How Can Internet Fundraising Help Major Gift Fundraising?

Mr. Bacon Please Help for Us Neophytes

People ask me how Internet fundraising should be used or could be used to compliment and supplement major gifts fundraising. I really don't know the answer but the question is bugging me so I keep watching for lay articles on where to begin.

I know that Web 2.o is about social networking and this platform can offer fundraising opportunities for all of us. To check out a real expert, look at GroundSpring.org. I will be moderating a session with Joseph Mouzon, the executive director of GroundSpring.org at a consulting firm conference in Utah this summer. He's trying to educate me on the basics. Check out his website on ways they can help your nonprofit through support services and training.

There is a recent article in The Wall Street Journal, 7/14/08. WSJ writer Paul Carroll quotes About Micro-Philanthropy that $44 million has been raised through social networking in the past two years. Movie star Kevin Bacon, who was the subject of a movie game, The Degrees of Kevin Bacon, has created a social networking website SixDegrees.org to play off of this game to raise funds for charitable causes. Check these sites out to understand more about the process and how your board members, members, alumni, and community of donors can help reach out through the Internet.

For a related article please click here.

Major Gift Officer Month & Yearly $ Tracking

3rd in a Series

In the last article we talked about productivity by year end. This is the measure the administration and donors should hold us major gift fundraisers accountable.

If you're managing major gift officers, yearly measures are not enough. You need to be monitoring monthly how much each development officer is raising based upon the yearly goal you have set for them. For a first year major gift officer making $50,000 (and thus a $100,000 total cost of fundraising, see last article), the monthly target should be $8,500 a month. Knowing that the first months may be low, a first year fundraiser is better measured quarterly — $25,500 is more realistic and all of that may have been raised in the last month or two.

For someone in year two, three, and beyond you should look at what they raised a year ago this month, and then this month and cumulative a year ago and cumulative this year. Don't worry about the month to month so much as the cumulative year to date compared to last year cumulative to date. There's always timing issues and of course it's the donor's money. We can't control when they give. Even the monthly isn't as critical as the quarterly this year cumulative compared to last year's quarterly cumulative.

Use these numbers not to scare your staff, but rather to hold them accountable and to use the data as coaching opportunities. Have you tried this? How can I help you be successful this year?

More to come

Mega Major Gifts Still Being Made in this Uncertain Economy

$100 Million Gift Naming Rights to Sunset in 50 Years

When people ask if fundraising will stop with the economy in the rough state it is in, I tell them no. Giving continues through good times and bad. Not all donors will participate, but some people are still increasing their wealth. Look at the oil people.

A great example is the $100 million 10-year pledge by David H. Koch, age 68, to the New York State Theater (part of Lincoln Center). He mentioned two factors that helped motivate his gift -- 40 years of going to the New York State Theater and "I was absolutely convinced that the quality of the work was world class."

Mr. Koch's wealth is estimated at $17 billion and is based in the oil and gas business.

As is typical of most mega gifts, he made a 10-year pledge.

What is atypical are the terms of the theater naming. It will be named for him but not in perpetuity. Instead it will be for 50 years with first right of refusal on naming to his family. According to Mr. Koch: "A naming opportunity should be a defined length of time to allow the institution to regenerate itself with another round of major fundraising."

To read the full article see The New York Times.

Major Gift Officer Dollar Expectations

Part 2 of a Series

The ultimate measure of a fundraisers success is the bottom line — how much money was raised this year. One college president told me he'd heard that the national benchmark was $2 million per development officer.

For an established fundraising program with an experienced fundraising who's been there awhile that sounds aggressive but doable. But, you need to take into account how many prospects the person has, their wealth capacity, how well they know the institution, and how much travel time is needed to see these prospects. For a regional urban university with 90% of the alumni in the metropolitan area you can expect one type of productivity. If you're a major gift officer for a major university with national alumni and your geographic region is a half day airplane ride away, that may be a different story.

There is another benchmark that is more universal. The cost of fundraising. For major gift officers working on the annual fund, building a new program, and with some travel achieving a 20% to 30% cost of fundraising is the goal. And soon. Ideally, you want to get a stable program to the 15% to 19% level.

In a capital campaign 10% cost of fundraising is the benchmark (lower for mega campaigns and second or third campaigns).

To get to this kind of frugal fundraising level (which is what donors expect so that 80% to 90% of their gift goes to the student, the faculty, the cancer program) you need to figure out your yearly cost to the institution in salary, benefits, expenses and support costs. For many places take your salary and double it to get a fully loaded number. So if you're paid $50,000, the total cost of fundraising to support you may be $100,000. To get to a 20% cost of fundraising you need to raise $500,000 a year. For a 15% cost, $700,000. For a 10% cost, $1 million. If you're paid $100,000 just double the money needed to justify your existence.

Now, that's the donor's perspective and probably the institutions expectations. These are real. We have learned the hard way that you need time to get there. Look at the chart to see a realistic expectation for your development office.


More to come: Click here for Part 1

Major Gift Officer Productivity

How to track and measure for results

This is the first of a series of short articles about how to tell if your major gift officers are productive. How can you tell? How much time for somebody new to carry their weight? How can we manage with out driving out people who need time to develop?

These are all great questions. I'm not sure I have all of the answers but I have learned a lot over the years managing my own staff, seeing my clients manage theirs, and in talking with directors of major giving who supervise 2 to 80 people.

The one thing we have learned is to be patient. While you want everyone to be a star, that's not reasonable. And, if you give people time, training, coaching, and mentoring they can develop over 2 to 3 years to be highly productive fundraisers.

As we go through this series, pleasae give me comments about questions you have, who you've been treated (well or poorly), tips you have learned over the years, and accountability pressure you feel from your supervisor and your volunteers.

I get this question of major gift officer productivity frequently. A client asked recently how long to give somebody to be productive. Nothing's happening, so how much time should be given somebody who may not work out. Another major gift officer asked what expectations he should have for his job. His dean doesn't know and he's getting no guidance. I recently facilitated a panel of hospital CEOs for the AHP Pacific Regional conference. In asking them what questions they had about philanthropic fundraising the major issue for all three panelists was how to figure out productivity. Hospital administrators love to measure everything in their world. But they can't figure out this fundraising thing.

More to come.

$306 Billion Donated in 2007

New Giving U.S.A. Report Just In

Giving U.S.A. Foundation just announced its annual report of giving. In 2007, an estimated $306 Billion was donated in America. This a 2% increase over 2006 — an increase is always good, but the increase in giving did not keep pace with inflation.

Of the total given, 1/3 — $102 Billion — was donated to religion. The following chart shows the balance of where funds came from. Please note that after religious giving is removed the changes from 2006 to 2007 are as follows:

• Individual giving was down 2%
• Proceeds from bequests down 1%
• Foundation giving was up 1%
• Corporate giving up 2%

Note that 50% of all foundation “founders” are still alive and can be approached individually and that bequest giving and individual giving are still 73% of total giving.

For additional information and to order the full Giving U.S.A. report, click here.

Listening to Build A Donor Community

How to Rally your Major Gift Donors for Your Organization

After a speaking engagement on listening to donors at the AHP Southeast regional conference outside of Jacksonville, Florida I was asked the following question:

“What can we do with donors for two hospitals who recently merged? The two hospitals had very different cultures and sets of donors. And, of course many in the community who didn’t give to either one. We’re trying to build a culture of philanthropy. What could we be doing through listening?”

We thought together and came up with a good idea. Write a overview case for support of the newly merged hospital system and foundation. List 5 to 7 projects that might need support over the next 2 to 3 years (hopefully longer). Then mail out a request for interview letter with this information to 50 to 100 of the new hospital foundation’s best potential donors — probably a mixture of past donors to each of the old hospitals plus community members never asked before.

Basically, conduct a donor engagement study to see how the new foundation is perceived and which projects would excite all donors collectively and specific donors.

Go listen to your major gift donors. Let them help you rally themselves around the newly energized healthcare system for their community.

Do try this at home. Listening is fun.

Tom Wilson