October 5, 2015
So, do we believe that finance people are from Mars and fundraisers are from Venus – or the other way around? It certainly can seem that way at times when either side is trying to communicate with the other. As the fundraising industry has rapidly developed in the last few years and the impact of that fundraising on an institution has grown, in some cases exponentially, the finance professionals have also had to be on a very steep learning curve. Spare a thought for the hardworking accountant who has perhaps never had to account for an endowment in a real life situation (until you came along) and needs to re-visit the theory.
Take, for example, the two related issues of strategy and reporting:
I doubt if there were more than a handful of institutions who incorporated fundraising within their finance strategy just a few years ago and many still don’t. That’s not meant as a slight to hardworking fundraisers. Finance people have a few core principles drilled into us when we are training and these principles are behind the way we view everything. This one is a question of materiality – the impact of the funds that are raised just might not be significant at this time. ‘Aargh!’ I hear you cry, ‘but it never will be if I can’t get the institution to realise the potential’. So it comes down to your ability to persuade the reluctant FD that , although the contribution may yet be modest, all you are really seeking to do is to raise the profile of fundraising, and one of the many ways available to you is to get it included in the finance strategy. Just by doing that, you stand a better chance of getting the relative merits of investing in fundraising discussed. So, make their lives easier and read the existing strategy, and come up with a brief sentence that you want included. But make sure it’s brief (the whole strategy may only be a page or two) and write it in the same style – even if you don’t like that style. It’s not your strategy!
The reporting of fundraising activity can also give rise to unexpected differences. Good reporting will be derived from the institution’s strategy and related key performance indicators. Any organisation will struggle to develop operational strategies which cascade down from the overall strategy and are fully integrated with each other. Such a state of nirvana would enable a strong set of operational reports to similarly cascade down and indeed flow across the whole organisation. However, very often that’s not the case, so there will be conflicts in information produced because of timing differences, differing priorities, and even simple definitions. For example, you will search in vain through any organisation’s statutory accounts to find the headline fundraising numbers that you have been reporting all year. So, work with the finance team to understand what the differences are so that you can explain them to others, and then see if you can get the headline figures into the narrative.
– Melvyn Keen, Associate