MYTH #1:  I first need to become a technical expert in legal and tax issues

Contrary to conventional planned giving wisdom, people don’t give to charity based on taxes.  While taxes can drive how a gift is structured, the timing of a gift, or the eventual amount of a gift, there is nothing in the tax code that directs individuals to donate to your organization!  Unfortunately, the image of a planned giving program is one of sophisticated trusts, complicated tax laws, and legal issues.  In reality, it’s about attracting gifts of accumulated wealth to support your organization’s mission.  Since most planned gifts are made through simple beneficiary arrangements in wills or trusts, you don’t have to be an expert estate planner to become effective. 

MYTH #2:  I have to concentrate all my energies on raising current resources.

There is never a good time to save for retirement, either!  In a tight economy the need for current dollars is greater than in the past.  However, donors rarely want to hear your every day problems.  They are attracted to your plans, your vision, and what your organization will be like twenty years from now.  More important, they want to be assured that their gift today is helping to build an organization that is financially sustainable over the long term.  More than ever before this means creating the structures and policies around an endowment fund, and then strategically communicating with your donors about how their current giving supports the work of the present, and their future or estate giving through your endowment can support your work in the future.

MYTH #3:  My organization isn’t ready to start a planned giving program

It is irrelevant whether your organization is ready or not.  The only thing that matters is whether your donors are ready.  And the answer to that is a resounding “Yes”!  The population continues to age, and wealth continues to accumulate.  In the next 50 years, estimates show that 40% to 50% of all charitable gifts will come from individuals’ bequests.  If you don’t think your organization is ready, well, you might want to get ready.

MYTH #4:  If people want to remember my organization through their estate plan, they’ll just  do it on their own.

That’s technically correct, although I suspect that hoping for planned gifts likely will not be as an effective strategy as actually doing something about it.  That is why building relationships with financial professionals in your area is vitally important.  Accountants, estate planning attorneys, financial advisors, bankers, life insurance professionals, and your local community foundation work with individuals every day to help design and implement their estate planning strategies.  Building a network of these key people to understand how your organization can help their clients accomplish their philanthropic goals is one of the most strategic moves you can make to start your planned giving efforts.

MYTH #5:  We don’t have any money to invest in long range plans.

Sometimes the simplest strategies can be the best.  Ineffective planned giving strategies operate separately from existing marketing and fund development activities.  Rather than starting something new, consider marketing your endowment fund and other planned giving strategies through existing avenues.  This way, you’re not adding additional costs to your marketing budget through fancy brochures and newsletters.  You’re simply incorporating new techniques for your donors to consider as they give to your organization.

A Planned Giving Director from a local college led the discussion.  He spoke about how he recently had a conversation with one of his donors who inquired, “How much do you need to stick in one of those charitable remainder trusts to get it to work?”

He replied, “About $100,000.  Less than that amount and it would likely make sense to use a charitable gift annuity.”  He went on to explain to us that the donor did, indeed, create a CRT with a corpus of $100k.  “I should have told her it took $200,000!” continued the Planned Giving Officer, of which the people around the table chuckled and nodded their heads.

His response bothered me, as you can well see since I’m writing about it a decade later.  With a little research at the time, I learned that the Planned Giving Officer was technically correct in his response concerning CRT’s and CGA’s.  Yet something seemed to be missing.

It took a few years, and many discussions with donors, and I discovered what was wrong.  The gift officer answered a question that the donor really didn’t ask.  So, instead of responding with the technically accurate response of “$100,000”, what if he responded with a much more strategic, much more donor-focused response:

“That depends.  What is it that you would like to accomplish with this?”

If he had responded that way, I suspect the ultimate size of CRT would have been significantly larger than $100,000.  Even significantly larger than the $200,000 level he mentioned in jest.  With this more strategic response, the donor would have been motivated by the end result of the gift, rather than the mechanics of the gift process.  I also suspect that this same donor would have realized her desire to give more right now, rather than waiting until the CRT matured at the time of her death.  Or both.

This experience ingrained in me the belief that transformational gifts are never based upon the monetary size of the gift.  They are based upon the impact the gift will have.  In other words, it’s not about the money, it’s about what the money will do!

As a fund development or gift planning professional, evaluate your own strategies.  Are you overly focused on dollar value?  Do you spend significant time in meetings talking about giving levels and donor societies?  Are you focused on selling various charitable products?  If so, you might be too focused on the need of your organization to receive, and less focused on the needs of your donors to give.

Rather, focus your thoughts and your donor conversations on the end result of their potential gifts.  Let the needs of your donor to impact your organization become the motivating factor in their decision making process.  Most important, allow the impact of the gift to drive the gift value, not the other way around.

When considering the source of charitable gifts within the United States, approximately $300 Billion (US) is given away each year. Of this total, about 12% is given from private foundations. This percentage has been steadily growing, particularly showing a steep increase in the last 5-10 years. Why is this so?

A superficial analysis of the data would suggest that private foundations are becoming more generous. Unlikely, since they prudently and rarely distribute no more than their required 5% each year.

Perhaps because of wise investments, their corpuses have grown, thus creating more charitable distribution. Again, not so. While some foundations have experienced growth through exceptional investments, operating in a level market cannot alone explain this dramatic increase.

The real reason for growth in foundation giving then becomes clear. And it’s quite simple. More private foundations are being created.

Now, for the strategic question: WHY?

Of course we’re all aware of the traditional reasons individuals establish private foundations, such as:
• Establishing a legacy
• Ensuring charitable giving following one’s death
• Retaining control of future charitable gifts
• Increased social standing
• Issues relative to taxes

When considering these traditional reasons, it is interesting that each and every one of these priorities can be accomplished equally well through an outright bequest to charity. In fact, gifts to a public charity are generally viewed as a much better tax-avoidance tool than gifts to a private foundation.

So there must be some other reason. I’d like to offer an additional thought which is seldom discussed:

Individuals generally do not trust public charities with their gifts of accumulated wealth. There. I said it.

In fact, I would contend that this mistrust is so deep, that wealthy individuals would rather create testamentary private foundations not currently in operation, than to give that same gift to a well-run charity.

Why is that? Well, charitable organizations are not created to manage wealth or to save and invest money. Whereas, a private foundation accomplishes exactly that.

In addition, donors are acutely aware of all the horror stories where a generous bequest ultimately hurts the charitable organization it was intended to help. For example, rather than using one-time sizable bequests for endowment growth, organizations might artificially expand their programs. Moreover, internal arguments over the money can create conflict, strife, and disharmony which needlessly distract the organization from fulfilling its mission. (Sounds a bit like what happens with sizable inheritance gifts to children and grandchildren, doesn’t it?) So donors create a private foundation to ensure this won’t happen.

Further, other smaller-level donors might learn about a generous bequest and conclude that the organization they support no longer needs their money. Now they’re rich! And now other philanthropic dollars can be diverted to different priorities. Whereas outright bequests might be inhibitors to leverage additional gifts, private foundations usually lead the way in inspiring others to give.

What can not-for-profit organizations and their leaders do to help with this? Let me offer a few suggestions. First, I would encourage charitable organizations to encourage their donors to create private foundations. Huh? You read that right. For too long, we’ve been in competition with our donors’ intentions. Rather than trying to talk them into doing something that WE want them to do. Let’s help them accomplish what THEY want to. If you do this, I can almost certainly guarantee that your donor will become more generous to your organization – both now and through their estate.

Second, continue to educate your donors and the financial services industry. Sometimes, individuals establish a private foundation simply because they are not fully aware of the various structures and systems available within public charities. To some degree, the financial services industry assumes that every donor with the financial means to create a private foundation is interested in doing so. Maybe. But maybe not.

Finally, continue to market your charity as a “safe place” for your donors to invest. Demonstrate the ability for your organization to use donor resources – particularly estate gifts – prudently. Become transparent with the various protocols and procedures to ensure that gifts are used exactly as their donor desires. Educate your Board about the importance of this issue to your donors. Consider establishing a supporting organization or a sister “foundation” to aid your donors in accomplishing their goals.

I anticipate the trend of numerical private foundation growth to continue. Rather than lamenting it. Rather than fighting it. Let’s embrace it, and have it become a pillar to the overall transformation of the philanthropic marketplace.

TRANSACTION-CENTRIC GIVING: Likely the most common fund raising method promoted to gain revenue.  Strategies involve the nonprofit promoting all the benefits the donor would receive through their “gift.”  Examples would be sponsorship opportunities that double as marketing for a special event.  Maybe it’s front row seats at the University football games.  Or, receiving a DVD copy of a TV show with your gift to public television.  The most common example of Transaction-Centered Giving might be buying Girl Scout cookies.  Arguably, cookies might taste better and be cheaper if I went to the grocery store, but the premium price I pay for thin mints is justified by “it’s for a good cause.”  From an organizational perspective, these activities are high in energy and time commitment, while offering a relatively low return on investment.  From the donors’ perspective, rarely is any connection established with the organization. 

EGO-CENTRIC GIVING:   Another well-known and often used fund raising strategy, particularly for major gifts.  Sometimes, individuals with financial capacity want to be publicly recognized for their generosity.  This might involve simple things like making sure their name is listed in your annual report.  At a higher level, it might involve naming a building or a new wing of a hospital after them. 

 Again, many organizations do an excellent job of promoting this sort of giving.  They spend hours and hours in meetings discussing Gift Levels and Donor Societies and the like.  Then, they use these traditional fund raising tools to enter into gift discussions with their donors.  Often, it is a successful strategy.  Ultimately, it can backfire as the organization, in effect, is establishing artificial limits on their donors.  This strategy also is absolutely ineffective for donors who have progressed beyond ego-centric giving and now find themselves in . . .

PHILANTHRO-CENTRIC GIVING:  Here, it is not about the donor.  It is about helping other people.  The donor generally doesn’t care about personal recognition, as they value their gift based on the impact the gift will have.  They often receive great emotional return based on the measured results of their gifts, rather than on the public recognition that might follow their generosity. 

Most organizations, from my experience, struggle with promoting this sort of giving.  It is difficult to perform, and many fund raising professionals fundamentally misunderstand donor motivations.  (Perhaps because they are not at a Philanthro-centric stage themselves.)These organizations, and these gift officers, are busy selling and marketing gift levels and gift products, while neglecting to recognize the true agenda of the individual donor.  By outward appearances, Philanthro-centric donors might seek piles of data, a variety of rational reasons to give, and a whole bunch of fact-oids.  What they truly seek, I would contend, is the emotional satisfaction that their gift is truly making a difference in the lives of others.   That’s a deeply rooted Right Brain communication strategy way before a superficial Left Brain approach.

When organizations and individual gift officers are successful with this approach, the results can be remarkable.  With this type of donor, the specific monetary amount of the gift is not determined by the organization, which usually has a limit to it.  The true desire of the donor is focused on what their gift will accomplish.  That gift, indeed, is limited only to what that donor is singularly capable of giving.  From experience, regardless of wealth, people of capacity only seem to give this sort of gift 3-5 times over their lifetime.

WORSHIP-CENTRIC GIVING:  Particularly for Christian individuals, many donors eventually reach a stage in their giving where it’s not about them and it’s not about others.  It’s about their role as a steward of God’s resources.  We’ll talk about this type of giving at another time.  

If you are an individual donor, consider where your motivations might fall along this spectrum.  If you are a leader in a nonprofit, consider how you and your organization communicate with your donors.  Are you busy selling products and gift levels to your donors?  Or are you focused on creating and nurturing your donors to become more effective in their giving?

A guest post from friend and leadership guru Shawn Miller.  Read more of his strategic thoughts at Performance Institute.

Everyone has heard of “Six Degrees of Separation” which suggests that we are all connected to everyone else in the world through just six people and that thusly anyone can simply meet anyone they would like to meet.  Not true says Dr. Ivan Misner in The 29% Solution:

 Establish an Endowment Fund.  Assuming you don’t have one already, it’s time to start one up.  Remember, organizations are created to spend money, which can be a risky place for wealthy donors to invest their accumulated wealth.  Inversely, your endowment fund needs to be established and constructed to retain and invest money.  Metaphorically, only spend the apples; never chop down the apple trees.

There are many ways to do this.  Some organizations establish a separate fund in their chart of accounts.  Some organizations establish separate “supporting organizations” or “foundations” to hold these types of gifts.  Multiple options exist to accomplish this, and don’t get bogged down in the details.  Most important, you need to establish the policies and protocols on how your endowment is governed, invested, and used to further the mission of your organization.  Creating this brand, this perception, in the mind of your prospective donors is the most critical element, regardless of the legal structures of the fund.  Yes, structure is important.  And it’s most important in creating the perception of a safe place for your donors to invest.

Create a Menu.  When you walk into a restaurant, the waiter/waitress welcomes you and then offers you a menu to choose from.  Why? Because it helps narrow down the customer’s preference in what they’d like to order.  Think about how difficult it would be to walk into a restaurant, and they start by asking you, “How much do you want to spend tonight?”  It’s foolish, and it’s equally foolish to do that to our donors.

Likewise, no donor wants their money to sit in an investment pool and never be used.  So we help them narrow where their gift might be designated.  And the key is to create a variety of “restricted funds” for “unrestricted purposes.”  For example:

• The Campus Improvement Fund
• The Technology and Innovation Fund
• The Scholarship Fund
• The “General” Fund

 We fundamentally don’t care where the donor might restrict their endowed gift.  As every dollar from the restricted endowment distribution frees up other funds for other purposes!

 To summarize, just like you focus on specific priorities for annual gifts or capital gifts, you now need to practice the same strategy for attracting endowed gifts of accumulated wealth.  That starts by creating your menu, and by being transparent with your donors about how their gift will be used to best accomplish their goals.

The 3 P’s of Planned Giving.  Finally, how do you promote these opportunities to your donors?  That’s easy.  Remember the 3 P’s:  Printed visibility; Professional advisors; Personal contact.

Printed Visibility.  On a practical level, many of the deferred gifts to your organization are going to happen outside of your direct involvement.  Your donors will work with their personal legal team, financial advisors, and accountants to craft a tax strategy that best meets their individual circumstance. You find out about this after the fact. 

That’s okay. It then becomes our strategy that your donor walks into that lawyer’s office – without you being present – yet with your organization as key priority in their estate planning goals.

First, seek to piggy-back on the current publication schedule already used by your organization, and supplement that with targeted mailings and other printed material to your core prospects – individuals 55+ years with a consistent history of giving to your organization.  Because this can be only a marginal increase to your print budget, it becomes ever more critical that the communication becomes deliberate and consistent.

Second, don’t get too distracted by all the electronic and social media strategy that’s relatively new in the marketplace.  Our goal is that the donor takes your mail piece, sticks it in their file labeled “Estate Planning”, and sometime in the next few years shares that information with their attorney.  I’ve never seen any donor be able to do the same thing with an e-newsletter. 

Professional Advisors.  Because financial advisors and estate planning attorneys are important for your donors, they are important to you.  Establish relationships with them that demonstrate the sound structures and protocols of your endowment fund which create safe places for their clients/your donors to consider in their estate planning goals.

Do not – I repeat – do not think of these individuals as key sources of referrals.  It’s just as inappropriate for you to ask them to refer their clients to make gifts to your organization as it is for them to ask you to refer your donors to them.  It’s rare, and simply doesn’t work.

Instead, ask for two things, and offer something in return.  First, IF one of their clients happens to have the desire to leave a bequest to your organization, please encourage them to get in touch with you in order that you can prepare for that eventual gift and help ensure the accomplishment of their goals.  Second, if one of their clients is looking for a well-managed organization that is equipped to use their gift according to their wishes, that your organization is well-situated to do that through your endowment fund.  In return, and if they’re interested, offer them to become part of your professional advisor team where you might need to contact them for technical advice and in developing strategies to help promote your endowment fund.  It works every time!

Personal Contact.  The first two P’s are an indirect strategy.  The most important and most direct strategy to success is to get to know your donors.  Ultimately, the deeper the relationship your donor has with you and your organization, the more likely they are to prioritize your organization in their estate planning goals.  Since it has become your purpose to help these individuals accomplish their philanthropic goals through your organization, you have required yourself to know your donors intimately – their hopes, their dreams, their fears, their reservations. 

Offer wise counsel.  Understand deeply held motivations on what they want to accomplish, and present them with various opportunities – both current and deferred – to make strategic gifts to help fulfill their goals through the mission of your organization.

Before we get directly into the implementation stage, allow me to offer 3 conceptual strategies as you start down this path.  In no particular order:

Yours Is a Service to the Wealthy.  (Gasp!) “We’re not meant to serve the wealthy, we’re here to serve the poor and the needy!  How could you say such a thing!!!”  Well, the only way you can serve the poor and fulfill the mission of your organization is to first acquire the financial resources to accomplish those goals.  This will require a level of service to wealthy individuals in order to attract them to partner with you in fulfillment of this mission.

Curiously, many nonprofit executives have the false impression that wealthy individuals are like Ebenezer Scrooge, pre-Christmas Eve.  In other words, they scrimp and save, never give anything away, and become wealthy because of their stinginess. 

Rid yourself of that thought.  Individuals become wealthy because they make strategic investments of their time, talent, and treasure.  Simply, they have a gift of investing $1 to make $10.  From my experience, the wealthier the individual, the more generous they learn to become.

When we consider how these same people arrange their estate plans, we also assume that they never give away anything – that it all goes directly to their children.  That’s simply NOT the case.  In fact, multiple studies have demonstrated that, regardless of total estate size at the time of death, each child of a multi-millionaire will likely receive a maximum of $1 million – $2 million.  Why?  Because that’s enough money to ensure their child (who, by the way, is likely at least 60 years old by then) will never go hungry. 

In fact, there exists a positive correlation between the net wealth of an individual and the percentage of their estate to charity.  For example, an individual with a $1 million estate may give away 5% to charity ($50,000); an individual with a $20 million estate will likely give a larger percentage, say 10% ($2 million).  Rhetorically, who do you need to spend your time with?

Demonstrate the Ability to Manage Wealth.  When we interact with high-net wealth individuals, we’re spending a few minutes with people who have spent their entire lives creating and managing wealth.  They’ve made strategic investments, carefully managed their resources, and looked for leveraged opportunities to increase their wealth.  They’ve been granted an important gift, and they’ve used it well.

And they become frustrated, oftentimes, with how nonprofit organizations are managed.  Each year we’re passing our break-even budgets.  We’re sending our monthly letters to donors informing them of our financial crisis de jour, and pleading for more money.  Then, when a generous individual happens to bequeath us a significant gift, what do we do with it?  Fight over it like a pack of wild dogs, and spend it as fast as we can.

Please don’t misunderstand, not all nonprofit organizations act this way.  I realize that I’m being hyper-critical. However, this is the perception for wealthy individuals.  And when one organization acts this way, all of them must, right?  After all, the purpose of establishing an organization is to spend money, not to retain it.

In your service to the wealthy, ensure that you have the systems and structures established to retain and prudently use gifts of accumulated wealth the same way your wealthy donors would – if they were available to do so.  More times than not, this involves creating or modifying your endowment fund in order to visibly demonstrate your ability to “live off the apples” rather than “chop down the apple trees.”

Next, communicate with your donors about your endowment fund on two levels: first, how your endowment fund directly impacts your mission, and isn’t just a chunk of money gathering interest.  Second, demonstrate how you manage the assets through strict protocols and expertise within your leadership.

Get Off the Agenda of Your Organization.  Get On the Agenda of Your Donors.  I hear a lot of nonprofit executives express frustration that their wealthiest donors intend to create private foundations at the time of death, rather than giving endowment-type gifts to their organization.  I agree that, anecdotally, this seems to be happening.  But why?

When donors do this, what are they saying to us?  Here’s my interpretation:  these donors trust an entity to be determined later, that doesn’t even exist today, more than they trust us!  If ever there was a condemnation on the nonprofit sector, this must be it.  

Let’s overcome this.  Here’s how. Rather than coming up with creative ways to get money into the coffers of our organization, let’s first start with helping donors figure out creative ways to give their money away.  Instead of an adversarial approach of “they have it, and I want it,” try getting on their side of the table. 

• Help them come up with creative plans to give to all of their favorite charities – not just simply yours. 
• Show them that they might be able to accomplish their same goals through a series of endowment restricted gifts, rather than establishing the cumbersome structures of a private foundation. 
• Most important, help them work through the delicate issues concerning inter-personal and family transfers of wealth. 

Incidentally, charitable gifts to your organization, when structured properly, have the ability to solve all of these issues.

For the more technical individuals out there, notice that I haven’t yet used the term charitable remainder trust, or charitable lead trust, or gift annuity, or any other gift product that gets trotted out into the philanthropic marketplace.  Those are all relevant tools, to a degree, but only to the point that they can accomplish the overall goals of your donor. 

We’re getting closer to making the Strategic Leap.  Up next, our implementation stage where we learn how to be “Aggressively Patient.”  Stay tuned!

-          Consider the wealthiest 1% of the population.  They own approximately 1/3 of the total wealth.

-          Next, consider the subsequent wealthiest 9%.  They own approximately the next 1/3.

-          So, the wealthiest 10% of the population has access to 2/3 of the wealth! (Inversely, 90% of the population only owns 1/3 of the wealth.)   

To be clear, I’m not talking about INCOME.  I’m talking about WEALTH.  Those are two very different factors to consider.  For example, many high income individuals are not wealthy.  And many high-net wealth individuals do not necessarily have high incomes.  Indeed, it’s relatively easy to identify high-income individuals.  Not so with high wealth. 

 As not-for-profit executives, our first step in making a Strategic Leap is to better and more clearly distinguish the two groups.  Why? It’s simple math.  Total net income each year is approximately $14 trillion.  Total net wealth in the United States is approximately $50 trillion. 

Let’s apply Aristotle’s observation to these two groups – high income and high wealth.  The highest 10% of income earners will earn more than $9 trillion.  These people, on average, generously donate 3% of their income to charity.  That’s about $270 billion, which is approximately the total amount given by individuals each year.  (At least close enough for government work.)

Now let’s consider the same situation for the $50 trillion of net wealth.  The wealthiest 10% will have access to approximately $33 trillion.  Apply the same 3% donated to charity, and we come up with a remarkable $990 billion in charitable gifts.  That number, all by itself, represents about the total amount given in the last 6 years.  Combined!

When you comment below and email me your thoughts, I totally recognize that there are some huge rounding errors, some crossover between gifts of income and gifts of wealth, and more precise analysis which could be done.  I agree with all of that.  However, do not let those thoughts cloud the primary point, which is:

Nonprofit organizations are doing a lousy job attracting gifts of accumulated wealth. 

Please don’t misunderstand.  We’re doing a great job of getting $5,000 event sponsorships and $25,000 end of year gifts from our major donors.  More “sophisticated” organizations might even be successful in selling $20,000 charitable gift annuities, and periodically attract six and seven figure gifts for special projects and campaigns. 

Unfortunately, each of these types of common gifts likely represent gifts of income, NOT accumulated net wealth.  They derive from the small puddle of $14 trillion, rather than the ocean of $50 trillion!

 What can we do about this?  In my next few blog postings, I’ll be commenting on some strategies which you and your organization might consider to start better attracting gifts of accumulated wealth.  Stay tuned, follow me on Twitter, check back frequently, or join the RSS feed to keep apprised of future postings.

Some experts in the field of Board development recommend using a Board “grid” to determine the characteristics needed to aid your organization.  For example, they look for a number of various expertises, such as accounting, legal, human resources, insurance, program activities, and fund development.  Then these experts recommend you work to ensure all of the boxes on your “grid” are filled. 

A great plan.  A poor strategy.  The “Board Grid Plan” makes sense in theory but, unfortunately, tends to end as a great academic exercise and does very little in ensuring overall effectiveness.

So if this doesn’t work, what characteristics should you look for?  Here’s my Rule of Thumb.  Are you ready?  Get your pen and paper out and get ready to write this down.

The best Board members hold, or have held, the ultimate responsibility of making a payroll. 

That’s it.  Simple, yet profound.  So why do I say this? For a variety of reasons:

1.)    When a person is responsible for paying people, they tend to realize that no organization has a divine right to exist.  This radically changes their decision making process. For the better.

2.)    People with payroll responsibility realize that you cannot save your way to prosperity.  Effective nonprofit leadership focuses first on revenue, not expenses.

3.)    Payroll makers are usually very high level executives, entrepreneurs, and leaders, i.e. they have money.  These are exactly the right types of leaders you need in the constellation surrounding your organization.

4.)    In this day and age, as many organizations struggle to make ends meet, it’s important that people on your Board understand the difficulties you’re dealing with.

Now, to be clear, I’m not just talking about  CEO’s of Fortune 500 companies.  Some of the best Board members I’ve had the privilege of working with have been owners of small collision shops, small financial services firms, car dealers, and restaurant owners.  Yet, through their unique independent experiences, now possess the very same type of thinking required for success in today’s nonprofit marketplace.

Test your own Board with this Rule of Thumb.  First, consider your most effective Board members, do they have this type of experience?  Second, ask the inverse question.  Do my least effective Board members lack this experience?

And then, let me know what you find out!

The first part of this story is true.  The second part, obviously, never happened.  Why, because it would never have worked. (And if this is YOU in the above picture, my apologies.)

Yet, when it comes to raising money, we tend to have the inclination that it’s okay to ask our donors to “marry” us right after we first meet them.  Such as, “Hi, nice to meet you.  You have lots of money.  Will you give it to me?”  Then, we actually expect them to agree, and get frustrated when they don’t! 

Other than directly asking her to marry me on that cold September evening, what other strategies could I have used?  Well, I could have passed her a note that read, “Do you like me?  Yes or No.  Please respond.”  Unfortunately, that didn’t work in 6^th grade gym class. It likely wouldn’t have worked any better here.  But, again, how much of our fund development strategy is the equivalent of passing a note to donors to find out if they like you? Be honest.

So, I used my blossoming fund development skills on her, instead.  (She was like putty in my hands.)I went up to one of her friends that I already knew and asked questions about her.  What does she like to do? What’s she interested in? If I would ask her out on a date, would she say ‘yes’?  I later learned that these same questions equally apply to donor prospecting.

Next, I had to call her up for a date.  But I’m a big chicken, and I hate rejection (like most people).  I decided to flip a coin.  Heads, I call her; tails I don’t.  I flipped it once – Tails!  Okay, best out of three.  And eventually, you’ll have to pick up the phone and get in direct contact with your donors, too.  When I eventually talked to her, she said yes.  But she might have said no, and that can be scary.

We had our first date, where we spent time getting to know each other.  And every warm blooded male knows that the goal of that first date is to have . . . a second date!  And the best way to assure there is a second date is to plan for it during the first.  Now, when you have that first “date” with your key donor prospect, prepare for what the subsequent steps might be before the date even begins.  That’s your goal – your only goal – of that first donor date.  Having another one.  Everything else will be premature.

We dated a few more times, and our relationship grew and changed.  Before, our conversations focused on “would you like to go out again on Friday”.  Now, those same conversations were about “what are WE going to do this weekend?”   And when that WE moment happens – and it definitely will with your donor relationships – it will be a legitimate question to ask them to “marry” you.  They might not say yes, but your relationship will still be in place.

Think back on your own personal relationship.  How long did you talk about the subject of marriage with your future spouse before the actual proposal took place?  You likely met the parents, shopped for rings, had multiple conversations about your hopes and dreams, and other traditional relationship building events. 

If you had a whirlwind romance, from the time you first met your spouse to the time they said “yes”, how long was it?  Months? Maybe years?  That’s how long a sound and strategic individual donor development process will likely take, as well.  From experience, the quickest I’ve seen, heard of, and observed a donor move from “I never heard of you before,” to “Here’s a $1,000,000 gift”? Ninety days.  Don’t plan on beating that record any time soon. For planning purposes, you should consider a 6 to 18 month process.  Of course, for donors who you’ve been courting already, the process can be much quicker.

What’s my point in all this rambling?  Three things.  First, major gift efforts with new donors will take time and investment.  It won’t happen overnight.  And if it does happen too quickly, you will likely be leaving money on the table.  Second, focus your efforts on relationship building, rather than on money.  When you and your donors have strong relationships, “closing the sale” becomes a natural extension of that relationship.

Finally, anyone can do this.  It’s not about double-secret strategy, magic fund raising handshakes, or other tricks.  It’s about understanding how people relate to people.  If you can understand and master those practices, you can become an exemplary fund development professional.

 (“Yes, dear, I’ll remember to change that picture on my blog.”)