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Is scarcity stopping you from asking for a major gift?

Do these phrases sound familiar to you?

“I never have enough money!”
“Money goes out faster than it comes in!”
“Money doesn’t grow on trees!”

How often have we heard these phrases growing up?  Well, if you were like me, probably a lot.  As a child, these were the Scarcity mindset in major giftsmessages that I subconsciously learned about money, and they helped to develop my now adult relationship with it.

Just this week, I led a workshop on asking for money.  As part of the icebreaker exercise, I asked attendees to share with me some of their greatest fears about fundraising.  And, fear after fear centered around scarcity.  In fact, many participants commented that they grew up hearing the very same phrases above.

Stop and think about what you believe about money.  Are your beliefs limiting you in your work?  Do you have a scarcity mindset?

Have you ever found yourself saying these types of things?

“There are only so many donors to go around!”
“Donors only have so much money to give!”
“We already asked our donors once this year; we can’t ask again!”

Are we placing our beliefs on our donors?  Are we making assumptions for our donors?  Are we self-sabotaging our work?  Are we limiting our role in the work that we do?  Are we focusing our efforts and time on things such as events that will take us out of the context of asking?

To be truly effective fundraisers, we all need to dig deep and look at our views and those beliefs of scarcity that may be holding you back.   Are they self-limiting and if so how can you work to create an abundance mindset?  We don’t want scarcity from preventing our life-changing work from happening both for our donors and for our missions. So, it is critical that you identify your mindset and work to change it.  Major gifts start with you.  Get that part of the relationship right first.

Break the scarcity mindset before you ask for a major gift.

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Ask your donors key questions, and fundraising becomes simple!

Let’s get rid of our printed newsletter and just send an e-newsletter.

Our donors don’t like personal solicitations.

We are only going to send out one appeal a year because we don’t want to send too much mail to our donors.

I hear statements like this all the time.  And, I wonder if we are making decisions for our donors.  I know that this goes for some groups.

Donor survey toolWhen I surmise this is the case, I often ask, “Have you asked your donors?”  And, the response is “No, how do you ask them?”

Well, quite simply you meet with them, or you call them on the telephone, and you ask them questions.  Questions like, “how much mail would you like from us?” or ” how do you prefer to be called upon to make a gift to us?”  or even, “how do you prefer to get information from us?”

There are other ways to ask donors what they prefer.

Try a donor survey.  You may design a questionnaire that asks things such as:

  • Why does he/she support the organization?”
  • Which programs, projects, or issues you address are the most important to him/her?
  • Is your organization one of his/her top philanthropic priorities?
  • Do he/she actively use email and do does he/she prefer to get emails from you?
  • Is he/she planning to remember your organization in his/her estate plans?
  • How old is he/she (hint ask for a birthday or date range)?
  • Etc., etc., etc.

Before mailing to your donors, be sure to test the survey and solicit feedback from other folks like your colleagues, friends, or family members, and include an envelope, a personalized letter, a brochure, and a self-addressed reply envelope as part of a survey package.

Then send this package out and be sure to analyze and document these returns. Don’t just let them pile up.

Then and only then will you be able to understand truly who your donors are, what motivates them to give to you, and what decisions you should make regarding your strategy, approach, and appropriate communications.

For instance, after you analyze and track the returned information, you can then segment your donors and mail materials that interest them.

But, the adage of “you don’t know until you ask” is such a critical element of driving all that you do in fund development.

We surely cannot begin to make assumptions for our donors based on our thoughts, interests, and profiling.

 

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Where are all your donors going?

Are you looking at your donor retention rate?  It seems like this is old hat in the field, but yet, it is such an important metric to be measuring in your development office.  The question is, are you?

It is more expensive and difficult to obtain a new donor than it is to keep a loyal donor. Do you know that it costs an Make-Me-Feel-Special-200x300average of twenty cents per dollar raised to renew donors via direct mail?  It costs about $1 to $1.25 to acquire a donor using that same method.  That is five times more.  And, on the converse, these new donors tend to give substantially less.  It is much easier to upgrade an existing loyal donor to a higher level of giving.

Are you running regular donor retention reports to determine what your rate is?  How does your donor retention rate compare to industry standards?  How does your donor retention rate compare to organizations in your area?  Is your rate going up, or is it going down?  If it is going down, what steps are you taking?

Here are a few ideas to boost your retention rate:

 

  • Consider decreasing the time required to send out an acknowledgment letter.  Best practice is 24-48 hours.
  • Call higher level donors and thank them for their gift or why not try calling everyone new.
  • Send out a welcome package to new donors making them feel a part of the organization
  • Send out regular updates either via email or printed news or both several times per year that are no solicitations.
  • Report back to the donor what their gift was able to make possible.
  • Develop a formal stewardship plan with donors of different giving levels getting different touches.

If you are not looking at donor retention, start.  While donor acquisition is still important, you can’t overlook the importance of keeping your donors interested in your work and supporting your mission.

What ways are you keeping your donors happy, satisfied, and giving?

Here are some more great resources:

Will I raise money with donor acquisition?

What is cultivation really about?

Knock, Knock, who is there?  Your new donor that is who!

How do you make your new donors feel welcome?

 

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What is your aversion to asking others for money?

I enjoy asking for gifts.  I like to connect a donor with a mission and see magic happen.  Indeed, when you ask one for a gift, the giver gives.

When I have broached this topic as of late, I see faces cringe and heads nod, “no.”  The body language says it all.  But, what is the aversion?  It has to do with how we value money and the beliefs and, ultimately, the power that money has over us.  Some feel awkward. Some even feel a little embarrassed about it.  Some ask “who will give us money?” and others ask “how will we ask them?”Beliefs around asking for money

We need to look carefully at ourselves.  What is our relationship to money?  We will never be able to move forward to ask for money if we do not know how we relate to it ourselves.

How important is money in our lives?  What is your past around money?  How do we spend the money we have?  Where are we giving our money?  How does having money affect our self-esteem and self-worth?

Money is about security and that is surely about a very vulnerable place in our lives.

Until you examine your beliefs and thoughts are around money, you will be adverse to ask others.

We must realize, that we are helping others by our asking.  We are enabling them to do great work for our clients, our community, and our world.

But, this must begin with you.  Take time to reflect on truly what money means to you.  And, that will prepare you to embrace asking others, and allowing for changed and transformed lives.

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Fundraising audits inside and out

The fundraising audit is a major step in fundraising planning.  When you think about planning, you think about where are we, where do we want to be, and how are we going to get there?

The fundraising audit helps you to determine, where are you.  And, it is probably the most important step of the entire planning process.  If you don’t know where you are today, how can you even plan for tomorrow?  And, it is What is a fundraising audit?important to not only look at internal things that will impact your fundraising success i.e. Board of Directors, etc., but it is also critical to examine external factors as well.  Some external things that may affect the success of fundraising include political factors (i.e. election time), economic (a down economy), sociocultural (changing demographics), and technology (changes in the web, social media, etc.).  Development audits also tend to examine others in the industry including nonprofits serving the same type of causes, similar sizes, potential collaborators, and other market factors).

Also, one can examine the feasibility of conducting a future large-scale campaign. Currently, I am conducting a development audit for a nonprofit organization, and as part of that review, I am asking initial capital campaign feasibility questions to determine if a proposed future capital campaign would be a success.

An audit is just that, a systematic attempt to gather tons of data, and then analyzing and synthesizing this data against professional best practices.  While it is best that an objective third party person conducts this process, it can also be accomplished by a new in-house development staff member who still has an objective “eye.”  It is also helpful to have someone who has their finger on the pulse regarding what is shifting and changing in the philanthropic landscape.

A development audit is also a great way to engage key stakeholders i.e. Board members, donors, etc. who may need more cultivation.  It is just as much about the product as it is about the process.

Insanity is creating a fundraising plan without first doing an audit.

Do you have a long-term strategic fund development plan?

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How does your fundraising ROI measure up?

How are you looking at your fundraising rate of return?

It is critical that you develop a variety of ways to measure your performance and report theFundraising Effectivenessse results to the board.

In doing so, you are ensuring appropriate stewardship of your resources through demonstrating that your fundraising is efficient and effective.  While it does cost money to raise funds, as professionals, we need to be assured that we aren’t spending excessive amounts to do so.  While our board should be looking at these types of benchmarks, we can be sure that our donors and public is.  Take a look at the recent issue surrounding the Wounded Warriors national charity.

It is important that we do invest in fundraising and administrative costs in these functions appropriately, even though there is much criticism for doing so.

What constitutes a reasonable amount?

James Greenfield wrote several important books several years ago, and I regularly still find myself turning to his outline on how to best measure the costs of fundraising.  One book, in particular, has been especially valuable.  It is titled, Fundraising Cost Effectiveness:  A Self-Assessment Workbook and was written in 1996.  He highly recommends the importance of benchmarking to other similar organizations in the sector both aggregate and on an individual fundraising level.  What are best practice and industry standards and how does your organization compare?

It is only through this analysis that we can say that our fundraising is within acceptable boundaries of efficiency.

As a fundraising consultant, I spend lots of time auditing organization’s fundraising effectiveness through auditing their development function comparing it to industry standards.

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Are you stuck in the fundraising dark ages?

With some nonprofits, there seems to be a disconnect.  These groups have operated using the same fundraising methods as they did twenty years ago, perhaps with the same leaders leading the organization.

GUSA-2015-Source-Pie-Chart-2They fail to look at national giving trends that show individuals giving more than 70% of all contributed income and only 15% made by grants and foundations, with even less by corporations.  It is these same organizations that continue
to disregard these philanthropic findings and keep on doing things the same old ways that they have always been done.  Many of them are still chasing grants and foundation that perhaps take months to make decisions and often will not give again.  It is these same organizations that will pursue funding and put their missions in jeopardy suffering from extreme mission creep.  Even grants and foundations want to know that an organization can be self-sustainable.

Well, you know what happens to folks who resist change?  They can no longer go on.

This fact is the reality.

And, reality while tough, is causing those organizations who embrace it, to move ahead.

What is this new (or not so new) reality?  Well, the once dominant paradigm of transaction fundraising has moved to relationships and transformative fund development.  This fact means that no longer are transaction special events king, but long-term sustainable donor relationships rule.  That is what our donors are exactly craving.  They don’t want to make one-time gifts and then go away.  They want to have long relationships with organizations that are making the difference that they believe.  Once an organization begins to think and act along these lines, they see tremendous results.

So banish the few choices for donors, banish the no segmentation, banish the standard donor communications, banish the reliance on special events, banish trying to fit your donors into YOUR boxes and not theirs.  Banish, banish, banish – your old ways of thinking before you disappear.

Is your organization stuck in the dark ages of fundraising?

Step out now, before you can’t.

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Plan before you prepare your next proposal.

What are the first steps to your grant planning?

First you need to document your funding priorities with custom tailored cases for supports that can be used to match up to a funders priority.Get your grants system in order before you apply

Once you have outlined your needs, the next steps are to do some detailed research to identify potential funding sources.  It is best to document a foundation schedule that includes the foundation’s priority areas, critical deadlines, and application process, among other items.  There are some helpful grant research tools available including The Foundation Center and the Foundation Directory Online.  While this is a subscription based software, you can check your local library or community foundation for free public access.

Then, you can then move to contact the potential funding sources and cultivate relationships.  Yes, even the grant and foundation process is about cultivating and stewarding relationships.  It’s not just about submitting proposals and then wishing for the best.

Now, write your application.  Answer all the questions as needed – nothing more, nothing less.  Then hit submit, and wait, often a few months.  I should add; you can submit many applications now online.  While that does make the process somewhat easier than in years past, it has its complexities with character limits, some background materials to submit, etc.

The proposal awarded?  Congratulations!  Be sure that you can administer this grant before you get the award or even apply.  You need to keep a detailed compliance record to be able to report back to the foundation promptly how the organization used the gift and the outcomes obtained.  Be sure to keep close attention to the reporting deadlines and ensure that reports get submitted.  And, most important determine how you are going to acknowledge and thank this foundation for its gift.

One pet peeve of mine, inadequate tracking systems.  More than once, I have been the staff person coming into a new office and finding out that the organization did not submit a report in the past.  Imagine my dismay, when I need to figure out how the organization used the grant money three, four, or even five years earlier.  Don’t let this happen in your organization.  Report timely and ensure proper documentation through an organized file tracking system both electronically and paper.

If you didn’t get funded, don’t dismay.  That happens more than you think.  Take this as an opportunity to reach out to the funding source to determine what the reasons for this decision are to be able to refine your proposal moving forward and to determine if there is still a possibility of perhaps receiving funding from this foundation in the future.  Maybe the proposal wasn’t meeting a particular priority area of the foundation.  Perhaps another project would have more suitable.  Or maybe the foundation just wasn’t a good match.

Also, send an acknowledgment letter to the foundation even if you didn’t get a grant.  Thank them for their time and consideration, and they will be sure to remember your organization in the future.  Don’t hesitate to keep this foundation up-to-date on your programs and progress.  Cultivation continues even if you didn’t get this award.

So, just like all aspects of development, grant writing is about doing appropriate research, building relationships, and then making the ask.  And, of course, don’t forget the stewardship in following up, reporting, and keep them apprised of your progress.

Development Consulting Solutions has a strong grant writing track record.  Check out a sampling of career awarded grants, and then email us to book your free consultation.

 

 

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I have a motive, and it is a bequest.

Yes, I have a motive, and it is a bequest. As a young woman with no children, I have already created my estate plans. Yes, I have. And while those I love will be taken care of as they should. There is a time after they are gone when my assets held in trust will be given to a charity which will receive the bulk of my estate.

You may ask, why?My motive for a bequest

Well, undoubtedly motives for donors are all different.  Some decide to leave money in their estate to avoid taxes, some choose to leave money to obtain recognition.   There is a whole host of other important motivations. For me, it is because I want to give to a charity which has given so very much to me. And, this gift that I make on my death will be impossible for me to make during my life.

We all tend to live on a set amount of disposable income.  While I have had saved and invested, surely I am not willing to take a chance and spend down a considerable amount of my assets while I may still need them.  I still have a long life yet to live.  However, after my death, who cares!  At that point, I will be able to make the single largest gift that I will ever make.  For me, that is enough.  More than I could do while alive.

I should add that at one point, I had a significant number of charities in my estate to benefit from my death.  And, that is where stewardship comes into play.  For you see, some charities are so intent on “chasing” the big donors that they forget about those little folks making small gifts out of their disposable income.  What they fail to think about is that for some, this giving may just be the tip of the iceberg. Since estate gifts are surely revocable, all donors whether large or small should be stewarded in some way appropriate to each.

I can’t tell you how many times during my career that an organization  I was working with received a bequest from a donor who may have made one $10 or $25 gift during their lifetime.

I have thought long and hard about those local charities and have narrowed it down to one – one that is extremely near and dear to my heart and one that treats me like a person when I visit, call, or make a gift.

I have a motive, and it is a bequest.

 

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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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A Case Study: Donor Acquisition – It Does Work!

This week, I had a conversation with one of my very first clients. And, I wanted to share their success story. You see, too many groups don’t want to invest in donor acquisition because they know that they will lose money – in the short-term. Who intends to invest in that, particularly if you are only thinking of the organization’s short-term success.

Donor Acquisition is itWell, this group had a total of 700 names in their donor file. And, they were in serious trouble operating in crisis mode. Person after person told them that they should not invest in donor acquisition, but
really what choice did they have. They knew that their donor file was suffering from natural attrition, and if they didn’t do something, they might as well not do anything at all.

They bit the bullet and against all odds decided to invest in donor acquisition. They hired a professional list brokerage and donor acquisition company who then supplied recommendations and advice on the records that best met their needs and premiums well suited to and representing their mission. Lists are usually anywhere from around $80 to $150 per thousand names and addresses for a single use. They also invested heavily in the acquisition renewal process, so that these first-time donors, would give again through a very intensive mail series. And, in fact, for the first seven donor acquisition pieces that they sent they did lose money. But, then the tide turned, just like it should with donor acquisition, and they began to see positive returns. And, not just with donor renewals, but with the acquisition mailing itself.

Now, several years later, they make money with their donor acquisition efforts. In fact, they are seeing donors who are sending in substantial donations as a result. In fact, they have received donations from donors renewing at $25,000 or more.

Further, they recently sent an urgent appeal to their donors in need of upgrading their sprinkler system. The result of this appeal mailing – net over $100,000.

So, when they started back in 2011, they had a donor list that had no more than 700 names. Today, that list has grown to well over 40,000 names.

Do you think that donor acquisition is way too costly for your organization? For this one small organization, it was, but if they wanted to be around, they had no other choice. While you may think that you cannot afford to invest in donor acquisition, imagine what could be achieved for your mission if you had a donor file that increased by over 5,500 percent in five years time!!!  How long has your donor file remained at the same stagnant number?

Donor Acquisition is THAT important to consider, and I know that you don’t want to, but to move your organization forward, you must. Your data file is declining just by merely being. What are you going to do about it?

More on donor acquisition in future blog articles.

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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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