One of the biggest challenges the nonprofit sector faces is the sometimes dysfunctional relationship between nonprofits and their donors. I’ve talked before about how nonprofits should stop lying to their donors. But today, in this month’s post in the on-goingFinancing Not Fundraising blog series, I want to discuss the flip side of the issue–how to respond to some of the crazy things donors demand.
In case you are new to the series, it discusses how nonprofits must break out of the FUNDRAISING (individual donor appeals, events, foundation grants) box and instead create a broader, more strategic approach to securing the overall FINANCING necessary to create social change. You can read the entire series here.
I firmly believe that nonprofits should no longer sit idly by when donors make crazy demands or give impossible instructions. It is the responsibility of a strong nonprofit leader to stand up to their donors and help educate them about the realities of the sector.
So the next time one of your donors throws one of the below at you, here’s how you can respond:
When a donor says: “Don’t spend any of my money on fundraising or infrastructure.”
“It might seem more effective to have all of your gifts go to support direct services, but actually those services will be stronger and more sustainable if there is a healthy, effective organization behind them. That means our organization needs a capable, well-trained and paid staff; a sustainable revenue engine; adequate equipment, systems and space; and efficient technology. Occasionally you might think about supporting those infrastructure items so that your program gifts can go even further.”
When a donor says “I want to know exactly how every penny of my money was spent.”
“I hope that you are investing in our program and our management team because you believe ours is the right solution to this social problem, and we are the right team to execute on that solution. We will be happy to provide you, on a regular basis, results about how the program grows and the impact it achieves, but the kind of extensive, detailed, and funder-specific reporting that you are requiring would take us away from delivering the program and creating impact, and I know you don’t want to do that.”
When a donor says “I won’t fund your program without proven results, but I won’t fund an evaluation study.”
“When you say that you are putting our organization into a catch-22 of needing a key element to get funding, but not having the funding to get the key element. It’s an unwinnable situation. We would love to be able to demonstrate the kind of results you are requesting. However, we have not yet identified a donor or group of donors who is willing to fund that kind of project. Would you be willing to lead an effort to get a small group of funders together to fund such an important evaluation study?”
When a donor says “I want your nonprofit to make huge changes from my $10,000 gift.”
“We agree that the change you would like to see is very exciting. We have done our research on the type of change you would like to see and it would cost approximately $100,000 [insert the correct figure] to bring to fruition. Is $100,000 a gift you would like to make to our organization? If not, would you be willing to identify a group of funders who could join you to fund this change? And if not, then we would gratefully accept your $10,000 gift to support our regular program operations.”
We have to create the nonprofit donors we want to see in the world. When a donor makes an unrealistic demand, use it as an opportunity to educate them about the reality of the nonprofits they support. In so doing, you are creating a better donor for the whole sector.