Fundraising or Finance? Opinions wanted...

Our civil discussion on the UKFundraising Board is often countered with serious arguments between finance and development in non-profit organizations regarding where the contributions are physically received and initially processed.

It is perhaps the most common of what are actually a number of inherent conflicts between the development and accounting departments. Sandre’s correct that personalities are not so much upon which to focus, as the attention should be given to function. However, from what I have come to know, the function is the problem.

Finance and development departments can and certainly do see a particular function in vastly different ways: Sometimes it’s an exercise in the daunting effort to mix oil and water. And here is where, in my opinion, personalities (the qualities or state of being in a person), can only, at best, make the arguments about function occur in a civil atmosphere. I think that a good and positive temperament is even more important in such disagreements regarding function, lest highly charged emotional responses trump rational discourse. All of that reference to semantics to say plainly that I believe the issues between finance and development are almost non-negotiable.

Right at the beginning, I believe there is a decided gulf in many non-profits between the chief development and finance officers concerning basic financial principles---principles which no doubt were mutually shared in the for-profit world where, for the most part, the finance directors worked with their colleague sales managers. Now they need to deal with development directors. And they are a most decidedly different breed indeed.

Development professionals work in fund-raising which, after all, is a subjective science of sorts. That seeming contradiction in terms is what gets them into trouble with the more precise and policy-oriented accounting professionals, most of whom come from the business sector. A development professional’s donor service mentality causes nothing but the most severe consternation in the finance department. as we fund-raising professionals constantly strive to please and accommodate our donors, prospects and volunteers by "flying by the seats of our pants" most of the time. Finance always works by the “book,” and we development types many times find it necessary to throw the “book” out of the window.

No amount of sitting down to talk will result in a change of mind, or compromise, when the finance director is stoutly against the wants of development when we:

-- book pledges “not exactly” confirmed at the time, and seek to carry them out over the fiscal year's end until they are confirmed so we can publish them in the hope they will get us closer to meeting our goal.

-- refuse to commit to make income projections as requested by the finance director of actual endowment or capital cash payments---in amounts by quarter---as she or he demands for such fund-raising campaigns which are not even yet organized, but just being talked about.

-- see the “bottom line” fund-raising result at the end of the fiscal year in a way completely at odds with the finance director’s expectations. Most commercial sales goals are based on the market potential. The numbers are generally scaled to projections of realistic achievement. Most non-profit fund-raising campaigns are based on the amount of contributions needed to balance the budget. Those latter numbers are often far out of the realm of possibility, and the CFO just does not understand that there are many things a for-profit can do to improve its bottom line to meet a sales goal, which are not at all possible for non-profits to do to meet a fund-raising goal. They just cannot accept our inability to forecast as accurately as they insist and think we should---as their former sales manager colleagues were able to do.

-- insist that all contributions (checks, pledges, etc.) must be initially received and processed in the development department.

No amount of the benefits of the best in software programs can counter human error, indifference, turf-guarding, and individuals who otherwise will not cooperate regarding what is in the best interest of the organization. While all of that certainly sounds like it’s personality-driven, I think it’s the oil and water thing; each department being fixed, having defensible arguments, and intractable ways of seeing and doing things.

I hasten to add that I am not a CFO “basher.” When I was a Director of Development, it was the financial department which saw to it that I received my paycheck on time, worked well with me to develop and regularly review required budgets and forecasts, and who helped to pay development-incurred invoices as promptly as possible.

But, in those other matters cited above---to name a few---we continually butted heads like mountain goats during mating season. And we did this nicely, sitting around a table, but each not giving an inch during the discourse, then going out to lunch together. We worked well, nevertheless, in that atmosphere---but when it came to actual operations, development continued to get its way. We simply had to.

Cheers,
Tony

Whatever system is in place is only as good as the people who work it.

Perhaps I'm adding 2+2 to make too large a number here, but it strikes me that the issues you are facing are to do with the people, more than the financial systems. Forget personalities and focus on functions. It's not a question of ownership or "competition" for the tasks - everyone in your organisation is working towards the same end. A (*gentle*) reminder that it is the work that the FR department carries out that pays -all- your salaries might not go amiss ... (Edit on re-reading thread: if your proposed system, which sounds perfectly sensible to me, leaves extra resource in Finance but the FR team overloaded, then someone maybe needs to move seats?)

Why not start with sitting the relevant people down round a table to talk about solutions that might satisfy the FR department's needs for quick response and donor communication and the Finance department's needs for accuracy and timely reporting?

Once the people are engaged, getting any software customisation done to make your agreed system work will be (comparatively speaking) a walk in the park.

Hi Sasha

Before our new database, each donation used to get entered twice - once by the Fundraising Dept. onto the fundraising database and then again by the Finance Dept. onto SAGE.

The new system is fantastic as it's obviously cut the workload down by 50% but has also brought about some issues such as this, ie. who should do the entering.

Now that they are not at the coal face themselves as such, the Finance Dept. are understandably concerned about the accuracy of the data which is getting exported automatically into SAGE.

I hopr this answers your question. I'd be interested to hear any insights you might have.

Thanks

Kate

Dear Gerry and Tony

Thank you so much for your feedback and recommendations, which have definitely given me food for thought and back up my original opinion that donation processing should be handled by Fundraising.

There is a lot more to it than meets the eye, for example, as well as entering the value of the donation and payment method, decisions have to be made as to its source and various other codes. If it's from a new supporter, they first need to be added and their mailing category decided etc. When adding existing donations, things may also be uncovered which need actioning such as finding out that another person prompted the donation who also needs to be thanked, or corrupt or incorrect data which needs cleaning. It makes sense that these tasks fall within Fundraising’s remit.

Gerry: just to put your mind at rest, yes, we do always have two people opening the post which is date stamped etc. As the donations are exported to SAGE, if Fundraising were to process donations, Finance would definitely have more time on their hands. However, their point of view is that it would free up time in Fundraising who are overburdened with administrative duties such as sending out support materials to supporters.

Tony: I agree how important it is for Fundraising to see the fruits of our success and have a handle on what's going on so appropriate action can be taken. As Development Manager myself, I too insist that I see everything as soon as the post arrives. There's definitely something special about seeing it in first hand.

Big thanks again

Kate