Andrew Watt is glad fewer fundraisers are feeling the lingering effects of the Great Recession. But he takes issue when they say they’ve recovered to pre-recession levels. “I disagree,” said Watt, president and CEO of the Association of Fundraising Professionals (AFP). “It’s not because we’re not doing well, but we will never go back. Things have changed exponentially.”
The new fundraising environment was one of the topics at the 6th Annual AFP New York City/New Jersey Summit on Philanthropy, held at the New Jersey Performing Arts Center in Newark, N.J. Watt was joined by a panel that included executives at The Prudential Foundation, the Rutgers University Foundation and the JPMorgan Chase Foundation.
Watt said that the culture of fundraising has shifted more toward creativity and innovation than in years past. Before he was president and CEO of AFP, Watt was on the board of a family foundation and a lobbyist in Belgium. “In the U.S., I was looking to learn how to run an annual campaign, a capital campaign. But if I want to look for creativity, innovation, broad solutions, I probably would not have looked at the U.S. or Canada.” He would have instead looked at emerging markets like Latin America and Eastern Europe, simply because those areas are used to making do with almost nothing.
“The recession has blown us out of our comfort zone,” said Watt. “Everywhere I travel I see creative and innovative approaches to fundraising, integrated solutions to critical social problems.”
The recession has affected not only charities, but also the foundations that fund often them. Shané Harris, vice president of the Newark, N.J.-based Prudential Foundation, said that her organization has put an increased focus on measurement and metrics. “We’ve all learned about the use of data to identify a problem, measure strategy and impact,” she said. “Now we have to translate that to the philanthropic round of supporting and choosing organizations. The entire sector has a long way to go in getting that right.”
Nevin Kessler, president of the Rutgers University Foundation in New Brunswick, N.J., agreed with her, saying fundraising for higher education faces new challenges. “We are introducing metrics in a way we’ve never done before,” he said. “There’s a great deal of concern on the part of the public and legislators on the value of higher education, particularly as costs increase.”
Harris said the relationship between grantor and grantee had been more like teacher and student. “There’s a test, don’t pick the wrong answer,” she said. “How we’ve approached this hasn’t allowed for real transparency.” Instead, funders need to treat charities as partners. “I remind my team that we’re in an ivory tower and we depend on our partners to give assessment of what’s happening and the needs of their constituents,” she said. “Evaluation is a strong tool in assessing the strengths and failures of work, but we need to start developing partners and approaching with a viewpoint of understanding.”
Collaboration is key in a new environment, on both the grantor and the grantee side. Michael Haberman, managing director and regional executive for the Northeast and Canada at the JPMorgan Chase Foundation in New York City, said he actively encourages partnerships and even mergers among nonprofits with similar purviews that go to the foundation seeking funding. “There’s too many organizations trying to do a slightly different version of the same thing,” he said. “Something I’ve been thinking a lot about as a funder is how to encourage more integration.”
Collaboration and integration is no longer limited to the nonprofit side, said Harris. “We’re starting to see more collaboration, very much in a practical sense,” she said. “There are limited resources, and many funders are moving from individual year-over-year support to systems-level support. We’re finding more funders willing to pool funding, have a seat at the table to develop shared strategies. That’s promising because it requires behavior change.”
Kessler said one of the biggest challenges in the fundraising profession is turnover. He believes organizations are doing a poor job of developing careers and talent. “The talent management issue is one of the factors that’s keeping the sector from realizing its fullest potential,” he said. “We used to measure a couple of things, now we measure everything. It helps us understand the top performers and those who will need support.”
Giving fundraisers that support is key to keeping them in their positions. A recent study showed many fundraisers leave the profession within two years. “We’re too focused on where the dollars are coming from,” said Kessler. “We need to get managers to look at what people will need to develop the skills to do their jobs.”
A high churn rate damages relationships between nonprofits and the foundations that support them, said Harris. “So much of developing an authentic partnership with an organization is relationship management,” she said. “That can’t be accomplished if every 18 months program staff has to create a relationship with a new person. The most successful collaborations with our nonprofits partners are with those organizations that have consistency as a team, not just at the executive level but on the development staff level, those who work closer with our team.”
Haberman admitted his final tip was obvious but bore repeating. “Go after people who are aligned with your strategy and ignore people who are not,” he said. “I get calls all the time from people who are essentially saying my funding strategy is wrong and I should be investing in them. You have to figure out a way to think about why you do what you do. The best fundraisers are not good salespeople, they’re people who really believe in the mission. That opens up so many doors: the idea of collaboration, mergers, getting the right people on the board, how to manage talent.”
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