisers.

The chief fundraiser for the aforementioned universities are part of the president’s cabinet, but not to undertake non-related fundraising activities. Rather, their place on the cabinet is to stay informed about university plans and activities, weigh in our strategic plans, communicate the pulse of the alumni community and donors, demonstrate to the university community that fundraising is important, lead and communicate on a university-wide campaign, and maintain an unfiltered communication relationship with the president.

Universities are layered with bureaucracy and getting entangled in fundraising related bureaucracy absorbs enough time as it is. The added burden of time spent on those items that will not advance fundraising initiatives is the opportunity cost of building relationships. Not all fundraising is the same, e.g. the annual fund solicitation compared to the major gift solicitation. The latter requires more personal attention and involvement because a donor’s philanthropic investment is greater.

Securing major gifts requires a steady pipeline of quality prospects. Research can provide invaluable information to help narrow the major gift prospect pool (capacity), but in many cases the personal visit is needed to help qualify a prospect (e.g. determine the level of connectivity). There are many necessary elements for a university to be successful in major gift fundraising, but relationship building is paramount. 

Additional non-fundraising responsibilities for the chief fundraising professional, especially when there isn’t a team of major gift officers on the road to assist, means less relationships are getting built. Although there is no universal correct way to organize the duties of the chief fundraiser there are better practices demonstrated daily by those fundraising operations leading the pack in raising monies. Your organisation could be leaving thousands, or millions, of philanthropic dollars on the table and restricting the chief fundraiser’s duties to capture this potential revenue is a demonstration that the organisation does take fundraising seriously.