Fundraising Paralysis: Facing What Freaks You Out

Are fundraising calls on your ongoing to-do list? Do those calls keep falling to the bottom of the list? Are you, in short, terrified?

In order to overcome your fear of fundraising you need to face what freaks you out. Here are six common fears, and how you can re-think them:

• Fear of rejection: You're going to be turned down; on average 50% of good prospects will give. Your job is to know that being turned down has nothing to do with you personally. When people choose not to give, they do so for many reasons - it does not mean you are a bad person or that they hate you. And whether they give or not, every conversation you have is a great opportunity to educate folks about your organization and its programs.
• Fear of failure: It's important to change your definition of success in fundraising. Success is how many times you ask. If you make all your asks, you get an A+.
• Fear of looking stupid: No donor will expect you to know everything. And when someone asks you a question you can't answer, say, "That's a great question - thanks for asking! Let me talk with the Executive Director and get back to you." 
• Fear of asking the wrong person: If you develop a strong database and do your homework, you will be asking the right people. Know that if if turns out you made a mistake, or someone is in the middle of a personal/fiscal crisis, you can always simply and graciously apologize.
• Fear of alienating friends: Have you ever ended a friendship because someone asked you to contribute to a favorite cause? Have you ever lost or damaged a friendship because of a charitable request? If you make your asks with integrity and without blindsiding your friends unexpectedly, they may or may not give but they will not disinherit you. It helps to give them an out - "Please feel free to say no" or "If you choose not to participate, that's totally OK; we'll still be friends. But I sure hope you can help."
• Fear of now knowing how to ask or what to say: You and your board should work together to identify key talking points and achievements, pinpoint good stories to tell, write a basic script, and practice with each other. But your most important job is to speak from the heart - focusing on your agency's mission, making a clear case, listening carefully, and inviting the donor to become involved. There are lots of fundraising techniques but they are far less important than your passion for your organization's good work.

Fundraising is not about your feelings - it's about the donor. Just as you feel good when you make a charitable donation to a cause you care about, you are giving the donor an opportunity to feel good. So take a deep breath, kick your fears out of the way, and go out and make those calls.

Where's the (Nonprofit) Money?

Statistics about nonprofit income abound - and often seem confusing and contradictory. Consider these from the National Center for Charitable Statistics:

• Charitable contributions: 72% come from individuals, 15% from foundations, 7% from bequests
• Nonprofit revenue: 21% from contributions and grants (only 4% of this from foundations); 72% from program service revenue (including government fees and contracts); 7% from dues, rentals, and special events.

So what's the message here? The largest source of charitable contributions is individual giving. The largest source of revenue is program service fees. Foundation funding is at the bottom of the barrel, along with special events.

But you should also know that none these bare figures take into account expenses, staff and volunteer time required, or value added. Nor do they take into account differences between small and big nonprofits, program service sectors, organizational cultures, or the communities being served.

There is in fact no one right model for a nonprofit fundraising program. Instead, consider these four guidelines to use as you shape a strategy for your unique organization:

• Diversify your income. Aim for a health mix of grant income, individual contributed income, and earned income. Avoid becoming totally dependent on one source of funding, both overall and within each category. If the loss of one significant major donor, one government contract, or one big foundation grant would cause a financial crisis you've got a major problem.
• Assess your return on investment. Look at how much actual time and resources go into raising dollars. Is that grant really worth the staff time spent in reporting and administration? Does that special event actually make a profit? Are you wasting time asking for donations from rich folks with no connection to your cause?
• Be realistic. It's always best to assume a one-year foundation grant is just that, and not an ongoing commitment. And never apply for funding for a project that doesn't fit your mission or organizational scale just because the money is tempting. Use grant funding to kick-start important new projects or substantially strengthen ongoing programs, with the knowledge you're going to have to raise more money to keep them going.
• Seek sustainable, unrestricted funding wherever possible. One of the key values of individual gifts is that most of them are unrestricted and can be used for those basic operating expenses that make your programs possible. And once donors make a contribution - as long as you continue to do good work - a majority will continue to make annual gifts. Having an option for monthly donations is another great way to build a source of ongoing unrestricted cash flow.

And always remember that the basis for successful fundraising and strong nonprofit organizations centers on building relationships over time with people - community leaders, foundation staff, key government representatives, clients, volunteers, and donors.

Nonprofit Professional Sports: Really?

Nonprofit professional sports - it sounds like an oxymoron, doesn't it? And yet, these organizations are classified as nonprofit under U.S. tax law: NHL (National Hockey League), PGA (Professional Golfers' Association, and - until just a few months ago - the NFL (National Football League).

A little background on the IRS code: Section 501(c)(6) allows a tax exemption for business leagues, chambers of commerce, real estate boards, boards of trade, and professional football leagues. All of these are supposedly not organized for profit, and no net earnings can be used to benefit any private shareholder or individual. The explicit inclusion of professional football leagues was part of a 1966 deal Congress made when it granted an antitrust exemption that allowed the NFL to merge with the AFL (a now defunct football league).

Here's a quick summary of revenues and salaries for these "nonprofits":

• The NFL reported revenue of $327 million in 2013; Commissioner Roger Goodell's salary was $44 million; the average price for 2015 Super Bowl tickets was $2,600.
• The NHL has annual revenue of $3.7 billion; Commissioner Gary Bettman's combined salary and benefits come to $8 million.
• The PGA takes in $973 million annually; I couldn't find any public data for current Tour Commissioner Pete Bevacqua, but previous Tour Commissioner Tom Finchem received a salary of $5.1 million.

The NFL opted out of its tax-exempt status a mere 4 months ago; Major League Baseball did so in 2007, largely to avoid IRS reporting requirements - now they don't have to make public the salaries for their top executives.

Even former Republican Senator Tom Coburn (an ardent anti-tax Tea Party proponent) believes these organizations should be paying income and property tax. His proposed Marketplace Fairness Act would have ended the practice of allowing professional sports leagues to qualify as tax-exempt. According to Coburn, the result would be a gain of $91 million in tax revenues for the U.S.

And there's the sad case of FIFA (Federation Internationale de Football Association). FIFA is a registered nonprofit under Swiss law. Its 2013 revenue was $1.3 billion, with a net profit of $72 million. Its top 13 executives received $26.1 million. They've been in the news lately due to the arrests of top executives for bribery, kickbacks, and match fixing. The Mob Museum in Las Vegas - home of exhibits on gangsters, Mafia bosses, drug cartels, and all manner of corruption - just opened a new exhibit on FIFA called "The Beautiful Game Turns Ugly."

There's something rotten in the world of tax regulation in the U.S. and internationally when these bedfellows get to call themselves nonprofits.