The Nonprofit Upside-Down: How focusing on your bottom line leads to topline growth

The Nonprofit Upside-Down: How focusing on your bottom line leads to topline growth

January 21, 2021
26 minutes
EPISODE SUMMERY

Sherry Quam Taylor · Nonprofit Growth Strategist | Sherry is a stellar nonprofit board consultant, growth strategist, and fundraising capacity builder—and when you hear what she has to say about accelerating your nonprofit's fundraising by investing in your job, your path forward will be clearer than ever.

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EPISODE NOTES

This episode of Nonstop Nonprofit is for anyone who's struggled to get their board, executive leadership, and development team working on the same fundraising planet in the same budgetary galaxy. Sherry Quam Taylor, nonprofit growth expert, joins Funraise CEO and Co-founder Justin Wheeler for a conversation that's going to get your entire team focused on the bottom line—yeah, THAT bottom line: your budget!

Often, the part of these conversations with nonprofit leaders is the real-life success stories we get to hear; today, both Sherry and Justin throw down several examples of nonprofits that have accomplished great things through shakeups in their teamwork and perspective. These are moves that any nonprofit can make with patience, communication, and practice.

So if you're looking for a way out of that rut your nonprofit has fallen into, listen in now. This conversation is gonna show you how focusing on your budget leads to greater awareness of your org's needs, teamwork that's actually productive, and investment in your nonprofit's true capacity for impact.

TRANSCRIPT

Hello, I'm Justin Wheeler, and welcome to Nonstop Nonprofit!

Hey everyone! Before we jump into today's episode, I want to extend a huge and sincere thanks to all of you who have seen us through what turned out to be a Year of The Unexpected. In 2020, the Nonstop Nonprofit podcast produced over 30 episodes, covering topics like the future of tech, virtual event strategies, and, of course... COVID! Your support has kept us going, so we're not stopping now! Get ready for a whole new year of Nonstop Nonprofit!

This episode of Nonstop Nonprofit is for anyone who's struggled to get their board, executive leadership, and development team working on the same fundraising planet in the same budgetary galaxy. Sherry Quam Taylor, nonprofit growth expert and fundraising capacity builder, joins me for a conversation that's going to get your entire team focused on the bottom line—yeah, THAT bottom line: your budget!

My favorite part of these conversations with nonprofit leaders is the real-life success stories we get to hear; today, both Sherry and I throw down several examples of nonprofits that have accomplished great things through shakeups in their teamwork and perspective. These are moves that any nonprofit can make with patience, communication, and practice.

So if you're looking for a way out of that rut your nonprofit has fallen into, listen in now. This conversation is gonna show you how focusing on your budget leads to greater awareness of your org's needs, teamwork that's actually productive, and investment in your nonprofit's true capacity for impact.

Justin Wheeler Hey, listeners. Welcome to Nonstop Nonprofit Podcast. Very exciting to have Sherry Quam Taylor join us today and before I say too much, Sherry, welcome to the podcast.

Sherry Quam Taylor Hey, Justin, thanks for having me. I think you're my last one of 2020 I'm recording.

Justin Wheeler Last one of 2020. All right.

Sherry Quam Taylor Hallelujah!

Justin Wheeler Here we go. Here we go. Hopefully, we go out with...

Sherry Quam Taylor Let's make it the best!

Justin Wheeler Let's go out with a bang!

Sherry Quam Taylor Yeah, yeah let's do it.

Justin Wheeler That's the hope! so for our listeners, tell us a little bit about yourself, your story and how you work with nonprofits.

Sherry Quam Taylor Sure. So I'm Sherry. I'm in the Chicagoland area, although I serve nonprofits all over the country. But I joined the nonprofit sector over a decade ago. I can't believe it's been that long. But I also like you. Justin left my job. I was in corporate America and to join a nonprofit I was beyond passionate about. I had volunteered. I had served on the board. And they were, they were doing international work in India to, you know, anti-trafficking work and really working with orphan care and elevating the orphan care, the level of care if you will. And so I was I always had been you know, I was one of those volunteers that was working like a forty-hour a week at night, you know, in addition to my regular job. And so finally they wore me down and I entered nonprofit in 2010. And so I found myself in a new sector where I had little connections, little network. And I wasn't short on passion or desire to want to fully fund the organization. But, you know, I quickly realized there were a lot of places we were stuck. And I realized that there were a lot of places that I saw in other organizations were stuck. A lot of misconceptions in the sector about how we should fully fund an organization. So it sent me on this journey to really figure out how do we get all the funding, not just, you know, the fun things, the program, things that people want to fund, but how do we fund admin? How do we fund overhead all this...

Justin Wheeler Don't say that word here!

Sherry Quam Taylor I love that word. I love it.

Justin Wheeler I love it. So do I!

Sherry Quam Taylor I'll talk about that word all day long because, you know, because we needed it. We need to scale. We needed to grow. And so I think at first it maybe it was like this for you, Justin, I felt like not being in the sector before and having a different background with a bit of a disadvantage. But looking back, I can honestly say that beginner's mind mindset was the biggest gift because I you know, we pushed back against, you know, the scariness of the percentages and the "we shouldn't do this" and "you shouldn't be risky and "you shouldn't try new things." I was trying to scale a business. Right. And so, you know, it was successful. We tripled the revenue in eighteen months. And so I realized that maybe I had kind of a unique approach and I didn't know it at the time, but I was really crafting the methodology that I teach today. And so after a few years, I started my own business. I'm on the eighth, starting, getting ready for the ninth year of my business. And really I saw the very specific problem. I help nonprofit leaders who are killing it in so many areas growing, but they still need more unrestricted cash to invest in their growth. And that usually in my case, comes from mid and major level individuals, but they just don't know how to do that because they have a background in something else. So that's what I that's in the gist, what I do.

Justin Wheeler OK, I love, you know, and in regards to a point you made a little bit earlier about sort of being new to the nonprofit, which afforded you the ability to ask the tougher questions and to think through things differently. I remember this article from Harvard Business Review. They call it zero gravity thinking where we are trying to solve a hard problem, sometimes the best way to solve it is to bring people that have zero context...

Sherry Quam Taylor Love that.

Justin Wheeler To the problem, because they're going to think more creatively. They're going to think, you know, they're not going to think with limitations. And I think this is a massive problem in the nonprofit community today, especially around overhead. You know, we think about overhead as this just this really negative connotation. And it's forced nonprofits to basically live on pennies on the dollar. Right. To run the business, which is which is not going to promote growth, which is not going to promote a deeper impact. And it's definitely not going to accelerate the overall outcome that the organization is trying to accomplish.

Sherry Quam Taylor Yeah, and I would say, like the number one thing I see that's keeping organizations from growing is like feeling like we have to abide by those misconceptions and then like working the puzzle to try to figure out how to fund against all these rules in it. It's why organizations funding plateaus so often. And so break free from it. Enter 2021, you know, pushing that aside is my message. And 2020 has never proved this more.

Justin Wheeler Yeah.

Sherry Quam Taylor You know, most people who have come to me this year, it's because their funding model has been either tied to this or, you know, they're kind of too dependent on one thing. You know, they're too dependent on government funds, too dependent on events or foundations when what everybody needed this year was cash. Yeah. You know, so we could invest it as flexibly as we could and that's individual donors. So it's exciting. It's been an exciting year to wrap up, even though I know it's been very difficult for many. It's it's really highlighted a kind of maybe even more passionate about this. Like we've got to fund all aspects of the organization.

Justin Wheeler Yeah, I think I think 2020 has been a year that has forced nonprofits diversify their revenue streams and to take a look at their own business model to understand is, is this sustainable? Is this going to work? And I think this is something that I love about, not I think, I know this is what I love about your consulting business, is the way you get executives and boards to really think about the business. So could you talk a little bit about sort of your methodology and what sort of the core, what you would say your core competencies are through the consulting business that you operate and run.

Sherry Quam Taylor Yeah. So I would say first, it's in that objectivity that you're mentioning is a huge part of what I do. First, it's let's make sure we're actually creating a true financing plan so we can fully fund your organization. Let's not, oh, we'll go be over here and squeak by. We'd love to do it. We hope to do it. What do you need? Like, let's put together a real financing plan that comes, starts with budget and we're gonna talk about budget, but we can't create a real fundraising plan for how we're going to finance the organization if we don't know where our actual need. And then the key is my next thought...

Justin Wheeler I thought that it's supposed to work where you fundraise and then you just do whatever you can with those funds. So, you know, you don't have a real you know, real strategy going into the year. It's just whatever you raise, those are the programs you're going be able to fund.

Sherry Quam Taylor Tisk, tisk!

Justin Wheeler That's not the way it's supposed to work?

Sherry Quam Taylor No, I don't like that. You can sign up for my program. No, I'm kidding! So then when we have that financing plan in place, then I want to talk about hours in time because the hours in time and money, because the number one thing I hear from fundraisers is I don't have time. I can't do it all. I've got events, I got foundations, I got appeals, I got Giving Tuesday. We have to make sure as you're trying to grow that you're aligning the limited hours you do have for your board, your executive leadership and development directors. We have to make sure that you are spending the right and do my pyramid. We're spending enough time on the size gifts that actually are going to yield the most money. I'm not saying ignore, you know, campaigns and, you know, online gifts. Not at all. But you also need to have a plan to move into larger gifts. If you don't, you leave the money on the table.

Justin Wheeler Yeah. So how do you get an organization to move in that direction or what's the process that helps an organization maybe that's traditionally dependent on campaign fundraising or low dollar fundraising? What's sort of approach do you take to help organizations kind of navigate that journey?

Sherry Quam Taylor Yeah, well, the first thing is and it always surprises people... Can we just jump in and talk budget here? I was on another podcast recently and I said, can I talk budget? And he said, well, you just lost half my audience, but I guess you can. I'm like "that half that stays on, they're going to raise more money this year." Or next year, I should say. Where I start Justin is looking at, A, I hop on the 990, but I also look at are you investing enough? Are you planning to invest enough in all three areas of your organization? And that's why you have to start with budget. I'm going to tell you 99 percent, I might even say a 100 percent of people who come to me are not reaching their goals, not raising more every year because of how they're approaching their budgeting. And it's based on, well, let's see what we have, what contracts we have committed. Let's see what we have pledged. And so it's their development strategy and plan that is already rooted in, well, I hope we can do it, you know, and then that tone to a donor is what we'd love to do this as opposed to I'm so excited to share with you our need this year. We have a $3.2 million dollar need. Can I share with you what that looks like? You know, like who, you know, a major donor, which conversation are they going to be attracted to? The hope we can do it or I've got a plan. I can't wait to share it with you. So you've got to start with the numbers, you've got to go to the numbers. And this is where I mean, it's key for the board to also understand and always understand that, the expense is a huge part of that. And they have to have a comfort level with investing, spending money to make money. That's my motto. I didn't invent it, of course. But it's true. You have to spend money to make money and then put more money into programs. So start with the numbers every single time.

Justin Wheeler Yeah. So when an organization is thinking about budgeting, what line items would you recommend for an organization that's looking to increase major gift fundraising? Is it headcount, is it technology? What is it that you help individuals kind of make that sort of...

Sherry Quam Taylor Yeah. I mean, technology is a huge one, right? Like are you using your CRM or do you have the tools in place that can help you make more money? I would say it's, a big one I see is headcount. You know, it's like, oh, that's going to throw off our percentages. Yeah. But if it helps you put more gas in the engine for 18 months and if you can look ahead 24 months and see that, you'll, you'll be bringing in hundreds of thousands of dollars more, was it worth it?

Justin Wheeler Yeah.

Sherry Quam Taylor It was. I always say I was trying to look at it from the standpoint of what do we need to stop doing so that we can start doing other things that generate more revenue. And so sometimes it is like, why are you guys doing that? It may have worked for you from year one to year four of your organization, but it's not the strategy that's going to take you to the next level. Right. So, yeah, it is. If you don't know how to do major of fundraising or write campaigns and appeals, you need to invest in learning how to do that, need to invest in equipping your board, you know, to help them see the role that they can play in that, too.

Justin Wheeler Yeah. And I think we like boards have, I sat on the board and so I think about this even from my own experience. I think boards have this they have this like, unrealistic time frame. We look at nonprofits and, you know, their budgets, their impact. We look at on a 12 month basis. And when you think about, you know, high growth, when you think about high impact, it's never done in 12 months. It's never reached. And so, you know, it's I think like when we think about, like strategic planning at the board level, when we think about strategic budgeting at the board level, the mindset needs to be, you know, not just what is our percentage in year one, what does it look into in your two and your three and your four? And I think there's I think the reason why this is important is I look at nonprofits in three different sort of categories, right. And the startup nonprofit is, of course, going to need to invest way more money in overhead. And if they aren't, I mean, I've met lots of organizations that are trying to do this 100 percent model or not get paid in the startup phase. And that's a recipe for disaster, a recipe for bankrupting the nonprofit before it even has any impact. So I think that we need to also need to change sort of just this framework at the board level to help organizations, help board members really understand this is more of a long term play, not not a 12 month play.

Sherry Quam Taylor That's really good to add that to the conversation. I have this graphic I show oftentimes when I do a lot of board trainings, I've done I think I've done the most trainings in 2020, which is kind of good, I guess.

Justin Wheeler Yeah.

Sherry Quam Taylor Virtual board trainings are easier to do. I have this graphic I show of one of my clients that it's probably an eight-year span, but it's showing how the first four years are kind of like, well, they're kind of they're right but it's ninety-two percent program, ninety percent program, ninety-one percent program. And then to show what happened when we shifted that to seventy-five percent program and more in admin and fundraising. Oh my goodness. Revenue started increasing and what happened even further on. So like to show them what that can be over a span of five to ten years is huge and speaks volumes. And it is super important to the board member who says we can't do that. We want as much money to go in programs. Well, over here on our growth, we're actually putting double back into programs, even though the percentage is less. So that doesn't add up. So I, I love, you're so right. I want them to be understanding the annual giving rhythm, but it's got to be they're going to be looking out further and longer.

Justin Wheeler Totally. And you know, I mentioned this a little bit earlier, you know, just kind of my dislike towards 100% model. And there is a back story there. So I when I was at Liberty in North Korea, I pushed our organization to actually embrace this 100% model. And when we did, we did grow. We grew significantly, but not because we embrace 100% model, because we are. We are spending 30 to 40 percent on overhead. We were hiring the right people and, you know, the way it was being marketed to the outside was even though we had funder's for overhead and it was a different bank account and different funds. So 100 percent private donations were going to programs, if you put the the overall fundraising dollars together, it was still 30 to 40 percent of total revenue. And so you create this real disadvantage and you perpetuate this problem in the nonprofit community. The less you spend on overhead, the better it is when in reality is the more you spend on overhead and of course there's a threshold, but the more you spend on overhead, the more impact you will make. And we just we need that, I don't know why that just seems so obvious to me now, but for some reason, it's still such a...

Sherry Quam Taylor It's huge.

Justin Wheeler Yeah.

Sherry Quam Taylor As a fundraiser, you almost have to be an educator to many donors. I mean, of course, they're savvy donors who get that. I had a client recently that this year is A, the most money she's ever raised, B, the most money she's ever put back into programs but C, her program percentage is the lowest it's been. And so she had, she was sharing this with a donor. And the donor literally said, come back to me when you get that turned around, I'm not going to fund that. And I was like, you know, just, we have to educate. We have to educate continually. And so, I understand the desire of the 100 percent model, but like, gosh, I just feel the pressure to educate, especially coming out of 2020 that that wasn't enough. The do more on less model, we got to leave it in 2020. It is not what, you know, my gosh we even I would look at it as don't we owe that to the people who have been on the front lines and have served our community so greatly that we owe that to them to understand that that's not how they can grow their business and mission.

Justin Wheeler Yeah, totally. And you know, this the last thing I'll say on this on this topic and to move on, but it reminds me of a story when I was fundraising with a major donor, they asked that question like, how much, you know, how much of fundraising goes overhead? And I was like 32%. And he's just like, oh, that's, that's tough. Like, I don't know if I can make a conscious like gift because that just seems really high. And I was like, well, how much, and he was a business owners I was like how much do you spend, what is your overhead of your business? I would imagine it's probably 70-75%. Your high growth. You're growing, you're living on that 30% margin. You're super profitable. What happens if you scale back that 70%? What if you start reinvesting just 20% of your income back into the overhead? What would happen? And the donor had an aha moment. He understood.

Sherry Quam Taylor Good!

Justin Wheeler Oh, yeah, that actually is. And so I like to tell fundraisers when you get asked that question, return it back to the donor whether or not they're a business owner or not, because I think it stops you in your tracks. It's a very fair comparison in my perspective. But anyways, we'll move on because I want to talk about the friction that we often meet with executive directors and board members. And so within your experience, talk to me about that. Do you see friction at the board level and executive level as it relates to fundraising? Is this a problem that you're trying to solve or what is it like for you?

Sherry Quam Taylor Yeah, I mean, of course, I don't have a lot of people coming to me saying, oh, our board loves fundraising and I can't stop them. Maybe no one has ever come to me and said that. I think it's a I mean, yes, there's friction to me. My strategy is let's demystify what this actually is like, what is really the thing that's holding them back because, A, theyr're volunteer so they already have limited time. So the other thing to remember is like with many people in the sector, we have degrees in something else. We are subject matter experts at our mission or our programs. Same with your board members. They're they're experts at something else. They probably have a limited understanding on what a donor experience even looks like or what is the process of asking for a major level gift. And so I think when we remember that they're an expert at something else than fundraising, it's easier for us to be like, well, that's why everybody says, just don't make me ask for money. I'll do anything but the ask or it's like just complete fear.

Justin Wheeler Yeah.

Sherry Quam Taylor So I'm always I really, really try to break down the us and them barrier and help them see that we all have to be supported through the process because typically the entire team, board, ED and sometimes DD are learning how to fundraise too, because they were in another role and kind of found themselves in this.

Justin Wheeler Totally.

Sherry Quam Taylor So I think it's important to check ourselves on that first.

Justin Wheeler And I think that's why it's also so important to ensure your board members are truly brand ambassadors for the organization. I think one of the best ways to create that is for them to have the real-life experience of what you're actually doing.

Sherry Quam Taylor Right.

Justin Wheeler At Liberty In North Korea, we take our board every other year to our programs in South Korea and Southeast Asia, where they actually experience firsthand what we're trying to do, what the challenges are and meet with individuals that have been supported by the organization and what we have seen that has actually turned our board. Our board is a fundraising machine.

Sherry Quam Taylor Awesome!

Justin Wheeler There's competitions at board meetings. There's friendly banter about who's going to raise more money, who's going to bring guests to the galas that's going to raise the most money. And so that wasn't that wasn't always the case. And it started to turn when and pivot when we started taking the board to the programs. And so I think this is something that I would also recommend is when possible, to have these mission trips so that you get the buy-in from your board members. And I think that you see, I talked about this a little bit yesterday, when you start to actually visually see the problems you're solving, you have these mirror neurons in your brain that start to trigger more empathy. And the more empathetic you are, that ask becomes a lot less of a challenge. And you actually you're starting to look at it more as an invitation. You're offering somebody the ability to feel and experience what you experienced when you were a part of that impact.

Sherry Quam Taylor You know, I am doing what I'm doing because I went over and saw, you know, a mission in action. And, you know, my whole life changed because of my whole career trajectory. My children I adopted from India, everything changed. So like that one on one, I couldn't agree more. Yeah, that's good. So you get a lot of executive directors, I imagine, reaching out to you and saying, Sherry, how do I increase revenue? How do I raise more money? Where do you start? So here's where I start. There's three places where I usually find that organization's funding has plateaued and they're a bit stuck. And someone just the other day say to me, it's a national medical organization you would know, like, we're really good at raising four million dollars every year. We're solid, like we're consistent, right. So there's three places I always like what we've already talked about, two of them, one being overhead. You've got to be spending more money to make money. So they yeah, they specifically had a staffing issue. Second one is budget. We've talked a little bit about too, are you actually budgeting to your need, therefore your fundraising plan sticks to that or it reflects that I should say. I always tell boards, I'll just as an aside, 50% of your role and your fiduciary responsibility is expense. The other 50% is the top half of that, the profit. How are we balancing it to you know, we can't just say looks good, budget approved. Let me know how it goes. How are you going to help balance that? You know, apparently competitions with boards that you're on. So it's fifty-fifty. You can't just approve the expense side without saying I as a board member, am committing to help really finance the organization and balance the budget, including reserve, including cash balance. And it's never been more important. As an aside, I probably would have said before 2020, gosh, you at least need to have four months reserve. And now, I'm up on the nine and 12-month mindset.

Justin Wheeler Yeah.

Sherry Quam Taylor That's what, that's what people needed this year, right?

Justin Wheeler How do you, I wanted to ask about that. So because this is, this is definitely I think a hot topic. You know, when donors look at the, whether it's a PNL or look at 990, and they see assets and they are like, whoa, why is this organization sitting on a million or two million dollars? How do you help one organization walk through the importance of this? Or I've never seen board members be opposed to having such large reserves. Nine to ten months does not seem like such a large reserve. So how do you have that conversation and how do you equip people to get in line on this?

Sherry Quam Taylor I think it's coming back to what you said of that, really, you had that investment level conversation with a donor. Usually when you're talking to him, you know, I work with mid and major level donors, but like we are having that investment level conversation, it is typically with somebody else who's running a business, has cash in the bank. And so my coaching is all about how do you talk that CEO dialect and really almost treat a donor as a stakeholder in understanding why you need that? You know, why do we need to have that? Well, because if we wouldn't have had that going into 2020, we would have shut down two sites or we would have had to lay off the staff or.

Justin Wheeler Yeah.

Sherry Quam Taylor You gotta lean into these conversations that for years people have avoided and we felt like we can't talk about reserve, we can't talk about overhead. The donor won't fund me. I'm going to call anybody's bluff on that because move into that openness and transparent, you know, I like peer-to-peer business person, people growing businesses conversation. I'll tell you nine times out of ten, that donor will appreciate it and think, gosh, I don't hear this from my other nonprofits I'm supporting. This person's really running a you know, well, oiled business.

Justin Wheeler Yeah.

Sherry Quam Taylor So let's bring up that elephant in the room, share with him why you have it. You have a good reason.

Justin Wheeler Yeah. Is there, so do you prescribe like a percentage of revenue to be set aside to build that? Do you, is it different donors that are funding sort of the reserve? How do you go about on the budgeting process of that?

Sherry Quam Taylor Yeah. You know what? I'm a believer in starting from an all-in number. You know, if if we've kind of, these are round numbers, you know, if you kind of, like, always hit$1.9M every year and you are struggling to pay, you know, to do a payroll every year or at the year last month of every year, I would say, like, let's do an all-in budget. Let's look at that, so it's $1.9M. Well, we probably should really be raising t0 $2.3M, OK, and then we're going to try to over the next 24 months, build a nine-month reserve. I will split that and put that right in the budget and say, you know, we're raising, we have a $3.6M or whatever it is, $2.6M dollar need this year and share with them why you're doing that. Walkthrough really nicely designed financials. That just makes sense. You're scaling a business.

Justin Wheeler And this is something that a lot of nonprofits don't think about. But having that reserve is actually advantageous, especially when raising with foundations. No one wants to fund an organization going out of business in three months. And when a foundation analyzes the finances and sees oh, this organization is healthy, it has reserves, it knows how to fundraise. It's going to make you a much more attractive organization to raise bigger dollars from foundations. And so I think that's another sort of strength of the reserve is for institutional giving. It's not frowned upon. It's actually it's an advantage for you.

Sherry Quam Taylor You have to have, though, your individual giving program tight to do that, though.

Justin Wheeler Oh, yeah.

Sherry Quam Taylor You've got, I mean, it's got to be unrestricted gifts. And so that's again where people have struggled when, you know, they were five million dollar budget and $4.7M of it is coming in from government or foundations where, you know, I have a group I'm working with and they have cash in the bank. It's all restricted. So they struggle every month. So it's important.

Justin Wheeler At one point we were 70% funded by one foundation and it was a seven-figure gift that the foundation was giving year over year. And we went back for our repitch for another two-year sort of commitment. And the foundation said, hey, this is like we're happy to renew and we're going to renew for one year as long as in year two our gift at the same size is only 40% of your budget. So we essentially had to go to work and build an individual donor program to ensure that we were getting the same amount of level of funding. And I remember walking to the meeting, I was so pissed off because it's like, yeah, how are we going to essentially find a couple of million dollars and one year. It seemed at the time like an impossible task. But I look back, it was one of the greatest things that ever happened because it was the start of our individual donor program, which I then learned how important that was to, you know, again, to foundations and institutional giving. That's good. So in regards to, going back to sort of like this tension that we face at the board level, and I've even experienced it with CEOs and executive directors at nonprofits who have felt that fundraising isn't a part of their job title and their job titles, you know, are not I mean, that's somewhat beneath them, which is always surprising when I hear that. How do you coach boards and executive directors that no, this is very much part of job description? This is perhaps one of the most important things you can be doing at this level.

Sherry Quam Taylor Yeah, I would agree with you. It's the most important thing. And even if you have a development staff, right? Like, you know, and I think because then it almost creates another friction of the development staff wanting the ED in the board to help. And then it's like, well, here's the budget. Go raise it, right? So my coaching, even if whether they have development staff or not, specifically if they have it, it amazes me how so often the development staff is actually not involved in the upfront planning and really understands what the need is.

Justin Wheeler They're just given the number.

Sherry Quam Taylor Here's the number, right? How would you go have an investment level conversation with that guy we're talking about? If you don't know why you need to move from $5.7M to $6.2M. How would you even be able to have that conversation? So what that turns into then is, well, fund this project and fund this project and then you're never fully funded because you aren't funding to the overall number. And so to me, it's a total copilot scenario or whatever that would be called the three, three pilots of the development team, the executive director and the board from the very get-go on, really understanding what is the need and then how are we all buying in and putting together the financing plan that actually leads to us hitting that number?

Justin Wheeler Totally. That's good.

Sherry Quam Taylor And so it has to start from the very beginning, and I'm always so baffled when I do webinars, there's always somebody at the end who raises her hand and says, I'm the development director. Should I have access to the budget? I'm always like, AHHH! Yes, like, you know, you've got to know that.

Justin Wheeler You should be, Yeah you should be creating the budget!

Sherry Quam Taylor Should be craving. But I see that that really holds people back. And so sometimes that's a little like, oh, really? They need access to that. So sometimes you do have to start way back at the beginning to make sure everybody understands how that fits in.

Justin Wheeler Totally. So I'm a sucker for turnaround stories. I love turnaround stories and following you on LinkedIn, I know you have a lot of turnaround stories. I'd love if you could share an example or two of one of those stories that you really, you came in and you saw the opportunity, but there was a lot of work to be done to kind of turn the organization around, to become a fundraising machine, anything that comes to mind that you can share and sort of what the process was from start to finish.

Sherry Quam Taylor Yeah, I mean, just yesterday I was talking to a client of mine that I've had the privilege, they're actually here in Chicago, helping high performing black youth be on a college path right. And through college. And just really, what a year for them, you know, doing remarkable work. But I've been working with them since I think probably April. And what's interesting is a very historic organization in a new leader came into play a couple of years ago. And what's actually interesting is he actually went through the program as a youth and is very successful. He's a lawyer. He's running the organization. But, you know, kind of like what we're talking about in the past, a lot of the giving had been very transactional, very we do an application, we get the funding, we go to a sponsorship, we get the funding. He also, you know, having that fresh set of eyes and that outsider point of view was kind of like, this seems like we should be doing something different, right? So, in essence, I've been working with them to really understand what does it first look like for them to fully fund this amazing vision he has, you know, to really drastically increase the number of students are serving like, is that doable? And it is because it takes an outsider sometimes for them to see where the money is sitting on the table that they aren't getting. And so we've really been on this journey of how do we not only create a real financing plan, but then how do we pivot what the staff has been doing from way more of those transactional activities and I'm gonna say board to really making sure that we're building deep relationships with people so that we can actually have a chance at getting their best gift. Yeah, because if we aren't going deeper and serving our donors in that way and really creating great donor experiences that are customized to them or customized to that segment, we're leaving money on the table.

Justin Wheeler Yeah.

Sherry Quam Taylor And so, of course, in this year, thankfully, a lot of people are coming to them and saying, OK, we want to help. But just yesterday I was talking to the senior development director and she brought up a spreadsheet showing the boards getting last year and the boards giving this year. And I was like, oh, no, second. What is this? What is it? It's quadrupled.

Justin Wheeler Wow!

Sherry Quam Taylor So their personal giving has quadrupled because they've grabbed onto this, oh, so it's not just me calling my buddy and, you know, at this big bank over here and getting money. But it's actually me leading my network through a great donor experience and actually getting to the point where we are soliciting their gift. So this board is I mean, they're on fire and they're leaders here in Chicago. So they're their own giving has quadrupled. And then I don't even have the number, Justin of their businesses, their connections, their colleagues. It's multi, multi, six figures, all because they learned how to ask for what they need and then how to tie that to what the donor valued or what they needed. And then they asked. They asked, you know, which doesn't happen all the time. So I'm cheering them on. They're doing awesome work. They have a hundred percent graduation rate from college for all their students.

Justin Wheeler That's awesome.

Sherry Quam Taylor They're going to like Harvard and crazy places. It's just it's been probably one of the most rewarding clients I've worked with this year. And their numbers are showing it, which is great.

Justin Wheeler Yeah, well, congratulations. That is, that's a phenomenal turnaround. And one, a couple of things you said stuck out to me and in regards to, you know, knowing what to ask for. Right. And this goes back to your strong belief in the budgeting side. When that transparency is shared with with with the board and the board helps obviously define that with the every sort of fundraising position at the organization, you know, you're not just going to ask for one hundred thousand dollars, you're asking hundred thousand dollars for X, Y and Z. And you know what it is. You can articulate it and that that makes all the difference. Another thing you said was and, you know, in regards to where a lot of money is being left on the table, is in this transactional fundraising approach. Help us understand what are some common transactional fundraising approaches that you see, that you try to turn around and try to eliminate from organizations fundraising habits?

Sherry Quam Taylor Yeah. A big one would be corporate sponsorships for events. And so to me, so much money is left on the table and this could be said for individual gifts as well, when we decide as a fundraiser or the board member what size gift somebody else should give or can give. So this, so in the past, this has looked like let's just ask them for silver sponsorship, because I don't know if they would do gold. Right. Like it's when they're actually over here writing unrestricted gifts for three times the size. But we're like limiting it because that's what our event sponsorship packages are. So, so much money. And I'll tell you, I asked everybody before about mid-February this year, if that event goes away, are those donors still going to give to you? And it was totally hypothetical. Yeah. And we're feeling that. So to me, Justin the money left on the table is when we decide ahead of time. Now this year that looks like, I know that donor gave, you know, $50,000 dollars last year, but I don't know how their business is doing, so let's just ask them for $25,000. And so as a fundraiser, as a board member, you know, well I don't know any major donors. Why are you deciding if your network, you know, can give or not, you have to really look what's behind that, because your job is to commit to sharing the need of the organization. And if you're not doing that, it's typically a symptom of maybe you're uncomfortable, you're not doing it right, and so you're avoiding it, which leaves money on the table. A lot of times we're doing that because we don't have a pipeline of donors. And so, oh, my gosh, we got to get this gift. Don't take them off. Let's just ask for $10,000 because, like, we're struggling and this is a slow month for us. So again, then we, like, undersell the ask or like there's just like a complete uncomfortableness of that ask. And the sad part of that is you're underselling your mission for far less than its impact when maybe that donor wanted to give a bigger gift to you and you just totally undersold it. And, gosh, if there's ever a year, we shouldn't be doing that. It's this year, right?

Justin Wheeler Yeah.

Sherry Quam Taylor So, like, don't make decisions. Don't go into the meeting going. They can't do this. That's that to me, that the most money is left on the table when that happens with businesses, even foundations to some extent, you know, just share the need. This is back to the budget. You know, you've got to know the need and sure. The need to let them decide, you know, guide them to their best gift.

Justin Wheeler Yeah, I love that because, you know, I think giving is so irrational. I mean, it's not like a if you really, like, sit down and just think about generosity, it's such a crazy concept that people who work so hard are willing to pay. And whether it's five bucks or five hundred thousand dollars, they're willing to part for it because they're they want to help something else, somebody else. And I go back to this idea of giving being irrational and how that's actually a really good thing for fundraising, because if someone cares if someone is compelled to do something, they will be irrational in how they actually give. Right. And this translates to the dollars. And I think that's why it's important when you're going to ask from a major donor or foundation, whatever it might be, why it makes one understand what is this person's capacity in the first place. Right. Like because you don't want to ask something that's outrageous...

Sherry Quam Taylor Of course.

Justin Wheeler That's going to like, I can't even make that gift. You don't know me, you know, whatever. But I generally like, the principle I like to go by when raising is 2x, what I thought at first I should ask for. Go bigger and it's OK if the donor comes back and says, hey, I want to do this. But oftentimes I found where we're leaving money on the table as even as fundraisers we often under ask for the amount the donor could give if they were a little bit more inspired, if they were a little bit more bought in, or understood, you know, the overall vision of where the organization was trying to go.

Sherry Quam Taylor Yeah, you're so right. I have a one time a young couple, I say young and I don't know, they're in upper 20s. They emptied out there 401K...

Justin Wheeler Wow!

Sherry Quam Taylor They both had nice jobs. But they were like, you know what, we have whatever, thirty years to make it back and we feel led to do this. And they emptied it out. It was a six figure gift. Never, ever would we have asked for that. Right. But like, if we would have said, oh, what would you give  $10,000 that would have been leaving money on the table. And so it's like, you know what we did, we shared the need to share the need. So I never underestimate, never tried, never make the decision, you know, for for for the donor.

Justin Wheeler Yeah, totally. So as we kind of wrap up here, what would you say as you go through the process with your clients? Like what's the ideal working relationship between a fundraising team... Let's say maybe a midsize organization who the fundraising team is maybe different than the executive director, what's the best way this team can leverage the ED and the board for ultimate success? Like what would you recommend for fundraising teams in this regard?

Sherry Quam Taylor Yeah, a lot of times when fundraising teams come to me and it's like I can't get the ED to fundraise, I can't get the board, you know, it's an us and them scenario. Sometimes my biggest advice and it seems a little like people like, wait what are you talking about? We have to show them how it's done. We have to remove the mystery from the process so that it's not this strong arm. Like my advice oftentimes to the development team is create a great donor experience for each one of the board members. Serve them, lead them to a solicitation. Show them that scary ask is only one step in the process. You'll show them all the different ways that they can actually be a supporting cast member. And oftentimes when that happens, they're like, you're pretty good at that. That was actually nicely done. And then they start feeling comfortable of maybe I can introduce my colleague to you or maybe I, OK, well, maybe I should introduce you to my neighbor. So I'm a big believer in, the fundraising team has to model what they want, the board and ED to do as a first step sometimes, even though we just want them to know, we just want you got to show them how to do that. And especially when I mean, I want the board focused on those top-level gifts. So if they are going to give me one or two hours, you know, between board meetings during the month, you gotta lead them and show them what you want them to do, because I want them yielding, you know, five, six-figure gifts versus, you know, getting auction items for the event. Right. So it's a whole managing up approach that I tell people to do.

Justin Wheeler Yeah, that's great. And I laughed because I could I have so much to say about auctions, but that's a different, a whole different...

Sherry Quam Taylor That's next time! That's next time.

Justin Wheeler A whole different podcast for another time. Yeah, that is great and I think the other thing I'd add there is, I think in those types of scenarios and even just in general, fundraising as a muscle, right. It's you have to train it. You have to exercise, you have to work it out. That's the only way you're going to be comfortable fundraising because it is not comfortable asking someone for money. It's no matter how good somebody is at it, right. It's because they developed and honed that skill over time and so understanding when there is this friction or this discomfort, it's because it's something you know, you said this earlier that just hasn't been done in the past. And so it's a new skill. It's a new sort of thing to learn and I think going in with that understanding, I love that that is your approach.

Sherry Quam Taylor That's key.

Justin Wheeler So far for our listeners who are like Sherry, I need more revenue. I need more money. I need I need to raise more in 2021 and beyond, how can they get in touch with you? How can they find you to talk.

Sherry Quam Taylor Thanks, Justin. Well, first LinkedIn. I'm on there every day, so go find me on LinkedIn and then you can hop on my website which is www.quamtaylor.com. My two last names mushed together and you can find me there.

Justin Wheeler Awesome. And for those listening, we'll also link to her website directly below the podcast so you'll have the link there as well. Sherry, thank you so much for spending time with us on the podcast, talking about fundraising, major gift fundraising, how to get boards and EDs more involved. Truly appreciate your time with us today.

Sherry Quam Taylor I appreciate you having me.

Justin Wheeler Have a good one!

Sherry Quam Taylor You too!

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