February: The Difference Between Fundraising and Development

There are two ways of raising money to support your tuition-charging school. The first is development, which is the most challenging and time-consuming, but is the most effective way to ensure sustainable revenue for your school over the long haul. The other somewhat easier, less time-consuming, but more commonly used way – the way schools have done it for so many years – is fundraising.

Before progressing further, it may help to acknowledge the other two terms which have entered into the discussion, namely, fund raising and advancement.  You’ll see there is a difference between fundraising and fund raising (it’s more than just a space); “fundraising” will be described in this article, since “fund raising” is any type of activity done which generates non-programmatic revenue to support the mission of an organization.  In the case of your school, programmatic revenue would be the tuition and fees your school charges.

As for advancement, our definition speaks to all the processes which are necessary to provide for your school’s firm financial foundation, including development, retention, enrollment, asset management and marketing.

Today’s article is dedicated to the difference between fundraising and development because there are a number of individuals who are engaged with schools, such as parents, board members and even administrators, who believe those two words are interchangeable.

They’re not.  They’re two different constructs.

Many consultative entities will say that you must make a fundamental shift in your strategies, moving from fundraising to development, but don’t provide a timetable for successful implementation. From a consultative standpoint, the first step toward change involves analysis and recommendation.  Implementation is the next step of the process, and, while many schools will fund the first step of a major transitional initiative, the next step may cost additional dollars and time which the school has not considered. Sometimes, schools acknowledge the importance of development, but then may discontinue all their fundraising without the proper guidance in place.  Guess what happens?  They close, because they didn’t realize that fundraising has it’s place, and a bridge needs to be formed to get from one mindset to the other.  Successful financial support requires both strategies be utilized as the organization moves from a fundraising mindset toward a development mindset.  It’s not a change (which implies a one-time, immediate event); it’s a transition (which can have a very long timetable).

Think of it as trying to turn a large luxury liner around. It’s a long process. While it’s pretty easy to turn a speedboat around, a luxury liner has no choice but to reverse engines to get out of port, and then, when out in wide-open waters, can begin the turnaround process. The same happens with moving from fundraising to development. It’s a big transition…both in processes and in mindsets.

The usual time frame for a successful full-blown implementation is usually three to five years, and even then, traction may only begin to happen. When you consider that a development director is expected to achieve immediate results, you can then understand why the average life-expectancy of a Development Director is…ready?…18 MONTHS!  When a new person is identified and hired, all those relationships that the prior development professional had built are severed, and they have to be rebuilt again.  Unfortunately, relationships take time to build.  I’ve witnessed schools which have significant development success, and when the development director leaves, the successful processes that were in place were not continued because the duties of the position were re-assigned as additional duties to another staff member.  Relationships were not continued, and therefore, development revenue levels dropped, which led to the inability to assist families in need, which caused enrollment declines.  If a new administration realizes that changes need to be made, it will take time to rebuild relationships and institute successful processes to bring revenue levels to the point they were in past years.  Sometimes, that requires not just time, but significant time.

Unfortunately, most school and finance boards expect instant successes.In these days of instant access to information, instant purchases of big-ticket items, and instant gratification, the expectation is that since there is a Development Director in place, monies will miraculously fall into the coffers of the school. Worse yet, the Development Director becomes the “catch-all” person for Box Tops for Education, Soup Labels for Education, Scrip and all the other fundraisers (one word) that school does. It’s important to realize that tasks and projects such as those are NOT the Development Director’s responsibility!  Yet, boards and administrators point to the “Other duties as assigned” clause on the job description, and regardless of whether the task is fundraising or development, it falls on the desk of the Development Director…usually to the detriment of the school.

Then whose responsibility is it? The Parent Teacher’s Guild/Organization’s. Fundraising is a part of your RETENTION element…NOT Development, as it involves the current parent community. If you’d like to challenge me on that, bring it on. Show me a school that has their Development Director doing fundraising activities, and I’ll show you a struggling school that can’t figure out what they’re doing wrong.  Fundraising is still important in the transition.  The danger is that when short-term development expectations for significant revenue generation are not met, then the school will resort back to focusing on fundraising.  The words attributed to Jack Dixon are most important to remember:  “If you focus on the results, you will never change; if you focus on the change, you will see results.”

When Development is in place, there may be some “Signature” fundraising events or activities that you may wish to hold on to. If it generates significant income, it becomes identified with your school, and most importantly, parents look forward to it and have a fun time with it by inviting their friends who are not a part of the school community, by all means, keep it! Remember, it’s “FUN”draising…not “TEDIOUS”draising. It’s also “FRIEND”raising,” which is key to your development success! It’s the meaningful involvement of individuals with your school’s mission and vision.

The following chart offers a framework to help recognize the important differences in these two concepts:

FUNDRAISING IS:

Short-term (planning done on a year to year basis)

Emergency funding

Spaghetti dinners

Candy, wrapping paper, cookie dough, popcorn, candle, fruit, wreaths, or any other kind of “sales”

Car washes

Special events

Non-threatening to other organizations

DEVELOPMENT IS:

Long-term (planning done on a three-to-five year or five-to-ten year basis)

Tied into strategic planning, and a systemic framework of advancement

Annual alumni & community appeals

Planned Giving/Major Gifts/Bequests

Grants, Underwriting and Sponsorships

Endowments

Partnering with community businesses

Threatening to other organizations

Threatening? Most school administrators don’t like to be threatening.  It takes boldness to be a development director, and we have the gifts of the Holy Spirit to embolden us – especially courage and fortitude! Why is fundraising non-threatening and development threatening? That’s the topic of next month’s article!

© Michael V. Ziemski, SchoolAdvancement, 2006 – 2017