1. Non-Profit Fundraising Strategies for Difficult Times Presented by: Phyllis Hockett & Dave Jones  2009 Pathway Associates www.pathwayassoc.com

2. What’s Changed in the Last Year and a Half? Indicators  Stock Market Loses 50% of Value  Corporate Icons on the Ropes  Home Price Depreciation  Unemployment at 25 Year High Impacts  Foundations : corpus reductions of 25% to 40%  Corporations: more losses than profits  Individuals: feeling poor and insecure

3. One thing that hasn’t changed… The desire of most individuals to make a difference in their community.

4. So what’s the best strategy? OUR RECOMMENDATION: Focus on major gifts from high net worth individuals.

5. The Pyramid of Fund Raising Strategies Planned Giving Capital Campaign Major Gifts Program Foundation/Government Grants Annual Giving Activities (Direct Mail, Events, Social Network Marketng) Degree of Personal Contact $ Size of Gift/ROI Universe of Donors

6. 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)

7. 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

8. The biggest reason: Cost Effective! A major gift campaign offers a tremendous return for a relatively small investment of time and money!

9. Relative Advantages of Development Activities $ Volume Generated Up Front Investment Profit Margin Cost in time and burnout EventsMed-HighHigh25 to 75%High Direct Mail Grant Writing Major Gift Solicitation

10. Relative Advantages of Development Activities $ Volume Generated Up Front Investment Profit Margin Cost in time and burnout EventsMed-HighHigh25 to 75%High Direct MailLowModerate40 to 80%Moderate Grant Writing Major Gift Solicitation

11. Relative Advantages of Development Activities $ Volume Generated Up Front Investment Profit Margin Cost in time and burnout EventsMed-HighHigh25 to 75%High Direct MailLowModerate40 to 80%Moderate Grant Writing ModerateLow50 to 80%Moderate to High Major Gift Solicitation

12. Relative Advantages of Development Activities $ Volume Generated Up Front Investment Profit Margin Cost in time and burnout EventsMed-HighHigh25 to 75%High Direct MailLowModerate40 to 80%Moderate Grant Writing ModerateLow50 to 80%Moderate to High Major Gift Solicitation HighLow95 to 99%Low to Moderate

13. Where do major gifts come from?  Corporations: 4%  Foundations:16%  Individuals: 80%  Corporations: 4%  Foundations:16%  Individuals: 80%

14. Why are Major Gifts Neglected as a Strategy? Planned Giving Capital Campaign Major Gifts Program Foundation/Government Grants Annual Giving Activities (Direct Mail, Events, Social Network Marketng) Degree of Personal Contact

15. 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

16. 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

17. The 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.

18. Board 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

19. 1. 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

20. 2. 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

21. Alternative 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.

22. Potential 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

23. Methods of Cultivation  Mailings  Events  Tours  Personal Meetings  Mailings  Events  Tours  Personal Meetings

24. 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

25. …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

26. …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

27. 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.

28. 4. 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

29. Make 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.”

30. Make 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  2 nd 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  2 nd meeting with organization representatives

31. Getting 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

32. The Four C’s

33. 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

34. Conclusion  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

35. And finally… Say Thank You Often!!!

36. 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