Fundraising experts on a Harvard Business School panel agreed on two big issues: First, accountability is vital to getting funded, and second, the future success of nonprofits lies with individual donors.
The panel discussion was part of the 5th Annual Social Enterprise Conference, held March 6. Speakers represented both sides of the fundraising equation: successful fundraisers and representatives in charge of deciding who gets the money.
Accountability is key, panelists agreed. Corporate donors and foundations are not going to give you money if they don't think you will be responsible with it. Put simply, if you fail, you make them look bad.
Royall Mack, corporate vice president of Civil Affairs for the Gillette Company, shared his advice from famed financier (and former Gillette director) Warren Buffett. Not known for throwing money around, Buffett stressed to Mack that he was responsible for shareholder dollars, and that ROI was essential. At each board meeting, Mack needed to be able to quantify how Gillette's philanthropic giving was making a difference in people's lives. From his days under Buffett's tutelage, Mack insists that nonprofits be able to quantify the following:
- How large is your target audience?
- What is the need for your services?
- What percentage of the need will your nonprofit fill or fix?
- How will you know you've made a difference? Are you tracking your target audience and following up on your efforts?
Andrea Silbert (HBS MBA '92), founder of the Center for Women and Enterprise, said her organization performs "a tremendous amount of tracking" that involves the equivalent work of about two full-time people. It's important for nonprofits to benchmark costs and norms in their industry, and "own" their measurement standards, she said.
| Fundraising is not about asking people for money. It is about selling points in heaven. |
| — Andrea Silbert, Center for Women and Enterprise |
She encouraged her audience to take four or five key internal measurements and use those to sell what they do. If donors want different measurements, convince them to accept yours. You know what you do well, and which numbers are meaningful in your sector.
Elizabeth Smith, executive director of Hyams Foundation, also emphasized the importance of making your case. Is your nonprofit filling a niche that is not being filled otherwise? The thoroughness of homework, networking, outreach to other organizations, and crunching the hard numbers to figure out how realistic your plan is absolutely critical, she said.
Finding the right target
Another important aspect of selling your nonprofit to potential funders is knowing whom to target. Ask yourself, "Who wins if we win?" Silbert said. Companies often look to link their philanthropy to core values of the corporation. Also look at the types of things the funding organization usually supports. Many corporate sponsors will only fund gala events, or prefer to fund programs that are new and innovative. Make sure your programs fit with the core programs supported by that corporation, Silbert said.
The same advice can be used when nonprofits look to connect with individual donors. Deborah Re, the executive director of City Year Boston, explained, "Everyone wants an organization that links to their core values."
All panel members agreed that individual donors were the key to sustainability. Organizational funders, who don't want to feel as if they are the only group contributing to the cause, want to know that a nonprofit has the network, public interest, and sales ability to raise funds from individuals.
Panelists admitted, however, that they were still exploring strategies for attracting individual donors. Re said she has had success attracting and keeping individual donors by involving people in the actual work the organization is doing. It is not just about writing a check, Re said.
Using personal networks is also important, Silbert said. Her staff has found new donors simply by talking to people they know about the good works of the organization.
"Fundraising is not about asking people for money, " she said. "It is about selling points in heaven."