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November 2022

Nov 28

Conducting a development audit: Is it time for a fundraising check-up?

By Sponsor Insight

by Angela E. White, CFRE, senior Consultant and CEO, Johnson, Grossnickle and Associates

The pandemic caused many nonprofit organizations to respond to urgent needs. Now nonprofit teams are emerging, ready to take stock of what they learned and determine how best to serve their constituents and deliver on their mission. This opportunity for reflection and planning presents a great time to consider the role of philanthropy at your organization and conduct a fundraising check-up.

What is a fundraising check-up? A development audit or assessment is a tool to measure capabilities of your fundraising program and help you identify opportunities to grow philanthropic support. It provides an objective view on assessing your current fundraising outcomes, setting realistic yet aspirational goals for future performance, and identifying areas for additional investment to be able to perform to your full potential. And, importantly, this tool will assess how well you have embraced a unified culture of philanthropy among your board, staff, and across your institution.

When should you conduct a fundraising check-up? There are some specific times when it is particularly beneficial to conduct a development audit. If your organization is going into strategic planning, an audit can help you determine a realistic plan to raise more money to fund your strategic initiatives. As new leadership comes into an organization, there are often new priorities that need to be funded or an opportunity to reflect on the staffing and structure of the organization.

Many nonprofits saw dramatic shifts in their revenue sources during the pandemic, either from an influx of new donors, the addition of new government funding, and/or potential shifts in corporate or foundation funding. As you identify these shifts in revenue, the audit can provide your leadership with an opportunity to dig more deeply into the trends to determine if it is a blip in the radar or something you can capitalize on for future growth.

National trends are also warning of a shifting donor base, with fewer households donating to charity. An audit can help you look at the implications of these trends within your organization and the mechanisms that could help you engage and keep new donors.

How do you conduct a fundraising check-up? We believe it is good to have an outside firm conduct an audit to provide a level of objectivity. However, you may be able to employ many of these methodologies if you wanted to undertake this type of check-up yourself, using your own analysis and reports.

Prior to undertaking an audit, it is important to communicate to staff and volunteers that you’ll be conducting an audit. Lesson any anxiety they may feel by sharing how you will use the information. An audit is not punitive. It shouldn’t be thought of as a way to find problems or mistakes. It is an opportunity to strengthen your development program and boost your fundraising results.

Before starting the audit, identify who you may want to engage to help you conduct objective interviews, compile data and resources, and assist with scheduling. Take the time to compile complete and accurate data and resources.

What data do you review in a fundraising check-up? First, review qualitative data sources to understand where you are and where you might be able to improve. Look over printed resources, such as your strategic plan, policies and procedures, and collateral materials. Conduct interviews with key staff members, board members, leadership, department heads, and volunteers. These conversations bring light to the numbers and data you will collect elsewhere.

Examine your development systems and structure to ensure you have the right resources and procedures in place to support the development operation. Are there resources the development department needs that are not being provided? Are you using your donor database to its full potential and are you able to track the kinds of metrics you need?

Next, examine quantitative data. We recommend looking at five years of fundraising data to identify trends. Look at the drivers of philanthropic revenue. Are you overly reliant on one source of philanthropic revenue that might put your organization at undue risk, for instance if there was a cut in major grants or government funding?

Compare your development expenses, including staff time and direct costs, to your philanthropic revenue to calculate your cost to raise a dollar (CRD) and the return on investment (ROI). This snapshot of your performance can be compared to peer institutions and national trends.

Using benchmarking data in an audit can help you gain an understanding of how well your development effort is performing as compared to your peer and aspirant institutions. The annual Giving USA report is an excellent benchmarking source.

How do you use a fundraising check-up? Once you review the quantitative and qualitative data that you have compiled, present those results along with your recommendations to your leadership, board, and staff for review and discussion. Following this review, develop an action plan and timeline for implementation of your recommendations.

Taking the time to conduct a development audit is a worthwhile way to capitalize on what’s going well and understand where you can expand and invest to raise even more funds for your organization in the future.

Angela E. White, CFRE, serves as Senior Consultant and CEO of Johnson, Grossnickle and Associates (JGA). Angela is a faculty member at The Fundraising School at the IU Lilly Family School of Philanthropy and serves on the CFRE International Committee on Directorship.

Nov 14

More than a pay raise: Retaining Indiana’s nonprofit employees requires a comprehensive wellness approach

By Feature

Indiana Youth Services Association launches pilot project to address nonprofit youth workers’ challenges

Disengaged, burned out, overwhelmed. Those are the adjectives often used to describe nonprofit employees in today’s work environment.

According to the Society for Human Resource Management, the voluntary nonprofit employer turnover rate is at a historic high — outpacing the turnover rate in the overall labor market. In 2022, the nonprofit industry had a turnover rate of 19 percent, compared to 12 percent for the overall labor market.

The challenge of retaining and recruiting nonprofit employees in a highly competitive labor market also comes at a time when nonprofit organizations are dealing with increased demands for services, changes in fundraising, and higher costs driven by inflation.

However, the well-being of nonprofit employees must take a priority, according to David Westenberger, CEO, Indiana Youth Services Association (IYSA), a statewide association of 30 Youth Service Bureaus in about 70 counties.

“Within our field, we haven’t done a very good job of taking care of our own people doing the work,” said Westenberger, who has been raising awareness about the need for nonprofit employers to support their employees beyond pay raises and title changes.  “In the field of youth work and social services, people in the field over a long period of time eventually mirror the population they serve more than retain the overall wellness and health that they had early on.”

Without adequate insights about the challenges nonprofit employees face and a comprehensive approach to address them, nonprofit organizations could be undermining their ability to achieve their mission, Westenberger said.

A comprehensive approach to employee wellness

Earlier this year, Westenberger and the IYSA team, launched a pilot project that addresses the overall wellness of nonprofit youth workers. The framework for the project includes the Eight Dimensions of Wellness outlined by the Substance Abuse and Mental Health Administration (SAMHSA) and insights from ACEs (adverse child experiences) training.

During each year of the three-year initiative, representatives from four Youth Service Bureau organizations undergo monthly training that addresses one of SAMHSA’s eight dimensions of wellness — emotional, occupational, social, financial, environmental, physical, spiritual, and intellectual. Each month, participants hear from experts in each of the eight fields reflected in the dimensions of well-being. The also collaborate on supportive strategies and ideas that are later integrated in their workplace employee programs.

IYSA provides the participating organizations with stipends to support the initiatives that help their staff members grow in each dimension.

“For emotional well-being, one of the organizations contracted with a local agency to offer mental health counseling services for their staff,” Westenberger said. Other proposals included providing employees with gym memberships, implementing walking meetings, giving time for employees to be active during the day, and serving nutritious food during meetings.  

The participants, who regularly report on their progress in implementing employee programs around the eight dimensions, will serve as mentors to the other eight organizations that will undergo training in 2023 and 2024.

Addressing a cycle of trauma

The IYSA pilot project follows extensive research that revealed numerous challenges for nonprofit workers in the field of youth services.

The association, which also supports numerous youth-focused initiatives, including increasing awareness about human trafficking, ACEs (adverse childhood experiences), medical amnesty related to underage drinking, launched surveys to gain insights about the challenges faced by youth workers on a day-to-day basis.

A financial analysis revealed that 78 percent of survey respondents experience moderate to significant financial stress, 67 percent are in debt, and 46 percent hadn’t save enough to cover an emergency. It also revealed that employees spend an average of 1.1 hours dealing with their personal finances while at work.

A 2022 IYSA survey related to the eight dimensions of health revealed the following:

  • 40 percent of survey respondents rated their emotional wellness as fair, poor, or very poor.
  • 36 percent rated the quality of emotional wellness support from their organization as poor or fair.
  • 43 percent rated their physical wellness as fair, poor, or very poor.
  • 29 percent rated the physical wellness support programs from their organization as fair or poor.
  • 64 percent rated their financial wellness as fair, poor, or very poor.

Survey respondents who rated their organizations as supportive with emotional wellness provided these comments about their employers:

  • “I am always taken care of and am constantly being checked up on to see if I am okay.”
  • “My employer is understanding and willing to listen and support and encourages us to take care of our minds as well as our bodies.”
  • “The employer does check-ins on staff to see how well we are doing or if we have any questions about programming or suggestions.”
  • “We can take a quick break if we are overwhelmed.”

Some suggestions provided by the survey respondents included providing employees with a quiet place so that they can relax for a minute, being supportive and listening to concerns, counseling, mental health check-ins, and an easily accessible platform for scheduling counseling and therapy.

Westenberger said that the surveys revealed the need to engage in a more comprehensive wellness strategy.

“In the field of youth work and social services, we have employees who, emotionally and financially, mirror the population they’re serving,” he said. “About 60 percent of the people working in the youth services field have their own trauma because they entered the field because of their childhood experiences. They have a passion to make things better for young people — to change the system and circumstances for children.”

A history of childhood trauma coupled with the demands of working with a traumatized population during pandemic is detrimental for many youth workers, Westenberger said.

“Like most other things, the pandemic brought to the forefront how much secondary trauma there is,” Westenberger said. “So, you’ve got people with high ACE scores where it is part of their intrinsic drive to do the work. And they’re working with populations who are experiencing high levels of abuse and neglect.

“We are asking, ‘What are some of the things in your workplace culture that could change to support employees and how can you provide resources to support them?’,” he added.