Monday, May 14, 2012

Chapter One - Successful Fundraising & Organizational Climate


Chapter One
Fundraising is about relationships.  A nonprofit organization builds and maintains relationships with its donor base to provide a stable and steady stream of income.  When a relationship is broken funding is removed by that particular donor until the relationship can be mended.  Rebuilding a relationship is more difficult than maintaining a good one.  Maintaining a good relationship is hard work.  It requires insight, integrity, involvement and empathy.  According to National Philanthropic Trust (2010), 81% of total giving to charities came from individuals (including bequests).  Individual giving represents those who give smaller amounts on a consistent basis.  Many nonprofit organizations depend on these smaller, consistent (many monthly) gifts to help fund the fulfillment of services to the clients.  There are the occasional larger gifts from corporations or grant making foundations, but combined these represent the other 19% of giving.  The key relationship is that of the organizational member responsible for securing funding for the organization and its donors. 
Most nonprofit organizations have an advancement department.  This department is responsible for engaging the donors, corporations and grant making foundations mentioned earlier as funding sources for the nonprofit organization.  The advancement department may have several team members or exist as a one person department. 
The dynamics of the advancement department are important in building the necessary relationships to create funding for the organization.  There are many advancement teams that function quite well as a unit.  They are successful in creating funding for their organization.  They are creative in building relationships with long term donors and engaging new donors to get involved in the mission of the nonprofit organization.  Many of these relationships have been developed over a long period of time.  Many of these relationships result in becoming personal friends.  An influence on this relationship is the other organizational members within the nonprofit organization.  During the early days of building the relationship organizational members who are not a part of the advancement department have an impact on the quality of the relationship or even if the relationship can be developed at all.  However, long term relationships are also broken by the influence of the non-advancement organizational members.
  Relationships bring a certain level of expectations.  The donors have expectations of the nonprofit organization.  The advancement staff tries to meet these expectations as the relationship grows and the donors become more involved.  As the donors have their expectations met by the advancement staff they extend these expectations to the rest of the nonprofit organization.  When the extended organizational members do not meet these expectations the relationship becomes vulnerable. Consider these actual stories.
During an event featuring clients, staff and donors of a nonprofit organization, a non-advancement staff used an expletive after being injured during a fall.  It was stated loud enough for many to hear including donors.   Being a faith-based nonprofit organization, the use of this type of language was not deemed appropriate.  The donor’s expectations were not met.  The advancement staff spent several future encounters rebuilding this broken relationship to not lose the donor as a donor or as advocate for the nonprofit organization.  It seemed like a simple slip of the tongue, but it became a difficult barrier to overcome.
As the year came to an end, several donors had committed to making a gift by year’s end in response to a pledge they had made to the nonprofit organization.  As the advancement staff reviewed these donors to assist them in remembering their commitments, one particular donor had not yet made their pledge payment.  The donor was contacted by the advancement staff to verify if a check had been mailed.  The actual donor was not in the office but their finance staff stated that the check had already cleared.  The finance department of the nonprofit organization was contacted and there was no record of the check being received.  Additional phone calls were made.  The actual donor was contacted and made aware of what was going on to the best of the advancement staff’s ability.  A couple of days later the actual donor called the nonprofit organization and was transferred to the finance department.  During the conversation with the finance department the donor was not treated with respect and the problem was pushed back on them.  The donor felt this was inappropriate.  The donor did fulfill their pledge obligation.  However, the donor communicated with advancement staff that there will be no future donations.  The advancement staff immediately started to repair the relationship but to no avail at the current time.
These two examples provide some anecdotal evidence for this research.  It is my belief that these stories are more the norm than not.  Non-advancement staff can make major impacts on the ability of the advancement staff to secure funds.  The climate of an organization influences every organizational member.  The success of the advancement staff is dependent upon the climate of the entire organization.
Statement of Research Purpose
My premise is that the climate of any nonprofit organization will enhance or deter the ability of its fundraisers to function most effectively. If the fundraiser resides in an environment with less than an ideal climate, the ability to create and maintain an effective relationship (secure funding) will be hindered.  The advancement department may in itself have a good organizational climate however; the larger organizational climate creates the greater influence on the success or not of the advancement department.
The primary goal of this research is to understand the influence of organizational climate on the advancement staff’s success in securing funding for the nonprofit organization.  The methodology will be an exploratory study of the lived experiences of advancement staff and their perceptions regarding how the organization’s climate has impacted their ability to be successful.  Using a phenomenological interview process, two specific fund-raiser experiences will be explored:
1.      An experience where an opportunity was lost considering conditions within your organization and/or a donor’s experience with your organization separate from your relationship.
2.      An experience where you were successful in securing a donation considering conditions within your organization and/or a donor’s experience with your organization separate from your relationship.
Conceptual foundation
The conceptual framework for this research project is based on a model of nonprofit organizational decision making units (DMUs) (Gelade, Ivery, 2003) and nonprofit funding decision making units and how this relationship creates success in securing such funding. 
Nonprofit organizational DMUs (NPO) will be defined as the separate DMUs that create the nonprofit organization.  Nonprofit funding DMU (NPF) is defined as private funding from decision making units such as individuals, foundations or grant making entities.  Nonprofit advancement DMU (NPA) will be defined as the decision making unit used to secure funding.  This would include, but not limited to, personal asks, grant writing, direct mail or events.  The nonprofit advancement DMU will not be considered a part of the nonprofit organization DMU for this study.
The specific area of interest for this study is how the organizational climate influences the DMUs. Figure 1 shows that there is a one-way relationship between the NPO and NPF while there is a two-way relationship between the NPF and NPA.  My position for this study is there also exists a one-way relationship between the NPO and NPA and this relationship can be influenced by the overall organizational climate of the NPO.
I am seeking to understand nonprofit organizational climate’s impact on nonprofit funding acquisition through the described experiences of the nonprofit advancement DMU.  The research design is based in phenomenological principles.  The methodology will be an exploratory study of the lived experiences of the NPA and their perceptions regarding how the NPO’s climate has impacted their ability to be successful with the potential donor. 
Significance of Research Purpose
Organizational Climate has been/is being discussed in many different settings (Communication: Guzley, 1992; Commitment: Noordin, Omar, Sehan, Idrus, 2010; Involvement: Shadur, Kienzle, Rodwell, 1999; Job Element Satisfaction: Thompson, n.d.; Organizational Variables: Zhang, Liu, 2010).  There are discussions about the difference between culture and climate, often times using the terms interchangeably (Denison, 1996; Fawcett, Brau, Rhoads, Whitlark, 2008; Jung, Scott, Davies, Bower, Whalley, McNally, Mannion, 2009).  I believe that climate is an outward expression of culture based on various research studies (Patterson, West, Shackelton, Dawson, Lawthom, Maitlis, Robinson, Wallace, 2005; Nazari, Herremans, Isaac, Manassian, Kline, 2011).  It is what outsiders see about the organization.  It is what organizational members see about the organization.  There are many studies about the impact of climate on organizational performance (Cahalane, Sites, 2008; Cooil, Aksoy, Keiningham, Maryott, 2009; Elankumaran, 2004; Glisson, Hemmelgarn, 1998; James, Choi, Ko, McNeil, Minton, Wright, Kim, 2008; Johannsen, Johnson, Stinson, 1976; Neal, West, Patterson, 2005; Patterson, Warr, West, 2004; Rogg, Schmidt, Shull, Schmitt, 2001; Glisson, 2007).  Many of these studies take place on nonprofit organizations as it relates to service outcomes.  Nonprofit organizations with a better climate provided better services to the end client.  The gap in the literature relates to nonprofit organizational climate and the funding acquisition of the nonprofit organization. 
If nonprofit organizational climate can create better service to its clients, would it not also create better funding acquisition?  The potential donors (NPF) perceive the organizational climate created in the organization (NPO).  They make funding decisions on these perceptions.  Some donors (NPFs) perceive the organization climate through their relationship with the member of the advancement team (NPA).  The relationship between the NPF and the NPA is significant.  Many NPFs will fund based on this perception. If this was the only perception of the organization considered then there would not be many funding issues for nonprofits.  However, the relationship between the organization (NPO) and the donor (NPF) is a significant factor and is the main one that creates a break in the donor-advancement team member (NPF-NPA) relationship.  In the stories cited earlier, the NPO caused a break in the NPF relationship.  The advancement team member (NPA) is the one that must rebuild the relationship with the potential donors and this includes mending any misconceptions about the nonprofit organization. 
I want to enlighten NPOs on the significance of organizational climate as it relates to funding acquisition.  I want nonprofits to benefit from this research and find ways to look at their organization as a whole and create a climate that lends itself to funding acquisition success.  Nonprofit organizations are looking for ways to increase their funding acquisition.  I believe that creating a better climate within the organization will not only lead to better services for the clients but better funding to provide those services.


Matt Johnson
Copyright 2011
nonprofitresearch@gmx.com

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