When I first met leaders from nine of Canada’s national health charities in 2002, I said “Good morning”, asked the 40 workshop participants to gather around a large table, reached under that table to retrieve a bucket, and proceeded to dump a pile of pasta bits under their collective noses.
It was a metaphor – each piece representing one of Canada’s nonprofit organizations. I asked each leader to try to find their charity, a single piece of pasta, amongst the tens of thousands of similar groups also asking for philanthropic support. I challenged them to think about what it was that differentiated their organization or cause; what, if anything would help them stand out in a crowded fundraising marketplace.
The magnitude of the challenge seemed all but overwhelming. And they spent the following hours learning to understand the basic concepts, principles and success factors that could make their fund development efforts excel.
To know where you’re going, figure out where you are
With any challenge, understanding where we presently are helps us in developing a plan for where we want to go. Knowing how we are performing today can help us plot improvement in our performance tomorrow. The fund development audit is a tool that allows for that discovery of where you are in your fundraising operations and serves as a key input into choice of future priorities.
A fund development audit is meant to nurture exploration into better ways of going about the business of raising money; to support the desire for constant, incremental improvement in your organization; and to support decision making about where to start.
Fundraising consulting companies often apply private audit tools when performing an audit of your organization. What’s not usual is to find a sophisticated audit tool available in the public domain … for use by all organizations, large or small. To help make best practice audit principles available, without the expense of securing a consultant, Ken Balmer and I created The Fund Development Audit Handbook based on current perceptions of fund development best practice. We have reviewed professional competency frameworks, training programs, books, papers and presentations to identify consensus on how best to go about the business of supporting philanthropy. The best practice elements that make up the audit tool itself belong to the fund development field.
The tool builds on current fund development theory. Each statement in the workbook suggests a concept, strategy or best practice that is important to the overall success of a comprehensive fund development program. It is designed to draw attention to areas that might need further work or consideration through training, performance management interventions and/or development planning.
What to examine in a fund development audit
The Fund Development Audit Handbook addresses the following eight critical areas. For each area, ten fundamental best practice statements (80 statements in total) are proposed and individuals are asked to assess the extent to which their organization acts in accordance with the statement and the extent to which they agree that their organization would be well advised to adopt this practice.
Area #1: governance environment
Statements made reflect the belief that a board is ultimately responsible for ensuring that the organization’s promise to the community or cause it serves is delivered. This accountability is most obvious and transparent when the organization develops and delivers its case for support, generates funds based on this apparent commitment to act, and then is judged by the donors interested in seeing the impact of their philanthropic investment.
Area #2: external environment
Statements in this area reflect the fact that philanthropic funding comes from a supportive community, from stakeholders that share your interest in your mission and the outcomes or benefits that the organization can deliver. The organization may be internally ready to move forward; but external readiness is equally critical.
Area #3: fundraising track record
Statements made in this area acknowledge that the starting place for any new fund development plan or initiative has already been established by the organization’s policies and performance to date. Plans to move forward must recognize the factual foundations of past activities and be based on evidence rather than assumption. The bottom line is that it is relatively easy to engineer a small shift from previous behaviour and much more difficult to plan and implement a major shift or change. You must know as much as possible about what has worked or not worked in the past before you commit to what’s next.
Area #4: constituency analysis
Statements in this area recognize that an effective fund development team knows and understands its stakeholders - both current and potential supporters. It takes the time to understand who might have an interest in the mission and work of the organization, who has linkages to the organization, who has been served or benefited (directly or indirectly), and who has the greatest potential to give. It is wise to build philanthropic relationships with those closest to us – building and leveraging on their commitments as we reach out to more distant target audiences.
Area #5: program maturity
Statements made in this area acknowledge that there is a huge difference between a fundraising organization that engages in a series of disparate initiatives and a mature fund development organization that manages an integrated, balanced and relationship based program. Fund development is fundamentally about developing and nurturing relationships with those that have an affinity for the organization, its vision and goals, ultimately with the intent of generating philanthropic support, the best possible gift.
Area #6: resource availability
Statements made in this area recognize that too many organizations expect high performance from their fund development team, but simply do not provide the resources or infrastructure to do an effective job. It is acknowledged that high performance fund development teams will recognize that effective fund development provides return on investment (ROI); have access to professional fund development expertise, if not on staff then on retainer; have a committed corps of volunteers prepared to support the fund development enterprise; and have access to the seed funding required to conduct the basic research required, develop appropriate materials, present their case, provide administrative support, and effectively follow up with and steward donors.
Area #7: fundraising culture
Statements made in this area recognize that fund raising cultures develop and evolve over time, and are based on friend-raising. Every constituent contact ideally should be viewed as the first step in building a relationship that has the potential to mature to supporter status. Absolutely everyone in the organization, not just the development team, must be proud of their nonprofit or charitable status and understand what that really means.
Area #8: donor perspective
Statements made in this area acknowledge that for fundraising to be effective, the optimal balance must be found between honoring the organization’s needs and the donor’s interests. Too often, fundraising is one sided – paying too little attention to the donor’s interests and need for respect.
Once you have completed assessing all 80 statements, you can plot your organization’s performance on a matrix to see the areas where your organization is acting in accordance with the statements, and to what extent your organization agrees with the statement as a reflection of best practice. Very quickly, you can determine what performance and cultural issues you may have, and where to focus your attention to strengthen your organization’s fund development initiatives.
The results of the fund development audit allow you to compare your organization’s reality to accepted fund development practice, identify gaps, issues and challenges that might be addressed, assess readiness to expand fund development ventures, and prepare for the process of completing a fund development plan.
This article is excerpted from Guy Mallabone’s upcoming book, The Fund Development Audit Handbook, to be released by Civil Sector Press in May.
Guy Mallabone has been a fundraiser for almost 30 years and is acknowledged as a leader in major gifts fundraising. He is presently the vice-president of external relations for SAIT Polytechnic, a leading institute of advanced technology in Calgary, Alberta.
