The Myth of Competition

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One of the most self-defeating ideas in the nonprofit sector is the perception of overwhelming competition for contribution dollars.  Sure, there are all kinds of organizations out there, all asking for support, and sometimes even from the same donors. But that’s not why your organization isn’t raising enough money.  If you’re struggling to make ends meet, it’s likely because of one of these overriding reasons —

  1. Your development team isn’t spending enough time with donors.
  2. Your cost structure is too high.

Time

Parkinson’s Law — “Work expands so as to fill the time available for its completion.”

In the Internet age, Parkinson’s Law is more true than ever.  Each one of us could sit at our computer all day, every day, and do nothing but send and respond to emails.  This administrative time-suck is one of the main reasons we’re not out there talking to donors. And there are many other demands for our time.

This requires a discipline to set up meetings and get out there.  If you wait until you have time, you’ll never have time. Every situation is different, but maybe you need to have one donor meeting every other day.  Maybe it’s every day. Maybe it’s once a week. Let your needs dictate the urgency of your schedule.

Your donor meetings give you the opportunity to tell your compelling story, build relationships, and ask for what you need — not what a donor gave last year or what you think they can afford.  These are other self-limitations to avoid.

In the end, you don’t have to be a master fundraiser to succeed.  Your passion for your mission will carry the day, and you’ll see results based on the amount of time you devote to donor interactions.

Cost Structure

If you’re devoting the necessary time to donor interactions and you still can’t raise the funds you need, by definition, your cost structure is too high.  You need to “right-size” the organization. No one wants to do this — it’s undesirable, unpleasant, and seems defeatist; however, it’s the path to stress-reduction and long-term sustainability.

“Right-sizing” should not be confused with starving the organization.  This isn’t about putting more financial stress on underpaid and overworked staff.  By necessity, this process requires doing less, which is something nonprofits are naturally averse to doing.

To avoid difficult decisions, too many organizations rationalize that they have a revenue-generation problem instead of an expensive problem.  If your expense structure can be overcome by more time with donors, go for it.  If not, you’re simply delaying the inevitable and endangering the organization.

The path to financial sustainability isn’t easy, but it is relatively simple.  How will you respond to ensure your organization’s success?

Dan Weiss, founder and President of Counterpart CFO, leads a team of flexible, part-time CFO’s specializing in nonprofits.
To read more from Dan, follow him on LinkedIn or subscribe to his blog at www.counterpartCFO.com.

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