How to Spend More, Smartly, on Development

In my last post, I showed you how to use a smart management tool to get a handle on your budget and figure out how much your organization should be spending on development.

If you tried it out, I'd bet you a box of off-brand ball point pens that it told you that you're underinvesting.

What?!? Are you suggesting that I increase my overhead? Maybe.

(On a related note, I saw Dan Palotta speak last week and I'm currently reading his book Uncharitable: How Restraints on Nonprofits Undermine Their Potential. I'm enjoying it so far, and I'll let you know my thoughts when I'm through it.)

Right-sizing your development budget doesn't necessarily mean hiring more permanent full- or part-time development staff. Below are a few suggestions of how you might increase your investment without adding fixed costs.

1. Contract a grant writer.

This will help to ensure that your grant proposals are professionally prepared, and it will allow the development director to spend more time building relationships with individual donors. Strong, sustainable support is built with the development director out meeting people, not behind their desk. Contract grant writers are specialists, and because they are independent contractors often serving multiple clients, you can quickly and easily end their contract with minimal hard feelings and drama.

2. Do more to steward existing donors.

Too many nonprofits skimp on stewarding their existing donors. I'm not suggesting that you throw extravagant parties or buy expensive thank-you gifts (not to mention the tax implications of doing so). Instead, invest smartly in regular communications, personal expressions of gratitude, and increased engagement. These activities, if well executed, lead to retention and increased contributions from your existing donor base.

3. Purchase a mailing list.

There are varying opinions about this, but I've come around to believing that, if your organization makes a particularly strong case to an identifiable group, purchasing a mailing list could be a wise investment. The ability to target specific demographics is pretty astounding -- filters include income, age, gender, highly targeted addresses, whether there are kids in the family, and more. As long as you have something specific to put in their hands -- a newsletter, a neighborhood-based communication, an event invitation, etc. -- that doesn't start with a solicitation, you can feel relatively confident that you won't field too many angry phone calls.

To find a list to purchase, talk with the mail house you typically use for bulk mail, or you can work with any number of online services like DirectMail.com. I advise committing in advance to a cultivation strategy for the list, and to drop any that don't convert to active donors by the end of the plan.

4. Conduct prospect research.

Again, with a smart strategy to guide you, this can be a wise investment. You could very well have major donors sleeping in your database, or be able to identify new donor prospects who support similar causes. This also can be especially helpful in identifying the current donors who have the capacity for planned (estate) gifts. You can even conduct prospect research for local and national grant opportunities. To find a qualified prospect researcher, I would suggest asking colleagues in the local fundraising network, such as AFP, or you could use a service like WealthEngine.com.

Final Thoughts

Don't get me wrong -- adding development staff is often part of the solution. Rounding out the team of people dedicated (full- or part-time) to raising friends and funds for your organization can be a wise move when the time is right. But it also comes with a sense of permanency because staff is a fixed cost.So before you post that ad for new staff, first consider these strategies of right-sizing your development investment.

Question: What strategies have you employed to enhance your fundraising capacity that don't involve adding more staff?