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The $25,000 Foosball Table: Making the Case for Fundraising Investment
50 Plays1 month ago
In this episode of the Abundant Vision Fundraising Podcast, Tom Dauber breaks down the hidden costs of underinvesting in fundraising staff—and why small, understaffed teams often struggle to unlock their full revenue potential. He explores how specialization (rather than forcing generalists to do everything) leads to healthier donor relationships, less staff burnout, and greater returns. From team structure to portfolio math, this episode offers compelling data, real-life stories, and practical scripting to help you persuade your board or CEO to scale your fundraising team the right way—before it’s too late.
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Transcript
Introduction and Episode Focus
00:00:05
Speaker
Welcome to the Abundant Vision Fundraising Podcast. Whether you are a seasoned professional or a first-time fundraiser, we have the advice you need to take your next step toward major gift mastery.
00:00:18
Speaker
I'm your host, Tom Dauber, President of Abundant Vision Philanthropic Consulting. So last week, we started a conversation about something every nonprofit leader wrestles with eventually.
00:00:31
Speaker
How do we grow our team? How do we make the case? Well, today, we're going to explore this a little bit further.
Opportunity Costs and Team Specialization
00:00:41
Speaker
I'm going to walk you through the opportunity cost of underinvestments and the benefits of team specialization, and the simple math that can help you make a rock-solid case to your board or CEO.
00:00:53
Speaker
I'll also share some real-life stories, including about a foosball table that cost a whole lot more than we thought. Whether you're a CEO stretched too thin or a fundraiser trying to grow your team, this episode will give you language, logic, and tools to make a compelling case for investing in what matters most, your fundraising capacity.
00:01:14
Speaker
And here's another thing to think about too. Some of us, like me, have a really great skill set for major gifts and major gift management and strategic thinking around major gifts, right?
00:01:25
Speaker
Campaigns, that sort of stuff. Other people are just kick butt grant writers, but you wouldn't want them being your campaign director, right? Some people are in c incredibly gifted at making donors feel special.
00:01:42
Speaker
They surprise them. They delight them. They report on impact in ways that just really hit home runs with donors, right? Those are your stewardship people. You've got other folks that are are amazing at planned gifts and and even other people who are great at events.
00:01:59
Speaker
Okay. Event people I mean, I'm not great at events. I could do an event for you, but it's going to take me a lot of work and it's not going to be as good as someone who's truly gifted at that.
Specialized Roles and Staff Effectiveness
00:02:10
Speaker
What am I saying? The more you lean into small understaffed teams, you in fundraising, the more your people are going to have to be generalists, which is going to limit the time that they're really working effectively in their area of greatest skill.
00:02:31
Speaker
And this is why it's important to invest money. Might be into some consultants, maybe some event people, maybe some grant writers, maybe some major gift strategists, different things like that. Or you know I do fractional campaign directing for organizations.
00:02:48
Speaker
You want to to do that. You want to bring those people on instead of making your one person do everything. Because if you ask them to do that, they're going to do everything poorly.
00:03:01
Speaker
They're not going to have the time to do all the things that you need
Segmentation and Donor Experience
00:03:05
Speaker
them to do. Because if you have adequate staffing, you can segment responsibilities, major gifts, grants, data stewardship, plan giving, events, other things too, right?
00:03:16
Speaker
data like gift entry, data entry. And this is going to improve your donor experience. This is going to improve your staff effectiveness and reduce burnout. So your events will be far better if you have someone who's truly gifted at running an event doing it.
00:03:32
Speaker
Your major gift prospects are going to be treated better by a person who's really good at that instead of having maybe a grant writer who doesn't really like you know that type of work, going out to visit them, or maybe having event fundraising specialist, trying to get on the road and making cold calls and doing all those things.
00:03:54
Speaker
You really want to specialize in your fundraising shop if you can.
Data and Financial Cases for Growth
00:04:00
Speaker
The next point that I want to cover is is data. And this is going to matter a lot, especially if you're dealing with a chief ah fiscal officer, or again, if you're dealing with you know the folks that are really looking at the dollars and cents on your board.
00:04:18
Speaker
But this is where you're going to make the best case. And I'll tell you a little story. So um I was at an organization and we essentially had three people, including myself on this team.
00:04:31
Speaker
One person had half of their role focused on engagement. So alumni affairs, right? The other half was kind of admin work.
00:04:43
Speaker
The other had 50% of their position doing communications and 50% of their position also doing alumni work, right? And then myself, I was responsible for everything fundraising.
00:04:57
Speaker
To me, that didn't feel like a big enough team. And so over time, what I was able to do was really grow things out. I mean, I saw a need for lots of communications people, more communications people than we had.
00:05:12
Speaker
And certainly on the the fundraising side, we had a lot of need there too. and And so over time, what happened is i I just kept going to my leader and making the case that to grow the team.
00:05:26
Speaker
And by the time it was done, okay, we had gotten to the point where we had like four or five communications people and the team was big enough. We actually broke them out, spun them out into their own office, right?
00:05:41
Speaker
And then with the fundraising team, We were able to add a second fundraiser. We were able to add a stewardship, a dedicated stewardship person. We were able to create ah a dedicated alumni affairs person and a dedicated admin that shared with someone else.
00:05:59
Speaker
And we even brought on a student intern. to help out. And so we went from really just having three people doing all that stuff to really almost 10 people.
00:06:11
Speaker
And that really helped move the organization forward when we could specialize appropriately and have all we need. So we've got to look at metrics.
00:06:22
Speaker
if we're going to make this argument.
Major Gift Prospects Strategy
00:06:23
Speaker
So I would start, honestly, by using what I'd call the 5%, 10% rule, the 5 to 10% rule.
00:06:33
Speaker
and and and And this is just back of the napkin math, right? Roughly 5 10%. five to ten percent of any engaged donor or constituent group likely has major gift capacity.
00:06:48
Speaker
So what that means is if you've got 5,000 individuals that are in your mailing list, right?
00:06:59
Speaker
Well, what that means is you probably have somewhere between 250 and 500 major prospects. and five hundred major gift prospects Now, in many organizations, they would expect a development officer to manage 100 to 150 prospects.
00:07:17
Speaker
To me, that isn't really possible. And the reason I say that is, let's say you have 100 Well, in any prospect portfolio, a third of your portfolio should be being solicited back in a given year.
00:07:32
Speaker
A third should be being cultivated in ah in any given year towards a solicitation. And then a third should be in kind of stewardship mode. You know, they've made a five-year pledge and, you know, you're catching up with them maybe once a year, couple times a year, in addition to inviting the events and things and thank you cards.
00:07:53
Speaker
Anyway, what I'm saying is if a third of your portfolio is going to need solicited in a given year, well, that means you're expecting your development officer to make 30 major gift asks in a given year.
00:08:08
Speaker
And, That's just not feasible. That's not realistic. A major gift takes time to think about. It takes trust. This is not a thing you just say yes to, right?
00:08:21
Speaker
Not without significant relationship building with your organization. If that's the type of transaction that's happening with the donor, I'd argue that's not a major gift. Again, that's an annual gift.
00:08:33
Speaker
I would argue that a major gift officer, probably the right number is closer to 80. So if you're at 150, you're almost at double capacity.
00:08:44
Speaker
Large flagship institutions, they expect their development officers solicit 14 major gifts per year and close seven, right? 100 to doesn't sense. Right.
00:08:56
Speaker
ah hundred to a hundred and fifty prospects doesn't make sense So that means for every 100, 150 prospects you have, you probably, i mean, real prospects, you probably want two fundraisers if you got it.
00:09:13
Speaker
That way, each person can manage about 75, 80 people. you know You can go a little higher on that. A lot of organizations do, but I ah wouldn't recommend it. Right. So so if you've got your your five thousand engaged individuals and and let's let's just say, you know, you've got your your five hundred major gift prospects. And I probably lean more towards the five percent number rather than the 10 percent there.
00:09:41
Speaker
But, you know, four major gift officers, maybe five ah for that group of people, for for five.
Donor Contact and Stewardship
00:09:50
Speaker
I mean, if it's if it's four, you know, that definitely hits your 250. But really, to get good coverage, um yeah, I mean, I would be, I'd be looking at five to six, really, if it's 500.
00:10:04
Speaker
Tom Dauber here for Abundant Vision Philanthropic Consulting. Fundraising can be hard work, and it can be hard to mentally get into the place you need to be in order to see new opportunities.
00:10:16
Speaker
Everyone struggles with it. We are like the fish in the fishbowl who just can't see the water they're swimming in. That's when having outside expertise comes in handy. For 25 years, I've been helping nonprofits analyze the challenges, discover new ways forward, and develop clear plans that lead to greater fundraising revenues.
00:10:37
Speaker
Now I am available to help your organization develop the abundant vision it needs to inspire new levels of philanthropy at your nonprofit as well. Check out AbundantVision.net to start your journey toward greater fundraising success today.
00:10:52
Speaker
Now, back to the show. Taking this approach, it doesn't require expensive wealth screening to begin making your case. It's really just strategic planning based on ratios that are fairly common across our industry.
00:11:07
Speaker
So you should be thinking about your current ratios. If you're the CEO and you don't have a development officer working for you, how many relationships are you responsible for?
00:11:20
Speaker
And realistically, how much of your time is going towards managing those people? managing those relationships, are you really connecting with them in a meaningful way three to four times a year?
00:11:33
Speaker
Are you carrying 200 relationships yourself? Is your responsibility for for that many people as the the CEO? If it is, you've got a real problem. And guarantee, even without doing a wealth screening, you're leaving money on the table.
00:11:48
Speaker
Because your your key prospects should not be going uncontacted for months at a time. Your donors, should be stewarded post-gift.
00:11:59
Speaker
They should be getting handwritten thank you notes. They should get texts from you with pictures of the new space they helped build, right?
00:12:10
Speaker
Or are you just thanking them and forgetting them and coming back to them when you need something? That's a transaction and that is going to contribute to you losing more donors each year. You got to stop that.
00:12:22
Speaker
What you have when you don't have enough fundraising or fun enough budget going towards fundraising and fundraising services, you have a capacity problem with your organization, not a donor or fundraising problem.
Benchmarking and Investment Benefits
00:12:35
Speaker
So again, just looking at the numbers involved with portfolio management should be able to help you make your case. Now, the other question too is, can you get numbers for similar sized organizations?
00:12:50
Speaker
right? hey Let's say you raise 5 million a year or 10 million a year. Well, what other organizations in your community or even across the country have similar size budgets?
00:13:02
Speaker
And because information like that is just available on GuideStar for free. You can look at their 990s, right? um You can even sort that, filter that by revenue. You can actually see that information. It's just, it's easily sortable.
00:13:16
Speaker
And then you can do a little bit of investigative work to say, well, well, Pure organizations, people that we're like, how many fundraisers do they have? If they have five times the number of fundraisers you do, well, that's a concern.
00:13:30
Speaker
And then aspirationally, if your goal is to be a 15 million organization instead of a 10 million organization, start looking at that. Are there orgs in similar sectors, in the nonprofit world, raising similar amounts of money?
00:13:44
Speaker
And what are they doing? And how do you get to where they're at if you're not there yet? Benchmarking can really make a powerful case because it helps normalize things. I remember a time when when I was interacting with a university and their highest potential um school had a quarter of fundraisers as one of their lesser schools.
00:14:12
Speaker
And the lesser school was pretty close to what they were doing. Now, the lesser school, you know they were spending more money on fundraising and they needed to, to get to where they were. but But that other school was was way underperforming because they only had one fundraiser.
00:14:28
Speaker
And what I saw over the course of years was people figured that out. And as they added fundraisers to that team, the fundraising there went up exponentially because they were giving their donors the attention they
Delayed Investments and Staffing Solutions
00:14:42
Speaker
deserve.
00:14:42
Speaker
And here's here's the other thing you want to watch out for. So many organizations get into crises because they don't have the money that they need.
00:14:54
Speaker
A great best practice is to have a certain number of years of operating costs just in the bank. That's kind of your emergency fund, like you do for your household budget, right?
00:15:05
Speaker
But what you don't want to do is wait till your organization is in financial trouble to start hiring fundraisers and start investing in fundraising.
00:15:16
Speaker
It is much cheaper to invest in adequate staffing now than to try and recover lost gifts or to re-engage disengaged donors or or to rehire and retrain after burnout ah leading to turnover.
00:15:32
Speaker
What you're doing by investing in fundraising now is you're creating stability today so that you protect tomorrow's revenue.
00:15:43
Speaker
You don't want to be in crisis mode. You may create some sense of urgency, but really the message that you're going to be giving to your donors is, hey, we manage money poorly.
00:15:55
Speaker
Nobody wants to give to an organization that manages money poorly. So don't do that. Show your donors that you manage money well by investing in the things that make really great impact on your revenue.
00:16:10
Speaker
And that's fundraising.
Reducing Administrative Burdens
00:16:12
Speaker
That's fundraising and the ancillary roles that surround fundraising. So if you're sitting with your board, if you're sitting with your CEO and you really wanted to make the case, I'd say something like this.
00:16:26
Speaker
So maybe you need the language. Maybe little scripting would help. Our current fundraising team is doing admirable work, but we're under-resourced relative to our opportunity. Strategic investment in additional staff, particularly in major gifts, would unlock significant revenue potential.
00:16:44
Speaker
Let's not wait until we're playing catch-up to act. You can just steal that phraseology, use it. And I tell you, and this this will be my last thought on this.
00:16:55
Speaker
Many times we talked about grant writers. We talked about stewardship people. We talked about fundraisers. If you're fundraisers, aren't able to focus on fundraising because they're doing data entry, because they're writing out receipts, because they're doing lots of administrative work.
00:17:18
Speaker
You're leaving money on the table again. You want to do everything you possibly can to free up your fundraisers, to be on the road, and to be in front of donors asking for money and closing gifts.
00:17:32
Speaker
for many of them, they need administrative support. They need someone that they can... a voice message to with their contact report and enter it for them. you know because you know If they're spending five, six hours a week doing data entry, that's a meeting or two meetings, maybe three meetings a week that could be with donors, that could be bringing in tens of thousands of dollars.
00:17:58
Speaker
Don't trade a $10,000 an hour opportunity for data entry. That's what you're doing. when you put all of this extra administrative burden on donors. I remember a time leader asked me to buy a foosball table ah for students, you know, and sure i did it and I like foosball. So it was kind of fun, but was that really the best use of my time?
00:18:25
Speaker
Was that really the best thing I could have been doing? Did having me spend four hours researching and ordering foosball table, that's half a day's work, did that prevent me from meeting with a donor and maybe asking them for... Yeah, it did.
00:18:44
Speaker
That's an expensive foosball table. Tell you what. So again, we want to be thinking about opportunity costs. We want to be making that case to our leaders so they really understand the value of our work.
Podcast Conclusion and Call to Action
00:18:59
Speaker
Now, if you've enjoyed this podcast, please be sure to subscribe and give us a five-star rating on your podcast provider. I'm your host, Tom Dobber. Thank you for joining me as we journey together towards major gift mastery on the Abundant Vision fundraising podcast.