raising money during challenging times lawrence henze july, 2009

Raising Money During Challenging Times


Lawrence Henze

July, 2009

Lawrence C. Henze, J.D. | Page #2© 2008 Blackbaud


This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author.

Our Agenda

Impact of challenging times on fundraising

Action items– Donor relations– Special events– Annual giving– Major giving– Planned giving

Summary and Questions




Recession

Our economic situation is officially a recession

How does a recession affect:– Donors and prospects?– Nonprofit organizations?– Your work?




The Effect of a Recession on Donors, Prospects

Know your constituencies

Different types of donors have different reactions (more later)

Remember, they don’t stop caring about your mission during these times!

However, it may limit their ability to support your mission




The Effect of a Recession on Your Organization

Some organizations realize that these times are temporary and act internally as if very little is different

Some organizations have not reacted yet Most common:

– Budget freeze or cuts– Programmatic changes– Hiring freezes– Layoffs


Understanding Donor Development




Ultimate Giving

Every individual has an “ultimate gift” Ultimate gifts may be any level, any type (including $0) Ultimate giving does not place a higher value on “major”

gifts Find ultimate giving profiles, develop appropriate

marketing strategies, close more gifts! Most major donors are also planned giving prospects, not

true in reverse!




Steps in the Donor PyramidDonor Loyalty is Critical!!!




Donor Profiling

Highest scores and high assets

Further qualification and research

Immediate individual cultivation

Lower likelihood scores, but high target giving ranges and assets

Need to be sold on your mission

Longer term cultivation

High likelihood scores and mid-level target giving ranges

Implement targeted upgrade, mid-level major gift strategies

Increase annual giving

Low likelihood scores and low target giving ranges

Minimize investment Consider reduced

resource application


Donor Relations




Donor Relations – Internal Review

Now is a good time to conduct an internal review of your outreach efforts

Analyze the following: How often do your constituents hear from you? Your Organization?– Via direct mail, email, telephone?– Solicitation vs. thanking or informing– Other contacts exclusive of fundraising, including the

activities of other offices




Donor Relations – Donor-Centered Style

Now that you know how, and how many times you contact your donors and prospects…

Perhaps it is a good time to ask them what they would like to see

Significant evidence that engaging donors and asking them to participate in this fashion leads to better donor relations and increased giving




Surveys: Learning More About the Loyal

Survey loyal donors to determine their interests, wants– Why do they give?– Which programs do they like the most?– What would they like to change about their relationship

with your organization?– What would they like to receive from you—and how?– Act upon the information—and provide feedback

Also survey other individuals on your database to determine their interests and feelings




Donor Relations – Special Events

Probably not a good time to launch a new event

Furthermore, a good time to review the purposes of existing events

Are these events meeting their goals?


Annual Giving




Annual Giving

Number of Solicitations: How many is too many?

Are we able to solicit loyal donors more efficiently?

Conveying other information through annual giving solicitations and thank-you efforts




Annual Giving – Question Everything

Are you using an outside vendor? Statistics may be used to point in many directions! Question all recommendations as they fit with

your organization How do you want to be perceived in recessionary

times?– More aggressive?– More effective/efficient?




Research Project

How do nonprofits solicit $10 donors

Frequency and type of solicitations

National trends

Again, what is the image you wish to project?




Anniversary Date Observations

How many donors give at the same time every year?

Do you solicit them at other times of the year?

Do you need to, or is this an opportunity to demonstrate fiscal responsibility




Multiple Opportunities

Seeking donor loyalty through the annual fund supports major and planned giving

Provide a donor check-off opportunity on annual giving response cards related to planned giving

Thanking annual donors and including a brief planned giving insert


Major and Planned Giving




Major Giving

Major gift activities, cultivation and solicitation, do not stop during these times

Be open and honest with your best donors about how your organization is affected by the challenges of the current economy

Show these donors the positive steps you will take to make the organization more efficient and effective




Recession and Planned Giving

February 7, 2008 edition of The Chronicle of Philanthropy– Several articles on this and related topics

Basically two points of view:– Contract marketing efforts and avoid long-range

gift maturity dates, or– Planned giving, particularly bequests, fit in

conservative economic times




My Thoughts on a Recession and Planned Giving

But we like planned giving opportunities, particularly bequests and annuities, during these times

Do not forego future opportunities for current savings – 2007 study reports that 50% of bequests are

first inked between the ages of 40-60 Act intelligently based on strong market research–

This is the best way to be more cost effective




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Planned Gifts that Work in a Recession

Bequest – A provision in your will to pass money to a charitable organization upon your death or the death of a spouse. Typical clauses include an outright amount, a percentage of the assets, or the residual of the estate.

Charitable Gift Annuity – You give money to a charity, which promises to pay you a fixed amount regularly for life. Although part of the annuity payments are taxable, you’ll also receive an upfront income tax deduction for the amount estimated to end up with the charity




Planned Giving Facts

Bequests constitute almost 90% of all planned gifts made– More than 80% of these are unknown at

present Annuities constitute another 5-6% of all planned

gifts You can have a successful planned giving

program without focusing on trusts (the complicated stuff!)

Fiscally conservative gifts for challenging times




Planned Giving Facts

You may have more dollar potential in planned giving than major giving

Why people give (NCPG, now PPP, survey)– 97% say they care about the charity– 87% desire to do something special– 35% tax planning– 22% know charity’s representative




Planned Giving by Gift Type

Bequests:– Two primary age groups: late 40s to late 50s, and 65-78.– Loyal donors, lower amounts– Comfortable with debt– Mid-to-upper middle income– Tend to live in one home for longer times– Children in college or have education-related debt– Charitably inclined– Volunteers




(Traditional) Charitable Gift Annuities:– Ages: mid-70s and older– Retired– Fiscally conservative– Uncomfortable with debt– Not wealthy (or do not think they are)– Are or were loyal donors, usually very low amounts– Charitably inclined– Worried about outliving their resources– Frequently single (widowed females)

Planned Giving by Gift Type




Profile Summary

Strong correlation with annual giving loyalty and planned giving

Do not let giving amount control decision to solicit for planned gifts

Do not let cash rule the day




In Summary - More on Cultivating Loyalty

One concept to act upon Loyal donors give at least 60% of the time Often exhibit habitual giving patterns Habitual giving offers opportunity to reduce solicitations

and create more donor-centered environment– Anniversary date giving

Look at all types of loyalty:– Volunteerism– Membership– Ticket buying




Summary and Questions Contact:

Lawrence [email protected] 843-991-9921

New Book: http://www.blackbaud.com/files/resources/downloads/Book_CreatingALegacy.pdf

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raising money during challenging times lawrence henze july, 2009

Documents

proprietary information

expressed permission

mission slide

donor development slide

ultimate giving profiles

ultimate gift ultimate

major donors

planned giving summary