Last week, I reviewed a job opportunity to pass along to a colleague. And there it was, clear as day. One of the requirements for the job was that prospective candidates bring a network of contacts (i.e., major donors). There was a time when few organizations asked fundraisers (staff or consultants) to bring in their contacts list. However, things changed. There’s increased competition from other nonprofits, for-profit companies focusing on social good, and impact investing. That’s only going to accelerate in the coming years.

Unfortunately, as leading nonprofits seek to innovate and disrupt the space, those stuck in the past will remain there. They’ll continue to ask fundraisers for major gift contacts as the norm rather than the exception. Some consultants have had organizations ask them for their contact lists to get a consulting contract, as if fundraising consultants have a list for sale. This is wrong ethically and as a business practice. Fundraising and development mean relationship-building. And donors help underwrite what they help write.

Association of Fundraising Professionals

Issues exist with the Association of Fundraising Professionals (AFP). Still, their Code of Ethical Standards makes disclosing privileged and confidential information unethical. Even if the AFP didn’t include it in their code, giving away donor names is unethical. However, fundraisers have an ethical obligation not to reveal the names and information about donors they met and developed relationships with working for other organizations.

With well-run nonprofits with solid boards and management, the question never gets asked about giving donor contacts. Why? They understand that fundraisers get tasked with researching, cultivating, soliciting, and stewarding donors. For nonprofits that think part of getting a fundraising job or consulting contract requires a list of prospective donors, that’s simply wrong and unrealistic. Ask yourself if you’d like your major donors to get picked up by a fundraiser and given to other organizations? The answer’s probably a resounding no!

Focusing on Past Contributors Who Didn’t Give

Organizations typically forget the donors (LYBUNTS/SYBUNTS) who gave last year or previous years but not in the current year. As a result, the focus is always on the “new” donor. But it costs more to acquire a new donor than regain the one who previously donated. Additionally, expert fundraisers work closely with donors and boards to help them leverage their spheres of influence. And, they figure out ways to drive new people toward the nonprofit using varying techniques, such as platforms like BoodleAI or iWave.

Therefore, it’s short-term thinking when fundraisers get asked if they have a list of people (i.e., major donors) to bring from organizations where they worked in the past. Boards and executives in these nonprofits need to be realistic. How many relationships is a fundraiser expected to bring? Five, ten, twenty-five, a hundred? An organization would be lucky if it got one person to become major donor. Essentially, out-of-network lists are useless.

Why? Because just because someone’s wealthy doesn’t mean they want to give to your organization. And how many times should a fundraiser ask people if they would support another organization? Do you see how problematic that could become if a fundraiser continually asks a major donor to help yet another organization? The reality is that doing this is the easiest way for any professional fundraiser to burn bridges with people. No one likes the idea of serving as nothing more than a large dollar sign.

Bringing Major Donors to the Table

Nonprofits should also ask themselves a question, especially with fundraisers staying in their jobs for only a few years. If fundraisers bring donors from past relationships, is it not necessary for them to take those same relationships and offer a new employer the opportunity for support—especially if the missions are similar? Yes, times have changed significantly in the last two years. We’re in a very fast-paced world, and what once worked no longer does. Innovation is a necessary ingredient for organizations today to stay relevant and grow.

And that means getting rid of outdated ideas and practices.

Often, fundraisers hear non-fundraisers say they can’t understand why the Gates Foundation or MacKenzie Scott would not give to them because their mission is terrific. This is the ‘billionaire fundraising myth.’ It just means that some think because people are billionaires, they should and would support a particular effort. It’s a myth, and that’s not how fundraising works. Just because someone has money doesn’t mean they’ll help your organization—no matter how good it is and its work.

Myth of the Fundraiser

There’s also the ‘fundraisers myth. This myth is that if you hire a fundraiser with contacts—particularly with individuals—fifty, one-hundred, or more people will suddenly appear with major donations of $500,000 or even $1 million. Yes, on rare occasions, a fundraiser’s relationship from the past gets leveraged, but that happens rarely. Moreover, it happens with high ethics, transparency, and integrity. And, more than likely, the fundraiser remained close friends with someone they got to know along the way. As a result, they might suggest one organization to them as friends because they know how passionate the major donor is about the cause. In other words, it happens as a favor for the donor—not to any nonprofit.

However, this rare occurrence can’t be the expectation. Again, if it ever happens, it occurs in an ad hoc manner and is not a requirement. Therefore, nonprofits considering asking for out-of-network donors to evaluate a fundraiser’s worth should take caution. Instead, they should look to follow good business practices. They should seek to maintain the highest ethical standards and develop a solid diversified portfolio of revenue streams that make good business sense. Anything less is not fair to the fundraiser, donor, or organization.

Need to learn more, at your own pace and time, about fundraising? Check out the Fundraising Playbook and also follow us on LinkedIn.

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