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

Saturday, July 19, 2008

Elicit Before You Solicit

If I had to sum up thirty years of philanthropic experience in a few short sentences, one of them would be, "The more you elicit from donors, the more successful your solicitations will be."

Elicit, of course means to draw out or bring forth. And what we are trying to draw out of our donors, well before we solicit their support, is their passions. What do they care most deeply about? What issues or current events affect them most deeply? Where do they think the human condition is in the greatest need of attention? Where do they volunteer? Why?

Our first or early calls on would-be donors should focus on eliciting their passions. Here are some questions that could be helpful:

What were the building blocks of your success?

Who or what made a difference in shaping your talents and virtues?

What are the most important lessons of your life?

What gives you most hope? What troubles you most?

What are the most important lessons or values we should pass on to the next generations?

What will the future demand of us? What adjustments will we need to make?

Who is making the most positive contributions to society?

Who or what organizations do you admire?

What has been your most rewarding civic, volunteer, or philanthropic experience?

Do you have a philanthropic plan?

If we ask the right questions and listen patiently and sincerely, we can then see if it is genuinely possible to align the passions of those we seek out with the purposes and aspirations of the institutions we represent. If we can help others understand the meaning of their lives, we can show them how to extend that meaning to others through philanthropy. We can show them that we are not just asking them to give to our organizations but through them to create a better world.

James Michael Langley

Tuesday, July 15, 2008

Charity vs. Philanthropy

Did you know that donors make a distinction between giving to charity and giving to philanthropic organization? They give generously to charities -- organizations that they see providing aid or relief or responding to urgent needs -- but they give more generously to philanthropic organizations. Let's explore this distinction in more depth.

Charity, to paraphrase an old saw, gives a person a fish; philanthropy teaches that person how to fish.

Charity saves and salves; philanthropy pursues solutions.

Charity pleads for contributions now; philanthropy makes a case for long-term investment (including in perpetuity through the creation of an endowment).

Charity reacts; philanthropy points to a better future.

Charity seeks gifts; philanthropy builds a community of sustained interest and support.

Is the distinction between the two always this sharp? No, I only make it so because too many would-be philanthropic organizations raise money like charities and thereby undercut their potential. A charity can't always afford to raise money like a philanthropy and vice versa. But there is no doubt that the greatest gifts, in general, go philanthropic organizations with a clear long-term vision, a motivating mission, and well-articulated projects that allow donors to see exactly how they can advance that particular cause.

We need both. We need charities, for instance, to provide disaster relief but we also need philanthropies to anticipate disasters and to find ways to lessen their impact. We need charities to alleviate suffering but we also need philanthropies to find ways of keeping more people safe and healthy in the first place.

In subsequent posts, we will delve more deeply into what motivates people to give most generously so we can help philanthropists give in more meaningful ways and help fund-raising organizations better align their purposes with the generous donors who are inclined to support them. I look forward to continuing our dialogue.

Sunday, July 13, 2008

The Langley Angle on Philanthropy

We live amid a revolution, one for which there is no parallel or no precedent in human history. It is not a revolution that produces social upheaval and human suffering. It is the antithesis and the potential solution to such revolutions. It it a revolution that has led to the voluntary transfer of wealth on a scale that no violent revolution could ever achieve. It is the American Philanthropic Revolution.

In the past year, Americans donated more that $300 billion to various charities. That's right -- more than $300 billion in a single year. And we have been giving on that scale (as measured as a percentage of the gross domestic product) for more than a hundred years. Even during difficult economic times, such as the Great Depression, Americans have given suprisingly generous amounts to churchs, schools, hospitals and other worthy organizations.

Why Americans give, what they hope to achieve and how we can better nuture this remarkable instinct will be covered in future blogs. This information will be provided for those considering giving money and those raising money, and all those interested in this most important social dynamic.

We must better understand this revolution so that we can ensure its perpetuation. It must be something that we never take for granted. That noble instincts from which it rises are not guaranteed; they must be recognized, appreciated and nurtured. Warren Buffett, "The Sage of Omaha," has said that capitalism "doesn't work" without philanthropy because it does not provide for the poor or those incapable of competing at the highest levels. Sage advice, indeed. A strong philanthropic culture serves as a counterweight to capitalism. Capitalism can create winners and losers, it can widen the disparity between "haves" and "have nots" but through philanthropy, capitalists can remediate social ills and widen the circle of opportunity. Philanthropy allows us to transfer wealth to causes or purposes that we deem most appropriate or most deserving. Philanthropy is an expression of "We the people." It is how we build a great system and how we can make it even better. It is democratic and therefore sustains democracy itself.

There is so much to be discussed. I look forward to sharing my thoughts with you and to hearing yours.