John Mark Vanderpool, co-founder of Social Impact Solutions joins the podcast today. With a focus in fundraising strategies, Tosha & John Mark settle here for the conversation as this is John Mark’s speciality.
Simplifying vs. Diversifying Revenue Sources
It is no surprise that clients have struggled in the final quarter of 2023. Year end giving wasn’t as projected and not to mention the conversations about inflation and rising costs has yet to settle, the non-profit space faces many challenges entering into 2024.
John Mark is on the other end of the phone for others who are seeking help in operational efficiencies and fundraising effectiveness.
As Tosha mentions, a survey produced by BDO stated that 45% of nonprofits are going to combat inflation through fundraising efficiencies. But what does that really mean?
Thanks to John Mark & Tosha’s conversation, we identified the answer to this question. Starting with simplifying what the question is asking, when in a high inflationary environment, John Mark shares that non-profit organizations must address two things:
- Raising more dollars
- Cutting costs
Sounds fairly simple, right? The entire idea is essentially saying, how does the nonprofit get more out of doing less? By doing fewer things (top line) and producing more of an output (bottom line), a nonprofit can address this problem.
Okay, so we’ve talked about the solution conceptually, but how does an organization actually get there? What is the practical answer to all of this?
One way is to address current diversifying scenarios. For example, over the last 10-12 years, the economic environment has been rather friendly. This ultimately allows for a business to take ‘risks’ or experiments with fundraising opportunities to settle on the one that makes sense for them. In essence, because the economic environment has been favorable, a non-profit can take time figuring out where the group wants to spend its time. A sprinkle of social media efforts here and a dash of new fundraising events there can net enough profit to feel okay, but maybe this isn’t where all the time should be spent.. Afterall, remember the goal – doing more with less.
John Mark suggests doubling down on the actions that have worked, which can be scary to many people because it opens up exposure. Or back to the old adage, putting all of the eggs into one basket.
Instead of diversifying to outside efforts, simplify them! Let’s take the concept of marketing channels for example.
Channel A is the business’ bread and butter. It is where the business has thrived in attracting new donors and funds year over year.
Channel B is a new event across town, which could attract a new market.
Channel C is social media and ties A & B all into one.
After three years of efforts, Channels B & C did not produce like they were thought out to. John Mark shares in theconversation how Channel A has always been the answer and that the solution is simple! He asks a very important question for non-profits:
Which one of our marketing channels, development channels, is actually producing high quality, new donors that are giving more money over the long run?
It’s not to say that B & C can’t be valuable or useful, but let’s not forget about A. A has been what has produced time and time again. Focusing here can help businesses do more, with less.
When it comes to simplifying and diversifying revenue sources, the two can sound counterintuitive. John Mark shares another example of an organization that was discontent with the amount of funders they had. On the flip side, they were raising significant amounts of dollars through grant writing. He shares that diversification doesn’t always have to come from doing something new, it can come from doing more of what you’re good at!
Essentially, this is an identity problem for the organization, asking the question; ‘What type of non-profit are you?’
Starting here can help lead organizations to focus on doing more of what they are already good at.
Fundraising Efficiencies & Boardroom Pitches
As the conversation continues, Tosha brings forth an amazing question. ‘How does a leader pitch to their organization’s board of directors that one fund raising initiative might be too much?’ For example, assuming the organization has many bases covered. While having fundraising events like trivia nights, 5Ks, Galas, and so on, how does a leader tell their board that pulling back from the $20,000 (net) Trivia night is the best move for the organization?
In theory, the group would like to take the time, efforts, and individuals from this event and apply them to the revenue source that produces 4x that. So how can this be communicated and does it even work?
John Mark refers to Jim Collins’ ideas of conducting small experiments. Can the group turn $1,000 into $10,000. Can the $10,000 be multiplied and so on? Even further, if the 5K is the best fundraising platform for the organization where they can get in front of and convert thousands of people into donors year over year, start there. Then it comes down to the math of the conversions. 100 new donors annually at $100/month has all of the sudden turned into $120,000 annually. Now, the $20,000 trivia night seems like yesterday’s news.
It will take time to work through these efforts, and probably even the convincing of the board, but eventually when the production is far greater from doing less, then it will start speaking for itself.
Tosha adds that by focusing on one channel, somehow, someway, the other channels pick up momentum as well. Maybe people attended the 5K, but the Facebook page landed more likes because of it.
The moral of today’s conversation is centered around the ability to create more out of less. Playing within the box, not necessarily outside of it. And lastly, how becoming a jack of all trades can actually mean being a master at none.
You can find Social Impact Solutions online or take their fundraising quiz here. You can also find them on LinkedIn & X.
Please be sure to engage with the interview. Whether you enjoy listening to it, reading about it, or watching us on YouTube, make sure you review, share, and engage with A Modern Nonprofit Podcast. You can find Tosha and the Charity CFO team on Youtube or our website, thecharitycfo.com!
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