Social Service Fundraising is Broken

In the last 45 days we’ve been called upon by four homeless service ministry organizations that are not our clients to help them brainstorm and gameplan to address a common problem they’re all facing.

These chief development officers and executive directors, though they run organizations in vastly different communities around the country, are all struggling with the same issue. They are staring down the barrel of increased expenses, a growing need in their community, declining donor participation rates, and a significant revenue gap in their budgets.

In fact, when each of these leaders called upon us for guidance, they shared eerily similar stories.

Their fundraising agencies are working hard to make their fundraising activities work more effectively. Their staff members are pulling out all the stops in an attempt to reduce costs and increase the income generated by their in-house fundraising efforts. They’ve been forced to cut staff and reduce their marketing and fundraising spending going into the all-important Fall fundraising season. 

Frustratingly, they’re still each down by anywhere from $500K - $1.2 Million in revenue year-over-year.

These are smart people. They’re doing the best they can. They have well-meaning fundraising agency partners. 

But none of that matters.

The problem that these leaders, their organizations, and their fundraising agencies are facing is an existential crisis. 

The crisis they are facing is driven by major changes in donor preferences, priorities, and expectations that have evolved over the last decade. These organizations and their partners are trying desperately to hold onto what used to be, while generous-minded supporters are doing everything possible to change the way that ministries like these engage with them in their philanthropic giving. 

Here are three ways social service fundraising is fundamentally broken and in need of a relationship-focused reset (and what you can do to fix it). 

• Chasing transactions instead of prioritizing relationship-building with supporters

1. If you’re too focused on your monthly mail and email appeals but not paying attention to identifying your most committed donors who have capacity to do more and engaging them in personal relationships, you’re missing key opportunities.

• At DickersonBakker we recently helped one of our client partners identify their highest potential major donors and engage them to activate their first ever major gifts. This effort generated over $650,000 in new gifts, including one $100,000 contribution. This is the power of Major Gift Activation!
• Focusing on cash instead of offering and promoting asset-based opportunities

1. According to Dr. Russell James at Texas Tech University, less than 5% of all wealth in the U.S. is held in cash. If you are only asking donors for credit card and checkbook gifts, you’re focusing all of your effort and revenue potential on an ever-shrinking part of American wealth. Instead, begin heavily promoting giving from Donor Advised Funds, Stocks, Individual Retirement Accounts, Bequests, and other assets. 

• One DickersonBakker client has promoted asset-based giving for the last six months. They just received a $70,000 stock transfer from a donor who had previously only given checkbook gifts of $100 - $250. 
• Prioritizing new donor acquisition instead of retaining existing supporters and deepening relationships with people already invested in your work

1. We all know that bringing new supporters into our organization is essential. But far too often organizations chase new givers at the expense of building and growing relationships with high value supporters who already love your cause. 

• If you want to fuel exponential growth in your organization’s revenue you won’t get there by increasing your acquisition spend. But you can get there by investing in quality major gift fundraising talent and enabling them to build relationships with your best donors and with high net worth supporters who have yet to make a major investment in your organization. 

We firmly believe that there’s a better way to fundraise. We’re helping ministries and other nonprofits all around the country figure out what their better way looks like and then build and execute the strategies that help them create transformational giving opportunities. 

If your organization is suffering a downturn in revenue, we’re happy to help you think differently about your fundraising strategy and determine what a better way might look like for your organization.

Reach out today or book a meeting HERE if you’d like to have a confidential conversation.