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