Major gifts fundraising isn’t normal

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Those who have been involved in major gifts solicitations and have spent years trying to get inside the head and heart of a single donor in the hopes of securing that elusive impact gift will agree with the headline. Likewise, major givers who have endured countless presentations for projects in which they have no interest and asking for amounts that are patently absurd, may also agree. But that’s not the “not normal” I’m referring to.

I’ve been giving a lot of thought to Major Gifts lately. No, my Powerball number hasn’t come up but I am co-authoring a book based on interviews with many of Canada’s top philanthropists. I’ve been considering how I can use what I’ve learned to help fundraising organizations. The yardstick I often use in approaching challenges in nonprofit organizations is what’s the equivalent for-profit situation and what would the ideal business response be.

I was trying to think of a business that offers products or services that range in price from $10 to $10 million. I couldn’t come up with one. And yet, that’s exactly what a hospital or college foundation is doing. They are selling opportunities that range from two digits to those that often exceed seven digits. Even if your organization’s definition of major giving is 5 digits, that’s still an incredible spread. I suspect that if you proposed a business venture with those parameters to your local bank, you’d be given a lecture about how a $10 sale requires a very different approach than one that is worth tens of thousands or millions.

And yet fundraising organizations have no choice but to do that which would be scoffed upon in the business world – and that’s why I say that major gifts fundraising isn’t normal. So, what’s a fundraising organization to do?

Be honest about the challenge. The for-profit world understands that a large ticket item requires a very different sales approach and so should you. Major gifts fundraising is, in may ways, its own discipline. It requires distinct knowledge and dedicated resources. If you’re going to be successful at it, you have to make the investment in time and people.

Resist the temptation. News of a philanthropist’s record-setting gift to a local organization is like the lure of a lottery ticket. “If she can give that organization $1 million, then maybe she will give mine $100,000.” You likely know nothing about that donor’s interests and have no relationship with her, but that doesn’t stop many organizations from thinking that they are going to secure that donor’s support. The reality is it's not going to happen. So, save yourself the time and the heartache and mine your current donor base. Maybe, the rule of tens (for every ten donors at one level, there is one donor who has the ability to add a zero to their gift) will work for you.

Be true to your organization. I mean this in two ways. First, define a major gift according to your needs and resources. For some, that will be a four digit amount and that’s OK – especially if it’s within your reach. Second, concentrate on developing a powerhouse case for giving that is authentic and compelling. In the interviews we conducted with major givers, we found that the the most likely determinant of whether and how much a philanthropist would give is the confidence that their gift would make a difference as well as the passion of the cause and its prime mover. There were also many, many instances in which a philanthropist gave more than asked – because the case for giving was so strong. If you worry about building a strong case and even stronger relationships, you may find that major gifts opportunities are less contrived and more organic.

It’s not for everyone. Let me completely contradict myself (I do it often) and say there may be organizations that are simply not set up for any kind of major gifts programs. Maybe that’s ok – as long as you can build a funding model that works on the volume of smaller gifts.

Normal or not, the challenge of major gifts is extremely demanding. Developing a realistic strategy that makes sense for your organization will help you save your sanity.

Quality v. Quantity in Philanthropy

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Does the size of a philanthropic gift determine its meaningfulness to the donor?

As part of our book project The Philanthropic Mind my writing partner and I recently conducted one of our interviews with Canada’s top philanthropists. In it a donor told us that his first meaningful gift and the one that may have given him the most pleasure was $200 to the university of which he was an alumnus. Not surprising. But what he told us about the rest of his giving history to the institution deserves attention. His most recent gift is quite significant – in the mid seven figures. However, he can recall little detail and nothing notable about all the gifts between the $200 gift thirty years ago and the multi-million dollar gift most recently.

Listen to his words in describing that first gift. “A couple of hundred bucks felt significant at the time. I was only making about $30,000 a year. It was my alma matter and I had a good time there and obviously universities need money. It wasn’t necessarily meaningful financially but it was meaningful spiritually.”

This is what he had to say about the intervening gifts. “Had I committed to other [gifts] before that of lesser amounts? Probably, but I don’t even remember any more. I might have agreed to a gift of $50,000, which at the time seemed significant but today I don’t even remember making the gift. I guess there had to be other gifts that preceded it [the multi-million dollar gift] because you just don’t one day donate that much money.”

What’s going on here? This is an intelligent and very successful businessman. Is it possible that he has forgotten the many intervening gifts? I don’t believe so but it appears he has forgotten their significance.

The reality is that he has been very generous to his alma mater. So what was lost by the forgotten significance? Who knows for sure. Perhaps he would have given more. Perhaps he would have been a stronger advocate for the institution, helping to solicit other gifts. Perhaps if he had spoken as “spiritually” about all his gifts, more people would have been motivated to give.

The message to today’s fundraisers and marketers is to try and make every gift as meaningful as that first $200. This donor had a strong sense of affinity, felt deep responsibility, perceived the need and was sure his gift was going to accomplish something. And he felt great – spiritual – for making it. What if every prospective donor felt that his gift could make that kind of difference – individually and organizationally? What if every supporter could feel that way every time she made a gift?

The lessons learned from listening to the top tier of philanthropists are profound. The number of zeroes in a gift amount won’t always make it more memorable to the donor. There are other, more significant considerations. It seems clear that when it comes to meaningful philanthropy – size doesn’t always matter.

The heart of fundraising success

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Sales is a transfer of emotion. That lesson was drummed into me early in my working life. If you want to make a sale, you’re going to have to make someone feel something and your job is to figure out the right emotion for the right person. It’s taken me a long time to accept the tyranny of that principle. I often want to believe that people buy/give for rational reasons – that they research, comparing objective criteria and make decisions on that basis. But that’s not reality and some recent online material as well as a research project in which I’m involved have made me think about the extent to which the heart rules the head when it comes to giving decisions.

A recent post from my Torontonian colleagues at Nyman Ink explored the concept of Emotional Branding, even citing a Wikipedia entry.

But isn’t all branding emotional? Seth Godin defines a brand as “the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.” – or in fundraising terms to donate to one cause over another. How do you even begin to separate the emotional from the rational in that definition? And why bother?

Katya Andresen focused on analysis vs. emotion in a post earlier this week that presents data/studies that not surprisingly confirm that emotion trumps analysis – as I would say it does every time.

That led me to a really interesting post by consultant Tony Macklin and his “Grand Unified Theory of Donor Desire.” Tony says, "if you want to increase charitable giving, first, listen to a person’s story and hopes. He asserts that perspectives on effective philanthropy will always take a back seat to the “fundamental search for meaning and belonging.”

The last online piece is the Money for Good study recently released by Hope Consulting. Their research consists of over 4,00 interviews with individuals representing household incomes of more than $80K. These are the people that you might think are most rationally discerning about their giving. However, the study concludes, “Few donors do research before they give, and those that do look to the nonprofit itself to provide simple information about efficiency and effectiveness.” Moreover, they found that, ” While donors say they care about nonprofit performance, very few actively donate to the highest performing nonprofits.”

All of this is borne out by research in which I am involved based on interviews with Canada’s top philanthropists. One of the most often cited criteria in major gifts decisions is the passion of the person that is driving the organization or project. Hardly an empirical or rational measure. Even at the major gift level, emotion is the major determinant.

The implication for fundraisers and marketers is clear. If you want someone to give to your cause, you’re going to have to make her feel something – even at the highest levels. And while you can’t ignore the need for clear information and accountability, the more you pitch to the heart, the more successful you will be.

Targeting Affluent Donors

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The most recent daily post from e-marketer may be worth taking note of as it relates to high net worth donors.

While I appreciate that it was brands/companies and not brands/non-profits that were the subject of this study, the results can still be instructive to fundraisers. Certainly those with financial means are going to be of interest to any charitable organization and understanding their online behaviour may help in building relationships.

While the most traditional and still most effective way of approaching affluent donors is in person, it would be a mistake to assume that social media can’t be an important tool in building relationships with this cohort. To that extent the study is very useful.

Some of the results were predictable. I would have assumed that “affluents” aren’t looking for bargains online so the differential in the responses to “I wanted to get deals/discounts” and “I love the brand…” isn’t surprising.

But the responses to the next four statements are far more telling. For the sake of analysis I would organize them into pairs. “I noticed someone following the brand/company profile” and “the social network recommended it,” both indicate the greater degree to which people in this category are influenced by the opinions of their peers and sources they trust. It’s not news to any major gifts specialist that the most important factor in any solicitation is the person doing the asking or who has brought the philanthropic opportunity to the donor’s attention. This is in fact borne out in interviews with Canada’s top philanthropists that I have been conducting as part of a book project.

The to do list regarding this factor would be to find ways to extend the influence of your current affluent donors. Perhaps consider setting up a Facebook page that reflects the interests/concerns of affluent donors. Make it easy for donors to convey information about your organization. Create giving opportunities targeted to affluent donors and strategically use social media advertising to create awareness and drive traffic.

The last pair that caught my attention was “An ad (print, tv, online) led me to it” and “It was mentioned in an article.” Both of these underline the need for cross channel marketing. It has been well documented that marketing and fundraising efforts that use multiple channels enjoy better results. In practical terms this may mean considering ads in targeted publications to drive traffic to an “affluent-focused” Facebook page. Perhaps the content of that page can be unique enough to attract media attention (with a little pr help of course).

There are undoubtedly many other practical ways to use these research findings to create and enhance your relationship with affluent donors and I’d love to hear some of your experiences and/or suggestions.