Chasing Your Tail

Meet Tramp, the newest canine member of our family.  Like all our dogs, he’s sweet, funny, and—hey, he is a border collie—smart. Unlike any of our other dogs, he is also a tail chaser.  I can’t tell if he thinks this is a great game—he also growls at his left foot and lunges for it, then pretends to be wrestling—or if, from time to time, he sees his tail from the corner of his eye and, not recognizing it as part of him, he tries to catch it.  No matter. It’s cute watching a dog chase his tail. Not so cute when it’s a nonprofit with an important mission and serious work to accomplish.

Last night, as I watched my pup  going round and round, attempting to catch something that would always be just beyond his reach, I had flashes of my he clients I’ve had—have—who are very Tramp-like in their actions.

The client who hired me to develop and help implement a comprehensive fund development plan.  We started by assessing the organization ‘s fundraising capacity. As part of that, we looked at the fundraising they were doing, most of which was random and bringing in very little money.  The one constant was an annual gala that, she insisted, brought in half their annual budget.  And, if you looked only at revenue in, she wasn’t far off.  But—and this is a big but—those gross revenues are not what you end up having to spend.

From those gross revenues you must subtract expenses.  And that should include the salaries of those who work on the gala, appropriately adjusted. That means if I spend 25% of my time for three months on the gala, then 25% of my monthly income (yes including benefits) multiplied by 3 should be added to the expenses.

Most organizations don’t do that.

Fine.  Let’s just focus on direct expenses.  In my client’s case, that was equal to 57% of the gross income. For every $1 raised, 57 cents was already spent on the gala!  And, again, we are not considering salaries or opportunity costs

I will stop ranting now. Except that as soon as we finished the assessment and were creating the plan to actually raise what was needed, she said that we would have to put everything on the back burner for now because—yes! you are not surprised—for the next 6 weeks she would be entirely focused on the gala.

The gala that doesn’t meet your fundraising needs ends?  I asked. The one we are looking to either enhance so it makes fiscal sense or replace with something that will be more profitable?

I can’t think about that now, she said. We need the money the gala generates. So, 100% of my time must be on chasing my tail.

Just like another client who couldn’t take the time to call the 3 people we had identified as her most likely larger givers and who we had reason to believe would, if asked by the CEO, make a gift in excess of $5,000. The reason she couldn’t bring in at least $15k? She was working on a grant which, if awarded, would provide $5,000 that was essentially a pass through as it could only be used as an award for a volunteer.

Why are you spending time on this, I asked.  I thought she would talk about the importance of the volunteer program. But, no. They were in dire need of bringing in $4,800 to meet payroll. So, instead of doing the work that would most likely provide what she needed, she felt it would be prudent to simply chase her tail

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