TOP 10 MAJOR DONOR FUNDRAISING TRENDS FOR 2014-15#9. Big data is awesome. I am barely beginning to...
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When I became the acting president of Hamilton College in 1999, I already knew a lot about the college. I am a 1996 Hamilton graduate, the parent of a former student, and I have served for 12 years on the college’s governing board. Still, when Hamilton President Eugene Tobin took a much- deserved sabbatical, I learned more about Hamilton during my six months in the presidency than in all my previous time associated with the college. Much of what I learned will make me — and, I expect, my fellow board members — better in the future. An unusual level of alumni involvement distinguishes Hamilton. Typically, more than 55 percent of alumni contribute every year to the annual fund, and more than a third volunteer to recruit students, raise funds, counsel undergraduates about careers, provide internships, conduct alumni events, and participate in other activities. As is the case at other colleges, Hamilton’s board sets the tone for financial and volunteer support. Yet despite this high level of alumni involvement and my own active participation with my alma mater, I had a superficial understanding about many important facets of the college and wondered whether my fellow board members did as well. Naturally, I recognize it is unrealistic to expect that board members who typically visit the campus just three or four times a year will ever have the same breadth and depth of knowledge as the president and senior administrators who are charged with the daily operations of the institution. A New Understanding of the College Soon after I became president, the impact of policy decisions became clear to me — much more so than when I was a board member. For example, deciding to admit an additional 20 to 30 students from the waiting list or planning for a larger class, though attractive from a financial point of view, had significant ramifications in the day-to-day life of the campus. Admitting more students means hiring more staff members. Where would we find additional housing? And if the new hires were adjuncts, how could we be certain they would be as qualified and as committed to the institution as full-time faculty members? This level of detail rarely makes it to the boardroom, but as president, I could see how a tempting financial solution might create an irritant in campus life. My experience as a college president has made me much more aware of the nuances of board decision making. Many issues that boards are asked to consider require much broader scrutiny. Switching roles for six months taught me five fundamental lessons that may help boards and board members become more effective. 1. Balance the membership of board member committees. Hamilton’s board of directors, like many governing boards, consists disproportionately of business executives, investors, and successful entrepreneurs. Their acumen is in finance and in running a business, so they tend to be most interested in the issues — fund-raising, endowment performance, and investments — with which they are most familiar and where results are tangible. They tend not to be so comfortable with the other components that make a college successful such as its staff, programs, and facilities. The tendency among board members to gravitate toward finance is understandable. After all, board members have a fiduciary responsibility to the college, and given today’s fiscal pressures, no board can be blamed for being preoccupied with an organization’s assets. But a balanced budget and a growing endowment are only two measures of an organization’s health. It is equally important that all board committees have the appropriate firepower if the mission of the institution is to be fulfilled. The committee on board members should look carefully at the distribution of talent and influence among the various standing committees to ensure that every function has an important voice at the boardroom table. 2. Seek, within limits, close encounters with leaders of the organization. In my six months as president, I met and spent time with most of the faculty, the swimming coach, the chair of the chemistry department, the director of the career center - people board members typically would not encounter. Yet the insights and opinions of such individuals can give board members a much broader understanding of an institution. Recognizing this untapped resource, we restructured board weekends at Hamilton to facilitate even greater informal interaction between the board and various college 1 A Board Member’s Stint in the Chief Executive’s Chair TOP 10 MAJOR DONOR FUNDRAISING TRENDS FOR 2014-15 By Gail Perry, president, Gail Perry Associates/firedupfundraising.com
Transcript of TOP 10 MAJOR DONOR FUNDRAISING TRENDS FOR 2014-15#9. Big data is awesome. I am barely beginning to...
When I became the acting president of Hamilton College in 1999, I already knew a lot about the college. I am a 1996 Hamilton graduate, the parent of a former student, and I have served for 12 years on the college’s governing board. Still, when Hamilton President Eugene Tobin took a much-deserved sabbatical, I learned more about Hamilton during my six months in the presidency than in all my previous time associated with the college. Much of what I learned will make me — and, I expect, my fellow board members — better in the future.
An unusual level of alumni involvement distinguishes Hamilton. Typically, more than 55 percent of alumni contribute every year to the annual fund, and more than a third volunteer to recruit students, raise funds, counsel undergraduates about careers, provide internships, conduct alumni events, and participate in other activities. As is the case at other colleges, Hamilton’s board sets the tone for financial and volunteer support.
Yet despite this high level of alumni involvement and my own active participation with my alma mater, I had a superficial understanding about many important facets of the college and wondered whether my fellow board members did as well. Naturally, I recognize it is unrealistic to expect that board members who typically visit the campus just three or four times a year will ever have the same breadth and depth of knowledge as the president and senior administrators who are charged with the daily operations of the institution.
A New Understanding of the CollegeSoon after I became president, the impact of policy decisions became clear to me — much more so than when I was a board member. For example, deciding to admit an additional 20 to 30 students from the waiting list or planning for a larger class, though attractive from a financial point of view, had significant ramifications in the day-to-day life of the campus. Admitting more students means hiring more staff members. Where would we find additional housing? And if the new hires were adjuncts, how could we be certain they would be as qualified and as committed to the institution as full-time faculty members? This level of detail rarely makes it to the boardroom, but as president, I could see how a tempting financial solution might create an irritant in campus life.
My experience as a college president has made me much more aware of the nuances of board decision making. Many issues that boards are asked to consider require much broader scrutiny. Switching roles for six months taught me five fundamental lessons that may help boards and board members become more effective.
1. Balance the membership of board member committees.Hamilton’s board of directors, like many governing boards, consists disproportionately of business executives, investors, and successful entrepreneurs. Their acumen is in finance and in running a business, so they tend to be most interested in the issues — fund-raising, endowment performance, and investments — with which they are most familiar and where results are tangible. They tend not to be so comfortable with the other components that make a college successful such as its staff, programs, and facilities.
The tendency among board members to gravitate toward finance is understandable. After all, board members have a fiduciary responsibility to the college, and given today’s fiscal pressures, no board can be blamed for being preoccupied with an organization’s assets. But a balanced budget and a growing endowment are only two measures of an organization’s health.
It is equally important that all board committees have the appropriate firepower if the mission of the institution is to be fulfilled. The committee on board members should look carefully at the distribution of talent and influence among the various standing committees to ensure that every function has an important voice at the boardroom table.
2. Seek, within limits, close encounters with leaders of the organization. In my six months as president, I met and spent time with most of the faculty, the swimming coach, the chair of the chemistry department, the director of the career center - people board members typically would not encounter. Yet the insights and opinions of such individuals can give board members a much broader understanding of an institution.
Recognizing this untapped resource, we restructured board weekends at Hamilton to facilitate even greater informal interaction between the board and various college
1A Board Member’s Stint in the Chief Executive’s Chair
TOP 10 MAJOR DONOR FUNDRAISING TRENDS FOR 2014-15By Gail Perry, president, Gail Perry Associates/firedupfundraising.com
Fundraising is changing! Everything is shifting these days. Donors are changing too. Post-recession donors really are different!
Are you changing your own fundraising strategies to keep up with donors’ newest attitudes and preferences? Because fundraising is recovering nicely now that the recession is over. Charitable gifts were up three percent last year, and wealthy individuals led most of that increase. And since 87 percent of all gifts come from individuals — either through bequests, family foundations, or outright gifts — it’s important to track the wants and needs of these donors today.
Here are my top 10 major donor trends for 2014-15. See if you can ride these fundraising trends to major fundraising success in the coming year or two!
#1. Donors are starting to trust again.We saw donors’ trust plummet in the recession. People lost trust in all larger institutions: government, the financial industry, Wall Street, and also nonprofits.
We saw this in donors’ questions to us: “How will you use my money? Where will my money go?” Will my money be wasted?” Major donors are looking at their gifts as investments for the social good.
Your strategy?• Foster personal relationships with your donors.• Be transparent. Be specific.
#2. Major donors see their gifts as investments to achieve good.We’ve all heard the drill: Donors want information on the specific results you are creating.
They want to know that you are both efficient and effective. Your strategy? • Go out of your way to demonstrate to your donors that
their gifts actually create “good” in the world.• Sharpen up your donor communications and be sure
you are talking the language they want to hear.• It’s easy to pay lip service to this goal. It’s much harder
to get it right!
#3. Donors want to see your financials tied directly to your impact.Here’s your chance to build more trust: Show your donors the right financials.
You can assure them, calm them down, and quiet their doubts — IF you communicate correctly. You’ve got to tie their money DIRECTLY back to the impact they are creating.
Your strategy? Talk to them in terms of the MPI formula:
• Money — How much money have you raised (or they gave)?
• Purpose/Project — What projects did you spend the money on?
• Impact — What impact did you accomplish with the project?
When you LINK the money directly to the project and the impact, you quell your donors’ doubts about you.
And when you build up their trust, they will invest more in your nonprofit.
#4. Rise of the Boomers as donors.The Boomers are the major donors of today. They are 34 percent of all donors, but they are giving 43 percent of all the money.
Remember the older generation of donors? They would give out of a sense of duty.
Boomers, on the other hand, see giving as a means of self-expression.
Your strategy? • Let Boomers’ personal interests and passions guide the
individual cultivation plans you develop.• Help them connect to what is most meaningful to them.
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#5. Women are the #1 donor demographic.OK, get ready. I’m going to surprise you with some new data:
Sixty-four percent of all charitable gifts are made by women (Huffington Post).
Boomer and older women are more likely to GIVE and also GIVE MORE than their male counterparts (Indiana University).
Fifty-two percent of women came into their marriages with assets equal to or larger than their partners. (US Trust).
Your strategy?Review your prospect lists.• Reevaluate the capacity of the ladies.• Get to work and go see them!
#6. The MEGA Donor is back! MEGA gifts are back! Our most generous donors are finally letting go of their money. All that recession-based caution is loosening up, and we are seeing multi-million dollar gifts all over the place.
The ten largest new charitable gifts from individuals announced in 2013 came to a combined $3.45 billion (Forbes and The Chronicle of Philanthropy).
Your strategy? • The Chronicle of Philanthropy says that most mega-gifts
happen close to home. So keep your eyes open locally! You may have more ways to access your friendly local billionaire (or multimillionaire) than you think.
• Be opportunistic and never stop trying to get the door open!
#7. Major donors who volunteer give much much more.How about this? Eighty-nine percent of high net-worth individuals volunteer with nonprofits.
I’ll never forget about the time a mega-wealthy donor said to me, “We give our money where we give our time.”I never, ever forgot that!Clearly, the wealthy only make big gifts to the causes that are near and dear to their hearts.
Your strategy? • What are you going to do to get your mega donors more
involved? How about a committee, or your board? How about a focus group?
• It’s one thing to take them on site in the middle of your action — that’s terrific and a must-do! It’s a next step to get them involved in decision making or policy roles. That’s when the bigger money may start to flow in.
#8. Financial advisors are more important than ever. Holy komoly! Donor-advised funds grew from $38 billion in 2011 to $45 billion in 2012 (National Philanthropic Trust). That is a pile of money. And much of it is under the management of financial wealth advisors, isn’t it?
Your strategy? • Do what you can to befriend the financial planners,
estate attorneys, CPAs, and wealth advisors in your community.
• Why not put a financial advisor on your board, or on a special fundraising committee?
#9. Big data is awesome.I am barely beginning to understand what big data can do for fundraisers. For example: Big data can watch thousands of donors, and based on their activities, create customized experiences for them.
And you can use “predictive modeling” to ID “sleeper” major gift prospects. This statistical technique compares your major donors to all other donors. It develops a “distinguishing formula” to describe your major donors. Then it scores all other donors in your file by how much they look like their major donors. Pretty mind-blowing!
Your strategy? • Clean up your data base as much as possible!• Add as much data as you can about people’s interests
and their activities — in addition to tracking their gifts.• And start exploring what big data can do for you.
Trend #10: Donors want a big idea!Remember last year when Stanford University announced that it had raised one $1 billion in one year? Well, I was pretty impressed!
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How did Stanford raise all this? Well, they had“Very big ideas, and they’re good at capturing people’s imagination, thinking about what they can do and what they could be.”
Your strategy? • Pull out your very best big ideas.• Use them to capture people’s imagination.• Talk about what you can do and what you can be to the
community and the world.
And you just might raise the mega gifts too!___________________________________
Gail Perry, CFRE, is an international fundraising coach, speaker, trainer, and thought-leader. She works with boards inspiring them to actively engage in fundraising, leads inspirational fundraising workshops and board retreats around the globe, blogs at FiredUpFundraising.com, and publishes widely and writes often for Guidestar and Fundraising Success.
Her “Fired-Up Fundraising” approach, developed over the past 25 years as a non-philanthropy expert, has helped organizations raise hundreds of millions in gifts. Gail’s book, Fired-Up Fundraising: Turn Board Passion into Action (Wiley/AFP) has been called the “gold standard guide to building successful fundraising boards.”
Gail will be presenting two sessions at the 2014 BoardSource Leadership Forum: Fundraising and Friendmaking Made Easy for Board MembersTurn Your Board from Board to Blazing: Seven Steps to Fire Up Your Board
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