How Helpful is Teaching Nonprofits How to Fish? | Beth’s Blog

How Helpful is Teaching Nonprofits How to Fish?

Training Design

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Note from Beth: I was thrilled that Paul Connolly agreed to write a  guest post sharing some of the  public learning taking place through the OE Goldmine Project on the Packard Foundation OE Wiki.  As a technology trainer,  capacity builder, and consultant working with nonprofits,  I always ask the fishing question, especially since I work in the area of emerging technologies that often falls prey to Shiny Object Syndrome — (Google + anyone?).     What lies beneath a request for technology capacity or skill building or the rush to adopt the newest social or mobile tool?     Are there other more pressing organizational issues that should be addressed first such as poor program quality or lack of a overall communications strategy or leadership issues.  Should a nonprofit hold off on spending time exploring new technologies and do the organizational work first?      As someone who works with nonprofits to build capacity in technology,  one always hopes for transformational versus transactional results.    Paul’s post unpacks some of the findings from the evaluation, but also raises some important questions about doing transformational capacity building.  What you think?

How Helpful is Teaching Nonprofits How to Fish?  Guest post by Paul Connolly

When thinking about fundraising, many nonprofits and funders believe in the old adage, “Give a person a fish, and you feed him for a day; teach a person to fish, and you feed him for a lifetime.”  Most nonprofits implore: “Just fund a development director position for us, and it will pay for itself in a year, enabling us not just to survive but to thrive.”  Fundraising advisors encourage this support too.  At the Council on Foundations annual conference in April, Dan Pallotta, author of Uncharitable: How Restraints on Nonprofits Undermine Their Potential, proclaimed, “We should be capitalizing on the multiplication potential by funding the fundraising operations that can fund the programs.”  He contended that investment—whether it’s in a major gift campaign, a planned giving or special event program, or the expansion of development staff—consistently generates a positive return.

The case for fortifying nonprofits’ fundraising capability seems like a no-brainer.  But is it?  According to a new study that TCC Group is conducting of the Packard Foundation’s support for nonprofit capacity-building activities, the answer is no.  Since 1997, the Packard Foundation has awarded 1,392 “organizational effectiveness” grants to an array of groups, most of which have annual operating budgets of $1 to $10 million, and operate in the human services, environmental conservation, population, and arts fields.  Packard recently surveyed 274 of these grantees from 2007-2009 (grant amounts ranged between $7,000 and $160,000) and analyzed the responses from 169 (a 62% response rate) to ascertain the outcomes. (To see and comment on the comprehensive set of results, visit the foundation’s wiki.)  One finding really jumped out at us:  Grantees that concentrated on improving fund development capacity reported inferior longer-term outcomes compared to those that focused on strategic planning, organizational learning, or leadership succession.  They were not as likely to have met their grant objectives and described lower levels of sustainability of their grant results, as well as less impact on program services.   Essentially, the work was more transactional than transformational.

This evidence is consistent with other research on nonprofit organizational performance that TCC Group has conducted over the past few years.  When we analyzed the results of almost 700 nonprofits nationwide that had taken the Core Capacity Assessment Tool survey, and then, through regression analysis, identified the key drivers for those that scored highest on financial sustainability, we determined that fundraising capacity was indeed a substantial factor—but predominantly when combined with robust internal leadership and programmatic learning (see “The Sustainability Formula” report).  Likewise, our study last year of 263 nonprofits in Los Angeles County for the Weingart Foundation (see “Fortifying L.A.’s Nonprofit Organizations”) found that fund-development capacity-building tended to lead more to individual knowledge and motivation, while organizational assessment, strategic planning, and board leadership development were more likely to result in institutional change.  Fundraising capacity is essential—even a nonprofit with the highest impact programs will not last without it—yet it needs to happen in conjunction with solid leadership and organizational learning.

Although fund development assistance can be beneficial in certain circumstances, it is not a panacea. Oftentimes, fundraising difficulties are a symptom of a deeper underlying problem—such as poor program quality or a checked-out board—that must be addressed beforehand.  A nonprofit can conduct an organizational assessment at the outset so that it can become more self-aware and better understand its organizational development needs and priorities and its readiness to undertake change.

Fundraising support also has to go beyond plans and translate to concrete action.  In the Packard survey and other recent research, TCC discovered that the biggest challenge that nonprofits face with capacity building is implementing the often first-rate strategies that are devised.  In other words, too much support for nonprofit organizational development is geared for “ready, set,” and not enough for “go.”  A fundraising consultant, for instance, may provide top-notch training and an excellent development plan to a nonprofit, but the board and staff leaders might not be engaged or equipped enough to effectively execute it.  TCC has learned that the foremost implementation assistance is ongoing action-oriented learning, peer exchange, coaching, real-time tools, and hands-on support to act on wise counsel and get the good work done.

So, how can a nonprofit achieve a high yield through support for fundraising capacity?  Sufficient program quality and leadership are prerequisites — if they are lacking, they should be enhanced first. An investment made in fundraising capacity will likely have a greater impact if it goes beyond just building technical skills and management abilities, and is holistically integrated with organization-wide activities related to learning, adapting, developing leadership, and decision-making.  In a vacuum, it can be marginal.  The best work is embraced by a reflective board and staff leaders alike, and is embedded in the organization’s culture and business model.

The Packard Foundation and TCC Group are still in the midst of making meaning from the data through an open “learning in public” process, so please share your comments here or via the wiki and contribute to the collective intelligence.  Do you disagree with any of our interpretations?  What has been your experience with the efficacy of building nonprofit fundraising capability?

Paul Connolly

Paul Connolly is a senior partner and chief client services officer at TCC Group, a national management consulting firm that provides planning, evaluation, and capacity-building services to funders, nonprofits, and corporate citizenship programs. His areas of expertise are philanthropic effectiveness, strategic planning, organizational capacity building, evaluation, and social enterprise.  He can be reached at pconnolly@tccgrp.com

23 Responses

  1. I would be very interested in learning whether any of the investment in fund development capacity studied was at a sufficient level to make a significant difference in the organization. For example, were there any organizations that were funding to put say, 4 or 5 development staff in place at one time? Or were all of the investments smaller scale, say one development director, or a fund development assessment or plan?

    And for many of us in fund development, our experience matches many of your conclusions. A strong technical program can’t make up for lack of vision, poor or apathetic leadership, strong outcomes orientation and great programs, and a long term strategy for the future.

  2. This is a very interesting set of findings and I am not surprised at all. I work mostly with small nonprofits. Rather than government funding they frequently depend on a few foundations with strong ties, bequests, a small number of big donors and a large array of smaller donors.

    The “big” sources of money are interested in the quality of your programs and how you are making them better all the time. They are interested in your future plans, the depth of your staff, the happiness of your staff, etc. Yes, they actually are interested in these hands on signs of how well their money will be used.

    They are not interested in having the new development officer take them to lunch and deftly ask them for money.

    These are important findings – I hope they get a lot of notice.

    Marion

  3. Katie Graf says:

    Marion Conway -
    I was right with you on your comments: yes, that is exactly the donor mix for smaller nonprofits. Yes, that is exactly what the majority of our funders want to fund – programming and programmatic capacity building.

    But I heaved a deep sigh on the next point – about “not having a new development officer take them to lunch and deftly ask them for money.” I guess I found it disappointing for two reasons:

    1. As one of those development officers, I get that vibe from people all of the time: that we are slicksters out wining and dining folks out of their money. Rather than people who are linking people with a passion for our mission to the organization that carries it out. We are hardworking people who take seriously our responsibility to people who entrust us with their gifts. I feel better having vented…thank you.

    2. I’m not sure how it became distasteful to invest in an organization’s ability to raise money. I don’t think the purpose of the article is to say that giving to build development isn’t good, but rather that it should be done in concert with other organizational development – board, program, etc… In fact, my takeaway wasn’t that it isn’t effective to give for fund development, but that it should be part of a larger initiative for organizational capacity building. I think that makes perfect sense.

    Obviously I have a bit of a chip on my shoulder about the perception of people doing fundraising but it is disheartening to have people want to see growth and expansion, but looking at distaste at the people who go out and connect people and resources to that goal.

  4. Hi Katie,

    I apologize for my flip remark. I do agree that it is the job of a development officer to connect people with a passion for your mission to your organization.

    It is a frustration that so many people think that adding development resources is the silver bullet for increased funding. It was refreshing to see the results of this study cite another route for capacity building.

    Marion

  5. Katie Graf says:

    Marion -
    Reading back I see I must have been feeling pretty touchy yesterday :) And I agree absolutely – it is refreshing to see a route with that bigger picture. Thanks -
    Katie

  6. David Eads says:

    This is useful work. It helps us understand that funding and effective capacity are not the same thing. This is why the “teach a person to fish” metaphor is mis-deployed in this case. Fishing, for nonprofits, is their mission — funding may allow the fisher to buy her rods and fishing wire and boat but that’s no guarantee she’ll haul in the biggest damn trout they ever saw there in Winooski county.

    I can’t say I agree that “fundraising capacity is essential—even a nonprofit with the highest impact programs will not last without it.” FreeGeek Chicago, my organization, has managed without it for six years and counting. Last summer we published a statement interrogating grant and foundation funding (http://codex.freegeekchicago.org/wiki/Community/FundingStatement). Since then, we’ve actually had to turn down a group of interns from a major municipal/foundation partnership because of the strings attached.

    But I also feel the force of this statement. As our impact has increased, so has the amount of waste we must recycle (which costs $$$) — our long term sustainability is decreasing as we get better at what we do, even as we can responsibly monetize more our waste stream. So we do need ways to offset our recycling costs, and we may not last if can’t.

    Instead of spending too much time chasing funding, our short term strategy focuses on grassroots fundraising: fundraise like NPR does and ask the privileged to basically pay a tax they should already be paying). Our long term strategy is political: Push, goad, and work with the city of Chicago to provide capital incentives that make ethical electronic waste refurbishing and recycling easier, more cost-effective, and more competitive for both non-profit community groups and for-profit companies.

    Also, “We should be capitalizing on the multiplication potential by funding the fundraising operations that can fund the programs”?!?! Dan Palotta is out of his goddamned mind (and in need of a better editor).

  7. Maayan Simon says:

    I read this, along with the post a while back that touched on the Packard study, with interest as a consultant. It gives me ideas about how I can structure my services to better support my clients for their success. (And offers validation/encouragement.) Thanks!

  8. That is some serious, succinct, high quality stuff from Paul C (as usual). With admitted SVP lens, I couldn’t agree more – it’s about sustained commitment to a non-profit’s capacity over the long-term, not one-off’s. It’s the holistic and sustained approach to CB that can truly help transform an institution

  9. Geri Stengel says:

    Strong board leadership is critical to a nonprofit’s success. It doesn’t matter how much money you raise if no one is planning how best to use the money and ensuring that the programs are worth continuing. Good boards do fundraise but [they do much more including planning, responding to crisis, and passionately advocating for the organization.

  10. Event360 says:

    I think you make a solid point – a creative development director who has innovative ideas is essential to finding new ways to fundraise, but strong organizational leadership needs to be in place in order to test those ideas and put them into action.

  11. Daniel Ben-Horin says:

    A related, interested discussion–with more rancor!–is on SSIR blog here http://www.ssireview.org/opinion/entry/everything_old_is_new_again_and_nonprofits_should_stay_that_way/

    The title of that SSIR stream is a bit misleading. It is a discussion of private sector skills/talent/mindset in the npo space.

  12. Diane says:

    I know this blog is accurate. I do fundraising for a nonprofit and certainly see that additional funding to support our “fundraising” would really help. However I am also studying Whole System Design and I see that no number of staff can make a dent on our needs if the programming and organizational systems are not as strong as they need to be. Our ability to fund raise depends on leadership, Board leadership and strong programming. The idea that we can throw money at fundraising and believe all of our issues will be solved is a very mechanistic solution to a complex problem.

  13. I found this article so informative! More time should be spent on leadership in my non-profit! Thank you for opening my eyes. But I do have a question. Do you think that the core group, or board of directors in the non-profit, should employ tactics to increase their leadership perception within their organization and outside of it?

    I explain myself better in our blog post. Check it out, it would be really helpful if you could answer this question because I’ve been on the fence about it.

    http://theblogforchange.org/2011/07/learning-manipulation-to-increase-power/

  14. I’m glad that the cottage industry of reports critiquing capacity building in the nonprofit sector is keeping all of those consultants at work in this tough economy.

    But don’t we have enough data to see that there is a pattern here?

    Paul challenges the myth of fundraising as a key lever.

    Beth has seen the “shiny objects syndrome” in organizations as they rush to address technology gaps.

    As a funder, I have front-row seats to a parade of nonprofit and foundation hopes pinned to capacity building interventions focused on one dimension or component of organizational capacity.

    “It’s evaluation and outcomes!” cries one.

    “It’s financial analysis and capacity!” offers another.

    “It’s yoga and aromatherapy!” cries another.

    And so on.

    We seem to forget that the best organizational consultants, car mechanics, psychologists, doctors, home repair experts help us go beyond our simple assessments and biases when exploring problems in complex systems.

    I’ll wager that Beth, for example, can size up an organization’s deeper and more pressing issues within 5 minutes.

    I really like Beth’s idea of asking ourselves:

    “Is this transactional or is this transformational?”

  15. As a novice in the non-profit world I can really appreciate this blog post. I’m currently working with a great and very knowledgeable group of people and we are definitely in the states of “set” in the “ready, set, go” analogy. This info definitely gave some food for thought on the foundation of the leadership team and the overall capabilities.

  16. Nelson Layag says:

    I think the case to be made is that fundraising capacity building cannot stand on its own. Finance/Fundraising/Progra​m Strategy need to be fully intertwined (at least in the question of what would an organization can best leverage) – capacity building (even fundraising focused capacity building) can yield higher returns. Also, we might look at different models that are yielding higher returns – possibly GIFT’s/CP’s Fundraising Academy for Communites of Color. Thanks Paul and Beth. Good food for thought.

  17. Kevin Monroe says:

    I read this article (and any thing else from TCC) and all of the responses with great interest. The thought that stuck me is there one additional distinction I’d offer that I think falls in line with the article.

    It’s one thing to give someone a fish, another thing to teach someone to fish; and it’s altogether different to teach someone how to run a successful commercial fishing venture.

    That’s what I read as the real end goal related to creating sustainability strategic fund development capacity. This is an enterprise effort requiring a holistic approach that threads through all aspects of the organization and creates a united effort. Fundraising is too often an isolated activity (transactional); whereas sustainable fund development requires all hands on deck and everyone playing their part (transformational). Thanks for the stimulating dialogue.

  18. Years of involvement with both for-profit sales and not-for profit fundraising have taught me one essential truth that applies to both of them, that I believe speaks to the subject of this article:

    The best promotional (sales or fundraising) function in the world is useless without a solid product to promote. You need both.

    Nadine

  19. Kevin, I love how you extended the metaphor to “teach someone how to run a successful commercial fishing venture”! Accepted as a very friendly amendment…

  20. Beth says:

    Kevin and Paul – I love that metaphor too – because it implies taking a networked or systems approach!!

  21. Kevin Monroe says:

    Paul,

    Glad you accepted “teach someone how to run a successful commercial fishing venture” as a “very friendly amendment” because that was the spirit with which it was offered.

  22. Mazarine says:

    I also wrote a post in response to these findings, because I thought it was important to not just focus on fundraising, but leadership in general. http://www.wildwomanfundraising.com/foundations-fund-development-staff-waste/

    Katie, as a long time fundraising professional, I agree, it’s difficult to get program people to see how we are fulfilling the mission too. It’s not about being slick, it’s about getting everyone on board to make sure our nonprofit actually moves the needle on the problem. that means staff and volunteers too, not just wealthy donors.

    And staff ignore this at their peril. Kevin, I think your point about running a commercial fishing venture is well made. It’s not just enough to get more fundraisers. It’s making sure your nonprofit is well-run enough to get them to stay. Which means, again, investing in the long term leadership of the organization. And board leadership, not just executive director leadership.

    After working in nonprofits for a long time, I have seen more harm done by boards that were not watching the executive director/ceo than by any fundraising staff.

    I would amend this proclamation to: FUNDRAISING TRAINING FOR EVERYBODY! and make sure everyone got it. And then add: Give the fundraisers more power to address power dynamics in the agency, because often this is what makes people leave, when they are asked to do too much, and have to end up doing it all badly.

    I wrote a post about that today. http://www.wildwomanfundraising.com/super-job/

    Maybe the answer is more complex, and should be tailored for each organization, instead of creating a new rule that’s supposed to stretch to fit everyone.

    Peace,

    Mazarine

  23. Beth says:

    Mazarine: Thanks for your response, been out on vacation – went fishing!