The two previous articles examined the fund development audit as a best practice evaluation tool to help identify gaps, issues and challenges in the fund development program. While the fund development audit has value on its own in this area, it can often be used for input to larger, more comprehensive organizational improvement processes, leading to dialogue and action in many different directions.

Here we examine two:  (1) evaluating performance of the fund development office; and (2) examining inputs into setting strategic fund development priorities for the organization.

There are six critical categories that will likely be considered when evaluating the performance of a fund development office. The audit is both a strategy tool for performance enhancement in all six areas, and an ideal tool to monitor the extent to which best practice performance is being achieved.

Each of the six categories is important when monitoring your fund development program’s performance.

Meeting fundraising targets

Make no mistake about it. The effectiveness of a fundraising operation is ultimately measured by the number of dollars raised. Period. Other fund development metrics are important to a healthy, productive fund development operation, not the least of which is the number of solid relationships being nurtured and managed, but the critical measure remains dollars raised. And this shouldn’t surprise us as fund development professionals. After all, it is the funds raised that allow our organizations to deliver programs that support our mission and vision.

Enhancing organizational reputation

While raising dollars is ultimately important to the success of a fund development operation, it is the reputation of the organization that allows fund development to operate effectively in the marketplace. Perhaps the single greatest asset that a nonprofit organization owns is its reputation and goodwill in the marketplace. Without that secured, raising money becomes almost impossible.

An effective fund development office can contribute to the overall positive reputation of the organization (and vice versa), through professional delivery of key messages to stakeholders and the community at large.

Efficiency of the fund development program

Naturally, there is a cost to raise a dollar. Depending on the element of the fundraising program, the costs can vary from pennies on the dollar (major gift programs, donor renewal programs) to costs exceeding the revenues earned (acquisition programs). An integrated fund development program manages these varying costs to generate a balanced return on the organization’s investment.

An effective fund development office has a good sense of when programs are operating within accepted industry efficiencies, and when they are not. Ultimately, the goal is to return a maximum return on investment to the organization for the dollars invested in the fund development operation.

Extent to which best practices are deployed

Having a thorough understanding of industry best practices and how to deploy them will ultimately lead to a more efficient and effective operation, which will in turn allow you to raise more money. Reinventing practices and processes is inefficient and a misallocation of resources.  Knowing how to deploy best practices will keep your fund development program focused and productive.

Customer satisfaction

Maintaining high satisfaction ratings from our key stakeholders is important to the effective operation of a fund development program. Donors are the most obvious stakeholder group to satisfy, because we want them to remain donors.

But our board and other program units within our organization are important as well. A healthy, strong mandate from our board allows us to stay focused on the business of raising money. We want to make sure that the work we do complements the board’sstrategic direction and brings obvious resources to the delivery of services which address the mission.

Team satisfaction

The other key stakeholder group to keep satisfied is our internal fund development team. Constant turnover and staff change can have a huge negative effect on the momentum of a fund development program. Team dissatisfaction can affect donor relationships, program delivery, and our very ability to raise money.

The effort made to retain valuable team members can pay off greatly in continual productivity. An effective fund development office focuses attention on team satisfaction and allows its finite resources to be spent on maximizing value to the organization.

From audit to strategic support

When creating a fund development plan to support the organization’s strategic plan, there are a number of key inputs to consider. The fund development audit can complement program evaluation, fund development planning and training plans. The key inputs come from several key result areas.

SWOT analysis

This is a systematic identification of the Strengths, Weaknesses, Opportunities and Threats that face our fund development organization. Involving key stakeholders in the identification of these SWOT variables will be of great assistance in the creation of a plan. The fund development audit will be one of the most useful as a means to identify strategic priorities in the higher level strategic planning process.

Key informant interviews

Interviewing individuals from key stakeholder groups, including your executive director or president, key board members, key program personnel within your organization, donors and others, will provide key qualitative input into the issues facing your development program.

Performance management system

Every program has its weak links. A performance management system is your plan to address the weak performing links within your fund development program. A summary of the progress being made by your performance management system will be an important input into your strategic planning process.

Fund development audit

The fund development audit will be a key tool to identify the degree to which your operation is currently pursuing best practices.

Current fund development plan

A review of your current plan and the progress on the initiatives and priorities contained within it will be an important evolutionary input into your next plan.

Organizational plans and strategies

As with the current fund development plan, a review of other key organizational plans and strategies will be an important input into your next development plan. What organizational priorities have changed since the last time the development plan was updated? What new organizational priorities have been identified? How will the context of the organizational plan(s) affect the creation of the fund development plan?

Examples of the strategic priorities that might emerge from the audit process include:

• building a philanthropic culture in our organization; 
• relationship-based approaches; 
• collaboration – linking our silos towards improved integration of donor management; 
• building reputation – closer integration of fund development messaging with overall public relations and positioning efforts.

The fund development audit is a multi-use tool.  It can be one of several ways to monitor a fund development program, as well as one input in creating the priorities for 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.