Starving Organizations: A Fundraising Crisis

While researching for my doctoral project, I came across an article in the Fall 2009 issue of Stanford Social Innovation Review entitled "The Nonprofit Starvation Cycle." After working for years in nonprofit organizations, I had an “aha” moment—this was a problem I had experienced first-hand. As the authors wrote, “Many nonprofits continue to skimp on overhead . . . Yet decreasing already austere overhead spending (also called indirect expenses) may jeopardize organizations’ very existence—not to mention their ability to fulfill their missions.”

OK, let’s have a show of hands—how many of you have been told to raise more money, but spend less (sometimes a whole lot less) to raise it? How often have you lost a qualified and trained fundraising team member because you couldn’t pay the few extra thousand a year that would have resulted in retaining that staff member? (To add insult to injury, you then spend that same amount or more to recruit and train the new hire, while losing ground while he or she gets up to speed.) How often have you wasted hours “making do” because what you really needed for a successful fundraising effort wasn’t available? How many times have you taken a day off simply because you were exhausted from trying to do too much with too little to meet unreasonable goals?

I’m sure all of us have a favorite invention that we’ve come to take for granted. I remember my first car. I joked that it had everything I needed: four wheels, a steering wheel, a halfway comfortable seat and a heater. Now it’s hard for some to imagine driving without the MP3 and Bluetooth connections, the air conditioner, GPS, cruise control, easily adjusted seat, back-up camera and all the other “essentials.” Every one of those upgrades—and many more, including numerous safety features—was the result of research and development. Vehicles are safer, get better fuel economy and are easier to drive because of investments companies made.

I’m not comparing a multi-zillion dollar car company to the local nonprofit’s fundraising efforts, but there is a lesson here: If a nonprofit organization won’t invest in its fundraising talent and income-generating programs, it is unlikely they will raise enough money to fund breakthroughs that lead to mission-fulfillment. We’ll remain less efficient with a constantly revolving door of talent.

I’m also not advocating out-of-control spending. Nonprofits need to take risks in their fundraising, but they need to be undertaken responsibly and learned from, whether they succeed or fail. But we need to stop pretending things will change if we don’t invest in what’s needed to drive that change. Insanity, in Albert Einstein’s words, is “doing the same thing over and over again and expecting different results.” If we’re really going to achieve our mission, we have to invest in fundraising.