By June Bradham
Nonprofit

Editor’s note: This is a new monthly column aimed at helping businesses figure out where to invest their gifts and helping nonprofit organizations succeed in fundraising.

Q: When we are preparing to invite a donor to invest in our organization, what will they want to know about our board?

A: It has been my experience that the potential donor first wants to know what impact your organization makes and how their gift will make a real difference in deepening that impact. In other words, what will their gift make it possible for you to do? Second, they will want to have confidence that your board is of the highest ethical standards and they will want to know and respect at least a few members of your board. Third, they will want to know if your board members are financially supporting their own fundraising efforts in a significant way.

Q: It seems to me that every day I learn of a new nonprofit. How many of them are there, anyway?

A: You are feeling the pressure of growth in nonprofits just like the population increase in our area. According to the National Center for Charitable Statistics, Urban Institute, there are almost 1 million 501c(3) organizations, including charitable nonprofits and private foundations registered with the Internal Revenue Service, but not not including religious organizations.

In South Carolina, there are 3,160 charitable organizations, with total assets of more than $15 billion. In Charleston, Berkeley and Dorchester counties alone there are 2,242. The nonprofit sector is often referred to as the “third sector,” just behind government and business. The total assets of all reporting nonprofits have reached more than $1.7 trillion, expenditures $945 billion. Without question, non profit fundraising occurs in a very competitive playing field.

Q: I am on the search committee for a new executive director for my organization. We know that a good executive director can really energize our fundraising, but we are having a hard time finding the right person for what we can afford to pay. What should we do?

A: The simple fact is that there is high turnover in executive directors and development officers. A study conducted by CompassPoint and the Meyer Foundation found that 75% of executives plan to leave their jobs within the next five years. Less than a third of those, however, had discussed succession planning with their boards.

To attract the finest director, the board must ensure that the executive feels personally supported and that there is clear agreement among the board, the director and the most dedicated donors to the organization on the direction of the organization. The director will also look closely at both the giving by the board and the ability of the board to attract the funding necessary to run the organization.

If the board and community exhibit the passion, enthusiasm and work to support the mission of the organization, then the executive can focus his or her energy positively, instead of constantly solving board-related problems. While nonprofit executives often believe they make significant financial sacrifices to lead nonprofits, they must still be able to live and support their families. The nonprofit board must face that reality as compensation is determined.

Q: What are the hallmarks of successful fundraising for a nonprofit organization?

A: In our experience and through our own benchmarking studies, we have found the following to be the most important: A highly visible executive who speaks passionately and frequently about the mission of the organization; the giving level of the governing board; and the stature of the governing board.

A great example of this locally is the South Carolina Coastal Conservation League. Whether you agree with their stance or not, it is irrefutable that Dana Beach, the executive director of the league, is considered a passionate, articulate and respected leader. In facing their first capital campaign some five years ago, the board had to transition from an issues-oriented body to a fundraising body. In that transition, the board’s contributions half of the campaign’s original goal in a campaign that went well over goal. The commitment of the Board made the difference.

Q: It seems like we are spending a lot of time and money running special events. Is there a more cost- and time-effective way to be successful in fundraising?

A: Absolutely. Special events, if run extremely well, should result in a return on investment of about $2 dollars for every dollar spent. Capital campaigns of at least $3 million or more, however, should return approximately $9 dollars for every dollar spent. Campaigns under that amount will raise around $5 dollars for every dollar spent. Remember, it takes the about the same amount of work to raise $1 million as it does to raise $100 million. And, of course, once your organization has a well-cultivated donor base accustomed to giving, a planned giving program is even more cost effective.

June Bradham, CFRE is the president of Corporate DevelopMint, a full service fundraising consulting firm with offices in Charleston, Greenville, Blowing Rock, N.C., and Memphis, Tenn. Send your questions to cdm@corporatedevelopmint.com.

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