Spending Money to Raise Money

Dear Kim:

I was hired about six months ago as the development director for a small organization (budget=$500,000) which raises most of its money from individuals and fees for service. I was told I could spend $30,000 on direct mail and web redesign for fundraising. Four months ago, I drew up a plan, arranged for list acquisition and created a direct mail package. The Executive Director then said I should discuss the plan with the whole staff as she is trying to promote a sense of team. I did so, and the finance director said we did not have the money to spend in this way (even though it was in the budget). The rest of the staff agreed with her, and so the ED said I had to shelve my plan. I wrote a few proposals and pursued some other strategies, but now the board is mad because the website is static and out of date, and we are not meeting our fundraising goals. The ED said I could spend $15,000 and I drew up a plan, arranged for some lists, got a web design firm to donate their time, and again had to present this to staff. The finance director announced we don’t have $15,000 and the staff agreed I can’t spend it, but they were happy with the free web design. My plans are once again shelved. Is this the normal way to build a team? I am ready to quit.

~Third down, 10,000 yards to go.

Dear Down:

This is not a normal way to build a team, but is an excellent way to drive your development people right out the door. You are hired for your expertise, which is then disregarded by people with no expertise. Do you chime in with your opinion about the balance sheet or accounts receivable? Does the finance person have to present her plan for paying bills? I am sure not.

Unfortunately, this faux team building has become common. Staff with extremely different competencies come together to share ideas and learn from each other. Great—I am in favor of that. They even comment on each other’s work plans. Again, great—people should understand each other’s work and it makes working in an office more interesting. But what no one can wrap their mind around is that an organization has to SPEND money in order to RAISE money. Often, in the case of direct mail in particular, an organization may spend more money than it raises in the first year, and it takes a year or two to recoup that investment.

Your finance person, with the blessing of the Executive Director, is on a long slow road to organizational death. Your organization can’t afford $30,000 so it makes sense that several months later you can’t afford $15,000. Had you spent the $30,000 when you wanted, you would have the $15,000 now and maybe more. Keep not spending and soon you won’t be able to afford to stay open. You cannot run an organization with the question of “what can we afford?” being paramount.

Talk to your Executive Director and be very clear in your frustration. If the situation doesn’t change soon, find another job. Because the other sure thing is when the organization runs out of money, you will be blamed, not the finance director.

~Kim Klein