Cash Crunch — Clearly this started with local government which became cash strapped due to lower tax collections, less funding from the State and huge cuts in Federal funding – a perfect storm.  Nonprofits from the arts to zoos had to dip into cash reserves, conduct emergency appeals and in some cases invade their endowments.  The social service sector saw demand for its services reach record levels.  Social media, like Facebook, kicked into high gear at many organizations.  Special requests for additional major gifts from longtime individual donors spiked.  It was a dash for cash.

Collaboration — In some situations, nonprofit leaders turned to grant making foundations for a special one-time grant to make it through the tough times.  A few succeeded.  However, many were quizzed by foundation executives as to why they hadn’t done a better job of seeing the cash crunch coming and were told they now need to consider collaborating with a similar agency if they expect a grant.  Collaboration is here to stay.

Consolidation — Those that did not give serious consideration to collaboration, found themselves facing consolidation of programs and services due to dwindling resources.  In other words, more focus on the core mission.  In some cases, even layoffs of staff.

Lessons Learned/Suggestions for Success in 2012

• Don’t let your organization get caught in a similar cash crunch in the years ahead. We have heard from dozens of board members during this recession and they are quite burned out and can’t wait until their term is up.  As they verbalize their experience to others, this will make enlistment of new board leaders a real challenge in 2012 and beyond.  The most common remark, “If only we had done a better job of strategic planning and building up our endowment to weather such ups and downs in the economy.”
• Follow the money.  Keep in mind 85% of all giving in the U.S. is from individuals.  It’s so easy to become dependent on that county grant of $100,000 each year and not have to organize a donor club of 100 friends at $1,000 each.  We call this kind of donor club a Living Endowment, as the 100 friends are giving $100,000 or the equivalent of the earnings from a permanent endowment that can generate this amount.  At today’s interest rates it would take an endowed fund of several million dollars to generate $100,000.
• Update your case for giving. Make it more compelling, urgent and relevant.  Test it, tweak it with donors, potential donors and friends. Make sure your case is about worthiness, not neediness.  Explain why your organization is worthy of the donor’s gift.  Donors respond to the former.

Call a Time Out

Step back and reflect. If there ever was a time to assess the past and think strategically about the future, now is the time.  No matter how busy your organization is keeping up, struggling to survive, there is always time to hold a retreat and ask these five key questions:

1. Where do our philanthropic resources come from now?
2. Where must they come from in the future?
3. What is our plan to keep the donors we’ve got, upgrade them and to obtain new donors?
4. What human and financial resources do we need to attract increased philanthropic support?
5. Where can we get assistance in securing those resources?

Consider Outside Assistance to:

• Conduct prospect research, a screening/wealth analysis of your current donors
• Conduct a Rapid Organizational Assessment to determine what is working and what needs fixing
• Plan and facilitate a day long board retreat to set strategic goals
• Conduct an Online Donor Satisfaction Survey
• Conduct a study to test the feasibility of your plan to increase philanthropic support
• Train volunteers and staff on how to solicit major and donor club gifts
• Ratchet up your planned giving efforts to take advantage of the trillion dollar transfer of wealth

All the best for a prosperous 2012.

          Jim Donovan                                                             Bill Carlton                                                                                                                  

Collaborating To Bring a Half Century of
Best Practice Experience to the Nonprofit Sector

For a free no obligation consultation, call or email us:

In Florida Jim Donovan at 407-321-0024 or email us at:  dmimgt@aol.com

In Colorado Prospect Screening, Barry Donovan at: 303-346-9001 dmimgt@aol.com

In the Northeast/New England Bill Carlton at: 1-800-622-0194.  Wlcarlton@aol.com

By Gino Santilli, CEO of Personal Touch Mailing Services, Orlando

1. USE A LOCAL MAIL HOUSE AND SAVE ON POSTAGE: The Post Office gives discounts for some local zip codes if mailed locally. Using internet and out of area mailing facilities may be costing you valuable postage….usually the highest cost in your direct mail campaign.

2. USE A BARCODE ON YOUR RETURN MEDIA: If you do not place a barcode on your return envelope or card, the Post Office will not allow your mailing to be processed at automation rates resulting in higher postage.

3. BE SURE YOUR MAILER IS THICK ENOUGH: A mail piece, whether it is a folded flyer or oversized postcard, must be at least 9/1000 of an inch thick or may be subject to much higher, non-machine postage rates.

4. TOO SQUARE MEANS HIGHER POSTAGE: If your mail piece does not meet the Post Offices rigid aspect ratio guidelines, you may be subject to much higher non-machine postage rates.

5. WATCH YOUR STAPLES: Staple placement is critical and could dramatically affect your mailer’s classification which could result in added labor & postage costs.

6. PROPER DESIGN AND FOLDING SAVES MONEY: The direction in which your mail piece is folded will dictate the number of wafer seals needed as well as whether the mail piece is machine or non-machine assembled which greatly influences your postage rates.

7. ADDRESS PLACEMENT & AREA SIZE: Label placement is very important for both letters and particularly flat sized mail and the size of the address area that you provide must be large enough to accommodate all postal endorsements for the lowest possible postage rates.

8. HIGH GLOSS COATINGS: If your mail piece or postcard has a finish on the addressing side such as a Varnish, UV or Aqueous coating, your mail house may not be able to inkjet the addresses onto your media which may result in higher labor cost and affect the integrity of your design.

9. DON’T PURCHASE A POSTAGE PERMIT Why pay the Post Office a large annual fee for your own permit when you can use a mail house permit at no cost? Whether you require a standard, non-profit or first class permit imprint, a mail house can supply them at no cost, you just pay postage.

10. DO I NEED A RETURN ADDRESS ON MY MAIL PIECE: The Postage Payment Method of your mail determines whether or not you should place your return address on your mailer. For example, most Standard Mail does not require a return. First Class, though not required, is recommended so as to receive your address corrections, a free service provided by the Post Office. Non-Profit Mailings MUST have the return address printed on the mail piece exactly as it is on file with the Post Office.

11. READABILITY OF YOUR AUTOMATION MAILER: If your return address is printed along the OCR read area of your mail piece and any of your mailing addresses are undeliverable, the Post Office’s OCR reader may read the return address instead and mail this media back to you. This can cost you in wasted printing, processing and postage.

12. MAILING IN-HOUSE COULD COST MORE: Many nonprofit organizations try to keep costs down, as they should, by utilizing volunteers and/or employees to process their mail. As the Post Office continues to tighten their budgets, they are turning to high tech automation to lower their labor costs. This automation can offer deep postage discounts for mailings. However, this savings can only be achieved through constantly updating your software and equipment. Most mail houses keep up with the changes in technology and can save you money by using their equipment.

A final note — Since the U.S. Post Office regulations continue to change at a rapid pace, the information presented here should be used as a starting point to assist you in your quality control process and not taken as the final rule.

Mr. Santilli has three decades of experience in direct mail marketing and advises nonprofit organizations on how to efficiently implement an effective direct mail campaign while adhering to tight budget restraints. You can reach him at 407-857-900 or by email at: ptms@cfl.rr.com or at www.personaltouchmailing.com

In an informal poll of fund raising clients it was not surprising to learn that a major challenge in the current economy is donor retention.  In addition, this is the #1 question we get in emails and telephone calls each week.  Here is what we have learned from donors we have interviewed over the years, and of late, in recent studies about their continued giving.

We have classified the donors as follows:

Activists – these are younger donors, 30-40 years old who spend a lot of time getting their news from the internet and want to do something about the latest crisis somewhere around the world.  They are very emotional about earthquake victims in Haiti or China.  They thrive on the immediacy of sending their support so they click and give.  They love the online eNews updates. Traditional charities do not appeal to them.  “My parents gave to the American Red Cross,” is a typical response.

Loyalists – they are just that, loyal year after year and inclined to keep giving provided there is frequent communication to them from the organization. “We always hear about how our gifts are being used and that is important to us,” is often the way Loyalists describe their reason for being so.  Most loyalists are college and university donors, as it has been drilled into them to “give back.”

Traditionalists – are the opposite of activists, as they are not internet savvy, prefer direct mail requests and support long established American charities and nonprofits like the American Red Cross, Big Brothers & Big Sisters, The Salvation Army, UNICEF or the YMCA.  Many traditionalists served in World War II, experienced the depression, know hard times, lived in the same community for years and don’t believe there is a need for so many new nonprofit groups.  And, they don’t trust online giving.

So, how does one retain these donors?

Let me suggest three ways that cover all three categories and the rationale.

1.  Increase your communication about how the donor’s most recent gift was used, made a difference and how grateful your organization is to them for helping to meet your mission.

Why?  The number one complaint we hear in study interviews is, “I give and never hear anything back, until it’s time for another contribution.”

2.  Ask donors why they give to your organization and what they think.  When is the last time you did a mail and/or online survey?  Surveys are a great engagement tool.  They send a message when you send them out that you want to do a better job and that the input from your donors is a top priority in doing that.

When facilitating a board retreat I often conduct a pre-retreat survey to identify in advance the issues/concerns facing the board.  I get more candid opinions this way than if I did this in an open session.  In addition, it saves time at the retreat and allows me to begin with a discussion of the issues facing the organization as they see them.

Why? Look at the Five Star hotels and how over the years they have perfected this.  As many a hotel executive has told me, “We live and die by those surveys.  Some get fired over them.” Sure many folks do not take the time to complete the survey.  However, you were given the opportunity to chime in or sound off.  And if you are like me, I say to myself, “They can’t fix it if they don’t know about it — complete the survey dummy.”

3.  Tweak your case by emphasizing worthiness rather than the neediness of your organization. In this competitive and tight economy, you have to stay sharp.  Donors can drift away to organizations that appear more appealing or timely in their mission/work.  Are you tying your case to the times?  Does your organization help those most affected by the tough times?  Can you give examples?

Why?  Dozens of new nonprofits are being established every day.  A businessman who watched the evening news had an idea on how to help the poor and created the water brick.  Now he is featured on the national news demonstrating his unique plastic brick that holds water and food and when emptied serves as an actual building block to construct a home.   Check out: www.waterbrick.org.  When was the last time you tweaked your case AND got press coverage of it?

Finally a word about mission drift – nothing will hurt your chances of keeping the donors you’ve got more than drifting away from your mission.  Donors know that without their money you have NO mission.  Money follows mission.  Too often nonprofit groups fail to constantly communicate their mission to their constituency and in a concise way.

Regardless of how precise your mission statement, nothing enhances it more than a great theme right after it.  Of course, my all time favorite theme is from my former employer of years ago — The United Negro College Fund – A Mind is a Terrible Thing to Waste.

If you would like us to help you keep the donors you got or engage your board more in fund raising, we would be happy to discuss a seminar with you or click on our publications at our web site.

As always, let us hear from you about this most recent Blog.

All the best for continued $ucce$$.

Jim Donovan, President, Donovan Management, Inc.

Remember…It’s Not About You – It’s About Your Donors

Update your website with a ThanksforGiving theme. Keep in mind your donors enabled your organization to meet its mission thus far this year.

Show prospects who have already given the Faces of Philanthropy in your Honor Roll thus far this year.  Display pictures of a cross section of donors.

Showcase your Mission and how it is helping those affected in these tough times. Post photos of the smiling faces of those you have helped.

Add a page to your website – Look Who Is Talking About Us, testimonials from community leaders about your effectiveness in meeting your mission.

Demonstrate the consequences of not meeting your giving goal and how that affects your mission.

Encourage pledges if prospects can’t make a year-end cash gift and allow them to give on their terms.  Most prospects feel all your organization wants is cash now.  Yes, you need it, but give donors the option to pledge now and pay later, when their financial situation improves.

Divide and Conquer

Split your LYBUNTS into three categories as follows:

Send a renewal reminder to donors under $100 via an eye catching post card on where to send a check or how to give online at your website.

Send a first class letter to those who gave $100 to $999, a personal salutation and P.S. note signed by a board member or another person the donor will know.

Meet in person with LYBUNTS of $1,000 or more and ask in person. Enlist a team of volunteers to get this done.

When Making the Ask (From my book: Take the Fear Out of Asking for Major Gifts)

Change your mindset from asking to inviting your major gift prospect to come along for the ride, make a difference, by helping your organization meet its mission.

Take a donor or board member with you when extending the invitation to give. One of you makes the case, as noted below, the other answers objections as they come up.

Give the prospect a sense of urgency.  Why is his/her gift needed NOW?

Engage the prospect when you meet with him/her. Don’t skip the social amenities.  Thank the prospect for seeing/meeting with you and promise to be brief and to the point.

Present your case to the prospect by answering these four key questions every donor deserves to have answered by your organization:

Where we have been…
Where we are today…
Where we are going in the future…
And what philanthropic investments/gifts are needed to get there NOW

Then stop talking.  Listen and be prepared to answer any objections.

Overcome Objections to Giving Now

“I am waiting for the economy to turn around before I give.  Times are tough right now.”

I couldn’t agree with you more. Times are tough, we see it in the demand for our programs and services, our numbers have never been higher. For example…

“I can’t afford to give now.”

I understand, many others have told us this as well.  Will you consider a pledge which you can pay in 2010?

“I have so many requests sitting on my desk — why should I give to your organization?”

We are very effective at what we do.  We stretch the dollar.  We are well run.  We keep costs down.

“I think I will wait until 2010 to give, see what happens.”

That’s fine if you don’t need or want the tax deduction for your gift THIS year. Most of our donors are glad we are reminding them to make their gift now so they can take the deduction this year.

“I am not sure my gift will make a difference.”

I can assure you it does in two ways.  First, it helps us meet our mission to….

And second, it inspires others to give, as people notice who supports us and that in turn encourages their friends/peers to give as well.

Happy ThanksforGiving

Jim Donovan

P.S.  This Holiday Season give the gift that raises Major Gifts.  Purchase and save $5:  Take the Fear Out of Asking for Major Gifts for $25 inclusive of shipping by Priority Mail and send your check to Donovan Management, Inc. P.O. Box 471438 Lake Monroe, FL  32747-1438 or email your order to dmimgt@aol.com and we will invoice you.  Click here to read more about the book.

The adage, “lead, follow, or get out of the way,” does not apply to fund raising practitioners. As a former boss once told me over twenty years ago, “When a picture is taken celebrating any fundraising success, you are to be behind the camera not in the picture.” That’s still sage advice today. As a consultant and having been involved in over 200 client engagements, I have seen dozens of fundraising staff try to lead their CEO and Board in the fund raising process. The trick is to involve them in the planning of the fund raising program right from the start, be it annual giving, a capital campaign, planned giving program or endowment campaign. As the plan evolves, ownership of action items has to be evenly distributed, including the CEO and at a minimum, the development committee of the Board. Leadership for fundraising must always come from volunteers not paid staff. Hold a day long retreat devoted to discussing your fundraising goals and strategies to achieve them. Remember: He who tries to lead the Board, ends up — front and center –in the unemployement line.

Tip #2. Good management is good for fundraising.

Identify what strengths and skills your CEO and Board have and how these can positively impact your fundraising programs. Too often expectations of the CEO are unrealistic. How many times have you heard this comment, “I was hired to run this place, you were hired to raise the money.” If your CEO is a good manager, keeps expenses down, gets clean audit reports, all of this helps fund raising. If your CEO has social skills and isn’t a “greenshades nerd” get him in front of key donors and prospects so he can talk about the effective and efficient manner in which your organization is run. Donors today are asking tougher questions of CEO’s, so they must be prepared to particpate in this fundraising process. Donors want to give to well managed organizations. As for your Board, less than one-third of it will have the required skills or contacts to participate in your fundraising program. Identify that third and get them all the training they will sit for. Don’t let anyone tell you 100% of your Board must be engaged in fundraising. It will never happen. On the other hand, 100% of the Board should give. Remember: No coach ever succeed, in any sport by focusing on his players’ weaknesses.

Tip #3. It’s about the messenger, not the message.

Use the outside voice of experience to send the message you want your CEO and Board to hear. For example, strategically your organization has been challenged by the government or others to go to the next level of programs and services for those you serve. New innovative methods are needed. By doing so, fundraising results may have to double or triple in the next couple of years. This is scarey stuff. It’s tempting to just coast. The CEO and Board start looking at you and ask, “Can we double or triple our giving?” You don’t want to be put in that corner. What the CEO and Board really need is a dose of courage. They need somone like them who has been through this at another agency tell them, “You can do this, I know I did it when I was CEO of my agency. Here’s how.” This tactic has worked many times for my clients. Once I had the CEO of the local YMCA as guest speaker at a client retreat where the agency was facing this same issue. It worked. Why? It was who was sending the message, not so much the message. Remember: fundraising is like business, you must take risks.

Tips #4. Communicate like a pilot.

Today on some airlines you can tune into the pilot’s channel and listen to all the chatter during the entire flight. If you have listened, did you notice how pilots communicate with the air traffic controllers or pilots of other aircraft? “Delta 165, this is Orlando Traffic Control, you are clear for takeoff on runway, 2 niner.” The pilot responds by saying, “Roger Orlando, Delta 165 clear for takeoff on 2 niner.” In other words, message sent, message understood, message acknowledged. If you want to succeed in fundraising with your CEO and Board, pick up the phone or walk down the hall and deliver your message “live.” Don’t send emails or leave voice messages for important matters. So much is lost in online communication. Whatever happened to dropping by the CEO’s office for a chat? When you speak to someone, before the conversation is over you must know if your message was heard and understood. We see so much wasted time in client engagements due to fundraising staff sending emails that often don’t get through or voice messages that are overlooked or never received. Remember: Thousands of flights take off and land safely in the U.S. everyday because pilots know the importance of communication.

Tip # 5. Act like a pro. Always.

Too often staff becomes too familiar with the Board and starts thinking they are like them — rich, powerful, influential. Staff is on tap, not on top. You are the hired help. Your job is to fund the goals the Board has set for your organization. If you want to win over your CEO and Board, look, talk and act like a real professional. Check your hurt meter at the door. Fundraising is a tough business. There is always the temptation to think of your Board as “family.” Then you take it a step further and start believing your Board “loves” you. Wrong. Your spouse loves you, your kids love you. Your boss and your Board like you. They will respect you and help you succeed if you make every effort to raise every dollar you can within the budget and resources you have. Remember: When you think the board members are your pals, watch out, you are about to get fired.

More Tips

Fundraising staff come and go. So do CEO’s and Board members. The institution remains, lives on, endures, long after others have left.

Work hard to put in place all the best fundraising practices you can so your organization can succeed long after you leave it, but don’t be surprised that six months after you are gone, your replacement changes everything.

Know the difference between asking your CEO for help and asking him to do your work.

To enage board members, ask them for their advice on special matters. They will be flattered.

When your CEO asks for your opinion, give it to him straight, don’t hold back, don’t be timid. And, always keep confidences.

Your job isn’t to make your CEO look good. Don’t pander or be a handler. Your job is to do your job. If you do it right, that will make both your CEO and Board look good.

Practice the wisdom of the greatest management consultant ever, Peter F. Drucker. “It’s not important to get things done. It’s important to get the right things done.”

Hope to hear from you.

Jim Donovan