Advancing Fundraising

The most empowering question in fundraising?

When I’m interviewing a prospective major donor for a capital campaign as part of a feasibility study, for the interview and indeed for the study to be relevant, it’s essential that I ask the right questions. For any fundraising purpose, asking the ‘right’ questions is critical to fundraising success.

Getting back to the feasibility study … what would you think is the most important question to ask in a feasibility study interview? I used to think it was … How much would you ‘personally’ contribute to the project, if the campaign proceeds?

But in my experience, there is a far more powerful, more revealing, campaign game breaking question and it’s this … is there one person who can give the lot?

Asking that question in a capital campaign feasibility study, or, for any fundraising purpose changes everything.  Asking the question changes your fundraising focus and strategy. It can drive your program priorities, staff training and how your staff resources are managed, positively impacting your fundraising bottom line.

Whether you’re raising funds for a specific purpose, for a general fund or an endowment, the first question to ask is … Is there one person who can give the lot?

Asking the question immediately leads you to one of two possible answers: yes, there is one person who can give the lot or, no, there isn’t! If the immediate answer is in the negative then the next question to ask is … are there two people who, between them, can give it? What do you think the next question might be, and the next?

Whether it’s one or a few people who between them can give the lot, you will need to ‘qualify’ them through effective prospect research. Once ‘qualified’, you can cultivate them, inform them and set their sights on the target, on the lot; and then …… you ask them for the lot! Simple really, isn’t it?

Asking the right question can transform your fundraising program.

Irrespective of the size of your fundraising development office, the institution or cause you serve, whether you have just a few fundraising programs or are managing a fully developed Total Development fundraising Program (TDP), asking the question for each and every one of your fundraising programs, transforms them.

At Addenbrooke’s Charitable Trust (ACT) that’s exactly what we’ve done. After two years of implementing a successful TDP, together with my development team, we produced a 3 year ACT TDP Business Plan, 2010 to 2012. To build the TDP Business Plan we rated and ranked each of our fundraising programs against three criteria.

ACT TDP Business Plan

Fundraising Programme RATING Summary

80/20 (Major Donors) – The level of cultivation and solicitation of the 20% of donors who give 80% of the income.

Friend Raising (LTV) The programme’s contribution to the Life Time Value (LTV) of the ACT database.

Fund Raising (ROI+) The programme’s contribution to both £ gross ACT income plus the cost effectiveness of the programme.

Of the three criteria, it is the 80/20 measure that has had the most extraordinary impact on our day to day fundraising. The ACT development team understand the real value of spending 80% of their time with the 20% of our donors or prospective donors who give, or have the potential to give, most of their program’s income.

Experienced fundraisers will observe that this is the case for capital campaigns but what about other programs? – direct response, community fundraising, special events and yes, for major gifts and legacy programs too. Asking ‘the’ question is transformational.

ACT’s direct response program, like other programs in our TDP has an annual budget – income targets, ROI’s and KPI’s. The program raises budget target amounts for general purposes, through a regular or committed giving program. In addition, there is one generic hospital and two equipment specific direct mailings annually, each with a specific fundraising target. But when preparing budgets, when brainstorming which projects we will raise funds for, our Direct Response Project Manager is obliged to ask the first question every fundraiser should ask … for this project need, is there one person who can give the lot?

To identify and qualify direct mail donors who can give the lot, the Direct Response Manager has, as standing members of their ‘project team’, the ACT Major Donor Manager, Prospect Research Officer and ACT’s Database Manager.

Even more empowering, in terms of the Direct Response Manager’s personal professional development, they are also responsible for developing, together with the other members of the Direct Response management team, the cultivation and solicitation plans for any DR prospect capable of ‘giving the lot’.

Similarly, the project managers for both Legacies and In Memoriam programs work closely with the Major Donor Manager and the Prospect Research Officer, just as the Major Donor Manager in turn, manages a ‘team’ of project managers from other related programs.

The point is, they are ‘all’ charged with major donor research, cultivation, solicitation and stewardship; predicated on the need to ask that one powerful question. All ACT project managers are trained in the ‘The Art of Asking’ for major gifts and participate in regular major donor prospect ‘allocation’ meetings.

The impact of asking ‘the’ question across all programs increases communication between program teams, allows greater integration of prospect research and cultivation and develops flexibility in the application of skills and knowledge of staff. What I’ve witnessed is staff being positively challenged by the major gift process and by the ‘joy of asking’ in particular. But it’s that very challenge that motivates them, driving the 80/20 imperative and lifting results across programs.

What’s the most common fundraising task you perform?

The 2009 CFRE Job Analysis Survey interviewed over 3000 professional fundraisers from 8 countries, and asked them ‘what’s the most common fundraising task you perform?’

The most common answer … developing a list of potential donors by identifying individuals and groups … who have the capacity and propensity to give, in order to ‘qualify’ prospective donors for further research and cultivation efforts.

Is that the answer you would have given? Is that the answer your development staff would give? If not, then it may well be worth asking, in respect of each and every one of your fundraising programs … is there one person who can give the lot!

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Taking a lead role in institutional advancement

At Fundraising Institute Australia’s (FIA) National Conference I ran a masterclass on the role of the fundraising professional and how they can and should play a leading role in their institution’s advancement.

I began by asking what the role of the fundraising professional is.

And if they, as a fundraising professional, played a leading role in their institution’s advancement. Finally I asked what I feel is a key question; just who is setting the fundraising agenda for their institution or cause? Is it primarily the fundraising professional? Is it the CEO and/or board? Or is it a strategic combination of this leadership group led by the fundraising professional?

How do institutions value the respective roles of the professional fundraiser and the institution’s CEO? The consider how you might value their respective roles if you know that 80% of the institution’s annual income is fundraised income?

Professional fundraisers need to understand the quantifiable nature and value of the development function, its institutionally sustaining and  transformational value. Above all, they need to demonstrate that value to their CEO and board – and by doing so they demonstrate the fundraiser’s value.

What is the annual % turnover of fundraising income of your institution now? What could it be, what potentially should it be?!

 There is a measurable difference between ‘good’ and ‘great’ fundraising.

To achieve great fundraising outcomes for your institution or cause, you need to apply best fundraising practice across ALL fundraising programs. To do so you will need to convince your CEO and board to invest in fundraising development … to invest in you and to invest in a bespoke Total Development fundraising Program (TDP) where the fundraising program is aligned to your institutions mission, objectives and ‘strategic’ plans.

And who is best placed to design an institution’s bespoke TDP? Surely not the institution’s board, executive or trustees?

What is a Total Development fundraising Program (TDP)? How does it fit into a fundraiser’s role; especially, into the executive fundraiser’s job specification. And can you really apply best practice to it?

A TDP integrates ‘best fundraising practice’ across the three major areas where an institution benefits from fundraising. These include: budget and recurrent cost needs; special projects such as capital projects; and investment and discretionary income. Sometimes a TDP is likened to a milking stool, an old-fashioned, typical three legged milking stool – and if just one leg breaks while you’re milking the cow, well …..

When designing  a bespoke TDP for an institution or cause, a professional fundraiser needs to first research the institution’s position in the market, agree on the institution’s fundraising ‘brands’, then, for each brand quantify its fundraising market, market reach and market penetration. For each brand, its Unique Selling Propositions (USPs) should be developed and selectively expressed as donor propositions

Once these fundraising brands and their respective market and donor proposition values are agreed with the institution’s leadership, the fundraising professional can plan a ‘bespoke’ TDP. And because a TDP may take 3 to 5 years to implement, the professional fundraiser needs to prepare a TDP Business Plan.

The objectives of a TDP Business Plan are to provide boards, executives or trustees with an indicative plan projecting the total annual fundraising programme cost and income, and cost ratios  for each fundraising programme

A TDP business plan can demonstrate a progressive decrease in the overall TDP cost ratio year by year plus ‘appropriate’ variations to cost ratios year by year for different programmes – increasing TDP gross income should be matched by increasing TDP net income.

A TDP Business Plan provides opportunities for the CEO, fundraising professional and all appropriate stakeholders, to critically assess fundraising priorities and identify what resources are needed to achieve agreed fundraising plans; including development staff roles and resourcing

Professor Adrian Sargeant who, amongst other roles, is Adjunct Professor of Fundraising at the Australian Centre for Philanthropic and Nonprofit Studies, Queensland University of Technology, states that …..“The successful quantification in monetary terms of the value of a donor can be a valuable aid to subsequent development of fundraising strategy.”

A TDP Business Plan needs to address donor Life Time Value (LTV). Simply defined, this is a measure of the total net worth to an organisation of its relationship with a particular donor. To calculate LTV one has to estimate the costs and revenues that will be associated with managing the communication with that donor during each year of his or her relationship

Each fundraising Programme can be assessed under a RATING criteria. The rating system criteria can include the level of cultivation and solicitation of the 20% (approx.) of donors who give 80% of an institutions income – the 80/20 (Major Donors); Friend Raising (LTV) – the program’s overall contribution to LTV; and, Fund Raising (ROI+) – the program’s contribution to both gross income plus the cost effectiveness of the programme.

Each programme in the TDP can then be rated 1, 2 or 3 against each of the 80/20, Friend Raising and Fundraising ROI measures, with 1 being the highest. By adding the three measures, 3 is the highest program rating and 9 is the lowest. Priority resourcing therefore may be directed to programs rated as a 3, and so on, to programs rated up to 9.

The objective of implementing a TDP Business Plan is to delineate fundraising best practice and resourcing efficiencies utilising quantifiable measures which demonstrate individual fundraising programmes contribution to gross return, net return and donor Life Time Value, over a minimum 3 year cycle.

A bespoke TDP Business Plan guides the professional fundraiser, their board, executive and trustees, on how to increase donor acquisition opportunities and add LTV to acquired donors from all sources, through progressive cultivation and sight setting enhancements across ALL programmes.

To sum up, the professional fundraiser can and should play a leading role in institutional advancement by delineating the institution’s fundraising objectives and TDP program in partnership with the institution’s board and executive. As a consequence, the professional fundraiser will inspire transformational fundraising for the institution and cause; and potentially, transform the institution itself.

 

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