From “Rainmaking: The Fundraisers Guide to Landing Big Gifts” on page 112…
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Roy C. Jones, CFRE
The best fundraisers know that relationships are never about money. By the same token, successful major gift officers make sure the relationships they build are never about the money. It may sound counter-intuitive, but if you want to receive large sums of money from people for your charity, your relationships should not be based on the money.
Successful fundraisers also know that investors (not just donors) write the largest checks, and that what they are first and foremost is a “friendraiser.” They make it a priority to build friendships that have absolutely nothing to do with receiving a donation.
Successful major gift officers are great at making friends with others. I remember meeting with donors and prospects for lunch and simply asking the question, “What are your plans today?” The next thing I knew I’d be taking Mrs. Smith to the grocery store or taking Mr. Johnson to the bank. I remember two or three occasions when my major gift officer duties included visiting a friend in the hospital, fixing a door hinge, re-hanging a photo and even cutting the grass (of course,with my lagging mechanical and carpentry skills, I have to be pretty careful).
I learned about this above-and-beyond mentality from a co-worker many years ago: I’d called to check on how his visit had gone with a donor, and a dear older lady answered his phone. She said that “My friend is helping me paint the front porch right now and could he call you back in an hour or so?”. Now that is a real friend.
Roy C. Jones, CFRE
Most organizations use “ask handles” (sometimes called an “ask table”) in order to do upgrade giving through their direct mail fundraising.
When the economy is good most charities will use the donor’s previous highest gift to calculate the three or four ask amounts in the gift array on the reply device in the letter. In short, the donors previous highest contribution (HPC) is the lowest amount you would ask for… the subsequent amounts might be: HPC; HPCx1.5; HPCx2; and Other.
When the economy is sagging, LIKE NOW, most not-for-profits use the donor’s last gift or average gift as the base to calculate the gift array. This tends not to upgrade too quickly and in most cases upgrades giving more gradually by simply lifting average giving.
Now for the question, “Is a gift array strategy the only tool you should use to upgrade donor participation?”
The obvious answer is “NO”.
You must do more in this economy to identify and harvest major gifts from your donor file. I am a big proponent of identifying “asks” around your programs existing program. Review your budget, analyze your program and look at every expense. Then repackage your programs and projects around the natural giving clusters that form around specific amounts in order to benchmark giving.
I compare it to having “rungs on a ladder”. You need to have $5,000 asks, $10,000 asks, $25,000, $50,000 and $100,000. With no rungs or levels between entry level giving and estate gifts it is almost impossible to take donors to the top of the giving pyramid.
Donors truly climb the ladder in their giving from one year to the next. It is extremely rare for a new donor to pull out their check book and write you a check for $100,000. Major donors are investors by nature. They will give you $5,000 and then measure your stewardship and impact. If you do well, their next gift could be $10,000 to $25,000. If you do poorly in reporting your impact it will likely be their last gift you get.
How do you find $1 million donors? By building a base of 6-figure donors that you are demonstrating impact from one
Roy C. Jones, CFRE
year to the next. How do you get $100,000 donors by demonstrating the best return on investment for their gifts at $10,000, $25,000 and $50,000. Donors move up the ladder from one year to the next as you ask for more and demonstrate that you have been a good steward with their previous gifts.
Internet giving is going up, up and up. The real question is why, why, why?
The median online revenue growth rate in 2012 is over 13 percent; in 2011 it was 15.8 percent, compared to 20 percent growth in 2010 over 2009. The gurus that work in the Internet and social media are almost giddy when they talk about it. I have heard some of the most ridiculous and unfounded conclusions in recent weeks. “Events in the real world are a waste of time”; “Telephone calls should never happen”; “No one reads hand written notes anymore”; “Fundraising mail is a complete waste of money”; “Direct mail is dead”…
The facts are that nothing could be further from the truth.
So many Internet gurus mistakenly lead people to believe that donations happen because people wake up in the morning and magically say, “I am going to send charity X a donation on my computer”. They convince their clients to curtail other forms of fundraising to rebuild their website every 24 to 36 months. The gurus of the web tell their clients “if you build it they will come.” Make no mistake about it, web sites are important and one day within this century, we will see all other forms of communication die. The tombstone for that day will not be in 2013, and will likely not be written for another decade or more.
What is really happening today? Donors are using the website as the “transaction form” for their giving.
If you do an event today, many participants will go on line to complete the pledge they made. Would the donation have happened without the event? Of course not… If you call a donor to talk about a project, most do not give on the telephone. After you hang up, they go on line to your website and make a gift? Would the donor have just magically gone to the website to donate without the call? Nope. If you send them a fundraising letter about 25 to 30 percent of all mail donors go on line today to process their donation today. Without the mailing, would those 3 out of 10 donors have given on line? Probably not.
Make no mistake about it. Web based donations do happen. Emails are used successfully to drive people to your website to donate. Nationally the response rate for house email files (people who have given to you before) is around 1%. One out of every 100 to 150 people will respond to your email appeal. If you are prospecting for new donor that number is a fraction of one percent. 1 out of 1,000 -1,500 will respond.
What the pundits and gurus fail to understand is that it is not an “either/or” scenario. It is not direct mail versus other marketing channels. It is direct mail AND the other channels. The word you should be talking about today is INTEGRATION.
Integration is the key to increasing the number of donations your charity receives. You must not get hung up on year over year giving from the individual communication channels. You have to track total revenue from all combined channels. There is just too much shifting back and forth between direct mail, white mail, telephone, internet and events. These silos work together in 2013. Donors go back in forth between silos based upon convenience and the time of year.
The way people give is changing. There is no doubt that the direct response fundraising metrics are different today than even one year ago. Gone are the days when direct mail was the ONLY tool for identifying, cultivating and renewing donor giving. Today, direct mail continues to produce checks in the pre printed reply envelopes. However, direct mail is playing a far greater role in driving transactions to the charity’s website.
If you track the daily giving to your charity’s website you are going to see that online giving mirrors the dates when your direct mail pieces arrive in-home. The spikes in giving online always follow, within hours, a mailing being placed into your donor’s mailbox.
So many “Internet Gurus” are churning out blatantly false information about what is occurring in digital fundraising. Fundraising “experts” are saying that all fundraising is shifting to the internet because it’s the new technology and they are absolutely wrong. When people give on line it is no more about the technology as saying when people give in the mail it is because of the paper.
I met recently with the president of a not-for-profit who shared that “we are going to stop using the mail entirely and move to digital communications exclusively.” After falling off my chair (for the dramatic effect, of course) I shared with him that he was about ready to “deep six” his organization. He had accepted another guru’s pronouncement that “direct mail is dead” at its face value was preparing to tell his donors “use your computer or give your money to someone else.”
I encouraged our new convert to “internet only” giving to look at on line donations by day and guess what he discovered? Seventy percent of his on line donations came within 48 hours of his in home mail date.
I asked the web convert how much cash he generated from his acknowledgement letters last year. Of course, he had no idea. When we ran the report we saw that he generated nearly 50,000 thank you letters which included a postage paid BRE for return gifts. The business reply envelops brought in an additional $300,000 in cash. Guess what happens to that income without direct mail fundraising? Poof… it is gone. You just lost $300,000 from the thank you mail alone.
Next I asked the “internet only” convert to look at checks over $500 that was sent to the organization through “white mail” (in the donors own envelop)? We were both shocked when the report came back that over $1 million came into the charity in the donors own white envelop that had not been attributed do the direct mail program, but the major gift program. When we looked at the dates he received the white mail donations…. Over 85% came into the charity within 72 hours of the in home date of the direct mail piece.
Where do major donors come from? Do they just magically appear? No, major donors come from the direct response program. Mail, events and the internet must work together. It is that simple. They go hand and glove. You really can not have one without the other.
[NOTE: Do not ask me why it is so but donors writing checks for $500, $1,000, $5,000 or more often DO NOT USE the pre-printed envelops that they are given with the direct mail piece. Anytime you increase the number of zeros on a check you dramatically increase the odds that they will use their own envelop.]
Remember…. acknowledgement giving, major donor gifts, planned gifts and internet giving do not happen in a silo by themselves. You have to look at the totality of each fundraising program. These marketing channels must continue to be fueled by direct mail packages.
Do I believe that fundraising is changing? You bet I do…. The reply device is what is changing in the industry.
Donors are going to use the medium for transferring their money to the charity that is the most convenient and trustworthy at the time of the transaction. In growing number of cases that will be the group’s website or their own envelop. Pre Printed reply envelopes and BRE’s will be used less in 2011 than in 2010, but there is one thing that will stay the same. Direct mail will be the tool that drives people to give, regardless of the medium the donor decides to use to transport their donation.
Roy C. Jones, CFRE
Direct mail pre printed reply devices may be decreasing in use, but the direct mail fundraising letter is at an exponential high. People are reading their mail and then using the giving channel they want. More and more donors are transacting their gift on line. Remember, in 2013 the key will be how you use direct mail AND the internet, not direct mail or the internet.
To quote my friend Mal Warwick, “The old reports and donor pathways are no longer sufficient—you must build a way to see, track, and analyze all the different ways your donors are experiencing and interacting with your organization in order to be able to build and refine a true multichannel fundraising and cultivation strategy.”
Roy C. Jones, CFRE
The Ask… no other action, technique or step in your fundraising program is more important than the ask. I meet and speak regularly with fundraising professionals nationwide. I truly believe in the old adage from the good book that “Iron Sharpens Iron”. Networking with other leaders of NPO’s, sharing our challenges and successes, is critical for improvement and making our charities better to meet the needs of others.
Without the crash and candor of iron coming down hard against iron the blade of operations, especially in non-profit organizations, rarely becomes sharp. I had a friend explain it to me another way a few months back. He said he believed so often non-profits fall into a pattern of doing things the “same old way”. He compared it to the way your eye’s gloss over a “spot on the wall”. Once you’ve seen the spot a few hundred times everytime you enter your office your mind’s eye somehow doesn’t notice the spot. Somehow the blemishes disappear after you ignore them day after day.
Our job as NPO leaders is to point out those “spots on the wall” in order to make improvements in our systems and raise the much needed support for the causes we are dedicated to. In starting the new year, I like to look at my walls to see if there are any spots I’ve been missing. I also reach out to friends, other industry leaders and co-workers to ask what “spots” do they see and what spots have they been cleaning up themselves. This year, unlike anytime I can remember over the last 25 years, the glaring spot on the wall is improving our “annual ask strategy” with our supporters, partners and investors.
Industry-wide charities are struggling with procuring major gifts. While total giving appears to be on the mend (although it is still nowhere close to the pre-crash 2007 record levels), major giving is seeing a significant decline. According to figures compiled by the Chronicle of Philantropy, there were 753 charitable gifts of $1-million or more in 2007. By 2011, that number had been cut to less than half — to 364. The totals of those gifts annually went from $32.2 -billion to just $4.1-billion. Many expect that number to flatten again as soon as 2012 numbers are compiled and released.
I truly believe the reason we are seeing major giving flatten is because NPO leaders have pulled back. Of the 2.1 million charities doing business in the United States, most enter the new year without an ask strategy. We don’t take the time to develop our 7-figure, 6-figure and 5-figure asks. We don’t have a case for support. We don’t even have a needs list. We get sloppy with our research and do not determine our supporters “donative intent” and giving capacity.
Over the next few weeks RoyJonesReports.com will be exploring how to prepare for the ask and then outlining how to make the ask. We approach it from the perspective of those who are actually making the major gift. I will also give examples of different types of asks and outline real examples from my career of “asks” that have worked and some that did not.
If you have any specific topics you’d like addressed or if you have some examples of ask strategies or case studies that you could share, please send them by way at firstname.lastname@example.org. Remember, “Iron Sharpens Iron”. Thanks for being my friend and partner in this wonderful work we call PHILANTHROPY.
No other act in fundraising is more indicative of good stewardship than how you make “the ask” in your fundraising program.
I am reminded of the great story about General Napoleon often used in fundraising:
After a long and brutal battle, the great French general, Napoleon, had finally conquered a highly prized Mediterranean island. He and his generals were savoring the victory, when a young officer came up and approached Napoleon. When the general asked the man what he wanted, he looked straight at Napoleon and said, “Give me this island!” All the generals began to laugh and mock the young man, until that is, Napoleon asked one of them for a pen and paper. To their utter amazement, he wrote out a deed to the island, signed it, and handed it to the bold, but lowly soldier. “How could you do that?” one of his generals asked, “What made him worthy to receive this great island?”
“I gave him this island,” Napoleon replied, “because he honored me by the magnitude of his request.”
My experience from organization to organization is that most are afraid of asking for too much?
The biggest mistake we make in fundraising is asking multi-millionaires for too small an amount or, worse yes, explaining the need without asking for a specific gift amount. Why does this happen? Most people think it has something to do with fear or a lack of boldness, but the real reason is a lack of preparation.
5-figure, 6-figure and million dollar asks should rarely, if ever, be made in an initial meeting. They are made after thoroughly researching the prospective major donor’s interests, capacity and giving history. As importantly, a major gift ask should only happen after the donor has shared with you previously what their intentions are and what kind project they want to be involved in.
Prior to a big ask I always ask the donor why they support our organization and what kinds of things they were thinking about this year. Then I shut up! I listen. I ask for permission to take some notes. I probe deeper with the donor and listen some more. Then I conclude the conversation with this scenario, “Would it be of interest to you for me to go back to our program folks in this area and get you some of specific needs we have right now?”
I have never had a donor tell me “no”. What has the donor just given me permission to do when I ask this question? Come back to them in our next meeting with a bold, Napoleon-ask.
Even if I think I know the answer, even if I have a list of needs from the organization…. I respect the donor insights, direction and instructions enough to go back to my program team and prepare a custom ask that is tailored to my donor’s heart and the most immediate needs of my organization’s program.
Rest assured, the more personal you are with the major gift prospect, the more likely it is that the donor will respond positively to your request. Every major donor prospect must be treated uniquely as your “only” business partner, not part of some mass marketing approach.
Major gift “asks” must never seem canned or produced for all of your top donors. Major gift “asks” are from one person to one person for one specific need. Every ask must be for a very specific amount and for a specific purpose.
At the initial ask, stay committed to the ask amount. Focus on the impact the gift will have and not the dollar amount. Every ask should be converted to the number of lives impacted by this specific gift. After outlining the need and the impact they could have with this investment, simply ask the question, “Would you consider a gift of _____?” And then shut up. Listen.
Allow the donor to think about the question? Let it sink in. Most importantly, allow your business partner to tell you “no”, “not now” or “I have to think about it.”
If they counter with a smaller amount, allow the donor to outline the kind of investment they would like to make and position your role as their advocate with the charity or non-profit. Reposition yourself as their advisor and partner working to get the greatest impact as you can for the investment they are willing to make.
Most importantly, follow up and follow-through are critical to closing the gift.
I have followed fundraising author Laura Fredricks over the years and like her five steps to improving conversations with donors:
Know exactly what you want. Before you contact a donor, you should have an idea “how much, how many, how often, and why” you want their gift, Ms. Fredricks said.
Prepare the conversation. Before meeting with a donor, script out what you’d like to say, with an emphasis on open-ended questions. These questions can help put a donor at ease and stir conversation, Ms. Fredricks said. One of Ms. Fredricks’s favorite questions is, “When was the first time you remembered it was important to give back?” Make sure that you, personally, aren’t spending too much time talking but that you cover your organization’s mission.
Deliver with confidence. It’s important to smile when you’re communicating with a donor, even if it’s over the phone or through e-mail. Listen to their responses to questions: Do they mention family or a hobby frequently? This can tip you off to the values that are important to them and allow you to adjust your approach. Mirror their language, and keep your requests for donations short and to the point.
Clarify your results. At the end of each conversation, repeat what you see as the results back to the
donor to make sure you completely understand each other, Ms. Fredricks said. Use a sentence starting with, “I heard you say today that …” and allow the donor to respond and correct you. If a donor gives you an adamant “no” about making a donation, ask why. ”Can I ask why it is you don’t want to give?” is the language that Ms. Fredricks recommended.
Plan the next move. If the donor is still unsure about giving, set a timetable with him or her to check in again, but phrase it as a question. ”Can I get back to you next week?” or “When would be a good time to get back to you about that?” are both effective, Ms. Fredricks said. If the donor does agree to give, you should still set a next goal, with a date, and record it along with all the other information your group has about the donor.
I am surprised at the number of blank stares I get these days from not-for-profit leaders when I use the term “LYBUNT”. If there is one thing a fundraising and development professional should be doing in December it should be making a list LYBUNTs “and checking it twice, you have to find out who has been naughty or nice.”
LYBUNT is an acronym that stands for “last year, but unfortunately not this year.” This is a term used frequently in the fundraising world to represent donors who gave your organization money last year but, who have not given you money yet this year. Fundraisers typically target this group of last year’s donors differently than people who haven’t made a gift at all.
A donor in this group is also sometimes referred to as a “low hanging fruit” or a “warm” donor since that individual could be expected to give a gift again. If you are an Executive Director, President, Board member or Director of Development there is not a better use of your time at this time of year than calling and meeting with your top donors from last year, but who have not yet given this year.
Focus on the top 15 – 30 donors who haven’t made a gift yet this year. Integration is the key to getting your calls returned: use in combination emails, voice mails, hand written notes and drop by visits to remind your LYBUNTs not to forget your charity this year. Don’t just make the purpose for the call or visit all about getting the money, use it instead, to build a real friendship with each person. Begin every call, contact or meeting with the words: “We’ve missed you this year.” Find out what’s going on in their lives, and what’s still important to them about the work you’re doing. Then ask them to make a year-end commitment to ensure that important work can continue.
Remember, in most cases the LYBUNT donor thinks that they have made a gift, most certainly within the last year. It is truly an oversight on their part so have a spirit of forgiveness and be as welcoming as possible. For those LYBUNT donors who did not forget to send you a gift, you should never presume that they lapsed because of something your organization did or didn’t do. Many donors stop giving for many reasons we might never know, like big purchases, lifestyle and work changes, and new priorities in their giving plans.
Roy C. Jones, CFRE
In the month of December, one thing is for sure… if your donor knows that “you a making a list and checking it twice and that you’ll find out soon who’s naughty or nice” they are going to make sure that there is a gift under the tree at your charitable organization. Merry Christmas!
Special thanks to Tracy Cadigan at www.prospectresearch.com for helping get the word out about www.RoyJonesReports.com . I invite you to visit Blackbaud’s prospect research blog for more industry knowledge and best practice sharing.
Roy C. Jones, CFRE
Why do major donors invest in your charity?
One word… TRUST.
Trust is is built by demonstrating good stewardship before, after and at the time a donation is made. Donors want to know that you care about their intentions and needs as much as the charitable work and people you minister to. While they may not say it, as a matter of fact most will deny it, donors want to know you care about them.
I like to treat major donors just as I would a business partner or major investor. I set up a schedule to speak with them on a regular basis. I meet with them face to face to provide a stewardship report on the projects they support. In short, I spend time with them and listen to not just their words, but their hearts.
Good development professionals position themselves as the donor’s advocate. They become their supporter’s eyes and ears inside the organization. The best development people are “fixers and matchmakers”. They identify the types of programs the donor is interested in and then align the charity’s needs list with the donor priorities.
Trust is not built through a fancy direct mail piece or interactive email. Trust is built face to face and working hand in hand.
If you want to see your donors step up and start making major investments in your charity or non-proft, then start treating them like you would a business partner or major investor. Meet with them, talk with them, but most importantly listen to them.
Most charities are looking for the short cut to big gifts. Trust seems to always be the critical step that they forget. Build trust first…. and be disciplined enought to refrain from making an “ask” for a large gift until the donor’s trust is in place.
Do you care about donors? Trust is built as you reposition your supporters as investors, business partners and good friends. As counter-intuitive as it sounds your biggest donors must know and believe whole heartedly that your relationship is not about the money… it is about T-R-U-S-T.
Roy C. Jones, CFRE
I played high school and college football and when we knew the opposing team was going to need a BIG play on offense to win the game, guess what we did? WE BLITZED!
We sent everybody on the team after their quarterback. I think even our coaches and guys on the sidelines went after their QB too. In fundraising and development, if there was ever a time to “blitz” it is when you enter the 4th quarter. Donors are in the decision making mode about who to make donations to and I can promise you the charity that gets the gift is the one that blitzes the donor, cuts through all the clutter and makes a clear, compelling case for yearend support.
Yes, it’s that time again. The 4th quarter has arrived and what play are your going to call? By any metric or system of measurement in fund development the last quarter of the year is the most important and the last week of the 4th quarter is by far the most profitable week for any not-for-profit organization. I often refer to this week as “golden week”.
Marketing “pros” know that once the Christmas appeal is in the mail that it is NOT the time to “take a break” and relax until January.
The best development leaders bear down during the month of December to insure that the last 4 weeks of the year are a huge success. For most healthy non-profits the last week of the year is the most profitable 7-days of the calendar year.
I know some development directors who “swear by” the last week of the year. They contend that reaching their annual goals often comes down to the last few days of the year. Most contend it is often the difference between ending the year in the black or sinking deeper into the red.
The best executives strategically plan for a “yearend” appeal and reach out to their best donors for one last year-end gift. Remember, it does not need to be a “balance the books” financial crisis, but the appeal should remind donors it is not too late to get their year-end tax deduction and help their favorite charity.
Be cynical if you want, but if your 2011 was like most not-for-profit organizations you are behind in achieving your financial goals. You have had to make some tough decisions this year and the fact is that unless a few of your best donors step up to make just one last yearend gift you may be forced to cut vital services and programs. Let me be blunt… sometimes the truth works!
Now is the time to be direct with our best donors. Tell them if fundraising has been slow and you need their help so that you do not have to cut vital programs in 2012.
To repeat a phrase that I used to tell political candidates… “a real crisis is a terrible thing to waste.”
Take immediate steps to insure that your ministry or charity can have an extra “payday” in 2011. Do not delay. Look at every revenue stream you have and see if you can make one last appeal to remind donors and supporters that it is not too late to impact 2012. The gift they make could be the difference between your organization continuing vital service or being force to turn those in dire need away.
Here are just a few suggestions for maximizing your cash flow during the “Golden Week” – last week of the calendar year:
- Major Donor Letter. Send a hand addressed, multi-stamped, first class letter to your major donors telling them of the “year end crisis” you are faced with. Include a reply envelop with live stamped first class postage. This tells the donor that this is not some “fund raising ploy” or mass marketing technique. The challenges you face are real or you would not have gone to the expense of writing them and sending it first class. I have seen many organizations do a 10 to 20 percent response rate during the last 10 days of the year. REMEMBER, EVEN IN THIS TOUGH ECONOMY THERE ARE DONORS WHO MUST MAKE A YEAR END DONATION OR END UP PAYING “UNCLE SAM” ON APRIL 15.
- E-mail Blast. Send a “year end, balance the books” appeal to every email address you have. I suggest sending at least 3 different appeals in your email campaign during the last 10 days of the year. Sure, you will get a few complaints, but to most of your supporters they understand the importance of ending the year in the black, not red. Most who take the time to see your emails, and as importantly, notice that you have emailed multiple times the last week of the year, know that the challenges you face at year end are real.
- Direct Mail Letter to Regular Donors. Now is the time to send that “Urgent Gram” to your regular (those that give under $1,000) direct mail donors. If you ever had a “real reason” to send that year-end appeal 2012 is the year to do it. Trust me, it is worth squeezing in one last pay day. Push your January appeal out a week or so later and create a hole in your mail schedule so that the Monday after Christmas your “year-end” appeal is in home.
- Do not forget your monthly donors. Your sustainer file should be mailed the year end appeal too. If you have your sustainers coded for a “limited mail or no mail” do not forget to create a flag so they are forced into your select for the mailing. In addition, your monthly donors who have an HPC (highest previous contribution) of $1,000+ should get a phone call thanking them for their support and asking them to make a “sacrificial year end gift”.
- Search Engine Marketing. The last week of the year sees a HUGE spike in major donors cruising the internet looking for a local charity to make that last gift to for the year-end income tax deduction. Beg, borrow or barter for your organization… sink another $500 to $1,000 into SEM. Search Engine Marketing will pay for itself. There is no doubt that during the last week of the year you will reap large rewards and a huge number of new donors at the major gift level.
- Earned Media. Sure you are exhausted… you have had that special Thanksgiving push and you had a very big Christmas push, but trust me… do just a little bit more. Hold a press conference with a local celebrity or politician reminding your community that YOUR CHARITY is the group to consider making a year-end gift to. Think of creative ways to get the media on site at your ministry or charity during this week. Remember, the last week of the year is the “slowest news” of the year. The media is frantic to find content and stories to write, film and broadcast about.
Do not quit! Finish strong! The last week of the year is not the time to “take off” or relax. IT IS THE TIME TO BLITZ. Your year could literally be turned around by a single major gift. Keep telling yourself that “it just takes one gift” to literally change your world. Work hard. Finish strong and take advantage of the “GOLDEN WEEK” in fundraising.
Roy C. Jones, CFRE
Major giving metrics in a multi-channel world is nothing short of confusing.
Response rates, data analysis, cost of fundraising, contacts to presentation ratios, closing rates, results assessments, weekly activity reports… Managing a successful major gift program in context of the rest of your fundraising is enough to make your head spin. Performance measurements are moving targets today and confounded by the channel integration of the telephone, mail, email, social media, one-on-one meetings and, of course, fundraising events.
I have often chuckled over the fact that so many business leaders, including Peter Drucker, Tom Peters and dozens of others, taking credit for first using the quote: “What gets measured is what gets done.” As a matter of fact, I have even had a few my old bosses take credit for the quote too. Regardless of who gets the credit for the maxim, success only happens in major gift development when it is measured.
Before looking at the metrics, I would like to begin with where we want end. What does success look like for a full time major gift officer or senior staff member calling on individual, businesses and other funders to your organization?
- A full time major gift officer should conduct an average of between 3 to 5 visits a week. That equates to 12 to 15 visits a month; 145 to 180 meetings a year.
- Gift officers should visit approximately 75 percent of their portfolio each year. So if the minimal annual meeting goal is 150, the maximum number of assignments to a gift officer should never exceed 200 people.
- Approximately one-third of a gift officer’s portfolio should be in the solicitation stage.
Notice that I did not list a financial goal or annual fundraising objective. The secret to successful major gift fundraising is measuring the activity, not counting the money. Trust me when I tell you that if the activity is being measured and the major gift staff is held to a standard of activity HUGE SUMS OF CASH WILL FOLLOW.
However, if you simply measure the amount of revenue raised each month by you and your staff problems will follow. Reward activity and incentivize the number of meetings, presentations and asks. Strange things can happen when you are just looking at the money and rewarding your staff for the amount of cash raised. I have seen it all.
I once had a client who over a period of 36 month period rewarded and compensated their gift officers for increasing revenue from their portfolios. The strange thing was that overall giving to the organization had declined. The charity threatened to fire their direct response fundraising company. They reached out and hired tens of thousands of dollars on consultants to diagnose the problem.
When they hired me I was fortunate enough to understand the importance of measuring the activity, not just counting the money. As I drilled down to find the solution I discovered that the activity of the 5 major gift officers had declined dramatically each year, while total giving in their portfolio increased. Things did not add up. I asked for a source code report of all the donors and the discover I found was worse than anything I had ever seen. Each of the members of the major gift team had permission to recode donors in the data base to their own portfolio. They had assigned themselves over 1,500 names each from the regular donor program. They had pulled the best performing donors every month out of the direct mail and email program to assign the income they’d generated that year to their portfolio. While well intentioned, the majority of these donors actually gave less because they were no longer being solicited on a monthly basis. And because each major gift officer could only meet with 100 or so year, thousands and thousands of the organizations best supporters were not being cultivated or solicited at all.
Over 2 or 3 years pulling every $500, $1,000 and $5,000+ donor out of the direct mail and email program had a devastating impact on the organization. Evan after we fixed the problem, thousands and thousands of these donors lapsed and could never be reacquired. These donors, the charity’s best donors, simply moved on to other non-profits because they were not being solicited.
Expanded portfolios are not the only problems that happen when you are just “counting the money”. I saw another charity who promoted a young twenty-something to vice president of major gifts because he had taken a phone call and then met with a senior citizen who was liquidating their estate and gave the young whiz kid a check for $1 million. When I talked to the wonder boy 16 months after his $1 million donation he had not received another donation larger than $500 bucks. He was clueless but likeable and it was costing the charity millions each year.
When non-profits only watch the income report on a monthly or quarterly basis strange things happen… Let’s say the organization has a fundraising dinner, golf tournament or a walk-a-thon fundraiser that sparks a big week in revenue for the organization. What happens? You guessed it, the major gift officers take a break. They’ll be using their vacation days, their comp time. They’ll be having family emergencies or just calling in sick. The sad fact is when a major gift or development person is exceeding their quota or income goals, they “check out”. Even if they are in the office, they are mentally somewhere else.
While you might say, well they deserve it. They hit their number. The fact is when a week happens when nothing happens… your moves management process begins to unravel very quickly.
Getting donors to sit down with you is a cycle. You have to get the pump primed before most donors say, “yes, let’s meet”. It might take 10 phone calls, 3 voice mail messages, a handwritten note and 2 or 3 actually phone conversations to get a visit. When you interrupt this cycle for one week, two weeks or even, three weeks, guess what? You have to start all over.
Allowing your major gift team to “check out” after a big event or they have hit their goal can have a devastating impact on your organizations income and financial growth. If you are serious about growing your income and increasing major gifts, stop counting the money and start measuring the activity.
Your plan should outline the organizations goals for major gift fundraising and its role in your overall development program. Your plan should create a general strategy of opportunities for engaging the donor with the organization, but most importantly, your plan should include hundreds of individual plans with deadlines for cultivating each individual relationship.
If you build the relationship, the money will follow… if your contact with donors is only about money it will not succeed. Remember, your major gift program consists of hundreds of individual donor plans.
Yes, your program goals may be fairly obvious. Maybe you want to increase the number of major donors by 10% this year and increase overall giving by this group by 25%. What is not obvious is the work required to accomplish such tasks. Remember, major gift development is not something that is done with mass marketing techniques. Building real relationships with donors will not happen on Facebook or by email or by direct mail letter. Friendships are built only one way. They happen one-on-one, face to face.
In order to grow your major gift program it comes down to one message, “all hands on deck!” The only way to expand your major gift program is to put more people on the job. I am not saying that you need to hire a large major gift staff, although in some cases that may be the right thing to do. Every organization needs to look at their development team, senior staff, board of directors, key volunteers and major donors in order to determine who has the skills cultivate relationships and ask for support from others.
The question that your organization has to determine is “how many meetings can we do?” How many individual meetings can you do a year, a month or each business day?
The 50-10-3 Rule. Remember, too, that you have to account for the time it takes to reach the donor by phone, mail or email in order to schedule a meeting. While this is a very broad generalization, I have always planned on talking to 10 people in order to schedule 2 to 3 visits. The real question then is what does it take to actually talk to ten people. In today’s market, dialing the phone over 50 times and leave about 20 voice mail messages is not unprecedented. Twenty voice mails (to 20 households) will result in reaching about half of them. If you talk to 10 people, only three will likely be able to meet the following week.
That’s right 50 phone calls in order to talk to 10 and meet with 3. It takes a lot of work. If you are like most not for profit executives you will now click back to your Facebook page and go back to your normal routine. However, if you are ready to roll up your sleeves and go to work… pick up the phone and start pounding out those phone calls. Don’t forget the 50-10-3 rule.
Roy C. Jones, CFRE
Why do regular donors suddenly step up and do something spectacular?
I was reminded of the importance of “Tipping Points” in fundraising this week by World Help’s Director of Sponsorship programs, Noah Barnett. We had a donor who suddenly went from sponsoring a child at just $35 to sending in $15,000 to help build water wells in an African village.
“There must have been a tipping point in the relationship…” explained Barnett. Upon checking the donor’s record it was easy to see just what happened. The donor’s sponsored child had been sick and in the hospital so the World Help team updated the sponsor and promised to keep them informed as the child recovered.
Unrelated to the sponsorship call, the development team sent to the donor the organization’s annual report and outlined, among other things, the number of wells World Help needed to drill this year to provide clean water and prevent children from getting sick. A few weeks later the development department called the donor to make sure they got the annual report and reminded them that 97% of the money raised for projects is used in the field. The donor then sent a check for $15,000 to help with a well.
Tipping points… a call about a sick child, a plan to help others from getting sick, a stewardship call, then a BIG gift. Like dominoes falling, the donor knew this was not some mass marketing campaign. It was truly one-on-one cultivation, truly building a relationship through accountability and stewardship.
Of course, the use of the term “Tipping Points” in fundraising is not new. It dominated the industry nearly 14 years ago when Malcolm Gladwell first published his book, The Tipping Point: How Little Things Can Make a Big Difference (ISBN 0-316-31696-2).
Tipping points in fundraising nearly always focus on stewardship. Donors upgrade their giving when they fully understand that you intend to be accountable for every penny spent. Most importantly, the donor will invest more when they see that you are looking for a business partner, not just somebody to to write a check.
The most exciting thing about Tipping Points is that they rarely happen in a vacuum or by themselves. Most of the time when a donor crosses the threshold moving up to the next level of giving, they are usually taking others along with them. They do not make 5-figure and 6-figure giving decisions without getting the advice of others.
Gladwell defined a tipping point as “the moment of critical mass, the threshold, the boiling point.” The book seeks to explain and describe the “mysterious” sociological changes that mark everyday life. As Gladwell states, “Ideas and products and messages and behaviors spread like viruses do.”
When you have a donor who upgrades their giving, especially those that move dramatically to the 5-figure level, do not just put them through your normal thank you receipting process. Get out of your office and go see them. Get face to face with that donor and thank them. Ask them to explain the decision making process and who are their trusted advisers that helped them with the decision. Before you know it that single gift will blossom into five or six figure major gifts, but only if you take the time to meet and cultivate real friendships.
Tipping points… they happen everyday. The true professional understands their importance and acts immediately!