Download - The Donor Development Process
![Page 1: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/1.jpg)
The Donor Development Process
Presented by
John Elbare, CFPFlorida Philanthropic Advisors, LLC
![Page 2: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/2.jpg)
Donors or Donations?
What is more important in your organization, donations or donors?
Your answer has a lot to do with your success!
![Page 3: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/3.jpg)
Transactional Approach
Transactional approach is inherently inefficient. It provides no positive reinforcement for the donor.
It misses out on most of the economic value of a donor:a large gift at the end of life.
![Page 4: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/4.jpg)
The Problem
A fund raising strategy based mainly on raising funds usually results in revenue stagnation.
Why? Lapsed donors. Donor who make a gift and never give again.
![Page 5: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/5.jpg)
Donor-Centered Approach
Recognizes the economic value of a donor’s giving over a lifetime
Focuses on helping the donor feel involved with the mission.
Encourages a sense of investment in the mission
![Page 6: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/6.jpg)
Why is This Important?
The key to sustained success is a base of loyal donors.If you do not retain your donors, you are spinning your wheels.
![Page 7: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/7.jpg)
A Typical Case
1. Clarence donates through Giving Challenge -- $50.
2. He becomes a steady donor at $100/year
3. He is personally solicited and starts giving $1000 annually
4. He leaves his home as a gift in his will
![Page 8: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/8.jpg)
The Economics
Year one……….......................$ 50Years 2 – 6 = $100/year........ 500Years 7 – 14 = $1000/year.... 8,000At death = $125,000............ 125,000Lifetime Giving
133,550Average per year: $ 8,900
![Page 9: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/9.jpg)
Questions:
How would this donor be treated by your organization?
Would you have noticed him? Would have cultivated a relationship
with him? If not, why not?
![Page 10: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/10.jpg)
What is the Real Value of a Donor?
This year’s gift?Past Giving?Current Giving?Potential for Future
Giving?An Entire Lifetime of
Giving?
![Page 11: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/11.jpg)
PlannedGifts
Major Gifts
Annual Gifts
Development Pyramid
New Donors
Larger Gifts
Smaller Gifts
![Page 12: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/12.jpg)
What’s the Solution?
Growing a Loyal Donor base
This is the key to building a growing, sustainable source of revenue.
![Page 13: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/13.jpg)
A Critical Question
What does it feel like to be a donor to your organization?
![Page 14: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/14.jpg)
Warning Signs You have a high donor lapse
rate(or you do know your lapse rate)
You do not know why your donors drift way
Your revenue is not increasing substantially every year.
![Page 15: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/15.jpg)
So, How Do We Do It?
By intentionally building strong relationships with our donors
By helping them feel good about their support and involvement
By providing positive reinforcement By providing opportunities for
involvement
![Page 16: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/16.jpg)
What Does A Donor-CenteredSystem Look Like?
Donor Acquisition
Donor Retention Donor Upgrading
Major Gift Planned Gift
![Page 17: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/17.jpg)
Donor Acquisition
Continuous new donor acquisition is essential for long-term success in fund raising.
Your organization needs a steady flow of new donors to grow your donor base.
Without a growing donor base, your revenue decline, not increase, over time.
![Page 18: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/18.jpg)
The Acquisition Challenge
A donor’s first donation is usually: That donor’s smallest donation The hardest donation to get The costliest donation to raise A way to test the charitySo, why don’t we work hard to keep the new
donors we do acquire?
![Page 19: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/19.jpg)
Donor Renewal
It is far easier to retain a donor than to go out and find another one to replace a lapsed donor.
Personal renewal letters Exemption from frequent solicitations Reports on the organization’s work Donor recognition club Opportunities for involvement
![Page 20: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/20.jpg)
Your Opportunity
Every gift is an opportunity to provide positive reinforcement and strengthen the relationship.
It is also an opportunity to harm the relationship and send the donor elsewhere.
![Page 21: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/21.jpg)
Why Do Donors Give?
Donors give because they care about your charitable mission.
Your success in fund raising depends on how well you make your case for support.
![Page 22: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/22.jpg)
Positive Reinforcement
A behavior strengthens if it is immediately followed by a positive reinforcer (reward)
A behavior reduces if it is not followed by any reinforcer (extinction)
A behavior is suppressed if it is followed by a negative reinforcer (punishment)
![Page 23: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/23.jpg)
Gift Acknowledgment
Use personal thank you letters Get their names right Connect the gift to the cause Get letters out fast Treat every donor well, despite gift size Make follow-up phone calls Involve Board Members Find out how they want to be involved Begin relationship building with the first gift Use a new donor kit
![Page 24: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/24.jpg)
Keep Good Records
You need a good information system:
Record of all transactions
Donor giving histories Gift acknowledgments Mail sort capability Contact management
![Page 25: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/25.jpg)
Goals of Good Donor Relations
1. Make sure every donor is properly thanked after each gift.
2. Proactively manage your donor renewal and upgrading process
3. Identify donors who are ready for personal cultivation and begin that process
4. Work to maximize each donor’s lifetime support for your organization.
![Page 26: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/26.jpg)
The Giving Decision
People give from the heart
They give to help people they empathize with
People do not give because your organization has needs
![Page 27: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/27.jpg)
Opportunities for Involvement
Tours of your programs, facilities
Lunches with the CEO Opportunities to meet
clients Opportunities to
meet/shadow staff Opportunities to volunteer Good communications Invitations to all events
![Page 28: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/28.jpg)
Donor Recognition Clubs
Avoid a lot of levels Recognize both annual
and cumulative giving Annual recognition
event Publish an Honor Roll Consider a Donor Wall Offer Certificates Avoid Expensive Gifts
![Page 29: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/29.jpg)
Donor Upgrading
Monitor donor giving histories Raise the ask amount, based on past
giving Tie the new amount to service levels Consider a monthly giving program Move to personal solicitations when
loyalty is established.
![Page 30: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/30.jpg)
Personal Cultivation
Donor acquisition, retention and upgrading is designed to produce a steady flow of loyal donors for personal cultivation.
Virtually all large gifts are obtained through personal, face-to-face relationships.
![Page 31: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/31.jpg)
The Donor Relationship Cycle
Identification Cultivation
SolicitationStewardship
![Page 32: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/32.jpg)
Some Important Metrics
Number of new donors Lapse rate Average gift size by donor Cost of raising funds Years of consecutive giving
(loyalty) Number and timing of mailings
![Page 33: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/33.jpg)
Fund Development Plan
A written plan is essential for reaching your goals.A failure to plan is a plan for failure.
![Page 34: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/34.jpg)
Your Plan Keeps You Focused
Often, the fund raising staff is: Under-trained and overworked Given unrealistic goals Given insufficient resources Given little or no board support Provided with no systems, plan
or policiesYet -- they are expected to raise
money!
![Page 35: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/35.jpg)
Benefits of a Development Plan
Stay focused on priorities Obtain sufficient support Engage the Board Use resources wisely Ensure feasibility Maintain balance Provide accountability
![Page 36: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/36.jpg)
Characteristics of a GoodFund Raising Plan
Strategic in Scope Written Feasible Clear Objectives Defined Activities Measurable
Outcomes Easily Evaluated
![Page 37: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/37.jpg)
Strategic in Scope
Your fund raising plan reflects your strategic plan
You are making your case for your vision
![Page 38: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/38.jpg)
Making the Case
Making the case for support requires both:
1. Factual Reasons – why a gift is a good investment in a charitable cause.
2. Emotional Reasons – how a donor can empathize with the people who are served.
![Page 39: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/39.jpg)
Investment in the Program
Without adequate investment, a promising fund raising program is doomed to failure.
Undercapitalization is the biggest reason for business failure – applies to fund raising as well.
![Page 40: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/40.jpg)
ROI for Fund Raising Strategies
Low ROI:1. Acquisition Mail2. Special Events3. Renewal Mail4. Thrift Stores5. Memberships
High ROI:1. Monthly Giving2. Personal Ask3. Major Gifts4. Planned Gifts5. Capital
Campaigns
![Page 41: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/41.jpg)
Typical Giving Patterns
Initial Gift $25 - $100
Renewal Gift $50 - $500
Major Gift $ 1000 - $50,000+
Planned Gift $ 25,000+
![Page 42: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/42.jpg)
Cost of Raising Funds
Initial Gift 50-100%
Renewal Gift 25-50%
Major Gift 10-20%
Planned Gift 5-10%
![Page 43: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/43.jpg)
Feasibility
The best fund raising goals are feasible yet ambitious
Unrealistic goals can destroy your fund raising effort; they build in a sense of failure and demoralize your staff and volunteers
![Page 44: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/44.jpg)
Fund Raising Systems
A system ensures that policies, procedures and practices are consistently followed.
A good fund raising program is system-dependent not people-dependent.
![Page 45: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/45.jpg)
Examples
1. We need your support for our home nutrition program. We serve 580 seniors and now need to purchase a new van and hire 3 more staff.
2. Your gift will help feed homebound seniors in our community. With your help, we will make sure no senior goes hungry.
![Page 46: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/46.jpg)
Elements of a Plan
Strategic Goals long-term and short-term
Donor Development Acquisition Renewal Upgrading Personal cultivation/solicitation Major/planned giving Stewardship
Metrics & Reporting
![Page 47: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/47.jpg)
Example of a Goal
“Our goal is to raise $500,000 this year to establish an endowment fund that will provide on-going support for client assistance every year. A $500,000 endowment will provide approximately $20,000 each year in client assistance funds.”
![Page 48: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/48.jpg)
Sample Activities
Target Group: Loyal Donors who have made a gift every year for the past 4 years and/or who have a cumulative giving of at least $ 1000.
Activities:1. Compile prospect list2. Hold prospect review sessions, rate prospects3. Send approach letter and follow-up phone call4. Seek personal visit5. Solicit gift after appropriate cultivation
Expected Outcome: 10-15 letters & calls per week; 3-5 visits per week; 2 solicitations per week; two gifts per month, avg. $ 7,500.00 = $180,000/year
Expenses: Mileage, meals, postage, printing = $6,000Staff Time: 25 hours/weekTimeline: Start Oct 2005, then continuously
![Page 49: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/49.jpg)
Indicators
Watch these data: Number of new donors Number of lapsed donor Lapse rate Renewal rate Size of donor base Growth (or decline) of
loyal donor segment(5+ years of annual giving)
Are your reports focused on the money or the donors?
![Page 50: The Donor Development Process](https://reader037.vdocument.in/reader037/viewer/2022102819/568143b1550346895db03905/html5/thumbnails/50.jpg)
Planning Pays Off!
Florida Philanthropic Advisors, LLC813-562-9333
www.floridagives.orgwww.pgcoach.org