Report finds fundamental flaws in many nonprofits’ fundraising

A new national survey of nonprofit executives suggests it isn’t just the uncertain economy that’s making it hard for charities – including arts and culture groups – to meet their fundraising goals. The research says there’s something fundamentally amiss with the way many of them go about courting donors.

“This study reveals that many nonprofit organizations are stuck in a vicious cycle that threatens their ability to raise the resources they need to succeed,” begins the 36-page report commissioned by the Evelyn and Walter Haas Jr. Fund and conducted by CompassPoint, a San Francisco-based organization that provides management advice to nonprofits.

Dubbed “Underdeveloped: A National Study of Challenges Facing Nonprofit Fundraising,” the study says it’s the first systematic attempt to explore how chief fundraisers for nonprofits view their jobs – and how that dovetails or clashes with the expectations of the chief executives they work for.

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Arts, culture and humanities accounted for 11% of the 1,852 head fundraisers and 870 chief executives who responded to the 2012 survey, making it the second-largest sector. Human services was the largest sector, at 22%.

A key finding is that half the chief fundraisers -- or “development directors” as they’re known in the nonprofit world -- expect to leave their current jobs within two years due to an assortment of pressures, including a frequent feeling that they’re out on a limb because they’re expected to produce results without having enough backup from bosses and boards that haven’t managed to put effective, systematic fundraising plans and approaches in place.

Only 58% of the development directors rated their organizations’ fundraising as “effective” or “very effective,” compared with 83% of the chief executives, and nearly a third of the fundraisers said they’d been given “unrealistic” goals. Their average annual pay ranged from $49,141 at organizations with budgets under $1 million to $100,127 when budgets exceeded $10 million.

“Fundraising can’t be a priority for just one individual. It has to be a priority, and a shared responsibility, for the board, the executive director and the staff alike,” Linda Wood, senior director for leadership and grant making at the San Francisco-based Haas Fund, wrote in a foreword to the study.

Marla Cornelius, a CompassPoint project director and co-author of the report, said that, judging from the 11 focus groups of development directors, chief executives and board members that she led around the country, the arts sector doesn’t differ substantially from other nonprofit sectors. She said the raw data could be broken down for a specific look at arts and culture fundraising, but it would take additional time and money to crunch those numbers separately.

Development directors outnumbered executive directors in the survey by more than 2 to 1, which Cornelius attributed less to reluctance on the part of the chief executives than to eagerness on the part of the often-overlooked fundraisers.

“They could not wait to answer these questions and have somebody hear them,” she said.

The study found that the position of head fundraiser is often a “revolving door” job, with openings occurring frequently, and nearly half the vacancies taking more than six months to fill – a situation that can stymie the consistency and relationship-building needed for effective fundraising.

No more than 15% of the organizations in the survey qualified as “high performers” when it came to fundraising – defined as groups whose executive director and development director both rated fundraising as “very effective” and for which 25% or more of the budget was gleaned from individual donors’ gifts.

Ideally, the report says, organizations will develop a “culture of philanthropy” in which “most people in the organization ... act as ambassadors and engage in relationship-building” with potential donors, “everyone promotes philanthropy and can articulate a case for giving,” and the executive director “is committed and personally involved in fundraising.”

“There’s definitely a message we hope comes out of this report,” said Cornelius, the co-author. “Across sectors we have a real need for a shift in attitude.”

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