Non-Profit Fundraising Strategies

for Difficult Times

Non-Profit Fundraising Strategies

for Difficult Times Presented by:

Phyllis Hockett & Dave Jones

2009 Pathway Associates

www.pathwayassoc.com

What’s Changed in the Last Year and a Half?What’s Changed in the Last Year and a Half?

IndicatorsIndicators

Stock Market Loses 50% of Value

Corporate Icons on the Ropes

Home Price Depreciation

Unemployment at 25 Year High

Stock Market Loses 50% of Value

Corporate Icons on the Ropes

Home Price Depreciation

Unemployment at 25 Year High

Impacts Impacts

Foundations : corpus reductions of 25% to 40%

Corporations: more losses than profits

Individuals: feeling poor and insecure

Foundations : corpus reductions of 25% to 40%

Corporations: more losses than profits

Individuals: feeling poor and insecure

One thing that hasn’t changed…One thing that hasn’t changed…

The desire of most individuals to make a difference in their community.

So what’s the best strategy?So what’s the best strategy?

OUR RECOMMENDATION:Focus on major gifts from high net worth individuals.

The Pyramid of Fund Raising StrategiesThe Pyramid of Fund Raising Strategies

Degree of Personal Contact

$ Size of Gift/ROI

Universe of Donors

What is a “Major Gift?What is a “Major Gift?

Large relative to the majority of gifts to the organization (usually $1k to $50 k.)

Often evolves over a period of time as the relationship with the prospect is cultivated

Usually solicited face-to-face by volunteers and staff members

Usually paid in lump sum, but could be pledged over several years

May consist of cash or appreciated assets (real estate or stock)

Large relative to the majority of gifts to the organization (usually $1k to $50 k.)

Often evolves over a period of time as the relationship with the prospect is cultivated

Usually solicited face-to-face by volunteers and staff members

Usually paid in lump sum, but could be pledged over several years

May consist of cash or appreciated assets (real estate or stock)

Why do you need a major gifts program?Why do you need a major gifts program?

Provides:

revenue stability during bad times

capacity building resources during good times

Helps raise the sights of donors who have additional giving capacity

Can generate large amounts of unrestricted revenue

Repeatable year after year

Provides:

revenue stability during bad times

capacity building resources during good times

Helps raise the sights of donors who have additional giving capacity

Can generate large amounts of unrestricted revenue

Repeatable year after year

The biggest reason:The biggest reason:

Cost Effective! A major gift campaign offers a tremendous return for a relatively small investment of time and money!

Cost Effective! A major gift campaign offers a tremendous return for a relatively small investment of time and money!

Relative Advantages of Development ActivitiesRelative Advantages of Development Activities

$ Volume Generated

Up Front Investment

Profit Margin

Cost in time and burnout

Events Med-High High 25 to 75% High

Direct Mail

Grant Writing

Major Gift Solicitation

Relative Advantages of Development ActivitiesRelative Advantages of Development Activities

$ Volume Generated

Up Front Investment

Profit Margin

Cost in time and burnout

Events Med-High High 25 to 75% High

Direct Mail Low Moderate 40 to 80% Moderate

Grant Writing

Major Gift Solicitation

Relative Advantages of Development ActivitiesRelative Advantages of Development Activities

$ Volume Generated

Up Front Investment

Profit Margin

Cost in time and burnout

Events Med-High High 25 to 75% High

Direct Mail Low Moderate 40 to 80% Moderate

Grant Writing

Moderate Low 50 to 80% Moderate to High

Major Gift Solicitation

Relative Advantages of Development ActivitiesRelative Advantages of Development Activities

$ Volume Generated

Up Front Investment

Profit Margin

Cost in time and burnout

Events Med-High High 25 to 75% High

Direct Mail Low Moderate 40 to 80% Moderate

Grant Writing

Moderate Low 50 to 80% Moderate to High

Major Gift Solicitation

High Low 95 to 99% Low to Moderate

Where do major gifts come from?Where do major gifts come from?

Corporations: 4%

Foundations:16%

Individuals: 80%

Corporations: 4%

Foundations:16%

Individuals: 80%

Why are Major Gifts Neglected as a Strategy?Why are Major Gifts Neglected as a Strategy?

Degree of Personal Contact

Why are we uncomfortable asking for major gifts?Why are we uncomfortable asking for major gifts?

Fear of rejection

Hesitant to put friends and acquaintances on the spot

Making an assumption about people’s finances

Feels like a one-way transaction

Fear of rejection

Hesitant to put friends and acquaintances on the spot

Making an assumption about people’s finances

Feels like a one-way transaction

Why do people give major gifts?Why do people give major gifts?

Major Stated Reasons:

Belief in the mission of the institution

Fiscal stability of organization

Regard for staff and leadership

Service on board or other connection to organization

Source: Jerold Panas Survey of 30 $1-million+ Donors

Major Stated Reasons:

Belief in the mission of the institution

Fiscal stability of organization

Regard for staff and leadership

Service on board or other connection to organization

Source: Jerold Panas Survey of 30 $1-million+ Donors

The Common DenominatorThe Common Denominator

Ninety-five percent of all major gifts would not have happened had the donor not been presented with a request.

Most major gifts can be traced back to a cultivation opportunity involving someone the donor knows and respects.

Ninety-five percent of all major gifts would not have happened had the donor not been presented with a request.

Most major gifts can be traced back to a cultivation opportunity involving someone the donor knows and respects.

Board and Staff Role in a Major Gift ProgramBoard and Staff Role in a Major Gift Program

1. Identifying and Evaluating Prospects

2. Creating the Cultivation Opportunity

3. Helping to Tell the Story

4. Helping to Make the Request

1. Identifying and Evaluating Prospects

2. Creating the Cultivation Opportunity

3. Helping to Tell the Story

4. Helping to Make the Request

1. Identifying and Evaluating Prospects1. Identifying and Evaluating Prospects

Focus on “Affluence”, not just “Wealth”

$3 million net worth = top 1% of nation

$250 k annual income = top 1% of nation

People who can give $5,000+ from discretionary income

Begin with existing donors with potential to give more

Identify new prospects with $5k potential

Focus on “Affluence”, not just “Wealth”

$3 million net worth = top 1% of nation

$250 k annual income = top 1% of nation

People who can give $5,000+ from discretionary income

Begin with existing donors with potential to give more

Identify new prospects with $5k potential

2. Creating the Cultivation Opportunity2. Creating the Cultivation Opportunity

Webster’s Definition of Cultivate:

To prepare land for growing crops

To promote the growth of a plant through labor and attention

Webster’s Definition of Cultivate:

To prepare land for growing crops

To promote the growth of a plant through labor and attention

Alternative Fund Raising DefinitionAlternative Fund Raising Definition

Cultivation is a process by which we gradually enable donors to share more and more of our own passion for the cause.

Cultivation is a process by which we gradually enable donors to share more and more of our own passion for the cause.

Potential CultivatorsPotential Cultivators

Board Members

Staff Members

Other Friends

Past Board Members

Community Leaders/Elected Officials

Other donors

Board Members

Staff Members

Other Friends

Past Board Members

Community Leaders/Elected Officials

Other donors

Methods of CultivationMethods of Cultivation

Mailings

Events

Tours

Personal Meetings

Mailings

Events

Tours

Personal Meetings

3. Helping to Tell the Story 3. Helping to Tell the Story

Be prepared to help tell the story from two distinct perspectives:

The organization or project perspective

Your personal perspective

Be prepared to help tell the story from two distinct perspectives:

The organization or project perspective

Your personal perspective

…the Story…the Story

The organization/project perspective

Familiarize yourself with historical aspects of the project

Be able to talk knowledgeably about project costs

Develop a clear understanding of the benefits to the community

The organization/project perspective

Familiarize yourself with historical aspects of the project

Be able to talk knowledgeably about project costs

Develop a clear understanding of the benefits to the community

…the Story…the Story

Your personal perspective

Reflect on why you are involved

Develop your own personal story

Personal anecdotes make the case real

If it comes from the heart, it can’t be challenged

Your personal perspective

Reflect on why you are involved

Develop your own personal story

Personal anecdotes make the case real

If it comes from the heart, it can’t be challenged

Story Time:Story Time:

• Put a human face on the story

• Make it as personal as you can

• Remember: If it comes from the heart, it can’t be challenged.

• Put a human face on the story

• Make it as personal as you can

• Remember: If it comes from the heart, it can’t be challenged.

4. Making the Request4. Making the Request

Strategize in advance

If you go in pairs, agree in advance who will make the request

Raise the donor’s sights before asking for a gift

Strategize in advance

If you go in pairs, agree in advance who will make the request

Raise the donor’s sights before asking for a gift

Make the RequestMake the Request

Ask for a thoughtful and proportionate gift by putting a “consideration amount” on the table.

“We would like you to consider a gift of $____”.

“If you can give more than that, we would be absolutely delighted. If you can’t give that much, we certainly understand.

“But we’d like you to think about how such could really make a difference.”

Ask for a thoughtful and proportionate gift by putting a “consideration amount” on the table.

“We would like you to consider a gift of $____”.

“If you can give more than that, we would be absolutely delighted. If you can’t give that much, we certainly understand.

“But we’d like you to think about how such could really make a difference.”

Make the RequestMake the Request

Sit quietly and wait for a response.

If the prospect needs more time, suggest a follow-up meeting within two weeks.

If the prospect needs more information, make arrangements to provide it.

Special tour

2nd meeting with organization representatives

Sit quietly and wait for a response.

If the prospect needs more time, suggest a follow-up meeting within two weeks.

If the prospect needs more information, make arrangements to provide it.

Special tour

2nd meeting with organization representatives

Getting StartedGetting Started

The Four C’s of a Successful Major Gift Program

Catalysts

Collaborators

Contributors

Connectors

The Four C’s of a Successful Major Gift Program

Catalysts

Collaborators

Contributors

Connectors

The Four C’sThe Four C’s

CATALYSTS

Contributor

Contributor

Contributor

Contributor

Contributor Contributor

Contributor

Collaborator

Collaborator

Collaborator

Connectors

Once the gift is received…Once the gift is received…

Properly acknowledge the donor’s generosity

Begin the cultivation process anew by

Staying in touch

Demonstrating good stewardship

Suggesting new ways the donor can be involved

Properly acknowledge the donor’s generosity

Begin the cultivation process anew by

Staying in touch

Demonstrating good stewardship

Suggesting new ways the donor can be involved

ConclusionConclusion

A major gift program represents a paradigm shift in organizational thinking about fund raising. (Not just another event or mailing.)

It can be the most cost effective strategy for raising large sums of money.

Staff and board members must be key partners in a major gift program. Their role is to:

Identify and Evaluate Prospects

Create the Cultivation Opportunity

Help to Tell the Story

Help to Make the Request

A major gift program represents a paradigm shift in organizational thinking about fund raising. (Not just another event or mailing.)

It can be the most cost effective strategy for raising large sums of money.

Staff and board members must be key partners in a major gift program. Their role is to:

Identify and Evaluate Prospects

Create the Cultivation Opportunity

Help to Tell the Story

Help to Make the Request

And finally…And finally…

Say Thank You Often!!!Say Thank You Often!!!

P a t h w a y A s s o c i a t e s P a t h w a y A s s o c i a t e s

Guiding Non-Profits Along the Path to Sustainable Futures

Guiding Non-Profits Along the Path to Sustainable Futures