Nigel Harris & Associates

Insights

Subscribe to Insights

Subscribe to Nigel’s email list to receive insights directly to your inbox about all things fundraising and philanthropy. 

The Leadership Challenge in Fundraising

The changes and challenges of the past two years can seem relentless. At every level. And it appears there is more coming at us as 2022 unfolds.

And diving into just one corner of our community, we have seen challenges continue to build in the non-profit sector, in philanthropy, and in fundraising. In 2022, the demand for social services continues to grow, while funding, from various sources, is increasingly challenged – at the same time that costs continue to rise.

Arguably, philanthropy continues to be less understood than it should be where it matters most. And pressures continue to grow on fundraising returns, as while giving increases, household giving continues to decline.

All of this presents a leadership challenge for non-profit organisations. There is a strong case for understanding what has changed, what needs to change, and why. Particularly in the domain of philanthropy and fundraising practice.

This leads us to the question of the role of leadership in fundraising.

What is it? Where is it? And what could it be in the future?

So, as we look forward, let’s begin to answer these questions by looking back.

In 2013, the Australian Centre for Philanthropy and Non-Profit Studies released a report from a study of fundraising and leadership in Australian non-profit organisations. Who’s asking for what? Fundraising and leadership in Australian non-profits.

This study highlighted some positive themes along with some areas of concern in regard to the impact on fundraising effectiveness.

Significantly, it raised some important observations and questions around the intersection of organisational leadership, at both governance and executive level, and fundraising practice.

Being effective as well as efficient

A dominant organisational question raised by this report is, “why aren’t we more effective on our fundraising?” An additional question to be taken from this report could be, “what do we need to do to be more effective in fundraising?”

A key word in both of these questions is “effective.” One of the most significant challenges for non-profit organisational leadership is the discernment between being effective and efficient.

Fundraising conversations focus inordinately on efficiency. It is offered up as a defining metric and even a mark of virtue. However, simply being efficient, without attending to effectiveness, serves no useful purpose. Efficiency alone does little, especially in the pursuit of a long-term social purpose, and even more so where philanthropy plays a role in serving that purpose.

“What are you trying to accomplish, and why?” are fundamental leadership questions which are addressed by understanding how process serves purpose and not by simply focussing on the efficiency of the process at a single point of time.

How do we understand the process of fundraising?

Understanding the process, specifically fundraising practice in this case, was identified as a point of difference. The report identified that organisational leaders (board members and CEOs) had a different view to that of fundraisers as to the extent that fundraising is a profession. This fundamental difference is problematic at a functional, strategic, and cultural level and accordingly impacts effectiveness in serving purpose.

This is clearly a leadership challenge at both governance and executive level. Board members should clearly understand their responsibility to be familiar with all aspects of the organisation’s business. There is even less ambiguity for CEOs in this responsibility. So, if fundraising is part of the organisation’s business, then a robust examination is warranted.

Fundraising practitioners may well contribute to this challenge of forming a shared understanding and agreement when it comes to fundraising. Framing defendable and evidenced professional expertise beyond just doing a job remains a gap in the pursuit of fundraising practice. So, fundraisers shouldn’t complain too loudly while this remains the case, as we reap what we sow!

The report also identified disagreement as to whether there should be at least one Board member with fundraising experience. Organisational leaders leaned to this being less important. This is not a question that is addressed simply however it does open a bigger leadership question.

The importance of people and relationships

Further differences were identified when it came to the question of staff turnover and specifically the impact of Board leadership. The cited turnover average of 18 months is simply at odds to the requirements of a relationship-based function, which fundraising is. Not to mention retained knowledge, organisational experience, and cultural framing. This is also a leadership question.

It is worth noting that in the same year (2013) that this report was released, CompassPoint and the Haas Fund released a report examining challenges in fundraising in the USA. This report highlighted fundraising staff turnover at a similar level to that identified in Australia and a fundamental divide between leadership and fundraising practitioners.

The role of fundraising was another point of difference identified in the ACPNS report, as was donor satisfaction and communication, compensation, training, resources, and role expectations. These are fundamental questions that impede effectiveness – and efficiency.

The role of a Board member in fundraising

Board members also identified challenges in fundraising related to their role, asking, and time commitment, all key success factors in fundraising effectiveness.

Once again, fundraising practitioners have a larger role in filling this gap where it exists. And ultimately, the critical leadership role and influence lies with the CEO. A compelling finding in this report.

Communication, power, role ambiguity and turnover were all identified by fundraisers as issues of concern. And while there is no single point of response or responsibility, there is no avoiding this as a leadership question. Once again, a question that the CEO plays a leading role in addressing.

The report concludes with a challenge to Board members to do no more that ask fundraisers how they might help more. That would be a good start, however, in the serious service of mission, can more be done by leaders – board members, executives and fundraisers alike?

The report was released in 2013 – nine years ago. So, what has changed since then?

Not a lot it would seem.

In 2019, the Association of Fundraising Professionals (AFP) and the Chronicle of Philanthropy, in conjunction with the Harris Poll, examined the question of staff satisfaction turnover and other workplace issues in fundraising in the USA. The report considered many of the questions considered in the CompassPoint work six years earlier. Put simply, little had changed.

Also in 2019, Noble Ambition and Perpetual partnered to examine Boards and their role in fundraising. The report identified many of the challenges highlighted in 2013, and a case was again made for a change in leadership approach.

The case for change at a leadership level, governance and executive led, has been amplified over the last decade. But despite the increase in volume, are we actually hearing and heeding the call to action?

A case for a different leadership focus

With all that we see challenging non-profit organisations in 2022, the need for change in way leadership addresses philanthropic engagement and fundraising practice has become even more important – and urgent. Or perhaps it always has been?

Perhaps the bigger question for non-profit leadership is this.

What will you do to be more effective in leading and stewarding philanthropic engagement and fundraising practice to further the mission you serve?

Nigel Harris

Managing Director

Nigel Harris & Associates Pty Ltd

 

February 2022