By Norman Olshansky
One of the most important activities a nonprofit needs to undertake prior to initiating a major gifts campaign is the identification and prioritization of prospects. Some organizations spend a lot of money, time and human resources on prospect mining and research. Others try to identify pockets of wealth in their community and then determine what is the best way to contact and solicit those individuals.
For many organizations, I recommend the following simple and inexpensive technique to identify and prioritize major gift prospects.
The Task Group
The first step is to put together a group of individuals who are already committed to the organization and who have good relationships in the community. When recruited they are told that they are being asked to attend a single meeting to identify names of individuals in the community who could be helpful to the nonprofit. The group can be composed of the organization’s board, donors, volunteers, members, or a combination of individuals from all of these groups. In addition, if a fundraising committee or major gifts committee has already been established, they should also be encouraged to participate. I prefer to have no less than 8 people or more than 30 participate in the focus group meeting, which typically takes about one to one in a half hours. It is helpful to have a diverse group from the various geographic areas served by the nonprofit. You should also try to include individuals who have good connections to high net worth individuals through their volunteer, business and/or social relationships.
Brainstorming
At the meeting, participants are asked to identify any individual they know who is charitable and is capable of making a major gift of $25,000 (or whatever level is established by the organization as a major gift) The goal of brainstorming is to identify major donors so the larger the threshold the better. If too low, you will end up with so many names that it will be hard to prioritize. The emphasis of this exercise is to identify individuals (not corporations) who have major gift potential and will be cultivated and solicited face to face. This includes individuals who utilize private foundations or donor advised funds for their charitable giving. This exercise should not be used for identification of prospects to be solicited by direct mail or for targeting donors who can be solicited by phone or contribute by attending events
The facilitator then encourages people to call out names which are written on flip charts or on a large white board that can easily be read by all.
Once everyone has shared names that came to mind during the brainstorming (hopefully, at least 50 names), the facilitator hands out paper and pencils to all participants.
The Nominal Group Technique
Next the facilitator gives the following instructions. “Take a few minutes to look at all of the names on the brainstorming list and write down on your paper the three to five names which best meet the following criteria.
A. They have a history of being philanthropic
B. They have a history of making gifts at our major gifts level
C. They are likely to have an interest in our mission
D. They are accessible. You or others you know in our organization can get a meeting with them or invite them to visit with us.
After adequate time is given for participants to write down their three names, the facilitator goes around the room and asks each person to say aloud the three names. The facilitator puts a hash mark next to those names on the master brainstorming list. When a name is mentioned by more than one participant, additional hash marks are made each time that name is mentioned. Once everyone has announced their three names, the facilitator counts the cumulative hash marks for each name on the master list and circles the top 10 names that were mentioned the most. If it is difficult to narrow it down to 10 names, circle more than ten and initiate another round where participants now write down two of the circled names which they feel best meet the priority characteristics. Then continue the process of narrowing down the names based upon number of times mentioned. Ultimately, the facilitator’s goal is to narrow it down to no more than ten names.
(The nominal group technique can also be used to help with prioritization of any other type of brainstorming activity. The beauty of the process is that it involves all of the participants and provides a way to quickly measure and prioritize responses.)
Fact Finding
The last stage of the process is to ask for input from participants on each of the top ten prospects identified. The facilitator or someone else should take copious notes from the comments shared by the group on each of the ten prospects in response to the following questions.
A. Who in our organization knows this person and could be our key contact to invite them to learn more about what we do?
B. What other organizations are they involved with and what are their major philanthropic interests?
C. Do you know how much they have given to other charities?
D. Do they make their philanthropic gifts directly, through a foundation, donor advised fund, etc.
E. Is there anything you know about them that could help our staff or fundraising committee to engage them with us?
F. Do you personally know, have a relationship with, and have access to anyone who knows the individual and has a close relationship to him/her?
G. Is there anything you know that might lower the priority level of this prospect?
Follow up
In addition to thanking participants, the information learned should be conveyed in detail to staff and volunteers involved in major gift fundraising. Hopefully, your fundraising leadership and staff participate as well and use the session to identify additional volunteers, who attended the session, who can assist the committee going forward with prospect research, cultivation, and solicitation. The top ten names should be among the first prospects targeted as part of the major gifts initiative. After the initial priority names have been assigned and solicited, other names on the brainstorming list should also be approached in the order of the priority established, taking into consideration your ability to access and engage each prospect.
A similar process can be used to identify and prioritize corporate prospects. However, the type of individuals you will want in the Task Group may be different from those you select to focus on individual donor prospects.
Showing posts with label Fundraising. Show all posts
Showing posts with label Fundraising. Show all posts
Saturday, February 13, 2010
Monday, November 30, 2009
Before you start a fundraising campaign
The Pre-Campaign Planning Study
By Norman Olshansky: President
NFP Consulting Resources, Inc.
All too often, nonprofit organizations jump into fundraising campaigns without proper preparation and without a well thought out campaign plan. Initial volunteer passion and enthusiasm frequently results in a “ready-fire-aim” mentality. To achieve goals and “hit your targets”, it is critical to take time to properly “aim” before initiating your campaign. Whether you are getting ready to plan your next annual campaign, special event, capital or endowment initiative, there are several critical aspects of any fundraising initiative which should be addressed in order to develop a useful and realistic campaign plan. Answers to the following questions can help provide important information you will need to begin the planning process.
Do you have a compelling case for support?Why are funds needed? What will be accomplished with gifts to the campaign? How will it improve your organization? Will it provide better service delivery, more clients served, better return on investment, improved facilities, opportunities for expansion, improved quality, etc.?
How much do you need to accomplish your goals?What is your campaign goal? What are the components that contribute to the costs? Have you taken into account all of the projected expenses related to the project? (Staff costs, operations, administration, overhead, fundraising, marketing, events, recognition, reserves for uncollectible pledges, and if applicable, finance costs, capital costs, business interruption expenses, capital reserves, etc.)
Have you identified leadership?
Is your Board fully behind the campaign? Will they personally participate as donors and solicitors on behalf of the campaign? The key to success will be your volunteer and staff leadership. Do you have the right people in place to achieve your goals? Will they have sufficient time to devote to the effort? If you do not have the right leadership, what are your plans to identify and recruit additional leadership and/or staff?
Will you be able to engage and obtain support from your existing donors?
Do they know about your plans? Are they supportive of your case for support? How can you engage, cultivate them and create enthusiasm for your project? Have you identified new potential donors? If not, what are your plans to identify and cultivate new prospects?
What are the internal factors that could impact your success?
Do you have internal systems, staff and back office supports that will be required? Is your database current and able to support your efforts? Do you have the initial capital and cash flow to support your efforts? What have you learned from your previous fundraising activities? What are mistakes that have been made in the past that need to be avoided in the future and what needs to be done to improve on past fundraising efforts?
What are the external factors that could impact your success?What has been the experience of other nonprofits who have initiated similar campaigns? Are there other competing campaigns underway or about to begin that could negatively impact your efforts? What is the image of your organization in the community? What are potential issues that could derail your efforts?
Do you have a sufficient prospect base to achieve your goals?
Based upon your goal, how many prospects will you need at each level of giving to produce the results needed? What is your prospect base? Have you developed a gift chart/pyramid that reflects your goal? What percentage of your campaign will need to come from leadership gifts? Do you have a sufficient number of prospects to reach your goal?
What are the key policy and procedural decisions which need to be addressed early in the planning process, such as:
A. Governance and Committee Structure
B: Engagement, coordination and involvement of fundraising plans with
construction, finance/budgeting, and marketing
C. Recognition of donors and volunteers
D. Decision Making Process-Authority and Accountability
E. Gift acceptance
F. Methods of giving
G. Length of payout
H. Reporting and Accountability
I. Pledge/gift documentation, acknowledgement, billing, and receipting
J. Acknowledgement of in kind donations
K. Staff assignments and accountability
Have you evaluated and prioritized your plans based on the best return on investment of your organization's time and resources, both human and financial?
Fundraising is both art and science. Success requires both.
There are definite processes, sequential steps, ethics, legal guidelines, tax laws, accounting and other requirements that need to be followed to achieve success. This is the science of fundraising. Just, if not more important, is the art of fundraising which focuses on relationships, personality, leadership, engagement and follow through.
By Norman Olshansky: President
NFP Consulting Resources, Inc.
All too often, nonprofit organizations jump into fundraising campaigns without proper preparation and without a well thought out campaign plan. Initial volunteer passion and enthusiasm frequently results in a “ready-fire-aim” mentality. To achieve goals and “hit your targets”, it is critical to take time to properly “aim” before initiating your campaign. Whether you are getting ready to plan your next annual campaign, special event, capital or endowment initiative, there are several critical aspects of any fundraising initiative which should be addressed in order to develop a useful and realistic campaign plan. Answers to the following questions can help provide important information you will need to begin the planning process.
Do you have a compelling case for support?Why are funds needed? What will be accomplished with gifts to the campaign? How will it improve your organization? Will it provide better service delivery, more clients served, better return on investment, improved facilities, opportunities for expansion, improved quality, etc.?
How much do you need to accomplish your goals?What is your campaign goal? What are the components that contribute to the costs? Have you taken into account all of the projected expenses related to the project? (Staff costs, operations, administration, overhead, fundraising, marketing, events, recognition, reserves for uncollectible pledges, and if applicable, finance costs, capital costs, business interruption expenses, capital reserves, etc.)
Have you identified leadership?
Is your Board fully behind the campaign? Will they personally participate as donors and solicitors on behalf of the campaign? The key to success will be your volunteer and staff leadership. Do you have the right people in place to achieve your goals? Will they have sufficient time to devote to the effort? If you do not have the right leadership, what are your plans to identify and recruit additional leadership and/or staff?
Will you be able to engage and obtain support from your existing donors?
Do they know about your plans? Are they supportive of your case for support? How can you engage, cultivate them and create enthusiasm for your project? Have you identified new potential donors? If not, what are your plans to identify and cultivate new prospects?
What are the internal factors that could impact your success?
Do you have internal systems, staff and back office supports that will be required? Is your database current and able to support your efforts? Do you have the initial capital and cash flow to support your efforts? What have you learned from your previous fundraising activities? What are mistakes that have been made in the past that need to be avoided in the future and what needs to be done to improve on past fundraising efforts?
What are the external factors that could impact your success?What has been the experience of other nonprofits who have initiated similar campaigns? Are there other competing campaigns underway or about to begin that could negatively impact your efforts? What is the image of your organization in the community? What are potential issues that could derail your efforts?
Do you have a sufficient prospect base to achieve your goals?
Based upon your goal, how many prospects will you need at each level of giving to produce the results needed? What is your prospect base? Have you developed a gift chart/pyramid that reflects your goal? What percentage of your campaign will need to come from leadership gifts? Do you have a sufficient number of prospects to reach your goal?
What are the key policy and procedural decisions which need to be addressed early in the planning process, such as:
A. Governance and Committee Structure
B: Engagement, coordination and involvement of fundraising plans with
construction, finance/budgeting, and marketing
C. Recognition of donors and volunteers
D. Decision Making Process-Authority and Accountability
E. Gift acceptance
F. Methods of giving
G. Length of payout
H. Reporting and Accountability
I. Pledge/gift documentation, acknowledgement, billing, and receipting
J. Acknowledgement of in kind donations
K. Staff assignments and accountability
Have you evaluated and prioritized your plans based on the best return on investment of your organization's time and resources, both human and financial?
Fundraising is both art and science. Success requires both.
There are definite processes, sequential steps, ethics, legal guidelines, tax laws, accounting and other requirements that need to be followed to achieve success. This is the science of fundraising. Just, if not more important, is the art of fundraising which focuses on relationships, personality, leadership, engagement and follow through.
Sunday, September 20, 2009
Fundraising Axioms: Simplified
10 Basic Fundraising Axioms: Simplified
Yes, science, technology and skill sets are necessary to be successful as a fundraiser for nonprofit organizations. However, there are also several very basic axioms which, if followed, will greatly increase your success.
You don’t get - if you don’t ask
Being good at providing services and programs does not automatically bring in contributions. It’s relatively easy to identify prospects who care about your mission, have great capacity and are knowledgeable about your organization. However, they are not going to become donors until they are asked. Asking can be in many forms. For major gifts, a personal “face to face” request to a prospect, to consider a suggested gift amount, provides the best return on investment. However, grants, group meetings with a general request for donations, events and direct mail, can also be utilized as a method to make an ask.
Connect to hearts and minds before you connect to wallets
People are not going to make significant contributions to an organization that is of no interest and about which they have no personal connection or feelings. The ability to secure a gift and the size of the gift will be enhanced if the donor is educated about the organization, “feels” the importance of what is being accomplished and has a relationship (directly or indirectly) with the organization, solicitor, project or program. Cultivation of those relationships provides added value to the donor and organization.
Fundraising is both art and science. Success requires both.
There are definite processes, sequential steps, ethics, legal guidelines, tax laws, accounting and other requirements that need to be followed to be successful within a nonprofit engaged in fundraising. This is the science of fundraising. Just, if not more important, is the art of fundraising which focuses on relationships, personality, leadership, engagement and follow through.
The 80/20 rule is now 90/10 and applies to fundraising.
80% to 90% of funds raised typically comes from 10%-20% of donors. Most nonprofits obtain the largest share of their philanthropic income from major gift donors. Time spent on major gift solicitation provides the greatest return on investment of nonprofit resources both human and financial. However, the most important annual funds will come from existing donors. Do not neglect them or the importance of their gifts. Major gift activities should not be at the expense of retention of existing donors or of the importance of new donor acquisition.
The quality of a gift is directly related to the quality of the relationship between the solicitor and prospect
Major prospects deserve personal attention. People give to people. Your relationship to the prospect has a direct impact on their gift. The more they know and trust the solicitor, 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 solicitor, with whom they have a relationship, is likely to be more familiar with their background, interests and abilities than would a stranger.
Avoid the ready, fire, aim temptation
Too often the desire - need to raise funds creates a sense of urgency which translates into volunteers and staff wanting to get started and solicit as many people as they can, as broadly and quickly as possible. Fundraising without a plan, organization, and discipline is an invitation to failure. There needs to be proper organization, leadership, communications, marketing, budgeting, back office systems and a well defined case for support. A campaign fundraising plan is critical and should be integrated within the overall business plan of the nonprofit. Fundraising should be conducted sequentially (top down and inside out). Initially the campaign should focus on the largest potential gifts and existing leadership of the organization. Events, group meetings and mass appeals should not be utilized until major gift solicitations have been addressed.
Leadership sets the example.
Before making their commitments, many major donors, corporations and foundations want to know that the leadership of the organization has demonstrated its fiduciary responsibilities, not only through stewardship of funds and budgets but also as donors. Early in any fundraising effort, Boards and leadership within the organization should be asked to participate as donors, to the best of their abilities. Full participation is as important, if not more so, than the total dollars raised from leadership.
You can never thank a donor, volunteer or staff member too often. They are your 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, volunteers and staff in a way that demonstrates your appreciation, the more likely they will be there for you when you need them in the future.
Donors expect and deserve a good return on their charitable gifts/investments
Yes, science, technology and skill sets are necessary to be successful as a fundraiser for nonprofit organizations. However, there are also several very basic axioms which, if followed, will greatly increase your success.
You don’t get - if you don’t ask
Being good at providing services and programs does not automatically bring in contributions. It’s relatively easy to identify prospects who care about your mission, have great capacity and are knowledgeable about your organization. However, they are not going to become donors until they are asked. Asking can be in many forms. For major gifts, a personal “face to face” request to a prospect, to consider a suggested gift amount, provides the best return on investment. However, grants, group meetings with a general request for donations, events and direct mail, can also be utilized as a method to make an ask.
Connect to hearts and minds before you connect to wallets
People are not going to make significant contributions to an organization that is of no interest and about which they have no personal connection or feelings. The ability to secure a gift and the size of the gift will be enhanced if the donor is educated about the organization, “feels” the importance of what is being accomplished and has a relationship (directly or indirectly) with the organization, solicitor, project or program. Cultivation of those relationships provides added value to the donor and organization.
Fundraising is both art and science. Success requires both.
There are definite processes, sequential steps, ethics, legal guidelines, tax laws, accounting and other requirements that need to be followed to be successful within a nonprofit engaged in fundraising. This is the science of fundraising. Just, if not more important, is the art of fundraising which focuses on relationships, personality, leadership, engagement and follow through.
The 80/20 rule is now 90/10 and applies to fundraising.
80% to 90% of funds raised typically comes from 10%-20% of donors. Most nonprofits obtain the largest share of their philanthropic income from major gift donors. Time spent on major gift solicitation provides the greatest return on investment of nonprofit resources both human and financial. However, the most important annual funds will come from existing donors. Do not neglect them or the importance of their gifts. Major gift activities should not be at the expense of retention of existing donors or of the importance of new donor acquisition.
The quality of a gift is directly related to the quality of the relationship between the solicitor and prospect
Major prospects deserve personal attention. People give to people. Your relationship to the prospect has a direct impact on their gift. The more they know and trust the solicitor, 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 solicitor, with whom they have a relationship, is likely to be more familiar with their background, interests and abilities than would a stranger.
Avoid the ready, fire, aim temptation
Too often the desire - need to raise funds creates a sense of urgency which translates into volunteers and staff wanting to get started and solicit as many people as they can, as broadly and quickly as possible. Fundraising without a plan, organization, and discipline is an invitation to failure. There needs to be proper organization, leadership, communications, marketing, budgeting, back office systems and a well defined case for support. A campaign fundraising plan is critical and should be integrated within the overall business plan of the nonprofit. Fundraising should be conducted sequentially (top down and inside out). Initially the campaign should focus on the largest potential gifts and existing leadership of the organization. Events, group meetings and mass appeals should not be utilized until major gift solicitations have been addressed.
Leadership sets the example.
Before making their commitments, many major donors, corporations and foundations want to know that the leadership of the organization has demonstrated its fiduciary responsibilities, not only through stewardship of funds and budgets but also as donors. Early in any fundraising effort, Boards and leadership within the organization should be asked to participate as donors, to the best of their abilities. Full participation is as important, if not more so, than the total dollars raised from leadership.
You can never thank a donor, volunteer or staff member too often. They are your 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, volunteers and staff in a way that demonstrates your appreciation, the more likely they will be there for you when you need them in the future.
Donors expect and deserve a good return on their charitable gifts/investments
Treat your donors as if they were major stockholders. They deserve to know how their investments in your organization are working and if the funds they have donated have accomplished the purposes for which they were given. The more you can demonstrate a good return on their investment, the more likely they will contribute in the future, and be a positive advocate for your organization in the community you serve.
Don’t do anything that you wouldn’t want to read about on the front page of the newspaper.
Nonprofits must conduct themselves ethically and appropriately if they are to maintain the trust and confidence of their supporters and those they serve. When faced with difficult decisions, nonprofits should take the moral high ground and work diligently to ensure that a culture is established that promotes ethical behavior at every level within the organization. Challenges will occur. Whether related to gift acceptance issues, donor requests for special treatment, financial management, reporting, disclosures, personality conflicts or other issues, every nonprofit will have to confront delicate and potentially controversial problems. How problems and challenges are addressed is a true test an organization’s strength and effectiveness.
Don’t do anything that you wouldn’t want to read about on the front page of the newspaper.
Nonprofits must conduct themselves ethically and appropriately if they are to maintain the trust and confidence of their supporters and those they serve. When faced with difficult decisions, nonprofits should take the moral high ground and work diligently to ensure that a culture is established that promotes ethical behavior at every level within the organization. Challenges will occur. Whether related to gift acceptance issues, donor requests for special treatment, financial management, reporting, disclosures, personality conflicts or other issues, every nonprofit will have to confront delicate and potentially controversial problems. How problems and challenges are addressed is a true test an organization’s strength and effectiveness.
Monday, August 24, 2009
Fundraising Return on Investment
By Norman Olshansky: President NFP Consulting Resources, Inc.
You are an executive or key volunteer leader of a nonprofit who has been in your position less than a year. You know the honeymoon is over. One of the many issues you want to address is the concern that so much of your fundraising time, energy and resources are spent planning fundraising events. It seems like the mission of your agency has shifted, and staff as well as volunteers spend more time planning parties than delivering service.
Fundraising events can and do play an important role in many not for profits. However, too many organizations do not fully understand how to maximize their fundraising efforts.
This may seem like blasphemy to some, but events should primarily be utilized to attract new donors, cultivate existing donors and volunteers, say thank you to your donors, volunteers and staff, or to provide community education. For most organizations, events (with a few notable exceptions) should not be undertaken if they are expected to provide a good financial return on the organization’s investment of time and resources to produce the event.
According to the AAFRC Trust for Philanthropy, 78.3% of all charitable contributions come from individuals. It is also well known that 80%-90% of all funds raised from those individuals are from the top 10% of donors. In other words, major giving is where it’s at. This is not to preclude the importance of broad based memberships and giving at all levels, but rather to focus your fundraising energies on the best return on investment (ROI) of time, staff, volunteers, and other resources, facilities, etc.
Fundraising Costs and Return on Investment – National Averages
Direct mail to general lists
(non donors) Cost 115% ROI 15%
Special Events Cost 50% ROI 50%
Planned Giving Cost 25% ROI 75%
Direct mail
(prior donors) Cost 20% ROI 80%
Foundations/Corporations Cost 20% ROI 80%
Major Gifts Cost 5-10% ROI 90-95%
National Average,
all methods: Cost 20% ROI 80%
(Based on: James Greenfield, Fund Raising: Evaluating and Managing the Fund Development Process)
The chart indicates that you would need to spend $1.15 in order to raise $1.00 through direct mailings to general lists. To solicit major gifts, you would spend 5 to 10 cents to raise $1.00.
When calculating ROI, keep in mind the indirect costs associated with fundraising. For example staff costs are not just for those who are directly involved with fundraising. Other staff and administration typically are involved as well, albeit to a lesser extent. The costs associated with staff and volunteer time, facility usage, overhead expenses, as well as out of pocket direct costs should all be factored into determining ROI.
From an ROI perspective, it costs less and produces more income to raise major gifts than to use other methods of fundraising. While a variety of methods should be used in each organization, all too often, nonprofits tend to utilize, to a disproportionate degree, those methods which produce the lower returns, (events and direct mail) rather than those that are more effective (major gifts).
Special events can build excitement, engage people, provide enjoyable opportunities for volunteers but they typically cost too much to produce to justify the amount of money they raise. As a result, most organizations are reducing the number of events they hold and are putting more emphasis on major gifts and planned giving.
Using the return on investment approach to analyze fundraising performance is an excellent way to engage leadership and staff on how best to plan your future fundraising activities. You will find that Board members who have for-profit business experience will likely better understand such an approach to planning and resource allocation.
You are an executive or key volunteer leader of a nonprofit who has been in your position less than a year. You know the honeymoon is over. One of the many issues you want to address is the concern that so much of your fundraising time, energy and resources are spent planning fundraising events. It seems like the mission of your agency has shifted, and staff as well as volunteers spend more time planning parties than delivering service.
Fundraising events can and do play an important role in many not for profits. However, too many organizations do not fully understand how to maximize their fundraising efforts.
This may seem like blasphemy to some, but events should primarily be utilized to attract new donors, cultivate existing donors and volunteers, say thank you to your donors, volunteers and staff, or to provide community education. For most organizations, events (with a few notable exceptions) should not be undertaken if they are expected to provide a good financial return on the organization’s investment of time and resources to produce the event.
According to the AAFRC Trust for Philanthropy, 78.3% of all charitable contributions come from individuals. It is also well known that 80%-90% of all funds raised from those individuals are from the top 10% of donors. In other words, major giving is where it’s at. This is not to preclude the importance of broad based memberships and giving at all levels, but rather to focus your fundraising energies on the best return on investment (ROI) of time, staff, volunteers, and other resources, facilities, etc.
Fundraising Costs and Return on Investment – National Averages
Direct mail to general lists
(non donors) Cost 115% ROI 15%
Special Events Cost 50% ROI 50%
Planned Giving Cost 25% ROI 75%
Direct mail
(prior donors) Cost 20% ROI 80%
Foundations/Corporations Cost 20% ROI 80%
Major Gifts Cost 5-10% ROI 90-95%
National Average,
all methods: Cost 20% ROI 80%
(Based on: James Greenfield, Fund Raising: Evaluating and Managing the Fund Development Process)
The chart indicates that you would need to spend $1.15 in order to raise $1.00 through direct mailings to general lists. To solicit major gifts, you would spend 5 to 10 cents to raise $1.00.
When calculating ROI, keep in mind the indirect costs associated with fundraising. For example staff costs are not just for those who are directly involved with fundraising. Other staff and administration typically are involved as well, albeit to a lesser extent. The costs associated with staff and volunteer time, facility usage, overhead expenses, as well as out of pocket direct costs should all be factored into determining ROI.
From an ROI perspective, it costs less and produces more income to raise major gifts than to use other methods of fundraising. While a variety of methods should be used in each organization, all too often, nonprofits tend to utilize, to a disproportionate degree, those methods which produce the lower returns, (events and direct mail) rather than those that are more effective (major gifts).
Special events can build excitement, engage people, provide enjoyable opportunities for volunteers but they typically cost too much to produce to justify the amount of money they raise. As a result, most organizations are reducing the number of events they hold and are putting more emphasis on major gifts and planned giving.
Using the return on investment approach to analyze fundraising performance is an excellent way to engage leadership and staff on how best to plan your future fundraising activities. You will find that Board members who have for-profit business experience will likely better understand such an approach to planning and resource allocation.
Saturday, May 2, 2009
Ten Tips for Soliciting Major Gifts for Your Congregation
Ten Tips for Soliciting Major Gifts for Your Congregation
By: Norman Olshansky
If your congregation needs significant financial support, beyond weekly offerings and operating revenues, for a capital campaign or other special project, it is time to develop and implement a major gifts campaign.
This article shares tips that can be utilized to train and support leadership, staff, and clergy to become better solicitors of major gifts.
1. Do Your Homework
Make sure you are familiar with the needs, programs, and importance of the project. Review your congregation's "Points of Pride" (major accomplishments), and, if possible, be prepared to share a personal experience that impressed you about the special ministry that your congregation provides.
Gather important information about your prospect. To the best of your ability, together with other leadership and staff, develop a profile of the prospect:
* What are her/his interests?
* What has been their history within the congregation?
* What have they contributed to previously?
* What is the largest gift they have ever given?
* Do they give individually or through their company or family foundation?
* Do they have a donor advised fund with a local Community Foundation? If so, how large is their fund?
* Are they candidates for estate planning and/or deferred gift discussions?
* Who are their key financial advisors?
* Have they recently sold a business or inherited significant resources?
* How is their business doing?
* Do they have a loved one who may be appropriate for memorializing or honoring with a gift?
* Are there other people who can be supportive with the solicitation who have special relationships with the prospect?
* What are the likely concerns the prospects might raise in the solicitation?
* Determine in advance what would be the best setting to conduct the initial meeting.
* Would it be helpful to have clergy or others participate in the solicitation?
* What materials, handouts, or visuals would be helpful to have for the solicitation?
* Finally, establish a "rating" for the individual. How much should you ask them to consider as a gift?
2. Leaders Lead
As a leader of the campaign and congregation, it is important that you make your own gift prior to soliciting others. It will be easier to obtain a quality gift from your prospects if you are comfortable that your gift is also credible and a quality one, based on your own personal circumstances. The ability to share the fact that you made your gift, when you are soliciting, will give the prospect more confidence in your support and leadership.
Prospects will take into consideration what leadership has given in determining their own gifts. Initial gifts will be "yardsticks" for giving by those who follow. Remember that you are representing the congregation, and, therefore, you need to be a good role model in your relationships, communications, and giving.
3. Personalize the Solicitation
Major gift solicitations should not be conducted over the phone. Large gifts are often not closed with one visit. Family members, financial advisors, and/or business partners may need to be involved prior to a decision. Obviously, if you know who the key decision-makers are (if they are not your prospect), they should be included in the solicitation meeting.
A major part of the success of a solicitation is the chemistry of the relationship between the solicitor(s) and prospect, as well as how one is asked. If at all possible, at least two solicitors should participate in the solicitation. It demonstrates to the prospect the importance you have put on their gift, it shows that there are others equally committed to the success of the campaign, and it provides for different perspectives to be heard.
The old saying that two heads are better than one also applies to solicitations. While one person is answering questions or explaining the need, the other person can better observe responses, body language, etc. Evaluating the solicitation and together determining best approaches for follow-up are enhanced with multiple solicitors.
4. The Appointment
The most critical aspect of major gift solicitations is getting the appointment. Be enthusiastic and let the prospect know that you want to share with them some exciting information about the congregation. Note that the project is near and dear to you and that you would like to solicit their advice, involvement, and support. Make sure that you make the appointment at a time and place that is convenient for both the prospect and solicitors.
Also, try to schedule at least 30 to 45 minutes for the initial meeting. Try to avoid an environment where others may overhear conversation or where there will be distractions. If the prospect asks if you are looking for money from them, be candid and enthusiastic, such as, ''Absolutely. I would like to tell you about what's happening with the congregation and have you join me as a supporter this year. But, just as important, we would like to get your input on additional ways we can succeed in our efforts on behalf of our congregation, which is doing such amazing things.''
Make it clear that you will be asking for their support.
5. Engage the Prospect
Do not try to close the gift too quickly. Share the mission, services, potential outcomes, points of pride, and needs of the project and congregation. While informing the prospect of the needs, you are also demonstrating the commitment of leadership. Donors want to be confident that the congregation and the project are being led by knowledgeable and committed leadership. Enthusiasm is contagious, and so is negativity. It's your choice.
6. The Meeting
Take a few minutes to break the ice and to establish a comfortable environment. Introduce yourself and those with you, through your involvement and commitment to the congregation. In a concise manner, share with the prospect what the congregation has accomplished. Refer to the Points of Pride. Emphasize the opportunities for the future based on the new vision and strategic plan for expansion or further development of the congregation. Discuss the importance of their participation, in addition to their financial support. The congregation needs their advice, expertise, identification of new leadership, and introduction to other prospective donors. Once you have shared your enthusiasm about the project and demonstrated the need, it is time to request the gift.
7. The Ask
Using the number that was agreed upon during the rating session (see item #1), the request can be introduced as follows: "We would appreciate if you would consider a gift of $ ___________ to the congregation's campaign." (If there are significant projects/or programs that need to be funded at the level of the request, mention the one or two that you think would appeal to the prospective donor.)
Once you have asked for the gift, it is time to be silent and let the prospect respond with questions or other comments. There is no need ever to apologize for asking for a gift. The individuals you are approaching expect you to ask, have likely been asked before by many other charitable organizations, and have, at times, been solicitors themselves.
8. Questions, Objections, and Dialogue
Answer the questions as best you can, but do not get into a debate. If you are unsure as to how to properly answer a specific question, tell the prospect you will find out the answer and get back to them or have one of the other leaders or staff provide them with the details. (Make sure you or someone on staff follows up promptly.)
If the donor offers a gift significantly lower than what was requested, you can supportively ask if, by spreading the gift over time, could it be more significant, or if it is structured as a deferred gift, with certain tax benefits, would they consider a larger amount? Do not press if they indicate that what they had offered is the limit to what they want to do. Thank them as enthusiastically as possible and ask them to complete the pledge card you have developed for the campaign.
If they indicate that they want some time to think about it and discuss it with others, thank them for their consideration and request a specific time when you can get back to them for a response. Think of yourself as an enthusiastic and committed supporter; you are not "begging." Make sure that you are a good listener as well as a good presenter.
Let your prospect know how important their support is to the congregation and ask them if they can help you to engage others who may also be interested and have financial capacity.
Once the gift is closed, stress the importance of the congregation's need for cash by the end of the year. Thank them and have them complete the pledge card, which should also have information on how and when they will be able to make payments.
9. Follow Up
Make sure that appropriate staff and/or leadership are briefed on your solicitation, any new leads, and that there are follow-up communications thanking the prospect, even if a gift was not made. A handwritten thank-you note, from the individual who initially set up the appointment and/or was the solicitor, in addition to whatever is sent officially by the congregation, is always appreciated. Solicitations should be a positive experience for the prospect. A successful solicitation can set the stage for future involvement. An unsuccessful solicitation can turn off a donor to the campaign, as well as to future potential for support of the congregation.
10. Remember the Basics
There are several axioms that are basic to major gift fundraising:* Connect to your congregants' hearts and minds before you connect to their wallets.
* You don't get if you don't ask.
* Fundraising is both an art and science. Success requires both.
* The quality of a gift is directly related to the quality of the relationship between the solicitor (the person who asks) and the prospect (potential donor).
* Avoid the ready, fire, aim temptation. Planning and patience is very important.
* You can never thank a donor, volunteer or staff member too often. They are your keys to success.
* Donors expect and deserve a good return on their gifts to the congregation. They want to know their gifts are spent wisely and effectively.
* 80-90% of your special campaign will likely come from major gifts (10-20% of the donors).
Keep in mind that people are more likely to contribute to make dreams happen than to solve problems. The more you can connect the donor to the congregation and project mission in their hearts and minds, the more you are likely to connect through their wallets.
Norman Olshansky is president of NFP Consulting Resources, Inc., a full service consulting firm serving the nonprofit sector, www.nfpconsulting.com.
Wednesday, April 1, 2009
Marketing Planned Gifts
Norman Olshansky: President
NFP Consulting Resources, Inc.
Nonprofits are facing increased competition for and more challenges related to annual fundraising for operations. Organizations which have strong endowments have been able to weather the storm. Today, every nonprofit organization is looking to develop endowments. Those who have had the most success have demonstrated that endowment fundraising is more about long term relationships and stewardship than advertising and print marketing.
Prime prospects for planned gifts, bequests and legacy giving are not necessarily the “major annual donors”. The best prospects for endowment development are individuals who have a long history with the organization, are over 55 years old and who have reasonable net worth. Many of these prospects are living off of unearned income, have concerns about their ability to provide for themselves long term and or other family members. Their net worth may primarily be in property or assets which do not produce income. They are usually individuals who have been small or moderate long term contributors to the organization.
Many organizations are not in a position to have full time professional planned giving staff. However, volunteers can be very effective in opening doors for planned giving which can be followed up by financial advisors or others. Many small organizations are collaborating with community foundations or other nonprofits to share professional resources related to planned giving.
With or without professional staff, the following marketing strategy has proven very successful and can be modified for organizations depending on size and scope of service.
Create a giving club for long term donors. It can be called Org ABC Heroes, Golden Givers, Org. ABC Angels, etc. Note that club members will be invited to a recognition event each year (regardless of how much they give each year). A donor of $25 each year will be recognized as much as a donor of $25,000 each year. The most honored donors will be those who have given the longest. A special program that highlights the history and current involvement of the organization can be part of each event.
Identify those donors to your organization who have been contributors for more than 20 years. (fewer years if your your organization has not been in operation that long) If you do not have good records of historical giving, let all donors self identify for membership in the club. To be a member, they must meet the threshold (number of years) of giving.
Promote the club in your newsletter and annual reports. In each edition of your newsletter show a photo of a club member or couple with a brief caption/quote as to why they have been a supporter for so long.
To obtain the photo and quote, have a planned giving staff person or volunteer solicitor be the one who interviews the individual(s) for the newsletter. Get the prospect to tell you their unique story of involvement and caring for the organization, how the got involved and why they have been such committed long term supporters. At the conclusion of the interview, comment on how impressed you are with their commitment and caring. Either have them give you a photo to use or have one taken.
Ask if they have ever considered making a legacy gift to the organization that will serve as a gift in perpetuity. Typically, they will respond that they are not wealthy and don’t have the ability to make such a gift.
The staff person should respond as follows:
“If you were in a position to make a legacy gift, and had the resources, would you want to make a legacy gift in perpetuity to the ABC Organization?”
In most cases (not all) the answer would be that they would if they could, but they can’t. That opens the door for the interviewer to respond as follows:
“If we could show you a way that would 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 interviewer is a planned giving professional they can continue the
conversation. If it’s a volunteer, they should ask if it’s ok to have one of the
organization’s advisors to set up a time to share with the prospect some of the
ways they can make a legacy gift and also receive income and significant tax
advantages.
The next step would be to determine what are the primary assets of the prospect
(residence, collectibles, life insurance, other appreciated assets, etc). 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 would best fit for
that individual. (Gift annuities, trusts, life insurance, bequests, 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 professional/advisor should offer to contact the prospects financial advisor
once the prospect has had a chance to initiate the discussion with him/her.
Follow up is important. The photo and caption should be used regardless of
response from the prospect regarding legacy giving. Timely follow up to provide
information and initiate discussions with advisors is critical.
My experience working with organizations which have used this strategy has indicated that at least 2 out of 10 prospect contacts/interviews of club members result in some form of planned gift.
Recognition and ongoing stewardship of all gifts is an important component of any planned giving program. Relationships make the difference.
NFP Consulting Resources, Inc.
Nonprofits are facing increased competition for and more challenges related to annual fundraising for operations. Organizations which have strong endowments have been able to weather the storm. Today, every nonprofit organization is looking to develop endowments. Those who have had the most success have demonstrated that endowment fundraising is more about long term relationships and stewardship than advertising and print marketing.
Prime prospects for planned gifts, bequests and legacy giving are not necessarily the “major annual donors”. The best prospects for endowment development are individuals who have a long history with the organization, are over 55 years old and who have reasonable net worth. Many of these prospects are living off of unearned income, have concerns about their ability to provide for themselves long term and or other family members. Their net worth may primarily be in property or assets which do not produce income. They are usually individuals who have been small or moderate long term contributors to the organization.
Many organizations are not in a position to have full time professional planned giving staff. However, volunteers can be very effective in opening doors for planned giving which can be followed up by financial advisors or others. Many small organizations are collaborating with community foundations or other nonprofits to share professional resources related to planned giving.
With or without professional staff, the following marketing strategy has proven very successful and can be modified for organizations depending on size and scope of service.
Create a giving club for long term donors. It can be called Org ABC Heroes, Golden Givers, Org. ABC Angels, etc. Note that club members will be invited to a recognition event each year (regardless of how much they give each year). A donor of $25 each year will be recognized as much as a donor of $25,000 each year. The most honored donors will be those who have given the longest. A special program that highlights the history and current involvement of the organization can be part of each event.
Identify those donors to your organization who have been contributors for more than 20 years. (fewer years if your your organization has not been in operation that long) If you do not have good records of historical giving, let all donors self identify for membership in the club. To be a member, they must meet the threshold (number of years) of giving.
Promote the club in your newsletter and annual reports. In each edition of your newsletter show a photo of a club member or couple with a brief caption/quote as to why they have been a supporter for so long.
To obtain the photo and quote, have a planned giving staff person or volunteer solicitor be the one who interviews the individual(s) for the newsletter. Get the prospect to tell you their unique story of involvement and caring for the organization, how the got involved and why they have been such committed long term supporters. At the conclusion of the interview, comment on how impressed you are with their commitment and caring. Either have them give you a photo to use or have one taken.
Ask if they have ever considered making a legacy gift to the organization that will serve as a gift in perpetuity. Typically, they will respond that they are not wealthy and don’t have the ability to make such a gift.
The staff person should respond as follows:
“If you were in a position to make a legacy gift, and had the resources, would you want to make a legacy gift in perpetuity to the ABC Organization?”
In most cases (not all) the answer would be that they would if they could, but they can’t. That opens the door for the interviewer to respond as follows:
“If we could show you a way that would 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 interviewer is a planned giving professional they can continue the
conversation. If it’s a volunteer, they should ask if it’s ok to have one of the
organization’s advisors to set up a time to share with the prospect some of the
ways they can make a legacy gift and also receive income and significant tax
advantages.
The next step would be to determine what are the primary assets of the prospect
(residence, collectibles, life insurance, other appreciated assets, etc). 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 would best fit for
that individual. (Gift annuities, trusts, life insurance, bequests, 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 professional/advisor should offer to contact the prospects financial advisor
once the prospect has had a chance to initiate the discussion with him/her.
Follow up is important. The photo and caption should be used regardless of
response from the prospect regarding legacy giving. Timely follow up to provide
information and initiate discussions with advisors is critical.
My experience working with organizations which have used this strategy has indicated that at least 2 out of 10 prospect contacts/interviews of club members result in some form of planned gift.
Recognition and ongoing stewardship of all gifts is an important component of any planned giving program. Relationships make the difference.
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