Secret No 2
The Right Donors
Who gives more: individuals or corporations and foundations?
Contrary to popular belief, corporations and foundations are not the most important source of income for nonprofit groups.
Corporations give only 7% of all private donations to nonprofits in Canada. Foundations give only another 5%. Individuals give 88% of the money about $3 billion dollars in 1990.32 These percentages are almost exactly the same in the USA.
Individuals give more to Canadian charities than foundations and corporations combined 730% more!
How do you find the generous people who donate big gifts?
It is not as hard to find generous donors as most people think. In fact, you may be surprised to discover major prospects among people you already know.
Research has given a detailed profile of the typical major donor. Of course, your own donors may have a different pattern of characteristic traits. Canada Gives provides two profiles of donors.33
The most generous donors to nonreligious activities are most typically:
The two most important factors are religion and community involvement.
The most generous donors to religious organizations are often:
A Us researcher added a few other factors, and came up with the next profile. It varies only slightly from the Canadian models above, but focuses more specifically on the biggest donors. The most likely major donor has38:
At the simplest level, the people who will give the largest amounts are willing, capable, and interested, in that order, said John Thomas.39
Start with people who already support your group
There is a big and dangerous delusion about major donor campaigns.
Many people share the false notion that the campaign should begin by finding a really wealthy person (even though that person may never have heard of your group before, much less donated to you). Then they try to persuade him or her that your group is worthy of support.
Quite the contrary. The secret of success is to begin with those most familiar with your group, those who have already demonstrated their commitment. Then slowly widen the circle of contacts.
A bird in the hand is worth two in the bush,
Start with the people you know best. It will come as a shock to some people that board members should be your first donors.
Your major gift prospects are, in order of priority:
Another way to express this is as `circles of influence'. Visualize a target, or the solar system. The people in the centre are the most likely to give. The farther out they are, the less likely it is that you will get a big donation. Current and past board members are in the centre. Donors, current and past, are in the next ring. Volunteers and staff, past and present are a little further out still, followed by participants and their families and contacts of board and volunteers. Strangers known for their generosity are at the outer limit the only ones more remote are strangers known for wealth but not generosity.
Why ask the board to give first? How do you ask?
Our board give? He must be joking! They can only afford to give their time. We don't have a bunch of rich people on the board, and we don't want to.
Many people don't believe there is any point in trying to get their board to give at all let alone give first. Yet there are good reasons why it is important. There are techniques that can make it surprisingly easy. Even in difficult circumstances, such as boards intentionally composed of poor people, it can be done.
Board giving is important. Even a token amount has value. In the eyes of prospects, this symbolic gesture of leadership may far overshadow the actual amount of money that a board member may be able to afford.
Let's explore three issues:
Is it possible to get the board to give major donations?
If you are convinced your board members can not give or will not give, you are not alone. Many organizations share this conviction. They may be right. However, this perception must be challenged and forestalled early in the campaign.
It is not necessary that all board members be rich. It is even not necessary that all of them give large donations. It is, however, absolutely necessary that all make some level of financial contribution. Each board member should be giving as much as he or she can afford.
Is this realistic?
A true story will show just how realistic it is. Lucy Charron, the then Coordinator of the National Anti-Poverty Organization (Napo), was attending a fundraising seminar for small organizations on Grindstone Island (north of Kingston, Ontario) in September of 1989. When others in the room expressed doubts about board members of grassroots groups giving money, she responded:
Imagine the moral power this gives Napo when it asks a prospect to give!
Many other organizations have found that board members are willing to give donations in addition to their time, when approached in the right way.
Why is it worth the trouble?
Why is it so important for board members to give money? They already give their time. They may be paying expenses to come to meetings sometimes major travel costs. Even if they do give, it won't add up to much money.
There are several reasons:
Prospects have been known to ask outright, Do 100% of your board contribute? If not, come back and see me when they do.
Prospects feel nervous about an organization where the board does not appear to be firmly enough committed to put their own money on the line. After all, if you cannot persuade your own board to give, how can you persuade others, who have less attachment to your mission?
It is also important for at least some of the board members to be involved in meeting potential donors. Staff should not take on this role alone. If a prospect asks the board member how much he or she is giving, as they sometimes do, it is not sufficient for the board member to reply, I give my time. Time does not pay any bills. The prospect is apt to respond, I'll give my time, too, and you've just had an hour of it. Goodbye.
Even if the board member can give only a small amount, this can be adequate. If prospects ask, tell them, We keep the actual amount of everyone's donations confidential. However, I can assure you that I give as much as I can.
Some board members may be willing to name the amount. They might say I give X dollars and that represents a significant percentage of my income and a large share of the money I have available to give to charity. If you'll give in the same proportion, we'd be happy.
It may seem shocking that prospects would ask board members about their own gifts. It happens most often when the prospect and the board member know each other quite well and that's the very sort of intimate relationship that's ideal for an approach.
When a board member gives, the actual amount may not make a significant difference to the overall fundraising goal. But it symbolizes a different relation to the organization.
Sometimes the board member's attitude changes as well. Board members who never before expressed any interest in raising funds suddenly realize how central it is when their own money is on the line.
A token donation may be all that can be arranged at first. In the long run, the board may have to take on more responsibility and dig deeper.
In traditional campaigns, the board members as a group are expected to make personal contributions totalling from 10% to 30% of the goal. If they can't give it personally, they are often expected to take responsibility for raising that much.
This may be difficult or impossible for some organizations.
Grassroots groups, for example, may have people on the board representing participants or minority groups who are poor.
Umbrella organizations and provincial and national federations also have problems. If their board members are appointed as representatives from other groups, their prime loyalty may be to their home organizations.
Still other groups have board members appointed as government watchdogs, rather than as supporters.
In such cases, board members should still be asked to make at least token contributions. At the minimum, if they are paying their own expenses, the organization might reimburse them, and then ask that the money be donated back. While this is primarily symbolic, it may suffice. Ideally, each member should give to his or her own level of sacrifice. For some that may be $10. For others, it may be $100, $1000, or much more.
Grassroots fundraising consultant and author Joan Flanagan offers this advice to board members:
How do you get the board members to give?
Here's the worst way to ask the board to give: march into a board meeting and propose a resolution that henceforth all board members shall be required to contribute a minimum of $100 to the organization on an annual basis.
This is bound to raise a storm. And it doesn't model the kind of approach they should use in appealing to prospective donors: asking privately, listening to their interests, and asking for a gift that is appropriate to their individual situation.
Instead, board members should be approached about giving with all the tact and care required for any other major prospect. All the techniques outlined in this manual apply equally to the first round, when you ask board members to donate. In addition, special measures are appropriate for these special people.
Choose one board member to spearhead the approach. Select this campaign leader quietly. Do not ask at a board meeting if anyone would like to volunteer. Do not have someone appointed. The person must be respected by others on the board. She or he must already be giving, or be willing to start giving. The leader will likely require training, as outlined later in the book.
The leader should, in turn, choose another prospect. Pick someone who can be persuaded easily to give a significant contribution. Someone who can influence others to give. The campaign leader should quietly speak to the new prospect about contributing. If the prospect agrees, then the two of them approach a third, and so on, until all have been asked.
All this is done by appointment. Meet them in your organization's office, or the board member's office or home. Don't slip it in at board or committee meetings or during breaks.
It may take some time to reach every board member. This is a critically important stage, however, and the time is well worth investing. In a real sense, all future major-donor contributions depend on the success of this stage.
Some board members may not be persuaded to give after this process of quiet discussions. In that case it may be appropriate to make the campaign more formal. Once all the board members have been approached and not before the matter could be raised at a board meeting. The campaign leader could announce the degree of success, measuring the percentage of the board members who have given and explaining why it is important to reach 100%.
Here's how one national organization based in Ottawa handled the problem of getting the board to give: they made a game of it. A draw was announced. The only eligible entrants were board members who had not previously given and were now making their first contribution. Prizes included restaurant meals and a weekend in a hotel, all donated. It took them three years, but they moved from no board members giving to full participation.
Ultimately, when appointing people to the board, consider their fundraising contributions as one of the criteria. This is not to suggest that the only consideration be the person's ability to donate or raise money. However, many grassroots groups have let the pendulum swing too far in the opposite direction. They may wrongly assume that the kind of people they want as board members couldn't contribute anything at all financially, and that people with money can't possibly contribute anything intellectually or emotionally.
Where the organization does not have control over the board, another solution is required. This applies when some or all board members are appointed, or for some other reason can't be selected with any consideration of fundraising factors.
In this case, set up another quasi-board, specifically for fundraising. It may be called an Advisory Council or an Honorary Board. It may be semi-independent, and be named Friends of _______ or The Business Council for _______. It may even be set up as a fully independent foundation, as many hospitals have done.
This group would be given the mandate of raising funds. Its members would be chosen for their fundraising ability, their contacts, and their personal willingness to give.
A team like this is well positioned to fulfil the motto increasingly used to describe the role of the board. Boards have moved beyond being asked to bring their Three T's: time, talent and treasure. Now the catchphrase is the Three G's: give, get, or get off.
A separate team with a fundraising mandate leaves the managerial and policy-making power with the original board. This is usually a satisfactory arrangement. People who are capable of serving on a fundraising group usually have no interest in taking over the policies or management of an organization.
Nevertheless, problems have occasionally erupted when trust between the two groups breaks down.
Advisory Councils have decided the Managing Board is incompetent. They have refused to turn over money on request. They have even decided to give funds to other organizations.
Managing Boards, in turn, have decided that the Advisory Council was not to be trusted and refused to share important information.
In most cases, however, regular consultation and careful attention to the balance of power have prevented any problems from developing.
How can you find hidden giving potential among current donors?
Once you have explored the potential for your board to become donors, you can widen the circle. The next group to look at are your current donors. In almost every case, some of your current donors could give more, if they were asked.
If you are fundraising for a new organization with no current donors, you may wish to skip to the next section, which deals with finding new supporters. However, this section is also good preparation for your long-term fundraising planning.
Do not pass too quickly to asking strangers. It takes a long time to get results. One study showed that on the average, three years pass between a first contact with a potential donor and the day a large gift is made.42 Fortunately, you may already be far beyond `first contact' with many people.
With rare exceptions, you should work with current and past donors before starting on strangers, no matter how rich or generous the strangers may appear to be.
Incidentally, the same study showed that fundraising staff stay with a charity only 2.6 years on average. Volunteers may move on even faster. This underlines the need for a long-term approach, with good recordkeeping for your successor.
Myth: Grass-roots groups don't know anyone with money.
Could your donors truly give more? Perhaps not, but if you don't try a face-to-face appeal, you will never know for sure. Donors are not as likely to give large sums as a result of mail or telephone campaigns, which are geared to relatively small donations. If someone does give a lot as a result of mail or phone contact, imagine how much more they might have given if approached in person.
A case study illustrates the point:
First, let's review the background of the group, which shall remain nameless. The organization is large, well known, and has been around for decades. It is controversial. Donors feel strong loyalty, but non-donors often bitterly oppose the group's positions. It is not the type of group that attracts the wealthy. In fact, it prides itself on focusing on ordinary people.
A study conducted by Ken Wyman and Associates Inc. found the group's fundraising was very strong in direct mail and telephone campaigns. Many donors were signed up on monthly payment plans. But even though there were a large number of donors, virtually none gave as much as $1000 a year. This was flagged as evidence of a problem.
Although the organization doubted that their supporters could or would give that much money, they agreed to a test. Fifty previous donors were chosen, based on past giving history. Ten volunteers were given one evening of training and then told to go approach their prospects, using the techniques outlined here.
Two weeks later, the campaign was over. The volunteers had raised $40,000. The average donation was over $1000. The effort involved was minimal.
Afterwards the donors were asked why they had never given so much to the group before. Their answer was predictable: No one ever asked!
Many groups are convinced that all their supporters are too poor to contribute. For a small number of groups, that is true.
For many others, there are exceptions. Many of the donors may be unable to give much more, but a few could. Your group, too, may have one or two or more supporters who, while they are far from wealthy, could make larger donations than others.
Remember, you don't need a lot of well-to-do supporters, just a few very generous ones. They may be able to make donations now, or leave you money in their wills.
Let's look at some examples of actual donors:
Marion Fulton lives on a farm four miles outside the small Manitoba town of Birtle, near the Saskatchewan border. The largest donation she ever made $10,000 happened because friends paid back a debt. I had loaned them the money and expected them to pay back a little at a time, but they paid it back all at once. Maybe they had a windfall. I was debating what to do with it. I decided the church Mission and Service Fund needed it, because they had a shortfall. People weren't giving to the church like they used to.
Names have been changed in the following examples, but they are true stories.
Myth: Asking for more money might drive donors away.
Many groups are unnecessarily nervous about approaching their current donors. They fear that pushing too hard will scare them away. Anyway, they doubt that the donors really have more money to give. Wouldn't it be easier to talk to new people instead?
These fears are perfectly reasonable. But the answers, based on years of experience, are reassuring.
Will you drive away donors if you ask them again? On the contrary, because you will send a well trained volunteer to talk with the donors face-to-face, in almost every case they will feel closer to your group whether they give or not. No high pressure tactics will be used. No annoying junk mail or ill-timed phone calls will increase their frustration. Instead, they will have a nice chat with a pleasant person who genuinely cares about their opinions.
A few may express irritation. If they are driven away this easily, these were probably people you were losing anyway. Apologies and promises not to offend in future may win them back. If not, the loss must be weighed against the benefits: extra income raised, and improved relations with the majority of top donors.
It is not easier to sign up new people. It is much simpler to persuade a current supporter to give more, than it is to convince someone who has never given to make a major contribution.
Action: Identify the best prospects among current donors.
At this stage, your key step is to examine your donor list. There are several ways to spot the people who might be willing to give more.
Take no action yet. Don't contact the prospects. At this point, you are simply compiling your best list of prospective donors.
Do prepare a list covering these top prospects. Include their name, address, telephone number, and complete giving history. If you have additional information, add any other comments you can. More will follow on how to research prospects.