The State of Fund Raising

Tuesday, April 1, at 2:30 p.m. Eastern time

Paulette V. Maehara is chief executive officer of the Association of Fundraising Professionals, in Arlington, Va. She is the former chief executive officer of the Epilepsy Foundation in Landover, Md., and has held executive positions with charities such as Project HOPE, in Millwood, Va.; the American Red Cross, in Washington; the March of Dimes Birth Defects Foundation, in Honolulu; and the University of Hawaii Foundation, in Honolulu.

A transcript of the chat follows.

Peter Panepento (Moderator):
    Welcome to today's online discussion with Association of Fundraising Professionals President and CEO Paulette V. Maehara. We're trying something a bit different today. Ms. Maehara is joining us live from the floor of the AFP's annual conference in San Diego. She will be taking questions for the next hour from the Chronicle's booth in the exhibit hall. We welcome everyone who is joining us from San Diego -- and those who are logging in from elsewhere.

Peter Panepento (Moderator):
    A reminder: if you have a question for Ms. Maehara, simply click the "ask a question" link. Be sure to include your name and something about you. We'll begin posting responses shortly.

Peter Panepento (Moderator):
    While we wait for Ms. Maehara to answer her first question, I'd like to comment on some of the issues that will be discussed today. We've had several questions about the impact of the difficult economy on fund raising. We're also had some queries about appropriate levels of fund-raising costs and how to attract qualified people to work in the field. We welcome your questions on these and other topics -- as well as your comments on your observations about what is happening in the fund-raising world.

Peter Panepento (Moderator):
    Paulette was held up on her way to the booth but is here with us now and is ready to go. Thanks for your patience.

Question from Marc Pitman, Fundraisingcoach.com:
    What's the tenor of the conversations you're having with folks at AFP? I just found out that here in Maine, philanthropy has been growing even though we've had a bad economy for years!

Paulette V. Maehara:
    /Thank you for your question. We are talking about several important issues at the conference. Fundraising costs, shortage of fundraising professionals around the word and Bob Geldof has just spoken about the importance of charity and policy and how policy impacts the world. We have also released the figures from our latest State of Fundraising survey which show that while the economy is having some impact on giving, 65% of AFP members reported raising more money in 2007 than in 2006. This is good news but we still are mindful of the impact the economy can have on giving. Best, Paulette V. Maehara

Peter Panepento (Moderator):
    I'd like to invite members of our audience to add to the discussion by also adding their own anecdotes about the current fund-raising climate. We'd love to hear what you are experiencing in your work -- and any advice you have for your colleagues on how to handle these economic conditions. I'll post your responses throughout the rest of our discussion.

Question from Kate, Maryland museum:
    My board has asked me to give them a best guess on where we will end the year in funds raised. I've looked at past economic downturns and tried use this a forecasting tool. Am I making a mistake here, is there any type of formula I should use or is this truly a guess

Paulette V. Maehara:
    Hi Kate, thank you for this question. The analysis that you have done thus far is good. I also suggest that you refer to the recently released AFP State of Fundraising Survey. This survey asks AFP members to compare their fundraising results from one year to the next. We have historical data for 7 years which will give a good perspective of what happened in 2002 and 2003 which were down years for philanthropy. Using this data, along with what you have already done will give you a good snapshot of what you might see in 2008. The Survey can be found on the AFP website at www.afpnet.org Best, Paulette V. Maehara

Question from Stacy Palmer, The Chronicle of Philanthropy:
    Paulette, you mentioned in your opening remarks that fund raisers need to stop apologizing for fund-raising costs. What is the danger of the way people respond to the cost issue? What would you urge them to explain to the public?

Paulette V. Maehara:
    Hi Stacy, Thank you for your question and the opportunity to do this live chat. This is fun!! I would suggest that the "danger" is not explaining that fundraising costs are essential to effective fundraising. In my career, the way I have addressed this issue with boards is doing the following things: 1. Explaining about the fundraising methods used/costs associated with these techniques and how other like organizations perform. 2. The impact of the current economic environment and how it influences the types of fundraising methods used. 3. Explaining the differences in fundraising costs between large, mature and small organizations. I have found that when people understand that brand awareness, which is typically associated with larger more mature organizations, has a tremendous impact on fundraising costs, then are more receptive to the message. Thanks so much. Paulette V. Maehara

Question from S. Sussman, National Yiddish Book Center:
    In efforts to hire and retain qualified fund-raisers, are there guidleines for 'perqs' an organization should offer, such as compensation (time off) for the time fund-raisers spend on the road?

Paulette V. Maehara:
    HI, thank you for your question. Every year AFP conducts a Salary and Benefits Survey. You can find the survey on our website at www.afpnet.org A review of the various benefits being offered to fundraising professionals will help you. Best, Paulette V. Maehara

Question from Ken Grunke, Pillars:
    Hi Paulette. I have read many published articles recently on how some nonprofits don't see economic hardship as an obstacle in their fundraising strategies. According to these sources, donors, even during tough times, still give to their charities and at similar levels of giving. This was even echoed in the example of the national disaster of Hurrican Katrina, when many donors continued giving to their charities of choice despite aggressive soliciting conducted to help the victims. Are we all getting worked up for nothing or do you really see the state of this economy making a significant impact in a donor's ability to give?

Paulette V. Maehara:
    Hi Ken, thank you for your question. The recently released AFP State of Fundraising Survey should give you some comfort but having said this, the economy is a factor. You can find the 2007 Survey on our website at www.afpnet.org. You can also find comparison results from the last 7 years of the survey. The bottom line is that 65% of respondents reported raising more money in 07 than 06. This is down from the all time high in 06 of 69%. The major factor cited by respondents was the economy. So while the sky is not falling, we still need to be cautious. Best, Paulette Maehara

Question from Hopeful future development professional:
    Ms. Maehara, thank you for hosting this discussion. I currently work in the for-profit sector but have wanted to move to the nonprofit sector for awhile. I have the passion, but not the specific skills. But I'm a bit tied down and can't take a few years off to go back to school and learn what it takes to be a development director. Any advice for a (relatively) young person who'd like to jump to the nonprofit sector? How can I convince VPs for development to roll the dice with a fund-raising newbie?

Paulette V. Maehara:
    Hi Hopeful, thank you for your question. With the critical shortage of all fundraising professionals, I can't imagine that you will have trouble finding a position. I am more than happy to help you with your resume. US News and World Report magazine did a story last week on Best Careers and fundraising was on this list! My email address is p.maehara@afpnet.org. You can also go to our Jobs site on our website which allows you to post your resume. www.afpnet.org Good luck and someone in the audience just yelled, "tell her to call me"!! Ha. Best,

Question from Anne, national nonprofit:
    Ethics - the board is the 3 founders (2 on staff) and there are no board meetings. In writing grants I am questioned as to why the foundation would request financial information or outcomes. Budgets seem to be made up on the fly. Two questions: Am I right to be worried? and Am I right in thinking that a difficult economy will require increased transparency?

Paulette V. Maehara:
    Hi Annie, Thank you for your question. You are right to be concerned about this situation. I suggest you review the AFP Code of Ethics which you can find on the AFP website www.afpnet.org. Transparency is an important issue regardless of the economy. I suggest that you have a discussion with your board and leadership about transparency and what types of materials should be provided proactively to your donors and publics. If you would like more guidance, you can reach me directly at pmaehara@afpnet.org. Best, Paulette Maehara

Question from Ken Grunke, Pillars:
    Paulette, do you have any advice for members of AFP (or those who are a member of any other professional fundraising or philanthropic organization)as to how we can support each other and other fellow fundraising constituents during times similar to these economic hardships?

Paulette V. Maehara:
    Hi Ken, thank you for your question. My advise would be to network, share information and get involved in professional development and mentoring activities. Being able to communicate with a peer about issues you are facing is very cathartic. AFP has on line discussion groups where members routinely ask questions. You can sign up through our website at www.afpnet.org.

Question from Marc A. Pitman, Fundraisingcoach.com:
    Paulette, Have you found a successful way to communicate fundraising expenses in terms business leaders would "get"? I find it amazing that business owners would feel upset that 100% of dollars don't go directly to patient care (or ________ fill in the blank). They have overhead and inventory and expenses. It seems like there must be a way to draw a similarity. But I haven't found it yet!

Paulette V. Maehara:
    Hi Marc, thank you for the question. My best advise is to talk to business people about sales and marketing. Products don't sell unless there is a sales force and without marketing, products do not sell. Fundraising costs are no different. Try this argument and if it doesn't work, email me directly at pmaehara@afpnet.org. Best, Paulette Maehara

Paulette V. Maehara:
    Thank you for your questions. I have enjoyed the chat and wish I had tine to answer all of them. You can always email me directly at pmaehara@afpnet.org. Best, Paulette Maehara

Peter Panepento (Moderator):
    Paulette has run out of time. We thank everyone who joined us today -- and we thank Ms. Maehara and the staff at AFP for arranging today's discussion. We'll return to our regular time -- noon Eastern time -- next Tuesday for a discussion on coping with stress in the nonprofit workplace. We are lining up some fantastic experts for that discussion. I hope you'll join us.