ROADMAP: WHERE YOU ARE, WHAT YOU NEED TO GROW, HOW TO GET THERE

Fundraising strategy with Barbara O'Reilly

Episode aired June 24, 2020: Fundraising Strategy

Barbara O’Reilly has over 25 years experience building fundraising strategies for organizations. That strategy has to focus on the resources, skills and tactics needed to build more effective donor relationships and catapult revenue. In this episode, Barbara discusses 

  • what a fundraising strategy has to include
  • the importance of conducting a campaign feasibility study
  • the need to always be planning and growing and
  • what has changed and what has stayed the same in fundraising over the last 25 years.

Below you can listen, watch or read this podcast episode.

 

Ephraim: Welcome to this edition of the Your Weekly Dose of Nonprofit Podcast, a podcast that delivers actionable items you can implement at your organization right away. I’m your host, Ephraim Gopin, of 1832 Communications. Today I’m really happy to have with us one of the nonprofit sectors top fundraising experts, Barbara O’Reilly. Barbara how you doing today?

Barbara: I’m great Ephraim. Thanks for having me this morning.

Ephraim: An absolute pleasure. Let’s introduce you to our listeners, watchers and readers. Barbara has more than 25 years of Annual Fund, major gifts and\ campaign fundraising experience at major nonprofit organizations, including Harvard University, the National Trust for Historic Preservation, Oxford University in England and the American Red Cross. Her firm, Windmill Hill, whillconsulting.com, helps nonprofit organizations of all sizes cut through the noise and develop a profitable fundraising strategy that focuses on the resources, skills and tactics they need to build more effective donor relationships and catapult their revenue. Barbara is a former member of the advisory panel for Rogare, the fundraising think-tank in the UK. She’s a frequent guest presenter at national conferences in the U.S. and on various national webinars.

Have A Fundraising Strategy!

In today’s episode we’re going to discuss fundraising roadmaps and strategy. Let’s dive right in. Barbara, can an organization be successful without a fundraising roadmap and if no, why not?

Barbara: That’s a great starting question.

So an organization needs to know not only what it has to raise money for but it has to know how this is going\ to help them in the long term. I have certainly seen organizations have fundraising programs without a formal plan. I don’t think it’s ideal because for me what’s missing is that longer term strategy. You have to know where you’re starting from but you also more importantly need to know where you want to go as an organization and what’s that going to require in terms of funds to implement that vision. Where I find the biggest use for a fundraising plan is to do a little bit of that, the analysis of what taking the fundraising temperature, so what are those core metrics that you’re starting with? How much have you typically raised and what do you need to raise in the next fiscal year and in the fiscal years beyond that, so that the organization can really start to realize the vision that it’s outlined for the short and the long term?

And that to me is the biggest advantage to having a fundraising plan because it forces you to look, to do the analytics, whether you do an actual analytics service or you’re just doing running the basics of what your retention rates have been, what your average gifts have been, what your file sizes have been, if your donors have been upgrading or downgrading and how your revenue has been sort of broken down in terms of institutional and individual. That then lets you set the stage for growth. So you can do this in a way that is reasonable, based on your past performance and it helps everybody see where you need to go. Where I’ve seen the biggest value, just as an example of that is, I was working with a client once that needed to… that felt that they needed to raise a certain amount of money, a few million dollars more than what they were raising. So we broke it down in terms of okay, what does this mean for where you’ve been? Okay you’ve been raising X amount up to this point, that means to get to that growth rate of whatever it was- but from a couple million I think it was- this is what the reasonable expectations for growth year over year will be. That really helped to reframe their board and the executive leadership to say, okay, this is going to take us… this is the projected time of our runway to get to that new annual revenue goal and these are the things that we’re going to need to have in place infrastructure wise, staff wise, in order to be able to get there.

Feasibility Study

Ephraim: Fantastic. Always be planning and then growing. Before embarking on a major fundraising initiative, why is conducting a campaign feasibility study so important?

Barbara: It helps to test the resonance of the case for support for your campaign: what are the priorities, why are you doing this campaign in the first place and it really helps to do that resonance check- does this make sense to an outside audience? Do we think that we’re gonna have the donors who will be interested in supporting this? Do we have the level of gifts… do we think we have the level of gifts that are going to be required to raise this campaign goal?

I actually really enjoy doing campaign feasibility studies, because it allows me to work with an organization to craft that vision for the campaign and also then to get that external assessment. I’ve done many interviews where the feedback has come back that it’s, you know, the priorities don’t make sense or maybe consistently there are one or two priorities that really more strongly connect with that outside audience and others. It helps to test the goal.

You know in some organizations when I’ve done feasibility studies, the feedback comes back as mmm probably not, or where would that come from or yeah, that seems too low. Probably a little bit higher. Based on what you’re saying that you want the campaign to do… So it really offers that organization an external view of what this campaign’s receptivity will be to its stakeholder audience. It often allows the organization to make adjustments both to the goal, to the priorities, to the messaging most importantly. And I’ve seen this where sometimes the campaign vision is not fully baked enough for the audience that they want to try to raise money from. And you know we get that from the interviews, we can hear that in the comments. So what might happen is that the organization says, well let’s just phase this then. Or I work with the organization to say maybe we should phase this. So that it’s phase 1 is gonna be a certain amount and you build up the capacity that way, you build up the interest while you’re developing out phases 2 or 3, whatever makes the most sense.

It’s that really good sort of testing ground to say are we on the right track or does this make sense to our outside audience, who we are going to be inviting to be part of this? And it allows you to do it in a way that you haven’t printed all the materials, created all the messaging, starting to promote this more widely. And it will also save the organization a lot of face, because I have seen organizations publicly launch… do feasibility studies, not particularly like the results which might have come back with a set of recommendations and then publicly launch a campaign that was well beyond their capacities. And it’s really hard because if they can’t reach that goal for XYZ reasons, that’s really hard to walk back, especially when it’s public and it’s broadcast and it’s in everything that they’re promoting.

Everyone Co-Owns Every Donor Experience

Ephraim: Excellent. Always know what’s going to succeed and where it might not succeed in advance. Today’s actionable item: Could you please tell us three ways or tactics people can use to ensure that board members and all staff are co-owners of every donor experience within an organization?

Barbara: One of the most important steps to empowering board members to be involved in fundraising, it starts at the orientation. So for every new board member that comes on, ideally there is an orientation process that gives them an opportunity to learn about the organization, learn about the finances of the programs, the fundraising and then allows them to figure out what exactly is the best way that they can be useful to the organization. So setting a very clear set of expectations, of the ways that the organization would like that board member to be involved in fundraising, in the orientations of saying we’d like you to do these kinds of activities, we’d like you to be a part of these events, we’d like you to make a certain level gift or make a gift towards hundred percent participation whatever it might be It should be a combination of different kinds of areas. That’s the expectation setting, so that the board member understands what you want from them and where can they be both the most useful.

But it’s also then… it should be a two-way dialogue. In that orientation and in ongoing conversations with board members, asking them what are other ways that you might be… that you can help, amplify our work, promote us, introduce us to new networks and they may come up with different ways that you were not even… ideas for the organization’s leadership. You want them to feel like they’re bought into creating that plan. Taking those expectations though and sort of I’ve seen work well is to codify them. So come up with a little agreement every year, where the board collectively thinks about what’s our goal? What’s our fundraising goal, as a board and I believe strongly in having it as a board goal so that nobody feels that any one of them is going to be bearing the fundraising weight for the board leadership. This is a shared goal that they all set and then the fundraising staff and executive leadership can have one-on-one conversations with each board member to define the ask amount or the giving level that is most appropriate for them.

But coming up with them that little set of lists, of ideas, a little menu of all the different ways that you’d like the board member to be involved… Maybe it’s grouped around events, it might be grouped around certain donor outreach, it might be grouped around solicitations that they are going to make and that they will be part of. Allow them to be able to check that off and then hold them to it. But in a nice way. I mean board members want to be useful but they’re busy. If they have a very clear set of expectations at the beginning of the fiscal year, of the things that they’re signing on to do, it’s up to the staff to then say, okay, by first quarter you said that you’re gonna you know host this event or you said that you’ll be part of this fundraiser that we’re doing. Does that still work for you? That sort of thing and really helping them to remember what it was they committed to and that it still works for them.

I would say the biggest data point to share with boards, there are actually two.

The first is to share the overall metrics of the donor giving behaviors for that organization, because so often- probably nearly every board meeting I’ve walked into has always focused on how much money are we raising and how much have we raised towards our goal. That’s one piece. But it’s not the full story of that organization’s fundraising. So how many donors are we keeping, how many new donors do we have, what’s that retention rate of the new donors? Is that average gift increasing, decreasing or staying the same? That’s a temperature check for if donors are feeling more inspired and are going to… are starting to increase their investment in that organization. So those data points really help the board leadership to see that there’s much more to fundraising than just revenue raise. And if they are intentional about the donor retention rates, which is really one of my- as you know- one of my soapboxes, that’s going to raise more money ultimately, they keep more donors, if they are really focused on that donor experience. So when the board members understand that, they can start to understand that this is much more about the donor experience. And then a conversation to have with the board is well how can they as board leaders influence that experience or be part of that experience.

The other data point that I would often share with boards is… Penelope Burk, who is this incredible Canadian researcher, who’s been studying donor behaviors for 20-some years, she’s written a book “Donor Centered Fundraising and Donor Centered Leadership” and in the second version of Donor Centered Fundraising, she found in surveying tens of thousands of donors that when board members make a call to a donor within days of that donors making a gift, it increases their likelihood for making another gift, for giving you definitely, for increasing the gift, significantly. And I think the numbers are something like 93 percent said that they would give again, seventy some percent said that they would continue to give indefinitely and I think it’s 80 some percent said they would give again without being solicited. Again the statisticians among us might say, well there’s a huge difference between what they say they would do, what they actually do. But when I show board members, when I do board trainings and I show them those stats, jaws literally drop, because it directly ties to the board members’ involvement in that stewardship, in that personal connection saying thank you to a donor and especially for first-time donors. I often recommend that they see that, they understand that they are integral to this- the donor experience and then how do we focus on those metrics and really create the right stewardship points, the right cultivation and engagement points, that are going to affect positively those retention rates.

Elements Of A Fundraising Strategy

Ephraim: Excellent. That’s plenty for them to start with. Via your company, Windmill Hill Consulting, you craft fundraising strategies for organizations. What elements must be included in an overall strategy? 

Barbara: So the metrics that I’ve been sort of going on about already in our conversation, that’s a starting point for me. I always… when I’m doing audits and assessments I start with, what are the core… what’s a benchmark? What’s the metrics around retention? What’s the trend line and have there been any… if they’re trending upward, that’s great. But if they’ve been relatively flat, we want to start to figure out how do we change that.

How do they typically do their fundraising? If they are more heavily weighed in one kind of donor base than the other, we’ll look at what are the opportunities to kind of widen that base a bit. Because if any organization is putting more eggs in one virtual basket than the other, we want to try to figure out how to mitigate the risk. Great example is: If they are very heavily focused on raising their revenue from events, without really doing anything else with corporates or foundations or have a strong individual giving strategy, we will look at- okay what are the conditions for implementing and diversifying those revenue streams and then implementing in a way that is sensitive to the current capacity and then what will they need ideally as they scale their fundraising in the future.

So it’s really looking at the metrics for where they are and how they need to grow and then what are those conditions to get to that point? I am a strong believer that we have to be thinking about it in terms of the investment in the infrastructure and the staff capacity, so that the organization can step into a sustainable and scalable fundraising strategy. That often is what gets overlooked and I will usually use that, in fact almost I will always use that data point in my recommendations for how they need to move forward.

Fundraising 1995 vs. 2020

Ephraim: Excellent. Let’s just look for a second at your overall experience. You’ve been doing this for over 25 years. Can you tell me one thing that has changed in the last 25 years and one thing that has stayed the same?

Barbara: So the thing that has changed is the obvious: it’s the incorporation of digital. When I started I had a Mac- you remember those old Macs, the cubes right? Like the tan cubes, with a screen that was like this big. We had the floppy disks. Walk down memory lane Ephraim! The technology has definitely improved but the increase in digital communication, all of the multi-channel, has completely changed how we fundraise.

But the thing that has stayed consistent has been that the relationship-based fundraising is still standing the test of time. Those building the one-on-one conversations, the fundamentals of an annual giving program are more or less the same. The vehicles might be different a little bit. But the strategy of thinking about your wider base, filling in that upgrade strategy to kind of a mid-level giving, to then a large gift giving, those are all more or less the same. Ultimately those transformational gifts can only come when that donor has that personal deep connection with the organization. That was very much true 25 years ago when we were only phone and face to face and mail. But it is still very much true: that you will only ever get those transformational gifts when you can get to know who that donor is, get to know what their interests are, help them to see the organization in lots of different ways and lots of different lights so they can figure out what makes the most sense for their own philanthropic dreams.

Let’s Learn More About Barbara

Ephraim: The more things change, the more they stay the same. Let’s move on to the lightning round and learn more about you. What got you started on your nonprofit career path?

Barbara: So I needed a job, summer after my junior year of college. And I called up the Alumni Office where I was going to school and said, do you have something that I can… do you have any summer positions? I was an English major and they said, well can you write? I said, well I guess I can. I mean, in theory I’m supposed to be able to. I’m an English major. So they said okay. We’ve got this position working with our director of development and you want to give it a try. And my mom had been working in development, in a development office, so I was aware of fundraising but never thought that this would be a career path for me.

I ended up staying in working for the alumni office, for that director of development, all through my senior year. When I was graduating, it was a recession and I wasn’t entirely sure what I wanted to do. So I figured I’ll stick with fundraising for now, until I can figure it all out. And here I am all these years later and I think I figured it out, maybe not entirely, but I’m still here doing this.

Ephraim: If you could shake up one thing in the nonprofit world, what would it be?

Barbara: The scarcity mindset. Whether you call it a fixed mindset or the scarcity mindset, gosh, this is the thing that holds us all back as a sector. Maybe it’s a gross generalization to say for the whole sector but there are so many organizations that fail to invest in themselves, they fail to think about the full picture of what they need for success, both internally and externally. By that I mean, we’ve gotten into this… partly why we’ve gotten into this whole kind of redundant phase of the overhead myth and the emphasis on indirect versus direct, is because organizations partly- there’s external factors as well- but the organizational mindsets have always been on, we’re gonna try to do things as lean and mean as possible. We’re gonna try to scale back as much as possible.

I do believe that this existed even before the whole debacle with the overhead myth and the external validators and so forth. I do believe it was systemic in our sector. That’s the thing that… I do believe it was systemic in our sector. That’s the thing that… the conditions for scaling, whether it’s scaling your revenue, scaling your programs. I mean they’re really kind of the same. If you have more money, you can do more things. And in order to raise more money, you need to have the staff and you need to have the infrastructure, you need to have functioning computers, you need to have a database, something that’s not Excel or QuickBooks. You need to be able to pay competitive salaries or at least salaries that will help you attract the people that you need. And so it gets stuck in this loop of scarcity, which for some organizations just doesn’t help them get out of the current state to be able to grow.

Ephraim:  You gotta spend a buck to make a buck. You currently serve as the president of the Washington D.C. Metro AFP chapter. What’s the toughest and best part about that role?

Barbara: The best part, I’ll start with that. The best part is that we are the largest U.S. chapter. We are incredibly active, we’ve got a terrific board and a dynamic member base. So the best part for me is just the honor of being in this position of being selected, to be leading this incredible group of fundraising experts.

The toughest part though is leading through this moment in time. We are a nonprofit like so many other nonprofits and so we are going through the hard conversations right now of reforecasting, doing some exercises around scenario planning or kind of modifications to scenario planning. I wouldn’t say it’s the…the toughest part is really just ensuring that we are steering the chapter. But it’s not just me, it’s us. I have a great board with whom I work extremely closely with. We are looking at how do we steer the organization, the chapter, through this year and through next year so that we can emerge out of all of this. That’s just the trickiest part.

Ephraim: Got it. Tell us about a mentor and how they helped move your career forward.

Barbara: So I’ve had two that come to mind. The first was my manager my first job out of college. And she was… I supported two major gift officers and she was one of them and I just learned… I learned so much from her in terms of how to think about managing a portfolio, how you build donor relationships, how you prepare for and develop strategies for understanding who those donors are. I learned a lot about just how you comport yourself in an organization and in a very high-level kind of department. So things I learned from her really just have carried and stayed with me. Like the attention to detail, the attention to high quality work all the time. And so that for me I think that was… I still reflect on my work, my time with her.

And then the other mentor I’d say is a current friend and colleague consultant with whom I’ve worked a number of times over the last few years and he has such a depth of experience and has really taught me a lot as a consultant and taught me how to think strategically, differently than I might have done. He’s helped me kind of push the envelope a little bit in how I work with organizations to help them. So I have learned a lot just being a consultant and working with him and kind of hearing and learning from his example.

Ephraim: Awesome. The activity you turn to or place you go when you need to just get away from it all.  

Barbara: So there are two. The first is, as you know I’m a runner. I try to run. I’ve been trying to run every day as best as I can or at least, at least a little bit every day and maybe not the distances every day. But I will do that and that has been really helpful for me.

Then the other is I ride horses and so talk about level setting. I mean, the horse really doesn’t care what kind of day you’ve had. It is you know, it’s a really good attitude adjustment too, because you’ve got to be focused on creating the right… it’s always about making sure that the horse feels really… it’s all about the horse, it’s not about me. So my job is to get out of the horses way and to help him or her ride, you know, sort of go without me being in his or her way. Anyway, I’ve been riding for a long time and that really is the thing that helps me to sometimes reset myself. So those two things.

Barbara: That’s great. Let’s turn the tables. You get to ask me a surprise question. I don’t know what’s coming. Go ahead.

Barbara: Alright, what is one thing on your bucket list that people would be surprised to learn about you?

Ephraim: There aren’t that many things on my bucket list… Skydiving. Now I am not… I don’t necessarily have a fear of planes. But I’m not necessarily one to just jump out of an airplane and go skydiving. It’s not something I would consider doing. Kind of around my 40th birthday or somewhere around there, there were a couple things on my bucket list. I’d never gone to a concert before, I got that out of the way. I got a couple things in the last seven, eight years off that bucket list. Skydiving is the big one. I have a friend in the D.C. area who has promised to go with me. We haven’t done it yet. They do it here for charity, where you can raise money and then you go skydiving. Raise for a specific organization, I thought about doing it that way. Or I thought about just paying the money and just going and I would love to see Israel from up high and go skydiving. I’m not the adventuresome type. I like to travel but I’m not like climb Everest but skydiving is on my bucket list.

Barbara: So the next time you come to D.C. you should try I Fly. They’ve got this indoor… at least as a test.

Ephraim: Yeah. I saw one of those. I looked at it. The hourly rate was really high. There was one in New Jersey that I thought about doing like two summers ago and it was really expensive and I was like, alright if I’m already gonna do it I don’t want to fly indoors. I just want to get in a plane, push me out, I want to go see a little bit and hopefully land safely on the ground and that’ll be that.

Barbara: That’s awesome. That’s a great thing on your bucket list.

Ephraim: I’m hoping to do it in the next couple of years before I turn 50 or maybe on my fiftieth. That’ll be the birthday activity.

Thanks very very much for appearing on the podcast today. If you’d like to connect with Barbara, you can find her on Twitter at @BOreillyWHC. You can learn more about her company at whillconsulting.com  Thanks so much for being here today Barbara, I appreciate it. Have a wonderful day.

Barbara: You do the same Ephraim. Thanks so much.

Ephraim: Pleasure. Bye.