2014 Washington Nonprofit Conference: Are You Reaching Your Fundraising Potential?

While presenting at the DMA Nonprofit Federation's 2014 Washington Nonprofit Conference two weeks ago, Chuck Longfield, Blackbaud's chief scientist and past recipient of DMANF's Max L. Hart Nonprofit Achievement Award, asked a very simple question: "Are you reaching your fundraising potential?"

There are usually three different answers: "Yes," "No" and "We're doing the best we can." It's that last answer that was central to his presentation.

Longfield shared the following insight into the opportunities nonprofits have to shift their answer towards "yes":

Hidden opportunities
If you take two nonprofits or a hundred nonprofits and line up their business practices, then you will quickly find differences. Some organizations do things one way, and a similar nonprofit does it a different way. If you asked them why they do things a certain way, then you're also likely to get a lot of qualitative answers.

Comparing organizations also shows that some organizations perform better than others. And those differences can be quantified and measured. It's what forms the basis for benchmarking — a very valuable tool used by nonprofits. But this is where many nonprofit organizations stop and miss hidden opportunities.

You actually need to go a few steps further to maximize the value from benchmarks. If one organization is performing significantly better in one area, then it's unlikely that it's all down to luck. Understanding exactly what those organizations are doing and replicating those programs are the basis for best practices.

Ubiquitous uniqueness
If benchmarks tell us how one nonprofit compares to another, and best practices tell us how to repeat performance improvements, then why doesn't every nonprofit use these tools? There are two primary shadow beliefs (things nonprofits believe are true but really aren't) that prevent them from reaching their fundraising potential.

The first shadow belief is that fundraisers think their organization is unique and what works for another organization can't possibly work for them. This notion of ubiquitous uniqueness is highly overstated and ignores the reality that there are proven patterns for donor behavior. As it turns out, if you look at enough donor data and apply some established human psychological factors, there are real predictable patterns.

The second shadow belief is that their organization is achieving the best results possible based on what they are doing today, which by the way is very unique. There is a significant blind spot here because most nonprofits can't see what's not happening because they aren't doing something. For example, fundraisers see their donor retention rate based only on what they are doing today. But they can't see how not running a donor thank-you call program is also impacting retention rates.

Tribal medicine
Since the 1940s, penicillin has been used by doctors as an antibiotic to treat serious diseases and infections. It has been proved through clinical trials, research and practical application to solve certain medical problems — so much so that not using it under the correct circumstances would be considered medical malpractice.

Doctors don't test penicillin at every hospital — once they tested it, it's accepted, and everyone uses it the same way. If a doctor doesn't do it that way, it's called malpractice. There are similar proven practices in the nonprofit sector that just aren't being used by everyone. This "tribal medicine" being practiced every day in the nonprofit sector leads to underperforming results.

The future opportunity for the nonprofit sector is to identify through our own clinical trials what works in the vast majority of cases for nonprofits. We already know of certain practices that improve donor retention and long-term value. This eliminates the tribal medicine and focuses on repeatable and scalable practices of donor care.

Longfield posed the question: Are you reaching your fundraising potential? The answer is clear — most nonprofits really aren't living up to their potential. But the good news is that we can do things as nonprofit professionals to improve the sector's performance across the board and, in turn, the ability to have real impact on our collective missions.

Steve MacLaughlin is director of Blackbaud's Idea Lab.