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Why Do Planned Giving Marketing Efforts by Nonprofits Fail?

Donor Recognition Capital Campaigns

So you want to work in the nonprofit sector.....Some tips to consider

It All Starts with Leadership

Nonprofit Organization Culture

Corporate Engagement with Nonprofits: The Good, The Bad, and The Ugly

Is the Use of Social Media by Nonprofits Worth the Time Spent?

Capital Campaign Budgeting: More than Construction Costs

My Journey Into Publishing

New Resource

How Are You Handling Risk

Major Gift Prospecting and Prioritization

Volunteer Succession Planning for Nonprofits

Nonprofits and PEO's

How to Develop a Strong Fundraising Board

Why Your Organization Needs A Gift Acceptance Policy

Before You Start A Fundraising Campaign

Ten Fundraising Axioms: Simplified

Fundraising Return on Investment

Best Kept Secret

Collaboration: Saving Operating Costs in a Tough Economy

Ten Tips for Nonprofit Major Gift Solicitors

A Marketing Approach for Planned Gifts

Professional Development Through Peer Engagemet

Nonprofit Lexicon

Why Do Many Planned Giving Marketing Efforts By Nonprofits Fail?

Why Do Many Planned Giving Marketing Efforts By Nonprofits Fail?

By Norman Olshansky: President

NFP Consulting Resources, Inc.

Nonprofit fundraising, whether for annual, capital or endowment campaigns, is all about relationships.  This is one of the main axioms of fundraising.  (See Ten Basic Fundraising Axioms http://nfpconsulting.blogspot.com/2009/09/fundraising-axioms-simplified.html )

Planned gifts are major gifts.  Like with other major gifts, they require proper prospect research by nonprofits related to the passions, interests and philanthropic goals of the potential donor, followed by a thoughtful cultivation process.

Since many planned gifts utilize giving techniques that can be technical or somewhat complicated, such as trusts, annuities, transfers of real property, insurance, etc., nonprofits have depended heavily upon the advice and input of financial services professionals (accountants, tax attorneys, investment advisors) for the development of their planned giving programs.  While financial advisors are a very important component within a nonprofit’s planned giving leadership, too often development professionals have focused too much on how to structure planned gifts rather than on how to engage qualified prospects to the point of willingness to consider making a planned gift.  As a result, marketing efforts have typically focused on charitable annuity tables, and a plea to “leave us in your will” rather than a focus on the interests and values of the donor.

The first step in obtaining charitable planned gifts is to identify prospects who care about your mission and have charitable intent.

The quality of a gift is directly related to the quality of the relationship between the nonprofit and prospect. Major prospects deserve personal attention. Your nonprofit’s relationship to the prospect has a direct impact on their gift. The more they know and trust the nonprofit and their representatives (volunteers and staff), the more comfortable they will be making a major gift. They need to know that they are getting accurate, current and reliable information about the organization and the impact of their giving. They also will be more comfortable knowing that the nonprofit, with whom they have a relationship, is  familiar with their background, interests and abilities than would a stranger. 

Planned giving is an opportunity for the donor to leave a legacy gift. 

The dictionary has two definitions for legacy.

1.  a gift by will especially of money or other personal property :

2.  something transmitted by or received from an ancestor or predecessor or from the past

As related to marketing of planned gifts, these definitions of “legacy” offer great input.  Why would a donor want to leave a legacy through a planned gift?  Is it the motivation for the gift to serve as appreciation for the work of the organization, or a memorial to a diseased relative, to honor someone, to set an example for others, to pass on their values of philanthropy to children and/or grandchildren, to sustain the organization about which the donor cares, to endow their annual gift, to fund a program or service or scholarship long term, to be recognized as a major donor while they are still alive, to thank the organization for its past service to the donor or a family member, to be able to make a more meaningful gift than they have in the past…. ?  The reasons may be different for each prospective donor.

Research has shown that the best prospects for planned gifts are:

1.    Long term donors and volunteers who have demonstrated a commitment to the organization (not gift size but more focused on length of giving)

2.    Those who are over 60 years old

Many of these prospects are living off of unearned income, have concerns about their ability to provide for themselves or other family members, long term. Their net worth may primarily be in property or other assets, which do not produce income or, at best, minimal interest. They are usually individuals who have been small or moderate long-term contributors to the organization.

While many charities have received bequests from individuals who had previously never made a gift to the charity, most donors of planned gifts fit the characteristics above when they made the decision to “plan” a gift.

Developing a “relationship” with the prospect so that conversations can take place that help the individual articulate what they care about, is the critical first step once they have been identified as a prospect.

Once the “solicitor” has acknowledged and demonstrated appreciation for their long term support, and has determined some of the potential interests and philanthropic motivations of the prospect related to your nonprofit, ask:  “If you were in a position to make a legacy gift to accomplish some of what you just mentioned, and you had the resources, would you want to make a legacy gift or gift in perpetuity to our nonprofit”?

Typically, they will respond that they are not wealthy or in a position to do so and don’t have the ability to make such a gift. 

Ask what they would want to accomplish with a major legacy gift to the nonprofit, if indeed they WERE in a position to do so.  Get them to talk about their passion for your nonprofit and their interests.

At the right time during that conversation, the solicitor can respond as follows:

“If we could show you a way that could enable you to make a legacy gift, without any cash out of your pocket and the possibility to receive income for the rest of your life greater than you are earning from some of your investments, would you be interested in learning more?

In most cases, long term supporters will be curious as to what you are suggesting and will be willing to learn more.

If the solicitor is a planned giving professional they can continue the

conversation.  If it’s a volunteer or a staff member without significant financial services knowledge, they should ask if it’s ok to have one of the

organization’s advisors set up a time to discuss with the prospect some of the ways they can make a legacy gift and also receive income and significant tax advantages.

The next step or meeting, once their interest has been established, would be to determine what are the primary assets of the prospect (residence, collectibles, life insurance, other appreciated assets, etc). Use of appreciated assets for gift planning offers the donor additional advantages.  In addition, a determination should be made regarding investments in low performing instruments. (money market funds, CD’s, bonds, etc.) With that information, the professional/advisor can suggest some of the techniques that might best fit that individual. (Gift annuities, trusts, life insurance, bequests, stock transfers, bequest, etc.)

It is important to encourage the prospect to engage their own financial advisors to make sure what is being discussed is appropriate based on more detailed knowledge of their unique financial situation and needs.

The nonprofit’s representative should offer to contact the prospect’s financial advisor once the prospect has had a chance to initiate the discussion with their advisor.

Marketing for planned gifts is primarily a one-on-one engagement of the prospect, their financial advisor and in many cases, their family. 

Establishing legacy societies and ways to recognize those who sign letters of intent to leave a bequest by will, or have committed to a planned gift, are critical components of a planned giving program.  The more planned gifts are recognized for the reasons the gift was made without emphasis on the amount of the gift, the more such recognition will encourage others to consider planned gifts.  

However, emphasis on marketing should primarily be on ways to identify and engage those who fit the legacy gift profile.  Brochures, emails, gift talbes seminars and engagement of financial advisors, while helpful, are not sufficient for the development of a successful planned giving program for your nonprofit.  The key to marketing your planned giving initiative is to get good conversations with appropriate prospects started, which is all about “relationships”.

How would you rate the marketing for your nonprofit’s planned giving program?

Donor Recognition Capital Campaigns

One of the areas of capital campaign planning that can enhance fundraising success is a determination of how donors will be recognized.  One of the axioms of fundraising is that you can never thank a donor too often. They are the critical keys to success.

Whether it be stewardship, public recognition, ongoing communication, personal thank yous, gifts, member benefits, etc………the more you are in touch with donors in a way that demonstrates your sincere appreciation, the more likely they will be there for you when you need them in the future.  Take care to establish donor recognition policies that will ensure that those who support the organization through donations receive recognition that is appropriate, equitable and consistent. 

Too often, organizations do not adequately establish policies and establish recognition programs during the pre campaign planning process.  Fundraising is much more than “the ask”.  How you recognize donors can be a critical determination as to how successful your campaign will be and its impact on future fundraising.

There are many ways to thank and give recognition to donors.

Some examples of the processes, events and activities that should be addressed early on, as part of the campaign plan are:

1.     Acknowledgment and appreciation expressed for pledges to the campaign

Many organizations provide for multiple actions including a handwritten note from the solicitor, letter(s) or calls from board members, official acknowledgement letter, etc.

Events

2.     Donor appreciation events can be held at various stages of the campaign at which presentations can be made that update donors on campaign progress and/or how new or renovated facilities are furthering the mission of the organization.  Some campaigns hold an event to recognize lead donors at the conclusion of the leadership gift phase of the campaign and another for major donors towards the end of the campaign.  I’ve also seen a combined donor, volunteer and staff recognition event at the end of the campaign.

      Gifts

3      Gifts can also be used to thank donors.   Depending on the size of donations, gifts can vary from meaningful art work to framed thank you notes from those served by the organization.  Presentations of certificates and plaques are no longer used as frequently as in the past in capital campaigns.  Creative gifts that the donor will find as a meaningful reminder of their impact to the campaign are the most appreciated gifts.  There is no limit to creative and meaningful  gifts.   Some examples:

A.    Framed photo or artist rendition of the new facilitiy(s) with engraved personalized appreciation name plate

B.    A construction hard hat with engraved personalized appreciation name plate

C.     A crystal bowl with engraved personalized appreciation

D.    Engraved bricks: at facility on patio, walkway, etc  and/or a duplicate brick given to donor to display at their home or office

E.     Any item that would be symbolic of the organization’s misison

(Cultural arts, human service, education, environmental, animal rights, etc.)

4      Building, room and area namings

I try to discourage offering donors the opportunity to name the organization.  The donor is providing funds for the capital campaign.  There are potential long-term problems when a donor is provided with the naming of the organization. The organization should not be exclusively identified with an individual, corporation or family donor. However, the naming of a building, wing, section, patio, garden, furnishings, bathroom, office, stairway or activity room can be named.  Care should be given in determining how much a donor would need to give to qualify for each of those naming opportunities.  Usually a building or room naming is not offered for less than 2 to 3 times the actual cost of construction and furnishings.  When naming a room or area that requires a lot of ongoing maintenance, build into the naming “levels” those costs, i.e. landscaping, gardens, technology rooms, athletic fields. If the cost of annual maintenance runs $X/yr., try to get that cost endowed.  Typically endowments should be established at 20 times the annual cost.   This is based on a corpus that will kick off at least 5% annually in earnings to cover the annual costs. Namings can also be offered for areas within a room or area that is named.  For example in an auditorium the stage, lighting, sound system and seats can be named separately from the overall auditorium naming.  Some organizations prefer not to put plaques or signage next to each named facility and only do so as part of a central donor wall of recognition.  Most do both.

5      Donor Walls

There are many styles of donor walls available to utilize for recognition.  Some of the newer ones combine electronics, videos, and interactive displays.  There is no limit to the creativity (and cost) of donor walls.  There are many vendors and artists who can work with you to create a donor wall that fits  your building design, organization culture,  and budget.

Additional issues to be addressed

The cumulative value of all naming opportunities offered should be significantly larger than the overall goal of your campaign.  It is important that there be naming opportunities at many levels, as a way to increase your ability to connect donors to a naming they will find of interest within their giving capability.  However, you may only want to put donor names on a wall that are considered major gifts starting at $5,000, $10,000 or higher depending on the size of your campaign. Donors should be recognized by categories of giving.  (Number of categories, values, and names of categories should reflect your organization, and size of the campaign.)  For example:  

Leaders                        $500,000 plus

Guardians                       100,000 plus

Producers                         50,000 plus

Engineers                          25,000 plus

Builders                             10,000 plus

Friends                                 5,000 plus

Some campaigns offer recognition (tributes, honorials, memorials) on bricks, chairs in theaters, or other smaller cost items as a way to recognize donors under $5,000

All donors from $.01 up should be recognized at the conclusion of the campaign in a tribute book, in newsletters, on website. and/or in other publications.  Donors should be informed in advance of how you plan to recognize them and be given the opportunity, if they so choose, to be anonymous.  All donors should be invited to the dedication of new facilities at the conclusion of the campaign.

Determining when a pledge becomes a gift is another issue to consider.  Do you want to put up room or building signage for a gift that has not as yet been fully paid?  How would you handle recognition and namings for revocable planned gifts?  It is important to have clear policies on gift acceptance prior to the initiation of solicitations for your capital campaign.

There will be many naming opportunities you will offer that are not selected by donors.   You may be able to provide these for donors who come forward after the campaign is concluded or as part of future campaigns.

Events, awards, gifts, room signage and donor walls require advance planning.  Take care and consider early in your planning, how you want to incorporate donor recognition in your campaign.

These are but a few examples of things to think about related to donor recognition for capital campaigns.  These recognition activities should always accompany communications to donors with updates on what your organization is accomplishing as a result of their involvement.  Connect donors to your mission.  That’s among the reasons that they got involved.   Keep in mind that recognition is one of many ways to show your appreciation for those who contribute to your campaign.  There is no limit to how you can creatively thank and show your appreciation to donors. 

So You Want to Work in the Nonprofit Sector……..Tips for Success

By Norman Olshansky: President

NFP Consulting Resources, Inc.

I am frequently asked for advice from students, recent grads and job seekers who are entering work within the nonprofit sector or who want to transition from the for profit sector to work in nonprofits.   Nonprofits are businesses, albeit with special tax status and missions, which are focused on community benefit.  A few of my suggestions are listed below.   What would you add?

1.    Nonprofit work starts with passion for mission

Make sure that you sincerely care about the mission of the nonprofit in which you seek employment.  Nonprofit work is first about mission.  Whatever your position, work, or engagement within a nonprofit, it is to add value to the mission of that organization and its community benefit endeavors.  Don’t work for a nonprofit if you can’t be a sincere and strong advocate for its mission.  Job satisfaction will be directly related to how much pride you have in your work and how it enhances the overall impact of your organization.

2.    Get involved with a professional or trade association

Jobs in nonprofits are varied.  Some are in direct service while others are in back office supports, administration, management or fundraising.  Nonprofits employ marketing, accounting, human resource and other specialties.  Whether it is the National Association of Social Workers, Association of Fundraising Professionals, Association of Healthcare Philanthropy, American Marketing Association, American Accounting Association or other local, regional or national groups, seek out the one that can best assist you in your new position.  Take advantage of their offerings, benefits and resources they provide.

3.    Find an experienced mentor

Seek out someone who has a lot of experience doing the work you will be doing or will want to do, i.e. counseling, human resources, marketing, accounting, fundraising, management, etc. There is more to being a good nonprofit employee than proficiency on the technical side of the work.  Nonprofits are all about relationships with clients, consumers of service, members, donors, co-workers, volunteers and other stakeholders.  The art of nonprofit work is as important as the science.  A mentor with lots of nonprofit experience can help someone new to nonprofit work address the various issues and relationships that impact nonprofit employees.  Choose a mentor who also has experience within the sector you are employed i.e. human service, education, arts and culture, government, healthcare, etc.  It is helpful to use a mentor who is not currently employed within your organization, who is trustworthy and who is able to maintain complete confidentiality.

4.    Seek out good supervision

Look for a position where you will receive good supervision by someone who will provide you with professional guidance, honest input and evaluation.  While any good employee seeks to learn more, it is especially important for new nonprofit employees to seek out leaning and growth opportunities.  Look for an organization that will provide you with those experiences.  Also check out leaning opportunities at your local colleges and universities, nonprofit resource centers, community foundations, and with national associations.

5.    Always be a student

Take advantage of opportunities to attend workshops, conferences, participate in online webinars, and continue to read as much as you can related to your work and the overall nonprofit sector.  Be curious.  Learn as much as you can about what others in your organization do, how your role intersects with theirs, and is part of the overall mission.   Ask lots of questions and be willing to try new approaches that will add value to your organization.   Be focused on outcomes and not outputs.  The number of things you do may not be as important as the quality of what is accomplished by your work.  Use your time wisely.  It is a valuable resource.   Nonprofits are just as concerned about return on investment as are for-profit organizations.  Human and financial capital is limited so your employer is going to look at how you add value to the organization.  A good student will sort out lots of information, make critical decisions and use their time and organization’s resources wisely.  Even the most experienced nonprofit professional needs to constantly seek out learning opportunities if they are going to keep up with the ever-changing nonprofit sector.

6.    Mistakes, change and risk

Nobody is perfect.  You WILL make mistakes.  Good employees learn from their mistakes and take advantage of new learning to go the next level.  Ask any professional how they have learned to be effective and they will include in their responses examples of learning from mistakes and failure.  In addition, be willing to take calculated risks.  Change does not occur if an organization or employee continually does everything the same way.  If something needs to be better, more effective, more efficient than is currently the situation in an organization, then change (which often involves risk taking) is necessary. Be willing to explore different ways of doing your job that can improve your impact within your organization.

7.    Be a role model and enjoy your work

Try to find a position where you will do work that you find enjoyable.  No job is perfect and there are always aspects of employment, which are not fun. Successful employees are typically the ones who sincerely love their work and want to be part of helping others in their organization succeed.   Be trustworthy.  Avoid office gossip.  People like to work with positive co-workers.  Be the type of employee that you would want to work with day to day.  You may be faced with tough decision based upon the positions and behavior exhibited by others.  Always take the moral/ethical high ground and avoid doing anything that you wouldn’t want to read about on the front page of your local newspaper.

        8.   Compensation and Benefits

               If your interest in working within a nonprofit organization is to make the big

               bucks, you will be disappointed.  While there are a few exceptions,

               nonprofits have historically paid less than comparable positions within the

               for-profit sector  Most established nonprofits offer reasonable compensation

               and benefits.  However, if your main motivation for looking at potential

               positions within the nonprofit sector is a highly competitive financial

               package,  it’s not the place for you.

As someone who has worked within the nonprofit sector for over 25 years I still love what I do and encourage those who are serious about nonprofit work and have a passion for community service to consider a career within the nonprofit sector.  There are few jobs that offer the satisfaction and feeling of service and accomplishment as those within nonprofits.