Evaluating Your Development Program

How does an organization measure the effectiveness of a development program? Could it be doing better? A development audit is often the best way to assess the development program's effectiveness. A development audit is done by an outside consultant who can look at the program, measure it against accepted standards and provide the organization with guidelines for improving the organization's development performance. This tutorial is meant to guide a development office through a similar process and help the organization prepare for a development audit. These are areas that will be assessed during the development audit process.  

1. Is the Organization Ready for Fundraising?
   • Before evaluating development efforts in regard to the various components of the program, a few basic questions are in order
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   • Is the nonprofit a 501 (c) organization or other entity that qualifies to receive tax-deductible contributions from donors? While tax deductibility is not the primary motivation factor that prompts people to give to an organization, it is a factor particularly in major and planned giving. If the organization is located outside the United States and wants to raise money from U.S. foundations and corporations, it may want to consider setting up a U.S. based foundation or other entity to receive tax deductible gifts for the U.S.
   • In the United States, most states also require registration with a Bureau of Charitable Organizations or State Department in order to do fundraising. Most states exclude or exempt certain kinds of institutions, usually higher education hospitals and public service organizations such as fire or police are often excluded from the law, and religious institutions are exempt from these registration requirements. Also, when raising money in other states, the organization may be required to register in each of those states as well. It is important to check with any state authorities in which the organization is raising money, to make sure it is following state regulations. Fines can be imposed on organizations not registering or not following full disclosure laws.
   • If the organization is doing bulk mailing as part of its development program, it should also apply for a nonprofit bulk permit through the U.S. Postal Service; this can save a lot of money on mailings.
   • Another area of organizational structure that should be in place to assure that development efforts are consistent with the organization's mission is a strategic long range plan. The nonprofit organization needs an overall organizational plan that includes program, human resources finances, facilities and development, the development plan which will be developed or enhanced after evaluation of your development program should be an integral; part of the organization's overall plan.


2. The Board's Role in Fundraising
   The board of directors will play an important role in fundraising efforts. Does the organization have a board that helps or hinders development efforts? Areas to be examined are:
   • Is the board large enough to be effective as a fundraising entity?
   • Does the board use its affluence and influence to help the organization?
   • Does the board have an effective committee structure, including an active development committee?
   • Does the board have regular meetings?
   • Is the board diverse and representative the community served?
   • Does the board have term limits that are enforced?
   • Are there position descriptions for board members that include a requirement to support the organization financially?
   • Do 100% of board members support the organization financially at a meaningful level?
   • Do board members feel a real passion for the mission of the organization?
   • Does the board have the appropriate skills and talents to move the organization forward?
   • How do board members feel about their own involvement with and contributions to the organization?


3. The Role of the Staff
   Staffing will also be looked at during the development audit. Questions to help evaluate staffing situation include:
   • Is there a chief development officer to oversee the development program?
   • Does the chief development officer report directly to the CEO of the organization?
   • Does the development staff have access to the board of directors?
   • Is there adequate support staff to perform routine tasks such as database management, freeing the development officer to work with donors?
   • Are staff people assigned to appropriate tasks for development and not preoccupied with other aspects of the program, diverting them from development work?
   • Is there money in your budget for ongoing professional education for development staff?
   • Does the organization seek to hire staff with certification (CFRE or ACFRE or other professional designations)?
   • Is the CEO spending 40-60% of their time in development activities, particularly donor cultivation and solicitation?
   • Is everyone in the organization aware of the role of the development officer and supportive of his or her efforts?
   • Does the development staff interact effectively with the finance office and the public relations department?
   • Does the CEO provide visionary leadership for the organizations?


4. Systems & Procedures
   There are some aspects that should be in place in the development office in order to be effective at fundraising. Among these are:
   • A compelling case for support for each development activity — capital campaigns, annual appeal, and planned giving, etc.
   • A mission statement that is clear an concise;
   • A vision statement that is truly visionary;
   • Gift acceptance policies that define what type of gifts will be accepted, from whom the organization will accept gifts, how those gifts will be used or disposed of, how those gifts will be acknowledged and recognized;
   • A procedure manual that guides staff on the day to day acceptance, receipt, crediting and reporting of gifts;

Another area to be evaluated is the effectiveness of the donor database system. There must be a system that can allow for merged, personalized letters, one that record gifts and pledges, identify donor preferences, segregate donor appeals and generate management reports. Adequate hardware s also needed to maintain the donor database systems, including a printer that has an envelope feeder to do personalized envelopes for donor appeals. If the organization is accepting gifts on its website, is there an adequate system to accept and record those gifts?

These are just a few basics that an organization can start to evaluate themselves, or that it may wish to engage a consultant to evaluate and about which the consultant will make recommendations.

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