Out with the Old, In with the New

Whether personally or professionally, a new year often includes new strategies and new goals. We’re a predictable lot: always looking for the new, shiny, quick fix from health and fitness to fundraising—seeking strategies which will magically realize our new goals with little effort and great rewards.

There’s always more data to research, more social media to engage, a new generation to court. And the chase is on—trading tried-and-true practices for glitzy new gimmicks. Don’t misunderstand; there’s a valuable and necessary place for testing and implementing new strategies in your fundraising program. Data research should be conducted; implementing social media strategies and engaging new donors are important elements to an effective fundraising program. They key is maintaining a healthy proportion of known successful strategies while exploring new strategies.

Now that the year has turned, and by now your books are closed, it’s time to review your fundraising results from last year.  Did you gain first time donors? Did you retain previous donors?  Did your donors grow in their average gift size, or number of gifts? Celebrate your successes, and mark your challenges.  Let this review inform what strategies you consider in the year to come.

Good fundraising programs test new strategies and methods in tandem with long-known practices of fostering donor-centered relations which build financial support through well-developed and inspiring stories of mission and outcomes.

In this new year, continue to develop the strategies which have shown to be successful in your efforts: personalized engagement, clarity of message, responsive and transparent reporting of outcomes. Build on the relationships of those who already support and encourage your organizational mission. Then, based on your results from last year, intentionally incorporate new strategies which support your current plan and don’t monopolize vital resources of time and finances. It’s the key to sustainable long-term growth of your fundraising efforts.

Jennie Wolf Smith

For information on how GSB can help to kick-start your planned and deferred giving efforts with a time- and cost-effective plan, contact me at Jennie@gsbfr.com.

3 Reasons to Improve Your Endowment Program Now

Endowment programs have nearly always taken a back seat in non-profit organization fundraising programs, and the economic squeeze of the last decade adding to the urgency of annual funding for current programs has pushed conscious efforts to secure deferred and estate gifts further out of view.

Regardless of the size of your organization—be it big or small, if intentional cultivation of planned gifts isn’t part of your on-going fundraising strategy, you’re setting up your organization for perpetual financial struggle.

It has been suggested that as much as 50% of future contributions to non-profits may come from gifts planned years before (Greenfield, 1999). Few organizations can afford to pass on this financial support, and none would want to.

There are many reasons to improve your endowment program now. Here are three:

  1. You don’t have to be an estate tax specialist.

In our current philanthropic climate, it’s possible that securing estate gifts has never been both easier and more complicated at the same time. Access to information and education for potential donors has never been more plentiful while the host of charitable vehicles and ever-changing tax codes can intimidate even the most seasoned gift officers.

The good news is that there are financial advisors and tax specialists available to help when a donor is ready to make such a gift. In fact, we strongly recommend gift officers direct potential planned gift donors to seek out third-party financial and tax advisors to ensure gifts made to the organization are in the interest of the donor, and avoid the perception of coercion or other impropriety. Establish organizational policies and procedures to receive these gifts, and leave the gifting technicalities to the estate professionals.

  1. For some donors, giving later may be easier than giving now.

Donors who are conscientious about economic uncertainty, or who are anticipating financial transitions (i.e., college-bound kids, a pending retirement, a future inheritance), may have limited resources today, but can more easily support the organizations they care about as part of their estate. Even a small percentage of an estate can have a significant impact on your organization and create a legacy for the giver.

Raising awareness among your faithful supporters that your organization is prepared to receive and manage deferred gifts instills confidence in donors that their donations will have an impact for years to come.

  1. Despite immediate financial pressures, the organizational mission is about the long-view.

For donors and organizational staff alike, it’s common to feel the pressure of immediate needs around budgets, facility maintenance and program funding shortfalls. Deferred and estate gifts help transition responses from reactive to proactive—a healthier and more productive way to carry out the organizational mission.

Endowments create financial resources for those same needs in the years to come, while also inspiring supporters, board members and employees to think about how needs and mission may develop in the future in response to cultural and environmental trends.

If your organization has suspended in endowment fundraising efforts for more urgent funding demand, it’s time to reallocate your strategy. Don’t have an endowment program in place? It’s time to start!

Jennie Wolf Smith

For information on how GSB can help to kick-start your planned and deferred giving efforts with a time- and cost-effective plan, contact me at Jennie@gsbfr.com.

 

 

 

Reference
Greenfield, J. (1999). Fundraising: Evaluating and Managing the Fund Development Process. 297.

5 Steps to Improving Board Engagement

Whatever the non-profit industry—education, social service, religious entities, health care, culture or beyond—the strength of an organization’s governing board is foundational to the strength of the organization. Board decisions have lasting impact on the organization’s ability—or inability—to adapt to future trends and remain flexible in delivering on its mission.

Yet, too often, board relationships are frustrating for executives and disappointing for members. It doesn’t have to be that way. Here are five steps to improving your board engagement:

  1. Understand why members agreed to serve.

We typically recruit board members for the skills and networks they may bring to our organizations. Focused on ourselves, we miss establishing a good foundation with prospective board members.

Board members agree to serve on boards for a variety of reasons. Not all reasons are directly related to your organization. Rather, they may agree to serve because they believe in the broader cause which your organization aims to influence. They may serve to build their own professional network—enticed by the opportunity to serve alongside other notable board members, or to gain experience as a board member. They may be serving on the board as a representative from an affiliated organization.

Regardless of their reason for serving, it’s vital to understand what they hope to gain from their service and position board time and effort accordingly. For instance: allow for collaborative time within meetings, couch the organization’s mission within the broader cause, or in partnership with affiliated organizations. Help board members recognize their goals as part of their board service.

  1. Set expectations early.

A board member’s failure to attend meetings, make a financial contribution or understand the mission and core values of the organization he or she serves is a direct reflection on the organization’s poor board recruiting.

Potential board members should know well the expectations of board service—from time required both in and outside of official meetings to financial participation and the opportunities and challenges facing the organization. If there are specific networks or skills the prospective member has which would be particularly helpful, tell him or her that you believe these areas will be important to helping the organization reach new goals.

  1. Equip!

Board members are often asked to do things for which they are ill-equipped: from sharing the story of the organization to making decisions which have significant impact on the future of the organization. Help these volunteers help your organization!

A few ideas include:

  • Provide them with success stories from your organization which they can share with others.
  • Present all relevant information regarding internal and external trends to best position their ability to govern and guide organizational decisions—even if (and especially if) they are unflattering or lend to new challenges.
  • Offer—and require—educational opportunities which would help them to better serve your organization. Courses on media relations, fundraising and industry-related trends help to inform your board members, and equip them to be better—and more satisfied—partners in their service.
  1. Provide meaningful tasks.

Board members often say the most frustrating board service is “rubber stamp” meetings which fail to utilize knowledge and skills from the collective board. Members leave these meetings deflated, devalued and discouraged.

Comparatively, working together to solve problems, to cast vision, to respond to the changing environment, are valuable and fulfilling responsibilities. When equipped and empowered, board members increase their engagement with the organization, inspired to reach new heights.

  1. Evaluation

Board self-evaluations are a helpful tool to maintaining a healthy board culture by providing feedback to the organization and affording opportunity for board members unable to honor the pre-determined expectations to improve their commitment or respectfully exit from board service. Yearly evaluations remind board members of their agreed expectations and hold members to the same standards.

Jennie Wolf SmithIf you’d like a sample board self-evaluation form, contact me at: Jennie Wolf Smith, GSB Consultant.

Click here to view my GSB website.

Further reading on Board Development
A great book to understand the mindset of your board members, check out: The Truth About What Nonprofit Boards Want:

The Nine Little Things That Matter Most by June Bradham, CFRE

When to Hire a Consultant

“I don’t know where to start.”

 “Too many expenses, not enough revenue.”

“We know what to do, but can’t figure out how to get there.”

“If our organization raised more money, we could….”

Hiring a consultant is like hiring a mountain climbing guide. You have goals you want—or need—to achieve, but something inhibits you from reaching them. Maybe this something is internal disorganization or limited resources; perhaps it’s external challenges or competition.

If you were planning to scale Mount Everest for the first time, you could swing by a store to pick up a few supplies and set out hoping for the best. More likely, you’d seek out experts—via books, blogs, individuals who have successfully navigated the elements. You’d pour over trail maps and test supplies before you leave. You’d probably find a seasoned guide to make the journey with you, to lead you through unfamiliar terrain.

Similarly, a consultant can help your organization identify your goals, develop a realistic and timely plan for reaching them, and provides the tools and accountability for you to be successful. You’ll have a knowledgeable partner and guide in the fundraising effort, peace of mind in the process.

And, consultants can be less expensive than you think. At GSB, we’re about serving our client’s best interests, providing only services you need to be successful. Most of our clients secure funding to cover a consulting contract within the first couple of months of partnering with us. With associates throughout the U.S., obtaining local GSB counsel is easy; check our website to find an associate near you.

Data-Driven Fundraising

Data is big business—I mean majorly big business. Consumer information is arguably one of the fastest growing economic commodities in our society, and organizations are paying big bucks to get their hands on this consumer data. From political analysis to product development, data drives strategy and decisions.

In 2012, a New York Times article raised public awareness regarding how companies are collecting and statistically analyzing consumer information. The article’s author, Charles Duhigg, wrote, “Almost every major retailer, from grocery chains to investment banks to the U.S. Postal Service, has a ‘predictive analytics’ department devoted to understanding not just consumers’ shopping habits but also their personal habits, so as to more efficiently market to them.”

While the for-profit industry capitalizes on data analysis to strategically grow profits and customer base, the nonprofit industry seems to lag behind—particularly in the area of fundraising.

Here are three ways to utilize data in your fundraising strategy, without a lot of added cost:

1)    Know your (potential) donors. It seems obvious, but I respectfully suggest that you don’t know your donors nearly as well as for-profit companies like Target or Amazon.com do. Understand why your donors give—and in this regard, loyalty doesn’t count. Find out what they specifically appreciate about your organization. What other organizations do they support, and why? Where does your cause rank in funding priority? What would cause a donor to increase his/her support?

2)    Track your donor-organization contact. It’s not just about when you send a mailing to the donor, but also when and how a donor responds. Did they attend an event or volunteer for a committee? Was a contribution made in response to a personal visit or public recognition? Are donations directed toward specific projects, but not others? Often donors self-identify and subtly communicate their interests. There is a host of data here, if organizations are willing to look.

3)    Tailor your appeals. Yes, this is a plug for segmentation. Not all donors are the same;  we should stop treating them so by expecting them to respond to one-size-fits-all appeals. We hail long-time supporters of our organizations with recognition and thanks, but often treat them as though they’re newcomers to our fundraising needs, oblivious to our previous partnership.

Target’s careful analysis enables them to send coupons for baby gear or power tools to specific customers rather than spamming their entire database with unnecessary material. When I log on to Amazon.com, I’m greeted with book recommendations tailored “just for me” based on previous purchases—and, no doubt, statistical analysis of similar purchases made by other customers.

Implementing data to grow support shouldn’t be limited to for-profit markets. Whether an agency or congregation, your nonprofit organization has similar information available if you’re willing to look for it. Use this data to uniquely message your organization—and your donors—for stronger partnerships and increased support.

3 Tips For Fundraising From a Small Shop

Let’s face it, in recent years few development programs have increased staff. More often, fundraising officers are asked to do more with less, leaving them burned out or too stressed to know where to begin. Here are three tips to maximize your time and optimize your efforts:

1) Prioritize. You can’t personally get to everyone in your donor pool, nor should you. Consider how much time you will devote to stewarding long-term relationships, recapturing lapsed donors and acquiring new financial partners.

  • We know keeping a donor engaged is less costly than acquiring a new one. Maintaining those long-term relationships can result in greater support, both now and later.
  • Devote time to re-engaging former donors who have stopped giving. They know your organization and have emotional reasons to reconnect. Start with those who were strong supporters.
  • Have at least one strategy to attract new donors to your cause. While you should encourage your current supporters to introduce you to potential donors, be specific: Host an event where long-term donors bring a potential new donor, ask faithful supporters to write five letters to friends in their network who would resonate with the mission of your organization.
  • Don’t forget the self-identifiers. People who volunteer, who send a gift before you asked for it—or for more than you anticipated, who demonstrate an interest and loyalty to your organization seemingly “out of the blue” are people you should get to know.

2) Plan. Map out a year-long strategy for whom, how and when donors will hear from you. What do you want them to know? When do you want them to know it? How will you communicate and how will they respond?

  • Donor communication isn’t limited to mailings and donor visits. Also consider events, press releases, non-donor directed material, thank you notes and church announcements.
  • Consider the receiver’s perspective. Too often we communicate in ways that donors find incomplete or ill-timed. Just as in storytelling, donor cultivation requires a thoughtful process of bringing the person along to an engagement with the organization. How do the messages a donor receives from your organization tell the story in a thoughtful and logical manner?

3) Systematize. Critical for small fundraising shops, but incredibly valuable for larger ones, developing systems for donor cultivation will streamline the office work and keep moving donors along in engagement with the organization.

  • Automate your steps. Establish timelines for each step of the process from donor identification to calls and follow-up, from gift received to acknowledgement and receipt, and annual fund contribution to conversation about estate gifts. Wherever a donor is at in the process, you can move them to the next step based on your automation.
  • There are a number of tools available to help you automate. Online calendar reminders are a great way to track next steps. Consider outsourcing a step or two, such as arranging annual delivery of birthday flowers to a major donor with a local florist, or use an online vendor like www.sendoutcards.com to pre-arrange birthday and holiday cards.

When you prioritize, plan and systematize, you can allocate more time executing the task at hand, finding more time for donor cultivation and minimize missed opportunities for communication and strengthening donor engagement.

Overhead vs. Outcomes

As donors clamor for greater transparency from nonprofit organizations regarding the use of charitable support, the default tendency is to trumpet minimal overhead as good stewardship of donor funds. But is minimal overhead really the best stewardship of those contributions? Perhaps our focus is misplaced.

Some organizations, such as the American Red Cross, have built strong reputations on directing a high percentage of contributions to specific mission initiatives. While this approach serves some organizations well, more often it leaves others with underpaid staff and underfunded budgets, limiting the potential reach of the cause. Instead of seeking the best, some organizations must compromise for the cheapest.

I’m not advocating high overhead for nonprofit organizations. It is imperative to maintain careful consideration of use of funds for the greatest impact on those served through the ministry. Rather than champion the cheapest of charities, let’s shift our focus—and our language—from one of simply redirecting donor funds to leveraging those contributions for greater impact. Let’s talk outcomes.

If current donor support can accomplish X (number of people served, new ministry initiatives begun, etc.), how much more could be accomplished if donor support doubled? Tripled? To really inspire donors, don’t just double or triple your statistical numbers. Consider the broader, non-tangible benefits.

Instead of reporting how an organization spends donated support, donors are seeking greater impact—desiring to see the needle move on causes about which they care deeply. How are monies pooled together to address new needs, new areas of ministry that are reaching new people—or people in a new way? Sure, it may be that those gifts are used to fund a new position (thus, increasing the dreaded organizational overhead). But instead of focusing on the new hire, highlight the currently untapped work the new hire will accomplish, ways that work will broaden the ministry and how the ministry will be better positioned.

See the People

As a development officer for a private, Christian college, this phrase echoed through prospect meetings and team goals: See the people. As our society further embraces the convenience of social media, the ease of e-transactions, the impression of personalization to masses, it seems as though something important is missing.

Don’t misunderstand. I’m a proponent of social media. I’ve reconnected with old friends on Facebook and am building a professional network on LinkedIn. I appreciate the ease of online giving and emails. As a donor, I accept nothing less than personalization in correspondence, even though I know it may be a thinly veiled impression. But organizations that rely heavily on these tactics are missing a critical piece: the personal interaction.

Non-profit organizations are regularly seeking ways to set themselves apart from a host of charities vying for financial support, to show themselves—and their cause—worthy of funding. As other organizations continue to send flyers and mass emails, one of the most effective ways to set your organization apart is to “see the people.”

There is little substitute for sitting face-to-face with a current or prospective donor, sharing the life-changing work of your organization and the challenges it faces, answering questions and relieving concerns, reminiscing about their personal history with your work, and communicating the opportunity for them—specifically them—to make an impact in the organization’s future. Donors have a choice in allocating their resources. Make your organization rise above the others with personal attention.

Seven Elements of a Gift Acceptance Policy

If your organization doesn’t have a Gift Acceptance Policy, first consider why you need one. If such a policy is already in place, consider reviewing it annually with board members and fundraising staff. This routine practice educates new members to the team and affords regular consideration of changes to the policy.

As you draft your policy, incorporate these seven elements:

1)     The organization’s mission and purpose. Your guiding principles should frame the decisions to accept—or decline—gifts to the organization.

2)     The purpose of this policy. The aim of this policy is not to restrict the organization, but rather to guide decisions and protect the organization’s assets, fundraising staff and donors.

3)     Use of legal counsel. Outline circumstances when legal counsel should be consulted, such as reviewing certain gifts, contracts and legal documents, transactions with potential conflicts of interests, etc. Specify when appraisals are required, and who will pay for the appraisal. 

4)     Consideration of a donor’s conflict of interest. The organization should encourage donors to consult with their professional advisors before making substantial gifts to the organization.

5)     Donor restrictions on gifts. What kinds of gift restrictions does the organization allow a donor to impose?

6)     Composition of a Gift Acceptance Committee. Inevitably, there may be rare exceptions to the gift acceptance policy or unique gifts which require consideration. Exceptions to the gift policy must be rare, well-supported and reasoned.

A small team of the organization’s financial governors may be named to a review board for consideration of these exceptions. These team members may include the chief financial officer, chief fundraising personnel, chief operations officer and president of the board. When applicable, the team may consult experts such as environmental analysts, property brokers and legal advisors.

7)     Types of gifts the organization receives. Small non-profits may not be able to accept all types of gifts, due to expertise in handling the gift or the resources available. Commonly, organizations receive gifts of cash, tangible personal property, marketable securities, real estate, life insurance. There may be reasons why an organization may decline any of these types of gifts. Such reasons for exemption should be outlined in the policy.

Three Reasons to Have a Gift Acceptance Policy

In the midst of ongoing responsibilities of cultivating relationships and increasing funds for your organization, developing foundational policies can be overlooked.

If your organization doesn’t have a Gift Acceptance Policy, here’s why you need one:

  1. Not every gift is a “good” gift. For many non-profit organizations, this basic statement can be difficult to reconcile. There can be a number of reasons a donor’s gift may burden an organization. Consider hidden costs such as taxes, fees and liability coverage to keep the gift; the costs of staff time to manage or care for the gift; and the likely market or environmental factors which may implicate selling the gift. A gift acceptance policy helps an organization from receiving gifts with unexpected costs of the organization’s time, money and exposure to liability.
  2. A policy guides fundraising staff. When a donor wants to make a gift to the organization, fundraising staff are conditioned to accept it. But if not every gift is a good gift, fundraising staff may see declining a donor’s gift as threatening to the relationship they have worked so diligently to cultivate. A gift acceptance policy defuses the urgency of deciding with a pending gift, affording the fundraising staff to pass along the unusual gift offer to the gift acceptance team for consideration.
  3. A policy protects the organization. It’s not unusual for gifts to come with unexpected costs such as professional fees, appraisal expenses or other dues. A well-developed policy outlines who will pay for these costs. Detailing very clearly how assets are handled by the organization eliminates misunderstanding from the donor as to what is expected.

 

If you already have a Gift Acceptance Policy, it’s important to review the document annually with board members and fundraising staff. The policy, meant to guide—not restrict—your team, may require changes unique to your organization’s circumstances, which may restrict or expand types of gifts received. The policy should allow rare exceptions for specific consideration, and should explicitly state how those rare exceptions should be handled.