The Top Mistakes in Fundraising and Board Governance: an Interview with Stephanie Cory

Stephanie was recently interviewed by a new fundraiser. Read her thoughts on best practices.

Beyond not asking for donations often enough or clearly enough, what’s the #1 fundraising mistake small nonprofits make? Is it the same mistake as larger organizations, or are their challenges entirely different?
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Many small nonprofits focus too much energy on grants and not enough on individual giving, particularly major gifts. Are you familiar with the Giving USA data that shows the vast majority of gifts come from individuals? Larger nonprofits tend to have dedicated major gifts staff while smaller ones have generalists who often don’t have the time to devote to major gifts.

I’m not familiar with the Giving USA data in particular, but I have heard that the majority of gifts are from individuals. I’d be curious to move beyond simply not having enough time and dig a little deeper into the psychology here. I know making the ask can be uncomfortable or nerve-wracking for a lot of people. Does working on grants just feel more productive than spending time on individual gifts—even though it may not be as effective—or are there other common fears and mental barriers around asking for donations? If so, how do you help people overcome them?

I would agree that working on grants feels productive because there is a defined product at the end and generally a deadline for finding out if funding is approved.
There tends to be a significant amount of fear about making the ask. Humans tend to fear rejection. You’ll also see a lot of fundraisers spending what time they have in cultivation and not moving on to the ask unless it’s more of a time-limited campaign like a capital campaign. Training and practice are how to overcome the fear of asking for money. I work with boards to teach them how to not be afraid of making the ask. It’s about being equipped with the tools to know how to make the ask, how to handle the silence after the ask, and how to counter objections.

In my research, I’ve found a lot of nonprofits that hire employees for every function imaginable (program coordinators, website administrators, social media managers, etc.) but don’t invest in any dedicated development staff. In particular, I’m thinking of one organization’s end-of-year giving campaign from this winter. In November, they set a goal of $100,000 but had raised less than a $25,000 by the time the campaign ended in January. When I finally noticed the campaign two weeks before it ended, I reached out and offered some free help with bringing in last minute donations. Their response was that they were happy with the money they did raise. Which I found strange, given how far they were from their goal. So my question is, in your experience, why is development such a low priority in some organizations?
For quite a few nonprofits, fundraising revenue makes up only a small portion of the total budget. There is also the issue of it taking money to raise money, and that can deter CEOs and CFOs from wanting to make the investment. It also takes a while for a new development department or effort to bear fruit. Many times non-fundraisers can be impatient about this.

I know very little about nonprofit governance. But I once ran into a situation where the executive director couldn’t do anything without the board president’s approval—and the president was on vacation for a month. I’ve heard it said that one of the board’s main functions is hiring and firing the executive director, but besides that, what else is necessary for a healthy relationship between the responsibilities of the board and the responsibilities of the executive director?
A clear understanding of the board’s role versus the executive director’s role. The board should be focused on governance, delegating management to the executive director. This is often a challenge for nonprofits in the early stages of the nonprofit lifecycle, regardless of the actual age of the organization. You often see a “working board” in these organizations where board members function in governance as well as management roles and get confused about what the boundaries are. Ideally, the board president and the CEO touch base once a week about what’s going on so the board president doesn’t feel excluded and so the CEO has some support. At least monthly updates to the rest of the board are key so they also feel like they know what’s going on without having to meddle.
Having been a CEO, I can tell you it’s a lonely job in the sense that you have no peers–just your staff and your “bosses” aka the board.

Read the full interview here.

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