One Way Out of the Box

My last post before Christmas raised the issue of adhering to donor wishes, and given most people’s understandably imperfect knowledge of every charity, questioned whether the "donor always does know best". Since this generated some interesting conversations, and ultimately a question of what might be done to address the issues raised, today I’m revisiting this topic.

One conversation was effectively about what is known as the "Charity starvation cycle". This is the process where either due to the Charity’s desire to see every penny raised go to programs, or due to a lack of donor support for infrastructure and capacity (or a combination thereof), charities are "starved" of the basic necessities to effectively and efficiently run their operations. This harms long-term sustainability and even the actual impact of the very programs that are being supported so aggressively. One suggested solution was to aggregate infrastructure and capacity needs to make them more interesting to donors.

The other conversation was about donors, and in particular the expectations of donors of larger gifts as compared to annual campaign or "smaller" donors. We all know that different things motivate different donors to give, but the point was made that larger donations often come with expectations. Special recognition might be part of it (e.g. naming rights within Capital Campaigns, etc.), but it was argued that primarily larger donors primarily expect more "impact" from their gift. The sense was that their goal is to be "transformational", hoping to move the Charity to entirely new heights or in new underserved directions. The suggestion was that unless the annual campaign and "smaller" donors took care of the infrastructure the charity couldn’t expect these larger gifts.

And to a point I agree. By definition annual campaigns are all about funding the day-to-day operations of the charity. Yet if the annual campaign is only enabling the charity to live "hand to mouth" are they forever trapped without access to "big" gifts?

Obviously there are other fundraising streams to consider, and creative tools generate more revenue from existing streams. But I believe even within this big donor / small donor paradigm there is the potential to break out of this box. While I was with Junior Achievement we were successful in receiving a significant multi-year corporate gift that included infrastructure funding elements required to help implement the desired programs. I appreciate this isn’t exactly the same as an individual donor making a transformational gift, but there are applicable insights.

First, fundraising is a relationship game. You need to get to know your prospect long before they become a donor, and that allows for two-way communication, including discussing the existing capacity of your charity. In our case we were able to show we were very lean already, and without support for capacity we wouldn’t be able to act on the gift.  Thus, in some rare cases a charity may have to walk away from gifts that don't include the right balance of support, or are simply unexecutable at the time. And I note as a sidebar that this can actually be a big positive in the long run: http://www.dwb.org/news/article.cfm?id=1644&cat=field-news

Second, truly deep donor relationships allow for education. This opens a whole new avenue for skilled fundraisers. I believe there’s an opportunity for good communication to show prospective donors of larger gifts how part of their gift can have even more impact – be even more transformational – if some portion of their gift goes to infrastructure and capacity building. So it need not be about aggregating the infrastructure needs or trying to ‘sexy’ them up in some way: simply being clear on the need can go a long way. Certainly that was my observation of the corporate gift we received.

Deep relationships. Solid communication. Complete transparency. Doing these things takes time, time that may not be cost-effective with every donor. But ultimately it’s the charity’s responsibility to help donors of all sizes to understand the charity's unique needs. And this is a key part of the solution to finding the way out of this particular box.

Myth #1: Selling skills = Fundraising skills

My premise is simple: all fundraising is sales, but not all sales is fundraising.  Thus, it might be argued that salespeople considering a move into fundraising are a natural fit.  However, as the phrase above makes clear there is overlap, but the two functions are not the same thing.  I appreciate there may some who disagree, but as an old “sales guy” I really see this as a compliment to the highly skilled fundraisers that I’ve come to know.

Websters defines the verb to Sell as “to transfer (goods) to or render (services) for another in exchange for money”.  The distinction for fundraisers is that, excluding pure sponsorship deals, what is most often being sold is a feeling.  Why do most individuals give?  Whether from altruism, obligation or from guilt, in the end it’s all about the donor feeling better.  Having a positive effect through one’s gift and feeling good about it is the core motivator.

So fundraisers do sell. However, what they usually sell is intangible, and both the “pitch” and the relationship this requires is quite different from traditional sales.  I’ve spent many hours in training sessions that counseled  “needs based selling” based on understanding the buyer’s needs and motivations.  But in the end whether you’re selling a box of Tide or the services of a call centre, it’s still selling a thing.  Not a feeling.

Selling a feeling is a whole different world.  Salespeople moving into the fundraising world have lots of solid transferable skills to start, including solid communication skills and hopefully good listening skills in particular.  But this not-so-subtle distinction that you’re asking people to part with their after-tax dollars for a feeling requires a lot of adjusting for many salespeople.  It certainly did for me.

There was a time when relationship selling meant “I’ll just go put these new golf clubs in the trunk of your car”.  Those days are largely gone in the sales world.  But relationships are about the ONLY thing that matters in fundraising.  The relationship between the donor/prospect and the charity, the relationship between the donor/prospect and the fundraiser, and most importantly the relationship between the donor/prospect and the cause are where this comes into play.

I’ll close with this thought.  I know quite a few good salespeople who would make excellent fundraisers.  But virtually every fundraiser I know would make a simply outstanding salesperson.  And for the organizations that they serve and the causes that benefit from their exceptional talents lets all be thankful that this is where they choose to stay.