Are You a Charity or a Business?

Why Wait for the Building to Catch Fire?
January 20, 2020

Are You a Charity or a Business?

“By compassion we make others’ misery our own, and so, by relieving them, we relieve ourselves also.”

Sir Thomas Browne

There is a reason that you choose to work for a nonprofit.  Perhaps it is something that gives you a great sense of purpose, provides emotional income, or you feel it allows you to give back to your community.  Regardless of what brought you into the nonprofit sector (Third Sector), we have to put business systems in place that allow us to predict revenue.

One of those systems is the measurement of the performance of your development operation, even if it’s just one person.   In most instances, this is the only “revenue center” for the organization, so it depends on planning and organization.

I encourage our clients to establish metrics for fundraising staff with targeted goals.  Some development people who did not come from this background may not be comfortable with this.  Others who have come from a sales background may be very comfortable with this form of measurement.  A recent client had a metric for each development officer to have 20 face-to-face meetings a month.  The meeting could be a cultivation, solicitation, or stewardship call, but every month several requests had to be made, including planned gift requests.  In looking at the number of proposals presented in a year and the number of visits made, this client could better predict the likelihood of positive outcomes and dollars raised.  It starts by tracking the number of visits and requests made monthly.

It is acceptable to provide bonuses to staff for achieving objectives or exceeding expectations.  We know that it cannot be a percentage of dollars raised.  I’ve recently seen development staff with MBO (management by objective) plans to provide quarterly bonuses.  It helps attract top talent when the salaries offered aren’t bringing you the caliber of people you are looking to earn.

MBO is an example of treating your charity as a business.   Attract top people, incentivize them if you can, and create the expectation of performance.  I understand that some charities only are looking for “ambassadors” on their fundraising team and do not put any metrics on their staff.  If this works for you, then don’t change it.  If, however, you want to measure how well you are doing against goals and objectives, make sure you have the right metrics in place.

Are you asking your fundraising staff to quantify their activity in terms of people seen every month and dollars raised?  Metrics applies to most aspects of fundraising activities.


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