Thursday, October 04, 2012
When Fundraisers Attack, Part Two
In their upbeat way, the fundraisers let their freak flag fly on Thursday. It was a day of contradictions.
The keynote speaker, Dan Pallotta, channeled the collective id of the group with a funny and disquieting presentation claiming that a misbegotten focus on asceticism (my word, not his) has led to self-inflicted weakness on the part of nonprofits. He argued that the common question asked of most nonprofit fundraising efforts -- “what percentage of the money goes to overhead?” -- is profoundly misplaced and destructive. As he noted, American culture prescribes one set of rules for nonprofits, and another for for-profits. For-profits are allowed to take sustained losses during the setup phase, on the recognition that investments take time to bear fruit. Non-profits are judged on “overhead” from day one. (He drew knowing laughter by referring to the seven years it took Amazon to show a profit. How many foundation directors would still be employed after seven years of pure overhead?)
His point was that on the for-profit side, people understand intuitively that you have to spend money to make money. But on the non-profit side, spending “too much” money is considered a moral failure. That’s true even when you’re spending “too much” on fundraising, which more than pays for itself. He mentioned that he once responded to the “I don’t want my money to go to fundraising” line by asking if the man wanted to be the only donor. Nicely done.
He illustrated the point with the inevitable slides showing the salary differences between CEO’s of for-profit companies and CEO’s of most charities. By cheaping out on “overhead” -- by which we would otherwise mean “labor” -- we deprive nonprofits of the talent they need to raise enough money to make a meaningful difference in the causes they embrace.
To this crowd, of course, this was red meat. “Pay fundraisers more!” is an easy sell to a room full of fundraisers. It had the naughty thrill of counterintuitive truth laced with a healthy self-interest. And it’s hard to argue with someone comparing the salary of a leader of a charity with the salary of, say, Judge Judy.
Of course, Pallotta’s complex and subtle message came right after a panel with IHE’s own Doug Lederman, in which he reminded us of the difficulty of communicating complex and subtle messages in today’s media. Sigh. Lederman drew an implicit parallel between the thoroughly disrupted world of journalism and the seemingly complacent, but soon to be disrupted, world of higher ed. He argued that the stories that would get press attention are of institutional change. If you can show “self-evaluation, experimentation, and movement,” you have something. But as he noted, it’s hard to sell a complex and subtle tale, especially when it involves admitting earlier flaws.
The rest of the day was more about fundraising in its traditional sense. Ann Kaplan and Susan Kubik did an overview of the Voluntary Support for Education survey, in which they noted, among other things, that the percentage of community college alumni who donate to their colleges has actually been dropping for the past ten years. I was surprised by that, given that so much of the previous day’s discussion was about the benefits of longevity. Given that community college fundraising efforts are still largely in the early stages, I would have expected an upward trend, or at least a fairly level performance. They didn’t have a developed explanation for the dip, though I wish they had. Off the top of my head, I wonder if a combination of rapidly increasing tuition and a steadily more hostile employment environment played into it. I’d be tempted to blame the Great Recession, but the decline has been fairly steady since 2001. Work to be done.
Richard Morley, of Irvine College, addressed the “overhead” question directly, but answered more obliquely. He argued that it takes three to five years to get a good return on investment for even a successful campaign, so that the “right” level of overhead depends on where the college is in the investment cycle. He spent most of his presentation offering “evidence-based” suggestions for successful fundraising, most of which relied on playing the long game. Cultivate “evergreen” donors, which he defined as those who have given for at least six of the previous eight years. Use geolocation data to spot successful alums in your geographic area, and start cultivating them. Don’t rely too much on “special events,” like golf tournaments or galas; they’re useful in small doses for visibility, but eventgoers don’t become philanthropists, and they generally only break even. The “longevity is good” message didn’t quite track with the decade-long decline noted by Kubik and Kaplan, but so it goes.
Finally, Ann McGee of Seminole State, in Florida, won the quote of the day: “Fundraising is like wrestling a gorilla. You don’t stop when you’re tired; you stop when the gorilla is tired.” She and her foundation director offered a lovely outline of several conflicts that occurred when the fundraising side of the house and the operations side of the house weren’t quite in sync. They ran it as a “you make the call!” exercise, for which I have to give them credit.
I’m tired, but the gorilla continues to rage. On to day three!