Saturday, July 20, 2013

Collecting Pledge Payments from Donors

What is the  proper protocol when you have emailed and invoiced a donor who pledged and you receive no response? An askAPB question from LH in Porter County, Indiana.

Great question, LH! 

I always like to assume the best about people--they pledged their gift wholeheartedly, voluntarily, and in good faith at the time of the pledge. There are three reasons why folks aren't responding:
  • They haven't gotten around to it. Donors lead complicated lives. Check out my earlier post about pleasant persistence vs. donor stalking
  • Something has changed in their financial situation, and they can't fulfill the pledge right now.
  • They just plain aren't interested in the cause anymore. 

Your job is to figure out which of these situations applies. So, pick up the phone and invite them (to coffee or for a tour) for a project update. Share your goals for the meeting: (1) to provide real examples of how their financial commitment has been working for your clients, and (2) to discuss the status of fundraising progress toward your goal.

The phone conversation alone may provide the detail you need. 
  • Folks may respond, "Oh, LH, I'm so sorry I've forgotten to put that check in the mail. I'll take care of it right away. It would be lovely to see you." 
  • Donors may say, "Yes, of course. We've had a delay in our payment schedule, but I still plan to make a payment... hopefully in 60 days." Remember, gifts are made on the donors' timetable, not always yours. Tell them you understand and you appreciate their commitment. Perhaps you can negotiate partial payment terms, or monthly auto-billing on a credit or debit card. If it is a larger payment, you could suggest fulfilling the pledge with a gift of appreciated stock or a gift directly from an IRA distribution.
  • People may not take your call. Continue to try periodically with paper, email, and phone check-ins. Always be optimistic. After a significant amount of time has passed and you've had a thorough discussion with your CFO, you may need to write-off uncollected pledges. However, I would remain positive in periodic (minimal cost) communications with the pledge-maker. You may not know or understand the reason for the delinquency, but that pledge-maker still has a voice in the community and may still have an affection for your cause.

Hope this helps, LH! If other readers have additional ideas, please feel free to share them in the comments below. 

Saturday, June 22, 2013

Fundraisers: This is your highest priority!

"How do you suggest prioritizing time between cultivation/stewardship and new prospect identification/qualification?" T.H., Lake County, IN

APB responds: T.H., this is an important question. 

Your number one goal in fundraising is to RETAIN your current donors.

Most (somewhere around 70%) of first-time donors to U.S. nonprofits never repeat that gift. Then, NPOs lose 30% of those donors year after year. Imagine the shock and horror of a for-profit company CEO who learned that 70% of her customers never bought from her again! She'd be out of a job, really quick.

Yet, somehow, in nonprofits--especially in the human service sector--we often make the mistake of chasing new donors (or, worse yet, new money). It's a grass-is-always greener view. And it's a HUGE missed opportunity.

Let's take a for instance: Let's say in your first year on the job, you are able to attain 10 donors who contribute at a $25 level. In year 2, only three of those 10 donors give again, but they increase their gift by 10%. In year 3, you have two donors left, and in year 4 you are down to only one of those original donors. 

The total amount you have raised in 4 years from all of those folks is $426.

  Year 1 Year 2 Year 3 Year 4 Total Giving
Donor A $25 $28 $30 $33 $116
Donor B $25 $28 $30   $83
Donor C $25 $28     $53
Donor D $25       $25
Donor E $25       $25
Donor F $25       $25
Donor G $25       $25
Donor H $25       $25
Donor I $25       $25
Donor J $25       $25

Presumably at some point during these four years, you would start scrambling to find new donors to replace the ones who are leaving their relationship with you. That would pull you away from stewardship and cultivation activities, and it would burn you out because 70% of all the new donors would never give again. 

But, let's say you prioritized retaining donors through stewardship and cultivation so that in year 2 you retained 50% of your donors and nothing else changed. By the end of your 4th year, you will have raised $545, 28% more than in the first scenario. 

  Year 1 Year 2 Year 3 Year 4 Total Giving
Donor A $25 $28 $30 $33 $116
Donor B $25 $28 $30 $33 $116
Donor C $25 $28 $30   $83
Donor D $25 $28     $53
Donor E $25 $28     $53
Donor F $25       $25
Donor G $25       $25
Donor H $25       $25
Donor I $25       $25
Donor J $25       $25

So, T.H., if you work for an organization with a large number of annual donors that you don't know very well, I would suggest spending a larger portion of your time stewarding those donors and cultivating personal relationships that could lead to major gifts and legacy gifts from those same individuals.

However, if you work for a newer, grassroots organization with a very modest donor pool, I would suggest prioritizing a few "point of entry" events or solicitations to help you identify first-time donors. Then I would urge you to devote a substantial portion of time towards encouraging donor loyalty.

Get your hands and eyes on anything by Adrian Sargeant for more research on donor retention. In addition, read the latest from the Fundraising Effectiveness Project at the Urban Institute by clicking HERE. 

If you have any burning, nagging, or "I'll look into that later" questions about fundraising, philanthropy, or the complex world of nonprofits, you can askAPB ( I'm excited hear from you!!

If anyone has more to share, please comment below!

Wednesday, May 29, 2013

When your Board Member says, "Sorry, I don't have any friends to ask for money."

"Three out of four executive directors (75%)--and 82% of executives among organizations with operating budgets under $1 million--call board member engagement insufficient" according to Underdeveloped: A National Study of Challenges Facing Nonprofit Organizations (2013). 
Penelope Burk's new research on Donor Centered Leadership also points to nonprofit staff and board leadership's self-reported dissatisfaction about board engagement in fundraising. Simone Joyaux writes eloquently and extensively about how to set governance expectations and what to do if board members don't meet those expectations. And, she reminds us not to ask board members to trespass on their personal and professional relationships (so important!). 

There's a lot of emotion--guilt, unclear expectations, resentment, and fear--all wrapped up in conversations with board members about introducing interested members of their spheres of influence to the nonprofit organizations that the serve and represent. In my experience working with boards on fund development plans, these emotions manifest with a comment like, "I'm sorry. I don't have any friends to ask for money." (Let me be clear: this is not the assignment they've been given.)

My sense is that a scarcity mindset is at the root of these emotions. It goes something like this, "If I talk to people about my nonprofit, (1) they will think I'm asking them for money, (2) that would be taking money away from someone, (3) I'm then going to owe that person money for whatever cause they represent, (4) and I don't want someone to ask me for money, because (5) I don't want someone to take money away from me." 

There are a number thoughts to unpack in the scarcity mindset I outlined above. We won't get to them all in this post. I want to start directly with the notion of charitable giving as "taking money away from someone." A way to enter into conversation with a board member who feels this way is to show him or her how charitable giving can offer a financial benefit to a donor and to a charitable organization: a win-win. These are things that are rarely discussed with board members, and doing so may make a slight shift in their scarcity mindset. It may inspire your board members to be more comfortable being an ambassador for your organization.

Please join me, Tim Rice and Aaron Adcock from Lakeside Wealth Management on Thursday June 6 from 8:30am-10:00am at United Way of Porter County for an in depth discussion about 4 Simple Charitable Giving Strategies that Board Members Can't Wait to Share.

You will learn:

  1. How giving stock can reduce tax exposure for donors
  2. Why you should create a great "sponsorship" menu--and how to do it
  3. Who can benefit from Indiana NAP tax credits--and how to explain them in plain English
  4. How IRAs can turn into great gifts
At the end of the session, you will be able to:
  1. Help donors understand how charitable gifts can have important tax benefits
  2. Educate your board members about 4 tax saving strategies to share with friends
  3. Communicate the value that you can bring to and advisor-client relationship

Friday, May 24, 2013

How NOT to Stalk Donors AND How to get a Fundraiser to STOP Calling

The meeting has been held and sponsorship materials have been reviewed and left with the potential sponsor.  The individual you met with appears interested in supporting your cause, but indicated the need to discuss it with others before making a commitment and requested that you follow up in a few weeks.  You do so, no response.  You wait a week or longer and reach out again, no response.  You wait another week to ten days and give it a third try thanking them for meeting with you and asking for a response one way or the other so that you do not continue to bother them.  Again, no response.  They are not saying yes or no, just not responding at all.  At what point do you call it quits?  And if you call it quits for the current year, do you meet with them again for the following year or are they telling you by not responding at all that they are not interested? 
An askAPB question from D.H. in Porter County, Indiana

D.H., this is a great question that many fundraisers worry about. First let me commend you for having the courage to personally visit with your donors and to be persistent in your follow-up. You are doing your job. To answer your question, I usually recommend following-up on proposals 3-4 times. But unfortunately, there's no science and no magic. 

Remember that you don't know what is going on with your donor: death in the family, divorce, problems with children, exotic vacations, weddings, graduations--all the amazing and painful and joyful life experiences that will always be a priority over your proposal (and should be!). So, when you've left your third or fourth voicemail and your donor still has not responded, why don't you write a nice, personal note to them.

Dear Jimmy, I really enjoyed our meeting to talk about Project Fantastic. I know you wanted to get consensus with your team before you confirm the gift. It seems like my follow-up calls haven't come at the most convenient times for you. I want you to know that your gift would be amazing, and my door is always open to talk about the project. But, out of respect for our relationship, I'll put the ball in your court to initiate the conversation. I hope that things are going really well for you, and I can't wait to see you at the next Business After Hours. Sincerely, ...

Remember, and remind your boss, "fundraising occurs on the donor's timetable, not yours." What you CAN control is the nature and character of your long-term relationship.

So let's flip your question and imagine that your prospective donor is not really interested your proposal, or he is not able to get consensus with his team (or family) to confirm the gift, or "something suddenly came up." Is there something that he can do to stop your worry and to stop you from calling (again). Of course! He can say "no, thank you" honestly and politely.

Here's how I've done it. A friend and business client asked me last winter if I'd be interested in supporting a summer event for a non-profit where she serves on the board. I was, and I still am definitely interested. But, between then and now, however, a couple of unexpected business circumstances emerged for me, and the timing just isn't working for a summer gift. Secretly, I had hoped that she'd forget my interest, but she's too good at fundraising for that. When she emailed me with the sponsorship information, here's how I replied:

Hi, L! Thanks for remembering my interest in this. I would like to support this cool event, but the timing is all wrong for me right now. I’m sorry I can’t commit to it this summer. Hopefully I will be in a better place support this group later in the fall. 

It is always best to be honest and authentic, even when that means no, not now, or not ever. Your saying "no" is also a gift to the fundraiser. It gives her back her time and focus. It lifts any anxiety she feels about calling you again. Momentary disappointment is always better than prolonged anxiety. 

So, to sum it all up, if you are feeling some kind of anxiety about calling a donor or about returning a fundraiser's phone call, respect that relationship with an honest statement (by phone or by personal note) about the situation and your discernment process. That's all we can ask of one another as human beings in pursuit of a common good.

If others of our colleagues and friends have different responses, I welcome any and all enhancements and positive, shared advice in the comments below.

If you have a burning, nagging, or "I'll look into that later" question about philanthropy, fundraising, or the wonderfully complicated world of nonprofits, click here to askAPB.

Exceeding all expectations and goals! Congratulations, Nicole!

I'm so proud of my recently graduated intern, Nicole Wilken. As readers of this blog know, Nicole has researched, created, and offered insightful posts about philanthropy, nonprofit leadership, grant-making, and fundraising since September 2012. Now I'm both so happy (and so sad) to congratulate her on her graduation from Valparaiso University and her new journey to Nicaragua as a Program Director at Manna Project International. Let me tell you, they will be so fortunate to benefit from her quiet, confident leadership.

Let me also share props for Nicole and her team of fellow Valparaiso University SALT (Social Action Leadership Team) students that exceeded their $15,000 fundraising goal by 34%! They raised $20,144.71 for the YAWA Project: Bettering a Nation through Education to implement a literacy program for Red Cloud Indian School on the Pine Ridge Indian Reservation in South Dakota.

According to Nicole, the secret sauce that put the fundraising efforts over the top was starting a donor relations program,e.g. visiting with past SALT donors, asking them why they were inspired to give, and sharing what was new with this year's project. Most of the people who received a stewardship visit increased their gifts. 

That's one of the beautiful things about Nicole, it was never enough to raise the money. It was always more important to share information, to express thanks, and to make sure whatever she did left a positive impression and a strong foundation for future growth. We should all remember those lessons.

Hats off to you, Nicole! I am excited to learn about your experiences and learn from your work abroad. Change the world, save peoples' lives, make no small plans... and remember your Vitamin C. I am thankful for all the wisdom that you shared with me!

Wednesday, May 15, 2013

Fundraising Event Overload? 3 Steps to Change the Conversation

"How do I convince my Board of Directors that having a special event every month is not good fundraising?" 


An askAPB question from S.P. in Lake County, Indiana.

Thanks for your great question, S.P. Congratulations! Your Board of Directors must be pleased with your special event abilities if they want one every month. Clearly your attention to detail and your planning skills are highly valued. We just need to help your volunteers focus your skills more on building relationships with people who love your cause and less on trying to figure out 12 new time-consuming ways to attract new and different people to your cause.

Your board members really want to do the right thing. My sense is that they don’t know what else to do, and/or they are afraid that fundraising is all about asking for money. Here’s your opportunity for board education.

Board members and volunteers like special events because (1) they are defined activities—volunteer roles are clear; (2)  they succeed (or fail) immediately; and (3) they are usually fun, so asking for sponsorships and ticket sales is a win-win for your organization and their friends.

Here are three steps to start a different conversation around events:
  • Talk about the return on investment for your current events. Make sure that you include an estimate of your staff time (and associated costs) in the calculations. When you are working on an event (napkin colors, signage, menu, invitations, etc.), you are (usually) not cultivating a donor who could make major gift, which is a much more efficient use of your time. There is an opportunity cost. See this for a thorough discussion of ROI analysis.
  • Pick your 1-3 top-performing fundraising events (ROI), and make a plan to enhance the top events by cultivating deeper relationships with attendees and sponsors. (Postpone the lowest-performing events for a year.) Invite your board members to partner with you on personal visits with past event attendees. In these visits, you should listen to what your donors like and don't like about the events.
More importantly, you should find out what inspires them about your organization. Share some “behind the scenes” information, thank them for their support, follow-up with them on ways they can become more involved (volunteering, serving on a committee, etc.). Have a fun time!
  • Set goals for donor loyalty in addition to net funds raised and attendance—how can you increase the likelihood that people will keep coming back to your signature event(s)? What is your regular donor communication plan? Set goals and plans for inspiring multiple gifts from each participant. Do they come to your event AND give to your year-end appeal AND volunteer? How can you get them to do that (Answer: thank them and ASK them). Make sure you report on progress at every board meeting.

If you take these three steps in the conversation, your board will feel wise that they are being financially responsible. They will feel safe because you have given them a clear, fun task of visiting with people who already like your cause. They will understand when and what kind of results to expect (over time), and their new donor loyalty goals will change your day-to-day work. The goals will shift the focus of your planning and detail skills away from the events and toward the donors, which is where the focus needs to be.

Please let me know how it goes, S.P., and if our colleagues have ideas to help, I hope they’ll share them in the comments below. 

Readers can askAPB their burning, nagging, "I'll look into that later" questions about fundraising, philanthropy, and all the beautiful complexity of the nonprofit sector by clicking here. We'll tackle the most interesting questions once a week on this blog. 

Thanks for making the world a more compassionate place by encouraging joyful giving!

Tuesday, April 16, 2013

Know where your donations are coming from (Nicole Wilken)

Many posts of this blog have focused on the importance of donor relations. But how are donors acquired and how do you know if your efforts in donor relations are effective? Here are some ideas:

1) Know whether most of your funding comes from donor outreach events or from private solicitations. Keep close records of attendance and donations. Create a database of email addresses and other contact information of the people interested in your organization’s mission. Make sure to track your donors’ contributions over time to know where they are on the philanthropic curve, how you can better reach out to them, and how to be better stewards of their money.

2) Don’t be afraid to prioritize outreach in the budget. If you use mail solicitations, one way to track the effectiveness of your outreach is to calculate return on investment:
This calculation can help to measure the cost/benefit ratio of specific neighborhoods or demographics of donors. Good record keeping will help to ensure your investments in outreach overset higher returns of donations.

3) Remember that you need to ask about three people for each donation, so don’t get discouraged with rejection. Keep the fundraising pyramid in mind and take care of your donors, regardless of the amount of their contribution.

Thursday, April 11, 2013

Some Events vs. Many Events (Nicole Wilken)

Although the majority of SALT's World Relief Campaign fundraising comes from private donors, our events are an important aspect of our campaign in order to raise awareness within the community and to seek out new donors. This year, instead of doing a large number of small events, we are focusing specifically on our annual events – a campus coffeehouse, educational dinner, semi-formal dance, and 5k. Hopefully, this will allow us to have enough time to plan and advertise these events ensuring a better turnout and more effective outreach of our campaign. By highlighting the annual events, we are also building name recognition for SALT and the Campaign on campus and in the community. 

For more information and updates about the World Relief Campaign, visit the SALT website.