The Foraker Group

Development, or fund development, is the term used today by nonprofits for the fundraising function. In prior newsletters we have written articles on raising money – most have been on the process of how to raise funds in a sustainable fashion.

Sustainable fund development occurs when prospects are engaged and cultivated over time then asked to provide financial support – first given opportunities to connect to the nonprofit’s mission and then asked to give. When their generosity is reinforced, it creates sustainable revenue for a charity. This is important since charitable giving provides one way to secure unrestricted funding, the kind of funding all nonprofits need to thrive. Unrestricted cash is one of the cornerstones of the Foraker Nonprofit Sustainability Model©. (Another way is through mission related, earned revenue.) Today we will outline the qualities needed by a good development officer (fundraising professional).

Nonprofit development officers should be personable, have good communications skills, as well as the capacity to attend to detail. The most important quality for senior development officers is maturity, since they should have the perseverance to commit the time to succeed in their position. Effective development officers are willing to make a multi-year commitment to the job, five to eight years or more, and stay. Building a sustainable fund development effort takes years of hard work.

My perception is that many development officers don’t stay in their positions long enough to have that impact. I have seen too many leave their jobs after two or three years. What I don’t know is if the development officer left because their supervisors (the nonprofit’s executive or board) had unrealistic expectations about how much money should be raised – and by when. I know that many boards and E.D.’s become impatient with fundraising results so the development officers may be forced to leave the position too soon. It is obvious that some development officers go from one job to another looking for a better opportunity, but if that occurs more than very occasionally, something is not right. Yet others likely leave their jobs because at some point they didn’t have the skills to succeed. Whatever the reason, the fact is, no nonprofit can build sustainable revenue from donors if they do not have the long-term commitment from their most senior development officer(s), as well as patience from their executive and board for the right work to be done.

Raising money is a nuanced endeavor. For example, the difference between fundraising and fund development is that successful fundraising only requires the nonprofit to identify the right person, someone who can’t be denied that asks for the donation. Fund development occurs when the institution invests in building a relationship with a prospective donor, over time, so the “ask” does not depend on the person asking. Fundraising works as long as you get the right person to ask. The problem is that over time, it gets harder to keep that right person asking. That is why development, or connecting the donor to the mission, has a longer term, sustainable impact.

Another nuance is that raising money from institutions like corporations or foundations can be easier and faster than raising money from individuals. Therefore, institutional giving has become a disproportionate percentage of Alaska’s philanthropy. While institutional donors can be consistent contributors for many years, history has shown that they are the most likely to decrease, or stop their support when the economy, or other factors, impact their business. On the other hand, individuals have historically given at the same, or at increased levels, even during the worst economic times. Nationally, institutions (corporations and foundations) provide 19% of total philanthropy, 81% comes from individuals. However, in Alaska, we estimate that institutions provide close to 35% of our charitable giving.

Nationally, foundations provide 14% of total giving. In Alaska, the Rasmuson Foundation alone provides almost 11%. So when we add the giving from other local and national foundations, we estimate that their combined giving is close to 20%.

Corporations provide 5% of total giving. But in Alaska, BP and ConocoPhillips combined give over 8%! When we add the donations from the remainder of the oil industry, we can easily assume that their combined giving exceeds 11%. And we know from interviews that other national firms give more here than in any other market, so we can guess that corporate giving is almost 15%, or three times the norm for other states.

Another unique quality in Alaska is the continued over-dependence on event fundraising. Raising money through events like runs, walks, derbies, auctions, etc., done well, can provide fast money for a nonprofit. But very few events can be trusted, over time, to provide critical funding for the nonprofit’s ongoing operation. In addition, events are a lot of work! If the board is not burned out at the end of the event, it only means that they are burning out their staff. Most events, done well, burn out the board and staff, and will eventually burn out donors.

This takes us back to the most important quality for senior development officers – maturity that includes the patience to persevere. If you only have one person in a fund development position, they are that senior person.

In order to understand why development done well is a long-term venture, it may be helpful for you to consider your own experience as a philanthropist. Can you think of causes you support regardless of who asks? Your place of worship, alma mater, or another one of your favorite charities? Would you give if you were not asked? Does it matter who asks?

Good development officers don’t spend too much time attempting to raise money from a broad, non-connected donor base. They create a donor base from higher potential prospects such as current and past recipients, volunteers (including board), and donors. They also identify institutions with a history of supporting such efforts. But when they identify prospective institutions, they look at how they can leverage their donations to build individual support. Raising money from individuals is a hallmark of effective development.

History validates that when the nonprofit nurtures a relationship with donors, it can build a loyal base of support. The only way to build that base is when the nonprofit invests in building its capacity to do development with individual donors. Such a commitment cannot take place in two to three years. This is why the most senior development officers must commit many more years to build a sustainable program.

In Alaska, we have so much opportunity to increase individual giving. Our recent experience with Pick.Click.Give. proves that when asked, Alaskans give. It is important to note that the nonprofits raising the most money through Pick.Click.Give. are the ones that are doing the best job of asking their base for support. If they want that base to continue to support, they will nurture the relationship.

In the most recent study on charitable giving in the U.S., the Chronicle of Philanthropy found that charitable giving state-by-state places Alaska at 47^th in overall giving and 45th in giving by those making the most – households earning $200,000 or more each year. At least this study did not find us in last place as some studies in the recent past.

But even with this negative distinction, we have institutions in Alaska that are among the best in the country in raising sustainable funds, or in “development.” Alaska Public Telecommunications Inc, (KAKM/KSKA) was recognized last year as having the highest per capita support in the nation! For many years, some of the United Ways in our state have been among the best supported in the nation! The United Way of Anchorage has often had the highest per capita number of donors who contribute $10,000 or more each year. Then there are the mature programs like Bean’s Café, Fairbanks Community Food Bank, Camp Fire, the Anchorage Museum, Kachemak Bay Land Trust, and Raven Radio (Sitka). They’re joined by some new stars like SAIL and the Anchorage Concert Association that are experiencing growing support from individual donors.

The common factor with all of these institutions is that they had (have) a development officer, or in some cases where they are too small to have a development officer their executive director serves for years identifying prospects, engaging them in their mission, and asking for their support. They had patience to raise funds the right way. It can be done in Alaska by many more nonprofits that have the wisdom to invest wisely in fund development. That investment begins with hiring the right development officer, or in a small organization, the right E.D., who is willing to invest the time to build that capacity.

In closing, I am compelled to point out a great development officer. While there are other development professionals in the state, Elizabeth Miller exemplifies this message. Elizabeth has invested more than two decades building and maintaining the development capacity for United Way of Anchorage. She is responsible for that United Way standing above its peers, around the country, when it comes to financial support. When any nonprofit finds its own Elizabeth, that organization, too, will raise more sustainable funds.