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.

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.

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.

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.

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.