Study shows lack of philanthropic culture in nonprofits hinders income growth

Less than half of fundraisers in a global study say philanthropy is embedded at the core of their organisation, while just over a quarter say they have no formal planning documents in place. This is despite the vast majority (95%) believing fundraising planning to be immensely important.

Development Plans and Fundraising Performance, by the Institute for Sustainable Philanthropy, examines how planning is undertaken in the fundraising sector and its impact on income, and identifies a link between organisational culture, formal planning processes and fundraising performance.

It uses data from a study of 325 fundraisers globally, demonstrating the importance of fundraising planning, along with statistical evidence to show that strategic planning drives higher income growth, donor retention and fundraiser confidence.

In its research, the Institute for Sustainable Philanthropy, which is a UK-based global research and professional training body, found that while the large majority of organisations do have fundraising plans in place and recognise the need for strategic planning, many lack philanthropic culture and engagement from the board. 

Philanthropic culture is measured against six metrics, including donor centricity; philanthropic core; significant board engagement with fundraising; respect for fundraising as a profession; an emotional/compelling case for support; and innovation in relation to fundraising.

84% of the fundraisers surveyed said they believe that their nonprofit is donor-centric, in that it is organised around donor need, but fewer than half (48%) believe philanthropy is embedded at the core of their organisation. Even fewer (40%) believe that colleagues outside of the fundraising team could clearly articulate the case for support.

Overall, 28% of fundraisers said their organisation lacks a formal planning document, although larger organisations – those with a turnover of more than $1m – are more likely (78%) to have a written plan compared to smaller nonprofits (63%). The vast majority (95%) however believe planning to be an immensely valuable process.

Commenting on the findings, Professor Adrian Sargeant, co-director of the Institute for Sustainable Philanthropy and report author said: 

“Failure to plan is effectively planning to fail – it’s crucial that charities of all sizes engage in rigorous planning with the involvement of fundraisers, senior management and the board. But our research also proves a clear link between philanthropic culture and fundraising success – those nonprofits whose boards value and respect the work of fundraising teams and support them and their planning process have better fundraising performance. I urge any organisation that wants to markedly increase its fundraising income to make developing its philanthropic culture an absolute priority.”

The study found that fundraising plans have greater levels of success in terms of revenue growth, donor retention and fundraiser confidence when the board is involved in their design. In most cases, the senior management team (75%) is involved in fundraising planning, but fewer than half of respondents (45%) report involvement at board level.

It also found that the board has a crucial role in the development of philanthropic culture but that only 57% of fundraisers feel that their board is supportive of them. In addition, a fifth (20%) of fundraisers do not believe their organisation views them as professionals. However, professional recognition of fundraisers was found to be higher in those organisations that formalise fundraising planning.

Barbara O’Reilly, senior fundraising consultant at Windmill Hill Consulting and report sponsor, commented:

“We’ve long believed that having a development plan is an important factor to fundraising success. This study concludes that very correlation among a wider sampling of charities around the world. A development plan serves as a time-tested roadmap for charities to navigate through uncertain times like what we’re experiencing this year. But, possibly more importantly, by involving other stakeholders like senior management and boards with the fundraisers in creating a data-informed plan, it can lead to a broader philanthropic culture which understands that fundraising isn’t transactional.  Both benefits are essential to a charity’s sustainability and thrivability, especially now.”