#Sustainability Means Sometimes Taking Chances

In some things, tradition matters more than almost everything else. Family recipes, for example.

In other things, how much tradition we incorporate into our work is ideally understood – like so many things – along a continuum. In an organization that delivers services primarily using technology, or develops apps, for example, we can see intuitively that it might be less productive to rely heavily on tradition as a guide to decision-making.

The world of philanthropy and fundraising is deeply steeped in tradition, which is often very instructive. Other times, being tied tightly to tradition in a world that is increasingly less so can be unnecessarily restrictive. Let’s look at an example.

Here’s an example of a chart we saw recently showing a dramatic shift in sources of nonprofit fundraising revenue over several years for a specific nonprofit. This particular nonprofit is, it is fair to say, fairly traditional in its thinking. This is an excellent example of this existential angst between tradition and the challenge of forward motion into what can sometimes seem like the relative unknown.

New and Traditional

The newer revenue source is growing by 30% annually for the most recent two years. The traditional channel is shrinking rapidly, by about half in each of the past two years, after having dropped significantly over several years.

The messages here are clear. The newer channel is now growing rapidly. The traditional channel, after several years of a moderate decline, has suddenly gone into a more severe one. Together, these dynamics would appear to clearly demonstrate how donors would like to work with this organization, and that this preference emerged about three years ago.

Despite the clarity of message from donors, this organization has a hard time letting go of the idea that the traditional channel had permanently lost traction to the newer giving model. For a long time, they insisted on diluting resources and results by supporting both fundraising channels equally with staff and other forms of support. The organization chose to value its traditions more than new and important information from its donors.

Unfortunately, this decision to delay the inevitable in what was a really quite urgent situation worked against the organization in a couple of ways. First, it broadcast a completely unintended message, essentially saying to donors, “We care more about what we think you want than what you are telling us you want. We care more about our internal traditions than your needs.” We found this inflexible view particularly striking because the overall level of donation was positive, and showed potential for growth, demonstrating significant donor appreciation for the traditions on which this organization was built.

Equally importantly, the organization took an unnecessary financial risk by deciding to evenly allocate resources to both channels. Weak support for the growing channel and a simultaneous focus on the decaying revenue stream meant that donors’ needs in the blossoming area were poorly met and not well understood by the organization. An alternative for resource allocation (human and organizational), as an example, would have been to do so based on expected revenue by channel.

A little more flexibility and openness about the shift taking place in donor giving models would have allowed this organization to both better serve its donors and grow its donations much more rapidly. Understanding tradition as a gift to be applied strategically and thoughtfully would have created the freedom for this team to incorporate the new information about donor behavior and preferences into this organization’s unique multi-channel funding model.

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