I think the short answer is…maybe not.
If you asked me 10 or even five years ago if the fund development function of an organization could be outsourced, my answer would be it depends. Grant writing, sure. Organizations have outsourced their database operations for decades. And, the biggest daddy, the capital (or comprehensive) campaign consultant.
But what about the annual fund campaign? Stewardship? Volunteer relations? Major donor cultivation and solicitation?
Pre-Covid, I would have said “no”. But that is not where we are now. I firmly believe that not only can these functions be outsourced, in many cases, they should be. Here is why.
- Costs – Finding a qualified fund development professional is hard. For small organizations, they are trying to recruit one person to do direct mail campaigns, special events, grant writing, manage the development committee and many times all the administrative tasks such as gift entry and acknowledgements. For those lucky shops that can hire specialists, you’re expenses grow exponentially. However, the biggest cost is when one (or more) of those employee’s leave. The time to recruit, train, on-board, cultivate relationships expends opportunity costs, loss of revenue in addition to the dollars needed to recruit a new employee. Outsourcing eliminates the unplanned downtimes thanks to a contract.
- Expectations – The contract between the organization and the consultant/contractor (whatever term you use), outlines expectations from BOTH parties. It is an opportunity to be clear about organizational needs and its an opportunity for the consultant to explain what resources (which is usually E.D. time/engagement as well as board member and other volunteer time/engagement).
- Objectivity – The ethical standards associated with the fund development activity can be overwhelming. I’ve heard stories from many colleague who were faced with tough situations. Many have feared that relationships with EDs and/or Board Members might be fractured, or worse. Conversely, your outsourced counsel will be able to objectively explain the conflict, offer suggested action and point to documented research for validation. This objectivity only protects the organization, its staff, board of directors and reputation.
- Eliminates Expenses – W-2 employees are expensive! You pay 7.5% of their FICA, plus state employment taxes. You have to pay into other state programs and provide workers compensation insurance. You also have to provide them with a work space and the technology and supplies to do their job. Most organizations provide some sort of contribution to health insurance and other benefits such as retirement plans. And, let’s not forget about holiday pay, vacation pay and sick time. That all goes away with a contractor.
- Expertise – Look for a credential. CFRE (Certified Fund Raising Executive) is a professional credential that requires recertification every three years. These days, many of my colleagues have MBAs (like me) and JDs in addition to CFRE or other similar credentials. There are some really intelligent professionals out there wanting to partner with you!
These are just five reasons. There are many more. Nonprofit organizations are needed more than ever. Revenue, primarily philanthropy, is the driver for those nonprofit missions.