A Donor Offers You $5,000. Now What?

Congratulations! You’ve done everything right, so far. As a result, a prospect has offered to write a $5,000 check to your nonprofit organization. She only has one question: “Who should I make the check out to?”

So, what should you do next?:

A. Let loose with an enthusiastic, sincere, “Whoohoo!”

B. Thank the donor and tell her the proper name of the organization for the check.

C. Tell the donor the information is on your organization’s website.

D. Thank the donor, tell her the proper name of the organization for the check, and then say, “And, let me just ask, if I may, do you have any appreciated stock?”

If you’re like most development professionals, you probably answered “B.”

While that’s not exactly a wrong answer, there is a better one that will be more helpful for the donor and for your charity: “D.”

Sadly, many development professionals wrongfully assume that all donors of means know, at least, the basics of financial planning and tax avoidance. However, that’s simply not the case.

Sometime ago, I served on the board of a nonprofit organization. At one of the charity’s events that I attended, a modest donor came over to me and expressed an interest in donating $5,000. She simply needed to know the organization’s official name so she could put it on the check.

As in the above scenario, after thanking her and providing the information, I asked if she had any appreciated stock.

Puzzled by my question, she replied, “Yes, I do. Why do you ask?”

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.”

9 Speaking Tips for Your Next Recognition Event & 2 Things Never to Do

When addressing a group of supporters who have gathered at a donor-recognition event, it is important to effectively manage both the message and how you deliver that message.

A colleague contacted me recently for some advice about his upcoming appreciation event:

I will be emceeing and addressing the members of our legacy society. The President and the Chair of our current capital campaign are both speaking as well, but it falls to me to open the gathering and set the tone, then close the gathering and send them on their way. Given an opportunity like this, what would you make sure you said? Do you have any words of wisdom?”

The answers to the above questions will vary somewhat based on the unique culture of the group. Determining the correct message and how to appropriately deliver it will require sensitivity to the organization’s traditions, regional culture, and national mores. With that in mind, here are nine ideas what he might consider doing followed by two things he should definitely never do:

1. Be lively. I have found that many legacy society events can be dull, even funereal. If that’s what your folks are expecting and want, then give it to them. However, if the situation allows, I encourage you to try to be a bit light and jovial. Sometimes, we can take ourselves a bit too seriously, particularly when it comes to planned giving. Giving should be a joyful, positive, uplifting experience, even for a very serious cause. Keep that in mind when addressing your supporters.

2. Show appreciation. Just because it’s a donor-recognition event, do not assume that your supporters will feel appreciated simply by being there. Make sure you tell donors that you appreciate not just their gifts but also their involvement and caring.

3. Tell stories. People also like a good story, especially if it’s amusing, has a twist, or is heart-warming. Think of what you want to say. Then, think if there’s a story you can tell that will make the same point. Stories engage people by allowing them to put themselves into the situation. Hearing a good story activates many of the same parts of the brain that would be activated if the listener were actually living the situation. For maximum impact, make sure to use real stories.

4. Tell donors how gifts have been used. It is important for donors to understand that the organization wisely uses donations to achieve its mission efficiently. Very often, we focus on how gifts will be used. That’s certainly important. In fact, that’s my next point. However, we must also show folks the impact of past support. That gives us an opportunity to provide evidence of our organization’s effectiveness.

So, if a realized bequest contribution allows a social service agency to provide 50 meals to the homeless each week, then share that story. Remember that bequest commitments are revocable. And, if treated well, your planned gift donors will be among your best prospects for another gift. Therefore, you’ll want to keep reassuring the people that made those commitments that they made the correct decision.

Sharing a story about a previous donor whose gift has been realized will do a number of important things:

• Tells people that donors continue to be remembered and appreciated even long after they’re gone.
• Reminds folks that others have made a planned gift. People like to know that they’re part of group.
• Underscores that planned gifts have a real impact.
• Implies that all donors will likely be similarly appreciated and have their gifts wisely used to achieve the organization’s mission.

5. Tell donors how gifts will be used. For planned gift commitments that might not be realized for years to come, it can be difficult to demonstrate how the realized donation will be used. However, while difficult, it is still something you have to do. It is important for you to let donors know that their gifts will work to wisely benefit those the organization serves. And, if appropriate, tell them how the broader community or society will benefit as well.

If You Don’t Care About Them, Why Will They Care About You?

A reader of Michael Rosen Says… recently contacted me with her/his own unfortunate experience with a nonprofit organization. S/he provided me with a copy of an email exchange s/he had with a theater company. I’m going to share this person’s story with you because it contains a worthwhile lesson about the importance of reciprocity.

Before I get to the story, however, I want you to know that I am editing the emails for brevity and any identifying information. I’m protecting the name of the theater company, the name of the Managing Director of the theater company, and the reader who contacted me because neither party knew, at the time, their one-on-one communications would find their way into the press.

From time to time, I write about the blunders that some nonprofit organizations make. I’ve done this, not to shame them, but so others can learn from someone else’s mistakes. It is much less painful if we learn from someone else’s missteps rather than our own.

The story begins when my reader — let’s call her/him “Sam” — received an email from a theater company. Sam, who had purchased two season subscriptions, immediately opened the email. The message promoted an interesting lecture by a well-regarded nonprofit leader in the community. The lecture dealt with leadership and tied-in with the company’s current play.

The event appealed to Sam. Just before clicking through to the organization’s website to accept the invitation and purchase tickets, Sam noticed the date of the lecture: Monday, March 25. Unfortunately, this meant that Sam would not be able to attend because that date was the first night of Passover, an important Jewish holiday.

Annoyed that the theater company would schedule a special one-time program on Passover, Sam wrote to the theater company:

Disappointing scheduling of an otherwise appealing, academic lecture.

So, add this to your discussion: Does a good (nonprofit) leader ‘dis’ a large portion of the region’s top arts patrons through thoughtless event scheduling?

We’ll be celebrating first Seder.

We really would have enjoyed hearing the address on this topic. The speaker is a dynamo.

Sam”

The theater’s Managing Director responded the next business day. This was very good. The Managing Director did the smart thing by responding soon after receiving the complaint:

Dear Sam,

Thanks very much for writing. I’m very sorry for the scheduling inconvenience. We truly do our best, but we present special events all season long and it is not possible to avoid all holidays on the calendar. For example, this event takes place on the first night of Passover, we have a performance of XXXXXXX on Easter, etc.

If you’re interested in history, I hope you’ll consider joining us for the talk on Monday, April 1 with ZZZZZZZZ. He’s truly fantastic.

All best,

Fran”

The response was good in three ways:

1. A high-level person sent an immediate, personal response.

2. The message contained an apology.

3. The author suggested another program that the individual might enjoy.

Unfortunately, the goodwill these positive points might have earned was largely negated by the defensive and dismissive tone of the email. Sam responded:

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.

Pope Francis Gets It. Do You?

I know that you may be wondering, “Why is a nice, Jewish guy writing about the Pope?”

Pope Francis greets the public.

Let me explain.

First, I believe that we all can learn something — sometimes, many things — from anyone.

Second, Pope Francis clearly understands branding, managing one’s image, living one’s mission, communicating effectively, engaging others, and maintaining a good sense of humor.

While the new Pope can certainly teach any number of lessons about religion and morality, I want to focus on what nonprofit managers and development professionals can learn from the new Pontiff.

Here are six things you can learn from Pope Francis that will help you do a more effective job for your nonprofit organization:

Know Your Brand. Pope Francis understands his brand. He is a Jesuit priest. The Order’s founding document, written by Ignatius of Loyola, calls on all Jesuits to take a vow of perpetual chastity, poverty and obedience. Through his lifestyle, public remarks, and image, the Pope has demonstrated his commitment to the principles outlined by the founder of the Society of Jesus (the religious order known as Jesuits).

Effective nonprofit managers and development professionals know they must carefully craft and manage their institutional and personal brands. We must have a mission, understand the mission and be able to convey that understanding to others.

Live Your Brand. Long before being elected the leader of the world’s 1.2 billion Catholics, Pope Francis lived his brand. For example, as a Cardinal in Argentina, he lived in a modest apartment rather than the more elegant, suburban Bishop’s residence. He used public transportation to get around. He cooked his own meals. In other words, he did not simply create a superficial public image. He created and lived a lifestyle. He lived authentically.

His authenticity continues. After the conclave elected him Pope, he took the name of Francis of Assisi explaining it this way, according to The New Yorker:

I will tell you the story. During the election, I was seated next to the Archbishop Emeritus of São Paolo and Prefect Emeritus of the Congregation for the Clergy, Cardinal Cláudio Hummes—a good friend, a good friend! When things were looking dangerous, he encouraged me. And when the votes reached two-thirds, there was the usual applause, because the Pope had been elected. And he gave me a hug and a kiss, and said, ‘Don’t forget the poor!’ And those words came to me: the poor, the poor. Then, right away, thinking of the poor, I thought of Francis of Assisi.”

Later, Pope Francis returned to his hotel to checkout of his room. He chose to take the bus rather than the Papal car. He was the new Pope, but he was also still the priest who rides the bus.

Nonprofit managers and development professionals must be authentic. We need to be true to brand identity and mission. It is not enough simply to pretend to be a certain way. Authenticity earns the public trust that generates and maintains support.

For example, there are charities that efficiently use donated funds to achieve their missions. However, there are also nonprofits or non-governmental organizations that squander contributed resources while still others are simply scams. On the surface, all may appear worthy of support. In reality, the authentic charities that operate with integrity are best positioned for long-term success on all fronts.

Manage Your Image. When addressing the public, Pope Francis reportedly ignored prepared remarks written by his would-be handlers. Instead, he spoke for himself, off the cuff. For example, he spoke of his desire for “a church that is poor and for the poor.” Beyond choosing his own words, the new Pope also chose to wear a plain white cassock instead of formal Papal robes. When first introduced to the public, he wore a simple wooden cross rather than a gold one such as those worn by his predecessors.

Nonprofit managers and development professionals need to carefully manage their own image as well as the image of their organization. Leaving our images to chance simply puts our organizations and us at risk. We must exert effort to effectively and appropriately manage our images and those of our organizations. It’s part of a sound communications strategy. Remember the old adage, “A picture is worth a thousand words.”

Do Not Let This Happen to Your Organization

It happened recently to a prestigious private school.

New York’s Dalton School inappropriately released private alumni information to its volunteer fundraisers. The New York Times reported the blunder that sent a shockwave through the School’s community and may have a chilling effect on fundraising.

Do not let this happen to your organization.

While volunteer and professional fundraisers must have useful information to effectively perform, organizations must protect sensitive items and keep them confidential. I’m going to provide you with eight tips that will help you keep your organization safe and your prospects and donors happy.

But first, let me tell you what went wrong at Dalton. Here’s what The New York Times reported this month:

But recently, one of the top Manhattan private schools, the Dalton School, might have been a little too open with the data it had about some graduates. The school said [February 7] that it had given out to some alumni who had volunteered to raise money for Dalton information about several other alumni whose own children had applied to the school. The information included whether those children had been admitted, information that most parents prefer not to be shared, especially in cases where the answer is no.”

It is common and acceptable practice for nonprofit organizations to share prospect and donor information with both volunteer and professional fundraisers. Such information often includes contact information, spouse or partner data, affiliation, giving history, volunteer involvement, event participation, and interests.

Dalton ran into trouble when it disseminated information about whether the children of prospects applied for admission and were rejected by the School.

The Times article quoted an upset alumna:

’It’s horrible,’ said one alumna who has been financially supportive of the school, and like nearly everyone interviewed about what happened, declined to be identified for fear of upsetting school leaders. ‘Why should anyone know how much I have given and whether my kid got in or didn’t get in or even applied?’” 

Prospects and donors care about their privacy. They do not want to feel that they are being spied on. They do not want private information about themselves or, especially, their children disseminated to friends and acquaintances. Dalton overstepped by releasing admissions information about alumni children, something acknowledged by the School:

’We apologize for and deeply regret the release of this information,’ said the letter, written by Ellen Stein, the head of school. ‘We are reviewing our protocols to ensure that information about the admissions status of all Dalton families and applicants is protected and remains confidential. We have reached out to apologize personally to those 11 alumni whose names were listed.’” 

While I applaud Dalton for reviewing its data protocols after the inappropriate release of private information, it would have been far better if it had had this review before a problem occurred. You now have that opportunity.

Before a crisis happens at your organization, take the time to review your organization’s own prospect research and information sharing protocols.

Here are some tips to guide you during your review:

Listen with Your Eyes

When visiting prospects and donors, it is essential to listen carefully. You will want to learn about their philanthropic aspirations and legacy hopes. Listening to your prospect or donor rather than simply pitching your organization is a big part of what donor-centered fundraising is about.

For thousands of years, wise people have understood the value of effective listening. For example, Epictetus, the ancient Greek philosopher, said:

We have two ears and one mouth so that we can listen twice as much as we speak.”

Last week, I wrote about the importance of getting out and visiting prospects and donors (“Want to Know the Secret to Raising More Money in 2013?“). Now, I want to suggest that while we should certainly listen with our ears during those visits, we should also “listen” with our eyes.

Let me explain.

We often see without really perceiving. It’s one reason why criminologists tell us that eyewitness reports can be highly inaccurate. By paying attention to what we are seeing, we can act appropriately on the information we gather.

When meeting with a prospect or donor, listening with our eyes will allow us to:

1. Observe the other person’s body language and respond accordingly. For example, if a prospect has his arms folded across his chest, he’s probably not comfortable with the general subject, something you’ve said, or the environment. Observing this will allow you to take corrective action rather than simply just pushing ahead.

2. Look for clues in the surroundings. You can learn a great deal about an individual by noticing the personal items in her office or home. These clues can help you better understand the person’s interests. The surroundings (i.e.: furnishings, artwork, the home itself) may help you estimate the person’s giving potential. In addition, you’ll find that some items (i.e.: photos of children) make great and, sometimes, meaningful conversation starters.

When meeting with someone, you’re not just there to talk and hear. You’re there to see. So, be sure to use your ears and your eyes.

The best place to meet with a prospect or donor will usually be that person’s home. Generally, people will feel more comfortable in their own home than they would in your office. Sometimes, a donor or prospect may wish to meet at a restaurant. But, restaurants can be noisy, and having a private conversation can be awkward in a public setting.

Meeting in the home of a prospect or donor also has the benefit of giving you the opportunity to uncover clues that will help you to understand the person much better. As I wrote in my book, Donor-Centered Planned Gift Marketing:

If visiting in someone’s home, one can look for awards, books, and other items on display that can provide clues to how the individual engages with the community and what other organizations they might support. In addition, clues will be found that will help gauge the individual’s ability [to make a gift].”

Let me be clear. I’m not suggesting that you should snoop around someone’s house once you’re invited in. I’m simply suggesting that you should take-in what you see in plain sight:

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.

Is MLK Day Just Another Day Off?

On Monday, January 21, Americans will celebrate the Martin Luther King, Jr. Day of Service. This is a national holiday rooted in the country’s core ideals.

“Service is a powerful way for citizens, nonprofits, the private sector and government to work together to meet critical needs and advance King’s dream of opportunity for all,” states the Corporation for National and Community Service. “MLK Day is an opportunity for Americans to put the core American principles of citizenship and service into action.”

These core ideals go back to the birth of the country. Alexis de Tocqueville, the 19th century French historian and political writer, made a number of observations about America including:

The health of a democratic society may be measured by the quality of functions performed by private citizens.”

“I must say that I have seen Americans make great and real sacrifices to the public welfare; and have noticed a hundred instances in which they hardly ever failed to lend faithful support to one another.”

“If a stoppage occurs in a thoroughfare, and the circulation of the public is hindered, the neighbors immediately constitute a deliberative body; and this extemporaneous assembly gives rise to an executive power which remedies the inconvenience before anybody has thought of recurring to an authority superior to that of the persons immediately concerned.”

It is an American tradition that when we see a problem, we often will seek to solve it. We are not content to sit back, whine, and hope the government will take care of it for us. Certainly, government has its role. However, at the heart of the American democratic spirit is the notion of private citizen action to help one another and our society in general.

Volunteers do much good for our society. They also form an important force that allows our democracy to thrive. On MLK Day, hundreds of thousands of people will volunteer joining the millions who do so throughout the year. This call to service makes MLK Day unique among American national holidays.

43 percent of Americans volunteered in 2011, according to The World Giving Index 2011. The world average was 21 percent. Only four other nations ranked higher than the US for volunteerism in 2011 (Turkmenistan, Liberia, Sri Lanka, and Tajikistan).

In the US, 42 percent of men and 44 percent of women volunteer. By age group, the percentage of the population that volunteered in 2011 breaks out as follows: