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. And although it’s becoming more and more tedious while generating less and less revenue, people still do it. Why? Because that’s the way they’ve always done it!
Before progressing further, there is a reason why this happens with fundraising, and it’s not “the economy,” even though that’s what usually gets blamed when fundraisers just don’t bring in what they used to. The real reason is physics; more precisely, The Law of Diminishing Returns.
Diminishing returns is the decrease in the marginal or incremental results of a process as the amount of a single effort which goes into it is incrementally increased, while all the other efforts that go into the process remain constant.
Here’s an example: If more people are selling candy, one would think that that would generate more and more revenue. However, if EVERYTHING else remains constant (the amount of candy sold by each person, the profit margin offered by the fundraising product provider, etc.), there’s still a significant possibility that the net result will be less
Why?
Because, in the marketplace, everything changes, and many of those changes are things which we have no control over.
When “one thing” is increased, leaders don’t understand what went wrong, since it seemed to be a simple answer! The real reason is that in process thinking, changing one element should provide a different result, right? And it does! Unfortunately, it may not the expected result.
To combat this mindset, one needs to move beyond “process” thinking, and into “systems” thinking. Situations don’t occur in a vacuum, and if only one thing changes, as The Fixx sang in 1982, “One Thing Leads to Another,” whether you want it to or not.
Also, it may help to acknowledge the other terms which have entered into the discussion between fundraising and development – 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, and for clarity, 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 asset management, retention of school families with children currently enrolled in your school, marketing to attract new students and new donors, enrollment (that is, enrolling new students in your school), and development (more precisely, “fund” development through “relationship” development).
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 its place, and a bridge needs to be formed to successfully move from one mindset to the other. Sustainable financial support requires both strategies be utilized as the organization progresses 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 in order to move forward. The same happens with moving from fundraising to development. It’s a big transition…both in process and in mindset.
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 (or, if the school never had a Development Director), 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.
To make matters worse, 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 flow 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) the school has
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…and usually to the detriment of the school.
Why is this? Because the Development Director is to be visible in the community, meeting with individuals and businesses. Unfortunately, most principals know how to monitor employees only when they’re at work IN the building! If they’re not in their offices, then people wonder what they’re doing and where they are. It’s a new supervisory process that many principals aren’t familiar nor comfortable with.
Then who’s responsible for those fundraisers? The Parent Teacher’s Guild/Organization. Fundraising is a part of your RETENTION element…NOT Development, as it involves engaging 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 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 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 (and now you see how a fundrasing event has just become a fund raising event, and potentially, a development event). It’s the continued meaningful involvement of individuals with your school’s mission and vision that will create its support base.
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
Family Movie Night, Roller Skating/Bowling or Dine to Donate 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
“Signature” Events
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 Development article!
© Michael V. Ziemski, SchoolAdvancement, 2006 – 2024