Norman Olshansky M.S.

Enhancing your Board's Fundraising Success

By Norman Olshansky: President
NFP Consulting Resources, Inc.

How can nonprofit organizations increase revenues? This is one of the most frequent issues that I am asked to address as part of my consulting practice.

Most nonprofits depend upon private philanthropy (in addition to user fees, memberships, grants, earned income, ticket sales, etc.) to support their operation. According to the AAFRC Trust for Philanthropy, 78.3% of all charitable contributions come from individuals. So if the largest portion of philanthropy comes from private, (individual) sources, what is the best way to seek out those funds?

There are many axioms related to fundraising. A few are:

You don’t get if you don’t ask
Connect to passions, hearts and minds before you connect to wallets
The quality of a gift is directly related to the quality of the relationship between the solicitor and prospect.
Fundraising is both an art and a science. Success requires both.
Most worthwhile endeavors, including fundraising, start with a clear vision/plan and require lots of planning, preparation, hard work, engagement of leadership and strategic execution.
You can never thank a donor, volunteer or staff member too often. They are the keys to your success.

There is a direct relationship between fundraising success and the quality of volunteer and professional organizational leadership. Better leadership equals better success.

Nonprofit boards are usually populated by individuals who are committed to the mission of the organization. Many have come up through the ranks as volunteers within the organization. Others are on the board based upon their professional expertise in the areas related to the organization’s service, operations or administration. All too often, however, boards are lacking in members who have the characteristics necessary to obtain significant private philanthropic support from individuals. In addition, staff members are often ill prepared to be successful fundraisers, especially in the area of major gifts.

Staff members need to be trained, mentored and encouraged to engage in those activities that will contribute to fundraising success. New hires should be selected, in part, on their ability to provide professional leadership to the fundraising process.

When a board does not have sufficient members who have major gift fundraising experience, access to wealth in the community, and the ability themselves to be philanthropic leaders for the organization, steps should be taken to make needed changes/additions. The goal should be to bring onto the board and fundraising committee(s) individuals who have a positive passion for the organization’s mission, are known and respected leaders in the community, have the ability to inspire others, can recruit additional leadership, are able to make a major gift to the organization and can open doors to other major donors. The organization should be among their top philanthropic priority during the length of their service on the board or fundraising committee. Many organizations are at a loss on how to recruit board members with the above characteristics.

When a nonprofit does not have a strong board and needs to bring on new people, the following are a few steps to consider which have been successfully implemented by nonprofit organizations.

A. Put together a 3-5 member nominating committee drawn from your most prominent board members, current supporters and past chairs.

B. Have them, with staff input, develop a job description for leadership which includes expectations for participation, attendance, philanthropy and committee involvement. Establish what will be the length of service. Identify your expectations of time commitment, including time needed for the review of minutes and other materials in preparation for meetings.

C. Review prospect lists developed by the organization, as well as other input from leadership and staff, for names of individuals who would be ideal to involve in your leadership. Think high and boldly. Look at names of philanthropists and other leadership who have been successful with other organizations. Prioritize prime candidates with whom you have or can obtain access.

D. Cultivate your top choices through invitations to visit your organization and/or participate in small group briefings about its work. Provide a quality experience for the prospective leader when they visit/tour your operations.

E. Based upon their desire to learn about your organization and their reactions to cultivation activities, approach the key leadership prospects to obtain their willingness to have their names put into nomination for a board or key committee position. Show them an expanded list of people who are being considered. This will demonstrate to them the quality of people with whom you will be talking. Tell them that you are interviewing many people on the list to determine if their names should be put into nomination. Ask what they know and what their feelings are, about the mission and work of your organization following their visits and involvement in the cultivation briefings. After you answer any questions they have, show them the job description for leadership and ask if they would be willing to be considered, among others, for submission to the nominating committee. Emphasize that only a few of the people submitted, will be asked if they can be nominated for a slate to be presented to the existing board/membership. Ask for their bio’s, list of nonprofit board and leadership experience, and professional accomplishments. The purpose of this strategy is to build status for participation.

F. Avoid any indication of existing weakness or need to upgrade leadership.
Make sure that the people talking to them are the select group that was recruited for the nominating committee. In addition you may want to involve your key professional from your organization (Executive Director, CEO, etc.) in the prospect meetings.

Recruiting the right people into leadership, who have demonstrated fundraising success in the past, in addition to training and mentoring existing leadership and staff in the art and science of fundraising will give your organization a tremendous return on investment.

(For more information on board development and nonprofit fundraising, go to http://www.nfpconsulting.com/ )

Ten Tips for Nonprofit Fundraising Solicitors

Ten Tips for Major Gift Solicitors

1. Do your homework

Make sure you are familiar with the services and programs that are offered by the organization. Review your organization's Points of Pride (major accomplishments) and, if possible, be prepared to share a personal experience that impressed you about the special work that the organization provides. Gather important information about your prospect. Together with other leadership and staff develop a profile of the prospect.
• What are her/his interests?
• What have they contributed to previously?
• What is the largest gift they have ever given?
• Do they give individually or through their company or family foundation?
• Do they have a philanthropic fund with a local Foundation? If so, how large is their fund?
• Are they candidates for estate planning and/or deferred gift discussions?
• Who are their key financial advisors?
• Have they recently sold a business or inherited significant resources?
• How is their business doing?
• Do they have a loved one who may be appropriate for memorializing or honoring with a gift?
• Are there other people who can be supportive with the solicitation who have special relationships with the prospect?
• What are the likely concerns the prospects might raise in the solicitation?
• Determine in advance what would be the best setting to conduct the initial meeting.
• Would it be helpful to have staff, or others participate in the solicitation?
• What materials, hand-outs or visuals would be helpful to have for the solicitation?
• Finally, establish a "rating" for the individual. How much should you ask them to consider as a gift?

2. Leaders Lead

As a leader of the campaign, it is important that you make your own gift prior to soliciting others. It will be easier to obtain a quality gift from your prospects if you are comfortable that your gift is also credible and a quality one, based on your own personal circumstances. The ability to share the fact that you made your gift, when you are soliciting, will give the prospect more confidence in your support and leadership. Prospects will take into consideration what leadership has given, in determining their own gifts. Initial gifts will be "yardsticks" for giving by those who follow.

3. Personalize the Solicitation

Major gift solicitations should not be conducted over the phone. Large gifts are often not closed with one visit. Family members, financial advisors and/or business partners may need to be involved prior to a decision. Obviously, if you know who the key decision-makers are (if they are not your prospect), they should be included in the solicitation meeting. A major part of the success of a solicitation is the chemistry of the relationship between the solicitor(s) and prospect, as well as how one is asked. If at all possible, at least two solicitors should participate in the solicitation. It demonstrates to the prospect the importance you have put on their gift, it shows that there are others equally committed to the success of the campaign and it provides for different perspectives to be heard. The old saying that two heads are better than one also applies to solicitations. While one person is answering questions or explaining the need, the other person can better observe responses, body language, etc. Evaluating the solicitation and together determining best approaches for follow-up are enhanced with multiple solicitors.

4. The Appointment

The most critical aspect of major gift solicitations is getting the appointment. Be enthusiastic and let the prospect know that you want to share with them some exciting information about the organization, which is a project near and dear to you and that you would like to solicit their advice and support. Make sure that you make the appointment at a time and place that is convenient for both the prospect and solicitors. Also, try to schedule at least 30-45 minutes for the initial meeting. Try to avoid an environment where others may overhear conversation or where there will be distractions. If the prospect asks if you are looking for money from them .... be candid and enthusiastic. ''Absolutely,.... I would like to tell you about the organization, and have you join me as a supporter this year, .... but just as important, we would like to get your input on additional ways we can succeed in our efforts on behalf of this great program which is doing such amazing things.'' Make it clear that you will be asking for their support.

5. Engage the Prospect

Do not try to close too quickly. Share the vision, services, benefits, points of pride and needs of
organization. While informing the prospect of the needs, you are also demonstrating the commitment of leadership. Donors want to be confident that they are giving to organizations with knowledgeable and committed leadership. Enthusiasm is contagious and so is negativity. It's your choice.

6. The Meeting

Take a few minutes to break the ice and to establish a comfortable environment. Introduce yourself and those with you, through your involvement and comitment to the organization and the services it provides. In a concise manner, share with the prospect the value of the organization and what it has accomplished. Refer to the Points of Pride....Emphasize the opportunities for the future based on the new vision and strategic plan for expansion or further development of the organization. Discuss the importance of their participation in addition to their financial support. Your organization needs their advice, expertise, identification of new leadership and introduction to other prospective donors. Once you have shared your enthusiasm about the project and demonstrated the needs, it is time to request the gift.

7. Ask

Using the number that was agreed upon during the rating session, (see item #1) the request can be introduced as follows: "We would appreciate if you would consider a gift of $ ___________ to the campaign." (If there are significant projects/or programs which need to be funded at the level of the request, mention the one or two which you think would appeal to the prospective donor.) PAUSE: Once you have asked for the gift, it is time to be silent and let the prospect respond with questions or other comments. There is no need ever to apologize for asking for a gift. The individuals you are approaching expect you to ask, have likely been asked before by many organizations and have, at times, been solicitors themselves.

8. Questions, Objections and Dialogue

Answer the questions as best you can but do not get into a debate. If you are unsure as to how to
properly answer a specific question, tell the prospect you will find out the answer and get back to them or have one of the staff provide them with the details. (Make sure you or staff follow up promptly.) If the donor offers a gift significantly lower than what was requested, you can supportively ask if, by spreading the gift over time, could it be more significant, or if it is structured as a deferred gift, with certain tax benefits, would they consider a larger amount? Do not press if they indicate that what they had offered is the limit to what they want to do.
Thank them as enthusiastically as possible and ask them to complete the pledge card. If they indicate that they want some time to think about it and discuss it with others, thank then for their consideration and request a specific time when you can get back to them for a response. Think of yourself as an enthusiastic salesperson ... you are not "begging". Make sure that you are a good listener as well as a good presenter. Let your prospect know how important their support is to the campaign and ask them if they can introduce you to others who may also be interested in your important work. Once the gift is closed, stress the importance of your organizations need for cash by the end of the year. If possible, discuss how and when they will be able to make payment(s). Thank them and have them complete the pledge card.

9. Follow Up

Make sure that appropriate staff and/or leadership are briefed on your solicitation, any new leads,and that there are follow-up communications thanking the prospect ... even if a gift was not made. A handwritten thank you, from the individual who initially set up the appointment and/or was the solicitor, in addition to whatever is sent officially by the organization, is always appreciated. Solicitations should be a positive experience for the prospect. A successful solicitation can set the stage for future involvement. An unsuccessful solicitation can turn off a donor to the campaign as well as to future potential for support.

10. Summary

Keep in mind that people are more likely to contribute to make dreams happen than to solve
problems. Success equals connecting the donor to the organization in their heart first and only then,... through their pockets.

Norman Olshansky: President

NFP Consulting Resources, Inc.

Return on Investment

Norman Olshansky: President
NFP Consulting Resources, Inc.

You are an Executive or Key Volunteer leader of a not for profit who has been in
your position less than a year. You know the honeymoon is over. One of the many issues you want to address is the concern that so much of your fundraising time, energy and resources are spent planning fundraising events. It seems like the mission of your agency has shifted, and staff as well as volunteers spend more time planning parties than delivering service.

Fundraising events can and do play an important role in many not for profits. However, too many organizations do not fully understand how to maximize their fundraising efforts.

This may seem like blasphemy to some, but events should primarily be utilized to attract new donors, cultivate existing donors and volunteers, say thank you to your donors, volunteers and staff, or to provide community education. For most organizations, events (with a few notable exceptions) should not be undertaken if they are expected to provide a good financial return on the organization’s investment of time and resources to produce the event.

According to the AAFRC Trust for Philanthropy, 78.3% of all charitable contributions come from individuals. It is also well known that 80%-90% of all funds raised from those individuals are from the top 10% of donors. In other words, major giving is where it’s at. This is not to preclude the importance of broad based memberships and giving at all levels, but rather to focus your fundraising energies on the best return on investment (ROI) of time, staff, volunteers, and other resources, facilities, etc.

Fundraising Costs and Return on Investment – National AveragesMethod Cost Return on InvestmentDirect mail to general lists (non donors) 115% -15% Special Events 50% 50%Planned Giving 25% 75%Direct mail to prior donors 20% 80%Foundations/Corporations 20% 80%Major Gifts 5-10% 90-95%
National Average, all methods: 20% 80%(Based on: James Greenfield, Fund-Raising: Evaluating and Managing the FundDevelopment Process)
The chart indicates that you would need to spend $1.15 in order to raise $1.00 through direct mailings to general lists. To solicit major gifts, you would spend 5 to 10 cents to raise $1.00.

When calculating ROI, keep in mind the indirect costs associated with fundraising. For example staff costs are not just for those who are directly involved with fundraising. Other staff and administration typically are involved as well, albeit to a lesser extent. The costs associated with staff and volunteer time, facility usage, overhead expenses, as well as out of pocket direct costs should all be factored into determining ROI.

From an ROI perspective, it costs less and produces more income to raise major gifts than to use other methods of fundraising. While a variety of methods should be used in each organization, all too often, nonprofits tend to utilize, to a disproportionate degree, those methods which produce the lower returns, (events and direct mail) rather than those that are more effective (major gifts)..

Special events can build excitement, engage people, provide enjoyable opportunities for volunteers but they typically cost too much to produce to justify the amount of money they raise. As a result, most organizations are reducing the number of events they hold and are putting more emphasis on major gifts and planned giving.

Using the return on investment approach to analyze fundraising performance is an excellent way to engage leadership and staff on how best to plan your future fundraising activities. You will find that Board members who have for-profit business experience will likely better understand such an approach to planning and resource allocation.

Norman Olshansky:President of NFP Consulting Resources, Inc., is a national consultant, trainer and not for profit educator who resides in Sarasota, FL. For more information go to http://www.nfpconsulting.com/

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