Can You Pay the Bills With Virtual Money?

I was recently on a panel discussion about cultural voice and global development as part of UN-sponsored day celebrating cultural diversity, hosted by Arts For Global Development. Not too shabby of a discussion (the academic took the opposing view for sport, as you can imagine). The interesting twist was that the panel discussion was simulcast online on Second Life.

Anyone collecting donations yet in Second Life? My sense is this is a huge branding opportunity that nonprofits, corporations, presidential candidates are staking territory in, but is this the next frontier for fundraising? Virtual gifts? Post a comment if you are blazing this trail.

Associating Power

If you work with a membership organization or association as a development staffer, you’ll quickly realize that fundraising has a different twist. Members pay dues for perceived value as well as, in some cases, a tangible service or product. Developing the compelling case can be an uphill battle when the does not actually execute “the business” of the field, but rather services “the business.” In a normal trade association, the natural tendency is to milk funds from the “seller” members (of the buyer/seller association model). This has its downfalls since most members feel they already gave at the office with their dues. And thus, the fundraising cycle begins.

However, an additional burden with the payment of their dues - they have a voice. They vote on who becomes a board member (in most structures), as well as a number of other organizational business items. This is an interesting phenomena considering how nominations or voting may take place. There are voting members who participate in the process that are largely disconnected with the needs of the organization or what the board composition should be to further organizational goals. (When I say disconnected, the truth is most association members assume running an association is the same as running their direct service business—which it is not.) Yet, various power groups emerge in the voting process. In some cases, the vote is pro forma, a consensus vote. But, in a contested election, it becomes a challenge to harness the membership factions toward consensus. As the lead fundraiser, you need to know the candidates, their capacities and ideally, be able to quietly campaign for your top prospects within these power groups of the membership.

The outcome can dramatically affect your life. A few dud board members can really drive down a productive board. So, get to work on that campaigning. It’s never too early to identify prospects for the board and start to seed the idea of running (this point goes for regular nonprofits as well, not just associations!). And in case you were wondering, this work doesn’t have an ounce of “fundraising” in it - it falls under that bullet on the job description “other duties as needed.”

Blogger Note: After a long absence, readers can expect to see more regular postings.

Talk It Up - Part 2

By Guest Blogger: Gregory Harris, Huntington Woods, MI

The Annual Report Is Your Best Publication
Annual reports can be the best publication your organization produces annually. Don’t think of the stuffy kind that Corporate America does, even they are changing. Read Coca-Cola’s new annual report—it reads like picture book yet gives you all the important, successful and interesting things they accomplished last year (and without the legal jargon). Four rules I have for annual reports: 1) available in four color hard copy and on the website, 2) something someone would actually pick up and read, 2) every page has large pictures or colorful graphs and few words and 3) has a theme.

Rack Brochure is the Evil Necessity
It’s an evil necessity for museums and attractions. Do these really bring business? Hard to tell unless you coupon, and even then it my not come close to the cost. But one thing is certain, if your organization is not in the rack or isn’t one of the first seven brochures spotted, your patrons and Board members will ask you why. You’ll hear more from them about the missing rack brochure than you will the quarterly publication, the membership package, the newspaper article, etc.

Planned Giving Brochure Gives You Respect
Whether your organization is large or small, with an endowment $500,000 or $50,000,000, employing a planned gifts officer or it’s everybody’s job, a planned giving brochure makes you look professional, accomplished and educated. The more custom the brochure (not the stick-your-hospital-name-on-the-cover), the more personalized your program will appear. Remember that perception is key to a person’s attitude. It’s not the only item you need (software, training, experience, etc), but if you’ve taken the time to personalize your program in a published format and demonstrate that you’re knowledgeable about the tools available for gifting, your donor may have a higher level of confidence that you can handle their lifetime assets.

Talk It Up - Part 2

Guest Blogger: Gregory Harris

The Annual Report Is Your Best Publication
Annual reports can be the best publication your organization produces annually. Don’t think of the stuffy kind that Corporate America does, even they are changing. Read Coca-Cola’s new annual report—it reads like picture book yet gives you all the important, successful and interesting things they accomplished last year (and without the legal jargon). Four rules I have for annual reports: 1) available in four color hard copy and on the website, 2) something someone would actually pick up and read, 2) every page has large pictures or colorful graphs and few words and 3) has a theme.

Rack Brochure is the Evil Necessity
It’s an evil necessity for museums and attractions. Do these really bring business? Hard to tell unless you coupon, and even then it my not come close to the cost. But one thing is certain, if your organization is not in the rack or isn’t one of the first seven brochures spotted, your patrons and Board members will ask you why. You’ll hear more from them about the missing rack brochure than you will the quarterly publication, the membership package, the newspaper article, etc.

Planned Giving Brochure Gives You Respect
Whether your organization is large or small, with an endowment $500,000 or $50,000,000, employing a planned gifts officer or it’s everybody’s job, a planned giving brochure makes you look professional, accomplished and educated. The more custom the brochure (not the stick-your-hospital-name-on-the-cover), the more personalized your program will appear. Remember that perception is key to a person’s attitude. It’s not the only item you need (software, training, experience, etc), but if you’ve taken the time to personalize your program in a published format and demonstrate that you’re knowledgeable about the tools available for gifting, your donor may have a higher level of confidence that you can handle their lifetime assets.

Talk It Up

By Guest Blogger: Gregory Harris, Huntington Woods, MI

100 Gets You One

There is an old sales formula first introduced in the insurance business that states for every 100 calls one makes ten leads are produced and one deal is closed. That’s 99% rejection—wow, really! Well…in a way…yes.

I suspect this formula was introduced as a way to get sales teams to make more sales calls. If you apply this strategy to a purely cold call scenario, the result may not be far off. Good sales people probably score ten deals for every 100 calls, but that still means getting a door slammed in your face 90% of the time.

The principle of this formula can be used in development departments today. While one should strive to make less cold calls and focus on warm prospect leads, it is the meat of the formula that is the point—make the call. Set a goal for yourself each week to make a certain number of calls. Some calls may be (and should be) for stewardship purposes, other calls may be fact finding, mixing it up is good. Just make the call.

Know Your Organization

Now that you know how many calls you need to make, I’m going to encourage you to take time away from calling and away from your office. Learn who your organization is what it is doing.

Some information you can glean from general staff meetings or by sitting in meetings of other departments. In addition to this time, I encourage you to get to know people that work in other divisions of your organization. Whether it’s a doctor, a professor, an animal keeper or an artist, you can pick up a great deal of information from these individuals. You’ll learn about challenges that create barriers for staff success, key research that’s been lost in the institution priorities, and valuable relationships that other staff have with donors, prospects or agencies.

Why do you need to know this? Your donors and prospects have questions that range your entire organization. The more you know the higher the confidence level of the constituents you are cultivating and stewarding. They want to talk with someone that is informed, that has a finger on the institution’s pulse, however close or removed it is.

Board Member Giving

Participation of board directors in annual giving varies as much as nonprofit missions. Some boards set financial goals, some focus more on percent of participation, and others combine giving with fund raising.

It’s less important where your directors are today with giving, it’s more important where you need them to be in three-to-five years. I have found that directors will be more responsive if they know what to expect ahead of time. A policy or guideline document that outlines their financial expectation is a good tool. Boards that aren’t used to formal solicitation will see this document as “insensitive’ or “off-putting.” Sometimes it takes two or even three attempts to get a Board ready to adopt a policy.

A preface to instituting written gift goals is to have a board consultant come in first. This is always fun for staff. After a good presentation about fiscal and legal responsibilities, directors are usually dazed enough to welcome written guidelines.

Who Counts the Money?

Fund raisers raise money and accountants count it, right? Sure, but what happens between the receipt of the cash or securities and the thank you letter?

Who decides how the gift should be coded—Development, Finance, staff directors vs. managers? When should you use a post office lock box versus the physical address? Are there checks and balances between department software systems and are these reconciled monthly? Should foundations gifts really be called grants? Is this gift restricted or capital? Is that contribution restricted or designated?

Some of the answers should be clear; others will depend upon your institution’s policies. One thing for certain, financial rules are getting strict and complicated. My advice—hire a firm to conduct an internal audit on cash controls. You may be surprised what you’ve missed or what procedure is now out of compliance.

Guest Bloggers

Over the next few months, you'll be seeing some new faces (okay, really reading some new voices) on my blog. I've asked some of my most trusted fundraising peers to offer their opinions, ideas, reflections. Enjoy the show.

Chorus of Crickets

Boards never cease to amaze me. It's not the people but the group dynamic. A poorly managed board is a deadly board. Every organization I have worked with has struggled in one facet or another in managing or activating its board, whether it is managing meetings, level of participation, raising funds, nominating and securing the 'right' participants.

I had the unfortunate opportunity to sit-in on a board meeting where one particular board member challenged his colleagues to set a give or get goal (not policy, just an immediate goal for the current fiscal year) to assist the organization meet some of it’s financial needs. The request was not outrageous in monetary size, actually quite the opposite – a very achievable amount of money for each person. This was met with dead silence, literally. I like to refer to this as the “chorus of crickets.” Whenever an ‘ask’ isn’t well planned or timed the prospect often responds with dead silence. Cue the crickets. [Note: in general, large amounts of dead silence during an 'ask' is a bad thing.]

What was so painful wasn’t that this person had the nerve to make the challenge (bravo, actually for suggesting it!) but the fact that the rest of his colleagues were so stupefied by the idea of having to take this on, they were speechless. To my amazement, not one other board member mumbled, even begrudgingly, “I agree” or “we should consider this now.” Their collective response revealed the true colors about the mentality of the group toward their fiduciary responsibility.

I won’t get into the details of what followed but in short, the outspoken board member was left hollowed by the experience. Ironically, for me, this is probably the fifth or sixth time in my career (across numerous boards, large and small, national and local) I’ve witnessed this in a board meeting. The crickets can be deafening.

Holiday Reading, part 2 - Brandful of Bucks

You can’t swing by Borders and grab the latest Stanford Social Innovation Review, but you should find a copy of the Winter issue. One of the feature articles debates the merits of nonprofit brand building and fundraising.

In short, authors Adrian Sargeant and John Ford undertook a body of research looking at a handful of U.K. charities and their donor activity against the perceived brand. Finding? Most nonprofit brands are “undifferentiated” and this should concern fundraisers. This is not breaking news, but their points are a worthy launching point for internal leadership discussions about your organization’s brand and personal reflection on brand value and fundraising.

A strong nonprofit brand is vital for successful fundraising. Brands are built and/or changed over decades not months or years. If you raise money for a category killer like I did at the Smithsonian, you quickly understand the power of brand when fundraising. While the Smithsonian is a highly regarded institution nationally and internationally, what’s behind the curtain would give most people some pause. But none of that internal muck mattered. When I picked up the phone to raise money all I had to say was I was calling from the Smithsonian. Instant name recognition, validity, and perception of quality. **Note: This got me the foot in the door at least. I still had to sell the project or event which was always a challenge, but less so with the Smithsonian brand backing it.

(I feel compelled to throw out one caveat for upstart or small nonprofits. This is where brand is often delivered in the service provided to the community and “brand building” isn’t in the budget: It’s not impossible to be successful, but it is admittedly a lot harder. I would argue that the power of your under-recognized brand is valued with funders in a way that can be translated into a windfall.)

I learned early on that to be successful asking for money I needed two things: control of the message and distinctive programs or services that consistently meet or exceed expectations. Essential to fundraising success: there must be a there there. Since I wasn’t the business of crafting programs, it became clear to me that communications and fundraising efforts must be close bed fellows. This led me to be a proponent of the “external affairs” staff structure (which brings development, communications, and sometimes other related staff under one department manager, usually a fundraiser). If the executive in charge of raising money has a leadership control in crafting the overall message of the organization in all its variations and channels, the power of the development effort is much more lucrative.

A related point is made by the authors as they challenge nonprofits to “pay attention” to all of the brand dimensions (vision, mission, etc) so all of the organization’s parts are consistent and supporting the brand. Often, the language of the fundraising message doesn’t match the reality of the organization’s work. The appeal messages are articulated in lofty language well beyond the organization’s scope or frame vanilla programs and services in a glorifying manner that’s not real. Donors can sniff this out instantly.

The authors emphasize the need to start talking to the people you serve, principally donors to figure out your brand position. I couldn’t agree more and I would add media or other community influencers who work outside the day-to-day framework of your industry. Once staff stops talking and starts listening to the outside, you’ll hear mostly subtle micro-differences between your organization and competitors, if any at all. Name a category killer brand that got to that spot with nuances and subtlety.

My advice for fundraisers as it relates to brands is simple: get your message right! Emphasize what makes you different. Identify the qualities that make you distinctive (including competitors’ work as the authors note). Find at least one distinct element of your organization and drive a truck through it for fundraising.

The SSIR article is worth a look. You may not be able to control your brand but you can help shape it. That’s work that will pay off in the long-run.

Random Acts of Giving

Fundraising lore is full of providential moments. You can plan, strategize, research until the cows come home, but sometimes luck and a higher power are on your side when looking for money.

Two days ago I welcomed my third child into the world. She’s a beautiful, healthy vision of an angel. And, with two older brothers, she’ll likely hold her own quickly. This experience, like the previous two, gives me pause to think of how lucky I am to father a brood and without the tremendous burden that some families do with a serious infant or child healthcare issue.

With this in mind, my wife and I have decided to make an annual contribution in each of our children’s names to three organizations that address, research or assist families with serious infant/child illnesses. Our first act is going to the National Association of Pediatric Nurse Practitioners (NAPNAP). The women (I’m sure there are men, but they weren’t in our hospital with us) who served, cared for, listened, educated, encouraged, and cajoled confidence into us for those adrenaline-filled 12 hours pre-birth were testimony to the health care profession. I can’t imagine the sights they see day in and day out. Before a baby arrives they are dealing with people who are largely void of sensical decision-making powers. Each person walks off the street bringing personal baggage, expectations, education of the birthing process, and of course, pain tolerance. Some are with a team of family supporters; some are alone. These nurses ease into each situation. Talk about customer service skills. Going from room to room, they hold a power to articulate a situation in a caring tone with civility and authority, while exuding an unguarded openness for dialogue. To grapple with the fact that at any moment in one or all of the rooms they are serving could deliver life altering news is intense.

I say all this as a preface to, I have no idea what NAPNAP’s fundraising goal is. Maybe my gift will put them over the top? I don’t know really what percentage of my dollar will go to programs vs. operations, and quite frankly nor do I care. I don’t expect to get every mailing and be recognized broadly. This is a random act of giving. We were so personally moved by the work of these individuals, we are going to act. Isn’t that what we all hope for in raising money? That the cause or people working for a cause so move a prospective donor by the work that they act with their bank account? (This is why letting prospects see your organization's work firsthand is vital to your fundraising succes. Let the programs or services sell themselves.)

Kick off 2007 with your ‘thankful in 2006’ list. Don’t just give to your usual suspects. Pull out your wallet, checkbook, or internet browser and give. Enjoy the fulfillment of a random act of giving and become part of the lore.