Building Bridges

Lessons for the Social Sector from the Freedom Convoy 2022 Fundraiser

In January, a convoy of truckers travelled across Canada to participate in a protest against COVID-19 public health restrictions. The protest fuelled controversy in several ways, including around the Freedom Convoy 2022 fundraiser on GoFundMe. In a few short weeks, the fundraiser raised more than $10 million–much of which came from outside of the country. The social crowdfunding platform was quick to pause the fundraiser, and has since refunded much of the money. But other forms of gift-giving have followed. And the public is calling for increased charity accountability. 

The situation has brought to the forefront the significance of having a plan and process for spending the money you raise – and reporting back – to protect your donors’ generosity. But more than that, having policies in place to protect your brand reputation and resources, as personal issues become increasingly political.

In this blog post, we’ll share 5 actionable ways to protect your charity by bridging your finance and fundraising teams: 

1. Ensure your case for support is clear

2. Review your gift acceptance policy

3. Be prepared for a financial windfall 

4. Establish a code of conduct for board members

5. Be wary of bleeding-edge ideas

The winding road to charity accountability  

All organizations want to be accountable, but the ways of looking at accountability are different thanks to varying definitions of charitable activity. In Canada, registered charities and non-profit organizations both operate on a non-profit basis; however, they have distinct purposes and are held to different standards. 

For example, registered charities–charitable organizations, public foundations, or private foundations that have charitable purposes–can provide official donation receipts. They’re also tax exempt. Non-profits, on the other hand, cannot issue official donation receipts. Nor do they have spending requirements (also called disbursement quotas) for charitable activities. 

The situation becomes more complicated when you consider the breadth of grant opportunities and funding programs available. From governments to community foundations, each granting body has its own expectations for how charitable organizations or non-profits should contribute to their causes and communities. 

Crowdfunding platforms like GoFundMe take an arms-length approach to accountability. In its Terms and Conditions, GoFundMe makes clear that it is a platform only–not a broker, financial institution, creditor, or charity. As such, it is the donor’s responsibility to understand how their funds will be used. At the same time, it’s the organizer’s duty to ensure donations are used as described in the fundraiser. But the public wants more. 

As platforms like GoFundMe take a more active role in charity accountability, ensuring your case for support is clear and putting policies in place to protect your organization is key. Your finance team can help. By working together, fundraising and finance teams can better assess how to plan for–and protect–fundraising priorities; helping to ensure your organization is both financially secure and impactful long into the future. 

5 ways finance and fundraising can work together to protect your charity 

1. Ensure your case for support is clear

Most grant applications or fundraising proposals require a detailed budget. That is, an explanation of how the funds will be used. It’s how they determine if your proposed project is both actionable and sustainable. As situations like the Freedom Convoy 2022 fundraiser unfold, it’s becoming increasingly clear that having a plan to distribute the funds is a top priority for grant administrators and the public alike. 

Whether it’s a requirement of your funder or not, it’s important to have this information on hand for transparency and true accountability. Your donors will want to know how their investment is being managed–and by whom. So, meet with your finance team to build a budget that includes descriptions as well as hard numbers for every line item. 

2. Review your gift acceptance policy

A gift acceptance policy describes the type of donations your non-profit or charitable organization will accept. It acts as a guide for your board and staff, and a source of information for potential donors. Furthermore, it serves as a powerful tool to protect your brand reputation and propel your mission forward. 

To create an ethical gift acceptance policy, consider all of the groups, organizations, and individuals your cause might attract. You’ll need to decide whether or not to accept their donations. A strong gift acceptance policy should be diverse, equitable, and inclusive, but take a hard stance against those that might negatively affect your reputation or expose your organization to uncertain risk. As experts in policy development, your finance team can ensure your fundraising priorities are supported by policies and procedures that protect your organization. 

3. Be prepared for a financial windfall 

It’s no secret that people support the causes and communities they care about. Just look at how much the Freedom Convoy 2022 fundraiser was able to raise in just a few, short weeks! 

A sudden influx of financial support could significantly impact your organization’s ability to deliver its mission and vision, but how you plan to save the money is just as important as how you plan to spend it. Creating lasting change in the causes and communities you care about requires sustainability; meeting near-term goals and mapping long-term tactics and strategies. 

Get clear on the resources you need to tackle the urgent and important work before you, and set yourself up for success later. This is key to winning your supporters’ trust. If you’re not sure, your finance team can help you find gaps your good fortune can fill. 

4. Establish a code of conduct for board members

Some charitable organizations have been surprised to find their board members named in the leaked lists of Freedom Convoy supporters. They may have donated their own personal funds, but as Mark Blumberg says, the situation is more complicated than that. Every charity is going to have to think hard about its response. 

One solution is to put in place a board code of conduct: a policy that outlines the principles and standards that all directors, including ex-officio directors, must follow. In addition to social media standards, you can include a summary of what’s expected in situations when board members’ personal interests conflict with their duties–and that includes disclosing any donations made to questionable causes. Your finance team can help you find the right way to describe this type of disclosure clause. 

5. Be wary of bleeding-edge ideas 

After courts froze donations that had been raised through GoFundMe and GiveSendGo, Freedom Convoy organizers turned to cryptocurrency. This new form of gift-giving recently stepped into the spotlight, and some charitable organizations and non-profits have started accepting Bitcoin and other crypto-currencies as donations. But like stocks, bonds, real estate, and other investments, they take time to appreciate. 

If your organization is ready to venture into the digital currency realm, make sure you have the financial systems necessary to create safe and regulatory-compliant crypto-giving platforms. This is where your finance team comes in. In some cases, it might make more sense to bring in outside support so you can focus on core fundraising activities and furthering your mission. A great third-party processor is Canada Helps. 

Bridge your teams and drive better results 

In this blog post, we’ve shared 5 ways to protect your charity by bridging your finance and fundraising teams. As a leading non-profit consulting firm, we’ve seen first-hand how working together can help charitable organizations and non-profits build capacity and maximize their impact. 

Subscribe to the KEA Canada newsletter for more tips like this, and information on how our team of fundraising professionals can help you further your mission. 

TED Talk

Dan Pallotta: “The Way We Think About Charity is Dead Wrong”

Activist and fundraiser Dan Pallotta calls out the double standard that drives our broken relationship to charities. Too many nonprofits, he says, are rewarded for how little they spend — not for what they get done. Instead of equating frugality with morality, he asks us to start rewarding charities for their big goals and big accomplishments (even if that comes with big expenses). In this bold talk, he says: Let's change the way we think about changing the world.

The Will to Give

As the pandemic rages on, COVID-19 has caused us to think about something we’d rather not: our own mortality. With that comes an opportunity to create a legacy of charitable giving.

After 18 months of uncertainty, the world is starting to open up again. In October, the Canadian Government lifted the global advisory on non-essential travel. And just last week, it dropped the molecular COVID-19 test requirement for short trips abroad. It’s a big step toward getting back to normal, and a welcome reprieve for those itching to escape the cold winter weather. But the reality is that we’re still living in a global pandemic. The health threat to ourselves and our loved ones, though reduced thanks to the rollout of vaccinations, still requires us to travel with care. For many, that means more than preparing a will (only 50% of Canadians currently have one, according to Statistics Canada), but thinking about the legacy they want to leave behind. Skeptics will question whether it’s possible to support both their family and their favourite causes. It is. And the simple truth is that charitable organizations need your support—now more than ever.

Those who already donate to charity know the sector is on its knees. From changes in policy and infrastructure to uncertainty in the economy, many non-profit and charitable organizations have dealt with blow after blow to their operations—some better than others. A full quarter of charity leaders surveyed by Imagine Canada say their organizations will not be able to operate for more than one year. But if just 3.5% more Canadians include a charitable gift in their will in the coming decade, $40 billion could be directed to charitable causes. For charities at risk of collapse, receiving a legacy gift could make all the difference.

There are big benefits to leaving a legacy gift. In 2018, the Government of Canada introduced a new tax incentive to encourage more people to include a charitable gift in their will. When you choose to support a charity, your estate can receive a donation tax credit for the full value of your gift; offsetting the amount of taxes to be paid and maximizing the amount left in your estate for your loved ones.

But leaving a charitable gift in your will is about more than tax breaks. It also allows you to bring future generations into your charitable activities. By involving your family in the decision-making process, you can make your gift more meaningful and ensure its viability long after you’re gone. Indeed, you may make it easier for friends and family who are charged with settling your affairs by naming your charity in your will. For some, knowing your loved ones will still be connected—and in some cases, inspired—by your contribution is very comforting.

So, how can you maximize your gift and make sure you have enough left for your family? A charitable bequest can be a specific amount of money, a percentage of your estate, or a residual gift. This type of gift allows you to take care of yourself and your family first by covering the costs of taxes, debts, burials, and other bequests, then give your remaining wealth to a charity. You’d be surprised how a small portion of your estate can create significant change for the causes and communities you care about, while still supporting your loved ones.

No matter what approach you choose, you want your gift to have the highest impact, both for your favourite cause and your family. A philanthropic advisor can partner with your legal or financial support team to design your gift in a way that helps the good work live on. Find the right advisor for you, and learn more about giving the gift of a lifetime at willpower.ca.

Kathy Arney is a philanthropic advisor, a chartered professional accountant and a master financial advisor in philanthropy (MFA-P) based in Alberta. In 2013, Kathy founded KEA Canada to help build stronger, more effective non-profit organizations, and contribute to a better world by nurturing generosity and philanthropy. Since then, she has consulted with organizations across Canada, including universities and colleges, arts organizations, community organizations, and the health sector. Now, she’s turning her attention to strategic philanthropy.

Making Way

Tips for diversifying and decolonizing non-profit board governance

Studies show diverse and inclusive organizations have significantly more impact on the communities they serve. From improved corporate social responsibility, to employee recruitment and retention, to governance practices, diverse organizations outperform less diverse ones in almost every area. Still, there’s a marked lack of representation of Black, Indigenous, and people of colour in leadership positions and on boards across the country.

A 2020 report by the Diversity Institute at Ryerson University found that racialized people occupy only 10.4% of board positions across the non-profit sector. In Calgary, they hold just 9.1% of board positions across all cause areas—even though they represent 33.7% of the population. For Indigenous people, that number is even less. Nearly zero, in fact. “Indigenous Peoples are rarely members of boards,” the report says.

The problem stems from pressure for board applicants to disclose their identities, as well as discrimination and a lack of personal and professional networks, says the report.

Olumide Abayomi, founder and CEO of the Toronto-based philanthropy company AGENTSC Inc., agrees. In a presentation on board development, Abayomi points to recruitment systems and processes as a barrier to diverse and inclusive boards. In particular, the practice of appointing friends and supporters is causing a lack of diversity. “A commitment to only appointing friends and people in the same network has pretty much left Canadian boards in a situation where they are almost exclusively white,” he says.

Many well-meaning non-profits have responded by making space on their boards for Indigenous representatives, but failed to do so effectively. That’s because the problem isn’t just a lack of accessibility. Non-profit boards are built on colonial systems of administration and traditional power dynamics that aren’t conducive to meaningful engagement with Indigenous Peoples. To improve engagement and increase Indigenous representation, organizations must commit to decolonizing non-profit board governance—and that means thinking about the goal before deciding the solution is making space on their board.

In this blog post, we share 3 tips we’ve uncovered on our own learning journey for improving engagement with Indigenous communities, and diversifying and decolonizing non-profit board governance, including:

• Reviewing and (re)commiting to the Truth and Reconciliation Commission of Canada’s Calls to Action.

• Reconsidering traditional board-based governance to incorporate diverse worldviews and approaches to decision making.

• Recognizing that volunteerism is a privilege and reviewing practices to encourage participation among those experiencing marginalization.

Answering the call

Diversifying board governance is not just about the numbers, says Liben Gebremikael in this 2021 Imagine Canada article. Organizations need to “change their boards’ processes and culture so that they are ready to welcome racialized and marginalized voices to the table and ensure their participation is meaningful,” Gebremikael says. That means all people are empowered to share their talents and strengthen their communities, regardless of their role.

Creating this kind of change requires reflecting on unconscious biases, listening and learning from community members, building authentic partnerships, rethinking policies and procedures, and more. It’s heavy lifting, but rewarding in so many ways!

Fortunately, when the Truth and Reconciliation Commission of Canada (TRC) created the Calls to Action in 2015, they laid a roadmap for reconciliation with Indigenous Peoples. Though call to action #92 references the corporate sector in Canada, the recommendations can be applied to non-profit and charitable organizations as well.

Excerpt from TRC Calls to Action

92. We call upon the corporate sector in Canada to adopt the United Nations Declaration on the Rights of Indigenous Peoples as a reconciliation framework and to apply its principles, norms, and standards to corporate policy and core operational activities involving Indigenous Peoples and their lands and resources. This would include, but not be limited to, the following:

i) Commit to meaningful consultation, building respectful relationships, and obtaining the free, prior, and informed consent of Indigenous Peoples before proceeding with economic development projects.

ii) Ensure that Aboriginal Peoples have equitable access to jobs, training, and education opportunities in the corporate sector, and that Aboriginal communities gain long-term sustainable benefits from economic development projects.

iii) Provide education for management and staff on the history of Aboriginal Peoples, including the history and legacy of residential schools, the United Nations Declaration on the Rights of Indigenous Peoples, Treaties and Aboriginal rights, Indigenous law, and Aboriginal–Crown relations. This will require skills based training in intercultural competency, conflict resolution, human rights, and anti-racism.

These recommendations are a great place to start the process of diversifying and decolonizing non-profit board governance. So, review the Calls to Action, find one that applies to your sector (if not call to action #92), and get started.

A cultural transformation

Decolonizing non-profit board governance requires addressing the underlying organizational cultures and values that hinder meaningful participation.

For some, that might mean exploring different decision-making models. Indigenous communities have used non-hierarchical governance approaches and shared decision-making since time immemorial, and there’s a reason for that. This type of decision-making takes into consideration multiple perspectives to best reflect the needs of a community, resulting in more relevant and responsive programming—and greater impact.

For others, that might mean reviewing policies and procedures. While non-profit and charitable organizations have to follow certain rules and regulations when it comes to board governance, flexibility does exist. What’s thought to be legislation is actually best practice that’s been carried forward year after year, says this 2021 report from the Edmonton Chamber of Voluntary Organizations. Some of these practices have become so deeply entrenched, it’s hard to recognize the difference—such as practices like not compensating board members.

“Most Alberta non-profits are not governed by legislation prohibiting organizations from paying board members for their services. However, notions that board members should be volunteers who do not receive financial compensation have been widely accepted as legal fact,” says the report. But providing compensation for board members, especially those experiencing marginalization, can remove significant barriers to participation.

All organizations, regardless of where they are in their learning journey, should invest in cultural awareness training. Delivered by a trained diversity, equity, and inclusion (DEI) specialist, preferably one with lived experience, cultural awareness training can help kickstart or continue important conversations about anti-racism among your board members, and move your organization one step closer towards reconciliation.

A step in the right direction

Bottom line: diversifying and decolonizing non-profit board governance is not easy work. Rather than bringing on board members to fill a quota of diversity, do the hard work of listening and learning from your community to build positive structures that make everyone feel welcome and included. Then turn those structures into policies and procedures. By designing a culture of belonging first, you can develop a DEI policy that meets the needs of your diverse community.

Additional Resources

The KEA Canada team is thankful for the opportunity to create, collaborate, play, and work on the lands known today as Canada. We recognize that these lands are home to the enduring presence of all First Nations and Métis people, and the Inuit.

We are grateful for the meaningful relationships that we are forging with Indigenous communities across this land as we work towards truth and reconciliation in all that we do today and every day. We honour the authentic history of Turtle Island and its original people, and are committed to sharing what we know—and what we learn—with colleagues in the social purpose sector.

The following resources have been integral to our continued learning:

• Truth and Reconciliation Commission of Canada: 94 Calls to Action

• United Nations Declaration on the Rights of Indigenous Peoples

• The Circle on Philanthropy’s Declaration on Action

• Of / By / For All Change Network—This 12-month online program that provides the structure, tools, coaching, and community to make your organization more diverse and inclusive.

• Progressive Aboriginal Relations (PAR) Program—Administered by the Canadian Council for Aboriginal Business, this certification program confirms corporate performance in Indigenous relations at the Bronze, Silver, or Gold level.

Improve Your Fundraising Strategy

Bow Valley Non-Profits Speaker Series

Future-Proofing the Charity Finance Sector — on Hilborn: Charity eNews

This September I wrote an article for Hilborn: Charity eNews, an organization that has been keeping nonprofit leaders updated on news, trends, tips and analysis of developments in the fields of fundraising and nonprofit management since 1991. My article focusses on tips to build capacity by increase your organization’s financial competency. Set yourself up for success now — and post-pandemic — by reading a snippet here, or the full article at the button below.

Future-Proofing the Charity Finance Sector: From surviving to thriving in a post-pandemic world

Over the course of the COVID-19 pandemic, many charitable organizations and non-profits have experienced considerable challenges. From changes in policy and infrastructure to uncertainty in the economy, they’ve dealt with blow after blow to their operations.

Unfortunately for some, one too many hits has left them down for the count. A full quarter of charity leaders surveyed by Imagine Canada say their organizations will not be able to operate for more than one year. So, what does this mean for non-profits looking to come out fighting? Financial competency is key.

In this article, we’ll share tips to build capacity by increasing your organization’s financial competency and setting yourself up for success. You’ll learn the importance of bridging your finance and fundraising teams to:

● Determine the full cost of your work and set realistic benchmarks for spending with a range — a minimum as well as a maximum investment.

● Understand the financial requirements of new forms of gift-giving, including legacy gifts and crypto-currencies.

● Show investments in strong infrastructure and inspiration.

READ THE FULL ARTICLE

Create a Legacy of Giving

Give the gift of a lifetime by including a charitable donation in your will 

Who and how you support is up to you. KEA Canada is a trusted third party that can help you identify your priorities and plan your gift giving. 

Support your favourite cause and your family 

Many people underestimate the potential impact of their estate. By giving even a small portion of your estate to charity, you can create significant change for the causes and communities you care about, and still support your loved ones. It’s possible to do both. We at KEA Canada are here to guide you through the process of planned giving, no matter where you are on your strategic philanthropic journey. 

Find your charity of choice 

Whether you have a charity in mind or need to find one, KEA Canada can help you decide who and how to support by identifying your passions, values, and priorities. Our team of dedicated philanthropic advisors will ask questions and leverage our industry connections to introduce you to charities that do work in your area of interest. We can even research options on your behalf, allowing you to remain anonymous until you want to be known. 

Identify tax-efficient options for giving 

No matter what approach you choose, you want your gift to have the highest impact—for you, your family, and your charity of choice. At KEA Canada, we speak the languages of finance and philanthropy. We will work alongside your financial and tax advisors to support your strategic philanthropy—ensuring and your finances and your heart are rewarded with your planning.  

Negotiate donor agreements and recognition 

The type of gift you give matters, and there are many options to choose from. With over 30 years in the industry, we know what drives non-profit and charitable organizations. We can help you design your gift in a way that’s most helpful to the recipient, so your charity of choice is able to do the important work it needs to do. We can also suggest appropriate ways to recognize your family’s contribution—now and in the future. 

Add a philanthropic advisor to your planned giving support team 

A philanthropic advisor from KEA Canada can help you plan your gift-giving by identifying who to support and how, understanding tax-efficient options to fund your charity of choice, and following up on your charitable investments. 

We’ve help donors create strategic philanthropic plans that support both the causes and communities they care about and the people they love. We can help you too. 

Make a philanthropic advisor from KEA Canada part of your planned giving support team. 

Charity Overhead

Flipping the Conversation

It’s time to talk straight about charity overhead. Over the years, this simple phrase has become synonymous with overspending—consequently, striking fear in the hearts of fundraising and finance teams alike. 

The crux of the matter is that donors will choose to support a charity based on how much of their donation goes directly to the work the organization does—but not the effort it takes to get that work done. Administrative expenses like staff salaries, marketing budgets, office finances, and facility fees, while essential to the operation of a charity, are seen as negative marks on a charity’s scorecard. 

The results have been disastrous for the charitable sector. Organizations are forced to cut core operating costs to compete for donations. And, as Arianna Hunter says in a 2020 Toronto Star article, “an industry faced with solving our greatest social problems is overworked, understaffed, underpaid, and outdated.” 

The solution is to bridge the gap between finance and fundraising; to work together to understand the full cost of a project and set realistic benchmarks for core operational costs that include a range—a minimum investment as well as a maximum. It’s only when we flip the conversation on charity overhead internally that we can start to change the way donors think about charity spending.

For more tips on how to bridge the gap between your finance and fundraising teams, check out our post, “Non-profit Fundraising: Bridging Finance and Fundraising to Improve Impact”.  

How to set realistic benchmarks for charity overhead 

In order to set realistic and sustainable benchmarks that have a range, you need to understand the full cost of a project. There are key questions you can ask from the outset to ensure your project is budgeted effectively and costed realistically. Be sure to consider all of the variables that might impact your work, for example: 

1. The size of your organization: Some charities are big; others small. Some work locally, others nationally or internationally. If your organization has complex operational requirements, you might need highly skilled staff, specialized equipment or infrastructure, or budget for frequent travel. 

2. The tenure of your organization: Some charities have been around for a long time; others are just getting started. If you’re just getting off the ground, you might need more resources to recruit and train staff, establish your home base, and build your brand.  

Once you’ve considered both the minimum and maximum requirements to cover your core operational costs, put them in your fundraising proposals. A good way to do this is by including a percentage of administrative expenses as a line item in each project’s budget. This will spread your day-to-day operating costs across all projects. 

The final step is to share your charity overhead projections with your donors and supporters so they understand and appreciate the full cost of your work. If you’re worried about objections from your donors, try focusing more on impact than investment. Remember, it’s not the dollar value that matters most, it’s what you’ll be able to achieve with it. 

Overcome the overhead objection by setting realistic benchmarks

Flipping the conversation on charity overhead will take time, but with these simple tips—and support from KEA Canada—you can get the investment you need to cover core operational costs and achieve real impact. 

As dedicated consultants, we’ve helped countless charitable organizations build capacity. Subscribe to the KEA Canada newsletter for more tips like this, and information on how our team of seasoned professionals can help you further your mission.

A Time for Rest and Renewal

I’m tired of hanging on by my fingernails. In speaking with others, I’m not alone. This is hard. And I really should have nothing to complain about. By all standards I am privileged, working, safe, healthy, and surrounded by the outdoors and natural beauty where I live. So—add guilt to the list!

However you feel, it’s okay. However you cope, it’s okay (though my preference leans heavily towards healthy coping mechanisms). We are all in this, and together we will find the way.

Kindness and gratitude are critical at this time, both for others and for ourselves. I was recently reminded of this incredible commercial, which shares the message that kindness gives you what money can’t buy.  

For those working in the non-profit sector, we at KEA Canada appreciate you! Your work is making our world a better place. And we know, it’s difficult.

Taking a Deep Breath v. Sprinting to the Finish Line

A recent article in the Globe and Mail about “finish line anxiety” spoke to me. It highlighted our natural instinct to go faster as we approach the finish line; to work harder to get there. But the finish line keeps moving and dissolving slightly. So, pacing ourselves is critical to avoid burnout.

Recommended Reading: Taking a Break from Saving the World

We recommend Taking a Break from Saving the World by author Stephen Legault. This honest, thoughtful, and relevant read offers a variety of techniques to cope with various states of anxiety and burnout, including clarifying your purpose, recognizing your limits, setting a fitness regime, meditating, and making the structural changes your organization needs.

Planning for the Future—Today

We hear often that non-profit leaders are tired and planning to take a break when we are through the current health crisis. While we completely understand, it makes us wonder about succession planning. The ongoing pressure on charity overhead combined with declining funding, and an anticipated exodus of non-profit leaders, means charitable organizations must ensure they are paying attention to succession planning. This article in Non-Profit Quarterly gives great tips for navigating succession.

Hope Springs Eternal  

In the midst of all of this, we want to celebrate some good things out there and by sharing some gratitude.

First, we are grateful for the 8020info Water Cooler newsletter, which shares insightful nuggets for small businesses, non-profits, and public sector organizations—such as this article on rethinking work schedules in the new normal. 

Next, we are grateful for our amazing clients, the work they do to make the world a better place, and for allowing us the privilege of supporting them.

For example, Cottonwood Lake Preservation Society in Nelson, BC achieved a major milestone, raising $604,000 to date to save a 49-hectare mature forest from unregulated clearcut logging by a private landowner. Volunteers spent countless hours speaking with businesses, running events, and driving letter writing campaigns to support the cause. But there’s more work to be done- now we are working to save it forever.

Shoutout to KEA Canada team members Katie Macpherson and Emily Bocking for their incredible work on this project! Be sure to follow #SaveCottonwood for more updates.

We are also grateful for progress being made at the federal level to address some of the most common issues in our sector. Together with thousands of others, we made a submission to the Special Senate Committee on the Charitable Sector. Read the report as well as the government response online. One of the most exciting outcomes is a commitment to include overhead costs in government grants! 

And finally, we celebrate KEA Canada’s own Kathy Arney as she recently completed her Master Financial Advisor-Philanthropy (MFA-P) designation. On her accomplishment, Kathy says: “We often talk about fundraising as matchmaking, and that helping donors to give away money strategically is as important as helping charities to be effective.  We look forward to putting this new knowledge to good use, and supporting more donors as they develop their giving strategies.” 

Get in touch with Kathy to learn how she can support your philanthropic efforts.

Together is Our Favourite Place to Be

Whether you’re a non-profit looking for ways to build organizational capacity and improve results or a donor searching for ways to give back, we can help. Our complementary one-hour consulting continues to be available to support you. 

Nonprofit Fundraising

Bridging Finance & Fundraising to Improve Impact

It’s a tale seemingly as old as time in non-profit fundraising: finance and fundraising departments entwined in a passionate yet delicate dance. The fundraising team is tasked with raising the money that keeps an organization operating and the finance department is responsible for managing those funds. It’s a constant balancing act between the needs of the organization and its mission, made even more intense under the hot spotlight held by conscientious donors. 

For as long as we can remember, paying for core operational costs through fundraising has been difficult. In recent years, it’s become one of the single most important considerations on a non-profit’s scorecard. A full three quarters of Canadians believe charities overspend on administrative and fundraising costs, according to a survey by the Muttart Foundation. So these individuals give elsewhere, or worse, choose not to give at all. This is what we call the overhead objection. 

The solution is to bridge the gap between finance and fundraising; to show that your organization is both financially secure and impactful. This type of transparency could increase donations by 50%, according to a report by Fidelity Charitable. While so many charities struggle, those that show investments in strong infrastructure and inspiration are the organizations that will survive. Non-profits with healthy reserve funds and strong leadership have the ability to tackle huge changes and hurdles before us. 

In this blog post, we’ll share three actionable strategies that will help you connect inspiration and infrastructure to maximize your organization’s effectiveness—and finally impress the critics. You’ll learn how finance professionals and fundraising teams can work together by doing the following:  

1. Finding inspirational non-profit fundraising priorities. 

2. Communicating the full cost of a project. 

3. Putting strong policy in place to guide fundraising projects. 

Why is it important for finance and fundraising to work together? 

While it’s true that finance and fundraising dance to different choreography—they often speak different languages and have different key performance indicators—they are both critical to the success of an organization. And in the eyes of their donors, it’s not the steps they take, but the way they move together on the dance floor that matters. 

When researching an organization’s financial information, the top two things potential donors look at are financial efficiency (70%) and impact (59%), according to the report, The Next Generation of American Giving. They want to know their investment is sound, and that the organization will be able to maximize its impact in the communities they care about for years to come. That’s why finding the sweet spot between finance and fundraising is essential in non-profit fundraising. A strong and strategic relationship between the two can not only help you attract new donors, but also keep the ones you have—giving your organization a sustainable way to achieve its long-term goals. 

How can finance professionals and non-profit fundraising teams work together? 

Strategy 1: Find inspirational fundraising priorities. 

It’s no secret that people support the causes and communities they care about. Working together, finance and fundraising teams can find inspirational ways to raise capital where core funding falls short. 

For example, your organization may have a need to pay down debt. Rather than focusing on the output—a strong balance sheet—focus on the outcomes. This approach is a win-win for both finance and fundraising teams, because working toward a shared goal of raising money for programs and impact can free up core funds to pay down debt. This may enable you to expand cultural programming, increase outreach and collaborate with partners to amplify your impact. When your organization can focus your fundraising priorities on the inspirational front-line work you’re doing, your donors will surely note the difference. 

So, before planning starts on your next funding priority, meet with your colleagues to find the inspirational stories that fundraising can leverage to fill the gaps and maximize potential revenue. Once you’ve aligned on needs, share your mission and vision with your entire organization. Effective non-profit fundraising requires everyone to know why they’re raising funds and how they’re going to mobilize supporters to help. 

Strategy 2: Communicate the full cost of a project. 

Finance and fundraising teams working together from the outset will not only ensure your next campaign maximizes opportunities for giving, but also that it is budgeted effectively and costed realistically. 

For example, your organization may be seeking to commemorate the life of someone in your community with a memorial bench. The cost of commemorating a bench can vary significantly from a few hundred to a few thousand dollars. But if the price point is too low, the bench will cost more to install and maintain—and your donors may be unhappy with this. To communicate the full cost of this project, you’ll need to consider the cost to purchase the bench as well as the cost to install and maintain it long-term. 

Finance and fundraising teams can can work together to answer key questions in the planning stage, like: 

• Have we included direct and indirect costs of the project? 

• Has donor recognition been considered in the full cost?

• What is the plan to cover related fundraising costs?

• What are the startup costs to consider to get this project off the ground and how will they be funded?

Covering these critical questions now can avoid potential conflicts later. When fundraising teams are equipped with the full cost of a project, they can help donors understand the full impact of their contributions—using the right language, tools, and stories to engage them.  

Strategy 3: Put a strong policy in place to guide non-profit fundraising projects. 

From tax issues and implications to non-profit codes of ethics, charities and fundraisers are facing increasing risks, regulations, and responsibilities. 

Take for example, the comprehensive fundraising campaign that fell short of delivering the donor recognition wall that was promised. The organization lost credibility with its donors and as a result, impacted their ability to raise funds from those donors for future projects. To avoid this situation, projects must be costed realistically, funded properly, and backed by policy. 

Working together, finance and fundraising teams need to consider whether policies include:

• Your organization’s approach to beginning projects before they are fully funded

• The requirements to include full costing in project plans and funding goals, such as donor recognition, planning, and overhead

• Ensuring that strong naming and gift acceptance policies are in place 

Finance professionals know policy. So, ensure that your fundraising priorities are supported by policies and procedures that protect your organization’s infrastructure. Finance and fundraising teams should be available to each other on an ongoing basis to help keep projects on track and steward the interests of the entire organization. The more you share and connect, the more effective you will be. 

Improve impact by bridging the gap between finance and fundraising 

Of course, trust and communication underpin all of these strategies. In any dance, the steps will only look effortless if both partners are moving in sync, confident in their own skills and in their partner’s strengths. Finance teams should be considered critical advisors to any campaign, and a solid sounding board. So, get out there and share your expertise and experience with the whole organization. With time, your friends in fundraising will come to rely on your strengths to help them soar. 

In this post, we’ve given you three actionable strategies to align your vision and goals, and connect inspiration and infrastructure, to maximize your organization’s effectiveness and overcome the overhead objection. Building a strong relationship between finance and fundraising takes a concerted effort, but we’ve seen first-hand the benefit it can have in non-profit fundraising—and we’re here to help if you need it.  

As dedicated consultants, we’ve helped countless non-profit and charitable organizations build organizational capacity. Learn more about how our team of seasoned professionals can help you improve impact by connecting inspiration and infrastructure. 

Listening

The Heart of Donor Relations

There’s an art and a science to strategic meetings. Here is a great video called Having Strategic Conversations from Karen Osborne, on how to plan a strategic meeting:

When I was first starting out in major gift meetings, I remember being soooooo nervous. I wrote myself scripts which either resulted in my being tongue-tied or I talked for the entire allotted time. I felt wooden, the donors seemed confused as to why I was there, and bottom line: I wasn’t having impact.

But I learned a few things, the first being this science-based fact: people forget 90% of what you say, but they remember 90% of what they say. So, if you get the donor to say it, the likelihood is very good that they will remember. 

But, how do you help the donor to say the thing that will move their donation forward? How do you get them to disclose why they’re deeply passionate about the cause? Or how they want to make a philanthropic impact?

Learning about this approach completely changed the way I held meetings. Suddenly my meetings were more productive, more meaningful for the donor, and gave us more opportunities to genuinely connect. 

Now I love working with clients to help them structure meetings that are fun and productive.

by Emily Bocking, Associate, KEA Canada