Usually we dedicate this first day of the fourth month to the perennial April Fools’ joke intended to remind us that amidst the pranks and laughter there’s usually a nugget of truth.  In the words of George Orwell the aim of the joke “is not to degrade the human being but to remind him that he is already degraded.”

Fortunately, and coincidentally (if there is such a thing as coincidence) today Rogare, the international fundraising think tank, released The Critical Fundraising (USA) Report at the AFP International Conference in San Antonio, Texas.

If you’re an Agitator reader attending AFPICon you can witness first-hand a delivery of the report at a session today ( Monday,  April 1st) from 1.15 to 2.30 in room 217A.  Otherwise, you can –and should—download this free report here because it not only touches on the “degraded” state of USA fundraising, but most importantly offers insights and recommendations on how to meet and overcome some of the major challenges ahead.

Whether you’re just launching your career as a fundraiser or already consider yourself a seasoned veteran this Report deserves some of your reading time because in compiling the information the task group made up of Rogare’s International Advisory Panel, presents “to the best of our ability, evidence-based information, not personal opinions, focusing on topics we believe are issues that warrant a deep analysis.”

Major Warning:  Imminent Talent Crisis in US Fundraising

The fundraising sector in the USA will face a worsening ‘talent crisis’ if it fails to invest in the career development of Millennial fundraisers.

In one of the report’s essays, Oklahoma-based senior fundraiser James Green, MBA, CFRE, points out that the average tenure for early career fundraisers is just under 2.5 years per job. That’s the same as it was 20 years ago.

The problem, Green argues, is that many nonprofits base their management strategies on an “outdated organizational theory which dictates that employees are obligated to ‘remain loyal’ to their employer for an ill-defined period of time.” This might have worked for Baby Boomers and members of the Golden Generation, who were promised job security, but it fails to accommodate the aspirations of the Millennial Generation, who want career growth and instant gratification.

Green says: “Young fundraisers are eager to learn. Taking a caring and personal interest in their professional career can have a dramatic impact on their tenure. By rethinking fundraising job levels and titles, providing more levels of advancement and decreasing how long it takes to award the next level of advancement, nonprofits could increase how long they hold on to those talented individuals.”

But without that investment, Green says that “early stage fundraisers are and will continue to be short-term hires.”

He adds: “When nonprofits hold firm to previously-developed management and advancement techniques, these workers will consistently leave organizations at predictable times and often earlier than their value is realized.”

A Wealth of Insights

Issues identified and explored in the CFR (USA) Report are:

• State of public trustin the nonprofit sector and the nonprofit starvation cycle – author: Barbara O’Reilly, CFRE (Windmill Hill Consulting)
• Stagnant donor retention ratesand national giving levels  – Marc A. Pitman, CFC (Concord Leadership Group)
• Tax reformand what it means for charitable giving – Cherian Koshy, CFRE (Des Moines Performing Arts)
• The current and anticipated fundraising talent crisis–James Green, MBA, CFRE
• Defining standards for fundraising– Heather R. Hill, CNM, CFRE (chair of the Rogare board)
• Diversity, inclusion, and gender equity– Ashley Belanger(Ashley H. Belanger Consulting)
• How data, technology and social mediaare affecting fundraising – Clay Buck, MFA, CFRE (Boys and Girls Clubs of Southern Nevada)
• The misalignment of social fundraising datasources and donor relations – Taylor Shanklin (Pursuant)

Recommendations

In all, the report makes 23 recommendations, among them:

• Remove from donor communications all language that promotes the percentage of the donation that is allocated to programs
• Conduct more research into and develop fresh thinking on donor retention, particularly around gifts that are not intended to be renewed annually, and how relationships are measured with donors who only give sporadically
• A raft of measures to encourage inclusion at an organizational and individual level
• Develop a new set of standards for professional practice that include the levels of knowledge needed to practice as a fundraiser
• Invest more in multi-channel communications, new technologies and social engagement.

Who Cares?

We all should care about the findings and recommendations of this report on USA fundraising no matter whether we practice the craft in the States or elsewhere. [Incidentally, previous Critical Fundraising Reports have been done by Rogare for Scotland and Ireland (2017) and reports for Canada and Italy are in the works.]

As Ian MacQuillin, director of Rogare – says in his introduction to the report:

“The United States of America holds a special – and perhaps privileged – place in global fundraising, exerting an influence that extends much further than its 50 states. There is sometimes a sense that the ideas and practices emanating from US fundraising are world-leading ideas and practices, both from the Americans developing and promulgating these ideas, and fundraisers in the rest of the world who receive them.

“With such reach and influence, it is a good idea to be able to critically reflect on the current state of US fundraising – to look not just at what’s working, but also at what’s not working so well, where the current knowledge gaps might be and how we could fill those gaps.”

SO….

An Agitator Raise for Rogare and the special task force who prepared this report.

And that’s no April Fools’ joke.

Roger

P.S.  In reading the report I marked some passages that struck me as particularly appropriate.  Here’s just a sampling, but I’m sure you’ll find many more after you’ve downloaded the report.

On the talent crisis:

“Nonprofits are not keeping less experienced fundraisers any longer than they have in the past 20 years. And there is no sign the problem is getting better. The average tenure per job for fundraisers under 10 years of experience remains very close to steady over 20 years, at about 2.5 years. There seems to be a significant lack of investment in professional growth of fundraisers by their employer nonprofits and the institutes that fund them. “

Recommendations

Nonprofit CEOs and senior leaders need to:

• Implement plans to reinvigorate their employee advancement and recognition strategy.
• Address their intention to professionally develop the abilities of their youngest staff and make it known that they personally care for the success of the
  individual fundraiser.
• Encourage women, and racial and sexual minorities to apply for lower tenure jobs and open the ranks of the senior levels to diverse populations.

On Technology and Data:

“As in all industries, the technological tools available to fundraisers now are myriad and offer solutions to nearly every aspect of fund development. However, many nonprofits cannot afford or do not have the expertise
or knowledge to implement tools that would drastically increase their fundraising results. Many practitioners may not even know that the resources exist. “

Recommendations

• Fundraisers need to invest in multi-channel comprehensive communications. Standard mail,
  email and phone are no longer viable stand-alone methodologies and donors of all generations are using multiple platforms for all their communications.
• Fundraisers must have a rudimentary understanding
  of data analysis and hygiene, as well as a modicum of technological knowledge to manage both standard communications and newer methodologies. Data quality can have the single largest impact on revenue; as data ages or becomes incorrect, fundraisers lose donors through the inability to contact them, or contact them correctly.
• As part of a comprehensive, strategic fundraising plan, fundraisers must include the strategies and platforms that make sense in the context of their organization and plans, and that they can manage well and efficiently. The tendency to chase after the newest technology or platform should be tempered against the overall plan for the organization and what can be managed and managed well.

Some factoids from the report I consider worth noting:

• More donors want to volunteer in addition to giving (Bureau of Labor Statistics 2016). The volunteer rates among high net worth individuals are rising.
  (US Trust 2018).
• Emphasis on engaging new and younger donors can distract nonprofits from their older, more established supporters (Blackbaud nd; Millennial Impact 2017).
• Online fundraising means ‘anyone can do it.’
• Employee tenures are shortening in both for-profit and nonprofit sectors. Three years in one job is now seen as an HR win (Society for Human Resource Management 2016)
• The overabundance of information about nonprofits and various issues makes decision-making difficult.
• There is a higher degree of expectation in communication, transparency, and engagement between donors and organizations due to widespread communication channels (Marks Paneth 2015).
• National grantmaking tends to focus on urban areas. Only six percent of foundation grant dollars are designated for rural areas.
• There is a collective concern over data protection amidst an increasing surveillance state in digital communication, as well as server data breaches (Pew Research Center 2016c). Most nonprofits have compromised their independence by signing up for commercial software, servers, cloud services, and other technological tools without being fully aware of how these systems and tools counteract their organizations (Segedin 2017)
• Front-line fundraisers don’t use technology well (MacLaughlin 2016). Poor-quality data has a negative impact on the ability to reach donors. Getting research and information to front-line fundraisers is difficult.
• There are 718 nonprofits opening each week, which creates intense competition with multiple nonprofits offering the same program, adversely affecting
  economies of scale and proliferating under-resourcing of nonprofits (National Center for Charitable Statistics nd).
• Many organizations practice a transactional fundraising model of asking and receiving. They don’t have the skills, experience, or capacity to develop relationship-
  based strategies or innovate, test, or adapt new
  fundraising models. Moreover, a competitive nonprofit landscape combined with these limited skills for effective fundraising by nonprofit staff creates donor churn with
  the average donor retention rate stuck at 46 percent nationally (Sargeant et al 2015).
• Because there is no formal source of fundraising training, best practices, and research, fundraising at nonprofits can be subject to the whims of non-fundraiser leadership and boards (Bell and Cornelius 2013).
• Racial segregation in giving and fundraising lack of diversity exists within the philanthropic sector – donors, staff, boards, prospective donors (Blackbaud 2015).
• There is no vetting process for fundraising resources which makes it difficult for fundraisers to discern good tools from ineffective ones. Strategies are often based on what has worked without understanding the reasoning. This leads to challenges in being able to replicate results or apply to other settings.

And some bright news for the future…

• Access to data is changing how nonprofits work – it can make them fundraise more strategically and efficiently and can enable nonprofits to create a greater sense of transparency by sharing that data with donors through impact reports.
• According to Boston College’s Center on Wealth & Philanthropy, an estimated $58 trillion is expected to be transferred from Baby Boomers to their heirs by 2061. (Havens and Schervish 2014) saw a surge in giving (Coffman 2016).
• There are more research centers dedicated to the thought and practice of fundraising, facilitating more thoughtful discussion and debate based on analysis and research. If we can agree on unification and standardization of curricula, we could advance the formalized training of the fundraising profession via existing certification and other education structures.
• Access to data is changing how nonprofits work – it can make them fundraise more strategically and efficiently and can enable nonprofits to create a greater sense of transparency by sharing that data with donors through impact reports.
• Younger donors and philanthropists are impacting the profession of fundraising by expressing more of what they want and need out of their experience as donors.
• There is great opportunity to clarify for potential board members what their responsibilities and functions are as the stewards of governance of a nonprofit. Other fields, such as marketing, sales, social sciences, etc, can inform the fundraising profession and help drive comprehensive communications strategies and relationship management.

I think we can get a few dozen Agitator posts from these. Which would you like us to focus on?

Roger