Slow Economy is time to dust off Case for Support

Well, perhaps it was, in the end, something of a self-fulfilling prophecy. Because of that initial reservation and doubt, there apparently wasn't enough excitement generated for the CEO to feel okay about making the mental and emotional leap from relying on fundraising events (with an average of $50 to $250 or even up to $500 per person) over to the major gifts cultivation and solicitation process (where individuals would give multiple-year commitments of $5000 and over). I guess it was just too tough to make those changes in the daily schedule, and make the mental adjustment to doing prospect management. Too bad. A lot of money has been left on the table.

So what's the upshot of all this? Apparently the viewpoint persists at that nonprofit, then, that the condition of Michigan's economy is adversely affecting this organization's fundraising ability. The conversation reportedly taking place in that board and staff is that since people are in tough economic times not as many signed up as sponsors, not as many came to the events, not as many bought at the auctions, or whatever was going on.

Well, that might be the case, but, frankly, my bet is that it doesn't have anything to do with the economy. It more probably has to do with the charity's own internal motivations, predilections and viewpoints. It has to do with the inability to simply pick up the phone, make the appointment, go see the prospects, and ask the prospect for the contribution. It may have to do with lack of training, too, but it also indicates a lack of commitment to do this kind of work, time after time, day after day. That's what is needed to make significant individual gifts a regular, even dominant, part of this organization's revenue. I've done it, in good times and bad. It works just great! It brings in a ton of money. It's a simple concept; relatively easy to do.

My friend reflected that in other charities where he has worked there was often so much more work and change involved. But here he had the stage all set, the process in motion, but the change of attitude and the change of daily priorities needed was subverted by an internal attitude that "we don't believe you can actually do that." Too bad. But it has nothing at all to do with the economy. So the economy is just an excuse.

Another friend of mine from the sales and marketing arena, Jerry Holcutt, says that to those who think that way, cold-calling prospects absolutely won't work. Yet for those who engage in it with verve and vigor, it works all the time. It's a matter of perspective. Same is true for calling on donors and making major gift donors out of them.

So where does this all bring us? It brings us to the point of saying that, if you look at it from a different point of view, a slow economy is really just the absolutely perfect excuse for a nonprofit to dust off their case for support, making it more creative and compelling. It also brings us to the consideration of the ways a nonprofit needs to deliver its case for support continually, on a persistent and frequent basis, to a wide variety of donors, prospects, constituents of all kinds.

The economy doesn't affect fundraising; attitude, perspective and action do affect fundraising.

Does a slow economy prevent a charity from asking?

I recently had a conversation with a fellow fundraiser who has worked for a nonprofit organization for a couple of years. His experience really points up the reality we're digging at here.

During that time he endeavored to put in place a major gifts emphasis and worked out all the basics, setting up staff and volunteer assignments to pursue the first round of major gift prospects gleaned from their database.

This nonprofit definitely wanted and needed more money; significantly more money. But my friend noted that the management team at that nonprofit apparently had some reservations about how money couold be raised. He tole me the CEO kept saying, "I'm not as enthusiastic as you are about our potential to do this."

But my friend was excited by the possibilities. Apparently their database of donors was a veritable goldmine for a major gifts process. He described their donors as loyal, frequent givers, and said there were lots of them. And this nonprofit had, over the years, taken the pains and trouble to put many of the right codes on donor records, making the work of prospect identification a pretty straightforward task. The stage was set.

The reason my fellow fundraiser mentioned this situation in the first place was the way this rather positive situation quickly collapsed on itself. Having assigned the first round of prospects to staff and volunteers for cultivation and solicitation, and having had a few early successes, one of their early discoveries was that they really needed to do more information sharing and more cultivation with a much more personal touch than they had used previously.

So that called for some changes in the way people viewed the task, and in the time it would take, and in the alteration of daily schedules for key staff. Nothing new there, it happens all the time.

But, in the meantime, it happened that some special event fundraisers this nonprofit put on came up short in terms of the amount of money they raised. That caused something of a financial crisis and the CEO decided they'd had enough of the major gifts emphasis and could do with more energy being spent by the development department on the special events.

My response to this situation was, "It looks like it might have been time for the development department and management staff to simply go out and raise the money you need with the process you already have in motion. You seem to have the prospects, the method, the program in place to do that; and if there were still six months before the end of the year you had plenty of time. Why didn't you just go out and raise the fiscal shortfall and be done with it?"

His reply was that the CEO had said to him, "As I told you at the beginning, I don't think I'm as enthusiastic as you are about the potential for our organization to go do that. I think you need to bear down on the special events."

More this afternoon…

The effects of hard times on giving

Here's another piece of this puzzle. The Chronicle of Philanthropy, in its September 15, 2005 edition, ran a special report on "How Charitable Giving Fared After National Crises." In this article, the report said, "Political turmoil, military confrontations, and economic turbulence can all affect what types of charities Americans support – but they generally do not cause a drop in the total amount donated to charity according to a study by the Center on Philanthropy at Indiana University for the Giving USA Foundation."

In another article some years ago, and I'm still trying to locate my source for this, but I think it was either Robert F. Sharpe Co., in their Give and Take publication, or the National Conference on Planned Giving, that compared all the 20th century recessions and depressions and the giving patterns that followed those economic downturns. In this I distinctly remember the trend in something like 12 of 15 instances was that giving increased significantly. If any of you happen to remember the source for this, I'd appreciate your assistance.

But the main point is that when times get tough the tough have generally increased giving. So, if you’re a director of development or a nonprofit executive director, and you're melancholy about being unable to raise funds in a down economy, it's time to get up and get moving; get those creative juices going, and get back to figuring out how to make that case for support really ZING the hearts and minds of donors and prospects.

More tomorrow.....

Hard times actually can increase donations

One thing we know is that our creator has hard-wired human beings to be able to give. For example, if you want to see someone get a really big "high" or rush, just watch them give a fairly major chunk of money, say $10,000 or so, to a cause they're really involved in and excited about. That donor will be on the ceiling for weeks! Why? I think that's because the internal satisfaction that comes with being a part of doing something good, accomplishing some good for humanity, making someone's life better, easing someone's pain or providing a leap in understanding of some cultural value – these bring a rush and a mental/emotional state of euphoria that is practically unbeatable.

Truth to tell, we need that rush, the high, that euphoria, in good times and in bad. Regardless of what is going on in the economy. Or maybe even BECAUSE of what's going on in the economy, I think we may need it more than ever. But we're hard-wired to need this internal satisfaction and excitement in our lives. We're built in such a way that when we give, and the more we give of ourselves, the better we feel.

That should make it easy for any nonprofit fundraiser to write a dynamite fundraising letter. The stage is set, we know charities work, and work well, we know that charities give us value and we are compelled by our sets of values to give. We know that people have this innate urge to give, and that they get a really powerful emotional high from doing so. So why is it that we keep churning out these really droll fundraising appeal letters time and time again? What's more, why is it that we keep expecting that these sleep-inducing tomes will appeal to donors more this year than they did last year?

If we want different, better results, more money, more donors, higher average gifts, why do we keep doing the same things we have always done? When we need improvement, why do we keep doing the same things that brought the results we want to improve? Who was it that said this is insanity? Einstein, I believe?

The Stage is Set for Nonprofit Success

Did you see the Wall Street Journal article in the Opinion section for Monday, November 27, 2006 entitled "Charitable Explanation"? It's a doozy! It was written by Arthur C. Brooks, professor at Syracuse University's Maxwell School of Public Affairs, and the author of "Who Really Cares: The Surprising Truth About Compassionate Conservatism."

He compares the 85 million American households who give away money each year to nonprofit organizations, to the other 30 million who do not. What's the reason some give and others don't? Brooks says, "The charity gap is driven not by economics but by values. Nowhere is the divide in values more on display than in religion, the frontline of our so-called 'culture war.' And the relationship between religion and charity is nothing short of extraordinary. The Social Capital Community Benchmark Survey indicates that Americans who weekly attend a house of worship are 25 percentage points more likely to give than people who go to church rarely or never. These religious folks also give nearly four times more dollars per year than secularists, on average, and volunteer more than twice as frequently."

There it is, folks! The perfect set-up for any nonprofit to go into the American marketplace and ask for support for mission accomplishment. He summarizes: "Private charity is a choice: a choice to express our values in a private and singularly humane way. This is worth remembering as we hold requests for charitable support in our hands this month – and make the right choice."

So, here we have it: we know that charities do good work and work more effectively and efficiently than government. We know that a huge majority of American households have the kinds of value systems that include giving to others and giving to make the world better as a result of their religious heritage.

Now, the stage having been perfectly set for nonprofit fundraising, in good economies and in bad, what are nonprofits going to do with this? Do poor economic times mean that we just can't think of ways to appeal to those sets of values out there in creative and compelling ways? Does the economy turn off the creative juices? Does the economy prevent us from enticing, romanticizing, motivating donors about what we do to make the world a better place to live in? I don't think so. I don't think the economy has a thing to do with it!

People are ready to give. Now, the decision each individual or household will make about what organizations they support is going to be made on how well any nonprofit states its case for support; on how compellingly and powerfully the donor is drawn into the urgency of the need for their dollars. It's not the economy that's the turn-off; it's charities that keep asking for money without giving us something exciting in return. What I believe any of us who make charitable gifts need and thrive on is that sense of belonging, that feeling of making a difference, that emotional rush of success and achievement that comes from seeing and experiencing the good that we're bringing about in the world. That's what makes giving truly exciting!

Charities use Economy as excuse not to expand fundraising efforts

I well remember Lawrence Lindsey, a Governor of the Federal Reserve Board, who spoke to one of the first assemblies of the National Conference on Planned Giving, which was probably about 1984 or 1985. He said to us that if you give charity $1 as a contribution, you're likely to get something in the neighborhood of $6 worth of service back from that gift. But if you give the IRS $6 in taxes, it is unlikely that you'll get back more than $1 in service. I thought that since he was a governor of the Federal Reserve Board, he probably knew whereof he spoke.

That's a pretty good reason to keep philanthropy alive in one's heart. If you're the kind of person who likes to give, has been brought up with that set of values that reaches out to others in need, or gives back to the community, or simply wants to advance the human plight to new levels of accomplishment, there is the answer: charity does what government cannot, and does it more effectively than government could.

Why is that the case? Lindsey went on in that speech to say that the reason this is so has to do with the effectiveness of volunteer boards. (Yes, those same boards that we just got done saying last week can only do two things: brainstorm and tell stories, I know!) The involvement of volunteers in a nonprofit organizations governance is key to that nonprofit being able to accomplish its mission. Because the board brings planning from a huge diversity of backgrounds, perspectives and skills sets; the board members give generously and get others to give financial resources to the mission to be accomplished; and the volunteer board provides fiscal and programmatic oversight that is far superior to that in government agencies, even under our democratic system.

So that helps set the stage for nonprofit's getting into and staying in the marketplace with a plethora of good, creative, compelling, motivating ideas about why we should give any money to a particular cause. We all know that the results of our giving will be productive.

EMAIL Dialogue: What do I do when the Donor says "Too Much?"

A recent client of mine, R. Hatter, sent me an email last week asking what the appropriate response would be to a key donor who had expressed irritation at the increased number of requests for contributions and the steady flow of information from that charity to his mailbox in recent months. "What can I tell him when he complains that we send him too many appeals and too much information?"

My response was this: "On the guy who says 'too much' -- I suspect the reason he's saying this is because his commitment to your charity is faltering a bit. What I would suggest is that you get him directly back in touch with 'the kids.' Let him touch and feel the urgency that these young lives contain, let him get back in touch with the urgent realities of their situation: that the reason we ask more often and ask more people ask for more money is that the costs of keeping these kids moving towards being fully participating citizens (in a society that otherwise would just dump 'em in the garbage) is getting more expensive each year. Let him see a life 'on the mend,' so to speak. Let him see that while 'God don't make no junk,' it's really generous and self-giving human beings who provide sustenance to life. Let him see that little girl's face or that little boy's smile; let him see the poem or the video or the new invention about to be born in that youngster's mind. He's out of touch. That's all.

"My further suggestion is that you don't answer his more 'obvious' objection, having to do with mailings, and asking too much. That's not where the issue is. And arguing the 'facts of the case,' the number of mailings, etc., in the terms in which he has couched the discussion, won't really get anywhere because he will just continually come back with the same answer. His question sets it up that way. The increased efforts of your staff in fundraising can only encounter objections among those who haven't seen, felt or touched the power of these young lives. Because, for any of the rest of us, there is only one answer -- ask for more money, get more money, use more money, save more kids."
What would your response have been to this question?

Hard Times Give Some Prospects the Excuse Not to Give

I've been thinking about this problem with the economy and charitable giving, and I think we need to take a look at the donor's or prospect's view of this situation. It seems to me that in a down economy it's pretty easy to get into a mode (or maybe it's must a mood) of scarcity. On the home front, for example, there's all the defensive budgeting we have to do – tightening the belt and depriving ourselves of those expenditures we'd really like to make in order to meet a decreased income level. And then there are the cuts we experience in our places of work in both budget and programs, the re-prioritizing of objectives and the re-directing of scarce resources to the "things that count." This looks like it's really the wonderfully perfect excuse to also deal with those nonprofits that bug us for contributions but don't give us anything to be excited about.

For example, for several years now, I've been giving to what in other times as been a favorite charity, my alma mater, in central Pennsylvania. Great place. They dealt with me, didn't they? MUST be a great place. And they continue to take hundreds of central PA's rural and small-town, provincial, unfocused kids and make thinking, discerning, creative adults out of them. With what more laudable program could you ply a vision for our world's betterment?

But in tight financial times, my giving there goes down. Why? Well, frankly, it's an excuse to save a little money for something else. Either that new computer I want, or maybe to get involved with a new charity that has captured my imagination more firmly.

Now, I read the bulletin, I get on the website to see what's happening, and I even talk to fellow alumni occasionally. What I find is that even though there's a whale of a lot happening there in terms of the type and quality of education you can get at this institution, the fact is that the way they describe it in the letters that ask for money makes my eyes glaze over and significantly reduces my motivation to keep giving there. The fundraising letters haven't kept pace with the quality and intensity of the educational experience of the kids that go there. That's too bad. This college, overall, and by comparison, does a creditable job of fundraising. But think how much more they could raise with a littl emore attention to making their fundraising letters compenning and motivating, exciting and alive!

Does the economy affect fundraising? I think it does: it allows donors, people like me, and some of the people we think could be our best prospects, the perfect excuse to use the economy as a reason to give elsewhere or to use resources for things they want when our professional fundraisers can't come up with anything that sparks their continued interest, meets their needs, matches their values. Sure the economy affects fundraising….. or does it!? We take on another example later today.

Is "The Economy" Just an Excuse?

I so well remember Robert F. Sharpe, Sr., who said to us back in about 1984, as we were in training to become major and planned gift officers in our respective nonprofits, that giving follows compelling ideas. Just as in business and industry the money tends to follow the leading edge of ideas that make what we euphemistically refer to as "better mousetraps." If Google comes up with a better search engine, the money to develop that comes their way, then followed by hugely increasing use of that engine when developed, and then followed by the ad dollars as advertisers finally catch on. Better ideas lead to better products, lead to booming economy. Right?

Can we apply that to charities? I think so. But from what I've seen, the boards and staffs of nonprofit organizations don't seem to share that point of view. For example, I've started collecting fundraising letters again this year. It's obvious there are not too many ideas out there in the southeast Michigan philanthropic marketplace. Here we have another gala – "please give to our cause and come to our gala." Over there we have another human service agency that writes a letter two pages long giving a long diatribe on all the aspects of their many-faceted program. Makes my eyes glaze over after the first paragraph! Then we have the hospital campaign – they're short and sweet: never mind what we're doing with your money, just pay up! Your pledge is past due.

During last year's holiday season I racked up 57 fundraising letters that I got in the mail. I can't complain about this. Comparatively, not all that many have my name and address, in light of the fact that there are some 3000 agencies in southeastern Michigan that have the 501-c-3 IRS designation! But of the 57 letters, only 3 of them had any real appeal at all, to my way of thinking. The rest just didn't have the ideas, the program, or the way of describing their efforts or success that appealed to me. So I gave to those three. I could have given to all 57, and would have, IF any of the other 54 had a spark of creativity about them, or presented their case for support in some way that was involving, compelling, motivating.

So my question on this is, does an economy in the tank mean, then, that all the creativity and all the good ideas suddenly vanish from the minds of those in charge of our nonprofits? Is the economy to blame for the fact that dull fundraising letters keep being produced? Does the economy dictate whether or not a given nonprofit thinks up a compelling, tantalizing or creative twist to its case for support?

I kind of don't think so, because this stuff happens – the dull fundraising letters, the lackluster descriptions of program, the failure to talk about exciting results people are having with their program – these all happen in GOOD economic times as well as in bad. Somehow I don't think creativity and compelling cases for support are tied that much to the economy. I'll bet an agency head could come up with a creative and compelling way to capture a donor's heart in any kind of economic circumstance. What do you think?

Bob Sharpe Sr. also said that there was never such a time of economic difficulty that someone couldn't raise a dollar, and there was never such a time of economic well-being and abundance that some nonprofit or other wasn't required to close its doors because of lack of contributions.

We'll explore the donor's response to the economy tomorrow.

The Economy and Fundraising

We have a new topic today. It concerns the flagging economy. In the past year, I have received many inquiries from clients and others about whether the slow economy, particularly slow here in Michigan, hurts fundraising. The most recent of these inquiries came in November from a prominent reporter for a business publication who was doing an article on philanthropy matters locally. The proposition was this: "There are so many capital campaigns going on right now, but will a slow economy hurt these efforts? Shouldn't these nonprofits wait until we have improved economic circumstances? Are there more campaigns going on than there is money to fund them?"

My response to this was that philanthropy is not like a pizza. A pizza is a finite, unexpandable entity. You slice it up. When you eat all the slices, the pie is gone. If there are 8 pieces of pizza and Joe has three, Bill and Mary can't each have 3 pieces. Three people can't divide an 8-piece pizza evenly. That's not what philanthropy is. But many people I've talked to over the years, especially a lot of Board members of nonprofits, seem to assume that if there are "too many charities in town" then there won't be enough money donated by the local populace for all of them to survive and thrive. But that's just not the case.

But I think philanthropy is more like an amoeba. It sort of grows tentacles out toward the food of good ideas and the more good, compelling ideas to give that there are out there in the marketplace, the more the "amoeba" of philanthropy thrives. The more compelling reasons there are to give, and the more great and wonderful things that are getting done to really help people and achieve the ideas we all generally share about the advancement of humankind, the more people are willint to give to those ideas.

Conversely, when there is a paucity of food, the amoeba shrinks, eventually dries up and dies. And, likewise, it seems to me that when there aren't a lot of good, compelling and motivating ideas happening in the area's nonprofits, when all is more or less ho-hum and same-ole-same-ole, the more people find excuses not to give. I don't think they become any less charitably inclined. Philanthropy, the "love of humankind" is alive and well in the hearts of many and is a tradition in our American culture. But people just become disinterested. Or they flock to the nonprofit that has the most compelling case for support and the one that gets the best results.