Wednesday, December 24, 2008

With Faith, In Time

Robert L. McDevitt’s first gift to his alma mater was $5. It came in 1954, 14 years after his graduation. The following year, he doubled the amount and sustained that commitment until 1962. The next year he gave $100 and the year after that, $125. In 1965, he gave his first major gift of $18,000. His annual giving continued to increase -- $200 in 1967, then $600 in 1969 and in 1970, $1,000, a level he sustained through 2006.

In 1971, 31 years after graduation, Mr. McDevitt made a $125,000 pledge, $100,000 of which was in the form of a bequest.

The more he gave, the more attention he received from university officials. He welcomed the visits and suggested to those who came that he would continue to be good to his alma mater but offered no specifics. He ran a successful funeral home business in Binghamton, New York and continued to add to the portfolio of IBM stock he inherited from his mother. University records showed Mr. McDevitt’s wealth was growing but his lifestyle remained unassuming.

The interactions between Mr. McDevitt and his alma mater eventually fell into a pattern. Once a year, a university delegation paid a call to Binghamton. Mr. McDevitt, who had built a chapel in his modest house, asked for a Jesuit in the delegation so that Mass could be celebrated. As time passed, Mr. McDevitt became a bit more specific. He made it clear, upon his death and that of his wife, he would divide his entire estate among his alma mater and other Catholic colleges and charities. He did not say, however, how much would be given to each. When someone attempted to extract a bit more information, he would only say, “Have faith.”

Human nature being what it is, some officials from his alma mater wondered if they might be deluding themselves – if they might be overly optimistic about the size of the estate, especially given the McDevitt’s modest lifestyle, if the annual visits were really making a difference, if Mr. McDevitt, who had become involved in local colleges and institutions, had come to see his alma mater as increasingly less important. It was so hard to tell. All Mr. McDevitt would say was “Have faith.” Presumably, Mr. McDevitt had said the same to the many other organizations he supported.

In September of this year, Mr. McDevitt died. His wife had died earlier in the year. He left the largest portion of his estate, 30 percent, to his alma mater, Georgetown University. The estate, largely in the form of IBM stock, was estimated to be $250 million. Georgetown’s share was $75 million. It was the largest gift received by that University in its 220-year history. Had the economy not contracted so precipitously, the value of Mr. McDevitt’s estate could have been $300 million or more.

All philanthropy-seeking organizations hope for a Mr. McDevitt. They try to discover those with deep philanthropic intent and to devote the necessary time to building a productive and enduring relationship. But the Mr. McDevitts of the world can be quiet and unassuming. There is no way of knowing for certain where our time is best spent but there is much is Mr. McDevitt’s record that is instructive. Far more important than the amount that he gave in any given year was his sustained loyalty over many years. Research shows that the steady, loyal donor who gives modestly is far more likely to leave an estate gift than the very generous but occasional donor. Sometimes the relatively modest amounts given by the loyal donor causes some institutions to overlook them, to say, in effect, “Well, that’s nice but most of my time should be spent with those capable of making major gifts.” But, in fact, time is never better spent than with the loyal donor. If we can encourage young supporters, those in their mid to late twenties, to give for five straight years, the vast majority will continue that habit of giving for the rest of their lives. If we can find ways to sustain the support of our donors for 15 straight years, their probability of making an estate commitment increases by 80 percent.

It is, as Mr. McDevitt would say, a matter of keeping faith, of prizing and nurturing loyalty. What we give over time will be returned in time, often many times over. There’s no perfect strategy, of course. No judgment, analysis, hunch or bet is foolproof – but keeping faith and spending time with our most loyal donors will produce rewarding and sometimes astonishing results.

Sunday, December 14, 2008

High Propensity Prospects

Philanthropy-seeking organizations spend a lot of time trying to find prospects. All too often, they build prospect lists on the basis of financial capacity alone. But being wealthy and being philanthropic are not necessarily one in the same. So, those organizations that chase prospects solely on the basis of wealth find themselves long in the chase, often with disappointing results. Organizations that build prospect lists by looking for those who possess the combination of financial means and philanthropic propensity (which I have explained in an earlier blog post) are invariably more successful.

Is there an even better way? Can we identify those with high philanthropic propensity early in life so we can spend most of our time building relations with those who are most likely to support us? Can we build those relationships in such a way that those with high propensity give increasingly, even without being asked, as they become more financially comfortable?

Well, in higher education, there is one group that I would pay enormous attention to because of their remarkably high propensity to be involved and to give: married alumni. That propensity is even higher if they began dating and got married on campus. It is even more so, if either one or both are legacies, or had siblings or other family members who are also alumni. The more family connections, the deeper the propensity to give. Indeed, the more family connections, the more alma mater seems like an extension of family. Do you know who fits this bill on your prospect lists? Are you paying great attention to them, early and often in their marriage and careers? I hope so.

And is there any way you can particularly cultivate the interests of married alumni? Let’s brainstorm. Do you know the great families of your institution? Do you keep diagrams showing various family connections over time, including in-laws? Do you seek out family archival material of those family for your library? Do you do oral histories of those families? Do you know when a new member of that family enters your admission pool? Do you keep records of those who request to be married in your chapel or somewhere on campus? Upon receipt of a campus wedding request, do you immediately check if the couple has broader or deeper family connections to other alumni? Do you do anything special for alumni when they get married, even a nice note of congratulations from your president or a “two for one” alumni discount on events and activities for the first five years of their marriage (also an extremely important period in cementing ties to one’s alma mater and establishing long-term philanthropic patterns)?

One of the best ways of recognizing the marriage bond and helping cement a couple’s relationship to their alma mater was instituted by Laura Wayland (now working for Georgetown University) when she was at the University of Dayton. Laura created a brief, half hour ceremony over reunion weekend, where married alumni, in unison, renewed their marriage vows, “all the men together; then all the women.” Says Laura, “We called it a ‘Blessing of Married Couples …. Our first year we had approximately 80 couples attend. Each lady got a single white rose and so many couldn’t get their rings off that our priest asked them to hold their hands up… At the end, he asked couples to remain standing” as various anniversaries were called out. “We had two couples married over 70 years. It was quite moving. I still don’t know if it was the exhaustion of the weekend or the ceremony, but I had to step outside as I was overcome with emotions myself.” Who wouldn’t be?

I realize that secular institutions cannot stage single-faith ceremonies but I cite this example to cause us all to think how we can do a much better job of letting our married alumni know that they and their families are very important building blocks in our vision of an ever greater alumni community.

If there are some that you are particularly proud of, please share them with us all.

Sunday, November 30, 2008

A Cause Makes the Best Case

In his recent New York Times article, " Alma Mater is Asking. Do You Give or Not Give?(Saturday, November 29, 2008)," Ron Lieber quoted me as saying, "Schools need to start acting like a cause and stop acting like an institution. They need to learn lessons from the Obama campaign, which had a powerful and unifying message that made people feel like they wanted to be a part of it." Allow me to develop that thought a bit more.

A cause, according to one dictionary, is "a series of actions that advance a principle or tend toward a particular end." To act like a cause, then, would entail articulating a powerful principle and a specific set of actions to advance it. World peace, for instance, is a cause well worth moving toward but defining concrete, achievable actions to advance it is quite difficult. A powerful principle without a set of actions won't inspire strong support, nor will a set of actions that are not unified by a powerful principle. We need both.

To act like an institution, on the other hand, is to make the crux of your case for support around the physical needs of a facility and the development of the talents of those who people it. A university that acts like an institution, for instance, makes a case for new construction or renovation, faculty excellence and student support. It looks inward and asks for donations so that it might persist and thrive, and further distinguish itself from other institutions. It calls primarily on the loyalty of its alumni to make their alma mater better so that the value of their degree will increase and their pride of affiliation will continue to grow. It assumes that its right to exist is unquestioned and that many who benefited from its excellence will respond to periodic calls to give to the institution's priorities out of some combination of gratitude and obligation. And it's all those assumptions, I would argue, that result in a relatively weak case for support.

An institution asks for support to create a better institution; a cause asks for support to create a better world. The latter is far more enticing particularly when donors have less to give. The best way to determine if a case is institutional or cause-oriented is to see if it motivates the uninformed, un-involved, non-loyal prospect to give. So, if you are writing or reviewing a case for a university, try reading it through the objective eyes of a non-alumnus who has had no previous interaction or involvement. If that prospect had no prior knowledge of, and no contact with your school and received a degree from another institution, what in your case would motivate him or her to give? The plain truth is that in most cases for most colleges and universities, there is very little. Since they rely on alumni support, they fail to make the case for the non-alumnus or the independent philanthropist. Since they assume a high-degree of built in loyalty from potential donors, they tend to plead or promise more than they they reason or persuade.

And here's the rub: Most analyses I have seen put the segment of alumni who give out of loyalty alone at 10-15 percent of your potential base of support. The rest, while they may look back with gratitude, give to bring about some specific improvement. In short, their philanthropy is far more future-oriented and cause-oriented than loyalty driven.

When I began planning the launch of a campaign at the University of California, San Diego, in 1998, I was advised by professional fund-raising counsel that we did not have the base of alumni support to raise our goal of $1 billion. They were right -- in part. At the time, the University was only 38 years of age and the vast majority of its alumni were very young. The "older" alumni had little history of giving to their alma mater. So we raised 98 percent of the proceeds from non-alumni. Yep, that's right -- 98 percent. How? We didn't write a case for alumni alone. We didn't call on loyalty. We advanced a set of bold ideas that captured the attention of those that had a stake in the greater community, including high tech leaders and venture capitalists. Our case and our cause was about fueling innovation under the rubric "Imagine What's Next." We cast ourselves as a start-up, not an institution, and sought support primarily for people and new programs. As a result, UCSD became the first university established in the post World War II era to raise over $1 billion.

So, if you want to prepare a truly persuasive case that appeals to a wide spectrum of potential donors, first define the cause that you seek to advance, a cause with a broad, unifying message that makes people feel like they want to be a part of it, even if they were never a part of your organization before. A cause creates and sustains a sense of community; it enlivens the imagination and feeds the soul. It lays out a practical path to a noble end. It becomes a foundation of enthusiastic support. It taps into the deep cultural core of American philanthropy -- "we the people" trying to create a more perfect union and a better world.

Tuesday, November 18, 2008

Seminar in Chicago

I'll be presenting a seminar in Chicago on February 23 and 24, 2009. Many of the ideas I have shared in this blog will be incorporated into this seminar but the block of time will allow me to go into much greater depth and to offer specific examples of how to better understand and advance the philanthropic process. I will, of course, tailor the curriculum to speak to the adjustments we all must make in the face of our current economic struggles.

Even if you have attended this seminar before, rest assured that I will be bringing new research and recent innovations to enliven and update the topic. You can find more information on the conference by clicking on the link below.

I hope I will see many of you there. In the meantime, Happy Thanksgiving. We have much to be grateful for even in these difficult times.

Sunday, November 9, 2008

The Seven Secrets to Successful Volunteer Engagement

1. Be Grateful

No one wants to work for an organization that just expects others to give their time or, even worse, that acts as if it is doing the volunteers a favor. Too often
I have seen organizations treat volunteers only as a force to be managed. While management is required, volunteers also need to be valued and inspired. Begin each meeting with volunteers the way some airlines end flights, by saying that you realize they have choices and you are glad they have chosen your organization. The best of volunteers are the most involved and most courted. Don’t make the mistake of taking them for granted.

2. Be Selective

Take your time in building volunteer bodies. Look for constructive people who share your organization’s values and purposes. A small, highly-engaged group will be far more effective, and will have a far more satisfying experience than a large, unwieldy body. The more selective you are in choosing volunteers, the more complimented they will be and the more others will vie to join. If you depend heavily on volunteers and use your most effective front line staff to manage them, remember that your organization can move no faster than the most obstinate, obdurate volunteer. One bad choice slows the entire fleet and diminishes the impact of your most accomplished professionals. Take the time to get to know a potential volunteer. Asking volunteers to serve on a board at the first meeting is like asking someone to marry you on the first date; you look desperate if you ask and they look desperate if they agree. Desperation is not the stuff of lasting, productive relationships.

3. Be Strategic

An effective volunteer body, like a good organization, is created by assembling people of varying talents. What’s the right skill set for your board? Do you have the right balance of creative, legal, financial and entrepreneurial talent? Do you have the right gender and geographical balance? Do you have too many people with similar backgrounds? If so, you may not be getting the variety of perspectives you need despite the size of your board. You may be getting the same viewpoint over and over. That could cause blind spots for your organization. The result could be poor decisions and market losses. Conversely, nothing is more impressive to a potential volunteer to be told, "We have a gap in our volunteer organization that needs to be filled with someone of your background and ability -- and we know of no one we would rather have."

4. Be Honest

Yes, there is powerful correlation between the time and the amount one gives to philanthropy. That clear and compelling fact has caused some organizations, however, to make up volunteer duties in hopes of raising more money. It won’t work for long because discerning volunteers soon realize that there’s really nothing for them to do; that they’re being shined on so they will give. Increasingly, I see donors growing suspicious of all volunteer requests for this very reason. The best of them don’t need or want to be humored. They understand the need for money; they just wonder why organizations have to be so oblique in their approaches. If you’re building a volunteer board, focus on the talent that your organization most needs. And, yes, there’s no problem in looking for a confluence of talent and generosity. But if you really have no need for volunteers, or no inclination to really make use of their talents, be honest – with them and yourselves. I see too many boards with too little to do. And I don’t believe in fund raising boards; the simple fact is that most people are not good at it. There is no better fund raiser than an accomplished professional. They don’t need volunteers to help them ask; they need volunteers to open doors, to advocate, to host events and convene meetings. In short, their need volunteers to advocate gracefully within their sphere of influence. They need to find the comfort zone of each volunteer and work within it. As I have written earlier, there are many ways of engaging volunteers for the purpose of fund raising without making up boards or faux volunteer duties. These options include conducting interviews to reveal prospects’ animating passions or to test the feasibility of a project, offering invitations to strategic planning sessions, urging involvement in brainstorming around new project creation, and making requests to review drafts of project white papers.

5. Be Creative

Make full use of your volunteers’ talents. When we become too short-term in our thinking and try to focus volunteers’ efforts only on fund raising, we restrict their ability to engage others, to advocate, and to fuel our cause with their passion. Ask volunteers to share their expertise on our behalf. If we have a tax expert on our board, ask her to conduct a seminar exclusively for other donors, prospects and volunteers. If one of our volunteers is a great cook, ask him to prepare a meal for top donors as a part of our stewardship program. If we have an amateur historian, ask him to lead a tour or give a lecture as part of our creative engagement of new prospects. The possibilities are endless but we really don’t know what assets we have until we explore what our volunteers have to offer, including otherwise hidden talents or insights.

6. Be Open

We say we want our organizations to “friend raise” but we often practice a weird form of friendship. We talk more than we listen and we brag incessantly about our virtues and accomplishments, often acting as if we have no real problems or challenges. Is that how we treat friends in real life? Don’t we confide in the best of our friends? Aren’t we complimented when a friend confides in us? So confide in your volunteers. Share real struggles and challenges with them. Let them help you with the tough stuff. I once asked a highly sought after volunteer what my organization could offer him that would make him want him to come on board. He said, “A clean shot at a really important problem.” Good people want to make a difference. Give them a chance.

7. Be Precise

It’s as important to let your volunteers know where you don’t need their help as it is to let them know where you do. I hear some professionals complain about an over-reaching board or an intrusive volunteer but, in many cases, the problem can be traced back to their own lack of clear direction or a tendency to try to cultivate volunteers through ingratiation and placation. The problem, then, is not one of “volunteer management” but of management itself. Be precise in the duties you want your volunteers to take on, in the term of their service, and the expectations you have for their giving. And the best time to be precise is when a volunteer is being recruited. You should have a "Vision, Mission and Goals" statement for every volunteer body and a job description for every volunteer position.

Saturday, November 1, 2008

The Importance of "Modest" Gifts

I'm sure you've heard it or even felt it yourself. "I'm not really in a position to give." Yet most of us are in a position to give something, even if it is very modest. What we really mean is, "I can't give a significant gift and, therefore, what I can give will have little impact." And the way we determine the significance of our gift is by comparing what we can do to what others have already done. When we see an organization that we care about celebrating the receipt of multi-million dollar gifts, we assume that we are no longer needed, that anything we might give is like a drop in the ocean. Perhaps that organization has never told us what small or modest gifts mean to them other than the usual, "Every gift counts!" Counts toward what?

Philanthropy-seeking organizations must, as I said in my previous post, not only make case for each and every gift, but for all gifts, no matter how modest. That case might include the following points:

1. We don't think in terms of large or small. We are grateful for every gift. Each one touches us. Each is a vote of confidence, of solidarity, of hope. The more votes we receive, the more heartened, encouraged and emboldened we grow in pursuit of our cause.

2. While we occasionally single out the major investor in our literature, we also celebrate all those who give according to their means. We realize that a $1,000 gift from someone of modest means may be as, if not more, generous than a gift of $1 million from someone of exceptional means.

3. A large, diverse portfolio of modest gifts is our biggest gift. It gives us a breadth and depth of steady support that allows us to persist over time. Large gifts are wonderful but they are, by definition, unusual and are given more occasionally and irregularly.

4. We revere the loyal donor, the one who may only be able to give modestly but gives again and again. While we will never take any gift or any donor for granted, we are so fortunate to know that we have donors that we can count on as long as we continue to live up to our promise. (Remember, long-term loyal donors are also the most apt to leave bequests to their favorite philanthropies.)

Obviously, philanthropy-seeking organizations should not just say these things. They should mean them and ingrain them in their ethos. This can be done by constantly striving to create a culture that eschews entitlement and begins each day by reflecting on the fact that no one owes us anything, that we are fortunate to receive each and every gift that comes our way, and we are blessed to live in culture where so many assume an obligation to achieve a greater good and to bequeath a better world than the one they inherited. Those of us who are fortunate enough to receive the philanthropic support of others should not think of ourselves as merely an organization or an institution, no matter how long we have been around, but a cause that will live only as long as we inspire the strong support of a few and the sustained support of many.

Sunday, October 26, 2008

A Case for Every Gift

In the past decade, I have spent a good bit of time on transformational gifts. I have tried to work “between” the organization I represent and the philanthropist to imagine and define areas where a very significant investment might have a profound and lasting impact in an area of mutual interest and concern. I have learned that eight and nine-figure commitments require big thinking, careful planning, ambitious goal setting and deliberative, detailed negotiation.

In the world we now live, I think we need to apply many of the same principles to ALL gifts that we seek. We will need to do away with “fund buckets” and replace them with thoughtfully conceived projects. By “fund buckets” I mean the broad categories of needs we advertise, including rubrics like “scholarships” or “research,” or even more vaguely – “current use,” “unrestricted” or “discretionary.” The latter three are particularly vulnerable in a contracted economy. These are needs that we often seek to meet through telefunds, direct mail or web-based appeals or avenues.

In their place, we need to begin offering projects that feature exact budgets, precise goals and specific outcomes. For instance, the top priority for my university in its next campaign is financial aid. To date, we have asked people to give to that area by making a broad case for its importance bolstered by specific examples of which students are most in need and how they will benefit from more aid. For those capable of giving gifts of six figures or more, we offer to create endowments or allow specific designations. Even though we personalize the process for the major donor, this is still a “fund bucket.” As our plans cohere for the coming campaign, our President has outlined three areas of importance within the larger financial aid goal – those with greatest need, those of highest merit and international students. Those of greatest need come from the lowest socio-economic quartile and represent only a small fraction of our current students. We intend to increase their participation by focusing on the recruitment of graduates from proven inner city high schools known as Cristo Rey schools. That target begins to move us away from a “fund bucket” to a specific goal, in this case to increase the participation of Cristo Rey graduates from the current number of 11 to 60 in the next five years. That means we will have to add 12 of these scholarships each year (and there is no permanent funding for the 11 we now have). That will require either an endowment gift that yields the necessary annual support for each student or a “current use” gift that covers the cost of their tuition.

In the past, we would have pursued this goal by engaging only donors capable of making a major gift while relegating our annual fund to filling broad fund buckets with gifts of varying sizes. Now, I am trying to find ways of allowing all donors, no matter what the size of their gift, to designate their gifts to support these students. But how? We could, for instance, make the case for one Cristo Rey student at a time. If our annual goal is 12 new scholarships, our most immediate objective would be to get the necessary funding for the very first by piecing together gifts of all sizes. On-line donors might be able to see icons for 12 Cristo Rey students with the level of funding for each. When the necessary funding for the first was reached, funding for the second could begin. In this way, donors could see how annual gifts could be applied until such time as institutional goals are met. They could see how many students were currently or partially funded and monitor the progress toward supporting the “next student” and reaching the annual goal. If the donor designated $50 or $100 or $1,000 toward the goal, they could see it added to the total and know exactly how they made a difference.

It hasn’t happened yet, but this is where we are headed –no more “fund buckets” but a specific project for every gift and showing every donor how every gift makes a difference and gets us closer to our goal.

Sunday, October 19, 2008

Getting the Big Things Right

I find myself in an odd position. I’m lucky enough to have others seek my advice as a speaker or consultant – but what I’m asked about most often are the least important aspects of philanthropy. I’m asked:

What are the secrets to a successful solicitation?
How do you know when to ask?
How do you go about getting appointments with top prospects?
When you’re with a prospect for the first time, how do you broach the topic of fund-raising?

You get the gist. Most people want to know about how to raise money and assume that the solicitation is the key. In fact, the solicitation is the least important part of the advancement process. The solicitation is a culmination of a process. If we are truly solicitous (in the sense of expressing care and concern) of our prospects from the outset, if we genuinely seek to understand what is most important to them and then align our institutional aspirations with their individual values, we immensely improve our chances of conducting a successful solicitation, no matter how nervous or maladroit we may be in “making the ask.” If we do not do those things, the solicitation, no matter how deft or moving it may be, has only a remote chance of success.

So, now that I have the opportunity and obligation to share what experience has taught me, I try to focus on that larger process and the cultural phenomena that shape it. I try to help others get the big things right so that they don’t waste so much time and effort on misconceived and misapplied tactics. For philanthropy-seeking organizations, the big things are:

1. Point to those you serve. Who are they? Why do they need our help? What is the state of the service you are now providing? What could it be? What is the larger difference you would like to make?

2. Compare the way you answer those questions to the way your donors and prospects answer them. Where are the big differences? Are some of the perceptions of your donors incomplete, uninformed or just false? If so, design a targeted, constituent-based marketing program to begin to systematically close those gaps through any and all means, including your President’s speeches and events. If you don’t know where these gaps are, you may be communicating what prospective donors already know and consider unimportant while failing to communicate what they think is most important to their philanthropic decisions. But, what if your donors have some negative perceptions of your organization that are essentially accurate, what then? Own up to them publicly and promulgate a plan to bring about improvements so that you can better serve. Pretending you don’t have flaws will frustrate your donors and make them feel as if they are being held at arm's length when, in fact, you want your most generous donors and most promising prospects to feel like insiders with a full and complete view of where your organization is and where it needs to be. If your organization were perfect, it wouldn’t need volunteer help and wouldn’t have a reason to raise money.

3. Engage donors and prospects by listening to what they believe to be important and what they hope to accomplish with their lives. Determine what you have in common before proposing how you can work together to achieve common goals.

4. Don’t do all the problem-solving or visioning on your own and then ask donors to support it. Involve them in the process; incorporate their analyses and advice. Create a sense of joint ownership right from the outset. True strategic planning is the means by which we shape our internal plans to meet external realities (both threats and opportunities). By bringing external experts and stakeholders in at the very being, we ensure that our plans will be truly strategic and capable of attracting support.

5. Make sure your current donors know how their gifts have been used to help do more for those you serve. Don’t just tell them the bucket that you put their money into but the people and the projects it enabled. Yes, donors want to be thanked and recognized but what they most need to know is where and how they made a difference. If they know that, and where a difference can still be made, they will give again.

Do these things and you will worry less about the solicitation -- and, when you conduct them, they will seem as a logical outgrowth of the discussion you have been having with your donors. They will also be much more successful.

Monday, October 13, 2008

Be Careful What You Ask For

No, I’m not invoking that old saw – “Be careful what you ask for; you may get it.” I’m establishing a new credo for fund raising in a contracted economy – “Be careful what you ask for, or you may not get anything.”

Philanthropy-seeking organizations can’t ask for more when people have less but they have to continue to ask to keep pursuing their mission. The way to do that is to be more careful in what they ask for. I would suggest dispensing with the tendency to ask for private support in nice round numbers -- $10,000, $100,000 or a $1,000,000. I would also forgo asking people to contribute so they could qualify for certain “giving societies.” No one is in the mood to give for the sake of a society but Americans will continue to give throughout this recession as they have through every previous recession including the Great Depression. They will give to the most clearly developed concepts designed to advance a common good or to redress a common need. Two indicators of a well-developed philanthropic concept are a carefully constructed business plan and a detailed budget.

When philanthropists see that an organization has not only conceived of a way to bring about a greater good but to do so in the most creative and cost-effective way possible, they will respond. They will give exactly what you ask if you are exacting in determining your needs. That will mean asking for very precise amounts to correspond with precise budget items. We should see “asks” then not in nice round numbers but in “sharp pencil” calculations such as $11,432 or $94, 274 or $965,804. This will show how thoughtfully you have developed your plans and how careful you are in asking those with less to continue to give.

Sunday, October 5, 2008

Longer Lines, Less Movement

Because there are an increasing number of philanthropy-seeking organizations employing more sophisticated wealth screening methods, you can safely assume any major prospect that your organization has identified has also been identified by many others. Chances are these prospects have not only been identified but are probably involved with other organizations and are being courted by even more. No prospect or donor is ours alone. And, if they are ours today, we should never assume they will always be.

When I think of a prospect of note, I imagine him or her as a monarch on a throne. In front of that monarch, I imagine a long line of courtiers. Some of those courtiers are long-known to the monarch and can easily gain access and command attention. Others are vying for time and attention. As I think about approaching the monarch-prospect, I see myself at the very back of the line. I realize I have little chance of gaining that prospect’s already divided attention by looking and sounding like everyone else. I try to think of what I could say, should the opportunity arise, to cause him or her to stop, listen, consider and want to hear more. I realize that if I am just another claimant with a similar list of wants, I stand little or no chance. But, what if I could offer something that would be more interesting or satisfying to that donor? But what?

I would prepare for that potential opportunity by learning as much as I could about that prospect, particularly his or her animating passions. I would look to see if there was a pattern to his philanthropy or to his avocations or civic engagements. I would see if he had written anything, or given any speeches, that would provide insight. I would try to be ready if and when the prospect noticed me from the back of the line and asked, perhaps wearily, “What do you want?” I would want to be prepared to say, “I think I know who you are, what you care about. I know you’re being asked to give by many organizations but I’d like you to give me the chance to prove my organization can best deliver what is most important to you. I’d like you to think about what would be most rewarding for you to achieve and to challenge us to respond with a proposal.” I may not use those exact words but that would be how I would try to position my organization.

While others might be asking that prospect to be loyal to their organization, I would be exploring if that prospect’s passions align with the aspirations and capabilities of my organization. I would be trying to project that we were not just asking what that prospect could do for us but what we could do for him. While others might focus on getting a gift, I might try to prove that we could best deliver on the promise. While others might be quick to ask, I would try to demonstrate a willingness to listen and to take the time to find or design a project that would align our interests. While others might be trying to secure a gift for broad purposes with no clear outcomes, I would lay out of business plan with specific goals to be achieved by specific dates.

We are now in a contracting economy. The lines in front of prospects may grow longer while they have less to give. Moving ahead will be even more difficult. What I’m suggesting is not about gaining a competitive advantage but about holding our own in a far more challenging philanthropic environment.

Saturday, September 20, 2008

Stewarding When It Counts Most

I hope all philanthropy-seeking organizations have taken the time to commiserate with their donors in the financial sector. While it may be astonishing and frightening for many of us to see some once-great financial institutions totter and some fall, imagine how it must feel to be a part of those institutions. Imagine how it must feel to have your way of life turned upside down by a perfect storm of adverse circumstances. Imagine waking up and wondering if anything you assumed in the past can be applied to your future.

I suspect that most of us have somehow benefited by the generosity of donors in the financial sector when markets were flush. Now is the time to let them know you remember and that you are mindful of their concerns as they were once mindful of yours. Philanthropy-seeking institutions can respond in different ways. It could be a simple as an e-mail from your CEO to donors in that sector. A more personal note would be appropriate for major donors and volunteer leaders. My university, which has a large number of alumni and donors in affected financial institutions, is conducting workshops on ways to personally and professionally manage the crisis. Our Wall Street Alliance, an alumni network that mentors recent graduates and raises money for scholarships, is an important segment of our community that now needs special attention.

Those of us who rely on the support of philanthropists don’t just steward gifts, we steward relationships, and true stewardship persists through thick and thin. And, when we reach out to donors during their most difficult times, we show that the value we place on their support is not measured by the most recent gift. If the fortunes of those now struggling return, the fortunes of our institutions will improve if we have sustained those relationships. If not, we will still have proven who we are and what we believe in. And those values will sustain our organizations over time, no matter what happens.

Thursday, September 18, 2008

Fund Raising in Falling Markets

There are two issues here. Should you continue to raise money in falling markets and, if so, how do you raise money when so many people are on edge?

The answer to the first is “yes,” but only for your most critical needs and opportunities. The fact is that Americans continue to give, no matter what – through recessions and even the Great Depression. Indeed, when you look at the impact of recessions on philanthropic giving over the past forty years, it is surprisingly light. But, when the economy contracts, Americans give much more selectively. In such an environment, it would be a mistake to ask for too much, or for too many things, or anything that isn’t patently and palpably critical to your institution and those it serves.

So, how do you raise money when so many financial institutions seem imperiled? The key is to remember that this crisis is financial. While finance can affect many businesses, it does not retard or stop all means of production and wealth creation. In other words, don’t assume that falling markets mean no one is making money. Figure out who is and focus your primary fund-raising on them. Some hedge fund managers, for instance, have been doing just fine lately. Continue to probe the interests of all prospects but be most sensitive toward those whose wealth seems most dependent on highly leveraged or credit-driven enterprises. Be sensitive but persist.

Also, remember that we will still see a massive transfer of generational wealth in the next year and beyond. Those who were planning to give a certain percentage of their estate for philanthropic purposes will, most likely, still designate the same percentage even as the size of their estates decrease. And, even with the contraction of many estates, the overall transfer of wealth will still be enormous.

Finally, never stop building common cause. Continue to engage would-be donors and speak to the higher purposes of your institution while proceeding with greater patience in the pursuit of pledges and gifts. If you pull back too much during a recession, you may sacrifice the sense of community that is so important to the long-term health of a philanthropy-dependent organization. Some donors may interpret your lack of presence not as sensitivity but as a loss of interest in them. Indeed, a difficult economy provides a great opportunity for philanthropies to build and deepen their relationships with those that have and might support them. When the economy recovers, your organization will be positioned to secure higher levels of support from those who have learned that your interest in them is not always tied to short-term giving expectations.

Persist not because you expect more but because you expect to continue to serve. Persist because so many Americans will continue to feel the need to give to others even as their fortunes decline. Persist because philanthropy must never lose sight of the future.

Saturday, September 13, 2008

The Role of Consultants

Consultants assist philanthropy-seeking organizations in two basic ways:

1. Helping Advancement show the CEO and Board the real cost of long-term fund-raising success.

2. Helping the CEO and Board objectively evaluate Advancement.

Above and beyond that, consultants can provide specific tools to assist with specific phases or aspects of advancement but you can spend way too much for too little if you fail to remember these precepts:

Strong leaders make for effective consultants. Don’t cede the leadership of an advancement operation or a campaign to a consultant. If your advancement operation is not well-led, a consultant won’t fix the problem. If your advancement leader sits at the knee of a consultant, the operation is not well led.

Emphasize organic growth. Over-reliance on consultants, either in number or duration of contract, doesn’t build fundamental strength in your organization. When the consultants go away, the capability to perform certain task or fulfill basic functions goes with them. Use consultants to identify capability gaps in your organization but challenge them to make themselves obsolete as soon as possible.

Augment, don’t rely. Don’t assume that one service provided by one consultant is all you need. One service provided by many consultants, for instance, is conducting confidential interviews with potential volunteers and donors to determine the feasibility of a campaign. It’s an important function that almost always yields valuable information. But even large feasibility studies (over 100) are very small samples of your potential base of support. The findings of a feasibility study should be compared to what your advancement officers are hearing in the field and to other qualitative and quantitative market research. Many organizations, for instance, have telefund staffers who can be converted to pollsters. They can make a thousand calls or more to solicit the opinions of donors and to broaden your understanding of how your organization is perceived.

Remember who works for whom. Don’t treat consultants like celebrities; they will start to believe they are. While the best of them can provide insight and comparative analyses, most haven’t actually raised money in long, long time, if ever.

Ask the right person for the right thing. If you want to know about the day to day challenges of running a campaign, for instance, don’t turn to a consulting firm, go to someone who is actually running a campaign. You will be surprised how many working professionals will provide advice or consult for you. Since they have full-time jobs, they won’t stay too long or try to sell you anything you don’t need.

Know what you really need. Consulting firms can sometimes be like deodorant companies; they have to convince you that you stink to get you to buy their products. If you are insecure and turn the wrong consultants loose, they will come back with a long list of deficiencies – that, interestingly enough, only they have the ability to solve!

Don’t get me wrong. Consultants can and do serve a very important role. Defining the right role at the right time with the right direction and confidence is the key is to making sure they do their best work – for you.

Thursday, September 11, 2008

Be Political, For Philanthropy's Sake

If you want to run a smart, strategic, successful fund-raising campaign, think of it as a political campaign.

Think of your CEO as the candidate. He or she has a limited time to secure enough votes (think dollars) to win the election (a chance for his or her administration to implement a new vision).

Think of your organization as a cause. What do you stand for? What societal improvement do you aspire to bring about? How can you help donors to get caught up in the cause?

Deploy the candidate strategically to make the best use of his time and talents. If your candidate can't be everywhere, which cities, regions or areas have the largest concentrations of potential support.

Develop the candidate’s biography. I’m not talking about sharing a CV but shaping a narrative that tells potential donors where the candidate came from and what shaped her outlook and values. Contributors want to know the personal story of the leaders they support.

Think about how the candidate can articulate the message in a highly believable, differentiating and motivating way. Stay on message; it takes a long time before it sinks into the electorate.

Develop position papers in advance of the campaign. Your candidate should not only articulate what she wants to achieve but where she or your organization stands on important issues. Having position papers on-line will demonstrate that yours is a well thought out effort.

Think about the way your campaign stops are staged. Don’t get hokey but don’t put your candidate in a setting that diminishes the stature of the office.

Rapidly respond to donations with on-line messaging and reinforce how the contribution has helped advance the cause.

Remember that the campaign has to fit the candidate. Don’t put your candidates in situations and venues that make them uncomfortable or require them to be what they are not. For instance, if your candidate is not a great orator, emphasize smaller venues that allow for more conversational exchanges.

Don’t try to be all things to all people. Figure out who and what your “base” is. Run on a “platform” (think core values) and demonstrate a willingness to make a decision. Mealy-mouthed candidates with ho-hum platforms excite no one’s attention, passion or support.

Don’t expect loyalty. Make your case on the issues. Remember that you can’t perpetuate the cause if you don’t serve the interests of the voters.

Sunday, September 7, 2008

Fund Raising vs. Development vs. Advancement

I encounter the occasional skeptic who says, “Ah, ‘advancement.’ That’s just a euphemism for fund raising, isn’t it?” My answer is, “Not really. Fund raising is an important outcome of advancement, not a synonym for it. Advancement describes everything a philanthropically-driven institution does to strategically align its mission with those who possess similar values, concerns and aspirations and those inclined to give their time, talent and treasure to worthy institutions or causes.” If my skeptic is still listening, I might add, “Advancement is about finding common cause, then building a sense of community around that cause, then determining how that cause can be advanced to yield tangible, sustainable improvements in the lives of those we have chosen to serve. Then the advancement operation would seek to secure the necessary resources to realize common goals. When secured, it would commit itself to seeing the project through to completion, to making sure that the institution lived up to its promises and that all stakeholders were informed from beginning to end.”

At that point my skeptic may say, “That’s what I thought; it’s about fund raising.” While stifling my Irish exasperation over the seemingly limited bandwidth of my questioner, I might semi-calmly reply, “If I were a fund raiser, I would be here for the sole purpose of asking for money. My organization would have already decided what it needed money for and would have deployed me to make the case and make ‘the ask.’ If I were a development officer, on the other hand, I wouldn’t just come and ask; I would try to increase and deepen your interest in my institution over time. I might find ways to engage you, to get you to see what we do close up. When I saw your interest increase and your passion rise, I would ask for your support. But as an advancement officer, I seek to understand how the unique assets of my organization relate to the evolving needs of society. I try to work within and without to anticipate those needs, to build coalitions of experts and philanthropists around ways of creating solutions for emerging needs, even before they fully manifest themselves. As an advancement officer, I don’t just say, “please give,” I say, “Our research suggests that you have passion for something that my organization does well and wants to do even better in the future. As we look to the future, we see an opportunity to better serve and wonder if you might be willing to hear our interpretation of what the world needs to see if we agree and, if not, if we can learn from your point of view. We want to benefit from your expertise and experience, to see if we can come to similar conclusions and, if so, how we can work together to bring about those necessary changes.”

At that point, my skeptic may be sufficiently stunned by the stream of words that just poured out of the front of my head, or sufficiently concerned by the throbbing Celtic intensity in my eyes to say, “So give me an example.” I would reply, “Okay, I will, but I’d like you tell me what you see as an important cause or a great issue of our day, something that you would see as generally worthy of your philanthropic consideration.” That might cause him to think for a while and give me time to figure out what I’m going to say next.

Imagine if after a few moments, he says, “I worry most about the environment but I don’t really see a way to make a difference.”

“Okay,” say I, “if I were a fund raiser, I would approach you with a prospectus or maybe even a four-color brochure describing what my institution is doing about the environment. In the vast majority of cases, I as the fund raiser would not have been involved in the shaping of the content of that prospectus or the planning of that environmental initiative. I would be deployed after the planning was complete to secure funds for a project. The scope, scale and time lines for that project would have already been decided. I would approach you to say, in effect, ‘We have decided what is important to do and we would like you to support us.’

“If I were a development officer,” I would go on to say, “the same set of facts would apply but I would be wise enough to know that the more abrupt I am in asking for support, the more likely you are to say “no” or to give a gift well below your financial potential.. As a development officer, I might ask you to come and meet some of the principals of our environmental initiative or attend an event at which the initiative would be discussed in greater detail. I might ask you to sit on an advisory board or offer other ways you could be more deeply engaged in my institution. I would take the necessary time to help you better understand exactly what we hoped to achieve through this environmental initiative, to feel more comfortable with the leadership and more appreciative of the breadth of talent that we had at our disposal. I’d work with you to answer all your questions and to respond to all your concerns and objections. When I saw that you have moved from a general interest in the initiative to having a deep appreciation for it, I would ask for you to make a major commitment to it.”

“But as an advancement officer, I would have come to you just as my institution was beginning to consider what it might do to improve the environment. I would have interviewed you and other ‘thought leaders’ or ‘civic leaders.’ I would have asked how our particular institutional strengths might map against your specific concerns or the needs of this particular municipality or region. I would have asked you what would be most useful for my institution to deliver and to whom. I would have carried your thoughts and ideas back to our environmental experts and worked with them to craft an initiative that aligned their capabilities with your needs. We would have then drafted a white paper outlining what we might accomplish together. I would share that draft with you to make sure that we had listened and incorporated the suggestions of others. If you thought we were still on track, we would then take the initiative to the next level of planning. We would work with you throughout so that when we returned to ask for your support, you would have watched and participated in the evolution of the project, you would have understood the trade-offs that we made and how we put the budget together. You would see yourself and the perspective of other community leaders in the initiative and you would not feel ambushed when we asked for your support. You would know where you could make a difference. Our approach would resonate with the deep cultural roots of American philanthropy. It would begin not with what my institution wanted for itself but what “we the people” need to accomplish to achieve a greater social good. And because we worked together from the outset and worked our way together through the issue, the solution and the struggle to achieve would be ours as well. I would not have just advanced the mission of my institution; we would have advanced a project of mutual concern and mutual benefit.”

This is how philanthropists want to work with organizations they fund. Those that best understand and best deliver will enjoy the best results – and the most rewarding experiences along the way.

Thursday, September 4, 2008

Philanthropy and Internal Politics

In my previous two posts, I addressed how organizations could generate more philanthropic support with the right balance of vision and strategic planning. Vision, I argued, must be backed up by sufficient planning detail to show potential investors where, how and when their support would make a difference, and who would benefit. Strategic planning, however, I said, can't drag on so long that it results in a pale and dated case for support. It’s all about striking the right balance. Both captain and crew must make some concessions to achieve a greater philanthropic good.

Let’s begin with the captain. No one faulted Captains Bligh and Queeg for instance, for a lack of vision. They just failed to create a shared sense of mission and their crews became mutinous. Captains, therefore, need to let their crews know not only what they see ahead but how long it will take to get there, what sacrifices will be required and what rewards can be expected upon arrival.

But crews who demand too much democracy can also undermine a voyage’s success. Just as we don’t want an ego maniacal captain who doesn’t engage the crew in some participative planning, we don’t want a process hound at the helm asking the crew for their suggestions as the ship nears the rocks or wanders farther from the Strait of Opportunity. A smart crew members wants a say but knows better than to expect a vote.

I have seen mistakes on both sides – leaders who fail to adjust their plans to achieve internal cohesion as well as internal stakeholders who shoot down some of their leaders’ best ideas by asserting anything new must necessarily be at the expense of the old. I have seen senior faculty members, for instance, warn colleagues that the realization of the new President’s vision can only be achieved at the expense of core academic needs. The fact is that a President with a vision can raise the profile of the institution and broaden its base of support in ways that both strengthen the academic core and make new initiatives possible. Indeed, sometimes the only way to get those core needs met is by projecting a more compelling institutional vision.

Internal dissonance and the failure of captain and crew to agree to broad terms have philanthropic consequences. Winning and sustaining the support of donors who are being wooed by so many other philanthropies requires a winning and sustained message, one that is echoed throughout the organization. Without that kind of discipline, many institutions limit their potential or slow their rate of climb. No complex organization will or should be free of dissent but it can’t be so given to strife that donors lose confidence in the whole. Even worse is when internal controversy breaks out into the open. Such was the case, for instance, with Gallaudet University a few years ago when students challenged a new president’s suitability to lead a deaf community. Major donors didn’t take sides; they just stopped giving.

An effective case for support is not just something that we present to the donor community; it is first an agreement reached within, not only about the money we wish to raise and how it is to be spent, but what elements of internal self-interest we are willing to subordinate for the good of the whole.

Sunday, August 31, 2008

Vision vs. Strategic Planning

If you are, or work for, a visionary leader, do you need a strategic plan to secure philanthropic support? After all, if you have someone who can see the future, why should the rest of the organization slog through a long, involved planning process? Why isn’t it enough for the visionary to climb high on the mast, gaze deep into the horizon, point to the faintest shadow of what is surely the promise land, then say confidently, “There is where we must go.”

Indeed, vision goes a long way toward inspiring donations. It excites the imagination, fires up our frontal lobes, and gives hope. It might be enough, in and of itself, to trigger a large number of rather small gifts.

But vision alone isn’t enough to sustain small-to-modest contributions or to inspire larger levels of support because the longer or deeper you ask donors to dig into their income or savings, the more they will want to know:

Exactly what do you need money for?

Where can I make the biggest difference?

What will result from my giving? What goals will be reached? What tangible improvements will be seen? Who will benefit and what will it mean to their future?

Donors not only want to give to a worthy cause, they want to see the face of those served by that cause. They want to make a lasting difference in the lives of those they are asked to help. So vision needs to be supported by specific goals to deliver specific benefits to specific constituents. That’s what you call a sound plan – and an effective case for support.

Notice I didn’t say you need a long planning process. The time taken will render it irrelevant. Internal and external conditions will have changed so much that internal aspirations will no longer match the external moment. Other institutions with lesser strengths may have caught the wave of opportunity before you simply by being lighter on their feet. In addition, if the planning process affords everyone a voice and a vote, you will end up with a planning tome that looks like a college course catalog. That "something for everyone approach is the antithesis of what you need, a focused, compelling, priority-driven case for support.

So, the perfect combination for an organization that seeks to inspire larger amounts of philanthropy would be:

A compelling, well-articulated vision
A flexible plan with a small number of bold but attainable goals
A list of gifts needed at various amounts (almost like registering for a wedding)

The challenge with the last item, unlike a wedding registry, is to explain who will benefit from gifts at every level. For some organizations, that may range from $100 million or more down to a $1,000 or less. In many ways, making the case for the small-to-modest gift is more difficult than for the mega-gift. I have heard many prospective donors question whether a gift of $1,000 or even $100,000 will have a significant impact. If we are to secure their support, we need to show how even modest donations to designated funds can help our organizations achieve significant milestones. And, when those gifts are received, we must show those donors where the money landed and who benefited.

Indeed, the attention we pay to the modest investors and case we make for their gifts is proof we operate not only from a broad vision but a specific plan with concrete goals and focused objectives. It is proof we have thought through what we want to achieve and who we want to help, that we have a place and a use for every gift we might receive, now and in the years ahead.

And the need that every organization has for many small-to-modest, loyal investors should tell their leaders that vision is extremely important but never enough to get the job done or sustain philanthropic support.

Tuesday, August 26, 2008

The Need for Vision

Leaders who seek to inspire philanthropic support must have vision. Major donors, in particular, want to know:

"What does the President or Executive Director of this organization want to accomplish?"

"Does his or her vision respond to a larger societal need? Is it bold but attainable?"

"Can he or she show me where my support can make a measurable difference?"

If compelling answers can be provided to those questions, significant philanthropic support can be secured.

And, yet, many leaders I have worked for or advised have confided, "I don't really know what vision is." Winston Churchill did, at least when he saw it in David LLoyd George, the brilliant Welsh politician who, as Prime Minister, led Great Britain through World War I.

Churchill said Lloyd George had the "seeing eye." He went on to explain: "He had that deep original instinct which peers through the surface of words and things -- the vision which sees dimly but surely the other side of the brick wall or which follows the hunt two fields before the throng. Against this, learning, scholarship, eloquence, social influence, wealth, reputation, an ordered mind, plenty of pluck, counted for nothing."

But that sort of vision is the rarest of gifts. So, if the leader of your organization is not Lloyd George, how can you come up with a workable vision that will help philanthropists understand why your organization needs their support? You can do so by crafting succinct, compelling answers to the following questions:

"What unique or rare assets does your organization possess and how do they relate to something that society needs or wants?"

"How would you (the leader) describe the state of your organization when you inherited it and what you would like it to be when you step down from your post?"

"Who is currently being served by your organization? How would you like them to be better served? Who would you like to serve that you are currently not able to?"

"If you were given a $10 million unrestricted gift, how would you use it to the best benefit of your organization or institution? What if it were a $25 million gift? A $50 million gift? A $100 million gift?"

Listening to how leaders answer this last set of questions can be particularly telling. All too often the answer is a roll-up of small needs designed to placate internal stakeholders, needs without a unifying theme, without clearly defined beneficiaries or time-sensitive goals. It all adds up to a ponderous pile of pasty pudding that will have little appeal to anyone other than your purely tribal or blindly loyal supporters.

If you go to the effort of crafting thoughtful answers to these questions, can I guarantee that you will secure larger gifts? No, but if you don't go to the trouble, I can promise that you will all but eliminate your chances of securing more significant support.

If you're wondering if the singular vision of a leader is more important than a comprehensive strategic plan for the institution, or how one relates to the other, stay tuned. I'll cover that in my next post.

Wednesday, August 20, 2008

Building Community by Sharing Achievement

One of the best ways to build a sense of community around the causes we care about or represent is to share the achievements of one with the many who helped make them possible. Let me illustrate what I mean.

Let's say you work for an educational institution and one of your students wins a prestigious award. Rather than merely announcing that achievement, go to the student who has won it and ask him or her if there were others who helped contribute to their success. That student might cite a faculty member, adviser, member of the clergy, scout leader, parent, friend, sibling, or loved one. Take that list of names and ask the president of your institution to write a letter something like this:

"Dear Professor Smith,

Susan Jones, a former student of yours, has recently been selected to receive one of the most prized and prestigious awards for scholastic and athletic achievement, the Rhodes Scholarship. When asked who had helped her toward this remarkable achievement, she cited you.

Thank you for giving of yourself to make such a significant difference in the life of this talented and dedicated student. While we are very proud of Susan's singular achievements, we believe it is also important to celebrate her success with all those who helped make it possible.

Yours Truly,

Eminence Gris
Alma Mater University"

Imagine how you might feel if you were, say, an advanced placement high school English teacher who might be feeling somewhat unappreciated and underpaid when, out of the clear blue, a letter like this lands on your desk. Wouldn't you be deeply affected? Wouldn't you feel great gratitude toward Susan and the university president who took the time to write you (and, perhaps, copied your principal)? You might want to frame the letter and display it in a prominent place. You might find yourself thinking about the university that sent it in a far more appreciative way. You might be inclined to tell other promising young people that they should consider going there.

And, if you are at Alma Mater U, you may want to invite those cited by the student winners to the campus event where the award is formally announced. Over time, you may want to cross-reference the attribution lists of all student award winners to see if certain names come up over and over. If so, you may want to explore ways of singling out those influential mentors for awards that speak to the impact they have had on many students. You may want to put those mentors on your VIP invitation list so that they feel that they are valued members of your community.

Can you use this approach at other organizations? Well, what about a medical center? What if you asked doctors to nominate patients who had demonstrated remarkable bravery and fortitude on the path to recovery? You could then approach these current or former patients to let them know that your medical center would like to hold them up as an example to others who may be struggling to overcome disease or injury. You could ask these heroic patients to list those who had been particularly helpful on their road to recovery. They might list doctors, nurses, spouses, members of the clergy, loved ones or others. You could then have your CEO write a letter with the similar theme to the one above to the supporters of the heroic patients. You could stage wonderful events where both the patients and their inner circle of support were celebrated. In so doing, you could highlight the human side of your medical center and discover over time the "difference makers" within and without.

Can you see how this approach can make a significant difference? For the cost of a few letters you give something of great meaning and make people feel more a part of the larger purposes of your organization.

If we are an organization that seeks the benevolence of others, should we not manifest what we seek? Is it not true -- from an ethical or practical perspective -- that the more we give, the more we will receive?

Sunday, August 10, 2008

Keeping A Donor Close By

Those of us who work in philanthropy are fortunate. We can go about our jobs in the right way knowing that it will also be the most productive way. And the right way is with integrity.

Integrity is about being whole and consistent, about integrating word and deed. You can have integrity without being a moralizing goody-goody. You just have to be reasonably consistent -- from place to place to place, from person to person, and from your private self to your public self.

The practice of philanthropy must be done with integrity. It is a social compact. No compact can long endure if it is infected by duplicity or disingenuousness. Am I suggesting that there is a lack of integrity in some philanthropic practices? I am. Do I believe it is because a large number of practitioners lack character? Good lord no. Some do but many of us just get so focused on what we think will be productive that we forget we are working within a social compact that requires constant attention to, and consideration for, those whose support we seek. At our worst, we begin to think of a potential donor as an object of our fund-raising aspirations rather than a potential philanthropic partner. What do I mean by that? Well, imagine how different our field might be if there were always a donor beside us.

If there were a donor in the room with us while we were doing our planning, would we be as inclined to refer to other donors as "targets" or "prospects"? Oh, I know we mean no harm in using such words; they're only a form of shorthand that allows us to segment various audiences. But such words can sound harsh to the uninitiated ear, or to the ear of a philanthropist, and the use of them can pull us too far into our own world and too far away from those who are deserving of our appreciation and respect.

If a donor were in the room would we be more circumspect about what we put in research profiles and with whom we shared sensitive donor information? Would we take extra precautions about establishing strict "need to know" protocols?

If there were a donor next to us would we be more apt to pay more attention to the opinions and attitudes of those who might support us? Would we be more intent on conducting market research and focus groups to make sure that we don't fall out of touch and less inclined to focus only on improving the argumentation we use to build our case?

If there were a donor in the room would we be less inclined to describe stewardship as something we execute to set ourselves up for a another solicitation and more likely to think of it as an ethical obligation in and of itself?

If a donor were in the room during our professional conferences would we feel a bit more squeamish about hearing the philanthropic process reduced to a series of moves executed by a masterful fund raiser on a seemingly passive prospect or would we more more inclined to wonder what it feels like to be on the donor's side of the equation and ask what we can learn the philanthropist's experience?

Have I always practiced what I preached? No, but I have done my best work and provided my greatest leadership when I have taken nothing for granted and reminded myself that no one owes me or my organization anything, that I am most fortunate to work in a culture predisposed to philanthropy and to work with people who will even consider working with me to find a way to improve the lives of others.

Wednesday, August 6, 2008

The Ten Biggest Mistakes Made in Soliciting Gifts

1. Soliciting Too Soon
This is the big one. Every other mistake pales in comparison. Here are the cold, hard facts: the more abruptly we solicit, the less likely we are to receive a commitment. If we do receive a commitment from an abrupt ask, it is likely to be well below the donor's potential. The more time we take to elicit (see my blog post, "Elicit Before You Solicit") the prospective donors' passions, values and life's lessons, and the more thoughtfully we align the donors' aspirations with those of our institution, the more successful our solicitations will be. We must respect the time it takes a donor to make a major financial decision and commit ourselves to work within it.

2. Soliciting Under False Circumstances
It's what I call the ambush -- inviting the unsuspecting prospect to a seemingly benign meeting or event and then springing "an ask" on him or her. When this is done, the donor is not psychologically prepared to consider the request and will vow silently not to fall into a similar trap again. All philanthropic organizations suffer from the ham-handed approaches of the worse practitioners. I wish I could tell you how many times I hear this horror story from philanthropists. There is the completely blind ambush which occurs when a fund raiser asks for a commitment to a project, initiative or institution that the philanthropist knows next to nothing about, and the "sagebrush" or thinly-veiled ambush in which the donor is asked to come to one information or brainstorming session and then hit up.

3. High Pressure Solicitations
At its worst, this approach consists of something like getting an executive of an organization to solicit his employees or getting someone who has social or professional power to suggest that giving is a requirement if one wants to have any position in the organization or social group. A solicitation should be a respectful request with no suggestion of negative consequences should the prospect decline.

4. Failing to Ask for Something Specific
Don't just ask people to put money into some great big bucket like "financial aid" or "medical research," or, even worse, "our unrestricted fund." Ask for a specific project, something with concrete goals and time lines, something that defines who will benefit, how and when.

5. Pushing for a "Yes" Rather Than Avoiding a "No"
Sure, it's nice to get a "yes" but many solicitations reveal a donor's misunderstanding or need for more information or simply more time to consider. A skilled practitioner and a true agent of philanthropy will recognize these needs and accept the dialogue has gone as far as it can for that day and that a seed of a future partnership has been planted.

6. Assuming "No" Means "No"
If a prospect says "no," it is perfectly professional to find out why. Does the donor like the project but have too many other philanthropic commitments? Is there some way the project can be modified to make it more acceptable? I like to ask, "Are there circumstances under which you would consider support for this project?" This often surfaces previously unexpressed concerns or frustrations or pre-conditions that a donor would like to see met. Learn from the "no." Does it mean "never" or "not now" or "no because there's something about your institution I don't like."

7. Not Putting Out a Number
Yes, philanthropists need to know the overall project costs and exactly what you are asking them to give. If you leave it to philanthropists to guess, they will guess far less than what you had in mind. The number you put out suggests the significance of the project. If you haven't established that in advance, the solicitation will sound unreasonable.

8. A Failure of Confidence
If you've done your work; if you've come up with a truly credible, compelling project that aligns with the donor's philanthropic propensity and if you are asking for an amount that comports with donor's capacity, you have to look like you believe in yourself and your institution. You can undercut something worthwhile and well-designed by fawning or apologizing or looking sheepish or going into a full-body squirm. Remember, it's not about you; it's about the cause or institution you represent. If it were for my personal use, I'd have a hard time asking for a dollar. But if it is something I believe is good and necessary, I can hold the gaze of the toughest prospect.

9. Putting Out an Unreasonable Number
I can't tell you how many times I've heard, "You really can't ask for too much. If it's more than a donor can give, they will be complimented that you think they are capable of giving such a large amount." Yeah? For every one who is complimented in some weird way, there's another hundred who will think you've been noshing your way through the medicine cabinet.

10. Not Knowing When to Accept Less
Okay, if a donor offers less than what you asked for, should you accept it or find some graceful or clever way of restating your request? In the vast majority of the cases, I would advise that you accept the offer, put the money to the best possible use, steward the hell out of the relationship and then go back and say, "If you're happy with the results of x, imagine what could be if you gave y." But there are exceptions. If, for instance, you are looking to launch a very significant project, a new building let's say, you must start by finding a lead gift that represents a significant portion of the total tab, no less than one-fourth. The lead gift is a proof of concept and you shouldn't start accepting smaller gifts until someone commits to it. Let's say, you have identified your very best lead gift donor, someone who's made the most noise about the need for this new building. He has a passion for the project and the clear capacity but, when solicited, he offers something much lower. At that point, I wouldn't hesitate to say, "Beauregard, this project has your name all over it. You've chaired the cancer center board through a period of unprecedented success. No one else is more closely associated with it; no one has pushed harder for it. You deserve to have your name on it." Let's say Beauregard harrumphs at this point. I would then say, "You are the most logical choice. If not you, who? There's no one on our prospect list that lines up with this project like you. It's not even close. You've demonstrated leadership at every step along the way and we respectfully request that you exert it again, now when it is most needed." If Beauregard sticks to his guns and repeats his earlier offer, I'd come back with, "Well, Beau, we appreciate it very much. It's very generous under any circumstance but this project isn't viable until we get a lead gift. We can't get there with smaller gifts. If we find the lead gift elsewhere -- and I don't know where that will be -- we'll take you up on it. But, for now, we need to focus our energy on getting this project off the ground." And, yes, I've been in a similar situation, one that resulted in the desired lead gift -- after nine meetings with the one and only viable lead gift prospect.

Saturday, August 2, 2008

How Many Prospects Do We Need?

One of the old saws in the fund raising world is that we have to solicit three prospects to net one donor. The three-to-one rule has been invoked so often that it is now conveyed with scriptural certainty. We base our budgets, staff size, workloads, portfolio assignments and determinations of success on it. But, to quote a Gershwin song, "it ain't necessarily so." In fact, blindly buying into the three-to-one rule makes our work much more of a slog than it should be.

There are any number of steps we can take to ensure a higher rate of success and make our jobs more rewarding, and philanthropy can be of field of immense psychic rewards. The best place to start is to think carefully about the way we assemble our prospect lists. In too many cases our prospect lists are nothing more than an enumeration of the obviously rich -- whether we know them or not and whether we know how to get an appointment with them or not. I wonder, for instance, if there is any philanthropic organization anywhere, large or small, that doesn't have Bill Gates or his foundation on it?

Rather than pine for or speculate wistfully about the rich-but-remote, we should spend much more time thinking about the philanthropic propensities of our donors. Indeed, there is no better way to turn a prospect list from a pipe dream to eminently workable plan than to do a "propensity scrub." Here's a simple way to do that.

Take your current prospect list and break it into five tiers. Assign five points to the wealthiest of your prospects, four points to the next wealthiest, etc. That will be your capacity rating. Then take that same tiered list and assign a propensity ranking to those same prospects. Give five points to donors who have given consistently to your organization (and presumably have the capacity to give more) and are, or have been, deeply involved in it. Give four points to those who have given once to your organization and somewhat involved but have recently demonstrated a strong interest or deep involvement in one of your current projects. Assign three points to those who have given significantly elsewhere but to an initiative the aligns with one of your institutional strengths or initiatives (e.g. the donor has given to other musical arts organizations in town and you're opening up a new concert hall). Allocate two points to donors who have given elsewhere to something that is somewhat similar to one of your institutional strengths or philanthropic objectives (e.g. the donor who has given to medicine but not to the disease group that your new research center will be tackling). Give one point to those who have given anywhere, any time. Give a zero to anyone on your list, no matter how wealthy, who has no history of philanthropy. That's your propensity rating. Then add the capacity ranking to the propensity ranking and rearrange your list according to the combined scores. Under that system, a prospect may be given a five for financial capacity and a zero for philanthropic propensity for a total score of five. That donor is ranked well below the one who was given a three for financial capacity and a four for philanthropic propensity for a combined score of seven. Those with the highest combined scores are most worthy of our time and attention. Even this simple method will make a significant difference but there are even more sophisticated methods for determining propensity.

With this combined list, the next steps become more logical, efficient and rewarding. Once we have an inclination of a donor's specific propensity (e.g. a long record of supporting certain kinds of causes), we can align our strategies and approaches with that inclination. If we know only of a donor's broad propensity (i.e. that he or she has been philanthropic), we can design our initial approaches to determine if there is a specific propensity that maps against one of our organization's strengths). We don't "cultivate" these donors in an ill-defined way; we interview them to determine degrees of alignment. We're not selling right from the outset, we're listening.

Once strong alignment between donor and institutional purposes has been found, or is brokered through numerous interactions, we can begin to think in earnest about the solicitation. And I can assure you that if this kind of approach is taken, if we determine propensity from the outset and take the time to align the interests of our donors with our organizations mission, the majority of our solicitations will be successful. That's right. That's what I said. The majority.

If we only go in pursuit of the obviously rich and ambush them at the first opportunity with a solicitation, assuming we can even be in a position to lay an ambush, we'll need at least three prospects for every successful solicitation.

The former is not only more efficient; is is far more rewarding for philanthropist and fund raiser. And we need more such mutually rewarding relationships to make sure that the philanthropic revolution is achieving the greatest possible social good.

Wednesday, July 30, 2008

The Best Way to Raise More Money

Okay, what's the real secret to raising more money? What's the single most important step we can take to bring in ever larger amounts? Let's explore some of the options.

1. Be more aggressive in fund raising. Well, that advice is often given, sometimes by our bosses or our boards. Those who advocate such an approach want you to be aggressive with everyone but them. And what sort of donors would respond to such tactics? What would be the long-term consequences of pushing people too hard? It might work with some; it might work for a while but it isn't the answer.

2. Expand the size of your fund-raising staff. Sure, the larger the staff, the more prospective donors you will be able to reach. But, it's also a matter of how reach them and with what purpose.

3. Increase the salaries of fund raisers. Yes, higher compensation packages will help increase the quality of your staff but the most effective fund-raising organizations don't always have the most expensive payrolls.

4. Establish rigorous performance standards for your fund raisers. Creating a culture of performance is important. Establish metrics. Monitor performance. Create portfolios and put the staff on the road. But do you really think that a tightly managed staff will be more effective than advocates who are inspired by the cause they represent?

5. Sharpen your message. You bet. That's important. Crystallize. Clarify. Be more creative in both the crafting of your message and the channels of communication you employ. But the most effective communication strategy can't hide a lack of content or a sameness of content.

6. Develop a strategic plan. Great idea. Think through your institution's unique capabilities and how they relate to emerging opportunities and changing circumstances. Anticipate, adjust, adapt and catch the next wave before others see it forming. We're getting warmer.

7. Hire a charismatic leader. Oh man, can't you just see it? A stem-winding visionary with the ability to stir souls and mobilize the masses! That's got to be it, right? Well, it will give you a huge advantage but charisma can create runaway expectations and must be backed by performance.

8. All of the above. It was a trick question, right? It's not one thing but lots of things. Yes, fund-raising success is attributable to many of the aforementioned factors but, no, it wasn't a trick question.

9. Ask how your organization might better serve its constituents. Begin by resolving to make a difference. Especially where your organization can make a substantial difference and where a difference needs to me made. You don't raise money by first resolving to raise more money but by first resolving to achieve a greater good, and committing your entire organization to getting it done. Start by asking who might be better served as a result of your initiative. Define the scope of the project, the specific goals to be achieved, and the timetable for completion. Those are the elements of a powerful case for support. Does not this first step give coherence to all the other options we have discussed? Can you think of anything more important?

Monday, July 28, 2008

Why We Give

"The raising of extraordinarily large sums of money, given voluntarily and freely by millions of our fellow Americans, is a unique American tradition," said John F. Kennedy. The facts support his claim. But why is this so?

The answers can be found in our early history. First of all, we were blessed with the abundance of nature. By the mid-eighteenth century, the average American colonist enjoyed the highest standard of living in the western world. As David McCullough notes in his wonderful book, "1776," British soldiers deployed to the colonies were astonished to find fields bursting with crops, woods rustling with wildlife, orchards teeming with fruit and rivers and lakes with a profusion of fish. They were also more than a little irked that such a fortunate people could be so ungrateful to king and country. Yet, American colonists were grateful, deeply so, but not to their king. The object of their gratitude was God.

They directly related their material abundance to God's grace. Wealth was a proof of godliness (the very opposite of what many other cultures would assume). Is it any wonder, then, that Americans, even today, are open even boastful about their prosperity or why we, perhaps more than any other society, so closely equate success with financial attainment? But how much credit and glory could we take unto ourselves if it was God-given? Why had God shed his grace on us? What was expected of us in return? Somewhere out of these reflections, we evolved a societal expectation of "giving back." It's an interesting phrase and concept because we don't really give back to God; we can only extend the example by giving to others.

This early sense of obligation dovetailed with another evolving social construct, one that was firmly in place well before the framers of the Constitution articulated it as "we the people." New people in a new land learned to rely on each other to raise barns, harvest crops, build schools, put out fires and provide for the common defense. If we wanted civic improvements or a better way of life in our communities, we had no one to look to but "we the people." It was not only an assertion of democratic ideals but an acceptance of a practical reality. If not us, who? If not now, when? When de Tocqueville arrived in the early 19th century, he marveled at our ability to affiliate and associate in pursuit of community improvements or a greater social good. By then, the culture of "we the people" was set. This, then, is the ABC triangle of American philanthropy (A=abundance, B=belief, C=compact).

By the end of the 18th century, we see Americans not just passing their estates to heirs but leaving bequests to benefit strangers. The impulse of aristocracies has been, and will always be, to keep wealth within to perpetuate the power of the family. In America, a new impulse emerged to give to those outside of our families to expand opportunity and thereby revitalize and extend the franchise of democracy. The American Philanthropic Revolution was well underway.

This is the power of culture. Certainly not all philanthropists today give for the same reasons as our ancestors. They may not even be aware of the roots of American philanthropy, but they are a part of culture that frequently espouses, and sets a magnificent example for, "giving back." Our ancestors shape our behavior whether we realize it or not.

In subsequent posts, we will discuss how to keep this revolution alive, as philanthropists and philanthropic organizations. We cannot afford to take this cultural phenomenon for granted or take selfish advantage of an underlying good that has made it possible to achieve so much for so many for so long.

Tuesday, July 22, 2008

The Moral of the Ben Franklin Story

"I wish to be useful even after my death, if possible," Ben Franklin wrote in his will, executed in 1790. Was he ever.

This early American giant -- statesman, inventor, scientist, philosopher -- was also among our earliest philanthropists. The 4,000 pounds sterling that he bequeathed to us is now worth millions. That enormous endowment growth was no happy accident; Franklin knew it would happen and planned for it. That's right; Franklin had a three hundred year vision.

While half of his bequest was set aside to make Pennsylvania's Schuylkill River navigable, Franklin directed that the remaining 2,000 be split between the cities of Boston and Philadelphia to be used for low-interest loans to young tradesmen -- for the first 100 years. Knowing that the endowment would grow over time and that society would change, Franklin stipulated that in the second 100 years, one-quarter should be used for loans while the rest could be used for public works in each city. That money was instrumental in the creation of the Franklin Institute in Philadelphia and the Franklin Institute of Boston, a technical school now known as the Benjamin Franklin Institute of Technology.

After two hundred years, Franklin wrote, the money was then to be divided again so that Boston and Philadelphia could keep one quarter of the total . The rest would go to their respective states and all restrictions on the use of the money would be lifted. Massachusetts continues to use the money to support the Franklin Institute of Technology. Pennsylvania, in 1990, divided their share between the Franklin Institute and the Community Foundations for Pennsylvania. The boards of those Foundations designated the money for uses that they knew Franklin cared about including firefighting and for scholarships.

Even in 1790, Franklin was only one of many Americans establishing bequests but there was no parallel or precedent for that kind of activity elsewhere or in world history. Many of those endowments were far larger than Franklin's but none that we know of were as well-structured to take advantage of changing circumstances over time.

Ben Franklin would be deeply disappointed if we didn't draw a moral from his story. In fact, there are several.

For philanthropists:

Imagine the impact you can have over time with even a modest bequest.

Bequeath your money so that it extends the meaning of your life (Franklin knew what it was like to struggle as a young tradesman) but don't put so many restrictions on the endowment that you lessen its impact. Think about reducing or changing restrictions over time.

Express your values in the creation of your bequests so that decision-makers of the future will have a clear sense of "donor intent."

For philanthropic organizations:

Tell this and other stories of enlightened bequests so your donors can grasp the power of a well-designed endowment.

Help donors write, even briefly, their own autobiography and encourage them to look for the themes and lessons that can be shared with others through philanthropy. Though Franklin never finished his autobiography, the lessons of his life comfort and inspire us today.

James Michael Langley