Saturday, August 28, 2010

If You Were a Philanthropist

Imagine, having achieved a degree of financial comfort, that you resolve to help others. After reflecting on what made a difference in your life, you decide to help young adults in your area launch their careers. You seek the counsel of wise and trustworthy advisors and, from their recommendations, put together a list of talented, motivated young people who are in need of support. After interviewing some wonderful candidates, you make the wrenching decision to provide significant support to two of them, rather than modest support to several of them.

Seth and Sarah, the two you have chosen, say the best way you can help them is to buy them a car. They make a similar case: a car will give them access to people and places that they would not otherwise have, allow them to focus the majority of their time on building their careers and, yes, make a positive impression as a young rising professional. You write a generous check to both of them in the same amount and tell them that they are free to buy whatever car they choose or, indeed, to use the money any way they would like. Seth spends every cent on a luxury car while Sarah buys a nice but practical vehicle, spending less than the full amount that you have given her.

Seth, whose career gets off to a roaring start, tells you that the quality of the car made all the difference. Like it or not, he says, you have to look a certain way for others to believe in you and his luxury car has allowed him to create the appearance of success which, in turn, proved invaluable in attracting a small number of very high end clients. Sarah tells you about where her car has taken her in developing a solid business base and begins to imagine where it might take her in the future. You are pleased with progress both are making, albeit in different ways, and make it clear that you are willing to consider additional support.

Seth says he needs additional support to keep his luxury car finely tuned, to keep up with the expensive repairs, to add a GPS system, and pay for the rising cost of fuel. Sarah says she could use money to extend her service area and shares with you her research which shows which new markets are within her reach. You provide additional support to both, giving more to Seth because his business has achieved such prominence in such a short time while recognizing that Sarah’s plan is sensible and full of promise.

This pattern persists for some time. Each time you consider a new investment, Seth always makes a case for the state of the vehicle and the rising cost of fuel while Sarah seeks additional investment to extend services to more and more clients. After awhile, you find yourself reassessing your priorities. As impressed as you have been with Seth, you find yourself growing frustrated with his endless insistence that more and more is needed to keep the increasingly expensive vehicle in optimal running condition and to keep up appearances lest he fall out of a select social group. Sarah, meanwhile, has treated her car as means of reaching more clients, not an end unto itself.

Then misfortune falls. The stock market collapses and your net worth is cut in half. You are determined to continue to help others, but at half your previous level you. And you apply the same principle as before; it is better to provide significant support to one rather than modest support to both. Seth doesn’t change his argument. Sarah says she’s trading in car to buy a smaller, more fuel-efficient one that will allow her to spend more of the capital available on delivering a higher level of service to her clients. Which one do you choose to support?

When I review the cases of support from various schools and non profits, I see too many Seths and too few Sarahs, too many asking for support to keep the enterprise in fine fettle, or so that it can remain competitive with peers, or just to keep it running as it always has, and too few explaining exactly where they are going and how they propose use private dollars to make difference in the lives of those they serve. I see too many asking for support on the basis of increased costs and too few detailing how they have cut costs to ensure that new philanthropic dollars add value to delivery of service to those most in need or those who stand the benefit the most.

Times have changed. New realities have been visited upon us. Philanthropy-seeking organizations will have to adjust. In making their case for support, they would be wise to put themselves in the philanthropists’ position and ask what they would do if they had to make had to decide between Seth and Sarah.

P.S. My thoughts on reviving lagging campaigns are featured in the latest Academic Impressions newsletter, at:

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Saturday, August 21, 2010

A New Kind of Feasibility Study

We need a new kind of feasibility study, one that samples a wider range of opinions than the usual major prospects, board members and institutional insiders, one that is conducted every few years, not just in advance of a campaign.

The new feasibility will allow institutions to see how they are tracking with their key constituents, and where their purposes are converging or diverging. It will be conducted largely on-line or over the phone and will sample the opinions of various stakeholders across the demographic spectrum. It will not only test whether constituents understand the institution’s mission and whether they believe it to be sufficiently focused and pursued with all due discipline, but the viability of specific aspirations and strategies -- before a major fund-raising initiative is introduced.

Let me give an example. When I was arrived at Georgetown, I committed myself to gaining a deep understanding of that culture, including the deeply-held beliefs and concerns of its alumni. We began sampling alumni opinion and learned that over 90 percent of its alumni, across all age groups, believed they received an excellent or very good education. Great. Over 80 percent said their alma mater had a “profound impact” on their lives. Fabulous. But only 17 percent were giving. Huh? Why the disparity between gratitude and giving? We then began testing the alumni’s receptivity to fund raising appeals and learned that 50 percent of the current donors didn’t really believe the institution needed the money. They pointed to the success of a recent campaign, a building boom on campus, and the hefty cost of tuition as proof that the University was more than adequately funded. And, they said, it wasn’t really clear what the University needed. The annual fund had become what one colleague called a “dog’s breakfast” of options, asking for so many “small” things that it appeared it didn’t really have any major needs.

We then tested the receptivity of the alumni to various funding categories -- faculty support, financial aid, programmatic initiatives, and capital projects. There was a general and genuine interest in all of them but when we asked which they would choose if they had to pick one, the vast majority said financial aid. That told us a lot about how to weight the priorities of the upcoming campaign. But it also told us we had our work cut out for ourselves. Although alumni believed that “need blind” admission, the policy of admitting students on merit alone, then committing to meeting their financial need, was something the University should be doing, but only 17 percent believed that policy was being actively pursued. It was an astonishing finding. The University had been committed to the policy since 1978 and had increased its financial commitment to it year after year, until it represented a very significant portion of its annual operating budget. The trouble was that the alumni, in the absence of specific communication about the extent of that commitment, and with what appeared to be contrary evidence -- healthy tuition income and, correspondingly, a larger number of wealthy students -- had formed an entirely different perception. A sizable gap had grown between the actual practices of the University an the perception of those who might support it. For the alumni of a Jesuit university, it was a moral issue. Until we could convince them that the University was not only committed to need blind admission but needed their financial support to respond to the growing demand, we realized, our fund-raising efforts would fall short.

That’s why we need a different kind of feasibility study. Too many institutions are flying blind. They’re asking money for this and that without knowing whether their prospects understand or believe in their mission, think they really need the money, or harbor a concern about the way the institution is going about its business. Without an understanding of these factual or perceptual gaps, institutions are wasting an enormous amount of time and money. They do not know the real reasons why calls go unanswered, or why solicitations prove unsuccessful.

Yet, with a broader-based sampling of constituent opinion, specific content and policy gaps for specific groups of prospects can be clearly seen which then allows for the creation of highly targeted strategies that work to systematically close those gaps, either through changes in institutional policy or precision-tuned communications. Institutions cannot raise more money by asserting they need more but by first making sure their goals harmonize with their potential supporters. When we achieve mutuality of purpose and common cause, we lay the foundations for sustained fund-raising success.

Saturday, August 14, 2010

My 100th Post

Gratitude, I believe, is the key to personal and professional success. It is achieved by reflecting on what we have and by realizing that none of it is owed to us. That which is not owed, is given. And what was given yesterday or today is not promised tomorrow. Tomorrow is constructed by making the most of our gifts today with what we inherited from yesterday.

Nature’s abundance, as well as the opportunity to freely express their faith and their opinions, and to seek and enjoy the fruits of their own labor, left many early Americans with a profound sense of gratitude. Realizing they had been given much, they resolved to build a better tomorrow by extending the franchise of freedom and opportunity to ever more members of the human family. This spirit defined our culture from its inception and continues to animate it today. The level of voluntary wealth transference is has produced is unparalleled in human history. I call it the American Philanthropic Revolution.

On July 13, 2008 I began writing this blog to remind us that we are not owed this revolution, that it will persist only as long as we remain grateful for it and commit ourselves to building better tomorrows from it. I wrote to suggest ways that we could replenish our remarkably rich philanthropic soil and to warn against tactics and techniques that were taking from it by taking it for granted. Too many non profits, I argued, were taking this revolution for granted by concluding all they need do is lay claim to some virtue and ask, ask, ask -- even without an imaginative vision, a compelling set of objectives, a commitment to contain ancillary costs, or a deep sense of accountability to their contributors. I saw too much of fund raising training and practice focusing on the “the ask,” and too little on “the give” as envisioned through the wants and hopes of donors. I saw too many non profits wandering about in pursuit of the mythic “low hanging fruit” and too few committing themselves to the long-term growth of orchards of support. I saw institutions expecting too much of donors and too little of themselves.

I shared my blog with a small group of friends, long-term colleagues and family members and received great encouragement from them. I asked a young company called Academic Impressions to allow me to design and present a series or workshops built around my philosophy of philanthropy, which they graciously consented to. When I made my case to fund raising professionals at their conferences, they responded with enthusiasm and asked for more. So I referred them to my blog and the number of readers grew. They, in turn, began sharing my blog posts with others, and I began hearing from conscientious professionals that I had never met. When I began to doubt the utility of writing this blog, some of my readers seemed to intuit my misgivings and wrote to tell me of its importance to them and to encourage me on.

So on the occasion of my 100th blog post, I write to thank my loyal readers and to let new readers what this blog is about. I will continue to write because of you and, indeed, because we all have more to do. We need to encourage and support best practice, to remind young and new members to the field, that our finest professionals see themselves as agents of philanthropy, not just representatives of a single institution. As such, they understand that philanthropy is a compact between their organization and those that support it to get something of mutual interest done. They know that the relationship between their organization and its donors, like all successful relationships must be based on mutual respect, regard and tactful candor, that even a whiff of institutional entitlement can create an atmosphere of donor exploitation, and that institutions must, in word and deed, always call upon the “angels of their better nature” if they are to attract the most conscientious professionals and the most constructive philanthropists.

Those are our purposes. Please write me at to let me how I can continue to make this blog meaningful to you for the next 100 posts.

Sunday, August 8, 2010

A Philanthropic Forecast

Penelope Burk has released “The Cygnus Donor Survey, Where Philanthropy is Headed in 2010.” As is the case with everything Penelope produces, this report is full of interesting and useful information.

For instance, the report sheds light on an intriguing correlation between age and the number of non profits one supports. “The percentage of donors over 65 who supported sixteen charities or more in 2009 is double that of donors between 35 and 64 years of age and forty times that of respondents under the age of 35.” the survey says “Young and middle‐aged donors confirmed their growing preference for supporting fewer causes, which should be noted by not‐for‐profits that rely on volume of donors rather than on gift value for their profitability.”

Other donor trends noted by Burk include: “a preference for giving to charities that provide donors with measurable results (69%); eliminating or reducing support to not‐for‐ profits that over‐solicit (67%); a greater tendency to take cost‐per‐dollar raised into account when making giving decisions (65%); shifting more support to charities working locally (43%); and supporting fewer causes (41%). Additionally, 59% of respondents said they now do more research prior to supporting a charity for the first time, which speaks to donors' growing independence in managing their philanthropy.” These trends, corroborated by other survey, make it clear that philanthropy-seeking organizations will have to work on what I call the the C’s -- Cost containment, a compelling Case, and being more closely Connected to the concerns of their key constituents.

In terms of future giving, the Cygnus survey says donors will hold the line in 2010, “with the majority reporting that they will support the same number of charities with gifts of the same value as they gave in 2009. Only 8% of typical donors plan to give less in 2010, which compares favorably with 17.5% who responded this way in last year's survey.” Again, this comports with other analyses I’ve seen and seems to suggest that the recent survey done by CASE, in which respondents projected increases of four to five percent over last year, is overly optimistic. I hope my assessment of those numbers is wrong but, so far, I haven’t seen any evidence of a that suggest a turnaround.

“On the flip side,” the Cygnus survey says, “charities who have seen their donor numbers and fundraising revenue drop during the recession will not likely see those numbers bounce back immediately. Among select donors, 11% intend to give less in 2010, and among the top 10% of select donors (by 2009 total gift value), the percentage rises to 17%. Even a small downturn in giving among these very generous donors can have a substantial impact on overall fundraising performance.”

The report does offer an encouraging word by noting, “An opportunity to build support exists across the respondent group but especially among donors under the age of 35, with 39% indicating that they plan to give more in 2010. They referenced healthy household incomes, were less likely to be supporting children or aging parents, and were more optimistic about the future. When asked, "Could you be inspired to give more generously than you had planned this year?", 81% of younger donors said yes vs 71% for older donors.” In addition, the report stresses that young donors’ lower gift values are not indicative of their “real current and future potential.” That potential is not being realized “due to fundraising design which is more passive (waits for donors to give at above‐average levels before offering meaningful stewardship), than active (offers meaningful stewardship first in order to inspire more generous giving).”

Remarkably, “72% of respondents in the Cygnus Donor Survey said they could be inspired to give more generously this year. When asked how this could be achieved, the response most often given by donors over the age of 35 was "Do not ask me to give so frequently". Donors under 35 said, "Explain what you intend to do with the money when asking me to give". For years, even well before the current economic contraction, Burk’s research has demonstrated the adverse impact of asking donors too often. The findings are consistent and convincing, yet too many continue to ask, ask, ask with too little explanation of how the money will be used.

“The predominant themes that emerged from unsolicited comments are,” Burk says, unfortunately, negative in nature. They are concerned with unwanted token gifts (premiums) that donors receive either after they give or as incentives to contribute, lack of results or specific information on how donations have been applied or will be used, and over‐solicitation. Despite their concerns, however, donors remain firmly committed to philanthropy, even while continuing to contend with a struggling economy.”

Some of the unsolicited comments she cites, presumably because they are representative, include:

“I do see that the nonprofits I support are offering more information to donors relating to accountability and transparency. This is a good direction. Though best practices in the sector are nascent, they are emerging. Relevance and effectiveness are high on my list of things for which I seek accountability from the organizations I support financially.”

“People need a reason to give. Saying, "Give me money and I will do good things", is not enough. People need to know where their money is going and how it will help.”

“I volunteer (for Women International) and donate to them as well. The fact that they have an outlet for me to volunteer makes me feel closer to the organization, and thus more likely to continue giving long‐ term.”

There you go. Donors continue to show us the way. We need only to listen and respond. It really is that simple.