Nonprofit Board Archives

July 11, 2019August 1, 2019

10 Top Skills That The Chief Development Officer of Tomorrow Will Need

The nonprofit landscape is ever-changing, yes. But, with major shifts coming in the next few years, Chief Development Officers (CDOs) or nonprofit leaders need to update the ways in which they approach their role.

What are these shifts? They relate to regulation, technology, and attitudes that come with new demographics that will be part of the workforce.

First, let’s look at 6 major trends that will affect the nonprofit sector over the next few years.

6 Major Trends That Affect Nonprofit Leaders

Artificial Intelligence and Machine Learning— Automation will be a major technological theme. Data will need to be refreshed, stored safely, and interpreted for insights. These will be enabled by AI ML.
Privacy— Changing regulation across the world will make data harder to access. The public will have greater control over their own data. For this reason, organizations that rely on data will need a strategy to gain consent.
Cybersecurity– With data privacy regulation on the rise globally, Personally Identifiable Information (PII) info will need greater protection. Thus, Chief Development Officers will need to budget for higher investments in cybersecurity.
Changing Demographics at the Workplace— As Millennials & Gen Z dominate the workplace, work culture will undergo a massive shift. Further, these generations care about authenticity and solving problems on a global scale. They have non-linear career paths but want to work at organizations that stand for something meaningful.
Social Media— Social media is here to stay. Channels may become more niche to serve the diverse interests of its users. They will also have a bearing on fundraising. Nonprofit leaders may see that giving is more fragmented, but there is a higher volume of smaller donations.
“With the click of a ‘like button’, users will be able to make microdonations, a cent or even less.” says, Felix Hartmann, CEO of FundThis
Tax Laws— Changing tax laws may reduce gift size and frequency especially among sporadic donors. Conversely, there will be an increase in the likelihood of Donor Advised Funds.

These trends affect the role of the Chief Development Officer in many impactful ways. CDOs need to understand these trends so that they can get ahead of them. Thus, here are 10 top skills that nonprofit leaders will need in the near future.

10 Top Skills Needed to Stay Ahead of These Trends

1. AI-Powered Data Modeling

Understanding the importance of data is only the first step. Nonprofit leaders should familiarize themselves with AI. Artificial Intelligence in data modeling, for instance, finds patterns among donors and prospects. Using wealth data analytics powered by AI gives you the ability to know the right “ask” amount for each potential donor.

2. Refine Precision Through Machine Learning

The old way of using your network, while still useful, is actually going to slow you down. Fortunately, Machine Learning technology can speed things up. When you use analytics to generate insights regularly, machine learning can constantly improve your results.

For instance, AI allows you to find important patterns among your top donors. Machine learning can refine these over time so that you have a precise formula for finding new donors just like your best ones.

3. Evolve from CRM to CDP

CRM is yesterday’s news, CDP is going to be the next big thing. CDP or a Customer Data Platform gives CDOs the ability to unify paid and owned data, according to McKinsey.

Thus, nonprofit leaders need to empower their team by integrating wealth, demographic, lifestyle, and affinities within a centralized CDP. This way, your team spends more time talking to the right people than spending time on administrative tasks.

4. Keep Up with Privacy Laws

The implementation of GDPR was a game-changer in Europe. This is a sign of things to come. Chief Development Officers need to keep up with changing privacy laws. When user consent becomes necessary for data, you will need a strategy to ensure that your donors remain connected to your organization.

5. Speak the Language of Cybersecurity

With PII data requiring more security, it is increasingly important to understand data collection, storage, and sharing. CDOs will need to hire an in-house data security expert or work with qualified consultants. Further, you will need to be equipped to speak their language. This will help you ensure that your infrastructure meets industry requirements.

6. Build Relationships with Wealth Managers

With the new tax laws, donor attitudes may change over time. CDOs who move quickly to leverage wealth data analytics and technology will gain a larger share of wallet from competing causes. Similarly, building relationships with Wealth Managers can help familiarize prospects with your cause. With the support of financial service professionals, you can gain traction on Donor Advised Funds.

7. Embrace Diversity

Millennials in the US are the most diverse generation to date. Therefore, nonprofit leaders must understand and embrace diversity. This means that cultural sensitivity has to be built into your leadership skills. Moreover, individuals have different intrinsic and extrinsic motivations, understanding what makes each one tick will create a harmonious workplace.

8. Lead with Authenticity

Leading with authenticity and passion are big draws for teams consisting of younger generations. For instance, motivating younger employees to give their all to your cause will be easier when they can see how much you believe in it.

9. Be Open to Learning

When it comes to the proliferation of social media and the increasing dependence on technology, a younger workforce can prove to be a great asset. As a leader, it is important that you are open to reverse mentoring from younger employees with respect to these areas.

10. Leverage Social Media

The benefit of fragmented donations over social media is the volume of donations. As a Chief Development Officer, you need to look beyond your core donor on social media. Further, activating potential donors online helps you create awareness that leads up to an actual conversation.

Using engagement metrics, you can understand how often to connect with members of your community. For example, some people don’t mind regular communications and outreach efforts. Others may be happy to donate but prefer infrequent contact.

How We Can Help

WealthEngine9 or WE9 is built to prepare you and your organization for the future. We leverage AI/ML to deliver automation. In fact, WE Screen enables you to add 50+ data points on each donor- data on wealth, lifestyle, demographics, interests, and affinities. These can be added to your database at the click of a button.

What’s more? With WE9, our industry-specific CDP will enable you to unify your data and make operation seamless for your team. When younger employees come in with convoluted career paths, you can rest easy that the learning curve on the platform is negligible.

Our modeling solutions help you answer specific fundraising questions.

What does this mean for your team?

With our holistic and seamless solutions, your team will not need to spend their hours on administrative tasks or learning how to use several different platforms. As a result, they can spend more time gaining deeper insights into your donors and building long-term relationships.

Get Started Today

“If We Build It, They Will Come”: The Magical Thinking Syndrome

Let’s spend this week diving into a story.

Three years into a stalled capital campaign, an arts nonprofit finally engineered bond financing in order to build the facility that the then-executive director and the board were determined to have. A consultant was hired, changes were made, but despite all that, the campaign wasn’t completely successful. Now, with the building built and five years removed from the campaign, the organization is saddled with bond debt and the board has decided that another campaign is called for – to retire the bond debt from the first campaign.

When do you think the last time the development office did a full screening of the organizational database? Eight years ago, because the board won’t authorize money in the budget to do so.

What is wrong with this picture?
The board in question is relatively high-performing. Most have given six-figure gifts toward the new effort. But the board expects the development director to go back to prior campaign donors for more donations and somehow magically keep the annual fund on a growth path, all without additional resources. What’s worse is they now have a thriving membership program but have no idea about the capacity and inclination of their members.
We have seen it time and time again here at WealthEngine. It’s like the movie “Field of Dreams” – but without the happy ending.

A board, or a president, or an executive director thinks, “If we build this facility, we can serve more people.”

Or, a board will say: “Well, if we have all given a six-figure gift to this cause, then there will be sixty other people in town who will do the same,”

Or worse: “We just need to find 1,000 people to give us $1,000.”

They will disregard a feasibility study that warns against an ambitious goal, launch a campaign, and double the goal for good measure, then blame the fundraising team for not achieving the impossible.

This is magical thinking.
Unfortunately, it’s so common, that we call it the Magical Thinking Syndrome.

Does your organization have the ability to absorb the additional operating expenses a new facility will incur – even if you successfully raise the entire amount you need? It costs money to pay additional staff, keep the lights on, pay for upkeep and additional supplies, add insurance costs, etc. Your board is undoubtedly made up of hard-working, generous, well-meaning individuals who are correct about one thing: Of course there are likely to be people with high capacity. But do those people share the board member’s inclination to give a gift to a particular organization? Are they one of the “usual suspects” in the community to whom every nonprofit, large, medium and small, goes with their hand out? And, quite frankly, where is a fundraiser to find 1,000 people willing to donate $1,000 to a particular nonprofit?

Boards and visionary executives aren’t the only ones complicit in this dilemma. Some fundraising professionals take the “glass half empty” approach and won’t advocate for themselves or their staff to be given the resources with which to do their job. They spend their 60 and 70 hour weeks packing more and more things into their schedule with the same results.

Without screening donor data, fundraisers have no actionable information with which to work. It’s like throwing someone deep into Carlsbad Caverns, turning off all of the lights, and expecting her to find her way out — in less than an hour.
The mountaineer, Eric Alexander best known for leading his blind friend, Erik Weihenmayer to Mt. Everest’s 29,035 foot summit, wouldn’t consider setting out without a map, a plan and a strategy for meeting all the possible scenarios.

Neither should fundraisers.

And boards (or senior staff) shouldn’t expect them to.

Even before embarking on a traditional feasibility study, a data or wealth screening, along with a major gift model and planned gift model, should be conducted. Wedding the best of data analytics with personal conversations can provide lasting return and insight on where your organization stands in the community and where it ranks in your donors’ philanthropic priorities.

The return on investment for a data screening can easily outweigh the modest cost. To learn more download WealthEngine’s white paper, Measuring Fundraising Return on Investment and the Impact of Wealth Intelligence.

In fact, think about including it in your board packets for the next meeting.

A few questions to ask when considering a capital campaign:

Can our nonprofit absorb the additional costs of a larger facility, including furnishings, fixtures, overhead, additional salaries, insurance, utilities, upkeep and more?
Is there an endowment in place to provide a financial cushion for these items? Or, is an endowment part of the proposed campaign goal?
Can you spend money to raise money? (In other words, is there a commitment from the board and key leadership to create a campaign budget, including additional staff, data screening, donor recognition and other essential elements?)
When was the last time you did a thorough screening of your constituent database?
Have you had major gift and planned gift models run?

Do you have a similar story to share? Let us know in the comments below.

To learn more about data-driven capital campaigns read our new workbook and listen to our webinar.

July 29, 2016

The Art of Fundraising – 5 Best Fundraising Practices for an Arts & Culture Organization

Donations are the livelihood of your organization. And fundraising can be challenging. It’s both an art and a science. In order to unlock the best practices out there, you need to find out what is making fundraising and research campaigns successful and, frankly, what’s not. Here are five best practices for successful fundraising:

Capture Ticketing Data to Identify Donor Potential
Arts and Culture organizations have a unique pool of individuals – their ticket purchasers – who already demonstrate a genuine interest in the mission and work of their organization. These ticket buyers already contribute to your organization’s revenue stream and represent a natural prospect pool. Once these individuals have purchased tickets and walked through your doors, you are presented with a far greater advantage—they are engaged and interested in the offerings of your organization. Now they must be cultivated while their interest level is high. High performing organizations usually have a strategy to harness the information collected during ticketing. Information can be captured through online ticket purchases, surveys, and visitor kiosks placed at entrances.
Leverage Membership to Fuel Your Donor Pipeline
Your donors like to feel involved with your organization. The benefits of membership are to regularly engage people in the mission of your organization and then to encourage them to support it financially. By paying quality attention to this membership group, your organization can get a lively pipeline of donors ready to be nurtured and promoted to the next donation tier. Benefits could include: discounts, valet parking, special events, backstage tours, post-performance receptions, event privileges, gift store discounts, educational seminars, magazine subscriptions, and free admission.
Leverage Your Board to Build an Inner Circle
While some organizations see active fundraising participation from their board and volunteers, others wish theirs were more active and involved. The model board candidate has a circle of friends that show a similar giving capacity and inclination toward the Arts. You want your board members to reach out to these friends and help the development team cultivate with a personal touch, ultimately strengthening your organization’s major gift pipeline.
Invest in Screening
Upgrading current donors and identifying new prospects are challenges for arts organizations. Invest in a screening of your donors and prospects to determine who has the capacity, propensity, and affinity to donate to your organization. Screening can help you fill in the gaps and deepen your data records so you can better segment and prioritize.
Manage Your Data Proactively
The recording and updating of donor records is a must in successful fundraising. Properly run Donor Management Systems (DMS) secure accurate and easy to follow-up results from research and wealth screenings. A well-managed DMS and solid implementation plan is indispensable. One of the most significant ways to increase the value of the data from your wealth screening is to integrate the results into your DMS. The DMS allows your team to compile information on all donors including their contact information, giving history, special event attendance, ticketing history and other interactions with the organization.

Fundraising as an arts organization poses its own set of challenges. Don’t let these challenges derail your fundraising. Use these tips to set your organization up for success.

Do you have a story to share about successful fundraising in your arts organization? Share in the comments below.

July 22, 2016

Setting the Stage for Success in Your Data-Driven Major Gift Campaigns

I can’t tell you how many times I’ve seen a nonprofit plunge head-first into a capital campaign.

Here’s the scenario: A capital campaign gets fast tracked to start. Great, right? Well, no feasibility study has been performed. An astronomically high goal is set, because, hey, why not? This is a great organization, right? The board of directors is totally gung-ho, but they’re hand’s off. The CEO thinks it’s a great idea, but is also hand’s off. Everybody is on board except …

You guessed it. The Development Team.

Have you ever felt as if you were thrown under the bus? Yeah, that’s the feeling a development team gets when management tells them to go out and work miracles based on what? Hubris? Desire? An “edifice complex”?

These are absolutely the wrong reasons to start a major fundraising effort like a capital campaign.

As a fundraising professional, wouldn’t you like to speak truth to power? Wouldn’t you like to nip this kind of magical thinking in the bud? Most of all, wouldn’t you like to know that you and your colleagues won’t bear the brunt of this kind of magical thinking?

One thing that senior management does tend to listen to is data. Sure, statistics can be manipulated by spinmeisters, but data is pretty black and white. That’s why it behooves any non-profit considering a capital or other major gift campaign to take a data-driven approach.

It takes some work, but you can do an internal audit to assess your organization’s readiness for the heavy lifting ahead.

Learn about this and much, much more, in part 1 of our Data-Driven Major Gifts Campaign workbook. Download Part 1. To accompany the workbook will be a three-part webinar series, the first scheduled for August 25, 2016 with Catherine McGrath, principal with Marts & Lundy, along with Linda Garrison, WealthEngine senior consultant. Register for the webinar.

Want to start a discussion now? Contact us or leave a message in the comments below.

June 24, 2016

3 Keys for Creating a Sustainable Fundraising Program: Who’s On Board?

WealthEngine works with nonprofits across the spectrum, from the largest universities, hospitals, and international aid organizations to local and regional arts and social service agencies. Many of those who reach out to us are startups who have a passion, a vision and willing hands, but lack fundraising expertise and have few or no resources to hire trained staff members. In this three part blog series we offer three keys to help make your fundraising program more sustainable.

All organizations go through transitions in the makeup and focus of their governing boards. Often, a mission begins with those in the community who catch the vision and passion for the mission directly from the founder or founding members. The primary goals of these individuals are to lay the groundwork for the organization, obtain nonprofit legal status, and guide the organization through early obstacles and challenges. These individuals often fund early activities personally. A small group of like-minded individuals often works well in making early decisions with the agility necessary to establish the organization.

As the organization becomes more established, it is normal to look to expand the board, paying particular attention to fulfilling or anticipating certain needs. These needs often include fundraising, influence in the community (especially if there will be zoning, legal or other hurdles), and partnerships (such as with government, civic, faith-based or social service agencies).

The board sets the fundraising tone for the organization and any donors to the cause, including individuals, foundations, and corporations. For example, when applying for grants, you will almost certainly be asked what percentage of your board members are donating (it should be 100%) and what percentage of total funds raised are from the board (it should be substantial – e.g. 20%). Likewise, board members cannot with credibility solicit other individuals for the cause without being able to honestly say, “I believe in this and have contributed to it substantially myself (or sacrificially).”

When searching for new board members, it is important to search for particular qualities. Here are some considerations for expanding the board:

Affluence – While this may seem obvious, it is truly important to have a board with deep pockets. Fundraising is one of the most important responsibilities of the board, and you will not have access or credibility to ask community members for substantial gifts without having a board who has committed these types of gifts themselves.
Influence – You will want a board who has many community connections, such as those involved in the Chamber of Commerce, on the City Council, or prominent business people. These connections are the key to expanded fundraising, committees, campaign volunteers and a pipeline for new board members.
Specific Expertise — You may benefit by having individuals who work in the social services sector, those with expertise in arts and culture or faith-related issues, someone in the construction field, a financial planner, or any number of other vocations. Consider the types of expertise that are a fit for your specific needs over the coming 3-5 years, and recruit board members with these skills and abilities.

If you do have your board put together, there are two activities I recommend every board engage in if they haven’t already:

Have a working session to develop a case for support. This is a comprehensive document that lays out your mission, vision, plans from getting from where you are to where you want to be, and all the reasons someone from the community might want to support you. See our Case for Support Checklist. This is not unlike a brochure that may describe your services and mission, but is more expansive, and intended as a working document to provide full and transparent visibility into your leadership, accomplishments, dreams, and needs. It is often used as a recruitment tool for new board members and a cultivation tool for prospective major donors.
Develop and adopt Board Member Guidelines. These should cover term limits (if any), roles and responsibilities (such as contributing time, treasure, talent), and governing responsibilities. Read our sample Board Member Expectation Statement to learn more about guidelines that you could adapt for your organization.

Both of these exercises will serve you well in educating your current board and developing the tools you need to begin recruiting additional board members. Growing your board and leveraging their skills and connections will contribute to your ability to raise major and capital gifts.

Do you have a story to share about establishing a board to help drive fundraising activities? Share in the comments below.

Next week, we will share Part 2 of our three part series, Your Most Valuable Asset, which will cover some of the ways you can grow your fundraising list.

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