The Golden Age of Fundraising: Part I

Fast Turtles Stick Their Necks Out

The Fundraiser Blog • Steve Reed • December 08, 2023

Turtle races! Really?  

Yup. And I remember being amazed at how fast a motivated box turtle can move. Legs and neck fully extended and eyes on the food. Unfortunately, the relevant image that fits many fundraising operations is more the typical picture of a turtle mostly hidden in its shell.  

It’s not that fundraisers don’t want to raise more money. But the fact is that the organizational leaders for whom many fundraisers work have little understanding of how fundraising really works. And little to no appreciation for the unrealized potential that philanthropy offers to make a strategic difference. 

So, what’s with this idea of a Golden Age of Fundraising? 

It rests on two big shifts that are just beginning to be felt. The second of these—at least of equal importance—will be the subject of Part II. The first—which I will address here—is in the economic stresses being felt across the board in the nonprofit sector, but particularly in healthcare.   

Let me set the stage with three examples from personal experiences that pretty much sum up the current state of regard for fundraising within many organizations: 

“I’ve spent years building this organization, now you want me going around town with a tin cup!?!” 

“Don’t spend too much time on this. After all, what they raise is about the equivalent of a rounding error.” 

“ … much more money can be made in a much shorter time by dealing with EBIDA than what philanthropy provides. Do I lay off a person in philanthropy or a health care professional? We are in the business of health care, not philanthropy.” 

All the above are first-hand quotes from meetings with smart, thoughtful, highly successful healthcare CEOs. All are representative of the thinking that makes building a Culture For Philanthropy in many organizations (not just those in healthcare) a challenge.  

The first, obviously, shows a still common deeply held negative view of the whole idea of fundraising. Fundraising is treated as a necessary evil. Organizational leaders avoid personal involvement in, underinvest in, and undermine their own fundraising programs. 

But this is beginning to change.  

The second quote—equating the production amount to a rounding error in the health system’s financials—reflected an unfortunately accurate assessment. Too many fundraising shops are performing poorly—often due to underinvestment usually traceable back to low expectations.  

But, given the resources and freedom to do so, most healthcare fundraising shops could dramatically increase revenue, typically at least doubling production. To do so, organizations will need to change the way they raise money. Fundraisers need the budgets to adopt tools, structure, processes, and technology—with emphasis on personalized individual giving strategies—that create high-performance development organizations.  

This, too, is beginning to happen.  

And the third quote (focus on EBITDA) conveys a widely held opinion within the ranks of healthcare executives. There’s a belief the dollars that philanthropy could provide are not significant enough to warrant much attention. And the staffing levels of a lot of fundraising shops make this a self-fulfilling prophecy. 

But there are bright spots here too.  

More senior executives are beginning to see philanthropy’s potential.  

One instance: A video made last month for all employees by the CEO of a stand-alone community hospital. Her message: We need transformational capital to fund the innovation we need to survive.  

She pointed out that hospitals have three, and only three, sources of new capital.  

• The first is operations. Given the margin pressure under which hospitals now operate, they can expect little here.  

• The second is borrowing. That’s expensive in this environment and limited in how they can use it.  

• That leaves the third: Philanthropy. And that’s why she said they have to invest in, and all get behind the new fundraising initiative. 

This is an under 300-bed stand-alone community hospital that had a fundraising staff of three raising well under an average of $1 million annually. They are investing in the infrastructure and staff to hit $7 million in cumulative production within three years. They will continue to grow their program to a run-rate of $7 million or more in annual commitments by the fifth year. 

For them, and many others like them, philanthropy is changing, from a nice-to-have at relatively insignificant levels to a must-have at a level of two or three times as much—or more.  

And therein is a catalyst for the Imminent Golden Age of Fundraising. 

In Part II we’ll address where the potentials are for huge increases in fundraising production. 

The question is, will you and your organization be staffed and ready to meet the opportunity? 

--Steve

(Look for Part II of the Golden Age of Fundraising next week.) 

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Our Mantra

Given the resources and freedom to do so, most fundraising shops could dramatically increase revenue, typically at least doubling production. But to do so, organizations will need to change the way they raise money. Fundraisers need to adopt tools, changes in structure, well-defined processes, and supporting technology—with emphasis on personalized individual giving strategies—that create high-performance development organizations. And—most importantly—we need to be willing to challenge the ways we think about, talk about, lead, manage, and do fundraising.

About the author

Steve Reed offers 30 years’ experience fundraising, the last 20 of which include the application of Lean 6-Sigma principles for performance improvement in healthcare and healthcare fundraising. He is president of Engage Performance Advantage (USA) and a partner in Engage Performance Advantage Canada.

About Engage Performance Advantage

We are performance improvement change agents offering nonprofit organizations a way to radically redesign how they raise money, with more emphasis on personalized strategies and larger gifts. Our process-based critical path major gifts framework is paired with supporting technology to help leadership create a top-level fundraising organization. It’s a complete solution that can be rapidly deployed with dramatic gains.

Contact Us

To comment or pose a question: sareed@mpicompanies.com or 269.208.3577