I know you're raising money for a capital campaign, but can you manage the money you've raised? Are you sure you're spending it the way you're going to spend it and can you report on the impact that it's having? Welcome to all about capital campaigns, a podcast that provides fuel for your nonprofits growth. Each week, Amy Istonstein and Andrea Kielstead, co-founders of Capital Campaign Pro, provide practical tips about raising more money for your nonprofit organization. Here are your hosts, Amy and Andrea. Hi there. Today we're going to talk about that. We're going to talk about managing the money you raised and being able to report to your donors about impact. And I have a fantastic guest with me here today who is the perfect person to talk to you about that. Joining me today is Chelsea Lamego. Chelsea is the co-founder and CEO of FundMiner. Now I have to say, Amy, my partner Amy is not with me today. She'll be back on next week's podcast. But as I'm sure you know Amy and I are entrepreneurs and we love entrepreneurs and we particularly love young women entrepreneurs. And that's what Chelsea is. She and her partner have created a brand new company that is doing really well. And the idea of that this company was born out of her work when she was the assistant vice president for advancement operations at the University of Texas at El Paso. Now that's a that's a mouthful, right? Chelsea, welcome. Thank you Andrea. I'm excited to be here and chat with you today. Now tell us what this job of yours was at the University of Texas. Oh gosh. Well, you know, the thing about doing good work is you get a lot more work, right? So I think when I started working at UTEP, I was overseeing gift processing, our compliance work and budget in HR. And over time that grew and grew and grew and grew and I was then overseeing all of our information systems units, our research and prospect management and more and more and more. And so really it was all of the operational components. We had our frontline fundraising team and development team. We had our alumni engagement team and events team and our operations area under me was sort of the catch all for everything else. Yeah. So you were in the crisis always right? The catch all departments are always the crisis, but I would say it was really we we were going through a lot of growth and change during my time there. And so it was a lot of helping the challenges that had existed for a long time. Right. You know, when we first spoke Chelsea, you totally rocked my rocked me back by telling me that it big institutions like the University of Texas and many big institutions of higher end that have a lot of funds of endowed funds, donor endowed funds that a ton of those funds end up not getting spent every year because people can't keep track of them. Now what was the number you told me? That's that's right. Andrea, we talked to higher ed institutions on a daily basis and what we find is that on average these institutions are not fully utilizing between 20 and 40% of the funds that they have available. And this really isn't because anyone is doing anything wrong or they're making huge mistakes. But if you think about these sort of natural nature of these organizations, they're just so dispersed. And of course, you have your fundraising team who is raising the money and you have your operations team within your fundraising office that is helping to process the money. But you really rely on all of your campus partners to actually deploy the capital and spend it correctly and on the right things at the right time. And it's really important, of course, that you actually spend donor money so that you can share impact. And this is certainly true of large organizations, but it's also true of medium size and small organizations. And it really has to do with the fact that there's this natural dispersed nature of the people who are spending the money. You have folks in different units, programs, colleges, you have a scholarship office, you have an athletics department, you've got programs everywhere, they're all reporting up under different structures. And when you have dozens, hundreds, thousands or tens of thousands, you need funds over time, some of which exist in perpetuity, it's just extremely complex and challenging. And to make that even more difficult, the information on funds tends to live in multiple different siloed systems. And we see between five and seven being the average number. But if you think about that, you have donor data and gift records in your CRM system. And oftentimes that's also where organizations are storing the purpose or criteria and restrictions on funds. Although sometimes it's also just in a spreadsheet or not tracked at all or just in the agreement. You have your balances, your expense information, transactions, and an accounting system, you have recipient data in an awarding system, you have documents in a document management system, hopefully, or maybe paper copies. And then there's also endowment information, which may be coming from a third party or in spreadsheets. And sometimes organizations have multiple CRM systems or multiple accounting systems, or there's a separate foundation supporting the institution. So all of this extra complexity just makes it even more challenging to manage donor funding. And of course it's critically important that if we're raising money from donors or the great need that exists, the drastic need that exists that we actually use the funding as we promised. Yeah, I mean, that's so interesting to think about, you know, we a capital campaign pro thinks so much about helping organizations raise the money. And we don't really think as much, though clearly we should about advising them and how to manage the spending of the money, the capturing of the information, the making sure that everything is spent and managed the way it should be. For example, if somebody has a capital campaign to build a new building, it seems perfectly obvious that they need a separate account for that money. Now, not every small nonprofit organization actually does that or manages their money in that way. So even at a very small level, right, this, the ideas that you're talking about of being able to manage the money and and have it and know where it's come from and where it's going. And who is looking out for it and who is making sure it's getting spent on the appropriate thing at the appropriate time. Just just one more thing for these for a small campaign, a small organization, the other complexity is that often they have donors who are pledging their gifts over time. Maybe three years, maybe five years, maybe they have donors who are giving money in cash in pledges in stocks and plan gifts right out of longer term requests or requesting tensions right. These are complex gifts and who even in these small and mid-sized organizations are looking at these and making sure that all of that is tracked in the right way and that when it comes in, it is, it is spent for what the donor thought it was going to be spent for. So I will talking to you is just open my eyes to how important all of this is. I love to hear that Andrea and it's so interesting because it's when you think about fundraising and the work that we do. This topic is so fundamental and foundational to the work that we do. There's a great statistic that was released in 2023 by independent sector. The statistic was that eight out of ten donors today want to see proof of impact in exchange for their continued support. So 80% of your donors before they give again want to know that the gift that they made made that impact or change that they intended to make when they made that gift. So in order to set yourself up for future success, you've got to make sure that you are tracking the funds using the funds and sharing that information with donors in order to be able to receive more funding from them in the future. And you bring up an interesting point with multi your pledges because we see this in the news all of the time where donors will get upset mid, you know, mid pledge commitment and they'll stop giving and they won't complete their pledges. And so that's another important factor to think about there. You know, I think your your business Chelsea has made you an expert on impact reports. Right. How do we track and how do we report to donors about the impact of their gifts and what have you learned about that and what do you recommend about that. Good question, Andrea. I think that I like to encourage organizations to start somewhere and develop and grow their programs over.
time and there's different types of impact reporting and sort of a, I think, baseline as especially a smaller organization. You want to make sure you're at least preparing an organizational impact report, sharing the activities that occurred in the prior year. How many recipients did you support? How many events took place? Whatever your mission is and you are, for lack of better word, selling to donors when you are raising funding, how are you going to tell them at the end of the year that you did that very thing and that you did it really well and that you're going to be able to do more of it in the future as you grow and your organization becomes more complex. And particularly when you have multiple or several restricted funds, that's when we really start to encourage for fund impact reporting. So if you have named funds where donors have given funds for specific purposes, then you want to report to those donors on that specific purpose. And this really, I mean, if you even think of a grant example, if you've got a grant for a specific purpose, you're reporting back to that grant or about the activities of that grant for that particular project or activity. And it's really the same notion when it comes to restricted funds. If somebody is giving funds to support a scholarship, tell them you awarded the scholarship and what the impact of that scholarship was. If someone is supporting a specific type of medical research, explain the progress that occurred on that type of research in the prior year. And when the donors feel like their gifts are making a difference, they are much more likely to continue giving for those initiatives and for other initiatives as well. It's interesting that I think there are many organizations that are community-based organizations that actually they're quite complex, but they don't think about themselves that way. They think about themselves as small community organizations. And yet when you look at all the things they do, and they have donors who are particularly, the donors may not make restricted gifts in one area of a program or another, but they may know that some donors are particularly interested in cats, for example, as opposed to dogs. If you look at a, you know, you may you may an organization, you know, an animal, animal shelter of some sort. So you may want to have an impact statement that leans in on what they do with cats. You know, what they do with feral cats if they know donors are interested in that even though the donor hasn't made a restricted gift there. Right. I think you sort of, you know, really hit the nail on the head there. Andrea, and it's thinking about what is your mission? What are you raising funding for and putting yourself in the shoes of those donors and what they care about? And how do you hold on that heart string for them? And how do you share that specific impact with them? Yeah, you know, it's interesting. I did a number of years ago. I did some work for a settlement house here in New York. Now, settlement houses by their nature do multiple things. Right. They started out helping immigrants into this country in the 1920s. Remember that whole, it's a Jane Hall, Jane Adams, anyway, I've got the name wrong. But anyway, there are many settlement houses in Chicago in New York. These organizations do multiple things. They often have daycare. They have English as a second language. They have elder care. They have meals on wheels. They have, you know, they may have a dozen, a dozen different programs. They have job training. They have, and often they don't find out what their donors are interested in. They don't actually take the time or use opportunities to survey their donors. But if you start to think from an impact report, point of view, it would push you to say, all right, every time we're in touch with our donors, why don't we give them an opportunity to tell them what they like best? Right? To have them tell us what they like best. What do they getting at what they care about? And I mean, the donors will tell you it just really takes the conversation. Now, the heart part for the organization is operationalizing this, right? So in the example that you gave, it's, well, how do we now think about what are these buckets of services or programs or types of initiatives that we are offering? And what is going to be our plan for how we report on each of these? And thinking about breaking out your donors into these different populations and sharing different types of impact reports for them. And going back to sort of where we first started talking about how you go about impact reporting and starting somewhere and improving over time, maybe your first version is an overall, you know, the first year you're doing some of this work, you're reporting on all activities. And maybe the next year you're breaking out some reporting on the different programs. And maybe the next year it's a custom impact report for the different donors who've identified which programs they care about and sharing that specific type of impact back with them. I do see organizations who will break out the different types of programs or initiatives and craft different types of reports for them. And even going back to the higher ed example, if it is a fund that is supporting research or faculty initiatives or programs, it's going to look really different from a scholarship fund. And when it's a scholarship fund, we're going to ask for narratives and stories of impact from students, scholarship and fellowship recipients who've actually received the funding. When it's a fund or type of initiative that is supporting the organization, we're going to ask the faculty members or leaders of those programs to write narratives and impact reports. So it's really breaking out those different populations to share that specific type of impact back with the donor. No, Chelsea, which you talk about is wonderful and raises in my mind the question of who's job is it to do this work? It's a tremendous amount of work to make all of this happen and to be on top of this. Is this the communications department? Is it the program, people that do it? Is the development director? Is it a low level development manager? Where do you position that this impact reporting in an organization? Of course, it will really depend on the size of the organization. With really small nonprofits, for example, you typically have an executive director who's doing just about everything and maybe they have some marketing support to help with some design work. I think it's worth engaging a board even like this is such important work that pulling whatever team and resources together and putting your heads together to produce something really impactful is important. So of course, it's going to really depend on the size of organization, the size of the team and the resources and as you scale as an organization that changes. So I imagine a mid-size organization, it might be a somebody in charge of programs and initiatives and they're always going to be working with someone in marketing and communications on the design part of it. As organizations grow, they typically have a donor relations area who owns impact reporting specifically and sometimes there's whole teams that do this and as you grow, it can be a job that can take months of time to produce these records. So it's really a job that scales with the work scales with the size of organization that you are, but I think it's commonly overlooked and critically important and really sets up the organization of any size for future success. And I have to say, I am on the board of a small nonprofit and this is something we don't do well and it's because we are so resource strapped and so resource constrained and we have such a small T game that this tends to be pushed on the back burner, but I truly believe if we were to invest the time and attention, it would have helped us meet our fundraising goals and grow as an organization over time. So I think it's something that's easy to overlook or easy to push to the side, but it's probably actually that magic to your future success. Yeah, sort of a catch 22, isn't it? The donors don't want to give to you if they think they're just giving to the annual fund and the organization is still in business, right? That's not a good impact report. We're still in business. It's interesting because I've been doing this work now for about seven or eight years and I've been very focused in on this and very recently, I kind of had a personal epiphany and I realized, you know, when I give, I mainly give to two organizations and that happens to be my alma mater where I went to school twice and graduated from and I happened to also work there and the other organization I've been involved with and also previously worked to there and I've been on the board for about 10 years. And so I have given, of course, two other organizations, but not recurring and not in a big way like these other organizations that I'm involved in. And so I started to think about that and I realized the key there or the difference really was that with these two organizations, I'm so involved that I know the exact impact
that my dollars are making. And that's just because I happened to work there and I happened to be so involved. But these other organizations where I gave one off gifts to and never gave again, the reason I never gave again is because I gave the gift and I never heard anything back. And these were large national or global organizations that everybody has heard of. And I just, my money felt like it went nowhere and did nothing. And had they told me your gift did XYZ? I probably would have considered giving again. And with the two organizations, I'm consistently and constantly contributing to. It's because I fully understand the impact and how critical my funding is to them. - Yeah, yeah, that's so, it's so interesting. I tend to give to smaller organizations where I'm involved. So I have the same feeling you do. And I have, I give to one organization. I give to doctors without borders. And the only reason I continue to give to them is because about every couple of months, they actually send me an impact statement. They really do. And it's interesting enough so that I look at it. It's like a magazine that says, here's what we've done, here's what we've done with your money. Here's the impact we're making around the world. Here's what's going on. We've been possible. I mean, it really is. It really does keep me giving. It makes all the difference. And so, and it's, you know, in that example that I just gave, my personal example, what I like to sort of challenge other people to think about is how do you recreate that feeling? Obviously, all of your donors are not gonna have previously worked at your organization and understand on that type of level. But how do you recreate that feeling that they know how critical and how important their continued support is? And the way to do that is through these impact reports and through sharing stories of impact and narratives of impact and constantly communicating like the example that you just gave. Yeah, so interesting. So it's such a great topic and it's so important and we don't do half enough to push it. So before we move forward, I want, Chelsea, I want everybody to tell everybody where they could reach you and where they could look up information about your company. - Thank you, Andrea. So of course, on our website, it's www.fundbinder.com. We're also very active on LinkedIn. So you can find me personally, you can find our company or any members of our team on LinkedIn. We're on all of the other standard social media sites like Twitter and Instagram as well. And we also produce a great biweekly newsletter where we share industry news, we share fund miner platform updates and we really, we publish articles on relevant topics. So I would encourage folks to visit our website to sign up for our newsletter and then to connect directly with us on LinkedIn. And they can always email me directly too and the email address
[email protected] goes directly to me. So we'd love to connect with anyone and everyone I love having conversations like this as well. - Great, just to be clear, it's fund miner, FUND, M-I-N-E-R, like you're mining ore, right? (laughs) Only ore. - That's exactly right. And there's actually a little bit of a Easter egg story there because the institution where I went to school was the U-TEP miners. And so I also ended up working there and that's where fund miner was born. I was inspired to build the tool while working there in a higher ed advancement. And so when I was thinking of a name for the company, I went through this long process and had about 300 different names I was considering. And honestly, naturally, fund miner was the top best choice and I even did voting with family and friends. And so it was just sort of a natural best fit that happened and I loved the notion that we were mining for additional new funding in the future. That's great. Listen, before we end, Chelsea, I want you to give our listeners three really practical things that you think they can do to do a better job of either tracking their money and spending it properly or reporting on impact. - Thanks, Andrea. So one thing I sort of one seed, I want to kind of plant before I jump into the three things is when you are doing all of the work to raise money for a campaign, it's a really great opportunity to have new long-term recurring donors. And the last thing that you want is for all of that work and effort to be a one-time show and for those donors to give once and never come back. And more recently, I've been talking to some leadership at some large organizations who, they're telling me, "Oh, we just raised a $500 million campaign "and we exceeded our goal and so we're gonna increase it." And my question back to them was, I mean, of course, congratulations, that's incredible. But my question back was, what is your plan to make good on all of those promises? How are you going to make sure that you deliver on that $500 million or $600 million or $1 billion that you just raised? And just about every single time their face goes completely blank because oftentimes, as we just discussed, folks are really thinking about and focused on raising the money and not thinking about how they're gonna actually deliver on the promises that they just made to those donors and how they're going to share the impact. So I want to encourage all the listeners to put the operational component of fundraising just at the top of the list, just as important as the fundraising is because I think that that's really the key to long-term success and sustainability. Really part of your fundraising plan and part of your campaign plan should be the post campaign and post fundraising plan. So that's one sort of key point that I wanted to bring up and with that, the three things that I would really encourage folks to think about is accountability. So making sure that you, again, are accountable to your donors, and transparent, and delivering on everything that you say you're gonna do and promise. And whether you say you're gonna do it or not, there is an expectation that you're going to and you have to realize and own that expectation and be accountable and hold yourself accountable to it. Second is impact and making sure that you are on some level reporting on impact. And there's a big difference between acknowledgement and impact reporting. Sending a receipt or a thank you is not impact reporting. That is a method of saying thanks for the initial gift. It's a receipt. It's a tax receipt. How are you going to, at the end of the initiative or program or year, actually tell the donor, hey, the money that you gave to the donation, the gift that you gave made a critical difference. And we really need you and rely on you again to do this again in the future. Then, lastly, I think the notion of starting somewhere and growing over time. And of course, as a leader of a company, we think about this with our metrics. You just have to start somewhere and you can improve over time. And sometimes I find that organizations are overwhelmed by the idea of starting somewhere. And I think that just giving yourself the grace to not tackle everything at once, but start with what you can and improve it over time is really important. Chelsea, what a treat to talk to you and to see your lovely person having had the courage to build this business on such an important and important subject. You have pushed me. I'm an old whale in this firm in this business and I've been doing it a long time. And I don't think half enough about the things that you really focused your attention on. So thank you for pushing me. Thank you for letting me share your ideas with our listeners. Those of you listening, you know that if you want to get hold of Amy or me, you can reach us at Capital Campaign Pro. Either Amy at Capital Campaign Pro or me, Andrea and Capital Campaign Pro were always happy to talk to you and talk to you about your campaign. And you know now how to get hold of Chelsea, which is inquiry. Is that right?
[email protected]. Yeah. Chelsea, thanks so much. It's really been a pleasure. [MUSIC PLAYING] Thanks for joining Amy and Andrea for today's All About Capital Campaigns. To learn more about them and their work together, visit capitalcampaignpro.com where you'll find all the help you'll need for your campaign. And please follow, rate, and review us on your favorite podcasting platform. Thank you. [MUSIC PLAYING]
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