Thinking in Bets for Fundraising Success

Measuring success in fundraising can sometimes feel like a card trick. A recent addition to the conversation in the field, however, could do a lot to strengthen our hand in understanding. Boardsource, the Association of Fundraising Professionals, and several others have released the conclusion of their deep dive into creating better measures for fundraising results. After reading through it, it struck me as the fundraising field learning to “think in bets” like when we play poker.
My enjoyment of poker really took off after reading Thinking in Bets by Annie Duke. Beyond just enjoying playing a hand, I love the way the game provides lessons on how we make decisions with limited information. Of particular focus in the book is the concept of “resulting,” where we equate the quality of the outcome with the quality of the decision. This happens a lot in fundraising. If you raised the needed money, you made good decisions. If you did not, you made bad decisions. Ms. Duke illustrates how you could make good decisions, but still not win. The goal then becomes continuing to fine tune the quality of your decision making. That’s what this new conversation for fundraising does.

What makes this conversation different from previous ones in the field is its acknowledgement that fundraising results, similar to poker, are differentiated by their cost and risk. A quality development program becomes one that utilizes all strategies to balance the impact of cost and risk. At the same time, knowing the role different strategies play in this balance allows us to be better informed and understanding of the results when we choose a higher risk or higher cost approach.

The points I was particularly pleased to see included were, 
  • Despite the low cost of major gift strategies, those costs look different when taking into account the lead time in cultivating such gifts,  
  • Grant strategies often have unanticipated costs related to reporting requirements, and
  • All fundraising strategies work best when they work together in an interdependent fashion. 

What I would like to see more conversation around is understanding the true costs of fundraising so we can better assess risk and make better decisions. For example,
  • Account for the overall marketing costs into the costs of development. Often the broader marketing costs are not included, but a quality marketing presence softens the ground for effective fundraising.
  • Account for the costs of program staff who must be involved in grant reporting, logic model designs, and the work of collecting, inputting, and analyzing outcome measures and program metrics that are used for donors just as much as they are for program staff.
  • Understand how fundraising costs can be underestimated when they do not include administrative costs we forget to associate with fundraising such as maintaining a donor database, sending out acknowledgement letters and tax statements, running the fundraising reports, sending out newsletters and annual reports, and reconciling information with finance departments.
Thankfully, this is a really good step forward in the conversation for our field. It will allow us to clarify and understand quality fundraising measurement so that we can all make better decisions on our strategies. And we could all practice by playing a little more poker too. Place your bets!

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