DevelopmentTypes of Giving

Shane D. Hudson

Where Does The $ Come From?• Individual

– Gifts– Bequests– Events

• Corporate– Grants/Gifts– Sponsorships

• Foundation• Government

– Local– State– National

Individuals

People Give With Their Hearts And Then Justify Their Gift With Facts

Individuals• Gifts Are Simple to Obtain

– No rigorous screening process– No political structure– No lengthily proposals

• Over 80% of All Gifts

• Relationships are Key

Why Do People Give?

• People Get Joy From Giving– Giving gives pleasure and satisfaction to the

donor.

Why Do People Give?• People Give Because They Want To

– Giving is not an unwanted burden– Think of your own giving – how does it make

you feel?

Thoughts on Individual Giving

• People Give To Save Or Change Lives

• People Don’t Give Unless They Are Asked

• People Give to Success Not Distress

• People Give Out Of Emotion And Justify It With Facts

• People Give Money To People– Person to person relationships underlie

philanthropy

Funding Options• Gifts or Opportunities?

– An investment in the future– Menu approach

• Operating funds• Scholarships• Endowment • Special Programs• Deferred Gifts

Individual Giving

• Each Donor is a Campaign

• Research and Segmentation

• What’s The Best Vehicle

• Personalized Communication, Recognition, Stewardship

Types of Communications

• Telephone Solicitations

• Direct Mail

• E-Fundraising

• Special Events

• Press

• Advertising

It’s Simple

• Identify

• Cultivate

• Ask

• Follow-up

• Thank

• Repeat

IDENTIFY

Research

• Subscribers, current donors and loyal single ticket buyers

• Other less active supporters

• Where else are they giving?

• What organizations are they members of?              

Identifying Prospects

• Your most likely donor is someone who has already given in the past. – They have already invested in you– Go to them first– Work for a deeper relationship

Identifying Prospects

• Moves Management– Find committed donors and move then into

larger gifts– Are they giving what they can afford– Repeat donors can mean big money– Once a donor is on board do everything you

can to keep them

Identifying Prospects

• Get to know your current donors– They arts ATM’s, they are people

Identifying Prospects

• Never make a cold call– Chances of success are much greater if you

have someone open the door for you

Identifying Prospects

• 95% of the money comes from 2-3% of your donors– Always narrow your focus to a few prospects

with deep pockets– Develop relationships– Don’t spread yourself too thin by chasing

every opportunity • Can’t manage follow-up

Identifying Prospects

• Most people who give to charities give to 5-15 different organizations– Active donors give to 25-35 organizations– 7 out of 10 Americans donate– Givers hang out with givers

Identifying Prospects

• Women drive the gift– Much like ticket buying– Majority of our nation’s capital held by women

CULTIVATE

Cultivate

• Fundraising is about relationships– Take the long term approach– The closer the relationship the more likely

(and larger) the gift– Take a long term approach– Get to know your donors

Cultivate

• Create a specific plan for each prospective donor– Goal to engage and involve the donor– Something that person is specifically

interested in– People want to be connected to something

meaningful in their lives

Cultivate

• Stay in front of your prospects– Direct correlation between the number of

contacts and the amount of the gift• Handwritten Notes• Personal Calls• Advisory Committees• Volunteer Projects• Bring Them to an Event

Cultivate

• Ask questions– Learn about the donor– What motivates them to give

Cultivate

• Make “advice and counsel” calls– Ask advice– Be sociable– Have fun– Develop a friendly relationship before you ask

Cultivate

• Turn prospects into volunteers– Get them involved– Ask them to participate– Create ownership

Cultivate

• Plan your visits– Always go to the door knowing what your

objectives are– What do you hope to accomplish– What is success– What are you asking

Cultivate

• Follow-through– Fundraising depends on it– Getting the door open is just the first step– Build credibility with an immediate follow-up

ASK & FOLLOW-UP

Just Ask!

• Be Passionate

• Listen

Just Ask!

• Discuss Common Ground– People give to people with causes, not just

causes– Enthusiasm for the cause will take you a long

way– Find connections

Just Ask!

• Listen your way to a major gift– Remember to be quiet and listen– Focus on the person behind the gift– Focus on how the donor can change the

world

Just Ask!

• Reconnaissance is vital– Research your potential donor– You need to have

• The right people • Involved in the right solicitation• At the right time• For the right amount• For the right purpose• At the right time and place

Just Ask!

• Person to person– Never rely on the proposal to sell for you– Cut the deal in person– Proposal is just an after-the-fact formality

Just Ask!

• Peers to peer– Peers should solicit peers– Volunteers can carry more credibility than

staff

Just Ask!

• Say: Would you consider a gift in the range of ________ for _________.

– Always ask for a specific amount• Based on the donor’s values and motivation

Just Ask!

• People give when they are ready– Not because they are strong armed or

manipulated– Ask, but be ready to ask again

THANK YOU!

Then Say “Thank You”

• Donors are generally dissatisfied with the “thank you” communication they receive from organizations. – Make it personal– Show the significance of the gift– First gift is rarely the largest

• Make the first giving experience a joy

Thank You!

• Donors don’t want recognition as much as they want information– Show the money at work– What are they accomplishing by giving– What impact are they making

Thank You!

• Donors want– Prompt personal acknowledgement

• Within two weeks

– Confirmation that you are going to use the gift as intended

– Make your communication passionate– Reflect your mission and your excitement– Find additional ways to say “thanks”

Biggest Loss Occurs Between First Gift and “Renewal”

First year donor retention is 29.3% !!!

Why?

• Focusing on Strategy and Tactics Rather Than…

• The Donor• The Causes The Donor Cares About• The Way The Donor Is Being Treated

What Donors Want

• Prompt, Personalized Acknowledgement

• Confirmation That Gift Was Used As Intended

• Before The Next Ask – Measurable Results Showing Impact

Acknowledgement, Confirmation, Impact

• 9 in 10 Donors Would Give Again If Asked

• 6 in 10 Would Give More

• 3 in 4 Would Keep Giving Indefinitely

What Donors Don’t Want

• Generalized reports on results

• Prompt but impersonal thank you communications

• Over solicitation

• Poor quality communications

Retention

• Nonprofits Could Raise More…– Focus on retaining the best donors over the

long term– Understand what donors want– Better customer service

FOCUS ON RESEARCH AND RETENTION

Question?

• Should staff be expected to donate regularly to the arts organization for which they work?

Corporate and Foundation Gifts

• Requires much reconnaissance– Area of Interest (Education, Poverty, Arts)– Size of Gifts (Ask for what is appropriate)– Funding Cycle (Usually a long timeframe)– Politics (Who influences the gift?)

Corporations

• Two Types– Contributions

• Often from a separate budget of foundation• Be clear about what you are looking for

– Sponsorships• Marketing and PR• Community Development• Trades• Promotion

Corporations• Strong connection to the state of the

economy

• Undergo constant changes in leadership

• Arts and Culture not at the top of the list, even in the best of times

• May be limited to immediate community

• Conditions may be attached

• Dislike controversial art

• Ethics and politics

Corporations

• Reciprocity – What can the corporation gain by giving support?– Public Relations– Marketing Potential– Employee Benefit

Strategic Fit

Foundations Types

• Corporate Foundations:– Private foundations, but their boards are

often made up of corporate officers. – Their endowment funds are separate

from the corporation and they have their own professional staff.

Question?• Should arts organizations reject donations

from corporations because of what the company manufactures, the company’s business practices, or the company’s support of certain politics?

Foundations Types

• Family Foundations (PRIVATE)– Receive endowments from individuals or

families. – Many large, iconic foundations are family

foundations. • Think of the Gates Foundation, the Rockefeller

Foundation, and the Ford Foundation. – Most family foundations are much smaller

• Tend to fund locally• Often have little to no professional staff

Foundations Types

• Community Foundations (PUBLIC)– Public foundations and pool the assets

of many donors. – Provide donor-advised funds for donors

who want to become more purposeful in their giving but don't want to set up their own private foundations. • They work to improve their local

communities through:– Grant-making– Awarding scholarships– Providing services to donors.

Foundations

• Never Approach Cold– Send a letter of Inquiry– Find a connection

• Usually Specific• Some will not accept unsolicited proposals

• Get to Know the Staff– Staff usually has a good deal of influence

Government

• Many Sources– Local Arts Councils– Tourist and Convention Bureau– Social Services– State Arts Councils– National Endowment for the Arts– Other Federal Support

Advocacy is vital!

Government

• National Endowment for the Arts– An independent federal agency dedicated to

supporting excellence in the arts.

• 1965

• Seal of Excellence

• Budget - 161.3 Million

NEA

• President Lyndon Johnson said upon signing the enabling legislation for the NEA, "We fully recognize that no government can call artistic excellence into existence...Nor should any government seek to restrict the freedom of the artist to pursue his own goals in his own way."

The Question of Government

•Should the government support the arts?

•How much influence should the government have?

Get Your Board Involved• Bring a guest

– Bring a foundation executive, corporate representative, or family member to an event

– Ask a friend or business collogue to sponsor an event

– Act as an advocate with elected officials– Write donors personally– Make personal visits to donors with staff– Contribute– Create challenge gifts– Assist with cultivation– Give or get

Secret to Fundraising Success

• Cultivate Donors – Ask for advice and you’ll get money… ask for money and you’ll get advice.

Assignment