honest fundraising with Rickesh Lakhani



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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

Rickesh’s Twitter

Rickesh’s LinkedIn

The Good Partnership

Transcript:


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.


Cindy W.: Yeah. Yeah. I love that and yeah, you don't have to change everyone, I think so often we see in our line of work like we want to change the world and the world is a lot of people and we think like we are used to working that systems levels for things. Sometimes we can't see that systems change through individuals and individual change. So I love that. And it doesn't have to be like, what I'm hearing from you is you can take a step towards this and it doesn't have to blow up your world.


Rickesh L.: Oh, no, absolutely. No. Like I don't think it will. And like I said, every single person not everything, but every single person who ended up changing their behavior. In addition to doing that also expressed gratitude for us telling them the truth. They almost they're what are other charities not telling us that, and it like if we're really trying to build trust to me, trust is built through the good times and the bad to the vulnerability.


And so I, I have to say Cindy and all this too. Maybe some folks that say frontline fundraisers in particular may not feel like they have the space to have these convos because of the impact it might have on giving. And I think that is a whole other, maybe that's a whole other podcast we got to do, but that we also have to be in an environment right. And I've acknowledged that I'm the ed. So I can do these things and not have to check in with all these folks. But if you're in an organization, you got to report to a manager, a director, a VP, or a CTO or CEO, whatever it is ED and they, you need to know that they have your back and whatever happens to the conversation that they're going to support you, even if it means you may lose a gift because they believe in it.


I would understand totally how fundraisers sometimes still don't feel like it. Conversations because they were like, I'm incentivized based on how much I bring in. I'm in say, I may get in trouble if we lose this donor. And so then there's almost this disincentive to do these things too. So I think this also speaks to a more kind of environmental issue that we operated in a management leadership issue that has to be addressed to enable this as well. But that's like probably a whole other conversation.


Cindy W.: If that's you if you're fundraiser listening to this, share it with your ED because I think that. We, most people who are listening to this, I think understand that we are not shy about articulating our values in this podcast and in the work that we do that this is something that collectively, I think we need to be moving towards and do we will do our sector justice. By having by making these steps, I can't tell you how, it or I just saw someone post about war amps. I think they're still called war AMS. I don't know if that's even like an appropriate term anymore, but where they send you the key tags in the mail and part of their appeals like we don't pay fundraisers and we don't have these costs and stuff yet, they're sending you these stupid little key tags to make you feel guilty or whatever I'm like, that is hurting the sector and I'd love your thoughts just on, like, how is this taking it outside of your organization? How do we start to actually build the sector? That's going to change the world and we, in the ways we need it to.


Rickesh L.: Yeah. I definitely have seen that there was a tweet actually. So I'm going to take a screenshot and every single thing on there was the kinds of things, that you saw very commonly and still actually still see a lot of people talking about, it sounds 20 year old, 20 years ago fundraising, where we're actually trying to win donors over. And again, the worst part is it may, it probably works.


Cindy W.: I literally, saw that photo on Twitter. I took the same photo. Almost 10 years ago, exact same photo. They haven't changed even their creativitya .


Rickesh L.: It is. It is there. Okay. So I had this analogy, a metaphor I used to use before, where I talk about you can't be, you can't take delight in another charity having a scandal or so you're like, oh, okay, good. They're good. Some more for us. There's like this. I see it as like a block of cheese, probably harder. And there's like this shaver you left, we'd love cheese, who doesn't like, unless you're like as tolerant or vegan, I get it.


But you're, you can shave every time, something bad happens in the sector, you shave a small bit of trust to always see it, that in this way, what they're doing there is shaving a little bit of that kind of like they're making a little bit harder for everybody else because now people are like this organization does pay fundraisers.


They must not be good because this charity is bragging about it. I completely do not agree with that because it's, it is a disservice. So on the flip side, you're saying, first of all, I believe this honest fundraising is good for your own soul because you don't feel like I'm not being my own self in here.

I want to tell you all these things, but I can't. So number one, and two, within your org, you become, again, more real and more open. And it does lead. From our experience, it's led to some really important results. Like I'm talking like, like for our we're about 850 $900,000 organization, and I'm talking like hundreds of this is a lot of money that we've raised with these kinds of conversations that we would have got, but it would have been much harder.


It would have been restricted and for this to work, but the juggling of act, I can't, I don't want to get into that, but everyone who's, who does it knows. For the sector, let's say we have this conversation with a donor and they understand it and they change their behavior, they're hoping one going to go do that with other orgs. They work with to say, Hey, look, I have this chat with this other group. Do you, are you experiencing a similar. You know what I'm going to, unrestrict my gift with you as well. I've actually seen those types of things happen where they take that behavior of others. So that's good. So there's like that.


And maybe if they're so inclined, depending on who they talk to about their giving, maybe they're also sharing that with other donors. And if they do that, then you know, we've really done something special because then is that peer influence piece. And again, when we say peer influence, we always want to see us all on the same page, but we know if you're hearing from your friend, who's donating to org and it's you, that's what I mean, when I say here, you're going to, you're going to probably listen to that a little bit as well.


I think we have to, first of all, as a group, continue to advocate and put pressure and call out things that were like, that's not okay. And there's a lot of folks doing that. So this is not okay. It's actually hurting the rest of us. So you might win, but you're shaving a little bit off for the rest of us, and we're trying to move this in a way that we all win. So if you did not the mindset piece, a lot of charities see it as competition. We got to work on the mindset of folks. I'm finding that a lot of leaders coming into the space now have that mindset a lot more than I've maybe traditionally found.


So I think if we could all agree, these are, like we agree you do not have performance based incentive sorry. Like based on dollars and cents, like that's, it's not technically illegal, but it's considered highly unethical. So we made this understanding and agreement that we're not going to do that, right?

Yeah. I'm correct. It's not illegal, it's another.


Cindy W.: Organizations like you and I both come from professional fundraising backgrounds, or CFRE CFRE I I didn't do any go to any schooling, but yeah same. I didn't take any schooling, but I've always been a fundraiser. I have my CFRE always done life he stuff. And for anyone listening, who's what are those acronyms? Don't worry. You don't actually don't need to know about it. But we're taught in, professional fundraising training. And I'm using air quotes because he can't see me, but like we're taught that's unethical. And we're telling ourselves that in an echo chamber again, like if we're so good at talking to each other in our sector, that I can't tell you how many smaller organizations that don't have professional fundraisers on their team or on their board. The very first thing they ask, is, do you work on commission? Very first thing.


And so we, again, there's this sort of gap in the conversation and I'd love for you to just talk a little bit about that because yes it's not considered ethical. And though that's one of the things that comes up over and over, and it stalls smaller organizations in terms of moving forward, their fundraising cause they never put aside money to start to invest in fundraising because they think, oh, I can just hire someone who will work off commission, like you really can't anyone who's been a PR like any professional fundraiser won't do that. Yeah, let's just talk about that for a minute.


Rickesh L.: Okay. Do you mean speaking about like the fact that there's this kind of known thing in our space, but not everybody knows about it? Is that the piece of


Cindy W.: Exactly. Exactly. And like, how can we ha even start to have that conversation? Like, why is it considered unethical? We just, honestly, most of the time people. It's not ethical and like big flashing lights and they don't even take the time to have a conversation.


Rickesh L.: Okay. So that's a kind of another important aspect of this is like how do we, so if in the context of honest fundraising, as well as a, as an idea, obviously that idea has permeated through some form it's been taken on and people have been promoting it.


And there are some folks who don't hear about it if they're not in certain circles. So it's like, how do we take that for me, there's a learning. There is how do we take concepts that we're tracking? We're trying to actively promote out there how can we follow some of those same mechanisms to get, to release that information and get others buying in and learning about it.


And that's maybe more of an outreach piece, right? As far as the piece around yeah, questioning. I do think there are a lot of things in our sector that we've been doing for so long that we just have to put on the table for discussion. And whether it be in the same place or not, does everyone actually understand why it's unethical, or is it one of those things where you're like you, sometimes you hear things where someone says something and they get smacked down and they don't, and they just shut down.


And so it's if someone were to say that, especially a small organ, I can fully understand why they would not know. And at that moment, is that also being also, are there explanations or is there a conversation about that as well? So I think there are a lot of pieces you've identified here around number one.

How does something, if you're trying to create a movement or kind of trick credit creates something, how do we permeate that into a broader space, but also who's being excluded in the sort of, some of the current systems in these conversations? Are people really understanding? Are they just accepting it? Because they're told it's the way. Yeah, I don't want not only answers to all those, but


Cindy W.: I don't know, but this is it, this is the honest conversations that we have to have with ourselves as much as with our donors, and that's, I think one of the things that I'm taking away from listening to you is that we have, whether, as you said before what donors like you're the executive director, you in a position to make these conversations, but other people might not have the authority to do that. And these are conversations we have to have as a sector and we have to have with our donor.


Rickesh L.: Yeah. Yep. It's what we need, there's like a few levels level of that talk. Like I said before, I got it. You talk to yourself about this, you talk within your org, we talk as a sector, and that as we have to do it in all those layers to enable the kind of environment as a sector and within our own orgs that we can have these conversations. Because I think a lot of stuff we actually already inherently know in many cases, we just don't know that we can speak up about it. And I think I'm really moving towards the fact that we, as a sector are doing a disservice to the people who are, who are investing and wanting to see change. And we're just like, we're missing an opportunity because I do believe that they feel closer to the org right.


It feels fewer trends when we talk about transactional relationships and stuff like that like they feel, I think oftentimes we feel the only way to get a donor to understand our work is to show them some ups stories, show the program. piece bro, that's, this is not the truth.


There are so many complications. And if they're coming from different spaces, if they're coming from running a household, if they've run a business, if they're from the government space, as they'll, they can innately understand that too. That it's not just what there's all this stuff in the background.


Cindy W.: So yeah. Amazing. Rickesh thank you so much for this conversation and ongoing conversation, right? This is, I know we're going to be talking about this for years, but it's a really great jumping-off point. So I really appreciate it. Where can listeners connect with you if they want to continue chatting about this or other topics?


Rickesh L.: Yeah, they can I'm pretty active on Twitter. My tag has constant changes that are why we live in those areas. It's always changing and also causes connect on LinkedIn, like pretty much really love to connect with folks and understand different perspectives. So just yeah, connect let's have a chat, especially if you have experienced some of this. So you didn't want to just chat about Hey, I'm going through this right now. Let's talk about what can I do to move this forward? Because I think that's something else. If you have this time-space capacity, I have some of that to support others in doing this as well, because we need to have mutual support.


So please yes reach out and thank you, Cindy, for the space to have these conversations and get some of these concepts out there. It's really meaningful.


Cindy W.: My pleasure. And of course, thank you to our listeners for your incredible work and having those brave conversations, which hopefully don't have to seem so brave and just feel a little bit more normal conversations. So we'll see you next week. Well, folks, that's it for today's episode of the small nonprofit. I'm your host, Cindy Wagman, and this show is brought to you by The Good Partnership. As a reminder, if you want more resources around raising more money for your small nonprofit, visit thegoodpartnership.com and download our free fundraising strategy guide. I'll see you next week.



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