Posts tagged ‘major donor’

April 20, 2018

Do Not Make this Big Error with Your Next Challenge Grant

I’ve seen it frequently. Fundraising professionals often make a big error when using a challenge grant. And they compound that error unethically by misleading prospective donors. It’s a common issue that is costing the nonprofit sector a fortune.

What’s the huge mistake? Fabrication of a bogus challenge grant.

True challenge grants are great. When a fundraising professional inspires a donor to provide a challenge grant, the nonprofit has a powerful tool to encourage greater contributions when making an appeal.

Typically, a challenge grant will match new and increased support to a charity. Oftentimes, the match will be dollar-for-dollar, though other multiples can also be arranged. In the case of a dollar-for-dollar challenge, if a new donor gives $100, the challenge-grant donor will give the charity $100. If a $50 donor from last year gives $75 this year, the challenge-grant donor will give $25. Typical challenge grants are not unlimited; the donor will set a maximum total amount.

Using a challenge grant can be an excellent fundraising tool for four reasons:

1.  It encourages donor support by increasing the value of donations. For example, with a one-to-one match, new donors have their contributions effectively doubled, thereby significantly magnifying the impact donors can have.

2. It encourages donor support because donors do not want the organization to lose money. If a donor makes a new or increased gift, the charity will receive additional money from the challenge-grant donor. However, the converse is also potentially true.

If a donor does not give, the charity could lose out on some of the challenge grant. Therefore, while a challenge grant can increase the value of a donor’s gift, it can also create the impression of a cost to the organization if the donor does not give. Some donors are motivated by the concern, “If I don’t give my $125, the organization could miss out on another $125 from the challenge-grant donor. I don’t want to cost the organization $125.”

3.  It creates a sense of urgency to give now. Typically, challenge grants must be fulfilled within a narrow time-frame. So, prospective donors are encouraged to act now rather than delay their philanthropic decision. The sooner someone gives in response to an appeal, the more likely they are to give. People who set an appeal aside thinking they’ll get to it later, often do not.

The urgency created by a challenge grant is also useful for planned giving campaigns encouraging donors to include the charity in their Will (Charitable Bequest). People do not like to think about end-of-life planning, so it’s easy for them to keep delaying until it’s too late. A challenge grant creates a sense of urgency that can overcome what social scientists call personal mortality salience.

You can read about a fantastic challenge-grant campaign for planned giving in my book, Donor-Centered Planned Gift Marketing, beginning on page 188.

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November 11, 2015

Rejecting a $100,000 Gift Helps #Nonprofit Raise MORE Money

The idea of rejecting a major donation usually sends a chill up the spine of nonprofit executives. After all, nonprofit organizations are not in business to return donations. Instead, charities employ hardworking fundraising professionals to bring in contributions. For many nonprofits, donations are the lifeblood of the organization.

However, rejecting a gift can actually help a charity protect its mission. Recently, I reported on two organizations that rejected or returned major gifts:

“When Should You Refuse a Gift?” — tells the story of Lucy the Elephant rejecting a grant offer from People for the Ethical Treatment of Animals

“Update: Spelman College Returns Gift from Bill Cosby” — relates why a major gift from Cosby was returned

Not long ago, the Girl Scouts of Western Washington demonstrated that a nonprofit can protect its mission and raise more money by mindfully rejecting a donation. In the case of the Girl Scouts, the organization rejected a $100,000 gift and raised over $250,000 in the process!

Girl Scouts W WashingtonWhen the Girl Scouts received the $100,000 gift, the staff was understandably thrilled. The money equaled approximately one-third of the organization’s financial assistance program budget for the year. The Girl Scouts offer financial assistance so that any girl can join despite economic obstacles.

Unfortunately, the Girl Scouts quickly learned that the major gift came with a major stipulation: the organization could not use any of the funds to help transgender children.

Megan Ferland, CEO of the Girl Scouts of Western Washington told Seattle Metropolitan magazine:

Girl Scouts is for every girl. And every girl should have the opportunity to be a Girl Scout if she wants to.”

In other words, accepting the donor’s terms for the gift would have violated the organization’s mission. So, the Girl Scouts made the only decision they could; they returned the gift.

Then, the organization tried to turn a lemon into lemonade. The Girls Scouts launched an Indiegogo crowd-funding campaign to try to recoup the funds. In the campaign, the Girl Scouts explained the situation. However, the organization correctly protected the privacy of the donor by not revealing the donor’s name.

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March 29, 2014

Top 10 Posts of All-Time from “Michael Rosen Says…”

I want to do something a bit different in this post. While I’ve ranked my posts in a given year to give you a Top-10 list, I’ve never before ranked all of my posts. So, I thought it would be interesting to do so now.

Here are links to my Top 10 Most-Read Posts of All Time:

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

2.  Survey Sounds Alarm Bell for Nonprofit Sector

3.  5 Things Never to Do in Your Phone Fundraising Calls

4.  How NOT to Run a Capital Campaign

5.  Does CFRE Have a Future?

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August 23, 2013

5 Words or Phrases that Can Cause Donors to Cringe

Words have the power to inspire. They also have the power to alienate. Words can touch us or they can fall flat.

In my previous post, I shared seven words that, when used together, can earn you the respect, trust, and appreciation of prospects and donors.

Word by Whatknot via FlickrMary Cahalane, of the Hands-on Fundraising blog, looked at words from a different perspective in her excellent post “7 Words and Phrases that Should Die.” 

Inspired by Mary, I now want to share my list of planned-giving and major-giving related words and phrases that, at times, make me cringe:

Planned Giving. I know, I just used the term “planned giving,” and now I’m telling you it makes me cringe. Let me explain. The term is jargon. As such, I think it’s fine to use with other nonprofit professionals in the office. It nicely encompasses all of the various ways of planning a gift. Unfortunately, most donors have either no idea what the term means or only a vague, partial notion.

When speaking with a prospect, avoid talking about “planned giving.” Instead, talk with your prospects about their “legacy” and the specific gift structure(s) you want to suggest. For example, talk about a gift in a will or a Charitable Gift Annuity rather than using the confusing and, for the context, overly broad term “planned giving.” If you need a generic term to use with prospects, I prefer “legacy giving,” while I acknowledge that that phrase is not completely without its own problems.

Bequest. When you read the previous paragraph, you might have noticed I avoided this word. You might have guessed that I don’t particularly like the word “bequest.” If you did, you’re right.

First, many people don’t really understand what a “bequest” is. Second, many of those who do understand the word think it is something only rich folks do. Third, the word sounds funereal to some.

Instead of using the word “bequest,” talk with prospects in simple, easy to understand terms. Don’t ask them to make a charitable bequest commitment. Ask your prospects to include your organization in their will.

Philanthropy. This is a great word. It comes from a Greek word literally meaning “love of humankind.” Unfortunately, some prospects, and even some donors, find the word alienating.

I remember speaking with a woman while we were waiting in the wings at a National Philanthropy Day luncheon. I was about to present her with the Partnership for Philanthropic Planning of Greater Philadelphia Legacy Award for Planned Giving Philanthropist of the Year. She told me she was honored to be present, but she wanted me to know, “I’m not really a philanthropist.”

I explained to the award recipient what the word “philanthropy” means. And I explained that it is not a term that is exclusive to the wealthy. I made sure she understood that she is indeed a philanthropist. I’m glad I had the chance to explain “philanthropy” to this caring donor. Sadly, we don’t always have such an opportunity.

If you’re thinking about using the word “philanthropy,” know your audience and know whether the term will resonate. Just keep in mind that 70 percent of people with investible assets of $1 million or more do not consider themselves wealthy, according to The UBS Investor Watch. If your prospects think “philanthropy” is only for the wealthy, and they’re not wealthy, you’re going to have some problems if you toss around the word. Words such as “legacy” or “support” might do nicely instead.

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December 28, 2012

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.

 

Champagne Toast by viking_79 via Flickr

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:

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August 10, 2012

8 Valuable Insights from a Major Donor

I recently had the opportunity to spend some quality time with a major donor. He was kind enough to visit with my graduate students in the “Advanced Fund Development” class I teach at Drexel University. Daniel (not his real name) shared a number of valuable insights about how some philanthropists think.

I thought you might like to learn what Daniel had to say since it might very well help you when working with your own donors and prospects.

Daniel and his wife personally contribute generously to a variety of nonprofit organizations and serve on a number of nonprofit boards. Daniel also administers a family foundation established by his parents.

Daniel told the class that he believes “donors see their giving as an extension of themselves.” He indicated that the more involved he is with an organization, the more personally he’s connected, the more likely he is to donate. In addition, he said that he is motivated by the notion of “giving back.” If he, or a family member, has benefited from the services of an organization in a significant way, he’s more likely to contribute.

However, for Daniel, it’s not all about involvement and reciprocity. He needs to also have confidence in an organization’s leadership before he’ll provide a significant gift. Two of the things that help build his confidence in the leadership are:

  1. the quality of the organization’s products or services,
  2. the demonstrated efficiency with which the organization provides those products or services.

One of his sources for information about organizational efficiency is Guidestar.

If an organization has a good relationship with a prospective donor, Daniel doesn’t really believe there’s much of risk in accidentally asking for too much. He says, “People aren’t really offended by being asked for too much if they were properly cultivated first.”

Daniel understands nonprofit organizations. He expects to be asked. If he’s asked for too much, he simply lets the development professional know. He doesn’t get offended because he assumes the development professional has made a good-faith attempt to ask for something appropriate. Sometimes they miss; sometimes they hit the target.

When discussing particularly large or complex gift arrangements, Daniel doesn’t rely on the expertise of his development contact. Instead, he turns to his lawyer for advice. While he wants his development contact to be knowledgeable, he has no expectation of or need for that person to be an expert in the area of complex gifting.

Organizations that approach Daniel should also understand that he and his wife consult each other before making philanthropic commitments. While they don’t necessarily support all the same organizations, they’re both involved in most philanthropic decisions.

When he gives, Daniel really doesn’t expect to receive any tangible benefits. Daniel says such benefits or little recognition gifts are not very important to him, though they’re sometimes nice. What’s more important to him is access. For example, when he contributes to a theatre company, he enjoys the opportunity to meet the actors and directors.

While Daniel likes having the option to meet with a development professional, to visit an organization’s home, or to observe its programs, he doesn’t usually require a lot of hand-holding before making a philanthropic decision because, in part, he doesn’t have the time for it.

“Someday, I may have more time, but I won’t necessarily want to spend it with a development person,” he says with a smile. He’s happiest when organizations respect his time while giving him the option of how much contact he will have.

Much of what Daniel shared with my students was nothing new. Researchers have found many donors feel the same way. But, his insights serve as terrific reminder for all development professionals.

When working with your major donors and prospects, keep these tips in mind:

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