Ensuring Nonprofit Fundability: Interview with Jeffrey Fulgham, CFRE
Jeffrey Fulgham, CFRE, is an experienced Charitable-Sector Leader and Development Officer with a demonstrated history of servant leadership and strong relationship-building outcomes. Skilled in Major Gifts, Capital Campaigns, Planned Giving, Nonprofit Organization Leadership, and Special Event Orchestration. Graduated from Florida Atlantic University.
Read the Interview Transcript
Hugh Ballou: Greetings, everyone. My guest today is a dear friend and advisor for SynerVision Leadership Foundation, Jeffrey Fulgham. We are both in Virginia. He is on the other side in Richmond. I am in Lynchburg. You know about me and The Nonprofit Exchange. We have been hosting it for a bunch of years, and we have had some really important subjects.
We haven’t really dug into the topic today of insuring fundability. Yes, you are doing great work. Yes, you have great products and services. Yes, you have brilliant people. Have you translated it into quantifiable descriptions, so funders can understand the value of why they’re funding you?
Before we get into the topic today, I will ask Jeffrey Fulgham to talk about his background of funding so you understand his expertise. Jeffrey, welcome. Please share a little bit about you.
Jeffrey Fulgham: Sure. Thanks, Hugh. Appreciate you inviting me. I have listened to a lot of these over the years, and it’s fun to be on this side of the microphone.
I started in fundraising a little over 30 years ago in nonprofit management. I started as a senior leader, the director of development, in health care. I then moved to an arts organization and became executive director there. I also did some historic preservation work. I became the director of development in monuments and memorials, working for the National D-Day Memorial. I worked my way into vice president of development and finance there. I ultimately was co-president when I left.
I switched again and went into advancement at a family ministry. Then I finished up in botanical gardens, doing some work in conservation, which I still do as board chairman. I have been fundraising as a paid professional for about 30 years. As a professional and volunteer, for probably almost 35 years.
Hugh: Wow. You’ve seen some things change over that time. Fundamentally, there is some consistent factors that help nonprofit leaders become fundable, correct?
Jeffrey: You’re correct. A lot has changed. Frankly, much of it I don’t personally think is for the better. We see this everywhere. It’s not just in fundraising; it’s just more obvious and pronounced in fundraising because it’s so dramatically opposed to the way it should be.
You see a lot of transactional fundraising now. Organizations are busy. People are busy. Organizations are trying to save money. They are trying to make ends meet. They are usually understaffed and usually have people in positions who may not necessarily have enough experience to do those jobs without having someone supervise them who understands what should be happening. I’m not saying that person shouldn’t be doing that job. The only way we build this up is if we bring in new people and teach them and train them. We are not teaching them or training them really well. That’s why they are leaving in less than 18 months in most cases. They are either leaving the nonprofit sector completely or job hopping to different organizations, trying to find the next great thing.
We all know this is about relationships. If you don’t have any continuity with your staff, then you don’t have continuity with your donors. You’re building relationships, and they’re ending. Someone is having to start again, and that ends. From a donor perspective, giving to an organization for five years, and having somewhere between 2-5 development officers coming out to visit you or calling on you, we all would say, if we were donors, “What’s going on with this organization? I can’t see the same person for more than two years.”
Hugh: It means we have to get our act together, doesn’t it?
Jeffrey: It does. We have to have our act together on both sides of the equation. A lot of folks look at the external only. They look at donor relations. They only focus on their outward-facing self. They don’t focus on internally creating a structure that supports the people who are working there. This is all part of being fundable: creating an organization that people trust, creating an organization that has people who are trustworthy, which gets to the character and integrity piece of ensuring fundability. Those individuals working there have to go out feeling good about where they work and the people they work for.
Hugh: it’s all around a central theme of stewardship. We are stewards of resources that come from others. For us to fully utilize those resources will help us attract more resources: time, talent, and money. Being fundable means people will be attracted to you as volunteers and contribute their talent. In-kind donations are just as valuable when you need things done and don’t have enough money.
In my world as a conductor, we stand on the podium and have a music score. Everything that is going to happen in that piece of music is written down: what everybody does, when they do it, how fast, etc. Everyone in the choir or orchestra has their part of it.
What I often find is nonprofit leaders and clergy are social entrepreneurs. We have lots of good stuff. We don’t think of structure as valuable. But the lack of structure causes problems. We hit barriers. People don’t understand because we haven’t spent the time and invested in creating a strong value proposition, which means this is what we do differently than anybody else and the impact of our work. What are the results of what we do? Those are the two things that are going to get the interest of a funder. What do you think?
Jeffrey: I agree completely. I talk about this all the time, especially with new organizations. A lot of them are in a hurry to get to the mission. You see this all the time with who you work with. They want to get from where they are now to raising money and implementing the mission as fast as possible. What they do is skip over a bunch of steps. Once they get up and running, they go back and start to realize what they forgot. They either figure it out, or one of their funders tells them, which is not the way you want to hear that you messed up, “We can’t fund you because you don’t have this or do this,” or you get a letter from the state saying, “Hey, you’re not licensed to fundraise, and therefore you need to cease and desist until you file these forms. If you don’t, we will fine you X thousands of dollars.”
For me, it’s all about creating that foundation to build on. Biblically, we know that the foundation is the rock that we are going to build the house on. We have to build on a firm foundation. If we build it on sand, it’s going to crumble. It may not crumble tomorrow or next year, but it will crumble at some point, and it will be unfortunate. When that happens, people lose organizations, jobs, money. All the things we are trying to protect are compromised.
Hugh: The strategy is your road map to where you want to be. The arguments that people give me about not having it is, “Oh, it limits my creativity.” No, it’s a container, so you are not spending your creative energy and effort trying to figure out what to do next. It’s a container for your creativity, so you can put all your energy into implementation. If it doesn’t work, you change it.
It’s a pathway, and it’s communication with your funders for what results you’re going to obtain. It’s also an engagement tool, so people in your organization know what they are supposed to do.
Back to what you were saying about the internal piece of this. We don’t think about that as a value that other people expect. They feel like their money is well spent when there is a high-performing team to implement it. I am a recovering Scottish Presbyterian, as you know. It’s not that you’re frugal with money. It’s that you have good stewardship of all your resources, and you are using them appropriately. In the strategy, you identify the competencies you need, so you can find the right people, and they know what work they are supposed to do.
In your strategy also is the funding channels that you will need to have. I have created a summary about streams of revenue for nonprofits. You have the nonprofit-specific channels, like donations, grants, planned giving, and in-kind donations, like facilities, food, printing, and media. It can save you money. Even though it’s not income, it can save you spending money.
You can also do events that for-profits do, but we are a for-purpose enterprise, so we have to generate proceeds. It’s not profit in the normal sense that go to stockholders. It’s proceeds to fund our work. Events can make money and lose money. They are also PR. They are also relationship, but they should be positive in your revenue.
Sponsorships are where a company spends marketing dollars to connect their brand with your brand. In a nonprofit, we are limited in how we present it. We can’t do the traditional heavy sales call to action because that puts us in the limelight of unrelated business income. We have to be careful about how we present sponsors. Public radio and public television are good examples. They say, “For more information, go here for your cruise.”
Partner money, I created this because it’s like churches, rotaries, and other service clubs have foundations and want to see things happen. They don’t necessarily do them, but through their foundation and giving in the community, they support a free clinic or food bank. A lot of churches or synagogues or service clubs will support one food bank that they rally with their time and money. If you have 10 or 12 of those organizations supporting an initiative for the community, then you do the work. It’s their vision. You partner their money and your work.
There is earned revenue. You have to be careful here. If it’s mission-related, it’s okay. It doesn’t become taxable. For the SynerVision Leadership Foundation, we have leadership content that brings in revenue. Amazon Smile is a way to create a little bit of revenue from people buying books. There are business principles that you can implement.
These are eight fundamental ways. If you have an endowment fund, there is also interest income from investment. If you have real estate, and you are able to rent it out, that is another track. There is potentially ten, but eight that all organizations can do. Do you want to comment on this list?
Jeffrey: Sure. One thing I will say as we look at all eight of these is some folks will say, “We’re only doing some of them.” I think the key here is making sure that there isn’t too much money coming from one pot. Within those eight pots, you also don’t want a high percentage of your money coming from one particular subpot, like grants. You don’t want too much money coming from one foundation or one donor.
Events is really important with us. I know organizations were getting 50% of their income from one or two annual events before COVID. Guess what? They didn’t have an event in 2020 or 2021. Their 2022 event, they’re not sure how it’s going to look. They ended up in a situation with not enough revenue.
Same with having a foundation. A foundation changes their focus. All of a sudden, they are not giving anymore. If they are only 2% of your budget, no big deal.
The planned giving stream is really important, too. If you are constantly investing in a planned giving program every year, you are slowly building that up. What you are doing is creating a revenue stream and preferably building an endowment because that is where you want your planned gifts to go. Sometimes people need to use them for other reasons, which is understandable. You want to create this stream long before the development person has left, long after the development person and CEO has left. You have a new board. The gifts coming in had seeds planted 25, 30, 40 years ago.
The organization I worked for recently has a $50 million+ endowment. The majority of that endowment was built on three gifts, two from one individual and one from another individual. $40 million of that came from those three gifts. They were all planned gifts.
Hugh: Wow. Most of us don’t know anything about that.
Things we do wrong when we are running an organization. You mentioned we want to go right to the results. In my mind, we have mental capital. We have products and services and offerings we do to feed people, clothe people, help people. That is our funding. That is an asset. You want a financial asset. In the middle, there is a relationship asset. We tend to skip over that. We talk about this often. Talk about how important relationship is in the process of getting funding.
Jeffrey: For me, it’s not only the most important thing, but it’s almost the only important thing. If it’s not there, then you might get a gift or a few, but you’re not going to maximize the potential for the organization or for the donor. The donor is in this, too. They are giving for a reason. Most likely, they are not just writing a check because they felt like signing their name, putting a dollar amount next to it, and dropping it in the mailbox to a stranger. They are giving because they care about what the organization is doing and the impact they are having.
If we are not building relationship, we are hurting both sides of that equation. We are not maximizing what we could get for the organization, but we are also not respecting what that donor’s interest is. Every time I do a presentation, I say that successful fundraising is not about money; it’s about relationships. It’s not a means to an end; it’s a means to the future of what can happen over time.
Think about what we can do for these donors in building that relationship. They increase their giving. They maybe become a board member. Who knows? They get involved in events. They get involved in telling their friends about the organization. They tell their friends why they support the organization, “The really great thing about what they do is they really treat me like a king or queen. I feel so special when they come out and see me. I feel special when I go to events. They treat me specially. They are always so grateful for what I do.” You know what? That is the best referral you could ever have as a nonprofit executive.
Hugh: That’s great. People don’t accidentally leave a large amount in their will for a random nonprofit. Typically, it’s somebody who has been involved at a higher level, creating impact for other people. There is a trusted relationship. They understand that their donation will help you create a legacy. It will be ongoing after we’re here. If we created something valuable, we certainly want it to continue. That is a prime example of relationship-building.
I want to talk about fundraising professionals, too. Unless you have someone working with you, in early-stage nonprofits and small nonprofits, often a lot of weight falls on the executive director. Talk about setting the stage for planned giving. That is an under-utilized channel. Also, talk about how the board and the executive can navigate that. Then we will jump to getting your first fundraising executive on board. Without the fundraising professional first, let’s talk about that. It’s not reasonable in my experience to expect board members to go out and raise money. It doesn’t happen, does it?
Jeffrey: It really doesn’t. There are some board members who like to raise money. They like to go out and ask for money from their friends. For some of them, it’s kind of a game. They do trade-offs. They have their project, and their friends have their projects. They get gifts from each other. There is a realm of that, too. But that’s not the world that most of us live in.
I think the best way to do it with most board members is not so much having them come out and ask for money. Some board members, we don’t want them doing that. They are not comfortable with it. When you put a square peg in a round hole, guess what? The donor will see that and wonder what this person is doing out here. It’s not a successful visit. It embarrasses everybody and makes people feel bad, and that’s how you lose friends and donors and relationships.
I have a really great example of what I like. I got a call on Sunday from the board member of an organization that my wife and I support. She was calling to thank us for our gift. She invited us to come out for a tour of the facility that we support. It’s an organization that helps people in a variety of ways: free clinic, food bank, financial assistance, the whole thing. I thought it was great. She says, “I’m a board member. Just wanted to call and thank you.” As a fundraiser, I’m thinking, “Good job, board member. Good job, person who asked the board member to do that.” An hour later, I got an email from her. “Hey, I left a voicemail. Here is the same information. Here is how to find me.”
If you can engage board members, it’s a lot of fun. Who doesn’t want to call someone up and thank them? Who doesn’t want to take someone out for coffee or lunch and tell them what their gift is doing to make a difference in your organization? It’s a great thing to have board members do. Most of them would love to do it. If they are not sure they are going to like it, I guarantee you they will do it one time, and they will be addicted. They will want more names, and they will want to call people. It’s fun! They will love it.
Kind of bridging onto that planned giving piece, here is that relationship-building. I am not suggesting board members talk about planned giving. Most of them won’t be qualified or comfortable with it. What they have done is you have just had a board member contact a donor. The donor is probably going to be impressed that the board member called. I was impressed on Sunday when I got that message, that a board member took the time to call me.
From a planned giving perspective, it’s all these different touchpoints from these different people that build that- If someone is going to make a planned gift, they can’t just believe in what you’re doing today. They can’t believe in what you’re going to do in five years. They have to believe in the organization, the leadership, and the transitional leadership in that organization, that it’s strong enough to make a gift that they maybe won’t get for 10, 20, 30 years. They have to believe that the leadership is there, the mission is there, in order for them to make that investment. It’s not an easy gift to get is what I’m saying.
The point that you made about when people decide to make a gift like this, and what encourages them to make a gift, and what category they’re in, I’ve had donors who have been giving me $10k, $20k, $50k a year make a planned gift. I have had donors who have never given us a dime give six figures. One of the largest bequests I ever got was $650,000, and it was from someone that not only didn’t I know, but no one in the organization knew, and they were not in our database. They had never given us any money. If they did, it was before they were keeping records, so 40 years ago.
Hugh: You just highlighted one of the biggest flaws. We tend to overlook people who aren’t donors, who we don’t think are capable or will do it. There is no overlooking anybody, is there?
Jeffrey: Right. This goes back to what we talked about very early on. We talk about character and integrity as an individual quality of a person. Organizations have them, too. People are watching you. They are watching you and your organization. If they see what they like, they may not be able to give you money right now. They may have other obligations, taking care of their kids or parents, all over the map. They make a little note and say, “SynerVision Leadership Foundation, I have been watching that guy, Hugh. I like what he is doing. I can’t do anything for him now, but I’m going to make sure I get some money to further this mission because I believe in it a lot. I just can’t do it right now.” That’s one example.
I will make a statement that is completely accurate: I have gotten more bequests in my career from people I did not know, and we did not have a relationship with—and this didn’t mean that we didn’t try to have a relationship with them. These were people we did not know and were not on our radar. I have gotten more bequests from them than from people I have had a relationship with.
Hugh: That’s fascinating. Thinking back over some of the things we do wrong is underestimating somebody who might have a lot of potential. Focusing on a few large donors, I heard you talking about not putting all your eggs in one basket because they can go away. Instead, you want to have all the small donors as well as the large donors. Suppose you have 1,000 people giving $25 a month. They aren’t all going to leave at once unless you break that integrity thing. Also, we underestimate how in the aggregate all of the donors make up a large portion of our budget.
We tend to think grants are a shoe-in. We write a grant and get money. Hmm. What wisdom do you have about grants? What do we do wrong?
Jeffrey: The first thing, and the one I hear the most from foundations, that we do wrong is we don’t do enough research. We don’t find out what they want to fund, how much they might give, and I’m talking about a range. It’s fairly easy to go online these days and find out what kind of qualifications the organization has to have, a range of how much they give, and the other details that you need to know: whether or not this organization will be interested in funding the entity or the particular program that they are wanting to fund; and then of course, how much is it going to be. That’s the #1 thing.
The other thing that we don’t do enough when it’s possible is to connect and communicate with the executive at the foundation. Pick up the phone or send an email and say, “Hey, I have a couple of questions about this request. Could we talk? Can you give me some advice on how best to pursue this?” You need to go after every avenue you can with a foundation.
The thing with foundations is everybody has a limited amount of money to give, just like individuals. But foundations are getting requests from way more organizations than we are as individuals. I know your mailbox doesn’t look that way, but they are getting bombarded. They have a fixed amount of money to give, just like we do. They already have their budget set. Some of that money is already committed because they have organizations they give to on an annual basis. What’s left over goes out to these other organizations. Unless it’s a different kind of foundation, like a community foundation, then they will give this much money. They are going to get probably between 10-100x as many applications as they can fund.
Hugh: Back to the strategy. Defining the purpose of what we do so people know why we’re in business, so to speak, why we are doing this. That is skipped over a lot. We go right to what we do, and people don’t understand why it’s important. Here is a problem. Here is a solution. Here is how we do it differently. This shows you have done your research; you know there are other organizations, but they are not doing exactly what you’re doing. This is differentiation.
The other piece is clearly defining the impact. What are the results that will happen? The foundations want to focus on what they want to give money to. We want to see these things happen.
You are required to do the administration of the grant, which is reporting how you use the money and the results. We are not required to do that with donors, but there is value in reporting back on what has happened, isn’t there?
Jeffrey: Yes. There is extensive research that has been done on donor attrition. Among the top reasons that donors only give to an organization one time or only give for a few years and then disappear is usually one of two reasons. One is they don’t feel appreciated, which means they are not getting the right kind of thank you, or any thank you, or enough thank yous, or from the right people, depending on how much they gave.
The second reason, which is what you’re talking about right now, is results. How did they use my money? Did it make a difference? What are they doing with it? Where is the organization today as opposed to when I made the gift? Sending out newsletters is great; it gives people generic information about what is happening. If you are going to have a relationship, it has to be a personal relationship.
I was just looking at a business cartoon, but it perfectly relates to this. I’m translating this to nonprofit terms: How many of our donors do we want to have a personal relationship with? The answer is as many as you want making the next gift. The more personal that relationship is, the more that person understands the individual who is asking for money, the more the person understands what the organization is doing with that money today, what they are going to be doing in one, two, and five years, is the key to someone staying engaged and not feeling like a stranger.
We don’t have relationships with strangers. A lot of times, organizations treat their donors like strangers. They get an email. This is my #1 pet peeve in fundraising. I make an online gift, not big, $100. For some people, that’s big. For me, it’s money, it’s not huge, but it’s money. I click the button. Boom, I get the email that says, “Thank you for your gift. We appreciate what you’ve done.” That’s the only thing I hear from the organization. I don’t get a letter in the mail that thanks me for the gift. I don’t get a letter from a person.
I’m not saying this happens with every organization, but it happens more than it ought to. Recently, out of maybe five or six gifts that I made, I’m going to say half of them did not send a letter from a person that said, “Thank you.” The thing that thanked me when I made the gift was a computer. A computer automatically thanked me with a message. That’s nice, computer, but I want to hear from the person whose fake signature is on there. I want a note, a letter, something that tells me that a human being saw that gift and thought enough of it to thank me for it.
Hugh: There are two parts to fundraising: getting the gift and getting it on a recurring basis. We are talking about donor relations. It’s nurturing. It’s an effective communication system with people who want to support you. We are also people. We don’t want to be treated that way, but time and time again, we hide behind the excuse, “I’m too busy” when in fact if you’re too busy, maybe you should step back and reorder your time. It’s like we build a car. We sometimes learn to drive it, stay between the white lines. But it doesn’t go anywhere until we put gas in the tank. The funding is like the gas to drive the car. Even though we have the strategy and the people, we have to have something that drives it forward.
We are going to go long today because this is a great topic, and I have this expert cornered. Are there other things we haven’t talked about that you’d like to talk about ensuring fundability?
Jeffrey: You touched on these two things I was going to mention, so I will expound quickly on both.
We don’t want to treat people like we want to be treated because we don’t know how they want to be treated. We want to treat people the way they want to be treated. The key is to find out how they want to be treated through phone calls, correspondence, personal visits. How much information do they want from us? How many times do they want to see us? Do they want to see us at all? I have had donors say, “Don’t waste your time coming out here to see me. You’re a long ways away. I’m going to keep doing what I’m doing because I care about what you guys do. I appreciate your phone call, and we’ll have a nice conversation. Don’t waste your time and gas coming out here to see me.” Fabulous. Now I know. I will make a note. Don’t put this person on a schedule list to go out and visit them, but call them, and keep them updated. Thank them for being conscious of our budget.
The other thing is people get so busy that they are cutting the bait, but they are not going fishing. If a fundraiser is too busy to contact donors, huge problem. If an executive director is charged with fundraising, and they are too busy running the organization and managing stuff to raise money, then we need to restructure the organization from a personnel standpoint. We need to create a situation where those individuals are freed up. I have been in a situation where I have had too much responsibility. It was hard to break out of that and get where I needed to be.
The key is to get people in those positions who you can trust to do the other work. Delegate everything you can that doesn’t involve donors. Obviously, you need to keep a handle on other things. If you are the person charged to visit and call donors, and you are making one phone call a week, going on one visit a week, and sending one note a week, you’re not going to get very far.
In a typical organization- I’m not talking about someone who raises $20,000 a year or $20 million a year. I’m talking about an organization that has a budget of somewhere between a quarter of a million and a million, maybe a little bit more. When you get into that half a million-dollar range, you need to start looking at having three people involved in fundraising. You’re not going to get to the next level if you don’t have three individuals spending time doing this.
Hugh: It’s an engagement tool. I hear over and over, “My board is not engaged.” If we had the proper training, and we gave them the pathways or the scripts, that makes them feel like they are doing something important. We bring people on the board so often without letting them do things they are capable of. Certainly, they are enthusiastic about the work they are performing, and they can share it with other people. That is a good thing that I’m taking away today. Plus some other things you talked about.
Jeffrey, this has been extremely helpful. I don’t care what level you are in your organization’s development. Remembering the basics is so key. As you said on the outset, it’s some of the same stuff we should have always been doing. It’s more important to do these fundamental things today because there are a lot of people out there looking for funding. We need to show up from the first visit being capable and clear on why we’re doing something and the impact it’s going to have.
Jeffrey: For anybody who hasn’t left their home in several years, customer service is sorely lacking in pretty much every industry right now. If you look at the organizations that are doing the best financially, retaining quality staff, and excelling overall, they are the ones who are doing well right now. Chick Fil-A is a great example of an organization focused on customer service. The place is busy all the time. There are people flocking there because you get treated with respect, you get what you ordered, it’s done right, and they say, “Thank you.” Same in the corporate sector. Look at the organizations doing things really well, treating people with respect. Apple is a great example. Treating privacy with respect. They are just doing really well. Nonprofits are the same way. If you treat people well and provide a high level of customer service, people walk away feeling good about the individual, the organization, and what they received. They will come back and tell all their friends about it.
Hugh: That is brilliant. That is the essential piece of being fundable right there. Jeffrey Fulgham, thank you for sharing your abundant wisdom and experience with us on The Nonprofit Exchange today.
Jeffrey: My pleasure, Hugh. Thanks for having me.