Andy Davis From BoardSource Talks With Amy Eisenstein About Fundraising Effectiveness

From the AFP International Conference on Fundraising in New Orleans, Amy Eisenstein talks with Andy Davis from BoardSource about measuring fundraising effectiveness and talking with your volunteer leaders.

Video Transcript

Amy Eisenstein:  Hi. I'm Amy Eisenstein, and today I'm here with Andy Davis from BoardSource. He's the director of education, and I'm so excited we're going to be talking about fundraising effectiveness. Welcome, Andy.

Andy Davis: Thank you so much for having me.

Amy Eisenstein:  It's a pleasure. We're here to talk about measuring fundraising effectiveness, so what should we be measuring, and how can we make sure our fundraising is effective?

Andy Davis: Well, thanks for first of all having me here, and I really appreciate the question. Measuring fundraising effectiveness is an initiative that BoardSource has started with GuideStar, BBB Wise Giving as well as Charity Navigator to make sure that boards are thinking about their fundraising strategy in a holistic approach. It takes three categories, really, that we want boards to look at and be familiar with to make sure that they are understanding their fundraising strategy to be healthy and stable for the long term. Those are really looking at your cost of fundraising, which we hear about all the time in the news, how much it costs to raise a dollar.

Andy Davis: But we also really want to be thinking about your total fundraising net, so looking at how many of your assets it took to raise a certain amount of money, and finally, what we are calling the dependency quotient. So looking at your top five funders, and what would happen if they were to go away. We want to be looking at not only that cost of fundraising, but how sustainable your strategy is over the long term. We want to be looking at the broad fundraising strategy for an organization and making sure that it's sustainable and structured in such a way where the organization is going to be healthy for the long run.

Amy Eisenstein:                   Yeah. I never thought about taking away the top five donors. That seems to me a terrifying but realistic proposition that organizations would need to consider. What have you found, then? What should organizations do?

Andy Davis:                            Well, we want—because that cost of fundraising number is out in the public so much, we want to be able to tell funders, "Hey, this is how much of your dollar is going straight to programs." What we really want to be thinking about is, how are we investing those funds in the long-term to make sure that we've got funding in the future for the organization?

Andy Davis:                            For example, a direct mail campaign may take a lot of money initially, but there is long-term payoff. Boards need to really be thinking about their fundraising strategy, not just in what will look good in terms of how they can talk to donors, but also thinking about how are we investing in our future and our long-term mission?

Amy Eisenstein:                   So, I know that one of the factors that a lot of donors do look at is the cost to raise a dollar, and that's one of the things that you're talking about. But is that really where we want to focus donors' attention? My concern is that that's taking precedence over impact, and if you have one organization that has a low cost to raise a dollar, maybe five cents or 10 cents to raise a dollar, and another one that's significantly higher, but the second organization has much greater impact—I'd rather give to the second one. But that's not what we're talking about in conversations with donors or the media. How do we deal with that?

Andy Davis:                            What we should be thinking about in organizations, especially at the board level, we should be asking three really important questions; do we have enough money to serve our mission? Did we raise that money in an ethical and accountable way? And are we ensuring the organization's long term success?

Amy Eisenstein:                   Great.

Andy Davis:                            Yes. Everybody wants as much money as we possibly can to go towards those programs, but those programs don't happen unless we are funding talent and we are funding the organization for the long term.

Amy Eisenstein:                   Yeah, and I think that that's an important conversation for us as professionals in the field to have, to turn it away from the cost to raise a dollar, and more on what's the outcomes and impact. Because I think it does lead to so much penny pinching, and organizations aren't as effective as they could be, because they're working so hard to keep their fundraising costs down.

Andy Davis:                            Right, so a big part of our measuring fundraising effectiveness campaign is really about teaching boards and senior leaders how to communicate exactly what you just said. To be able to tell people, "It's not about just the cost of fundraising. It is about how we are investing in this organization to make sure that we can have an impact for generations. So, there may be some upfront cost because we are having to invest to make sure we are able to provide those resources and services over the long run."

Amy Eisenstein:                   All right, so what's the board's role in communicating the fundraising strategy and talking about the measuring effectiveness?

Andy Davis:                            Well, I think it goes back to the same conversation you and I have been having; not falling into that trap of just talking about how much of a dollar goes directly to programs. We want to be talking about the organization's overall success. When you're talking to a donor or a funder, we don't want to send the message that we are so concerned that all of this money is going to one direct place. We want to be sending the message that this organization is going to be healthy for a long time, and able to serve its mission in a responsible manner.

Andy Davis:                            So, when we look beyond that, what we want our board to really be thinking about is just talking about having a wise investment strategy, and maybe even having a space on their website that says, "This is what we do with the money that we raise, and this is how our operations fund that mission," and not necessarily talking about, for instance, this is how much of your dollar will go to saving this or creating that. But this is how our organization is fulfilling its mission.

Amy Eisenstein:                   Yeah, and I think if all board members start to talk about it in those terms, because I've been in plenty of board rooms where they are very concerned about the cost to raise a dollar, and I think it's our responsibility to help them change the conversation so that we're not focused on that; we're focused on impact and outcomes.

Andy Davis:                            That's right, and I think development professionals really do get that. It's harder for those volunteer board members in a lot of respects, who are concerned about where their donation dollars are going. So, we need to be having these higher level conversations with our boards or directors to make sure that when they're out in the public, they're speaking about our organizations and our missions in a responsible manner.

Amy Eisenstein:                   Yeah, fantastic. Any final thoughts you'd like to leave our viewers with?

Andy Davis:                            No, I just ... Thank you so much for having me. Really excited about being here at AFP conference, and looking forward to a great week.

Amy Eisenstein:                   Terrific. Thank you so much for joining me.

Andy Davis:                            All right, thank you.

Amy Eisenstein:                   Thanks so much for joining me. For even more videos, interviews, tools, and resources, I hope you'll visit my website, AmyEisenstein.com, and subscribe to my weekly newsletter.

For even more interviews, tools, and resources, I hope you’ll visit my website www.amyeisenstein.com.