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.

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.

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.

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.

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.

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.