With June 30 just a couple of weeks away, remember why your donors donate to you
If you are a nonprofit leader—executive director, board chair, development director, or another concerned citizen—and you saw the image of June 30 and panicked…relax. I mean, you probably won’t hit your financial goals if the money in hand, the pledges that will in fact be paid, or last year’s May-June giving history don’t get you over a certain goal line, so yeah, go ahead and worry about that.
“Relax” in this context means that you don’t need to worry about panicking everyone else into a fiscal year-end campaign that will turn off your donors, cut several years off your lifespan, and turn your staff against you as a money-grubbing schmuck who cares more about revenue and expense than about helping the underserved.
Not that you’d be wrong in caring about it; you’d be wrong in only caring about it. Perhaps you have an unscrupulous financial bonus based on revenues?
Yes, receiving bonuses on raised money is unethical. Ask the Association for Fundraising Professionals.
Regardless, June 30 is not a deadline for anyone except those for whom it is a deadline. Which is to say, just because your fiscal year ends on June 30 doesn’t mean that anyone cares. No one cares.
To a donor, there is no advantage—tax deduction or otherwise—to donating before June 30. So, when you send your frenetic letter, email, text, or phone call to your donors about donating before the end of the fiscal year, they’re going to react as they should: dumbfoundedly.
After all, they already gave to your organization. It’s not an emergency (and honestly, if it were, they’d just be donating earlier, not more). And the end of the year usually is loaded with things like balls dropping in Times Square, ships floating down the Thames, and fireworks emanating from the Eiffel Tower, not a hot day at the beach.
(For those from OZ who read this blog, I apologize for the northern hemisphere bias. I’m also envious as hell. And hey, if you’ve got a conference panel with an empty seat on it, my travel plans are pretty open about now. Just sayin’.)
Whether you’re a board chair, a board member, an executive director, a development director, or the volunteer who answers the phones on Thursdays between 9 and 2, you should already know by April how your fiscal year is likely to end. It won’t be a surprise. After all, your development plan is in semi-hard clay, most of it has been accomplished (save an annual dinner or something obsequious like that) and there’s nowhere else to turn in 90 days.
Unless you intentionally tank your year so that all your money comes in right at the end to make you look like a fundraising superhero.
Or you believe that you’re an actual superhero.
Over the years, I’ve worked with panicky, type-A bosses who believed that their reputation rose and fell on the revenue line of the budget. I had one extremely nice one who was proud that in her 17 years of service as an executive director, the company had never once ended a fiscal year in debt.
She actually believed that fiscal responsibility was equivalent to ending the year in the black. Wow, right?
I saw that. You tilted your head at that “Wow, right?” Right?
For a nonprofit organization—whether it’s an arts organization or otherwise—the balance at the end of the year can never be used as an evaluation of whether the charity is succeeding. Never. It has nothing to do with your mission, the execution thereof, or whether your community is tangibly, quantifiably better off for your having participated in a nonprofit experiment.
No, it doesn’t.
Example: you run a nonprofit arts organization, specifically a theater organization. Your plays and musicals have received great acclaim from the press. Your tickets are being purchased, mostly, by the same older white folks who have always bought your tickets. But you don’t care, as long as that whiteness turns green in your cash registers.
How does that prove that you’ve solved or mitigated one of your community core problems?
Your artists have worked unethically (and, potentially, illegally) long weeks and weekends just to get the plays on stage on time. You pay them the negotiated minimum, if union, and as little as you can, if non-union. Not even minimum wage, because, hey, they’d perform for nothing, right?
How does that prove that you’ve solved or mitigated one of your community core problems?
In this final month of the fiscal year, you push your staff to the limits raising money for the organization, especially on the development side. You approached the same donors, foundations, and corporations. For their donation, they get great seats, their name on the wall, and special thanks from a fawning artist right there on the stage at the beginning of the performance. They get dinner with the director, drinks with the others in their caste, and a private room in which to enjoy it all. Très élégant! Très chic! Ils pètent plus haut que leurs culs!
How does that prove that you’ve solved or mitigated one of your community core problems?
On the other hand, let’s say that your entire audience is comprised of people who are underserved or unserved by society. Or that your revenues were split between your own expenses and those of social safety net charities who used the money to help people get homes. Or food. Or jobs. And let’s say those jobs helped those underserved folks, in turn, to get back on their feet, avoid eviction, and regain their dignity.
Or let’s say that you were able to provide your art within places in your communities which make it inconvenient or pricy for people in the middle class to afford an evening out. And you provided licensed child care. And each performance was subsidized not by the purchase of a ticket, but by your company’s expense line.
And then, let’s say July 1 comes around and your financial bottom line ended substantially in the red.
If that happened, all I can say is “Bravo.” Your nonprofit arts organization is a great one. Your company has done what almost no nonprofit arts organization in America has done – served the neediest in its community. Just like a charity ought to. Regardless of what your boss says.
Alan Harrison is a writer and speaker specializing in nonprofit organizations, strategy, the arts, and life politics. His columns appear regularly in major publications. Contact him directly at alan@501c3.guru. If you’re feeling generous or inspired, just click on the coffee cup. You don’t have to, of course, but if you can afford it and find some value here, please provide the desperate need for caffeine. Alan is always looking for good opportunities to write and consult for nonprofits that need a hand. And, of course, that elusive Perfect Opportunity™.
Alan’s new book, “Scene Change: Why Today’s Nonprofit Arts Organizations Have to Stop Producing Art and Start Producing Impact” will be published in January. CLICK HERE TO PRE-ORDER IN THE UNITED STATES. If you live in the UK, CLICK HERE.
Advance copies may be made available for those booking conferences, reading engagements, and speaking engagements. Recruit your local bookstore, conference panel, or boardroom to get a visit from Alan.
Don’t forget to let Alan know if you want bulk copies for your board!
Creative leaders are needed who can find the balance between fiscal solvency (which is necessary to do both the artistic and societal/social impact work well and on a sustained basis) and fulfilling the artistic/social/community role. The tendency to cut back on service, education, and social impact in times of budget shortfall shows that impact is not embedded into the mission but something to be touted in hopes of gaining new donors or larger contributions or the favor of foundations who are pulling away from arts support. We do not teach artists to understand this nexus, nor do we have or educate leaders who are willing to demonstrate how such balance can be achieved. As long as arts organizations are dependent on gold-givers who have never experienced lack of funds for daily needs, social impact will be perceived as a missionary task rather than as responsible service embedded in the fabric of the arts.