I couldn’t be happier to have a guest post on outsourced fundraising from Anne Marie Burgoyne. Anne’s role at Draper Richards is to find and support early-stage, high-growth nonprofits, and Anne serves on the Boards of One Acre Fund, LivingGoods, Mapendo International, Spark, Agora Partnerships, Global Citizen Year and Mission Continues. If anyone is in a position to see these questions play out in multiple early-stage nonprofits, it’s Anne Marie.
When I read Sasha’s post last week about Peter Haas’ TED Fellows blog post (on the possible future of the fund raising industry), I jotted down ideas I had about how such an outsourcing idea might (not) work and why – purely as an intellectual exercise. And then, oddly, an email arrived from Sasha asking if I might have thoughts on this topic to share. How fun and here goes!
For context, I work for the Draper Richards Foundation – a funder of early-stage non-profits with high-growth models. We see 40-500 applications annually, use a very thorough diligence process to get to know the individuals and models applying for our grants, and fund 1-2% of the applicants with $300K, a board seat and participation in our community of practice. We seek to invest in organizations with strong leadership, scalable models and sustainable impact and provide general operating support, introductions, and as much time and attention as we can to help our portfolio of entrepreneurs succeed. We come from a venture capital tradition and firmly believe that fundraising is a key skill set of a gifted entrepreneur.
I concur with Peter Haas on a number of levels. It IS really hard to raise money and it is hard to be good at fund development. I have great admiration for people who raise money well (and those who continue to hone the craft) and I remember it being the hardest part of my job when I was an executive director.
Unlocking resources is the highest and best use of time, especially for an organization in its early years. Fund development calls rarely are mono-focused on raising money. A well-prepared, well-executed fund development meeting can yield partnership and board development leads, as well as identification of possible volunteer and full-time talent – a social network stands at the ready when a person who is committed long-term to their organization calls on a foundation or generous individual. I am reminded of one of the findings from Heather Grant and Leslie Crutchfield’s terrific book Forces for Good – “Convert individual supporters into evangelists for the cause.”
This sort of conversation only happens through good listening, continued dialog and mutual trust – with a leader who is intellectually and emotionally stuck long- term to their organization.
In addition, fund development keeps nonprofit leaders close to a big part of their market – a must in the bifurcated world of non-profits in which the “purchaser” of services is different from the recipient. In my further past, I managed a sales team, and feel strongly that the market feedback role of revenue generation is integral to an organization’s success. Many donors focus on a topic or geography of interest to them. The questions they ask and the observations they share are often rich with intelligence that can help with execution and organizational decision making.
Don’t ever think that your gun for hire is looking for more than the money when they pay a call. People respond to their incentives – and if their motivator is gift size alone then that is what they are looking for and that is what they will close.
In addition, there is a big difference between need (“I’ll take any money”) and want (“This is a funder who understands our work and sees our vision.”). If a fundraiser is motivated by their “cut,” versus the trajectory of an organization’s work, mission creep is sure to follow.
The aspect of the equation that is missing here, I think, is that in early-stage work, all you have to offer is the reputation and past success of the leader and her brave and capable staff. There is no consistent proof of concept, no execution in multiple settings, few impacts to share that are clearly replicable. There is, however, a vision for change and a path to make the world different – and that story can best be told by the person whose mind incubated the idea, the person who is orchestrating its execution.
Once an organization reaches critical mass in terms of size and history – often when they have been in existence 3-5 years and have a budget of above $1-2M – hiring a committed and professional Development Director can be a boon. These senior members of the team often have an area of expertise – high net worth individuals or large institutional funders – and come in with their eyes open to learning the mission in intimate detail and their ears open to hearing what current and potential funders have to share about the work of the organization and their experience as donors. They can multiply the impact of the founder’s considerably, but are never a panacea – the role of fundraiser, and role of the executive director in fundraising, never ends, it simply mutates over time as the needs of the organization evolve.
I am a big fan of outsourcing non-critical path tasks that are routine, time consuming and distracting – but fund development is not one of them. Human capital is the heart the non-profit engine. And relationships with funders as people and as connectors, rather than wallets, builds deep capacity for future giving – of money, of ideas, of additional relationships.
Founders and leaders, especially in the early years when an organization is building its model, reputation and brand, are in the best position to successfully raise funds and to build deep and broad relationships that will be a foundation for future success.