Spending Money to Raise Money

Dear Kim, 

I was hired about a year ago as the development director for a small organization (budget $750,000), which raises most of its money from individuals and fees for service. The executive director told me I could spend $30,000 on a direct mail and social media campaign that included some web redesign. Four months ago, I drew up a plan, contracted with a social media firm and set a date for a launch. I was pleased with the plan because $30,000 is actually not a whole lot of money for what we wanted to do. I went to the executive director for final approval and she said I should discuss it 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 him and so the executive director said I had to shelve my plan. I was amazed but agreed, and have been doing some much smaller scale stuff. Then the executive director said I could spend $15,000 so I modified the plan and even 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. Is this the normal way to build a team? Does the finance director normally have this much power? I am ready to quit.  

~Bottom of the Ninth in a No-Hitter  

Dear Bottom,  

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. Does the finance person have to present his plan for paying bills? I am sure not.  

Unfortunately, your executive director is not building a team, but ceding her authority to the finance director. The finance director also does not seem to understand the concept of a budget, which people are given so they know what they have to spend. I am very in favor of building teams and getting input from people with very different competencies on work plans. But far too often there is a failure to understand that you have to SPEND money in order to RAISE money. It may take a year or more for the organization to recover the money you are spending. When the budget was put together, that was recognized but the finance person is getting cold feet.  

 Your finance person, with the blessing of the executive director, is on a long slow road to organizational death. Since he said the organization couldn’t afford $30,000, it makes sense that several months later you can’t afford $15,000. Had you spent the $30,000 when you wanted, you might be on the way to having the $15,000 now. Keep not spending and soon you won’t be able to afford to stay open.  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 board sees how little has been raised, you will be blamed, not the finance director.  

~Kim Klein