5 Tips for Giving Donors What They Really Want

Do you know what your donors want?

Do they want a clever t-shirt? A fancy certificate? A lovely lapel pin? A practical coffee mug? A recognition lunch?

Maybe. However, while some donors will appreciate receiving trinkets or invitations to recognition events, others really don’t care and still others will view such items as a waste of money.

So, what do your donors really want?

Virtually all donors want to know that their donations will have a positive impact. In other words, donors of all sizes want to know that their contributions make a difference. The younger the donor, the more true this is. In addition, they want to feel like they are partners with the organizations they support.

Renata J. Rafferty, in her book Don’t Just Give It Away, advises philanthropists, “You truly want the charity to view you as a partner in its work, and partnerships are successful only when all parties can be candid with one another.”

The way to partner with donors and let them know they are having the desired impact is through solid stewardship. You need to be transparent. You need to candidly give them the information they want.

Stewardship is defined by the AFP Fundraising Dictionary as:

a process whereby an organization seeks to be worthy of continued philanthropic support, including the acknowledgment of gifts, donor recognition, the honoring of donor intent, prudent investment of gifts, and the effective and efficient use of funds to further the mission of the organization.”

As I mention in my book, Donor-Centered Planned Gift Marketing:

Stewardship will help the donor feel good about her commitment. It will ensure that revocable gifts (i.e., bequests) remain in force and, perhaps, increase in value over time. Good stewardship can also lead to another planned gift from the donor. For example, a donor who makes a bequest commitment may be impressed by the organization and a sufficient level of trust might have been developed through the process to allow the donor to feel comfortable making a donation to establish a charitable gift annuity (CGA). A donor who establishes a CGA may feel so comfortable having done so, he may decide to establish a second. Or, a CGA donor may make a bequest commitment.”

Great stewardship can help strengthen your organization’s relationships with donors. The additional benefit is that solid stewardship of existing donors can also build relationships with prospective donors as well.

Jewish Federation of Greater Philadelphia has figured this out.

Rather than generating a bland, corporate annual report that examines the fiscal condition of the organization, Federation has produced a Community Impact Report that looks at the difference the organization is having on people’s lives.

There are a number of things worth noting about the Community Impact Report:

1. It exists. Perhaps the most noteworthy thing about the report is simply that it exists. Most nonprofit organizations thank donors for their support. However, far fewer charities report on how gifts are put to use.

Federation prepares a Community Impact Report each year. Actually, it usually prepares two reports, mid-year and end-of-year documents. Now on its fifth report, Federation uses the information to keep the community updated about its work toward mission fulfillment.

2. It focuses on outcomes. Unlike a typical annual report, the Community Impact Report is not a state-of-the-organization analysis. Instead, the report examines the impact the organization is having on its service area. It’s a report about mission fulfillment.

“Our donors really appreciate seeing the level of accountability we have achieved,” says Alex Stroker, Federation’s Chief Operating Officer. “They also like to know that we are focused on program outcomes.”

16 Tips for Crafting a Powerful Postcard Campaign

As you might imagine, I regularly receive direct mail appeals from many charities. Most of them are truly “junk mail.” After a quick glance, I quickly deposit the junk appeals into the recycling bin where they will do much more good than their intended purpose.

JFGP Postcard (click for larger image)

Occasionally, I’ll receive a mailing that captures my attention, for the right reasons. Even more rarely, I’ll find something in my mailbox that is worthy of sharing with you. Earlier this month, I found just such a piece.

The postcard mailing from the Jewish Federation of Greater Philadelphia arrived shortly before the Passover and tied into the holiday. This post contains an image of the front and back of the postcard so you can see it for yourself. Federation did a great job with the piece. So, let me take a few moments to share some tips we all can learn from it:

1. Get rid of the envelope. One of the greatest challenges with direct mail is getting people to open the envelope. They won’t get your message unless they do. If you can get your message across in a way that does not require a full mailing package, you can overcome this challenge by simply doing away with the envelope altogether. Federation’s postcard mailing has done exactly that.

2. Employ a pattern interrupt. Another challenge with direct mail involves figuring out ways to engage the recipient so they spend more than two seconds with the piece before tossing it into the trash. When most folks go through their mail, they quickly look for the fun stuff and bills. People quickly weed-out what appears to be junk.

So, how did Federation disrupt the typical mail-sorting pattern? They did it with two very different photos on the front of an odd-sized postcard. While speedily going through my mail, I noticed an old-fashioned, sepia-tone photo of an older couple on the postcard. Beside it, there was a contemporary color picture of a cute, young child eating matzo. The postcard got me to ask, “Huh, what’s this about?”

In other words, Federation caught my attention by being unusual and by presenting contrasting photographs. They knocked me out of my normal mail-sorting pattern.

3. Make it easy to read. By printing black type on a white background, Federation provides strong contrast that makes reading easier. While reverse type was used – something I normally do not approve of — it was used sparingly and with a larger serif font ensuring easy readability.

4. Keep the message brief but impactful. In about 50 words, I learned that Mr. and Mrs. Schweig had passed away long ago. However, I also learned they had contributed to Federation. Most compellingly, I discovered that their generous support would feed 1,500 community members in need during Passover.

The generosity of the Schweigs impressed me. The depth of the community need surprised me. The organization really had my attention.

5. Engage the reader. I was already engaged with the postcard when the photos caught my attention and I read the pithy message on the front of the card. However, the card engaged me further with a simple question: “What will your legacy be?” By asking the reader a question, you can get them to stop and think.

6. Provide more details. On the address-side of the postcard, the reader is told that Mr. and Mrs. Schweig made their gift through a bequest. Providing additional details and telling people where they can get even more information will satisfy all readers and their individual levels of curiosity.

7. Demonstrate impact. Donors want to make a difference. Whether they give to the annual fund or make a planned gift commitment, people want to know that their support will have a positive impact. They want to know that their donations will be used efficiently to help the organization fulfill its mission.

This postcard shows how the support of past donors is being put to good use. The implied messages are: We wisely use the support from past donors to help the community. We can help you to have a positive, high-impact as well.

What Can Your Nonprofit Learn from a Fortune Cookie?

Have you ever had a Thai fortune cookie?

Until recently, I never even knew they existed. Over the years, I’ve eaten more than my share of Chinese fortune cookies. However, I had never experienced the Thai variety.

Before anyone comments below, let me just say that I’m completely aware that Chinese fortune cookies are not really Chinese. They’re Chinese-American with possible Japanese roots. As for Thai fortune cookies, I have no idea where they were invented. But, they’re certainly tasty. They’re crunchy, flaky, light as air, toasted coconut goodness in the form of a little tube wrapped around a parchment-like fortune.

Anyway, my wife brought some Thai fortune cookies home one evening. While I was enjoying one of the cookies, I read the fortune it had contained:

Feeling gratitude without expressing it, is like wrapping a gift without giving it.” 

I immediately recognized that my cookie contained a valuable lesson for all nonprofit organizations. If we want to build strong relationships and secure passionate philanthropic support for our  organizations, we must thank our supporters and show gratitude.

I know you’re grateful when someone gives your organization money. But, beyond a simple thank you letter, do you do anything to show your gratitude?

Henri Frederic Amiel, a 19th century philosopher and poet, commented on the difference between thankfulness and gratitude:

Thankfulness is the beginning of gratitude. Gratitude is the completion of thankfulness. Thankfulness may consist merely of words. Gratitude is shown in acts.”

Some nonprofit organizations do a better job than others when it comes to expressing gratitude. Unfortunately, as a sector, we have a long way to go. We can and should be doing much more.

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.

Special Report: Are You Ready for 2013? These FREE Resources Will Help

When Congress recently adopted the American Taxpayer Relief Act of 2012, it had an immediate impact on the nonprofit sector. The new law provides some opportunities and challenges. Are you ready for both in 2013?

I’ve already written two posts to provide some useful insights:

• “Special Report: Everything Each NPO Must Know about Fiscal Cliff Legislation”
• “Fiscal Cliff Disaster Averted, but Trouble Looms”

Now, Viken Mikaelian and Brian Sagrestano, JD, CFRE, of PlannedGiving.Com, are offering a free webinar on Wednesday, January 16, at 2:00 PM (EST). “What to Tell Your Prospects” will explore:

Fiscal Cliff Disaster Averted, but Trouble Looms

We ended 2012 by surviving the so-called Mayan Doomsday. We began 2013 by driving off the so-called Fiscal Cliff before averting possible economic disaster. Congress passed the American Taxpayer Relief Act of 2012 which put the nation back on safe ground, for the moment.

Previously, I looked at the Act and provided information about what key elements mean for the nonprofit sector. Now, let’s look at:

What’s next?

The Charitable Giving Coalition, chaired by the Association of Fundraising Professionals, as well as the AFP Political Action Committee, won a great victory when Congress preserved the charitable giving tax deduction and reinstated the IRA Charitable Rollover for 2012 and 2013. Everyone who was involved in visiting members of Congress, writing them, or calling them to advocate for the nonprofit sector certainly has a right to take pride in what the sector has accomplished.

However, before we get too carried away congratulating ourselves, let’s remember that the nonprofit sector continues to face danger.

The return of Pease Amendment provisions will make charitable giving a bit more expensive for wealthy donors. Higher taxes will also mean that donors will have less money with which to give. As a result, organizations may face some challenges. But, these are challenges that we have faced before. We’ll just have to work a bit more creatively.

Unfortunately, there are other looming dangers.

The Fiscal Cliff legislation, which was originally supposed to decrease the deficit, will actually increase the deficit by $4 trillion over the next decade, according to the nonpartisan Congressional Budget Office. In other words, we’re still headed full-speed ahead to economic collapse which would be a disaster for the nonprofit sector and society in general.

Charitable giving has historically correlated to about two percent of Gross Domestic Product. If GDP growth continues at a slow pace, philanthropy is also likely to grow only modestly. If runaway deficit spending leads to another recession, we can expect a likely decline in overall philanthropy.

All Congress has done is buy a bit of time.

Republicans have signaled that they will address the issue of spending cuts within the next two months. In two months, Congress will have to vote on whether to increase the nation’s debt ceiling. President Obama has already said that any spending cuts will require an increase in tax revenue in order to garner Democrat support.

Having achieved a tax rate increase, The White House now seeks to raise additional revenue in other ways. For example, the Administration may want to apply the top tax rates to those earning less than the current threshold of $400,000 for individuals and $450,000 for married couples. Also, the Administration is likely to seek limitations on deductions, particularly for the “wealthy.” The Administration has previously expressed support for both revenue generating options. Now, it’s likely those proposals will resurface during spending-cut negotiations.

So, while the charitable deduction appears to be safe for the moment, that safety may only last for two months.

Think I’m being alarmist? Let me provide some perspective from the US Debt Clock:

In 2000 the deficit was $5.8 trillion, which was $56,150 per taxpayer.

In 2008 the deficit was $9.2 trillion, which was $85,893 per taxpayer.

In 2012 the deficit was $16.4 trillion, which was $145,620 for every taxpayer.

Now, the Fiscal Cliff deal will add another $4 trillion to the deficit over 10 years!

At some point, the American economy will either collapse, going the way of Greece, or the government will get its act together and control spending. I’ve heard a lot of talk during the debate over the Fiscal Cliff about the need to return to Clinton Era tax rates. Sadly, there was little talk of returning to Clinton Era spending levels, even as a percentage of GDP which would still allow for spending increases.

The situation must be dealt with for the good of the nation. Unfortunately, this may require some pain for the nonprofit sector in the form of a reduced charitable giving tax deduction and reduced direct grants to and contracts with nonprofit organizations.

On the floor of the House of Representatives, during debate over the Fiscal Cliff legislation, Democrats have already begun to argue for additional revenues, echoing statements this week from The White House. In other words, the nonprofit sector has made it out of the first round of debates. But, the second round is quickly approaching.

Challenging times remain immediately ahead.

Special Report: Everything Each NPO Must Know about Fiscal Cliff Legislation

A dysfunctional White House and Congress officially took the United States over the so-called “Fiscal Cliff” at the close of December 31. Fortunately, a deal was reached late on New Year’s Day, hopefully averting what economists say would have been an almost certain return to deep recession.

Since the American Taxpayer Relief Act of 2012 was passed, there’s already been a great deal of confusion and misinformation about what the Act means to the nonprofit sector. 

Thankfully, Brian M. Sagrestano, JD, CFRE, a consultant and co-author of Philanthropic Planning Companion: The Fundraiser’s and Professional Advisors’ Guide to Charitable Gift Planning, has written a careful and thorough analysis of the 157-page Act with particular attention to: income taxes, long-term capital gains and qualified dividends, gift and estate taxes, the IRA Charitable Rollover, and other provisions. He also predicts the impact the Act will have on philanthropy and provides some important tips for all nonprofit organizations.

Top Ten Posts of 2012, and Other Reflections

We’ve survived another “Doomsday”! Now, as 2012 draws to a close, I thought it would be interesting to look back briefly before we march into the new year.

 

Happy New Year!

 

For starters, let’s look at which of my posts have been the most read in the past year:

1. Survey Sounds Alarm Bell for Nonprofit Sector

2. Can a Nonprofit Return a Donor’s Gift?

3. 10 Essential Tips to Protect Children from Real Monsters

4. Garth Brooks Sues Hospital for Return of $500,000 Gift

5. 8 Valuable Insights from a Major Donor

6. Overcoming the 9 Fundraising NOs (Bernard Ross)

7. Breaking News: Brain Scan Study Gives Fresh Insight into Charitable Giving Behavior

8. What NOT to Do in Your Email or Direct Mail Appeals

9. 20 Factoids about Planned Giving. Some May Surprise You.

10. Two Major Factors that Demotivate Donors

I invite you to read any posts you might have missed by clicking on the title above. If you’ve read them all, thank you for being a committed reader.

I’m honored to know that I have readers from around the world. (I love the Internet!) While I appreciate all of my readers, I thought it would be interesting to look, beyond the United States, to see my top ten countries for readership:

Special Report: PANO Webinar, “Planned Giving Primer”

On Wednesday, December 12, 2012, I will be co-presenting the webinar “Planned Giving Primer” from 1:30 – 3:00 PM (EST – 05:00 GMT). The program is hosted by the Pennsylvania Association of Nonprofit Organizations and the Nonprofit Issues newsletter.

To participate in the live program, click here to register. To purchase a recording of the program at the PANO Online Store, click here. 

Don Kramer, an attorney with Montgomery McCracken Walker & Rhoads and publisher of Nonprofit Issues, and I will review the major planned giving instruments and discuss which ones make the most sense to emphasize in starting a planned giving program. We will also discuss the advantages of integrating planned giving into an existing development program, targeting the best prospects, getting buy-in from the board, and techniques for generating gifts.

Latest Stelter Report Flawed but Still Insightful

Earlier this month, The Stelter Company presented the findings of its latest research project at the Partnership for Philanthropic Planning’s 2012 National Conference on Philanthropic Planning. What Makes Them Give: 2012 Stelter Donor Insight Report is the Company’s third study of planned giving in the United States.

As a nerd and as the winner of the 2011 Association of Fundraising Professionals/Skystone Partners Prize for Research in Fundraising and Philanthropy, I enjoyed reading the report. And, I thank The Stelter Company for adding to the nonprofit sector’s base of knowledge.

While flawed, the report does offer some interesting tidbits. This post will examine some of the useful tidbits and problematic flaws. Some of the insights are new while others will confirm what experienced gift planners have long known or suspected.

Many Planned Givers Are NOT Loyal Donors

Perhaps the most interesting finding is that 21 percent of those who have made a planned gift “never donated to the charity before putting a planned gift in place.” An additional 20 percent did give to the charity prior to making a planned gift, but did so for less than five years.

The conventional wisdom has been that loyal donors make the best planned giving prospects. However, the report shows that 41 percent of planned gift donors are outside of the loyal-donor model. This underscores the importance of making planned gift messaging ubiquitous.

Planned Givers Are NOT Always Large Current Donors

Among those who have made a planned gift and who have also made an annual giving donation to the charity, 40 percent gave less than $500. Only 16 percent have given $5,000 or more. While the old donor pyramid, where small donors become major donors and then become planned gift donors, may be true for many, the vast majority of planned gift donors have not first been major donors.

This means that, when looking for prospective planned gift donors, development professionals must consider the organization’s entire database. This includes large donors, medium donors, small donors, and even non-donors.

Bequest Giving is the Most Popular Planned Gift

The study found that “a bequest is the most popular vehicle for planned giving.” The report confirms what has been a long-held belief among gift planners and a fact that I included in my book, Donor-Centered Planned Gift Marketing.

This is good news for all nonprofit organizations. Virtually all nonprofits can easily and inexpensively promote bequest giving. For those organizations with a bit more expertise and resources, a bequest conversation or a bequest commitment may provide a gateway for a conversation with the donor about more complex giving vehicles. If the market finds a bequest to be the most popular form of planned giving, savvy planned gift marketers will take notice and market accordingly. On the other hand, bequest giving may be the most popular vehicle because it is the one that is already most widely promoted by the nonprofit sector; perhaps this should be examined in a future study.

Many Planned Givers Are Reluctant to Tell the Charity

Among those who have made a planned gift, 49 percent say that they have not told the charity. This raises an important question not asked as part of this study: Why haven’t you told the charity?

I suspect that many donors simply consider their estate planning a private matter and, therefore, choose not to disclose a planned gift provision to the charity that will benefit. I also suspect that others do not want recognition from the charity that they suspect will lead to more pressure to give more either to that charity or another nonprofit organization that takes notice. But, the biggest reason for nondisclosure may simply be that donors do not understand the value of disclosure to themselves and to the organization. Development professionals need to do a better job of articulating the benefits of disclosure to encourage more donors to do it.

Planned Givers and Prospects Use Social Media

A majority of planned gift donors and prospects surveyed use at least one of five social media networks tested:

–Facebook, 39 percent

–Google Plus, 19 percent

–LinkedIn, 17 percent

–Twitter, 6 percent

–MyLife, 1 percent

The report found, “Almost one-fourth of major donors, current planned givers and best prospects in their 40s would like to connect with nonprofits on Facebook.” Donors and prospects are using social media. Smart development professionals will meet donors and prospects where they are. This means including social media in the marketing mix.

Few People Are Asked for a Planned Gift

Only 26 percent of planned gift donors and best prospects — “people who say they will definitely or probably make a planned gift in the future” — say they have received a letter or email about planned giving. Only 17 percent say they have been asked directly for a planned gift.

If nonprofit organizations want more planned gifts, they need to ask more people, more often, and in the right way. With so few people receiving direct planned giving communications, there is not a high-degree of competition. On the other hand, this means tremendous potential.

While What Makes Them Give contains some useful and valuable information, I have some issues with other elements of the report: