Sales vs. Development

Some say development is to the nonprofit sector what sales is to the private sector. We say, “not really.” There are similarities, and distinct differences. Development (aka fundraising) is not just about revenue: it is about building philanthropic relationships. Yes – nonprofits are dependent on the funds raised through philanthropic relationships, but the focus of the work cannot be “get the money.” The focus is the relationship between donors and the nonprofit.

Sometimes this can be confusing, especially for executive directors – and board members – who want to know “where’s the money?” First, let us set the stage: you can’t simply hire someone and expect them to raise money for you. They can raise money with the CEO and board members, but the development professional who comes with a magic-wand-rolodex is a unicorn. These individuals are very rare and are traditionally found in political fundraising and not within the nonprofit sector. 

So what’s a nonprofit to do? Here are some things that distinguish fundraising from sales. Understanding the difference can help position your nonprofit for fundraising success. Let’s start with this cornerstone concept: Fundraising is not a transaction – it is about building long-term relationships. And it includes the work of building the leadership, capacity, and infrastructure a nonprofit needs to successfully ask individuals or institutions for financial support. 

You can’t measure development performance by counting dollars raised. Someone can make a one-time gift that exceeds your organization’s annual budget. But that’s not a fundraising success. That is good fortune. That gift could be a bequest that is the result of an individual’s engagement with your nonprofit decades ago. Or it could be the result of a “search” by a major philanthropist who wants to invest in organizations such as yours. In both cases there is “money in the door” but this is not necessarily the result of your staff’s work. 

Setting “quotas” or “goals” that are not tied to the number and giving-capacity of your current and prospective donors is just pulling numbers out of the air. The same with creating goals by deciding “let’s go for 20% above last year.” That doesn’t work. You have to account for donor attrition (those who make a gift one year but not the next), and you have to have a pool of prospective donors who have the financial capacity to give that additional 20%. 

A nonprofit fundraiser may spend a lot of time identifying potential donors and finding out who is the right person to ask them for a gift. Or they may spend time keeping current donors up to date so that when a board member asks for their annual gift the donor is poised to give. Nonprofit fundraisers solicit gifts, but they do so much more. Importantly they build teams of volunteers who can ask their peers to give. They equip them with the information they need. They create a positive “buzz” around your nonprofit that encourages giving. None of this is measured using the metric, “how much did you personally raise?” 

Copyright 2021 – Mel and Pearl Shaw of Saad&Shaw – Comprehensive Fund Development Services. Let us help you plan for 2021 Video and phone conferencing services are always available. Call us at (901) 522-8727. www.saadandshaw.com.