Published on March 1, 2016 by

How the poverty mentality is killing your fundraising

people-845710_1280

 

I believe the poverty mentality of non-profits is one of the biggest killers of fundraising success.

It makes it impossible to succeed in fundraising because the overarching goal of the organisation becomes:

How can we spend as little as possible?

Instead of:

What do we have to do to achieve our mission?

Below are three major warning signs of the poverty mentality.

If your non-profit exhibits this kind of behaviour, I strongly suggest some mindsets need to change.

You urgently need a shift from a poverty mentality to a stewardship mentality.

You may be familiar with the parable of the talents in the Bible. The manager who kept his master’s money safe was NOT rewarded. The one who made the most he could from his master’s money WAS.

The 3 signs of a poverty mentality

1. You think you should get goods and services for free or at a vastly reduced discount because you’re a charity. You believe any vendor that refuses to do this is evil and doesn’t care about helping others.

Whether it’s copywriting, design, printing, phones, database, website… you don’t think you should have to pay full price for anything simply because you’re a charity.

A variation on this is saying to a vendor, “If you do this for half the fee, it could lead to more work later on.”

Your non-profit may get away with this attitude for a while. But eventually the best suppliers move onto other organisations that treat them better. Worse, they also warn other vendors that you’re cheap. So you end up working with middle-of-the-road or low-end vendors who may well be costing you tens or hundreds of thousands of dollars.

Over the years, I notice the most successful non-profits are the ones that pay for quality goods and services. They may want to see good value – but they don’t expect to get an ongoing series of free lunches.

Remember that you get what you pay for – or don’t pay for.

2. You spend more time looking for ways to cut costs than on expanding your work.

I’ve seen non-profits in financial dire straits that cause them to scramble to cut down on every single possible expense they can. That includes support staff which means the burden of administration, budgets, and even marketing and fundraising, is “shared” (read: dumped) on people unqualified for those tasks.

Usually this desperation has resulted from an unexpected large expense. Or over-reliance on funding that has been withdrawn (from the government or a single large donor).

Charities like this have lost sight of their mission. The staff are so stressed trying to cope with extra duties and meet reduced budgets that they can’t focus on the problems they should be solving. Instead of asking:

“How can we serve our people/ the cause better?

“How can we reach more people/ what programs are the most effective?

“What is the best strategy for the future to fulfil our mission?

The questions then become:

“How can we survive until the next budget?

“Can we do this job with one and a half people instead of four?

“Can we get someone to do this for free/ install a free system?

I am not saying that non-profits shouldn’t try to be efficient with their costs. They should. But they should spend more time looking at how best to fulfil their mission.

3. You’re constantly trying to purchase expertise, systems or software based on the lowest possible price rather than properly evaluating what you really need and working out a way to fund it.

I see this constantly with non-profits. In terms of fundraising, this “let’s just do it cheap” mindset most often affects three areas:

Donor database – do you want the free version that will do for now? Or invest in a system that will allow you to record meaningful donor data, mine and segment your list, produce reports that help you make decisions, and analyse trends?

And what about proper integration with your website so donations are automatically recorded and processed so your admin staff don’t have to do them manually? Not to mention better management of events…

Website – do you want the free version or to pay a uni student $1000 to do your website?

Or do you want to properly identify the needs of your website users and build a website that gives you the flexibility to produce the types of appeal and campaign pages you want rather than being stuck with a couple of templates? To enable you to do online testing and tracking of donor behaviour online?

Donor care and service – do you employ admin assistants who can answer the phone and process the donations as part of a myriad of other responsibilities they have?

Or do you employ donor care officers who can answer phones, engage with donors, thank donors for their generosity while processing donations, spot opportunities to upgrade them and handle complaints in a way that makes the donor feel their feedback was valued?

One final warning…

If you’re trying to develop a stewardship mentality, sometimes you get an imposter.

That is, you get a poverty mentality masquerading as a stewardship mentality. It looks like this:

“We can’t spend the money on {Insert Proposed Expenditure That Should Improve Your Bottom Line} because that would be bad stewardship of our resources.”

I see this, or variations of it, especially in relation to fundraising costs (although it affects other areas besides fundraising too).

If a fundraising investment means you can raise more funds more effectively so you can serve more beneficiaries, that is good stewardship.

Leave a Comment