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 The Three C's of Fundraising - Part II


Steve West


   In my last blog post, I introduced the Three C’s of Fundraising:


          ·      Cost of fundraising

          ·      Circulation system dilemma

          ·      Compensation of fundraisers


   In the first part, I wrote about the challenges of maintaining costs in fundraising.  If you haven’t read it, please check it out.  Today I want to write about the “Circulation System Dilemma”.


   I first learned about this dilemma when visiting a fundraising department at a large Korean university last fall.  We were talking about our challenges.  During this conversation I was told one challenge in Korea is the “Circulation System Dilemma”.  It was explained to me that staff are often moved into the fundraising department having had no previous experience and then are moved to a different department a year or two later.


   Needless to say I had never heard of this before!  After that visit, I was invited to visit two other universities and one hospital.  Each had the same Circulation System Dilemma.  In fact, one of the organizations is in the middle of a large campaign and the person in charge will be moved out of the department to another department in the near future.


How can the organization be cost-effective and successful in its fundraising efforts when there is no continuity in this very important department?  I cannot believe this is the most efficient and cost-effective way to raise funds.  For instance:


          · Even though each of us tries our best to document what we do, some history of the program remains with us.  So this history moves on as the staff person moves on.

          ·   Most likely the new person is just starting to learn fundraising.  Even if they spend two years in the fundraising department, learning everything about fundraising and becoming very good at it is not possible.   

          ·   Then there are the relationships we build with donors.  A good fundraiser cultivates those relationships which ultimately will enhance the fundraising efforts.  With the Circulation System, another staff person is put into the position to take over in the continued cultivation of those relationships.  Why force the donor, who could take their gift to another organization, to build a new relationship with another staff member?


   These are just a few examples of the problems with the Circulation System.  As you can see, the Circulation System limits the success of the fundraising program and can negatively affect the cost-efficiency of the program.  And that goes back to Part 1 of this series.  Remember, presently in Korea nonprofits need to keep overhead costs, administrative and fundraising, at 15% or lower.  So does the Circulation System help reduce costs through efficiency?  Logic and past experience tells me ‘no”.   


Now I have to ask the following questions.  Would a hospital move an Oncologist into Heart Surgery for two years and then move them to Gastroenterology?  Would a university move a person with a Phd in English to teach Engineering and then move them to the Mathematics Department?  I don’t think so!  Then why would an organization do that in a fundraising department that is so important to the future of the organization?  Is there something I’m missing here?


One challenge nonprofits have in the US is experienced fundraisers tend to move from one organization to another.  Sometimes every three years.  If these fundraisers are good, they can move very easily to another organization and be paid more.  Even though I have problems with a career fundraiser moving that frequently, the organization is still hiring an experienced fundraiser.


While the Circulation System might be good for employees and beneficial to organizations in some departments, I do not see where it is beneficial to the fundraising department.  I ask that organizations start to consider moving staff into the fundraising department that might have an interest in learning about fundraising and philanthropy.  If these people don’t have an interest in that department, then look for somebody else.  If they move into the fundraising department and do well, then keep them there.  They are productive and will help the organization raise more significant funds in the future.


Unless I’m missing something, I hope changes like what I just mentioned happen in the near future.  I hope more and more people in Korea find the career of fundraising to be rewarding.  I hope organizations begin to understand the benefit of not using the Circulation System in the fundraising department.  By doing that, organizations will begin to use their resources more effectively, maximize their fundraising opportunities and raise more dollars for the benefit of their organization, the community and the country.


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