Tuesday, August 7, 2007

Changes in Giving and Volunteering

Mrs. Goodale is a veteran-pro fundraiser, having cut her teeth as an alumna of Smith College raising funds for alma mater. One thing led to another, interest led to progress; and more than three decades later Mrs. Goodale is one of the pre-eminent advisers in her field. In these columns which should run about twice a month, she shares the knowledge that experience has provided.

Toni Goodale's Consultant's Corner
Changes in Giving and Volunteering

Over the last decade, I have witnessed several changes in the fund-raising field. Some of these changes have been beneficial and, indeed, welcome developments. However, some of these new developments are arguably detrimental to successful fund-raising efforts. Let’s explore some of these.

There have been several noticeable changes in fund raising for major gifts, the large gifts that constitute the majority of dollars for any campaign. First, fund raising for major gifts have become a more time consuming process: today, major gifts have not decreased in size, but they might take three or four visits to successfully solicit. Greater time and effort are required to solicit major gifts because, in today’s competitive fund-raising environment, donors have more priorities. Over hundreds of thousands of non-profits now exist, most of whom are actively seeking funds. Moreover, even in some small communities, you will find as many as five major organizations doing campaigns at the same time.

In this highly competitive situation, major givers often spread their gifts around several organizations. In addition, many major gifts today include planned gifts which take a while to work out. Finally, fund raisers are more likely than before to wait for what they believe to be the donor’s optimum gift. Consequently, major gifts that in the past might have been solicited in one or two visits might take much longer today.

 Another change has been an increase in the size of lead gifts in campaigns. More organizations are trying for lead gifts which are 20 percent rather than 10 percent of the campaign goal. Foundations and major donors are increasingly interested in big challenge grants at the start of a campaign, a development with which I do not necessarily agree. As a fund-raising strategy, I believe that, in most cases, challenge gifts are much more useful in the later stages of a campaign as a means of encouraging small gifts. I do not believe that major donors are particularly influenced by challenge gifts but, in some cases, Board members giving big lead gifts to challenge other Board members can be a useful strategy.

Also, deferred giving is becoming an increasingly important component of fund-raising campaigns. Development staff are becoming more sophisticated about approaching donors for both outright and planned gifts. Indeed, many development offices are creating separate planned gift staff positions. Planned giving programs are being started everywhere and these gifts are then often realized in capital campaigns. For many donors, planned giving represents not only a charitable means of giving, but also a growing component of their estate planning.

Finally, many campaigns are focusing more exclusively on major gift solicitations. Some universities are even limiting their campaigns to major gifts. These campaigns are easier to organize because they involve fewer prospects and, therefore, less staff support and fewer volunteers. Such campaigns, however, are missing involving smaller, sometimes younger donors who are the institution’s future. In addition, the excitement of the entire organization or community being involved in the campaign is often sacrificed.

New Developments in the Fund Raising Process

In addition to developments in major gift solicitation, I am also observing fundamental changes in the fund-raising process itself. In particular, an increasing tendency toward what is sometimes called “friend raising” rather than fund raising is worrisome. Several colleges are encouraging waiting before asking for gifts, sometimes for several years. In my opinion, cultivation of donors is critically important, but I think that extensive “friend raising” is often a way of avoiding actually raising money and letting solicitors off the hook. In other words, a form of procrastination rather than cultivation. Once a donor has received enough information about your organization, has met the key players and has visited the site, there is nothing wrong with putting the specific ask out on the table on certainly the second, if not the first visit, if you ask for the gift appropriately and diplomatically.

Another development that worries me is that staff members are spending too much time trying to figure out what donors want to give before they are visited. It’s always useful to have an idea about the donor’s special interests when you go in for a solicitation, but it can be a mistake to second guess any donor. The best thing to do in a visit is to discuss all the funding objectives in a campaign, show the donor the list of naming opportunities and make some suggestions. Then, it is important to listen to the donor describe his or her special interests and, to gear the ensuing conversation accordingly. One more new development in the fund-raising process is the phenomenon of ongoing capital campaigns.

Today, it seems as if every non-profit is constantly in a capital campaign. Several universities and large prep schools have formed Development Boards composed of top volunteers and donors who organize ongoing capital fund raising similar to ongoing annual fund raising. I believe that Development Boards are the wave of the future.

Stay tuned for Part II.

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