Evaluate your fundraising worthiness

Used with permission.

Who is responsible for fundraising success? Most ministry leaders spend at least 40% of their time fundraising, so they are partly responsible. Some agencies have fundraisers, so they are partly responsible too. But the player with the most influence on fundraising success is rarely considered — the organization itself. The best fundraiser will not be successful if working for a ministry that donors do not deem worthy of support. So before reviewing the performance of the fundraising staff, leadership should do a ‘worthiness review’ of the organization. In this short excerpt from a module I wrote for CCCC’s Advancing Stewardship II course (being offered in November), I give an overview of how to do a worthiness review.

Two vital worthiness factors

From the donor’s perspective, there are two key questions related to the ministry as a whole:

  1. Are your strategic statements clear and compelling and is the tagline motivational? These statements form the core of your appeal to donors and they are the connection between what your ministry does and the cause your donors want to support. The statements must motivate prospective donors who are interested in your cause. They must be clear about the external change your ministry intends to make in the world and lead potential supporters to say “I’d like to get behind that and help.” Your job is to connect your prospective donor’s passion with your ministry’s mission.
  2. Are you really making a lasting change in the world and how can you prove it, or at least demonstrate that you are having an effect outside of the ministry? Donors don’t just want to see activity. According to Penelope Burk, “A donor’s prime needs are to know the gift was received, to know the gift was set to work as intended, and to know the project or program is having the desired effect.”[i]

Proving lasting, external change

Some ministries have missions that are difficult to tangibly measure, but any measurement is better than no measurement. You can use stories to add the human factor to your statistics, but stories alone are not as convincing as stories and stats together.

If you find it difficult to provide hard data about your outcomes, another approach is to develop a persuasive theory of change that explains why you believe that your work is accomplishing the mission. If you can develop a logical connection between your mission and your programs, donors will be able to follow each link in the connection and test it for reasonableness. The overall result is that even if you can‘t provide tangible proof of success, you can provide logical evidence that success should be the result of your work.

Worthiness Review questions:

Based on these considerations, here are some questions that will help you evaluate the organizational context for your fundraising program. Be sure to answer them from your donors’ perspective:

  • Do your donors find the strategic statements clear, compelling and motivational?
  • Is there a clear rationale (called a “theory of change” or “logic model”) connecting your programs to mission fulfillment?
  • Is the external change you create real lasting change or is it a temporary helping hand? If a helping hand, can you make a compelling case that this is either all that is needed or that it is a vital specialized niche that other ministries will build on? If it is the latter case, then you will need to talk about partner ministries that carry on the work.
  • What accountability program does the charity have? What, how, and when do you report to your donors?
  • Does your online presence support donors? Donors want to know who you are, what your goals are, what you do and how you do it, how you use your donations, and what your expense ratios are. The answers need to be available from your home page (Eg., A link to “Information for Donors”).
  • What is your overall ratio for Fundraising and Administrative Costs to total Expenses (the FACE ratio)? Most people expect this ratio to be between 10 and 35%, so if your ministry is outside of these bounds it will raise questions. These are arbitrary limits, but arbitrary or not, they are what most people think is reasonable. If your ratio is too low, you will have a credibility problem, but if it is too high you will be seen as not devoting enough of your resources to ‘good works.’ You should at least know what this ratio is because others can use publicly available information to calculate it. To find out how easily your donors can get this information, go to CRA’s charity search page, enter the name of your charity (and if there are several results from the search, pick your charity), click on T3010 and then on “Quickview”. Scroll down the page and that’s what your donors are seeing about your charity! If the FACE ratio is high and cannot be reduced, or if it is really low because of some unusual circumstance, you will need to explain why.

Other Worthiness factors

Donors want to have good interactions with your ministry, so you should have a donor bill of rights or an ethical fundraising policy in place. Be sure to provide excellent service to your donors and keep them engaged with your ministry by regularly asking for prayer support and providing outcomes information.


[i]Burk, Penelope. 2003. Donor-Centred Fundraising. Cygnus Applied Research, Inc. p 15.

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Thoughts on Evaluate your fundraising worthiness

  1. Elizabeth Sharpe

    Thank you John for your excellent article. I am working with a new Christian charity and in the process of explaining the FACE ratio to them. The Board of Directors is concerned that we must stay within this ratio throughout the life of the charity. I have explained that in our Strategic plan and our Operations plan we will have startup one-time expenses that will be extraordinary and that FACE might not apply in the same way while capacity building. Do you or anyone else have anything to add to this?

    Reply
    1. John PelloweJohn Pellowe Post author

      Yes, Gil Langerak wrote a great article in Issue 1, 2009 of the CCCC Bulletin explaining administration costs (the idea applies to fundraising costs as well).

      To that article, I would add from a fundraising perspective that costs will be higher when:
      – the charity is new
      – the charity is not a household name
      – the charity’s cause is not as popular as other causes
      – you don’t have volunteer fundraisers
      – you are building, rather than maintaining, a donor base (although social media is rapidly changing this)
      – you have to travel to meet with donors

      I’m sure there are more possible reasons. CRA does take ALL these factors into account when assessing your fundraising performance. I have another post that should be up today on why charity management teams should produce an annual Management Discussion & Analysis as part of their annual report – to deal with issues such as this one.

      Also, no one should be giving based on the FACE ratio. They should be giving to charities that are working on causes they care about in ways that they support, and that are transparent and accountable for the work they do and how they handle donor’s gifts. The post later today is the introduction for a double workshop I’m doing at the CCCC conference in a few weeks, and when I’m done writing that, I’ll be writing a little booklet that charities can use to explain all this in easily understood language to their donors.

      Your approach to the board is correct, Elizabeth.

      Blessings,
      John

      Reply

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