In our work with one of the largest healthcare systems in the country, I’ve noticed a very interesting dynamic that I also talked about at the Association of Fundraising Professionals last week.
What really is the GOAL of any Development Office, Advancement Office, Development Officer, Hospital Foundation or College Foundation??? In my world, it’s to:
WRITE A TRIPLE NET CHECK TO THE (BLUE) ORGANIZATION!
I wrote a few days ago that the GREEN PEOPLE need to help the BLUE PEOPLE. I meant that literally (not figuratively).
Our role in ‘development’ is to provide as much GREEN INCOME as possible to help SCALE and GROW the BLUE IMPACT!
It’s that simple.
What does ‘Triple Net’ mean? I borrowed it from the real estate industry, where it’s usually referencing a triple net lease.
For us, it means that ALL COST OF FUNDRAISING is deducted from the REVENUE generated by the Development Team (Green People)… therefore, resulting in a triple net (actual check) being ‘written’/transferred to the organization. (Again, the Blue People.)
I don’t want to go too Jack Nicholson on you, but I do want to make this crystal clear.
- This has nothing to do with the IRS, accounting, 990 AR’s or whatever.
- This has noting to do with CASE (Council for the Advancement and Support of Education), AFP (Association of Fundraising Professionals), CRFE, etc.
- This has nothing to do with what you decide to ‘count’ or not ‘count’ relative to the cost of fundraising.
The only measure of success is determined by how much money (INCOME) you provide to your organization/institution to help them Save Lives, Change Lives, Transform Lives (IMPACT).
Put one more way, our job in ‘Development’ is to FUND THE VISION.
This is getting long, but it’s a really important topic to me at this moment. Here are 3 more BIG thoughts around this subject.
- 1. Everyone in our industry knows that the absolute best way to raise the most amount of money… at the least cost… is through ‘MAJOR GIFTS’. This is where we actually sit down, shoulder-to-shoulder, on a visit with a qualified prospect and make a great presentation and ultimately present the opportunity for them to help.
- The cost is a ‘nickle on a dollar’/5¢… while the ‘special events’, golf outings, mailings, etc. cost is ‘three quarters’/75¢.
- *I have to tell you that I have seen far too many Development Operations spending one dollar to raise one dollar in the last few months.
- 2. I can quickly show anyone reading this the way to raise $1M in the next year, and I will personally guarantee it!
- Hire 10 Major Gift Officers, paying them each $100,000 a year to ensure good quality people.
- Have them trained by The Suddes Group (on how to make a visit, how to present the opportunity, etc.)
- They will each raise $100,000 in real money over the course of the year.
- There it is. They just raised $1M for your organization. When you look at that silly scenario, you realize that raising money is not the goal/measurement of a Development Office.
- ***Note: In our world, a Development Officer should be doing a minimum of 10X and ideally 20X their respective ‘cost‘.
- 3. ‘Cost of Fundraising’ is not some fuzzy math issue. Again, it’s not how you decide to ‘count’. It’s actually a very easy and simple equation.
- R – AE = N³C.
- Revenue – All Expenses = Net, Net, Net Cash. (To be shipped over in a Brink’s truck to the BLUE PEOPLE.)
For what it’s worth –