Fundraising Management for Nonprofits in 2023: A Comprehensive Guide

For nonprofits, fundraising management is a key part of success. Without proper fundraising management, your organization will struggle to attract donors and secure the funds necessary to keep your mission going strong. Fortunately, there are a few simple steps that any nonprofit can take to ensure their fundraising efforts are successful. Read on for our comprehensive guide to help you get started.

When overseeing a development department, there are commonly monitored, high-level temperature checks for how the department is performing with relationship-building, retaining donors and budget effectiveness. The most common metrics are:

• Donor retention rate is the number of donors that gave last fiscal year and this fiscal year. The national average teeters between 41% - 45% (depending on the source). Retention is a systemic issue in the nonprofit sector, and the goal for most of my clients is 60%. 
• Cost to raise $1 is calculated by diving expenses by revenue. Most sources say that a solid cost to raise $1 is between $0.20 and $0.30. This metric can be viewed department wide or by segments. For example, the cost to raise a dollar will be different for major gift officers compared to annual fund. 
• Total raised to goal allows you to understand if the goal is reasonable (too easy or too hard) and if you have the right staff and donor pool. If you meet your fundraising goal in month two of the new fiscal year, it's too easy. If your fundraisers struggle to meet goal every fiscal year, it's either unattainable or you don't have the right staff.

By tracking these metrics over time, you'll gain valuable insights into your fundraising efforts and can adjust accordingly. If you're interested in my favorite fundraising report templates to track these metrics, watch the video below.

One Size Doesn't Fit All

The key to successful fundraising management lies in understanding the unique needs of both front-line fundraisers, like major gift officers and grant writers, and fundraising operations professionals, like your database administrator and stewardship coordinator. There are two sides to your development department, and both are critically important to your fundraising success. They need to work in tandem, but they have different needs. Let’s review some strategies that can help ensure both sides of your development department are successful. When both are effective and productive, your donor experience will be curated, thoughtful, and meaningful.

Let’s start with Management of Your Fundraisers

How you measure your fundraisers’ performance, define their goals, and allocate their resources will affect each fundraiser's ability to be successful. That's why we recommend measuring the right key performance indicators (KPIs), using servant leadership techniques, and helping them manage their time. These elements will not only play a role in their success but help you to hold on to great talent.

Goal Setting & Key Performance Indicators

Fundraising goals should be measurable so that you can track progress over time; they should also be achievable within a given timeframe. Once you’ve set your goals, it’s important to allocate enough time to achieve them. This means blocking out specific times each day dedicated solely for fundraising—otherwise, it will be easy to get sidetracked by competing tasks and deadlines that don't affect revenue production. We highly recommend that your fundraisers are excused from meetings that do not affect fundraising.

Choosing the right fundraising metrics is key. Once a metric is established, the team is going to focus on meeting that metric so it's important not to measure vanity metrics or metrics that do not drive specific actions.  Additionally, you'll want to choose metrics that don't tie your fundraisers to their desks because they are so data heavy. You can check out our favorite fundraising KPIs here. 

Your fundraising metrics should follow these guidelines:

Simple & Time Effective: Getting MGOs to track all touchpoints with prospects is a systemic, constant struggle, so it's important to track only the significant meetings, asks, and funded proposals. MGOs don’t feel tied to their desks entering every single touchpoint. 

Grow Your Major Gift Pool: Most organizations make asks of the same major gift donors every year, while other donors with capacity and affinity go under cultivated and under-solicited. Your metrics should encourage reaching out to new prospects and securing new money.

Pursue Quality Prospects: Metrics should be designed to keep each portfolio at a manageable size and full of quality prospects. If MGOs cannot meet these metrics, it's a sign that their portfolio is either: 1) too large and needs to be honed and/or 2) their portfolio does not include the right, qualified prospects.

Timely, holistic reporting: Most organizations set fundraising goals annually. The challenge with annual goals is that it's easy to fall behind; the misconception is that there’s plenty of time to catch up. We recommend goals measured quarterly and annually so that there are regular temperature checks and issues can be identified and resolved quickly.

Leading with Servant Leadership

The late, great Robert Greenleaf coined the term servant leadership and defined it as a non-traditional leadership philosophy, embedded in a set of behaviors and practices that place the primary emphasis on the well-being of those being served. 

This shouldn't be a stretch for someone managing major gift officers because as nonprofit leaders, we're in the business of building deep, meaningful relationships. This management strategy is important in a fundraising department, as your team members will be working closely with donors and potential donors and will need to be able to build strong relationships with these individuals in order to be successful. When fundraisers feel supported by good working relationships with their managers, they are empowered to go out and build good relationships with donors.

To practice servant leadership, you should focus on building trust and respect with your team members, and on providing them with the resources and support they need to be successful. Additionally, you should be available to them as a sounding board, and to provide them with feedback and guidance when needed.

Servant leaders ask:

• How can I help you reach your fundraising goal?
• What do you need from me to do your job effectively?
• What are your strengths and weaknesses, and how can I help you to develop in both areas?
• How can I help to improve the work environment for everyone?
• What is your perspective on the situation/issue at hand?
• What new ideas do you have for improving our fundraising processes?
• What are your concerns or challenges in your role, and how can I help address them?
• How do you feel about your growth and development opportunities within the organization?
• What can I do to make your workday easier and more productive?

Fundraising Time Management

One of the biggest impediments for fundraisers in not having enough time to fundraise, which includes building strategy for a prospect, having donor meetings, writing proposals, and properly stewarding major donors. We see it with almost every client we partner with, and one of the first items we address is peeling back all the things that do not directly affect the fundraiser's metrics, goals, and productivity. Here are a couple examples of where fundraisers get off track:

• They are pulled into too many meetings (that don't affect fundraising)
• They do things manually that should be automated
• They are tied to their desks entering too much data in the fundraising database
• They are educating people in the organization about fundraising
• They are managing other departments like volunteers or the gift shop

These items cut into their fundraising time. You might have noticed that these examples are internally focused tasks, which is why we work with clients to prioritize external-facing tasks first. Fundraisers should spend 80% of their time fundraising, prospecting, building relationships, cultivating, soliciting, and stewarding donors.

A servant leader would empower their fundraisers to:

1. Decline politely: If asked to take on tasks outside of fundraising, politely decline and explain your limitations.
2. Offer alternatives: If the task is important, offer to help find someone else who can handle it.
3. Negotiate responsibilities: Have a conversation with your manager to renegotiate your responsibilities and prioritize your workload.
4. Focus on core tasks: Stay focused on fundraising and donor relationships and prioritize those tasks over others.
5. Eliminate distractions: Find ways to minimize interruptions, such as closing your office door or working remotely.

Let’s Dig into Management of Your Fundraiser Operations Professionals

Your operations is the business center of your fundraising program and when you have strong operations, it helps your fundraisers be successful and helps to create loyal donors. You’re acknowledging gifts quickly, sending out timely pledge reminders, managing all your fundraising software and platforms, and reconciling with Finance. Both your fundraisers and donors are supported by strong operations.

Strong fundraising operations subtly communicates that your organization is sophisticated, has streamlined processes in place, and understands how to manage money. All strategies and tactics implemented by fundraising operations should result in one of two things:

1. Ensure the donor has a stellar experience with the organization after making a gift
2. Help the fundraisers be successful in their quest for funds

Key Performance Indicators and Goals

The goals for your operations team will be geared toward internal systems and setting donors and fundraisers up for success. In some departments, the operations staff do not see their role as service to the fundraisers, and this can hinder the organization's fundraising success. The role of operations is first and foremost a supporting one, and the success of operations should be linked to the success of the fundraisers. If the operations team member does not see their role as service to donors or fundraisers, they are not in the right seat on the bus.

For example, an operations person might see their main goal is to maintain a clean database. Because of this, they will shut out or clamp down access to the fundraisers. The end goal is not a clean database; the end goal is a database that is useful in helping to raise money. The fundraising database is a shared space, and everyone should have access to fulfill their job function.

Here are some of our favorite metrics:

• Acknowledgements are sent within 72 hours of gift receipt
• 100% of pledgers receive a reminder before payments are due and additional reminders if payments are missed
• A relevant policies and procedures library is available for the development department and kept up to date. Here's an audit that might help you.
• Data hygiene checks are performed on the fundraising database quarterly and problems addressed immediately
• 100% of internal list requests are provided within one week of request
• Reports are automated and distributed monthly
• Reconciliation with finance is seamless and occurs monthly

There are many more, but you probably get where we're headed. 

Managing Fundraising Operations Professionals

Because this is a highly specialized skillset, it is important to hire an operations team member that you trust and then allow them to build systems that work. Oftentimes, the person who manages the operations staff is a fundraiser by trade, so they understand the benefits of the systems but not how to build the systems. This group also benefits from a servant leadership style and here are questions that managers can ask:

• What tools/platforms/software to you need to be successful?
• What support is required to automate monthly reporting and save you time manually manipulating data?
• How can we help support donors when they need assistance?
• What proactive measures do you think we should put in place to help the fundraisers spend more time fundraising?
• What is your perspective on the situation/issue at hand?

In conclusion, fundraising management is a critical aspect of non-profit organizations and requires careful planning, execution, and evaluation. From setting realistic goals to servant leadership, it is essential to implement effective strategies that engage team members and build relationships. Remember to stay transparent, communicate regularly, and acknowledge the contributions of your team members.