Major Gift Development Fundraising That Matters: An Introduction to - - PDF document

Major Gift Development

David Allen | fundraisinghelp@sbcglobal.net | 608-239-5006

Fundraising That Matters: An Introduction to Major Gift Fundraising

Presented to

Conservation Excellence 2015

March 2015

1

Outline for the Session

• Introductions
• Current Trends in Philanthropy
• Why People Give
• Decision‐Making Dynamics
• Frank Talk About Money
• Priorities – Using a Top 100 List
• Board and Staff Roles in Fundraising
• Cultivation Basics
• An Outline for Asking for Anything

Three Things to Get from Today

• “Success comes to those who ask.” To raise

money you have to ASK for money.

• Asking and Giving dynamics change with how

the decision gets made more so than with the denomination of the gift.

• 90 percent of fundraising success involves

cultivation – building relationships.

Thank You!

Stephen Covey, Seven Habits of Highly Effective People Bill Sturtevant, Institute for Charitable Giving The Nature Conservancy Dan Burke & Laurel Hauser Door County Land Trust Jeff Schreifels & Richard Perry Passionate Giving Blog

2

Housekeeping

• Begin at the end
• Aha Moments!
• Commit to just one or two ideas now, and

to a deliberate review in 6 months

Circle of Influence

Circle of Interest/Concern

FREE Executive Summary

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3

Definitions:

Annual and Major (Gifts) describes the decision‐making process, not the dollar amount. Annual (periodic) Gifts require little, if any, deliberation by the donor.

Annual Gifts

Definitions:

• Annual expectation (renewal)
• General organizational appeal (operations)
• Mail or phone solicitation
• Quick response
• Small(er) gift size
• Measure of success = YES

Annual Gifts

Definitions:

• Specific need
• Unique appeal
• Personal ask
• Multiple visits
• Large(r) gift size
• Measure of success = ADVANCE

Major Gifts

4

Factors Defining Major Gifts

• How do your donors perceive the organization?

– What does your Board give? – What is your largest gift? – Do your donors know?

• How do your donors perceive themselves as

donors?

• How much do you need? (As a generalization,

donors are unlikely to give more than 40% of the need under the best of circumstances.)

Ultimate (Planned) Gifts

• Long‐term relationship with organization
• Organization is one of donor’s only charities
• Desire to leave a legacy
• Perhaps self‐conscious about ability to give

during lifetime

Sustainability

Robust, resilient, sustainable

• rganizations work with their donors
• n annual gift, major gift, and

planned gift programs, all three, at the same time with systematic board member engagement and adequate staff support.

5

Frames of Reference

• Fundraising is about building relationships;
• nly 10% is about “asking”
• All Board Members fundraise
• You have to give yourself to be effective as a

fundraiser

• $1,000 is not as much money as it used to be

Frank Talk About Money

• It is difficult to do much for less than $20
• Many people take $100 at a time from ATMs
• Time is NOT the same as money
• “I don’t have enough” time/money really

means “I choose to spend my time/money elsewhere”

So….

• Regularly asking for $100 is OK
• Almost everyone could give $1,000 if they

really wanted to

• Many people could give $10,000 if they

could spread payments out over time

6

So….

• If our belief that a donor cannot afford a

$1,000 prevents us from asking, that says more about us than about them.

• Don’t say NO for people by not asking.

Board Campaign

Board

• Chair, FR Chair, ED set Board goal
• Chair sets the tone, makes his/her gift first
• Chair solicits other Board members
• First Quarter Activity
• Pledges OK

Board Campaign Mechanics

www.DevelopmentForConservation.com /about‐us/resources

7

Fifty-Three Ways for Board Members to Raise $1000 by Kim Klein

Donors you have access to Donors who love you Donors who have money

All Donors

Most Important Donors

= Top 100

Top100 List

• These are your organization’s most important

donors

• Could be less than 100; should not be more than

100 without multiple staff dedicated to Major Donor fundraising

• Add new people onto the list and rotate people
• ff the list once a year
• Keep an “Under Consideration” List

8

Top 100 List

• Board members should be familiar enough

with the people on the Top 100 list that they would recognize one at the grocery store.

Prospects – Top100 List

• Members who make $250+ gifts
• Members who give $500+ in a single year
• Members who give $5,000+ to other
• rganizations
• Members who have given in each of the

last six years

• Known Planned Gift Donors
• Membership Screening Results

Top100 List

• For each donor on the list:

– Assign a Shepherd (Board Member?) – Assign an ask amount

• Determine the next step, by whom, and

by when

9

Introduce Involve Inform Invest Interest

Getting Started

• Make your own gift
• Pair up with a member of the Development

Committee

• Screen your entire donor list
• Select five prospects to start and eventually

settle on just three

• Research each one
• Call each one
• Draft a Status Paragraph for each one

Getting Started

• Is this a person you can work with?
• Does this person have cultivatable

interest?

• (If not, then, you’ll need to “adopt”

another prospect.)

10

Getting Started

• What’s the next cultivation step?
• Who’s going to do it?
• By when?

Top 100 List

• Do we have pictures?
• Relationship with the organization should

be documented in the Donor Files

• Field Trips, Organizational Events, and

Soirées should be evaluated, in part, based on Top 100 List participation

Basic Principles

• Facetime is KING
• Redundancy
• Prospects selected based on giving

capacity

• Three-year cultivation plans
• Relationship is recorded in the files

11

Easy Cultivation

• Annual Renewal Solicitation and

Acknowledgement

• Introductions to other org leaders
• Invitations to YOUR events
• “Chance” meetings at their events
• Share news and stories

A Word About Donor Files

• You need them
• Include essential contact info
• Copies of everything that comes from

THEM – including email and checks

• Strategy and cultivation planning

Axiom

• Investments in the best photography

and great food will always pay off.

12

General rule for getting major gifts

• Ask

Board Roles

• Contribute
• Understand, endorse, and oversee planning
• Help identify and evaluate Top 100 Prospects
• Make introductions to Top 100 Prospects
• Share in the cultivation of Top 100 Prospects
• Accompany others in asking
• Ask

Staff Roles

• Handle all the membership work
• Handle the administrative duties
• Handle all the record‐keeping
• Otherwise make it as easy as possible for

Board members to do their work

13

Ask For......

• Information
• Advice
• Involvement
• Annual Gift
• Capital Gift

Things to Bring to a Donor Visit

• 1‐2 Page Organizational or Project

Description

• One‐page customized fund raising plan
• Photo album/video/slideshow
• Courage

Asking

• Preliminaries
• Introductions
• Establish Common Ground
• Make the case
• Envisioned role for the prospect
• ASK
• Pause
• Close

14

Three Points About Closing

Closing means that you know:

• What’s supposed to happen next,
• Who’s supposed to do it, and
• By when.

Closing means that you have agreed with the prospect

• n the above, and that you have communicated the

detail to the office. Closing means that you know what you are going to do if it doesn’t happen.

Three Things to Get from Today

• “Success comes to those who ask.” To raise

money you have to ASK for money.

• Asking and Giving dynamics change with how

the decision gets made more so than with the denomination of the gift.

• 90 percent of fundraising success involves

cultivation – building relationships.

Services

Call me for:

Strategic Planning Board Development Development Audit Capital Campaigns Board Training Major Gift Training Fundraising Coaching

fundraisinghelp@sbcglobal.net

608/239‐5006

FTM – Supplemental Materials

15

Acknowledgements

Stephen Covey, Author of Seven Habits of Highly Effective People Bill Sturtevant, Institute for Charitable Giving, Author of The Artful Journey Jerald Panas, Institute for Charitable Giving, Author of MegaGifts The Nature Conservancy Dan Burke & Laurel Hauser Door County Land Trust Blogs The Agitator (Direct Mail Fundraising), www.theagitator.net Beth’s Blog (Social Networking) www.bethkantor.org Jeff Brooks (Non-Profit Marketing) http://www.futurefundraisingnow.com Jeff Schreifels & Richard Perry (Major Gift Fundraising) www.veritusgroup.wordpress.com

FTM – Supplemental Materials

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Annual Gift Major Gift Planned Gift

Periodic Expectation (Habit) Once every 3-5 years (at most) depending on the project Single Event General organizational appeal Project or program specific appeal General organizational appeal, or capital (land acquisition) funds Case: “It’s time” Unique case made for each project Endowment or “Legacy” Mail or Phone Solicitation Personal Solicitation Often not solicited Quick Response Can take 1-3 years to mature Most bequests are not known prior to the estate being settled Small(er) gift size Large(r) gift size (10-20) times annual gift VERY Large Average Gift Measure of Success = Yes Measure of Success = Advance Measure of Success = Donor informs org of intent to give

KEY CONCEPT

Robust, resilient, sustainable organizations work with their donors on annual gift, major gift, and planned gift programs, all three, at the same time with systematic board member engagement and adequate staff support.

FTM – Supplemental Materials

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Development Planning

Considered in the business sense, fundraising should return a “net” to the program side equal to expenses needed to complete the program plan. Fundraising budgets should be prepared separately, and financial statements should be presented so that Board members can easily determine how well fundraising is meeting this objective.

KEY CONCEPT

The Fundraising Goal becomes the mission of the Fundraising Program.

FTM – Supplemental Materials

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Development Planning Fundamentals:

• Membership is a Conservation Strategy (especially for

land trusts)

• Major Gifts are driven by strategic cultivation of

current members

• Membership numbers are driven by strategic

marketing

• Strategic marketing has five objectives:

 Create awareness of the organization  Create belief in the competence of the

• rganization

 Create belief that contributing will make a difference  Create behavior of annual contributions and long- term commitment  Create ambassador behavior

FTM – Supplemental Materials

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Building a Development Plan

Once the fundraising goal (net) is known, the development plan can be built from its various components. The cost of each component, added together, becomes the Development Budget, and the fundraising goal (net) plus the budget becomes the fundraising goal (gross). Membership Recruitment – THIS IS MARKETING!: Just to break even, recruitment activities should be sufficient to overcome normal background membership attrition, usually 20-25%. To grow, recruitment activity will need to be accelerated accordingly. Ideas to consider include:

• Targeted direct mail – especially for special project appeals
• Saturation mail into targeted zip codes or carrier routes
• Point-of-purchase brochure displays and/or newsletter distribution
• Event/Fair Booths
• Complimentary memberships

Use coding to track results back to the source for at least two years, so that you understand which lists or sources generate the best results, both initially and through the first renewal cycle. Membership recruitment can easily overwhelm other activities. Recruitment rarely produces net revenue the first year and often loses money. Start-up organizations need seed money grants to get a membership started. Existing organizations are advised to budget a set amount of money each year for recruitment as an expense. Then any money produced from the activities offsets the same expense line next year. Membership Renewals: Membership dues are gifts for most non-profits, as opposed to fees, and they work for revenue generation when members steadily increase their giving

• ver time. The most effective organizations ask very specifically for “upgrades” with

every renewal cycle, from $35 to $50 to $100 to $250, and so on. The best letters are on the short side and refer to the member’s length of membership, or most recent gift, or

• both. Reminder letters, spaced 3-5 weeks apart can greatly increase response rates.

Estimate current year’s revenue based on last year’s actual. Growth rates (in revenue) of 3-5% are difficult to surpass because donors at the top end are syphoned off into donor clubs.

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Building a Development Plan cont’d

Appeals: Most donors should receive the membership cycle of letters at renewal time and also receive a special “appeal” about six months later. Appeals often include two letters, but in such cases the second letter is very different from the first, to better appeal to different segments of the membership. Members who go several years without responding to special appeal letters may be removed from future mailings. Donor Clubs: Donor clubs provide social exclusivity and serve to encourage donors to make annual gifts at the $1,000 and greater. Benefits are often privilege-based rather than goods-based; an invitation to an exclusive event, for example, instead of a tote bag. Mechanically, donor club dues can be handled the same as any other member dues, but the dollar returns are worthy of a higher level of personalization. Personal visits are preferred – or hand-written letters. Many organizations see 50-70% of their annual revenue from this membership subset. Fundraising Events: Events are time-consuming to plan and execute, but they can have tremendous upsides if they are used specifically to cultivate donors. In general,

• rganizations try to pay for the event three times: once through sponsorships, once

through ticket sales, and once through auction or raffle sales. When calendaring events, keep in mind that quality is more important than quantity. Measure events as much or more so based on WHO is there than how many are there. Board members should be expected to attend and should expect to work. Donors need to be identified from mailing lists, noticed and greeted at the event, introduced to VIPs, and emailed or called to thank them personally for attending. Bringing the components together: I recommend pulling out for separate consideration any large gifts or grants that are not repeatable and looking for overall growth without them in the 12-15% range. If the program side needs more aggressive growth, new activities will be necessary: the introduction of a new giving club, for example, or a capital campaign. Short-term growth can also be affected in some cases through more aggressive grant-writing, but such growth is rarely sustainable.

If you always do what you’ve always done, you’ll always get what you’ve always got.

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Building a Development Plan cont’d

The following table shows preliminary work on a 2011-2012 Development Plan for IATA.

2011 GOAL: $430,000 2012 GOAL: $560,000 This plan is designed to raise the goal plus an additional amount as a cushion, thus: TRENDS 2009 2010 2011 2012 Board $ 5,200 $13,288 $15,000 $20,000 Singularly Large Grants/Gifts 499,546 100,000 $1,000 Giving Club Prospects 80,645 96,337 120,000 140,000 “Renewals” and Appeals 84,305 98,262 115,000 125,000 New Donor Recruitment 16,105 23,983 25,000 25,000 Events 28,000 28,000 30,000 30,000 Foundation Grants 34,796 39,319 80,000 80,000 Corporate/Business Contributions & Underwriting 23,678 12,313 55,000 55,000 TOTAL $772,275 $311,512 $440,000 $575,000

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Time Management

It used to be that 80 percent of the money came from 20 percent of the

• donors. In fact, nowadays, more than 90 percent comes from them.

So where are you spending your (organizational) time?

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Getting Started with Major Gift Cultivation

To raise the money needed for land acquisition and stewardship and to provide long term stability, most land trusts need to cultivate donors for much larger gifts in addition to annual membership, special appeals, auctions, and other fundraising activities. This work is ideally suited for board director involvement. Major gift development is a deliberate,

• n-going cultivation program aimed at cultivating and soliciting substantial gifts. Most

will be targeted to specific projects or programs, but renewing membership for the donors involved is an important cultivation tool and should be specifically incorporated. Major gift development is built around the following set of principles:

• Cultivation is about personal connections between organizational leaders and donors.
• Redundancy: Prospects should know more than one director/staff.
• Prospects are selected based on giving capacity and inclination, not necessarily on

past giving.

• For each major donor and prospective donor, the land trust maintains a three-year

cultivation plan and a series of immediate next steps (by whom and by when). Each director and the ED/DD accepts some minimal level of responsibility as well. Those who can do more are asked to do more.

• The relationship each donor has with the organization is recorded on a profile sheet.

Each profile includes a photograph and is permanently filed, with their cultivation plan, in the office. Profiles are regularly shared with all directors so that, over time, directors learn who the top donors are. For Each Director

• 1. Make a gift that is significant for you. The gift may be made in the form of a pledge

to be paid monthly or quarterly during the year.

• 2. Participate in a screening exercise designed to formally review the entire mailing list.

Identify everyone you know personally and/or have access to, meaning that they would return your phone call if you were to leave them a message. Second, identify anyone with known capacity to make giving decisions of $10,000 regardless of whether you know them or not. This may be based on personal knowledge of their income or net worth. It may also be based on known giving to other charities.

• 3. From the resulting list of potential donors, select five (5) that you would enjoy

working with or getting to know better. You may select people you know, people who live near you, or people based on some other criteria. Some prospects will be selected by several board directors. We want to make appropriate pairings and knowing who you want will help determine the final “donor partner” pairings.

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Getting Started with Major Gift Cultivation (cont’d)

• 4. Accept initial responsibility for a set of three (3) donor partners.
• 5. Work with staff to access the database and understand each donor’s giving history

with the organization along with any other institutional history (prior board service, volunteer activities, event participation, and so on) that they might have. Call and interview other board members who indicated that they knew your donor partners Google them to see what you can learn from the internet.

• 6. After doing the initial research, call them. Tell each one who you are, that you are not

calling for money, and that you would like to ask them three questions about their experience with the land trust to date. The questions may be chosen from the list

• below. Understand that the actual questions you choose and their answers to them are

not as important as the time you spend talking and getting to know them better.

• a. How long have you been a member?
• b. What first attracted you to the land trust?
• c. What do you like most about the land trust?
• d. Did you know about land trusts before you became a member?
• e. Are you a member of other land trusts? TNC?
• f. Have you ever attended one of the events? (Auction fundraiser, annual meeting,

hike, other?)

• g. Have you ever visited one of the preserves? Would you like to?
• h. What do you think of the newsletter?
• i. Have you ever met our Executive Director?
• j. Is there anything about the organization that you would like the board to hear?
• k. What would you most like to see the land trust accomplish in the next 5 years?
• l. Do you feel that you’ve gotten a good return on the investment you’ve made in

the land trust?

• 7. Now write up in plain English (no shorthand, no jargon, no acronyms) description of

what you have learned. Share it with a member of the Development Committee (DC) and answer the following two questions:

• a. Is this a person you feel like you could work with over the next few years? If not,

is there someone else on the board who could? (You would need to “adopt” a replacement donor partner and go back to Step 5.)

• b. Is this a person who has “cultivatable” interest? If not, why not? If so, what might

they be interested in?

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Getting Started with Major Gift Cultivation (cont’d)

• 8. Finally, again working with a member of the DC, draft a cultivation and solicitation

plan for each of your donors covering the next three years. Identify membership renewals, any special appeals, invitations to special events, invitations to preserve walks or field trips, and any other cultivation activity you might devise to spark a known interest of theirs. Introduce them to the ED and to board leadership. Calendar as much of this activity as possible.

• 9. Identify and calendar a specific next step for each donor. Communicate the profile

descriptions, cultivation plans, and calendared next steps with staff so they can maintain the donor files and a master cultivation calendar.

• 10. If this process has been fairly comfortable for you so far, consider accepting

responsibility for additional donors up to a maximum of ten. For Members of the Development Committee (DC)

• 11. Pair up. Work with another member of the DC on your own donor partners and on
• theirs. Share cultivation ideas and hold each other accountable for making progress.

Help each other troubleshoot problems.

• 12. Also pair up with a board director who is NOT on the DC with the same objectives in

mind.

• 13. Create space at committee meetings and at board meetings to share problems, ideas,

experiences, and stories around the table. For the Executive Director and Development Director (possibly with assistance from

• ther Staff)
• 14. Maintain a master calendar of cultivation activity that is both donor specific and

director specific. Make yourself available to attend as many events and meetings as possible.

• 15. Maintain complete and accurate files, both paper and electronic.
• 16. Identify and help troubleshoot issues and problems as they arise.
• 17. Prepare materials and sample letters for directors to use as models.
• 18. ED Only: Go through steps 4-9 for at least ten donors to cultivate personally.

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Cultivation Opportunities

Annual Renewal Solicitation

• Take personal responsibility for their renewal
• Personal visit
• Handwritten letter
• Notes on typed letters
• Telephone call follow-up
• Personal Thank You letter, card and/or call

Introduction to other organizational leaders

• Executive Director
• Other board directors
• Land stewards or professional advisors (GIS specialists, restoration ecologists,

foresters, wetland biologists, and so on) Invitations to YOUR events

• Annual Meeting
• Fundraising event
• Field trips
• Small social gatherings

“Chance” meetings at their events

• Golf outings
• Local award events
• Conferences and meetings
• Social clubs

Share News and Stories

• Recent acquisitions
• Insider tidbits
• Stories about how THEIR gift made a difference

27 Major Gift Development

What to do Now

• Review the skills covered during the seminar.
• Identify any “AHA” moments for you.
• Identify 2-3 actions you are willing to take in the next three months based on

what you’ve learned today.

Aha Moments Actions for the next 2-3 months

28 Major Gift Development

NOTES:

29 Major Gift Development

Questionnaire

Please rank each of the following statements: 1 = Disagree 2 = Agree 3 = I Don’t Know or Not On My Radar Once you’ve completed ranking each item, please total the numbers and write the total at the bottom. _____ We are not always clear what the fundraising goals are and/or how they relate to our program goals _____ Not everyone on the Board gives money _____ We rely on donations from a few very generous individuals or institutions (government or foundation support) _____ The money we raise for operations has remained constant or declined in recent years _____ We let some projects go because we lack confidence in fundraising _____ The Board members who LEAD our fundraising work are not the recognized organizational leaders (Chair, Officers, and so on) _____ We don’t regularly screen our donor lists to help identify major gift prospects _____ Our donors don’t know our board members (and vice-versa) _____ Our Board members are not involved in meeting donors and/or asking for money _____ Our Board members don’t always know when major gifts are received _____ Our Development/Fundraising Committee seems anemic and actually gets very little done _____ We get donor acknowledgements out inconsistently, or often a week or more following our receipt of the gift _____ Our donors feel like the only time they hear from us is when we are asking for money _____ We do not have a Planned Giving program ____________ TOTAL

DAVID ALLEN

I am a non-profit organizational development consultant. I work with organization boards to help their members learn how to be better leaders and advocates. My background includes 30 years working in membership fundraising, major donor development, communications, and marketing. I worked for about half that time for Nature Conservancy (TNC) chapters in Oregon, Texas, and Wisconsin. In addition to my duties for the individual chapters, I served TNC as an internal fundraising consultant and major donor development trainer. In 2000, served as the vice-president of

• perations for the Wisconsin-based,

international conservation organization Sand County Foundation, a position I held through mid-2009. Gathering Waters Conservancy, a land trust service agency based in Wisconsin, called me in 2002 to ask whether I would be interested in teaching a seminar for Wisconsin land trusts on major donor development. From 2002, then, through 2009, I consulted on a nights and weekends basis with just a few clients each year. In March of 2009, I launched my consulting business full-time using the name Development for Conservation. Also in 2009, I partnered with Peter McKeever and Nancy Moore to form Conservation Consulting Group. Together we help land trusts prepare for accreditation by providing assessment, planning, and leadership coaching services. I consider myself a strategic thinker, problem solver, facilitator, educator, and program developer who brings a particular passion for conservation and the environment. Practice Competencies Fundraising Organizational Development

• Development Audit
• Strategy Development
• Staff/Board Training and Development
• Practice & Process Assessment
• Major Gift Coaching
• Problem Solving Facilitation
• Capital Campaigns
• Marketing

David Allen Development for Conservation

fundraisinghelp@sbcglobal.net 608-239-5006 608 West Dean Avenue Monona, WI 53716

www.developmentforconservation.com