I’m convinced that a major barrier to most nonprofits’ growth is that there is little understanding of an organization’s true potential.

As a result, far too many organizations and their consultants set their sights far too low, settling for the average given in a benchmark like Giving USA, which year after year, for the past 20 years, has estimated the growth of giving at 2% of Gross Domestic Product.

The first of the Easy Excuses arises from benchmarking. The fundraiser tells the CEO or the board, “Well, our giving increased this year by 3% and that’s more than the national average.”  (Pause, wait for applause.)

In addition to the Easy Excuses that spring from benchmarking there’s another equally Easy Excuse: “We’re already using ‘best practices’.”

Well, as I pointed out in Part 6 of Barriers to Growth, the field of fundraising simply doesn’t have a set of peer-reviewed, empirically-based ‘best practices’.

What we do have is a mass of accumulated tribal wisdom, often conflicting, seldom empirically-based. The result, as economists Gneezy and List note in their book, The Why Axis — “the vibrant … important charity sector is driven by anecdote, not science”.

This is why Chuck Longfield, Blackbaud’s Chief Scientist and Founder of Target Analytics, has long preached the need for fundraisers to “seek the truth”.

By this, Chuck means every organization needs to better understand its potential by rigorously asking and answering questions such as:

• Where is there real room for improvement?

• Are our business practices truly the ‘best’?

These two key questions boil down to a realistic view of your organization’s true potential. Take a look at the chart Chuck developed, from a careful study of giving by sector. (Click on chart to enlarge or download.)

No tribal wisdom or myth here. From Retention Rates … Matching Gift Revenue … Planned Giving … to Sustainers and Poor Database Hygiene, Chuck has created a ‘Revenue Opportunity and Action Report’. In this case, the organization Chuck studied is leaving $5.1 million on the table.

One of the enormous benefits that spring from a rigorous analysis like this is that you can do a far better job making a persuasive case to the CEO and board for long-term investment. (Also see The Agitator’s Investment Paradox.)

It’s appropriate to end with another piece of Chuck Longfield’s advice: “Stop chasing the next greatest idea and focus on execution!”

Do you know your organization’s true potential? Or are you just using Easy Excuses?

Roger

P.S. A long overdue Agitator raise for Chuck and special thanks for his tireless efforts to raise standards.