Common Fundraising Pitfalls with Patton McDowell

Big Fundraising Ideas for All Nonprofits

4 Tips for Efficient and Effective Fundraising with Patton McDowell

Big Fundraising Ideas for All Nonprofits

4 Tips for Efficient and Effective Fundraising with Patton McDowell

by goldenburggroup

Small and medium-sized nonprofits face unique fundraising challenges and all too often overcompensate in ways that can cause lasting damage. Today’s guest, Patton McDowell, is not only a nonprofit podcast sensation himself, but a fundraising expert. Patton shares 4 simple tips to accomplish efficient and effective fundraising: adopt an achievable fundraising strategy, use positive messaging,  properly engage your board and executive director, and keep your development staff happy. Listen in for details on how you and your nonprofit can achieve each of these and improve your fundraising outcome!

Listen to the Episode Here!

Links

Website: PRM Consulting

Patton’s LinkedIn

The Book: Deep Work by Cal Newort

Timestamps

(2:42) Fundraising pitfalls for small and medium-sized nonprofits

(5:09) The 20-10-5 fundraising strategy 

(5:57) The mission-vision-action messaging formula

(12:58) How to engage your Board in fundraising

(16:37) How to keep your fundraising staff happy and productive

Transcript

Dolph Goldenburg (00:00):

Welcome to the Successful Nonprofits® Podcast. I’m your host, Dolph Goldenburg. There are a lot of suggestions out there for how you can bring in more fundraising dollars. It might be enhance your development team. It could be update your strategic or your fundraising plans. But for many small and medium-sized nonprofits, they scratch their heads and say, “That just seems like a pipe dream.” With limited funds, limited staff, and limited time, many small and medium-sized nonprofits feel like they don’t even have the resources to implement one or two fundraising best practices, much less whatever “enhancing the development team” may look like or go beyond and do some of the other suggestions that are out there. And so today we are going to discuss how small and medium-sized nonprofits can build their fundraising infrastructure. Joining me is Patton McDowell, founder, and president of PMA Consulting, which helps nonprofits with strategic planning, fundraising, and talent development.

Dolph Goldenburg (01:07):

Patton has decades of hands on experience. He started his career with the Special Olympics and led fundraising teams at two universities. And of course he also started his own consulting firm, which we’ve already mentioned, PMA Consulting. And at that firm, he has worked with over 225 nonprofits, which probably makes him one of the most prolific and successful fundraising consultants in the nation today. In addition to all of that, Patton also hosts his very own podcast, Your Path to Nonprofit Leadership. I should mention that this is a very special reverse episode of the podcast. This is the first time I’ve actually done a reverse episode. I’ve been wanting to for years and Patton was game to do it. So we’re going to publish this on our feed and Patton is going to put it out on his own podcast feed as well. Just to let you all know, Listeners, we’re doing a reverse one with Patton as well. So we’re going to do the same thing where one of Patton’s episodes is going to be on this feed. If this is your first time hearing the Successful Nonprofits® Podcast either because you just found it or because you listen to Patton’s podcast, Your Path Nonprofit Leadership, welcome. I’m glad you’re here. So join me in welcoming Patton to the Successful Nonprofits® Podcast. Hey Patton, welcome. We’re so glad you’re here.

Patton McDowell (02:38):

Dolph, delighted to be with you, fun to be part of this conversation.

Dolph Goldenburg (02:42):

Share with me the story of a client, a small or medium-sized client, that faced some obstacles in putting together some infrastructure for their fundraising efforts.

Patton McDowell (02:57):

You said it well in your introduction, Dolph. The limitations many small and medium nonprofits face, I think, creates two general problems. Number one is what I call volume fundraising. “Let’s just ask everybody we know for money.” It feels efficient. And I understand the math. “If we could just get $50 from everybody on our mailing list then our budget needs are met.” But of course, as you know, it never works that way. And so that’s one of the first challenges I think organizations have to face, which is to focus. The second related challenge, I think, is thematic. In other words, what I would call desperation fundraising. Instead of talking about where you’re going and the impact you’re having on your audiences, you talk about things like meeting budget or “we’re not going to survive” or things like that. And to me, those two challenges affect a lot of smaller nonprofits. And it’s understandable, but I’ve certainly felt like they don’t need to fall victim to either one of them.

Dolph Goldenburg (04:06):

I think so often those two challenges also merge for nonprofits. I think, especially right now, given the recession that we’re in, those two so often merge where you’re doing the spray and pray volume fundraising, where you’re asking everybody in every way you can. And you’re also going out with that mayday-the-ship-is-on-fire message. And that’s probably a bad message to send when you’re sending it out to anyone other than your closest, most trusted major donors.

Patton McDowell (04:35):

Exactly right. There are friends and family that may rescue you under those circumstances or that messaging, but you just don’t inspire confidence. And we need confidence in our donors and investors in whatever format. And that’s why, again, I’ve suggested some ways that perhaps can help them do so

Dolph Goldenburg (04:53):

Unpack that because I would be willing to bet there are some organizations out there right now that are definitely feeling the pinch of the recession. So if they’re feeling that pinch, instead of going out to the world and saying “We’re in trouble,” what should they be doing?

Patton McDowell (05:09):

Well, number one, I think it starts with a focused orientation to your existing donor base. I call it the 20-10-5 model. 20 individuals and families, 10 corporations or businesses, and 5 foundations. Now those numbers are not magic, but they provide a framework to focus and prioritize instead of chasing everybody at once. Let’s think about who have been our most supportive donors. Notice it’s proportionate to, as you know, Dolph, where generally philanthropy comes from: it’s with the individuals and families. Are we taking care of our most important folks? And so 20-10-5 provides an initial framework that I think organizations can start with. Then we can talk about messaging.

Patton McDowell (05:57):

You know, I learned something from Eunice Kennedy Shriver when I started in special Olympics. Of course, that was a life and career changing experience as a college intern. But she had this formula that I still use to this day that she called mission-vision-action. I think a lot of small nonprofits articulate well what they do and they can make a case for the activity that they provide to whoever they’re serving, individuals, families, organizations, and such. Where I think organizations struggle, however, is articulating their vision. Mrs. Shriver was really adamant about needing to describe to people what we do and, more importantly, where we’re going. We might serve 30,000 individuals with developmental disabilities in North Carolina, let’s say. But her point would be that there are a hundred thousand more that need us. And so I ask organizations if they articulate vision as to the need that still exists, that you’re going to serve? And so, final point to complete Mrs. Shriver’s formula: she always said, and again, I say this to small organizations specifically, “Why do you need their help? What is the action?” And in this formula: Here’s what we do. Here’s why it is important. And then finally, something tangible with here’s what we’re going to do this year to help.

Dolph Goldenburg (07:34):

Patton, let’s drill down on that. So you’ve given the example of the Special Olympics and Mrs. Schriver. So talk to us about the Special Olympics mission and then their vision and then their action.

Patton McDowell (07:49):

Mrs. Shriver was so effective in articulating all three of these elements because the mission, in many cases, is evident for an organization like hers. When she founded it, she was very clear and articulate: “We are providing year round opportunities for individuals with developmental disabilities and Olympic-style competition and training.” And so people generally had a good idea. And I would suggest most organizations do a pretty good job of articulating that. If I go to their website, they have some form of poetry in there that tells what they do. Fewer, however, can articulate where they’re going, their vision. And so Mrs. Shriver was quick to say, “Tell them what we’re doing, but be able to articulate that there is still a need that we’re going to meet.” So again, using an example in any state, or frankly for any organization, you can describe how many you’re serving, but there’s always more that needs to be done. So that was the vision that Mrs. Shriver required us to be able to share. “We’re serving 30,000 now in the state of North Carolina, but there’s a hundred thousand more that need us.” And then finally the action was a specific, tangible course that, frankly, a donor could understand. “My investment will help you do the new program.” Let’s say it’s tennis in Eastern North Carolina that would help us tangibly move toward our vision.

Dolph Goldenburg (09:23):

So, just to be clear, when you’re saying “vision” that it’s not necessarily the organization’s stated vision like in their strategic plan. But, for example, it is the vision of, “We want to serve a hundred thousand people a year, not 30,000 people a year. And the action we need is, Donor, for you to make a gift that subsidizes the opening event” or something like that.

Patton McDowell (09:45):

That’s a great point. She would often, in fact, encourage us to plant a flag. If there are a hundred thousand more that need us in the next five years, we’re going to get to half of them. And so it became a rally cry for the organization, aspirational indeed, and a challenge. But to me that was more compelling for a donor than “Help us meet budget” or “Help us get through our struggles.” I think donors rally around aspirational goals like that. And so the vision would be some numeric form of “Let’s get to half or two thirds of the population we’re trying to reach.”

Dolph Goldenburg (10:25):

Can you maybe think of a donor who really rallied around that? Whether it was the Special Olympics or one of the universities you were at?

Patton McDowell (10:32):

Well, it was with Special Olympics. And the example I use is the addition of sports that could serve an adult population. Many people think of Special Olympics in terms of school age participants when in fact the movement is very much for all ages. And so we were able to inspire some donors to realize that adult athletes, just like you and I, may have run track and field as high school students, but perhaps we’re not sprinting as much now as adults. Well, the same is true for Special Olympians. And so we were intent upon on providing bocce and tennis and golf and cycling; sports that suited that population. And frankly, donors understood because they were going through a similar life cycle of participation and we got some significant gifts as a result.

Dolph Goldenburg (11:27):

Nice. Now I know you’re doing a lot of talent development with fundraisers as well. What are some of the greatest needs within fundraising offices and departments around building your fundraising team?

Patton McDowell (11:41):

What we’re seeing are a lot of problems in the interaction and alignment between staff and their board members as it relates to fundraising. And that is one of the most critical needs. Staff either can’t get their boards engaged or feel micromanaged at a level that’s not productive. And so from a fundraising perspective, the clear job description of the board member and how he or she might support fundraising efforts is often involved in a lot of our training components; getting the board member comfortable with their ability to open doors and not feel the pressure of solicitation, which I think scares a lot of board members away from productive activity. Also though, Dolph, providing professional development on the staff side. We’re struggling with turnover in our sector. And so it just hurts every element of fundraising if our staff continue to turn over and there’s no continuity in the relationship building.

Dolph Goldenburg (12:46):

I definitely want us to talk about staff turnover and fundraising. I agree with you. I know we are currently in a pandemic, but the fundraising epidemic is staff turnover. So I agree with you a hundred percent on that. But let’s first jump back and chat a little bit about how we get our board members more involved in fundraising. So let’s assume that you’ve put together a job description. What are some things that development teams can do to engage their board members in fundraising? What are some structures they can create?

Patton McDowell (13:22):

I use a similar framework that I describe earlier, the 20-10-5 or some method, to prioritize and, frankly, not intimidate board members who often come from organizations that have asked them to basically chase their entire Rolodex or their entire contact list selling tickets, selling tables, and selling sponsorships. I think board members come in fatigued because of previous experience. And I’ve found great success when I can go to a board and say, “Hey, our organization is going to, in essence, be made or broken by the relationships with 25 to 30 entities, individuals, businesses, and foundations. If each of you 15 board members could help us own the relationship for two or maybe three entities, we’re going to be successful.” And I find the angst that board members may show up with tends to be relaxed because they’re like, “Alright, I have the time and the energy to help invest in three relationships because you’re not making me chase 25 or 30.”

Dolph Goldenburg (14:33):

I was an executive director for about a dozen years. I was a fundraiser for a decade before that. And so often when there’s this expectation that every board member buy or sell a table, what I see happen is the board member buys the table. They drop a $1,000, $2,500, whatever the cost of 10 seats at that table is. They bring their spouse and they give away eight tickets to friends who may be each give $50 or $100 in the fund-a-need, but aren’t actual prospects. So I think what you’re suggesting is, “Hey, board member, help us find one person or two people or three people who will be an actual prospect of giving $10,000 or $20,000.”

Patton McDowell (15:12):

Absolutely. And often I think the staff can identify folks that board members may have a way to triangulate and help get in the door as opposed to only asking the board member to chase their friends and contacts. Often the organization has institutional knowledge and can go to the board and say, “Hey, we had a very generous support from the Smith family 10 years ago. How can we get back to the Smith family who’ve not been engaged of late?” And board members, I think, are willing to help strategize there. Especially if they don’t feel like you’re trying to only milk their list of friends and contacts.

Dolph Goldenburg (15:50):

Right. The other thing that I think happens so often when you milk their friends and contacts is you get gifts out of reciprocity. So the board member gave $250 to their friend Ted’s organization and then Ted gives $250 to the board member’s organization. But when that board member leaves the board, you lose both gifts.

Patton McDowell (16:12):

You are so right. When I was leading the fundraising at Queen’s University in Charlotte, Hugh McCall, formerly the Bank of America chairman, said exactly that. So we had to be sensitive to that point. He said, “Yes, I might be able to help you here, but I’m going to get hit up just as quickly. And we may lose the long-term kind of philanthropy of this contact if you only play that kind of game.”

Dolph Goldenburg (16:37):

Right. Now, I promised we were also going to talk about what’s epidemic in fundraising, which is fundraising staff coming in and leaving in 18, 36, 48 months. Let’s talk about that.

Patton McDowell (16:53):

People often point to compensation as the problem. I don’t think that’s the leading issue. I think frankly, we parachute people in with very poor orientation. We give them too much to do. And while their passion for the mission can carry them for 12, 18 or 24 months, ultimately we burn them out with unrealistic expectations. We tell them we want them to fundraise, but then we continue to pile on. It’s “Hey, can you redo our website?” Or “Can you add to the newsletter?” “Can you run another event?” And we allow board members to pile on and they want to do a golf tournament and they want to do this and that. And so I really think the best thing you can do to keep your talent, particularly in fundraising, is to narrow their focus. Let them actually fundraise without distraction. Otherwise there are going to be opportunities outside the current one and they’re going to leave.

Dolph Goldenburg (17:52):

What does a chief executive do to keep their board members from piling onto the development staff to say, “Oh, can you do this bake sale?” And “Can you do this gold exchange sale?” And this and that?

Patton McDowell (18:04):

Illustrate some of the principles of where the money is coming from. As you know, the money is with the individuals and families in terms of overall philanthropy in the United States. So I like to demonstrate, even with a pie chart. Because most organizations reflect something close to that and if they don’t, they need to be educated about the opportunities. And so we need our board members to understand that, frankly, nickel and diming the donor pool ultimately hurts us. And so if they can understand the great value and the efficiency of developing a relationship with a major donor prospect and the multiplier effect that has on the money we can raise, then hopefully we can discourage the well-intentioned smaller ideas. Board members are energized people and if we don’t provide them with ideas, they’re going to bring them to the table. So in some ways I don’t want to blame board members because it’s up to us as staff to give them a focused set of activities.

Dolph Goldenburg (19:14):

Listeners, can’t see this, but Patton and I can see each other. I’m smiling because last year I said that to a coaching client. It was someone who was having some issues with their board. And I actually said to the person, “I think you’re not giving your board enough to do. And so they’re finding all these things for you to do. You need to find things for them to do.”

Patton McDowell (19:32):

Absolutely right. And I also advise development directors to have the same philosophy toward their executive director because executive directors are passionate and they’re energized. And if you don’t give them strategic opportunities to get involved in development, they’re going to keep asking you, “Why aren’t we doing this? Why aren’t we doing that?” And that’s also a source sometimes, Dolph, of that departure; the development director and the relationship with the ED becomes strained.

Dolph Goldenburg (20:01):

I came to become an executive director through fundraising, but so many EDs do not and they really do need that development director, that lead fundraising person, who sets them up for success in fundraising. Because they may have become an executive director without ever making an ask or ever knowingly cultivated a major donor.

Patton McDowell (20:24):

That’s so true. I’m part of a program here in Charlotte called Leadership Gifts School, which was founded on that principle. Executive directors are not as engaged in the fundraising process, and frankly, funders want to see the CEO. And so if they’re not part of that process, the organization is going to suffer. And so we’ve set up a cohort model where executive directors and directors of development participate together to talk about that dynamic of how they can partner more effectively.

Dolph Goldenburg (21:02):

It’s interesting you say that because I’ve found while helping some organizations with their strategic planning, especially those that are small and do not yet have a dedicated fundraising person, the executive director will say he or she really wants to get a development director because then the executive director won’t have to do any fundraising. And I typically say, “You need to understand you will probably spend more time doing fundraising. Once you have a development director, it’ll be more high level things, but you will spend more time. You’ll go to more coffees. You will do more cultivation work. Your workload in fundraising will go up.”

Patton McDowell (21:36):

Could not agree more. And hopefully it will be even more effective because a good development director is going to play to your strengths as the executive and puts you in the right positions to be successful.

Dolph Goldenburg (21:47):

Right. So, care and feeding of the development director, here’s what we’ve got from you so far: give the person a doable job, not three jobs, but one doable job; have reasonable goals for the person; and make sure there’s a strong relationship that’s built between the chief executive and whoever’s leading fundraising. Anything else that organizations should be thinking about to keep their fundraising staff happy and ultimately keep their fundraising staff?

Patton McDowell (22:21):

I’m a big believer, as you are, in professional development. I think sometimes executive directors are fearful of encouraging too much professional development because they think their fundraiser will have more career ambition and leave. But quite honestly, even if that happens, you create an atmosphere and a culture that other talented individuals would want to join. So if you’re trying to restrict your talented folks from advancing themselves, you’re only hurting yourself. They’re going to leave anyway. And so you’re better off creating a culture that is engaged for your talent. And even if they do leave, they’re likely to recommend someone to follow them as opposed to creating this vacuum that often is hard to fill. But to me, I see many more examples when you invest in your person’s professional development, they stay because you are giving them opportunities. So I encourage a specific annual professional development plan and give executive directors and development directors a framework of 10 skills and experiences they can both work on, which I think is motivating and helps strengthen the fundraising effort.

Dolph Goldenburg (23:31):

That is such a good idea. And also I think it’s such a good idea, as employers, to think of ourselves as helping someone get to the next point in their career. Not trying to trap someone here for as long as we can possibly keep them.

Patton McDowell (23:46):

Right. It’s similar to desperation fundraising. It might work for a short time, but ultimately you’re pulling the rug on your own organization.

Dolph Goldenburg (23:55):

For an organization to be able to point and say, “Oh, look, this person was a first time development director with us and 10 years later they’re running development for this larger institution.” That’s impressive. And it helps you recruit talent. Even if you’re a $2 million organization.

Patton McDowell (24:10):

Could not agree more.

Dolph Goldenburg (24:11):

I actually just stole that from you because you said it and I was like, “Oh, let me repeat that because that’s such a good idea! I have to own that!”

Patton McDowell (24:18):

Like minds.

Dolph Goldenburg (24:20):

I want to make sure that we’ve got some time to talk about the off-the-map question. It just gives our Listeners a glimpse into you as a person. I know that you have mentioned you’re an avid reader. What books would you most recommend to our Listeners?

Patton McDowell (24:44):

What was transformational for me a couple of years ago was Cal Newport’s book called Deep Work. And I have since read just about everything else he has published, including Digital Minimalism more recently. But Deep Work, in a quick summary, suggests that we are often obsessed with multitasking, which cognitive science disproves is possible. And yet we continue to pull ourselves in too many directions. And so Newport’s book was just transformational for me in terms of focusing on productivity and spending quality time and not just quantity based activities. So that is one I tend to start with. I’ve tried to get all three of my kids to read it with mixed results. I still think they’re in the college, recent college graduate age. And I wonder if they do believe they can multitask their way through things. But I’m convinced that what Cal often describes as an analog mindset often is as effective if not more so than the digital environment in which we often live.

Dolph Goldenburg (25:56):

Nice. I love that recommendation. Thank you. And listeners, just share with you, at the end of each episode and Patton’s podcast, he asks the guest for a book they would recommend that everybody read. So I figured turnaround was fair play. I really enjoy listening to his podcast. Patton, thank you so much for talking with us today.

Patton McDowell (26:21):

Dolph, it’s been a pleasure. I love the work you’re doing and the messages you’re lifting up. And so I’m delighted to be part of it.

Dolph Goldenburg (26:28):

Well, thank you. And Listeners, if today’s conversation really spoke to you, then make sure you check out PMA Consulting’s website at pattonmcdowell.com. From this website, you can get to Patton’s podcast, Your Path to Nonprofit Leadership. You can also access nonprofit leadership stories, book recommendations, and just a wealth of resources about everything we have discussed today and more. Now, let me give you the down low on something. Patton expects to release a book, also titled Your Path to Nonprofit Leadership. And he’s expecting it to come out this December. So it’s the perfect end of year or new year gift for yourself. So make sure you keep an eye out for it. And lastly, if you want to reach out to Patton because you just can’t get enough, obviously subscribe to his podcast, but you can also find him on LinkedIn. Patton, thanks so much again, I’m so grateful you came on.

Patton McDowell (27:30):

Dolph, much appreciated. Thank you.

Dolph Goldenburg (27:31):

Listeners, I would not blame you if you are adding Patton’s book recommendation to your reading list and therefore missed the link to his website. So make your way over to our website at successfulnonprofits.com where you can find the link we mentioned, a link to his LinkedIn page, and also a link to the book, Deep Work. After you’ve got your reading list squared away, I would appreciate it if you took a few minutes to share this podcast with your colleagues; it’s how we can keep growing and reaching more people. And if that’s not your style and you’re a first time listener, then just hit subscribe so that you will get this podcast every week when it comes out. That, Dear Listeners, is our show for the week. I hope you have gained some insight to help your nonprofit thrive in a competitive environment.

Dolph Goldenburg (28:28):

I am not an accountant or attorney and neither I nor the Goldenburg Group provide tax legal or accounting advice. This material has been provided for informational purposes only, is not intended to provide and should not be relied on for tax legal or accounting advice. Always consult a qualified, licensed professional about such matters.

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