Chase impact, not credit

Picture this. You're sitting in the boardroom of a major nonprofit organization, invited there by the Annual Giving team to help them brainstorm ideas to increase revenue.

The conversation goes something like this...

We're behind goal for the year and we need to make up $500,000 by the end of our fiscal year. What ideas do you have to help us close this gap?

After exhausting a number recommendations, you propose three more ideas that could significantly increase revenue for the organization:

1. Promote Donor Advised Fund giving, because we know that when donors give through their DAF, they tend to give gifts that are anywhere from 2X - 5X more than when they give from a cash account.
2. Promote giving of stocks and other assets, again because we know that when donors give appreciated assets, the value of those gifts tends to be significantly more than when those same donors make cash contributions.
3. Promote employer matching contributions, because a donor who gives you $100 and then gets their employer to match their gift with another $100 has effectively doubled their impact for you.

All three of these ideas are about maximizing impact and creating additional value for your organization. These three great (and strategically sound) ideas are met with the following response:

Those are good ideas, and we know they'd work. BUT...Our Finance department rules mandate that those types of gifts would all get credited to a different team. Since that doesn't help OUR team meet OUR goal this year, we don't want to spend the time or effort to do any of them.

What other ideas do you have?

This. Is. Pure. Insanity.

The blame for this flawed logic falls squarely at the feet of an organizations Executive leadership -- CEO, CFO, and CDO alike. Allowing silly budget allocation rules to dictate what fundraising activities your people do or don't undertake -- because you've set up a system of "credit" for activities that doesn't align incentives with desired behaviors is fully a leadership issue. It's not the fault of your fundraisers. They're just following the rules that were set by the organization's leadership.

In this particular case, given the size and value of this organization's donor base, these tactics could have delivered anywhere from $50,000 to $250,000 of additional revenue.

And yes. This is a real world example.

But because another team gets credit for these types of gifts, the overall organization and the millions of people they serve globally lost out.

You can overcome these kinds of mistakes by more effectively aligning your incentives with the behaviors you want more of. If you want your people to raise more money, and to do it in the most effective ways possible, stop handcuffing them with silly rules around credit.

This article is excerpted from my book, 101 Biggest Mistakes Nonprofits Make And How You Can Avoid Them .