I am thrilled to welcome you to Philanthropy Squared’s blog, THE THINKERY.

In Aristophanes’ Clouds, Socrates was ridiculed for thinking outside the square. But time changes everything, and today Socrates is honoured for his wisdom rather than his folly. THE THINKERY will challenge accepted beliefs about philanthropy and step outside obsolete practice in order to stress and stress again: organisational development is the KEY to philanthropic endeavors.

My not-so-hidden agenda is also to rehearse some of my thinking to help shape a future research project.

We hope you enjoy the read and warmly welcome your comments.

In brainstorming topics for the blog we found it hard to isolate any one point from the others – they are all inter-connected, yet each has some point of distinction.  This first post outlines the main themes which will be examined one by one in the coming weeks and months.  We’re also going to add the perspective of non-profit leaders and donors through a series of interviews.

Organisational culture is defined by the dominant source of revenue

A bit of a blanket statement, but it captures attention.Stanford Social Innovation Review (Spring 2009, Volume 7, Number 2),  identifies 10 organisational models which they order by the dominant source of funding – broadly, government/major philanthropy/mass philanthropy/ corporate/market mix.  The authors suggest that diversifying income is seldom simple because the machinery of the organisation is geared to targeting the main market.

We (Philanthropy Squared) get called in when non-profits want to diversify their income streams – mostly, but not exclusively, from an over-reliance on government – by adding a new, or ramping up an existing, fundraising program.  Many of these organisations, all outstanding in their own way and many of them leaders in their field, expect to make a seamless transition into major philanthropic funding (“because we’re worth it”).

Seldom has enough thought gone into assessing what impact fundraising might have on the wider organisation – how it operates, how it manages finances, how systems need to be adapted, how much time the CEO or board or non-fundraising executives need to dedicate, what the reporting lines should be.  As a consequence, fundraising will fail to gain traction.

The SSI paper goes on to say: “And when dollars become tight, a chaotic fundraising scramble is all the more likely to ensue.” 

Absolutely.

Which leads me to…

You won’t get good fundraising until you have good fundraising organisations

Over the last decade the number of fundraising roles has exploded.  There are far more good jobs out there than there are skilled and experienced professionals to fill them.  We talk of first-rate staff being enticed away by ever increasing salary packages.  Of second-rate staff being enticed away by ever increasing salary packages.  Even with money being thrown at it, the problem isn’t getting solved.  The profession simply hasn’t grown to meet the demand.  Why not?

The old school of fundraising – characterised by short, sharp campaigns that gave an injection of additional funding but were not central to the profit and loss – isn’t sufficient any more.  Organisations can no longer bolt fundraising onto the side of the core operation to provide top-up funding or overcome a crisis.  As government pulls back from direct funding we’re now talking about generating a substantial and sustainable income stream to achieve all we want to achieve.  So raising funds has become core business – or it should be.  And anything that is core business requires the whole organisation to sit up and take note.

Which leads me to…

Underlying values drive behaviour – making the outcome self-fulfilling

Terrible misconception – that fundraising is about cash.  Understandable, though, when the need is urgent.  Time and time again, fundraising campaigns end in frustration and are seen to take precious time away from delivering services.

But – setting aside for a moment the staggering short-termism – that outlook assumes a power imbalance.   No, let’s not set it aside.  In fact, the short-termism drives that power imbalance, locking us into a benefactor/supplicant model.   We see fundraising as a necessary evil instead of an honourable and powerful thing to be doing.  Little wonder, then, that non-profit executives and boards feel uncomfortable making the ask.  Enter fundraiser as salesman, charged with chasing short-term funding at the expense of long-term investment and growth.

Fundamentally if non-profit leaders believe that fundraising is all about cash and all they need is a salesman to get donors to part with it, then they resist investing time, energy and resources in relationship building.  It’s like outsourcing your marriage – tempting from time to time, no doubt, but ultimately destructive!

Which leads me to…

We are what we are measured by..

IF fundraising is about more than just cash, and IF it is to be core business and IF a culture shift is required and a longer-term approach is necessary, then we must find a new way to measure outcomes and progress.

Not uncommon – a pervasive sense of disappointment in fundraising because it is taking time to grow a meaningful revenue stream, or not securing untied funds, or costing more than the allocated budget.  Disconnect between the targets set and the maturity of the fundraising operation.  Also an expectation that the only thing to be measured is money in and money out.

Generating a sustainable income from philanthropy means careful thought must be given to goals and targets, a range of metrics (financial and non-financial) to track progress and KPIs to drive behaviour.  If success relies on, for example, CEOs or academic deans or artistic directors or program managers to do certain things, why penalise just the fundraiser for failure to deliver?

Which leads me to one last point…

Leadership, leadership, leadership..

Assuming you’ve come down this far in the blog (nearly wrote bog!) then hopefully you’ll have some sense that sustainable income from fundraising involves strategic, in-depth restructuring of an organisation to create a culture where strong, mutually beneficial relationships with donors can flourish.

If that isn’t a role for leadership, what is?

This will be the detailed topic for our next post.