Do You Know How to Navigate in the Gray Area?

I recently published a post about how City of Hope plans to host a special fundraising event at odds with the organization’s mission. Most readers who responded to a poll at the end of the post felt the event is inappropriate with many even finding the event unethical.

The unscientific poll reveals that 49 percent of respondents feel that the “Let Them Eat Cake” event is “Inappropriate but Not Unethical,” 27 percent say the event is “Unethical & Inappropriate,” 13 percent say the event is a “Great Idea All Around,” and 10 percent believe the event is “Appropriate, Whether on Mission or Not.”

I’m comforted to know that over three-quarters of the respondents feel the same way as I do about the City of Hope event. However, some of the comments I’ve received on this blog site, on LinkedIn, and via email concern me a bit.

Perhaps the comments are a result of how I worded the post or phrased the poll responses. Some people seem to be under the impression that one’s actions are either purely ethical or purely unethical. In certain cases, those folks would be correct. Some actions are clearly ethical or not. Stealing money from Girl Scouts selling cookies (this really happened) is clearly unethical.

However, not all situations are black and white, ethical or unethical.

While the legality or illegality of an action is certainly a guideline, such as the theft incident I just described, something can be unethical without being illegal. Some situations in which we find ourselves put us into a gray area. The most challenging ethical dilemmas often involve situations that are not black and white. If they didn’t, they really wouldn’t be dilemmas, would they?

When considering the possible, multiple responses to a situation, we will often find some alternatives are more ethical while some are less ethical. In the case of City of Hope, the organization could choose to continue to host its “Let Them Eat Cake” event without any changes although many readers found it at odds with the nonprofit’s mission and, therefore, unethical. Alternatively, the organization could choose not do any event.

However, the organization has other options. For example, City of Hope can run its cake event but offer healthy alternatives and educational material as well. Or, the organization could host a different event like the Healthy Chef Competition in Vancouver, Canada that Rory Green, a development professional and blogger, told me about.

Again, some alternative courses of action are more ethical or less ethical than others. The objective should be to always choose the best option, make the best decision.

The most challenging ethical dilemmas of all, however, do not have any good, ethical solution. They’re no-win situations. Think of the novel/movie Sophie’s Choice or the “Kobayashi Maru” test from the film Star Trek II: The Wrath of Khan. Even in these no-win situations, we must cope as best as we can to be the best we can.

As those who work in the nonprofit sector, we must understand that our greatest asset is the trust of the public. The more trust people have in charities, the more likely they are to donate. And, with greater trust comes larger contributions.

Special Report: Do You Want to Talk with an Award-Winning Author?

Have you ever read a book and wished you could talk directly with the author? Did you ever want to pick the brain of the author to get additional helpful ideas? Have you had questions about the material that you desired to explore more deeply? Were you ever curious about the author’s view of the future? Did you ever wonder what parts of the book the author felt were most important? Did you ever want to let the author know which parts of the book you particularly liked or which parts you disagreed with? Have you ever wanted to know if the author had acquired valuable, new information since writing the book?

If you answered “Yes” to any of the above questions, I have a special opportunity that will interest you.

I (Michael J. Rosen, CFRE) will be interviewed on The Nonprofit Coach Radio Show on Tuesday, February 26, 2013 at 12:00 PM (EST).

I wrote the bestselling book Donor-Centered Planned Gift Marketing, for which I won the AFP/Skystone Prize for Research in Fundraising and Philanthropy. The book is on the official CFRE International Resource Reading List. I’ll be discussing the book with host Ted Hart, ACFRE. We’ll also look at the challenges and opportunities presented by recent changes in government policy.

During the program, listeners will have the opportunity to call in to ask questions. You can learn more about the broadcast and find the call-in number by clicking here.

I invite you to listen to the show live and to participate by calling in to the program. If you’re unable to listen to the live show, you will be able to stream it after the broadcast.

To Sue or Not to Sue Over Unpaid Pledges?

Sometimes, nonprofit organizations sue philanthropists over unpaid pledges. This was recently the case with the Kansas City Art Institute. When a charity pursues this type of legal action, it sends shockwaves throughout the nonprofit and philanthropic sectors.

I do believe there are times when a nonprofit can and should sue a donor. However, this should only be done as an absolute last resort. The three instances when a lawsuit might be acceptable are:

1. The donor dies with an outstanding pledge and an heir challenges the will. In that case, the nonprofit might need to sue the estate to establish its claim and collect.

2. The nonprofit incurs real expense based on the donor’s commitment. For example, based on a pledge agreement, the nonprofit breaks-ground on a new building. The nonprofit might need to sue simply to survive.

3. The donor is about to or has entered bankruptcy. Suing the donor would be a way for the nonprofit to establish its claim. (By the way, I suspect that this fear might be what may have triggered the Art Institute case.)

In any case, suing a donor should only be done after careful consideration and only when all other options have been exhausted.

To sue or not sue over unpaid pledges? That is the question. The answer, offered by Brian M. Sagrestano, JD, CFRE and Robert E. Wahlers, MS, CFRE, is: Avoid the problem in the first place!

Brian and Robert are friends of mine. They are both seasoned, wise development professionals who have served on the national board of the Partnership for Philanthropic Planning. I’m pleased that they have offered to share some of their wisdom below as they introduce us to the concept of “concierge stewardship.”

Brian and Robert both generously provided insights and material for my book, Donor-Centered Planned Gift Marketing, for which I won the AFP-Skystone Partners Prize for Research in Fundraising and Philanthropy.

Now, Brian and Robert have written their own book, Philanthropic Planning Companion: The Fundraisers’ and Professional Advisors’ Guide to Charitable Gift Planning, and I’m honored to have been included in their comprehensive volume. The book is part of the AFP/Wiley Fund Development Series.

The official description of the book notes, “For fundraisers and professional advisors alike, The Philanthropic Planning Companion is the one-stop resource you’ll keep by your side to help your donors/clients meet their charitable and personal planning objectives.”

So, do you want to avoid a nightmare at your organization? If so, read on:

 

The Kansas City Art Institute recently sued Larry and Kristina Dodge for failure to pay $4 million on a $5 million pledge that was to be used to pay for construction of a new building, according to The Kansas City Star.

When the Dodges attempted to defend themselves (rather than hire an attorney they indicated that they could not afford), they made procedural errors and a default judgment was entered against them for the full $4 million due on the pledge. According to The Star, the Dodges made three payments on their pledge before their financial situation was impacted by the Great Recession, limiting their ability to fulfill the commitment.

In the article, Larry Dodge is quoted, indicating that he and his wife were in negotiation with the Institute to come up with a payment plan when it unexpectedly filed suit to collect on the pledge.

Regardless of the outcome, the reputations of both the Dodges and the Institute are forever harmed. Prospective donors will think twice before making a major commitment to a charity that would sue them to collect on a pledge. Meantime, the Dodges reputation, despite their many years of generous philanthropy, will be forever tarnished.

We cannot judge the merits of the Art Institute’s action or the ability of the Dodges to pay on their pledge, as we are not privy to all of the facts of the case. However, it raises a much larger issue about charities and pledges.

Special Report: PPP National Conference on Philanthropic Planning Follow-up

The 2012 Partnership for Philanthropic Planning’s National Conference on Philanthropic Planning has come and gone. I thought it was a terrific conference in New Orleans because of the efforts of staff and the volunteers.

Personally, I enjoyed co-facilitating a session, attending other sessions, meeting PPP’s new President/CEO, selling and signing copies of my book (Donor-Centered Planned Gift Marketing), seeing old buddies, and making new friends.

If you weren’t able to attend the conference, or even if you were there, I have some useful information for you:

 

1. Wiley Authors’ Central

Authors Michael J. Rosen, Margaret May Damen, Brian M. Sagrestano

During the conference, publisher John Wiley & Sons hosted a booth for the authors of four of its books. You can download the flyer describing the books here. The flyer also contains QR Codes you can use to download a free copy of the corresponding book’s Table of Contents and first chapter. Below, you’ll find the titles of the four books, which you can click to go to The Nonprofit Bookstore (Amazon) where you can learn more and purchase a discounted copy:

•  Donor-Centered Planned Gift Marketing, Michael J. Rosen
• Women, Wealth, & Giving, Margaret May Damen and Niki Nicastro McCuistion
• The Philanthropic Planning Companion, Brian M. Sagrestano and Robert E. Wahlers
• A Fundraising Guide for Nonprofit Board Members, Julia Ingraham Walker

 

2. Council Conversation

In New Orleans, leaders from PPP councils from around the country gathered for the Council Conversation. Philip Purcell, JD (Past President of the Planned Giving Group of Indiana), Barbara Yeager (Director of Operations at PPP), and I (Immediate Past President of PPP of Greater Philadelphia) facilitated the gathering. The program looked at “Tips for Teaching Adult Learners” and two innovative program ideas: World Café and Pecha Kucha.

PPP will be posting the materials from the Council Conversation on its website.

If you would like to discuss having me do a presentation for your group, please contact me.

 

3. New PPP President/CEO

During the conference, Michael Kenyon was introduced as PPP’s new President/CEO. I first wrote about Kenyon when his hiring was announced. In New Orleans, I had the opportunity to speak with him for a few moments. He’s eager to assume the helm of PPP later this month. He’s passionate about the organization and is looking forward to building on its strengths. I wish him well.

 

4. How to Order Session Recordings

If you attended the conference, you know that there were often many sessions of interest being presented at the same time. It was impossible to participate in all of them. If you weren’t in New Orleans, you sadly missed them all.

However, you don’t need to feel too disappointed.

PPP recorded virtually all of the sessions and is making them available in two formats: MP3 ($13 per session) and CD ($15 per session). A complete set of conference MP3 recordings is $199.

For a complete list of recorded sessions and to order recordings online, visit AVEN-Audio Visual Education Network.

How Much is a Bequest Commitment Worth?

A charitable bequest commitment has tremendous value for the organization receiving it. The value may be even greater than you realize. Bequest commitments are valuable in three important ways:

 

1.  Future Money

For donors, a charitable bequest commitment is an easy painless way to give. It’s a way even middle-class donors can be “major donors.” While most people cannot afford to make a huge cash gift to a nonprofit they love, most can make substantial gifts upon death. This is particularly important during economic hard or uncertain times. A bequest commitment allows donors to show their significant support for their favorite charities without having to deplete current cash resources.

For nonprofit organizations, bequests allow more money to flow into the organization than would otherwise be the case. And, the organization will not even necessarily need to wait decades for the donor to die and for the gift to be realized. Depending on the age and health of the donor, the bequest gift might be realized in a surprisingly short time period.

Many people have tried to estimate the value of the average bequest gift in the US. I’ve seen a range of numbers used. The consensus figure I used in my book, Donor-Centered Planned Gift Marketing, is $35,000. However, that’s not a particularly useful figure since there is such a massive range in the size of actual bequest gifts that individuals make.

So, researcher Russell N. James, III, JD, PhD, CFP®, Director of Graduate Studies in Charitable Planning at Texas Tech University, looked at how bequest giving compares with annual giving. In his AFP International Conference presentation, “The Presence and Timing of Charitable Estate Planning: New Research Findings,” James revealed the following about Americans over the age of 50:

 

Total Estate Value	Annual Giving Multiple
< $100,000	0.15
$100,000 – < $500,000	1.89
$500,000 – < $1,000,000	3.73
$1,000,000 – < $5,000,000	8.12
$5,000,000+	11.65
TOTAL	5.07

 

4 Simple Steps to Raising All the Money Your Nonprofit Needs

Sandy Rees, CFRE is a nonprofit fundraising coach who has a particular knack for simplifying complex concepts in a helpful way. She’s distilled her ideas into a book: Get Fully Funded: How to Raise the Money of Your Dreams.

Her book breaks the fundraising process into a number of steps that many fundraising professionals are likely to find familiar while the territory might be new for chief executives and board members. But, not satisfied with providing just a review of the fundamentals, Sandy does two valuable things:

1. She includes a step that is often taken for granted, and thus overlooked, by many authors: preparation. In this section, she looks at things like how to: make fundraising a priority, manage time, get organized, be ethical, and build an infrastructure that will allow fundraisers to be successful.

2. For each step of the process, Sandy drills down into the subject to get readers to address issues and ideas they may never have considered.

I appreciate that Sandy has chosen to share some of her insights here. Those new to fundraising will certainly appreciate Sandy’s accessible approach. Readers with fundraising experience will find that many, if not all, of the overarching ideas in the article will be familiar. But, from time-to-time, it behooves us all to not only review the fundamentals, but think of them more deeply. As we gain experience throughout our careers, we’ll be able to gain new insights as we revisit the basics.

Want to raise the “money of your dreams”? Read on:

 

In the world of nonprofits, you can’t do much in the way of service delivery or mission fulfillment without money.

For fundraising staff, that means it is all about raising money. Sometimes, it can be a big challenge. I’ve spent years raising money for all kinds of nonprofit organizations, and I know what works and what doesn’t. One thing I know for sure is that we must aim high.

I learned early on in my career to shoot for the stars. This came from my unwillingness to settle. I saw so many people waiting to be helped at the rescue mission and at the food bank. I knew that if I raised more money, we could help more of them. So, I started working toward fully funding my organization. I wanted to do everything in my power to make sure that people had a warm bed and a hot meal. 

I call it “Getting Fully Funded.” It means that your nonprofit’s staff have everything they need to deliver service. It means that all the bills are paid and you have a rainy day fund established. You have lots of happy and engaged donors. You have diversified revenue streams and fundraising is fun. It’s a wonderful place to be!

Before you can Get Fully Funded, there are a few things you need to have in place. You must have:

Special Report: Free e-Book Samples from AFP and John Wiley & Sons!

Recently, my friend Ligia Pena, CFRE ‏(@lpdiversa) informed me that publisher John Wiley & Sons is providing FREE samples from six e-books in the AFP Fund Development Series. You can download an entire chapter from each of the following titles by going to the Wiley site:

Fundraising and the Next Generation by Emily Davis

A Fundraising Guide for Nonprofit Board Members by Julia Walker 

An Executive’s Guide to Fundraising Operations by Christopher Cannon 

Breakthrough Nonprofit Branding by Jocelyne Daw and Carol Cone  

The Nonprofit Development Companion by Brydon DeWitt 

Donor-Centered Planned Gift Marketing by Michael J. Rosen, CFRE 

So, download and enjoy your free book samples today. When you’re ready to purchase a print or electronic version of the books mentioned, simply click on the title above to be taken to The Nonprofit Bookstore (powered by Amazon), purchase through the Wiley site, or go to your favorite bookseller.

For some terrific tips from the 2012 AFP International Conference, be sure to read my post: “Special Report: Helpful Tips from the AFP Conference.”

That’s what Michael Rosen says… What do you say?

  

[Publisher's Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are not widely promoted. To be notified of all new posts, including "Special Reports," please take a moment to subscribe in the right-hand column.]

Stewardship: More than a Thank-You

“Thankfulness is the beginning of gratitude. Gratitude is the completion of thankfulness. Thankfulness may consist merely of words. Gratitude is shown in acts.” – Henri Frederic Amiel, 19th century philosopher and poet

“Those of us who make planned gifts do not expect, nor do we want, lavish thank-you presents or excessive recognition. However, we do want to know that the organizations we support appreciate our philanthropy and will use our gift in the way we intend.” – H. Gerry Lenfest, 21st century philanthropist and Giving Pledge member

 

Stewardship is undeniably an essential part of any development effort, whether for annual fund, capital, or planned giving support.

Much of what is required for good, solid stewardship is simple common sense. Unfortunately, it’s far too often not common practice. That’s why mega-donor H. Gerry Lenfest reminded nonprofit professionals of the importance of stewardship when he wrote the Foreword for my book, Donor-Centered Planned Gift Marketing. 

Good stewardship means sending out an appropriate thank-you letter immediately after receiving a gift. But, as Henri Frederic Amiel pointed out, gratitude is about much more than simply sending a thank-you letter. Organizations need to demonstrate that they truly appreciate the support of donors.

As Lenfest suggests, stewardship need not involve a huge expense and lots of trinkets. Let’s face it, planned giving donors, for example, don’t exactly want a t-shirt that says, “I’m dying to give!” Instead, stewardship should involve a show of appreciation and an explanation of how gifts have been or will be used.

Janet L. Hedrick, author of Effective Donor Relations, asserts that donors should be thanked seven times for each gift. This does not mean one has to send seven thank-you letters. One should be much more creative than that. However, it does mean that one should look for multiple ways to express appreciation once a donor makes a gift. For example, here is a list of seven ways an organization can show its appreciation:

1. The donor gets a written thank-you letter from the development professional within two business days of a gift or gift commitment being received.
2. The organization’s CEO or Board Chair sends a thank-you letter.
3. A board member calls the donor within a week of receipt of the gift to express appreciation.
4. The organization thanks donors by name, unless the gift was anonymous, in its newsletter.
5. The organization thanks donors by name, unless the gift was anonymous, in its annual report.
6. The donor gets thanked with an invitation to a donor recognition event.
7. The donor gets thanked at other types of events throughout the year.

Legendary fundraiser James M. Greenfield, author of several books including Fund Raising: Evaluating and Managing the Fund Development Process, reveals the benefits associated with a luncheon event to recognize planned gift donors:

Hosting an annual luncheon for planned gift contributors has multiple benefits for each participant. First, they are reengaged after the gift has been made. Second, they can share this special time with one or two family members and/or their financial advisor who they are encouraged to bring as their guests. Third, they can enhance their legacy by serving as a testimonial for gift planning by sharing their story, which can also be used for a newsletter, magazine, or annual report. Fourth, led by a volunteer member of the planned gifts committee, the luncheon program should feature the CEO and professional staff members’ reports on current activities and future plans.”

As Greenfield suggests, thanking donors has many benefits. And, when the show of appreciation includes information about how gifts have been or will be used, donors will appreciate the effort and powerful things will happen as a result. 

For example, I once implemented a phone fundraising campaign for a hospital. For our control group, we simply explained the purpose of the current campaign and asked for support. For the test group, we told prospects how annual fund support was used in the previous year. Then, we told them the purpose of the current campaign and asked for their support. The test group, generated 68 percent more support than the control group!

In the context of planned giving, Lenfest, from the donor’s perspective, puts it this way:

Do not make the mistake of forgetting about us once you receive our gift commitment. We may truly appreciate how efficiently and effectively you handle contributed funds so much that we entrust you with another planned gift. We are also in a position to influence others to do the same, so bringing together current and prospective planned gift donors for an informational event may have a very good outcome. Publishing stories — with or without the use of the donor’s name — can show prospects the many backgrounds of planned gift donors. Even a reluctant philanthropist may be urged to serve as an example for others to follow.”

When it comes to stewardship, remember these three simple things:

1. Thank donors promptly and warmly.
2. Give donors information about how gifts are or will be used.
3. Honor the intentions of donors. Use a donor’s gift how you told the donor it would be used. Recognize the donor in the way you agreed to.

If you do these three things, you’re organization will distinguish itself from many other nonprofits and will be better able to maintain and increase the support of its existing donors while attracting new support as well.

That’s what Michael Rosen says… What do you say?

Special Report: Seeking Helpful Tips from the AFP Conference; Chance to Win a Book

I’ve never missed attending the Association of Fundraising Professionals International Conference since I first attended way back when, in the long, long ago. It’s always been a great chance to see old friends, make new ones, and learn something. Unfortunately, this year, due to my wife’s health condition, I did not go to Vancouver for the Conference. For whatever reason, I know many other development pros who were also unable to attend.

So, I’m calling on folks who were able to go to the Conference to share some of what they’ve learned. If you attended the Conference, please share with us below an interesting factoid you learned or the favorite how-to you picked up. It doesn’t have to be a long description. Any pithy, useful piece of information or advice would be appreciated. Feel free to enter as often as you’d like.

When you share a precious nugget, you’ll automatically be entered into a drawing to win a free copy of my book, Donor-Centered Planned Gift Marketing, for which I won the 2011 AFP-Skystone Partners Prize for Research in Fundraising and Philanthropy. If you already have a copy of my book and you win, I’ll be happy to donate the book in your honor to your favorite charity.

If you’re interested in purchasing a recording of one or more of the Conference sessions, ordering information will be posted at the AFP website. 

That’s what Michael Rosen says… What do you say?

 

[Publisher's Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are not widely promoted. To be notified of all new posts, including "Special Reports," please take a moment to subscribe in the right-hand column.]

Are Zombies Philanthropic?

If a person is philanthropic while he’s alive, will he continue to be philanthropic if he were turned into a zombie?

Well, since zombies are soulless and not particularly bright, I think it’s probably safe to say that zombies would not be great philanthropists. However, I have discovered that zombies just might enable philanthropy.

Runner chased by zombies.

Before I explain, let me just say that you don’t need to check your calendar. I know Halloween is not just around the corner. However, the first of a series of nationwide zombie-infested 5K races of 2012 is coming up in May. And, a portion of the proceeds will benefit the American Red Cross.

“Run for Your Lives” is a 5K race through a zombie-infested obstacle course. The races will take place throughout 2012 in 11 cities around the U.S.A.

In an Oct. 26, 2011 article in The Daily, Derrick Smith, co-founder of the race, said that the first race in Maryland in 2011 was expected to attract about 1,000 participants. Instead, the race attracted far more interest and the number of racers had to be capped at 10,000. In addition, tickets were sold to approximately 1,000 spectators. This generated approximately $800,000 in gross revenue for the production company in addition to revenue generated from other related activities.

Race participants, who pay $77 each for the experience, are equipped with three “health flags” similar to what kids wear when playing flag-football in school. To be eligible for prizes, participants must finish the race with at least one health flag, which the zombies will be trying to seize. If a racer has all of his flags snatched away, he’s still allowed to complete the race, but he won’t be eligible for prizes. And, he’ll need to suffer the humiliation of being listed among the undead.

While these races are for-profit events, the race’s website lists the American Red Cross as a “Charitable Partner” with a portion of the proceeds going to the charity in an exhibition of corporate social responsibility.

This looks like a fun series of events. Not only will participants get to enjoy a fun race, they’ll also get to hear live bands, attend an after-party, and can even camp-out.

While the “Run for Your Lives” races look fun, they raise a number of questions: