Having a “positive” relationship with your donors is a cornerstone of fundraising success. It's the key to building trust and earning loyalty, which is why so many fundraisers and executive directors are afraid of saying the wrong thing or doing the wrong thing. But what if you could be completely honest with your donors? What would that look like?
With Rickesh Lakhani, we're discussing the importance of “honest fundraising'' in today's episode. Rickesh has over 15 years of experience in the social good sector, and he is the current Executive Director at Future Possibilities for Kids. He believes that we are all responsible for each other’s success.
Myths that Rickesh wants us to walk away from:
Donors should only know about the good things in your organization. Being honest with your donors about the reality of your organization will help them understand how your organization works and how you are spending your funds. It can bring them closer to your organization and help you achieve more of your goals.
Donations should only go to programs and services. Allowing donors to understand unrestricted funds and how they will support your services in the long term will help your organization become more sustainable.
Rickesh’s tips on starting an honest fundraising
Start with your team. Write down everything you wish donors knew about the work you do and tell them the realities of everything that happens within your organization that they aren't aware of.
Communicate with donors. Start having an honest conversation about fundraising with board members and annual donors, or with people you feel most comfortable with.
Make it a practice. Building trust and relationships with donors doesn’t happen overnight, that’s why you need to make sure to include them in the conversation to help them understand how the organization works and how they can help in a more meaningful way.
Favourite Quotes from Today’s Episode
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“When I say honest fundraising, it's not that we've been dishonest, but there are specific things that we have been withholding from donors and proactively sharing with them that are keeping things the way they are and what we're wanting all this change we’re wanting donors to invest in the space differently and have a different relationship. And we're holding back on some of these conversations that we're all having amongst ourselves and we're not having with donors. And so I was like, how are we going to expect them to understand and change what they're doing? If we, as the folks who are living this day-to-day, aren't letting them into that a little bit more?”
“Trust is built through the good times and the bad, to the vulnerability. ”
Resources from this Episode
Cindy W.: So often in fundraising, I see fundraisers or executive directors try like tiptoe or walk on eggshells around donors for fear of saying the wrong thing or doing the wrong thing and jeopardizing their funding. And this has created what I think we can all agree as a fairly unhealthy dynamic in our sector. And the good news is that people are aware of it and we're having conversations and we're starting to think about how we can change that dynamic.
And so today we are going to be talking about just that and my guest and friend Rickesh Lakhani has coined this honest fundraising, and I'm so excited to dive in.
My name is Cindy Wagman. And I'm your host of the small non-profit podcast, where we bring you practical down-to-earth advice on how to get more done for your small nonprofit. You are going to change the world, we're here to help. So with that, it is a true pleasure to invite Rickesh to the podcast. He's the current ED of Future Possibilities for Kids. And I love the things he shared with me to share with you because I think they're so emblematic of his character. He's lovingly critical of the social good sector. And he calls himself a work in progress. And I just think that is so true of all of us but very rare for us to admit it. So Rickesh welcome to the podcast.
Rickesh L.: It's great to be back.
Cindy W.: It's so I always love chatting with you, and I love that you've coined this term, honest fundraising. Do you want to tell us a little bit about how you came to be thinking and talking and presenting on this topic?
Rickesh L.: Yeah. Yeah. So I, I may, I'm not sure necessarily if I coined it or not, but I haven't really seen it being that a specific phrasing being used. Lots of, okay.
Cindy W.: I haven't eitherthe . So I'm saying you're coining it.
Rickesh L.: Yeah. It's, we've had a lot of discussions before about in last while in particular around dynamics and power dynamics with donors and people with wealth and influence in the charity sector and our role and our roles as fundraisers and nonprofit and charity leaders. And so we've been having a lot of those discussions and a lot of that has circled around how much can we say to donors and address things as they come up when a donor, for example, presents a bad behavior or something along those lines. It's like, how do we address that? There's a lot of layers in there.
That's been discussed quite a bit. This is a little bit of a different space on that because I'm not necessarily talking about when a donor has bad behavior. How are we going to address that? It's a little bit different. It's more. When I say honest fundraising, it's not that we've been dishonest, but there are specific things that we have been withholding from donors and proactively sharing with them that are keeping things the way they are and where we're wanting all this change for wanting donors to invest in the space differently and have a different relationship.
And we're holding back on some of these conversations that we're all having amongst ourselves and we're not having with donors. And so I was like how are we going to expect them to understand and change what they're doing? If we, as the folks who are living this day-to-day, aren't letting them into that a little bit more. So what I think, honest fundraising, again, it's not to say we've been dishonest. It's just, that maybe we haven't been sharing the full truth and experience of what it actually takes to do some of this work and what's actually going to help our organization do the work that the donor is intending to want to support.
Cindy W.: Yeah. Okay. I, as soon as you said that some things came to mind for me that I feel like, again, it's not that it's dishonest, but it's not the full picture. So where organizations spend all this time, figuring out your donation of $35 will do this or matching gifts, we all know that the matching donors going to give their amount regardless of how much we raised.
So those are just like, from my experience, things that come to mind, but I would love to hear from you other examples of I'd love that like of not including donors in the full conversation or keeping. like how these behaviors are keeping things status quo.
Rickesh L.: Yeah. There's a lot, there's a lot of different components. Definitely what you identified is the impact statements and that the issue we have in our space, I think a lot of times is but it works right. And so I think that in itself is a very dangerous framing because we're like, but it works as an assumption that do it another way won't work. And there's when you're seeing that it works, are you factoring in like the total, gain and also the harm, cause an often, it's like when you're running an event, you're like we raised a hundred thousand dollars, but we spent 60. You raised 40 then you know what I mean? That's the net and that's fine celebrate that, but it's just, it's not the, again, that's another example of honest fundraising.
It's if a gala event we used to look at net costs. So same thing with, yeah with donors and talking about, let's say matching gifts where we say we're going to have a matching gift up to $50,000 will be matched with the donors already committed that amount. And, people give 150,000. And that last hundred thousand doesn't know who was matched who wasn't. And we're not exactly sharing that with them to say, oh, by the way, that's been cut off with the matching gift is done necessarily. We're not always doing that. And if the money was going to come anyway, what if we only raised 25,000?
Are we only getting a $25,000 match? We know that's not true. So those are on one, one space and the impact statements for sure. How much does it cost to do this or do that? It does maybe work in some cases, but number one, is it commoditizing, social good in a negative way? And those numbers change and fluctuate.
I know from running an org we actually stopped doing that now, and we explained to our fundraising volunteers too, that here's why we're changing it. And we're going to stand by that. And maybe we lose a couple of gifts, but I think we're going to gain another way. So I'm thinking more along the lines of, okay.
So we always say we want unrestricted gifts, and multi-year commitments. And we might say that to donors sometimes, but are we really having that deep conversation about, Hey here's what it takes to run an organization when you restrict the gift in this way, here's all the things we have to do internally that go along with that, that literally take away from the work.
I'm not saying we're not going to be accountable, but this term mission-based funding is one that we've really been using a lot in our org too it's like supporting everything we do, including all the things that enable the direct sort of quote-unquote direct programming work. So I think when you have that conversation, my experience having this with a lot of donors, maybe the first couple times I was wincing a little bit like, okay, how are they going to receive this? I still got to do this. I'm not saying anything against them. I'm just telling them here's my reality. Here's our reality. They're like, why has no one said this before? These are donors who donate to like lots of different organizations in many cases. And they're like, no one's ever told me this. So we're missing this opportunity to bring them into the inner circle of Hey, you really want to understand our work.
I'm going to tell you what no one else is telling you. It's a bit of a differentiator in a way too. They're like, they've told me, I appreciate you sharing this with me 'cause now I know how to best invest in the organization. Not everybody goes for it. But there are those that do, and then we got a little bit closer to some of these broader goals that again, you and I talk about and other people, we talk about it on Twitter or social media.
We want unrestricted gifts, but here's a literal moment with somebody who can make a decision differently based on that conversation.
Cindy W.: Yeah. I love that too, because again, so often our sector frames this as a difficult conversation, or having that, and again, we've set up this power dynamic that we're on opposite sides of our donors, but in what you've talked about, it really feels like we're on the same side. And we're just having to pull back the curtain a little bit.
I'd love to hear a little bit about your experience doing this because you have been doing it. And I think just for most people getting started is the hardest step, right? It's like figuring out that, what's the first mini step that you need to take to get on that same side as the donor. So how do we start these conversations? Is it one-on-one is it in writing? Is it like, how do you go about making these changes? That's a huge question. Let's start where you want.
Rickesh L.: No, but see, is, this is, a piece well, whenever we talk about issues in our space is often we have a lot of leaders and fundraisers who actually agree. They just don't know where to get started. Like literally, what do I actually say in this conversation? What do I actually do? And then it just becomes overwhelming and you just go back to what you were doing. And I get it with everything that's on our plates. But a couple of things is one is maybe go through an exercise with your team, right? Or yourself as a starting point. What are all the things you wish that donors knew about the work that you do? Not what you wish you could say to donors. or it's a little different. What do you wish that they knew. and write it all down and say what are the realities of everything that happens within this org that they're probably sheltered from?
And honestly, cuddled in many cases where like we have to only share the good, we have to only tell them all the good things that are happening because we want to. But if they're looking to go down this journey, then you have to like, see them, as you said, as someone who's trying to do good within the org.
So by not letting them know this, in some ways, I feel like we're doing a disservice. So write down all the things you wish they knew. Then get started but maybe start in a more quote, unquote safer spot. Maybe you start with some donors that are close to you. Maybe start with some board members, maybe start with some annual donors who, are like, so just say, Hey, and even tell them that, say, look, we've been there's a lot of things. We wish people knew about our work, but we just haven't felt like people would be interested or, they might not want to give it anymore or whatever. Can I share some of those with you and tell me what you think and just run it by them.
And then number one, first of all, that person's going to, you're bringing it close to the organization to bring them closer, but they're also in that conversation may already say, oh wow. I realize I'm not even doing that. So can we talk about my giving? Of course, starting we can. I'm not trying to manipulate them, but I think start where it's sort of safe. And then I think just to make it a practice. Like in every conversation, we're going to think about something that you can share with a donor and work it in in a certain way so that they advance their learning. Cause it doesn't happen overnight. But what is one thing you can bring into a conversation that will help them move closer to being? Someone who really understands what's going on and not that here's that person over there, they're giving money to us. We have to treat them give them red carpet treatment and treat them like royalty. And we're over here doing all this work. It's no. Like we gotta fix that. And as much as we can rebalance the scales a little bit. So I think that's a couple of ways the ideas I had. What's worked for me to get started.
Cindy W.: I love that. I want to go a little deeper, but I also want to point out. I think this was clear already, but it just has been sitting with me is like we are equally responsible for holding up those power dynamics that we are quick to criticize in how we in avoiding moving forward with this. And so I just want to leave that out there, but I'd love to hear a little bit about you said your fundraising appeals, you've taken out that like your donor donation of this well, that those impact statements. How has that gone? And what did you replace it with? I think people really need to see, oftentimes we can't believe something until we can actually picture in our minds.
And actually if we can link to some examples of stuff that you've done in our show notes, I'd love to include that because again, so often. We're taught over and over again in this sector. Those impact statements are best practices, that we haven't, we don't have good alternatives as role models. And I'm a huge believer in let's not create everything from scratch. So can you tell us a little bit about what it actually is like to frame it differently frame that asked differently?
Rickesh L.: Yeah. I think speaking from the experience of doing this, for sure, because that's, I couldn't, I wouldn't feel right, coming on here and saying we haven't actually tried it. I have to be honest about the impact statements piece. We haven't replaced it with any with that particular piece. Like when you go to the website and you donate it, doesn't something else doesn't come up, but we're working on that. It's like, how can we position this and say, no matter what amount you give, you're going to be supporting all of these different things. And proudly saying, we have an office proudly saying we pay for, we have a lease on our printer.
And here's what we do with a proudly saying all those things. And not that we're justifying that we're actually saying, this is what it takes to run an organization. If you don't understand that then you're right. We play a role in that and not, and I'm not. So we're still figuring out what to replace that with. But we've taken off the impact statement piece. For a more direct conversation with foundations and donors.
What that's looked like is now I have to say that in one way, I did have a blessing because I had an opportunity. One we were had a growth strategy. We had a big grant that came in to lead us off.
And then another funder was interested in supporting and just what was the poor growth of me with my usual habits was like we're looking to grow this program in this way. You can invest this much to support this much programming, whatever it was. And, they're like what is it? What's it going to support that growth that other people, may not know about? And so I said, okay I, I'm going to do, I'm going to give you two proposals. One is the typical kind of programmatic one at this amount. The other is all the things that no one else is funding, but I know we need and are going to help us grow.
And that was a full-time fundraising staff, a new website. Investment in our CRM system. We didn't even have that in place yet because we didn't have the funding and capacity so we can get extra. So I just made the wishlist, I just put it all down and we got a three-year $250,000 commitment to investing in ourselves.
And that's been a huge reason why we've been able to sustain. I know that's different than unrestricted, but it's still being the honest conversation. If I had not done that, I said no, like this is, I could tell you these things, but if I just know I'm going to take the initiative and just give you an entire proposal, telling you why these things will help.
And they were like, you know what, if you do, if we do these things, then you can go raise more money and be more sustainable. So if that was a really critical moment for us, so that was a pretty significant gift for an organization of our size.
Cindy W.: Absolutely. So it sounds like these conversations have been going well for you. Fair to say.
Rickesh L.: I think so. That was just one of a few and others they've been that they've I think it raised a bit of eyebrow sometimes because they're like but what about this, but what about that? Don't you have anything new or growth things that you're investing and I'm like when you invest in this, you're investing in the current and the growth and the infrastructure you're doing it all.
And you'll put us in the best position to be able to do these things. So it is, I would say, I've never, I haven't had anybody telling me, I'm not giving to your organization as a result. They may not get it. And it may not change their behavior, but no one's been like, forget it. We're leaving work.