READING, PA (July 9, 2021) – Consider for a moment two stories about Bobbi, who is a pretty astute businesswoman, or at least that’s her reputation.
At nine in the morning, Bobbi is meeting with the management team of the company she founded 20 years ago. Jane, the Chief Financial Officer, has just finished a presentation in which she recommended that the company invest $1 million in a joint venture with a supplier. Based on Jane’s analysis, the company’s investment would be almost assured of generating $2 million in net revenue by the end of the year. “Jane, this is brilliant work,” Bobbi says. “Maybe it’s only once in a lifetime that we get to generate a 100% Return on Investment. There’ll be a big bonus in this for you at the end.”
The meeting wraps up and Bobbi hustles across town to Humans for Humanity, her favorite charity. Today, she’s chairing a meeting of the planning committee and will see a presentation by Don, the new Director of Development.
As the meeting begins, Don says, “I’d like to lay out a new fundraising plan for the upcoming year. We need to build our donor base, so we’re undertaking an aggressive outreach strategy to acquire new donors.” Over the next 20 minutes, Don provides details regarding a campaign of direct mail, social media, and special events. The plan, it seems to Bobbi, is sound. ‘Don is impressive,’ she thinks to herself.
“To conclude,” Don says, “we’ll need to invest about $1 million in this strategy, but I project it will raise $2 million in contributions in the first year. I’m pretty confident about that.”
Bobbi chokes on her latte. “This is absolutely not acceptable,” she sputters. “The board has said that fundraising expenses cannot exceed 18% of contributions and that it would prefer those expenses to be less. There is no way Humans for Humanity can spend 50% of our contributions on fundraising. We need to put that money into programs.”
The questions that I’d really like to pose to Bobbi (and there are a million Bobbis serving on nonprofit boards) are these: What’s the difference between a 100% ROI and a 50% fundraising expense? Why is something that would thrill you at a for-profit enterprise something that would appall you at a nonprofit organization?
This “logic” is what keeps the nonprofit sector from achieving its potential. Note to Bobbi and all other nonprofit board members: Give Don the same consideration that you give Jane. Nonprofits deserve to make decisions regarding their fundraising that are similar to those that for-profits make regarding their investments.
Kevin K. Murphy, President
Berks County Community Foundation