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Insanity? Creating a fundraising plan without conducting an audit.

When developing a fundraising plan, I am often asked whether or not, I can skip the development audit analysis. And, I arguably say “no!”

A fundraising audit is probably the most critical stage of the entire planning process looking at where an organization is now, where it has been, and where do they want to be? Without knowing the answers to these questions, how can anyone put together a solid plan for the future?Importance of a fundraising audit

An audit is a review of all the factors within an organization that may impact how an organization can expect to accomplish in the future both internally and externally.

A fundraising audit is the first essential component of a healthy fundraising plan, and it provides the “Where are we now?” component. It is only when the organization has a complete picture of the organization’s current strategic position and each of the donor markets served can the organization hope to make meaningful objectives for the future.

So, when an organization says to me, “We don’t have the time to bother conducting a fundraising audit. We’re too busy doing the fundraising.” I say, that if you don’t have a roadmap for the future, you are always going to do what you have done and how do you expect your fundraising to do any better than it has always done? It is absolutely essential and critical to the success of any planning efforts.

Don’t skimp on a development audit. You will only be skimping on solid results in the future.  And, that is just plain insanity!

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Younger people want to give, but can’t!

Younger donors don’t give as much.  You can chase the Millennials and the generation whatever’s, but if you don’t take into consideration the family life cycle, then you are misdirecting your energies.

What is the family life cycle I hear you ask?

Wills and Gubar (1966) identified nine distinct life cycle stages of a family.  1966 – and this information is still relevant!  They believed that that the age and composition of the family unit has a direct impact on the buying patterns of families.  And, as the family moves through the life cycles, these stages change as well.Family Life Cycle Stages and Giving

For instance, at certain points, giving decisions are made jointly with spouses, starting a new family impacts discretionary spending patterns, and levels of disposable income vary over the lifetime of a family.  That is why you see younger people not giving as much – while raising a family, they have less disposable income to give away, saving for their child’s education, and their retirement.  As folks age and their children grow up, these same folks have an improved financial position with more disposable income and fewer demands on the future and tend to give more.

Since 1966, there have been changes in the family unit that bring to mind some questions – what about single parent households, families having children later in life, and other family units?  How do those impact philanthropic giving patterns?

However, overall, I think it is fair to say that looking at where a family is in their particular life cycle stage is an important indicator of their propensity to give, and why I believe that younger folks, while wanting to be, just cannot be as generous as their parents.

 

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A great time for bequests, but are you ready?

Data from the U.S. Census Bureau indicate that the number of people dying in the United States will double in the next forty years. WOW!

Hard to read, but surely reality. And, sometimes reality is stark.

Planned GivingThe Baby Boomers will soon be facing retirement, old age, and eventually death. And, Baby Boomers will have more wealth to leave behind – significantly more than previous generations.

Researchers have been hard at work calculating the details behind this transfer of wealth. Their findings? They estimate that approximately $41 trillion will transfer between 1998 and 2052 from a predicted eighty-eight million estates. Of that $41 trillion, it is estimated that $6 trillion will transfer to charity.

However, as large as these statistics are, only around 18% of the nation’s wealthiest individuals presently leave a gift to charity in their will. While data is insufficient, it is estimated that a small percentage leave a gift in their will.

So, are nonprofits so focused on their annual operating support that they are failing to include planned giving as part of their fundraising strategy? Are we just not asking enough? I would garner to say this is very accurate. Most of the organizations that I work with are so focused on meeting the day-to-day operational needs of the organization that they cannot even think beyond into the future. Or if they can think about the future, they just don’t want to talk about death. Or they fear that they will take away from their annual support. Or they are just impatient, and can’t wait for planned gifts to mature because the income won’t be forthcoming for many years. Or perhaps they have such high expectations within their departments to produce that their focus is more on immediate returns and not for the long haul.

We keep talking about this enormous transfer of wealth, but what are we doing as fundraisers to begin the conversations. Conversations in our organizations that confront current expectations by our superiors to raise money for today. Or how we as fundraisers don’t want to grapple with sensitive topics as death with our donors. Or because we as organizations need the money today to keep the doors open for tomorrow. Or maybe because we don’t have enough knowledge about planned giving and what it is, so we just don’t want to bring up the subject.

All organizations both large and small absolutely must begin thinking about legacy giving.

I know one thing for certain, these statistics point to us as fundraisers to do a better job. And, so the question is, what are you doing to do that better job?

 

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We need money now! An ethical decision.

This week, I read a post by the very insightful Veritus Group. In the post, they asked,”When you think of your donor, do you first think of them as a source of cash – as a way to reach the goals you have set?”

This question indeed touched a cord in me. How many organization believe that donors are ATMs. We go to them; we ask them for a certain amount of money, we get the gift, and we get a receipt.Ethics of fundraising

I have worked for organizations that think donors are partners. How refreshing. And, then I have worked for organizations, that think donors are money as in the “We need money now!” donor.

I have a difficult time hearing donors referred to in this way. I can’t conceivably fathom such talk about another human being, mainly relating to them as if they were a transaction and not a living, breathing person with feelings, and beliefs, and values.

Over my career, donors have personally “cared” for me and my well-being. When I have been traveling, they have provided me with dinner. We I was in a new town, they ensured that I got home safely. When I was sick, they called. We built relationships. We were people connecting for a higher purpose. The “Show me the money attitude” just doesn’t work for me.

Do you view your donors as mere money machines? Do you love your donors just as much as they love your mission? Do you believe that donors should be treated with worth and dignity?

Ethically, I asked myself, would I as a donor want to be thought of or treated in such a transactional way? I couldn’t answer yes.

We are in a noble profession. We transform communities; ourselves, and the donor through the process of fund development. That is what I believe in about what I do.

And, ethically, I can’t operate otherwise.

Donors give to us because we have the highest ethical standards to do what is right. Trust is the basis of all we make possible.

Perhaps we need to revisit the “Donor Bill of Rights” and ensure that there is a clause in there about “to be treated as I would want to be treated by another, not as a machine, but as a person who has beliefs in and the capacity to support a mission.”

As a fundraiser, what I want remembrance for is my success on the job, both monetarily and ethically.

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When your donor loves you way too much.

For many donors who hold great wealth, they sometimes want to do more than just give. In fact, they want to shape directly rather than just support a charitable cause. This term is often called, “hyperagency.”

In most cases, that is fine. In fact, it is very welcomed. Paul Shervish, Director of the Center on Wealth and Philanthropy at Boston College, noted that hyperagency is “a distinctive characteristic of maWealth donors and mission creepjor giving because such donors are capable of establishing the institutional framework in which they and others live.” They want to produce rather than support.

Not often, but in some cases, the donor upon giving an enormous gift expects the organization to do what he or she wishes, changing the whole agenda of the organization. They want to determine what happens and when programmatically.

To me, this can become dangerous territory. For you see, just because someone has extensive wealth and wants to give it us, does not mean that we have to entertain “mission creep.” Our organizations have been founded to serve a community through a particular mission. It is the obligation of the organization and its Board of Directors to ensure the organization’s programs, and mission continues to be relevant to the community that it serves.

We often see “mission drift” in cases where organizations “chase” foundation funding just because it is available and whether or not it meets the orgazation’s mission. As a result, programs develop that are not mission consistent, and the organization begins to take on areas that they do not have a specialty.

A case in point, in 1907, a $3 million bequest left to Swarthmore College met this description: It was made conditional on the school ceasing all participation in intercollegiate sports. (Though tempted by the much-needed funds, Swarthmore turned the gift down.)

So, are you tempted to keep the gift or would you turn it down?

Well, if the gift is going to subject your organization to terms it couldn’t possibly meet or that are not consistent with the core mission, then yes, I say it needs to be turned down. Turning down a gift is a rather difficult decision. But, you must realize that you are bound to the donors’ wishes once you accept it. If you can’t abide by the terms whether impractical, unethical, or for other reasons, then you just need to say “no!”

The dilemma mentioned above points to the importance of having a Gift Acceptance Policy in place. Yes, I know these policies are so mundane, and I know you don’t have the time to create them, but, when you start seeking major gifts, you just may come across a situation like this. Even the smallest organizations have found themselves with donors wishing to make contributions that have binding strings attached. And, when you are small, it becomes especially difficult to say no to a massive infusion of cash.

This situation is more of an ethical and moral question. But surely, the ethics involved in fundraising must be a topic that your organization discusses at a strategic level (meaning Board), and Gift Acceptance Policies provide a basis for that discussion.

So, you don’t always have to say “yes” to a donor who loves you too much. In fact, sometimes, it is best to say no, if it means you won’t hold true to your core mission and the community that you are bound to serve.

What is your take on this ethical dilemma?

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It’s all in the asking! Rehearse well before your next major gift ask.

Yep. You can go through the motions with your donor, but if you don’t A S K, you don’t G E T. Simple as that.

So, where do you even start?

Each donor is an individual. And, being an individual, he or she needs an individualized strategy – each solicitation is a campaign on its own.

Deciding who does the asking is key to the process. While a team of two to three people may be present during the solicitation meeting, there is only one person who makes the ask. And, don’t bring along someone who has never met the prospect to the solicitation meeting.

Fundraisers should not do all of the solicitations. Someone else in the organization, such as a Board Member, may be better suited to make the ask because of a “peer” based relationship. And, let’s face it, Board members are volunteers and their income is not impacted by a gift.  

Then you must set a target gift level and for what specific projects or goals. A prospect often can give between two and ten times the amount that he or she has given annually in the past. You would also want to revisit all the original research on a donor’s interest, concerns, and motives. This information will help you to narrow the range of the ask. Once you decide on an ask amount – double that number.

Then you need to select when and where you will do the asking. It is best to meet where the donor feels most comfortable. Also, It's all in the ask. Major gift fundraising.determine whether or not the prospects spouse or partner should be a part of this meeting. Note to self, restaurants are not usually places where you want this all to go down. The awkward question regarding coffee and dessert has ruined many a solicitation.

You should give some thought about whether or not the gifts should be outright gifts of cash, stock, or pledges, and if pledges, what is the timeframe for installments?

What should you bring on a visit? I would bring along a letter with a proposal that should include the project’s need, proposed action for meeting the need, financial information, including costs, and a summary of the benefits the donor will get from giving.

Don’t forget to assign specific roles to each member of the team at the meeting, and then role-play, role-play, and role-play before the actual visit. In other words, rehearse all possible scenarios before your team has ever walked through the prospect’s door

Call the prospect to ask for a time to talk about the case for support and opportunities for investment and how the donor can get more involved and be supportive in a more meaningful way. If you have done your cultivation to this point, they should know why you are calling. Above all else, be honest with them and fully explain why you would like to meet. It also sets the stage for the solicitation process. Then confirm this appointment in writing. Send along some easy-to-read information about the organization’s plans along with the confirmation letter. Reconfirm the meeting by phone or email shortly beforehand.

And, then it is showtime! Lights, camera, action.

If you would like more information on major gifts in small shops, don’t forget to sign-up for my FREE four-part e-course today.

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How to qualify major gift prospects

The world is full of prospects. Now who to see first. Well, those that are most likely to make an individual donation.

Without a crystal ball, how do you even begin to determine those most likely to make a donation?

Well, first you look at linkage. Is there a strong connection between your organization and the prospect? Are they active in the organization? Do they know someone actively involved in the organization? These linkages are what matters. A genuine link to the organization.

The next thing to look at is their ability. Do they have the financial ability to make a sizable gift? There are ways both formal and informal that can help you determine if someone can make a gift.

The last thing one needs to determine is if the prospect has any interest in your organization. And, by interest, I mean belief in and passion for the mission. Again, some of this information is available online.Qualifying major donors

I would also recommend that you conduct a silent prospecting rating session with your closest board, staff, and volunteers. Prepare lists of the top one hundred prospects and have them review the lists for linkage, ability, and interest.

Then you take this prioritized list of prospects and determine initial cultivation and strategies for each. You can then segment each category of prospects into tiers. Tier 1 prospects are your major donors already close to the organization and have been supporting it for quite some time. Tier 2 donors are those with the capacity and interest to make a gift but lack connection. Further cultivation may be necessary for these individuals. And, Tier 3 donors are potential donors who very little is know of them. They folks would require additional prospect research and more in-depth cultivation.

So there you have my primer on major donor qualification. While, I know that asking is critical, I would hesitate to skip this careful planning step. In doing this step, you are determining who is more likely to support the organization immediately, and that will make for a much more effective and efficient solicitation process.

For your free e-course on establishing a major gifts effort in a small fundraising shop, sign up here! 

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It’s not over until it’s over…what to do with your strategic plan!

So you ask…now that the planning is over now what do we do with the plan?

It is time to package it up!

Once the initial goals and objectives are drafted and approved by the planning team and board of directors, the organization needs to look at the two main audiences both internally and externally and in what form they should receive a copy of the plan.

And just like a case for support, there are several ways of packaging and for different reasons and audiences.

From my experience you will want to have an internal plan for executive management staff and board purposes that outlines priorities and goals, key objectives and tasks, along with any new staff requirements needed to achieve the plan, budgets to support the efforts and timelines for turning the vision into reality.  This internal plan becomes the day-to-day operational plan.   This  version while very specific and detailed is less formal than what is presented externally. It can be kept as a very informal, rudimentary working document with an eye towards task management and internal benchmarking.

Externally, while not as specific, this document can be more formally polished and presented to a wide variety of stakeholders according to traditional modes of communication.  These modes might include brochures, articles in newsletters, insider updates, websites, social media and other mediums as desired depending upon the particular cultural needs and expectations of the stakeholders including potential funders, donors and community partners.

Consider:

1. Distributing a full copy to every board and management team member.

2. Distributing all (or highlights from) the plan to everyone in the organization from the newest employee to direct care staff.

3. Posting your mission, vision and values statements on the walls of your main offices.

4.  Consider giving each employee a card with the mission, vision and values statements (or highlights from them) on a card.

5. Publishing portions of your plan in your newsletter, advertising and marketing materials (brochures, ads, etc.).

6. Training board members and employees on portions of the plan during orientations.

7. Including portions of the plan in policies and procedures, including the employee manual.

8. Providing copies of the plan for major stakeholders, for example, funders/investors, trade associations, potential collaborators, vendors/suppliers, etc.

So how have you gone that final step and packaged your strategic plan?

Share your thoughts, suggestions and samples!

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Let’s talk about board of directors giving…

Does you board of directors give?

This all important topic that is so hard to broach.

First, lets start where it all starts…

Does your organization have board of directors expectations that you share with them even before they are elected?

Do you have them sign and commit to those expectations?

Do you evaluate them on those expectations?

I am certainly not an advocate for board giving at a certain amount. Let’s face it, a major gift differs from one person to the next and that is plain respect. However, what I do advocate for is 100% giving by all board members at a level that they are most comfortable giving, but, with the condition that it should reflect the organization’s position as one of their top philanthropic choices.

Board giving is critical not just because funders require it, but, for the pure fact that one cannot ask another without having made their own gift.

And, if your board as the fiduciary “trustee” of the organization does not make a gift, what does that say about their commitment to the mission.

Something else to think about?

Our board members are our closest constituent group. So when they do give, how do we treat them? Do we treat them as the important donors that they are?

That is another question for another blog!

But, don’t forget to sign up for my e-mail newsletter for your free board of directors composition matrix template. You will find it most helpful and the weekly tips will accelerate your fund development!

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