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Lack of philanthropic culture in nonprofits hindering income growth, finds study

Lack of philanthropic culture in nonprofits hindering income growth, finds study

While most fundraisers believe their nonprofit is donor-centric, less than half say philanthropy is embedded at the core of their organisation, with this lack of philanthropic culture hindering income growth, according to research released today.

The report, Development Plans and Fundraising Performance, from the Institute for Sustainable Philanthropy, examines how planning is undertaken in the fundraising sector and its impact on income. It presents data from a study of 325 fundraisers globally to demonstrate the importance of fundraising planning and provide statistical evidence to show that strategic planning drives higher income growth, donor retention and fundraiser confidence.

During its study, the Institute for Sustainable Philanthropy found that while the many organisations do have fundraising plans in place and recognise the need for strategic planning, many lack philanthropic culture and engagement from the board.

In fact, while 84% of the fundraisers questioned say they believe their nonprofit is donor-centric in that it is organised around donor need, fewer than half (48%) feel that philanthropy is embedded at the core of their organisation. Just 40% of respondents believe that colleagues outside of the fundraising team could clearly articulate the case for support.

Dr Adrian Sargeant, Co-Director of the Institute for Sustainable Philanthropy and report author said:

“Failure to plan is effectively planning to fail – it’s crucial that charities of all sizes engage in rigorous planning with the involvement of fundraisers, senior management and the board. But our research also proves a clear link between philanthropic culture and fundraising success – those nonprofits whose boards value and respect the work of fundraising teams and support them and their planning process have better fundraising performance. I urge any organisation that wants to markedly increase its fundraising income to make developing its philanthropic culture an absolute priority.”

The report finds too that while the vast majority (95%) of fundraisers believe planning to be an immensely valuable process, just over a quarter of fundraisers (28%) say their organisation lacks a formal planning document. Larger organisations (those with a turnover above $1m) are more likely (78%) to have a written plan compared to smaller nonprofits (63%).

In addition, the report argues, fundraising plans have greater levels of success in terms of revenue growth, donor retention and fundraiser confidence when the board is involved in their design. In most cases, the senior management team (75%) is involved in fundraising planning, but fewer than half of respondents (45%) report involvement at board level.

And, while the research shows that the board has a crucial role in the development of philanthropic culture, it also reveals that only 57% of fundraisers feel that their Board is supportive of them, while a fifth of fundraisers do not believe their organisation views them as professionals. However, it finds, professional recognition of fundraisers is higher in those organisations that formalise fundraising planning.

Barbara O’Reilly, Senior Fundraising Consultant at Windmill Hill Consulting and report sponsor commented:

“We’ve long believed that having a development plan is an important factor to fundraising success. This study concludes that very correlation among a wider sampling of charities around the world. A development plan serves as a time-tested roadmap for charities to navigate through uncertain times like what we’re experiencing this year. But, possibly more importantly, by involving other stakeholders like senior management and boards with the fundraisers in creating a data-informed plan, it can lead to a broader philanthropic culture which understands that fundraising isn’t transactional. Both benefits are essential to a charity’s sustainability and thrivability, especially now.”

Sarah TeDesco, Executive Vice President at Donor Search and report sponsor added:

“In a constantly changing environment, innovation is key to the success of so many organisations. While planning is hugely important, so is embracing innovative techniques such as models and technology to enhance the current donor experience. While more than half of respondents acknowledge a lack of innovation when it came to their objectives and fundraising goals, with the publication of this report, I hope it might inspire change to do things better and differently.”

Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via www.thepurplepim.com.

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