The Top Ten Mistakes in Fundraising

by Rick Dunham of member firm Dunham+Company

Over the last 33 years of work in the non-profit fundraising world, I’ve observed a number of mistakes that fundraisers, CEOs and board members have made. Those mistakes cover a full slate of errors that impede fundraising success. 

In a time when so many charities are facing tremendous funding challenges, it’s critical that leadership avoid missteps that can undermine their fundraising efforts. Following are a distillation of these mistakes into a “Top Ten” list that I hope is helpful. 

THE TOP TEN MISTAKES IN FUNDRAISING…

10. Treating donors more like a commodity than a person and therefore failing to engage their hearts.

There is a lot of talk about “relationship fundraising,” but most organizations default to techniques rather than building a true relationship with a donor. At the core of any effective donor development program is a genuine human relationship which must be captured in both personal interaction as well as mass communication. This means deliberately developing a genuine knowledge of your donors and creating ways of authentic interaction/insight. Unfortunately, many organizations fail to approach donors as people first and donors second, and fail to build a communication strategy that moves donors from the “first date” into a serious, authentic relationship.

9. Believing there is a magic bullet that will lead to successful fundraising rather than doing the hard work of consistently executing the fundamentals well.

Fundraising is just hard work that has its highest level of potential success when there is consistent, effective application of the fundamentals. Some of those fundamentals include a clear understanding of your brand, regular and consistent communications, segmenting of your file, ensuring there are effective response strategies to those who engage/give a gift, balancing your efforts around acquisition, conversion, cultivation and reactivation, and multi-channel communication that is integrated. When you study the most successful sports teams (like the Dallas Mavericks J), you find that they are not necessarily those with the best talent, but rather those that execute the fundamentals consistently well.

8. Driving a fundraising program by expense management.

The most effective fundraising programs are always driven by the effective investment of available funds, not managing expenses. The question that should drive fundraising is not, “How can I do this most cheaply?”, but “What will bring about the greatest return on investment?”

Expense management will always drive you to do things most cheaply, not most effectively, and will end up marginalizing or killing your fundraising efforts!

7. Believing that the growth of a fundraising program is linear, not cyclical.

It’s a major mistake to believe you can grow your revenues on a straight line. Often there will be pressure by boards to see a consistent climb in income with little toleration for the cycle of fundraising. There are times when a donor file just needs to breathe and there needs to be room for fluctuations in the economic environment, natural/seasonal ups and downs, and the fact there will just be periods when fundraising is off goal.

6. Failing to realize that an effective donor development program is built on diversified streams of revenue.

Many charities put themselves in jeopardy because they fail to build a balanced portfolio of donated revenue. A balanced portfolio includes among other things, direct mail, newsletters, receipt response income, major donor income, bequests, planned gifts, and foundations/trusts. The healthiest fundraising programs are those that are not overly reliant on any one source of revenue.

5. Believing that donors care about your organization.

It is a great mistake to think it is the organization that your donors support rather than the cause. This lack of understanding leads to the use of “we need” language rather than delivering to your donors the “opportunity” to see their donations make an impact. Donors don’t care about your organization, they care about what you do and the impact your organization makes on the people/community it serves.

4. The lack of a brand strategy.

Most organizations have a fairly clear understanding of their mission and even vision, but fail to know how to translate that into the marketplace in order to effectively engage current and prospective supporters. That is the role of a brand strategy… to help you define the promise you make to the marketplace in such a way that people want to engage. Most organizations have failed to discern their “high ground” and what differentiates them from the rest of the field, which is the essence of that unique promise they make to the marketplace. This leads to “thin” and organizationally-centric communications that fail to inspire and effectively engage donors.

3. Believing your likes or dislikes are actually relevant to effective fundraising.

Never decide on a strategy because you or someone on your team thinks, “This is something I would never respond to.” You need to drive your strategy by best practices and what you know about your donors. In a recent meeting with a CEO of a charity he expressed his distaste for the telemarketing campaign we were conducting and how he would never respond to such a phone call and how he is convinced that it puts people off. Our telemarketing to newly acquired first-time donors saw  a 20% conversion rate compared to a 2% response to a direct mail piece… without one complaint. If we were to drive the fundraising program by the likes and dislikes of this CEO, we would end up with a marginalized and underperforming program.

2. Believing that your burnout on an idea or approach equates to donor fatigue.

You get bored with certain messages because you live, eat and breathe your organization. I have news for you… your donors don’t love you that much. You are not top of mind for them. They don’t think about you 24/7 and you only show up on their radar when you communicate with them. One organization we serve wanted to change an annual campaign because they were bored with it and thought donors were too. We convinced them to keep it and last year it set a record in income for this organization! There is no such thing as donor fatigue, just poor or boring communication that fails to inspire your supporters.

1. Managing to the exception… not the rule.

This includes reacting to the complaints of a few and making decisions that actually damage your fundraising program. We have an Australian client that has just made the decision to completely change their donor development program because of the complaints of three donors… after setting record income in the midst of a struggling economy. This is a horrific decision and will deeply damage a fundraising program in a way that could actually put the organization in jeopardy. Avoid reacting to the complaints of the few. Listen to those complaints, use them as an opportunity for actually building that relationship, but don’t overreact.

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