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.

How to Find, Enlist and Motivate Leadership

Recently I attended a memorial service for a local banker who was a pillar of Central Florida. He started out as a bank teller and rose to become CEO. The late Buell Duncan of SunTrust was a real gentleman and chief cheerleader for our region. He was the Chairman of the Board of the University of Central Florida Foundation in Orlando where I served as Executive Director in the early 80’s.

This made me recall how many bankers over the years I have had the good fortune to work with in several states. I learned in Fund Raising 101 years ago; don’t attempt a major community fund raising campaign without the leadership of a local banker, as bankers have clout and connections. Their phone calls are returned. They lean on their best and most successful customers to “give” to the community. And more importantly, they know where the money is.

Today the media is watching and reporting on bankers more than ever due to the Federal bailout of banks, thereby shrinking the pool of available board leadership. Nonprofit boards will always recruit bankers to their boards. However, in today’s environment they have to look beyond this traditional and dependable source of leaders.

Having a powerful board is always a plus. Engaging and motivating it is even better. Clearly this is a top priority today according to a recent survey conducted by the Nonprofit Finance Fund of 1,300 nonprofit leaders as reported in the March 25th issue of the Chronicle of Philanthropy. It noted that 60% of respondents ranked engaging the board as the best way to respond to budget shortfalls.

So how do you find, enlist and engage/motivate board leadership given the current market conditions?

Why not start with these qualifying questions to find board leadership:

• Which companies are driving the economy of your region?
• Who is on their top management team?
• What skill set do you need for transforming your organization in the future?
• Do these executives have those skills and talents?
• What other boards have they served on that are similar to your own?
• Can they provide access to key prospects and donors on your Master List?
• Will they make a significant corporate or personal gift as a board member?
• Will they ask others for major gifts to your organization?

What is the best way to enlist board leadership?

• By having a current or former board member who is a major customer or client of the company ask for an appointment.

• At the meeting, show the board candidate the list of current and former board members, particularly those who are customers or clients of his company. Familiarity breeds success.

• Explain the reasons why you are inviting the candidate to serve on your board.

• Outline expectations of board members, using Peter Drucker’s model in his book, Managing the Nonprofit Organization.

Board members serve as:

• Ambassadors to communicate the message and case of the organization.

• Consultants to provide their expertise in key areas.

• Governors to oversee the work of the organization.

• Sponsors to provide financial resources to fund the organization’s work.

• Don’t dwell on fund raising as a board member. That’s a given. Emphasize mission over money, as money follows mission.

Motivating the Board

• In all my years in this profession, nothing motivates the board more than a carefully planned and executed board retreat. It energizes everyone.

• Another way is to invite a guest speaker to address the board on issues and trends facing your sector of the nonprofit world.

• Tell a success story of how your organization changed a life. Let the client/customer tell his/her story prior to a regularly scheduled board meeting.

• Feature board members in your advertising as people who are making a difference in your community. Remember, people relate to people, not causes or needs. Who serves on your board is something to celebrate/feature.

• Constantly recognize and acknowledge the 3 D’s of your board members — their dedication, deeds and diligence.

For more ideas on motivating the board, check out my book, 50 Ways to Motivate Your Board, A Guide for Nonprofit Executives at: http://donovanmanagement.com/wptest/dmi-publications/

Local nonprofit organizations have had extensive news coverage this year — the termination of a homeless drop-incenter initiative by downtown churches, the closing of the Destiny Foundation, the hefty salary for the chief executive officer of Florida’s Blood Centers, record demand at Second Harvest Food Bank and a local couple starting Bags of Hope for the homeless in the woods.

Nationally, The New York Times recently reported that in a decade there has been a 60 percent increase in the number of nonprofit organizations in the U.S. to 1.1 million. California Democrat Congressman Xavier Becerra found this trend to be troubling. He questioned whether American “taxpayers are getting a big enough benefit in return” to justify the $50 billion loss to the U.S. budget due to $300 billion given to charity last year in the form of tax-deductible contributions.

The article points out that the Internal Revenue Service makes it easy for anyone who wants to start a charity. Who wouldn’t apply when the approval rate for such applications was 99 percent last year — or more than one every 10 to 15 minutes — according to a recent study by students at Stanford University.  As a consultant in philanthropy who has worked with more than 400 nonprofits from the arts to zoos, we don’t need more nonprofits. We need more nonprofits to work together for charitable, educational, scientific and public benefit to society. At least that is what donors tell us in the feasibility studies we conduct for clients.

Congress should establish a commission to review the inequities among nonprofit organizations. For example, donors who give to the University of Florida get a tax-deduction just as they would if they gave to Bags of Hope. The university adds thousands of potential life-long donors at each graduation, unlike Bags of Hope alumni who are poor. Nonprofits serving the poor should be able to provide a higher tax deduction to their donors, because such organizations do not have a built-in constituency like a university.

Furthermore, there is a lack of available leadership for existing nonprofits, let alone new ones. With the downsizing of corporate America, many CEOs don’t have the time to serve on nonprofit boards to exercise their clout, work their connections and provide cash support.  The $300 billion in giving last year represented less than 3percent of the Gross Domestic Product, according to the Giving USA Report. There are millions of uninvited contributions out there for the asking. Congress should focus its efforts on providing incentives to nonprofits to collaborate, merge and share resources, not increasing the number of them. 

What a holiday gift that would be for the least among us come December 2010.

James A. Donovan is President of Donovan Management, Inc., which assists organizations engaged in philanthropy.

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.

Second, we ask the CEO and board how the organization is earning income.  Is there something they can do to generate more “retail” dollars? (Not another special event.) Sell more products, for example, or expand services, review their fee structure, as most organizations set their fees too low and they can often be increased.

Third, we ask about income from investments from the organization’s savings, reserves or endowments.  If returns are poor, we suggest that a review might be in order.  Given the present economy, many organizations are trying to augment the decrease in giving with an increase in investment income.  No small task given the swings in the stock market of late.

In the early 80′s, when I was the Executive Director of the UCF Foundation, I remember when the President of the University wanted me to hire more staff so we could raise more money.  I disagreed.  I felt it was time for the Foundation to establish an investment committee, as I was concerned about the stewardship of the endowed professorships we were obtaining through a combination of donor gifts and state matching funds — keeping it safe, doing a better job of investing.  Fortunately he agreed with me and we hired our first ever Business Manager who later took a leadership role in enlisting an investment committee that did a remarkable job.

In this Blog I thought it would be timely to discuss enhancing your investment returns.  So I turned to Tom Carhart of South Street Advisors in New York with whom we have collaborated over the years.  The firm, established in 1996, is independent and specializes in managing endowments of nonprofit organizations including some here in Florida.  Here are four suggestions from Mr. Carhart for improving your investment income.

1. Research, identify and enlist investment committee members who have a strong background in endowment management with a nonprofit organization similar in size to your own. Be sure they know and understand that the dollars you invest are donor dollars and you have a special obligation of stewarding donor gifts.
2. Prepare a policy statement that clearly describes the organization’s investment goals and expectations for return on investments.
3. Select an investment manager with a proven track record who will tailor investments to your organization’s financial requirements.
4. Insist on frequent “face time” update meetings with your investment advisors so your investment committee can have all your questions and concerns addressed.

Today, the competition among investment managers to obtain new accounts is quite competitive.  The recent decline in endowment portfolios has resulted in many nonprofits issuing new RFP’s in hopes of finding a firm that will get them back or close to pre-market decline levels.

We always encourage clients to keep their selection process wide in scope.  For example, don’t limit your RFP to just local firms. Resist the pressure to keep the local donated money invested locally.  Go where you get the best advice, return and service as the bottom line is just that, the bottom line.

Finally, we suggest that your organization be clear and forthright about investing donor dollars.  It is surprising how many nonprofit websites have little information on how their investments are handled.  We suggest a page, tab or click that includes these headings and a subsequent statement for each:

• Stewardship of Donor Gifts

Why is it so important to your organization?

• Investment Committee Oversight

What’s their purpose?

• Investment Committee Members and Affiliations

What are their qualifications and credentials?

• Investment Management Firm

What’s their track record with nonprofits, returns and service?

What distinguishes them from other firms?

• Investment Strategy

What investment products are being used?

What is the strategy for asset allocation?

In two weeks we will begin the final quarter of 2009.  Take time now to review your investment income so far this year.  Make plans now to maximize your investment income in 2010.  You owe it to your donors, organization and those you serve be they — people, pets or the planet.

Please let me hear from you, especially about our revised website.

All the best for continued success.

Jim Donovan

In this Blog, some tips on how to do just that from three accomplished American leaders:

Peter F. Drucker, Management Author and Consultant to the Fortune 500

Rabbi Herbert A. Friedman, Pioneer of United Jewish Appeal

James A. Baker III, Former Secretary of State and Advisor to three U.S. Presidents

In 1972 I started my career at the United Way of Utica, New York. The first week on the job I read The Effective Executive by Drucker. It’s a classic. Drucker offers this sage advice, “It’s not important to get things done. It’s important to get the right things done.”

Today with Email consuming most of us, Drucker’s advice is more relevant than ever. I have followed Drucker’s advice over the years by starting my day with a long “to do” list. Then I ask myself, ‘What are the right things I must get done today?’ By addressing strategic tasks, the smaller ones get done as well and in less time.

Fast forward to 2009 and the latest Drucker book, The Five Most Important Questions You Will Ever Ask About Your Organization. In it the late Drucker, with other authors, offers five strategic organizational questions that could set a new post recession direction for your organization.

What is our mission?

Who is our customer?

What does the customer value?

What are our results?

What is our plan?

As we pull out of the recession, maybe your board should ponder each question to better position your organization as we head, in less than five months, into 2010.

Rabbi Friedman, author of Roots of the Future, tells his life story as a rabbi in World War II, rescuing Jews from Hitler’s death camps and then transitioning into fundraising for displaced Jews throughout Europe and finally his role in creating the United Jewish Appeal in America. In the chapter How To Raise Billions, he lists the “five significant assets in the fundraiser’s arsenal”:

Knowledge of the cause he/she is representing

A passionate belief in that cause

Strong self-confidence that produces clear articulation

An easy manner

An ability to rebound from rejection

When asked the secret of his success in raising billions throughout his career, Rabbi Friedman writes:

“Raising people (first). People raise money and if you develop a cadre of workers, knowledgeable about and dedicated to the cause they espouse, they will do the job successfully.”

James A. Baker III was given advice by his grandfather early in life –Work Hard, Study and Keep Out of Politics. That is the title of Baker’s recent book which he subtitled, Adventures and Lessons from an Unexpected Public Life. Obviously he didn’t heed grandpa’s advice.

Baker went on to serve three U.S. Presidents — Gerald Ford, George H.W. Bush and Ronald Reagan — in capacities ranging from Campaign Manager to Chief of Staff to Secretary of State and Treasury. A lawyer by training, he notes early in his life his father also gave him some advice, which he did listen to. It was the Five P’s:

Prior Preparation Prevents Poor Performance.

As you read about the complex issues Baker had to work through in his various roles he keeps coming back to the challenge of preparation. He clearly makes the case for doing your homework. He was especially disciplined when it came to communicating the case for whatever issue or legislation was being debated before Congress and in the media.

In the early 90′s I recall being told by a client just how good Baker was at stating a case. Prior to becoming a fundraiser, my client spent many years as a local television anchor. One day at lunch he said to me, “Did you see Jim Baker on Meet the Press Sunday?” I told him I had not.

My client said — “I was in television news for over twenty-five years and I have never seen anyone more prepared, articulate and precise in making his case.” We can all learn from that, especially when it comes to making and stating the case for fundraising. Today is the age of the 30, 90 and 120 second sound bite. You have to get the public’s attention and keep it. There isn’t a lot of time for rambling or generalities.

As we head into the best time of the year to raise money, take time to improve your professional and organizational performance by heeding the wise counsel of these three accomplished leaders in management, fund raising and communication.

Ask the right questions so you focus on the right tasks.

Raise people first. Money second.

Prepare before making the case for your organization. Then state your case in 90 seconds or less.

Please let me hear from you. If you have a question or need assistance with an issue facing your organization, feel free to contact me at no obligation. By the way, we would love to hear your feedback on our new and improved website.

All the best for continued success.

Jim Donovan, President & CEO, Donovan Management, Inc.

Remember the scandal involving United Way President William Aramony in the early 90′s and how contributions to the United Way declined?

Fast forward to the present and the even more extensive media coverage of the Madoff scandal. Many charities, some right here in Florida, had significant losses in their investment/endowment funds due to Madoff’s ponzi scheme. Today, building trust and confidence among prospects and donors is more important than ever.

In this Blog we explore, with the help of three special resources, how to create an ethical nonprofit organization so that current and future donors trust you. After all, those who give to your organization expect their gifts to be used in a prudent and cost effective manner.

So how do nonprofits create this level of trust?

The short answer is — by encouraging ethical behavior among everyone involved in your organization. Here are three resources and suggestions that can help you build that trust.

The Association of Fundraising Professionals Code-of-Ethics and Donor Bill of Rights available at: http://www.afpnet.org/

The Ethics of Asking — Dilemmas in Higher Education Fund Raising, by Deni Elliot, John Hopkins University Press

Compass for Uncharted Lives, by Donald J. Kirby, S.J. Syracuse University Press

A few thoughts on each…

Paulette Maehara, National President of AFP, recently spoke to the Central Florida Chapter of AFP on Weaving Ethics Into Your Organization’s Fundraising. She got everyone’s attention when she asked the question, “How do we view ethics?”

The answer — often times in a negative sense and during a controversy or scandal. Citing a Brookings Institution survey, she noted that 70% of Americans say charities waste a “great deal” or “fair amount” of money. That’s not a typo–70%!

Then this finding — only 10% said charities are “very good” at spending money wisely. OUCH!

See survey at: http://www.brookings.edu/papers/2008/04_nonprofits_light.aspx

Remember, people give to organizations they perceive as worthy of their generosity.

All the best for continued success. Let me hear from you.

Jim Donovan, President
www.donovanmanagement.com

We are almost half-way through 2009. Are you, your fund raising staff and volunteer committees prepared to maximize your major gift fund raising efforts for the remaining six months of the year?

Most financial experts are predicting an improved economy and stock market toward year-end. Regardless, it is still a tough environment for philanthropy. In my last Blog (scroll down) I noted several reports and studies that indicate that donors keep giving even in tough times.

However, this does not mean it will be easy to obtain major gifts. On the contrary, it will be more competitive than ever because those wealthy donors who still have the capacity to give will consider the times we are in, the increased number of requests for their gifts and how their giving can have the greatest impact on those most affected by these tough times. The challenge facing nonprofit boards and staff is to prepare staff and volunteers to do their best when making the ask.

My long time friend and colleague, Bill Carlton, ACFRE is Chair of the AFP Board for Advanced Certification and Chair of Carlton & Company in Boston. Bill makes volunteer solicitor preparation a priority for the campaigns he and his associates direct. He insists, as part of his client contract, that all campaign workers attend special training before they ask for a major gift. As noted below, he will tell you that convincing his client to do this hasn’t always been easy.

Over the years it has been my good fortune to provide this training for Carlton & Company clients in Alabama, Massachusetts, Ohio and elsewhere in the U.S. What is interesting about this exercise is that prior to the training, I ask Bill’s on-site campaign director to poll each participant as to what they fear the most about asking for money. The answer is always the same — dealing with the objections.

Occasionally, even Bill’s client raises an objection about bringing me in to conduct the training. “How is this guy from Central Florida going to come to Huntsville, Alabama and tell us how to ask for money for our church/school capital campaign?”

His response to this objection is always the same, “Jim has written a book on this, I’ve road tested and refined it with him over the years. He has a method – it works, trust me.”

Indeed, the content of my solicitor training is based on my book, Take the Fear Out of Asking for Major Gifts. In this Blog, I will share with you the chapter on Dealing with Objections in the hope you, your staff and volunteer leaders can be better prepared in the remaining six months of 2009 when seeking major gifts.

Tip One: Acknowledge the objections as they arise.

Don’t overlook them. If you do, it says you are more concerned about what you have to say than what the prospect/donor is saying to you. Listen, then repeat back the objection. For example, “I believe you said, now is not a good time, as your stocks are down. Is that right?”

Then give a response such as, “There are still a few months left in 2009 and hopefully your stocks will appreciate. If they do, you know the tax advantages of gifting stock. And, we know you want to make a gift, as you have always been a great supporter. Why don’t we come back to see you in two months?”

Tip Two: Don’t debate, educate.

Nothing overcomes an objection better than facts. The prospect/donor may be worried that the goal for your campaign is too ambitious given the current economy. Use this objection to provide the facts facing your organization.

“Yes, $5 million is a lot of money. The facts are the Food Bank is getting four times the number of requests for assistance, has access to tons of government food and no more space to properly store it. Furthermore, we now operate in two new counties in addition to the four we already serve. The growing demand isn’t going to go away even when the recession is over as these counties are six of the fastest growing counties in our state with the elderly poor accounting for the largest percentage of that growth.”

Tip Three: Maintain a common ground.

Always stress principles that you have in common with the prospect/donor, like keeping costs down. “I have a problem with the organization’s 12% fund raising costs. They are too high.”

You can say, “I agree these costs are too high. In this economy we had two choices. Spend less, raise less, do less. Or, spend more, raise more do more. Thankfully, the extra costs we have incurred resulted in dozens of new donors. Sure the acquisition cost is high right now; however, if we treat these new donors right they will be repeat donors year after year and that is what we need. The fact is, had we budgeted more for fund raising in the good years, we would not be in the position we are in now. It takes money to raise money and we are well within acceptable guidelines.”

Tip Four: Do an inventory of objections and responses to them.

By the end of each solicitor training seminar we do for Carlton & Company clients and our own clients, we conduct the inventory exercise with participants. This forces them to collectively think and devise the best responses. The objections and responses are later printed on the back of a special Talking Points Card that is given to each campaign worker.

The front of the card contains bullet points for making the case to the donor/prospect. It has four questions with bullet point answers for each question. You can answer these same questions about your organization. The questions are:

1. Where has your organization been, its past.
2. Where is it today, the present situation/challenge facing it.
3. Where does it need to go in the future? The solution to the situation/challenge.
4. What philanthropic investment is needed to get there? The prospect/donor’s gift.

I think Bill Carlton said it best for many of us consultants who have seen a trend of late:

Volunteers, especially in recent years, are less comfortable in asking for major gifts. Moreover, many who would like to get involved often do not because of their fear and dislike of fund raising. This is alarming for two reasons.

First, experience shows that campaign goals are better met or exceeded when the asking is done on a peer-to-peer basis, that is volunteer to volunteer.

Second, the shifting of asking to the professional staff sends the signal to major gift prospects/donors that their peers don’t care enough to invite them to give and instead they are sending out the hired help.

One last tip from my book. If you really want your team to be successful in major gift fund raising, consider making a shift in your thinking. Asking for major gifts is not about solicitation, but invitation. I tell the story about how I came to this conclusion in the first few pages of the revised edition of my book. It took place in the Caribbean while working with the Puerto Rico Chapter of the American Red Cross in the late nineties.

All the best for continued $ucce$$.

Jim Donovan

P.S. For information on my book: Take the Fear Out of Asking for Major Gifts, click here.

When ordering, reference this Blog and receive a 10% discount on single or quantity orders.

To learn about Carlton & Company, go to: www.fundraising.org

* Most wealthy donors will continue to give even if the charitable tax deduction was taken away. Nearly 52% of 700 households with a net worth of at least $1 million and an income of $200,000 indicated in a joint study by Bank of America and the University of Indiana Center on Philanthropy that their giving would remain the same even if the tax deduction was reduced or eliminated. While the remainder of the sampling said they would give less if deductions were wiped out, a third of them would somewhat decrease their giving.

* Over 92% of Americans are employed

* 70% of U.S. households give to charity, even in tough times

* Foundation portfolios are down an average of 30% or more. However, by law, they must give away 5% of their assets annually

* 94% of individuals in the U.S. have yet to make a bequest to a nonprofit

* Trillions of dollars will pass from one generation to the next in decades to come

* Gifts of stock, whether appreciated or depreciated, can be gifted to a bona fide nonprofit that has a Letter of Determination from the IRS. In this down market, donors can sell their depreciated stock, trigger a taxable loss and give the cash to charity. Donors get a charitable deduction for the cash gift and usually incur a second taxable loss (a second deduction) equal to the difference between the stock’s taxable cost basis and its fair market value at the date of sale. Always encourage donors to consult their own tax advisor on such matters.

Sources: University of Indiana Center on Philanthropy, Foundation Center, Chronicle of Philanthropy

Ten Questions for Your Organization to Ponder in this Economy

1. Have you assessed your situation, adjusted or re-tooled your fund raising program/strategy? (Does your fund raising effort need a Second Opinion?)

2. Do you have a contingency plan or fund?

3. Have you done an inventory of what you must do to compete in this highly competitive fund raising environment, especially for the shrinking number of foundation grants and individual major gifts?

4. Have you tweaked your case by making it known how your organization is assisting those most affected by tough times?

5. Have you prepared a list of possible donor objections to giving in tough times and responses to the objections?

6. Have you devoted more time to training volunteers on how to ask for major gifts to bolster their confidence when making the ask?

7. Is it time to consider the feasibility of a merger with an organization with a similar mission?

8. Do you have a Stimulus Package shovel ready project and a special Board Task Force that can make the case for it with your legislative delegation?

9. Holding off on that capital campaign? Now is a good time to plan and prepare for that campaign. Have you considered a pre-campaign online survey to test the campaign project list among your constituency and ask them when they think the time is right to launch a campaign?

10. Finally, keep in mind the number one reason why people give money in good times and bad — because they are asked (invited) to do so. How many invitations have you extended this month?

Please let me hear from you.

A special thanks to my friend and colleague, Mark J. Wolff, Professor of Law at St. Thomas University School of Law, Miami Gardens for his advice and counsel on this Blog.

All the best for continued $ucce$$.

Jim Donovan

This brief overview sums up the reason why so many board members of nonprofit organizations, local leaders and others are spending a lot of time raising objections rather than raising money to fix their nonprofit budgets. Are these real objections or excuses for not raising money in tough times?

Having received so many e-mails and phone calls of late about such objections, in this Blog I will share with you the top three objections my consulting colleagues and I have been asked to address and our responses. These are as follows:

Why try to fund raise? We all know, now is not the right time.

How can you not “try” to fund raise? What does not trying say about the importance of your organization’s mission or the relevance of your case? Hasn’t your message been that you are performing a vital function for the community? Isn’t your mission even more relevant now?

This objection also strikes me as a sweeping generalization that most giving is done by corporations and businesses, when in fact we know that less than 15 percent of all giving is from this sector. Given the media coverage (hype), one would think the U.S. economy (the world’s largest) is about to crash. Some would say — the right time is when the nation’s economy and the stock market are soaring.

Closer to home in Florida, one might say — when the mortgage crisis is over, tourism and housing construction picks up. Keep in mind, even in the tightest market, many businesses flourish. It’s the law of supply and demand. Some sectors are doing well; seek them out. Check what the experts say at the websites of Florida’s public universities and community colleges. These economists provide valuable insights into what’s ahead. It’s not all gloom and doom. We still have 95 percent employment.

But, more to the point: The best time to raise money is when you need it. This isn’t a fund raising issue, it’s a communications challenge. You must convince your constituency that your mission is more relevant NOW than ever before. Remind them of the consequences of not meeting your mission. Who will suffer, go without, be worse off than they are today?

Money is tight, people won’t give.

How do you know? Have you asked — by mail, by phone or in person? Nine times out of ten when I ask that question the answer is, “Well, no we haven’t, we just figured…” In tough economic times donors may not give as much as in the past, but they don’t stop giving. Ask them to give what they can now and pledge more to be paid in the same year or future years. Pledges are not legally binding and 90 percent of the time donors do honor their pledges. When being interviewed for a new client account, I am always asked, “How much do you think we can raise?” My response is twofold — “I can only estimate that if we do a feasibility study. But I can tell you how much you will raise if you don’t get out and ask — nothing.” The history of giving shows that during economic slumps people continue to give, particularly to causes that are serving those most affected.

Some say right now is a really difficult time for the arts. Perhaps. On the other hand, the major donors to the arts — financial service sector, stock brokers and individual philanthropists — have seen the ups and downs before. Now is a good time to hug and hold on to them so when things improve they know you didn’t abandon them or their passion for art, dance, music and theater.

Yes, money may be tight. Let the donor/prospect tell you that, don’t assume you know. People who really care about your work and mission try to find a way to help. In the end, that’s why people give — they want to help.

We need to wait until there is a turnaround in the economy.

And when will that be? While your organization is waiting for this announcement from the business gurus on television, calculate how much money your organization left for the asking by nonprofit groups that kept asking while your organization sat on the sidelines. Even worse, imagine how croweded the starting line is going to be when television hosts Lou Dobbs, Jim Cramer and Larry Kudlow tell nonprofit leaders, “Ready, set, go.”

I know, I know, you are just a staff person. You work for the board. It’s your board that is dragging its feet. Well sure, they fear failure. Most board members, any given day, month or year, don’t get out of bed in the morning and say, “I think I will launch a fund raising campaign today, that will be great fun.” No, when it comes to fund raising, most boards do so reluctantly. Board members prefer to spend their time in examining budgets, scrutinizing expenses, developing policy and some, even micro-managing staff.

But what about the big picture? What about the organization’s ultimate purpose — which is called the mission?

Fear of failure is normal. In fact, it’s healthy for board members to feel this way. However, with proper planning, the right message, a compelling case, good strategies and the right combination of outstanding staff and volunteers, nonprofits can not only survive in this economy, but flourish.

But, don’t take my word for it. Ask your donors and prospects. You might be pleasantly surprised.

Please, let me hear from you.

All the best.

Jim Donovan