Soapbox Engage Blog

For those new to the nonprofit space, the difference between development and fundraising may seem unclear. Common definitions such as “asking for donations” and “asking for major donations” may seem like splitting hairs and cause some to wonder why the distinction is made in the first place.

However, there is a fundamental difference between the two, a difference that leads to happier, more connected donors and a happier, less-stressed fundraising team. To help explore that difference, this article will discuss:

• Fundraising
• Development
• The Development Process
• When to Fundraise in Development

Remember that while fundraising and development are different, they fundamentally serve the same purpose: earning monetary gifts to support your cause. There is a time and place for both, as well as a time to fundraise in the development process. Let’s walk through these terms, starting with fundraising, and why they can sometimes make your fundraising committees panic.

Fundraising

People hate public speaking. Time and again major news organizations cite some new study pointing out that people’s top fear is public speaking, over heights, over death, and even sharks!

But for nonprofit professionals, there’s one fear that seems to beat out even public speaking–the fear of asking for money. Let’s call it “fundraise-a-phobia.”

Fundraise-a-phobia is easy to spot. Just sit around a table at the next meeting of your favorite charity and ask someone, anyone, to volunteer to raise money or be on a committee to raise money. Suddenly their eyes fall to the floor. The bravest might mumble something about time or being away. Most people sit in stony silence, trying to avoid eye contact.

It’s amazing how much the thought of saying, “Can you give $10 for my cause?” can weaken even the strongest souls. It could be why the most popular fundraising methods are creative ways to “ask without asking.” Activities like selling merchandise and hosting events let the asker look like they’re giving something in exchange for the donation. Social media and direct mail keep the donor at arm’s length from the solicitor. Even grant proposal writing has a veneer of not really encountering the donor—only communicating with the donor’s representatives.

Yet getting money by asking is one of the most popular nonprofit revenue generation techniques. Why? It’s culturally acceptable to give. Giving to nonprofits is a Western tradition that goes back thousands of years with the work of churches providing relief to the poor and health services for the sick. Much of this work was supported by tithes and the occasional bequest. No doubt, the ability to solicit funds was a key function of your successful medieval abbot and abbess.

While giving is comfortable and culturally approved, asking is much less so. The perceived power difference between the donor and the solicitor makes most people avoid directly asking for support as much as they can. At its core, fundraise-a-phobia occurs because asking others for money can be socially diminishing. Or, in other words, it feels like begging.

Yet that leads to a problem. You can’t complete your mission without money.

Development

It’s a fact that modern executive directors must be competent revenue generators and able to help fulfill your fundraising strategy. For most, that means getting over the fear and discomfort, if not embracing, asking others for money. In short, they need to be fundraisers.

Or do they?

A lot of nonprofits professionalize the process of charitable giving revenue generation, leaving it as a matter for specialists. Whether nonprofits out of a desire for greater efficiency, avoidance on the part of the executive director and board, or a recognition of the talent of the person who has the job of raising the money, we’ll never know.

What do they call those jobs? Development officers.

Huh? Where did that name come from? Why “development” instead of “fundraiser”?

Because there’s a difference. Development isn’t just a soft euphemism for “asking for money.” Development is fundraising, and much, much more.

The Development Process

There’s a process, a cycle, connected to just about any charitable gift. It starts with identification. Any person or organization who might make a charitable gift needs to be identified as a possible donor. Someone needs to say, “hey, that person there, maybe they can make a gift?” Then that person’s name is added to a list of possible donors.

Next is “engagement.” In other words, you need to connect with that person or organization in some way. Maybe it’s an introduction from a mutual friend. It could be a cold call. Some foundations want a “letter of intent.” Think of it as “first contact” where you try to make a great impression.

If the person (or organization) welcomes the contact, then you move to “cultivation.” Cultivation includes a wide range of activities and can be as simple as writing a letter that includes the reasons they might give, offering to take them on a tour of your programs, or inviting them to lunch with a board member.

Up to this point, you haven’t really fundraised. In other words, you haven’t asked for money. What you’ve done is “develop” a relationship. That’s why it’s called “development.”

“Development,” as it relates to charitable giving, is developing relationships that lead to donations for your nonprofit organization. All the above steps can occur in a single letter or over the course of a year of personal get-togethers and activities. The point is that there’s a process—a relationship development process—that leads to a charitable gift.

But it doesn’t end there.

When to Fundraise in Development

Of course, development doesn’t completely forgo fundraising, the actual asking for money.

After building a relationship through development, it’s time for the next step in the cycle: fundraising. You ask for the gift. Whether it’s written in a letter or spoken aloud, the real fundraising part typically doesn’t take more than a few seconds. Then you wait for a response, ranging from “Yes,” and “No,” to “Let me think about it.”

Regardless of their answer, you flip back into “development mode” by continuing the relationship. If it’s a yes, you thank them for their gift. If they say no or maybe, you still thank them and, if you can, explore why they answered that way. Is it your cause as a whole or a specific aspect of your mission that caused their answer? Was the amount too much or too little? Were you not the right person to ask? How about the timing? Is next week, next month or next year, better? This is all part of the “stewardship” phase of the cycle.

Whether they donate or not, after your fundraising ask, it’s back to the start. You’ve already identified them as a prospect, so you engage their interest in a new project, engage them in donor cultivation opportunities, and eventually make another fundraising request.

Now, let’s go back to that solicitation—the fundraising part. It’s the hardest part for most people, but it’s also the shortest, which might make you wonder why so many people throw out the entire process due to a few brief seconds of it! The answer is that they miss how the act of asking (fundraising) is part of a process (development).

Nonprofit professionals who do recognize this see that development is a proven way to make fundraising easier, and most importantly, development gets more money than fundraising alone.

Imagine this: you’re walking down the street, and someone stops you, and suddenly blurts out, “Give me money for my cause!” If you’re nice, you’d likely tell them no and quickly walk away.

Instead, what if that same person was introduced by a mutual friend. Your friend knows that you have a connection to the specific cause. The person you just met explained how their nonprofit organization has been working for that cause for years, doing even more and better work today. You’re impressed. Then your friend says, “Can you make a donation to the cause, today?” You say yes and pull out your phone to make a payment directly through their app. Transaction complete, you get a letter and a video thank you as well as the heartfelt appreciation from your friend and your new contact. You might even think to yourself that you’d be happy to give to that same nonprofit again in the future.

The first example, the stranger on the street, was straightforward fundraising without development. The second was fundraising with development—the development of a relationship that led to easier, and successful fundraising.

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“Development” transforms the task of finding charitable gifts into the creation of advocates for your nonprofit’s mission. It creates a partnership with your donor, leveling some of that dreaded power imbalance that makes you feel like you’re begging. It moves the act of charitable giving from a transaction of money to a relationship of support.

So, you can still be afraid of public speaking, death, heights, and sharks, but with development, you don’t need to be afraid of fundraising anymore.

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Guest Post by Matt Hugg

Matt Hugg is an author and instructor in nonprofit management in the US and abroad. He is president and founder of Nonprofit.Courses (https://nonprofit.courses), an on-demand, eLearning educational resource for nonprofit leaders, staff, board members, and volunteers, with thousands of courses in nearly every aspect of nonprofit work.

Over his 30-year career, Hugg has held positions at the Boy Scouts of America, Lebanon Valley College, the University of Cincinnati, Ursinus College, and the University of the Arts. In these positions, Matt raised thousands of gifts from individuals, foundations, corporations and government entities, and worked with hundreds of volunteers on boards and fundraising committees, in addition to his organizational leadership responsibilities.

Matt teaches fundraising, philanthropy, and marketing in graduate programs at Eastern University, the University of Pennsylvania, Juniata College and Thomas Edison State University via the web, and in-person in the United States, Africa, Asia and Europe, and is a popular conference speaker. He has a BS from Juniata College and an MA in Philanthropy and Development from St. Mary’s University of Minnesota. Mr. Hugg has served on the board of the Greater Philadelphia Chapter of the Association of Fundraising Professionals, the Nonprofit Career Network of Philadelphia and several nonprofits.