Sustainable and Comprehensive Fundraising

Sustainable & Comprehensive Fundraising – highlights of a presentation from Kent Dove


By Tom Wilson Major Gifts Guru

In July 2009 Kent Dove, long-time fundraiser for the University of Indiana, presented an AFP (Association of Fundraising Professionals) Webconference on sustainable and comprehensive fundraising. Mr. Dove is author of several books including Conducting a Successful Major Gifts and Planned Giving Program (Dove, Spears, and Herbert) and is serving as special assistant to the president of University Indiana as he prepares for retirement later this year.

Here are some highlights for major gift officers

  • In reviewing where the University of Indiana is going with their fundraising, Mr. Dove noted they had “a campaign with a working goal of $1 billion.” I liked the working concept as a good definition of the quiet phase goal of a campaign (which can go up, down, or be confirmed prior to taking the campaign public).
  • He stressed a sustainable, fundraising model for the lifetime of the donor. Again, a great concept to encourage us to go for the right gift over time, not the quick gift to meet this year’s annual fund goal, or this campaign’s target.
  • What’s the organization’s business model? Fundraising can’t do it all. What earned income sources do you have? What role is government funding playing? How can endowments provide resources over time?
  • The distinction between transactional fundraising (special event and corporate) and relationship fundraising. Go for the relationship, it's about people.
  • In reviewing 18 years of giving records at the University of Indiana they found that “every year” donors were 9 times more generous; donors who gave 9 times during those 18 years were 4 times more generous. So get people giving and shoot for an 80%-plus renewal rate.
  • You’ve got to have a planned giving program. If 15% of philanthropy comes from planned gifts, you can’t afford not to play the game.
  • Traditional campaigns are still effective, but less so if they’re continuous. Give your donors a break.
  • Have a mission-focused, donor-centered fundraising program.
  • Find out who’s got deep interest and passion about your mission.
  • Make sure your case is donor centered – how your organization benefits the community. Test your case with donors, listen, adjust, keep shopping your case.
  • Volunteers in fundraising are important – they need information, education, and training on how to fundraise. Don’t have them do the work of staff. Keep them focused on opening doors, debrief them after meetings, and follow up to make sure the work gets done.
  • Watch for income giving versus asset giving – the big gifts will come from asset donors.
  • Database – get donors cell phone numbers, they are more permanent than home phone numbers; get email address; and age.
  • For annual fundraising – mix and match techniques, don’t worry about timing.
  • Help the donor form a mental image of your organization and its impact, help them see their gift in action.
  • Enroll top caliber volunteers to provide leadership, demonstrate role model gifts, and open doors to key prospective donors.
  • Stewardship is important – one research study showed a higher retention rate after thank you phone calls compared to just thank you letters.
  • Do a signature event, not just a special event.
  • Metrics around giving are important – total giving, average gift, # of donors.


What you’ve just read; and what I’ve just completed here is an exercise in “reflective learning.” After taking notes during the Webconference, this rewriting of what was important to me enables me to reflect and think back upon what I heard. It deepens my listening and my learning.

I encourage you to do this after every learning experience . . . be reflective.Write blog post content here

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How to Enhance Efficiency of Major Gift Officers (part 2 of a series)


How to Enhance Efficiency of Major Gift Officers (part 2 of a series)

By Tom Wilson Major Gifts Guru

Question: Any particular advice on operations to enhance efficiency of the gift officers and to ensure prospects don’t fall through the cracks?

Why track & monitor ROI?

As you’ll notice on the chart above, there is an ROI (Return on Investment) column (header in green) so that you can sensitize your staff on how your program will be monitored by your boss, the institutional leader, the institutional board, and the nonprofit community.

As supervisor you will need to enter in the denominator in the ROI equation – the person’s fully loaded salary and benefits. For example, let’s assume a salary of $65,000 with a 35% benefit package (check with your HR department to see what your institution’s rate is for this level of staffing) which equates to $87,750.

This example shows a history of 2 years ago achieving salary and benefits coverage – your basic expectation is after a full year your major gift officer is at least paying for themselves (hopefully better, but that’s the minimal expectation) – ROI of 1, $1 raised for every dollar invested

Last year, this person geared up, raised $275,000, and hit their target ROI of 3 – $3 raised for every dollar invested.

This year’s target is an ROI of 5 – $5 raised for every dollar invested. This should only be measured on cash and pledges not planned estate gifts as they expectancies will come in 3, 5 or 10 years. Planned estate gift expectancies secured 10 years ago that mature this year should be counted in the MGO’s cash and pledges. This encourages everyone to work with older, more mature people on their estate plans.

So, the ROI expectations for salary and benefit recovery (which doesn’t count expenses, support staff, materials, etc.) need to be clearly stated to your major gift officer staff, your supervisor, and your board. They need to know the basic expectations of ROI’s of 1, 3, and 5 over their first 3 years of a major gift officer’s time in your office. If you hire someone highly experienced, they should beat these ratios, but then their salary is usually higher.

If a major gift officer wants to surpass expectations, they can certainly aim for an ROI of 7 or 10. And, if they hit it, you’ve got a star that you need to promote, retain, and treat like the royalty they are.

More to come – Before measuring dollars, measure activity


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Mega Donor Values Warren Buffett (Part 5 of a series)

Mega Donor Values Warren Buffett (Part 5 of a series)

By Tom Wilson Major Gifts Guru

This article is part of an ongoing series of excerpts and insights from the recent biography The Snowball: Warren Buffett and the Business Life by Alice Schroeder. I encourage you to buy this book to get the full story.

“Paul Newman, Bill Gates, Sr., George Soros, a smattering of Rockefellers, and nearly two hundred other rich and influential people agreed and signed a petition published in the New York times that opposed Bush’s plan to eliminate the estate tax. Buffett didn’t join the petition because he thought it did not go far enough.

"He thought rich people were lucky and blessed and they should pay taxes.

"Repealing the estate tax would be like choosing the nation’s Olympic team from the children of past Olympic champions. Wealth is just a bunch of claim checks on the activities of others in the future. You can use your wealth in any way you want to. You can cash it in or give it away. But, the idea of passing wealth from generation to generation so that hundreds of your descendants can command the resources of other people simply because they came from the right womb flies in the face of a meritocratic society.

"I’d have higher tax at the higher levels of wealth. I wouldn’t mind having not tax up to a point and then a hundred percent tax for an estate over a hundred and fifty million dollars.

"The most important thing is to ask ‘And then what/’ if you eliminate the twenty billion dollars or so raised by the estate tax, you’ve got to make the money up by taxing everybody else somehow.

"I don’t like anything where the bottom twenty percent keep getting a poorer and poorer deal.”

This article is part of series. To read the other articles in the series, please click the links below:

Permanent Link: Mega Donor Values Warren Buffett (Part 5 of a series)

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Nonprofit Board Size Does Matter

Nonprofit Board Size Does Matter

By Tom Wilson Major Gifts Guru

How big should nonprofit boards become? How big should charitable foundation boards be?

In a recent article in New York Times, "Study ties Charity’s Board Size to Losses in Madoff Scandal by Step," Stephanie Strom reported on an analysis by the National Committee for Responsive Philanthropy that showed that a majority of the more than 100 foundations that lost 30% or more of their assets to the Madoff scandal had four or fewer board members.

Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy said: “There’s one startlingly simple conclusion here: to avoid falling prey to the next Bernie Madoff who comes along, foundations would be wise to increase the size and diversity of their boards.”

150 foundations were impacted by this scandal.

The Council on Foundations found the median size of foundations is 11. The Association of Small Foundations found that they had a median size of 5 board members.

I bring this up because as a major gift officer I advice nonprofits to have large boards. Each board member should be a major gift donor and they generally know 5 to 10 more. The more board members the larger the fundraising network and the more money you will raise.

However, I get pushback as people want small, corporate style, efficient boards. Look what happened to those small board foundations, efficient decisions, quick decisions weren't necessarily wise decisions.

This size issue has implications for large boards with small, powerful executive committees of 4 or 5 people who make all of the decisions. Watching large boards make decisions may be messy, make take time, but it builds ownership in the final decision by all board members (which usually means they will give more money to “their” organization) and better decisions are made.

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How to Enhance Efficiency of Major Gift Officers (part 1 of a series)


How to Enhance Efficiency of Major Gift Officers (part 1 of a series)

Question: Steve – I recently took on a position to manage a major gift team for a major capital campaign at a healthcare institution. Any particular advice on operations to enhance efficiency of the gift officers and to ensure prospects don’t fall through the cracks? How would you begin this process?

By Tom Wilson Major Gifts Guru

Your efficiency question is excellent. But, balance the question of efficiency with effectiveness. Over the years we have learned that in managing major gift officers you want to promote results while maintaining a people-first, relationship fundraising model.

Absolutely track dollar results as that’s how everyone will measure the overall impact of your major gifts fundraising program. Therefore, the first efficiency measure is financial impact.

See the chart above for what I think would be a good start. Please note this is set up on a calendar year. You can easily modify this if your fiscal year starts July 1st or some other month.

Also note I track each month and compare it to last year and 2 years ago. We have learned the hard way that the productivity for a brand new major gifts officer is quite different from an experienced person and that to fully hold a major gift officers feet in the fire they need 3 years of experience.

Another assumption in the chart, you have major gift officers but no planned giving officers. I am a firm believer that every major gift officer needs to have basic training to detect planned estate gifting noises. For many fundraising programs the major gift officer also needs to be trained to close basic planned estate gifts only handing off complicated cases to one more highly trained planned giving officer on staff or available on-call. And, even if you have one planned giving officer, the major gift officers should be the lead generator. Monitor these leads to reward good behavior.

So you need to track cash gifts and documented pledges each month as well as documented planned estate gifts.

While monthly tracking is helpful, major accountability for gift generation should be done quarterly with milestone accountability at the end of each fiscal year.

More to come – Why track monitor ROI


This article is part of a series. To read the other articles also in the series, please click the links below:

Permanent Link: How to Enhance Efficiency of Major Gift Officers (part 1 of a series)

http://majorgiftsguru.com/2009/07/how-to-enhance-efficiency-of-major-gift.html

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Mega Donor Values Warren Buffett (Part 4 of a series)

Mega Donor Values Warren Buffett (Part 4 of a series)

By Tom Wilson Major Gifts Guru

This article is part of an ongoing series of excerpts and insights from the recent biography The Snowball: Warren Buffett and the Business Life by Alice Schroeder. I encourage you to read the entire book to hear the full story.

“In 1984, Warren Buffett was worth $8 billion. He and his wife Susie had already decided that they would donate most of their fortune to their charitable foundation making it one of Berkshire Hathaway’s largest shareholders. The foundation was giving about $3.5 million a year away at this stage.”

And yet, Buffett was thinking about philanthropy.

“. . . Buffett handed our copies of a booklet, The Gospel of Wealth by turn-of-the-century industrialist and philanthropist Andrew Carnegie. As he celebrated his sixty-fifth birthday, and took stock of his life to date, he had been rereading Carnegie. Now he led the group in a debate of Carnegie’s premise that ‘He who dies rich dies disgraced.’

“Carnegie had honored that philosophy, spending nearly his whole fortune, one of the greatest in history at the time, to establish libraries in towns and cities all over the United States. Buffett had always planned to die rich and disgraced, as Carnegie would put it, so that there would be more to give away after he was gone. He insisted that the best use of his talents was to keep making more money until he died, and he had to interest in being personally involved in the foundation’s work. That would be Susie’s project. But he wanted to hear what other people thought and obviously was giving some consideration to this question.

“They went around the table. Bill Ruane, who had never cared much about money and was poor compared to the rest, was about to undertake a project to transform the worst of New York’s public schools. He would later go to work with Columbia University to screen thousands of New York City schoolchildren for mood disorders and suicide risk.

“Fred and Alice Stanback were among the most important donors to environmental causes in the United States. Tom Murphy was chairman of Save the Children. Jane Olson, Ron’s wife, chaired the international board of Human Rights Watch. Before Dan’s death, the Cowins had donated an important collection of art to the American Folk Art Museum. Charlie Munger gave to Good Samaritan Hospital and education. Walter and Suzanne Scott had donated huge amounts of money in Omaha. Ruth Gottesman served on the Albert Einstein College of Medicine Board of Oversees. Marshall Weinberg was gradually giving away nearly all of his money for scholarships, world health, Middle East issues, and educational research. The others had their own causes.

“When his turn in the conversation came, Bill Gates said, shouldn’t the measure of accomplishment be how many lives you can save with a given amount of money? He agreed with Buffett that you had to make the money first in order to have the money to give away. But as soon as you made a certain amount, Gates said, he was going to use it to save more lives in the present, by giving most of it away.

“The Buffett Foundation was spending very little in proportion to Buffett’s wealth.”

More to come (These philanthropy excerpts are like gold from this book).

This article is part of series. To read the other articles in the series, please click the links below:

Permanent Link: Mega Donor Values Warren Buffett (Part 4 of a series)

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More Fundraising Coordination Meetings by Phone (part of the listening series)

More Fundraising Coordination Meetings by Phone (part of the Listening series)

by Tom Wilson Major Gifts Guru

A short article in a recent issue of The Chronicle of Philanthropy caught my eye: "Cutting Travel for Meetings Takes a Toll, Says Study" by Paula Wasley. The study was from The Goodman Center on "Dialing In, Logging On, Nodding Off."

The Chronicle article noted that economy moves have cut travel leading to more conference calls. Many of these calls are less than satisfactory: "A survey of more than 1,200 nonprofit and government employees about their use of video and teleconferences and Webinars found that all too often the technology enhanced meetings are plagued by technical difficulties, poor leadership, and lack of participation."

The reason these comments struck a chord with me is that I have done so many Webinars and conference calls with clients that I have seen and felt many challenges. One particularly frustrating one was with a potential client in Montana where we were in their conference room and their key board members were in Colorado and California. At 10 am the technology shut down and we lost everybody outside the room. It turned out their new phone system shutdown everyday at 10 am and we were using it on the first day so they weren't aware of the challenge.

Other challenges can be appreciated from the listening research I did for my book Winning Gifts (see chapter 3 Listen). If 55% of all communication is nonverbal, then conference calls without video don't work well. I find in presenting Webinars the lack of nonverbal feedback makes these presentations far more difficult than live presentations. I can't see people nodding their heads or smiling so there feels like a lack of engagement.

Participation is hard to monitor when there are more than a couple of people on the phone. Everyone is waiting for somebody else. I also find it harder to tell when someone is done speaking than when I'm in a face-to-face meeting.

With one client we've tried video connections between people around the state of California and our meeting site. It's okay, the people in their offices can certainly see more of what we are doing, but we had one poor guy that was patiently listening to the presentation and yet his picture was at the front of the room for 2 hours. He finally moved his laptop camera up to the ceiling so we didn't have to watch him the entire time.

Without visual cues I find it harder to listen to these conference calls. Unless they are highly organized, move swiftly, and use PowerPoint, the meetings can really be slow because people can listen at 500 words a minute while most people speak at 150 words a minute.

Why is this important for major gifts officers? There will be a tendency for your organization to tell you to stay in the office rather than driving or flying to see a major gift prospect. You need the face-to-face time to be effective. Short bursts by phone are fine, but develop a true, authentic relationship requires personal interaction.

And, if you want to develop a major gifts officers team, you need to do it face to face.

Permanent Link: More Fundraising Coordination Meetings by Phone (part of the listening series)

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Mega Donor Values Warren Buffett (Part 3 of a series)

Mega Donor Values Warren Buffett (Part 3 of a series)

By Tom Wilson Major Gifts Guru

This article is part of an ongoing series of excerpts and insights from the recent biography The Snowball: Warren Buffett and the Business Life by Alice Schroeder.

We are all aware of the Rockefeller Foundation and Rockefeller University but I hadn’t heard any stories before about John D. Rockefeller’s importance to American philanthropy. These items were listed as philanthropic initiatives that caught the attention of Mr. Buffett.

“Mr. Rockefeller sent Abraham Flexner to study medical education in the United States. His report caused a scandal and convinced the Rockefeller Foundation to donate enough money to revolutionize medical education.

“Rockefeller also wanted to tackle problems that lacked a natural funding constituency. He found that poor black colleges, lacking rich alumni, had no way to improve themselves. In effect, John D. Rockefeller became their alumnus.”

What a great role model donor. I had no idea. To hire people to proactively look for problems that needed solving (medical schools) or poor nonprofits that needed adoption (poor black colleges), takes great insight and courage. I can see why Mr. Buffett was impressed.

I’m sharing some of these stories, as they may be useful for you as a major gifts officer to share at your board meetings or with donors who need to think through their own philanthropic legacy.

This article is part of series. To read the other articles in the series, please click the links below:

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Asking for Major Gifts – Highlights from Laura Fredericks book (part 1 of a series)


Asking for Major Gifts – Highlights from Laura Fredericks book (part 1 of a series)

By Tom Wilson Major Gifts Guru

I’ve been asked to join several other authors for a series of presentations. Laura Fredericks, author of The Ask: How to Ask Anyone for Any Amount for Any Purpose is one of my colleagues. I haven’t met Laura yet, but decided to read her book to look for asking gems for major gift officers.

“Develop a strategic plan to steer the process. The organization needs a strategic plan, preferably one that covers three to five years, that sets out the goals and purpose of the major gifts program.

“For example, one organization’s strategic plan might state that the organization will increase its endowment by a specific percentage each year so that at the end of five years the organization will have over $100 million.

“It is possible to raise major gift money without a strategic plan, and many organizations do so, but whenever possible convince the leadership that your group will be far more successful if it has a plan that it can share with prospects and donors. Major gifts will arrive quicker when the organization has a plan because a plan supplies purpose and a timeline which connotes a sense of urgency. . . .

“If the organization has a strategic plan, then logically the campaign (a capital campaign or a comprehensive campaign) should coexist with and complement that plan. Otherwise the organization is at risk of having too many plans and goals to fund or divergent goals that are at odds with each other.”

“Sample plan objectives: 1) Strengthen Academic Excellence and Reputation, 2) Reinforce Our Commitment to be a Student-Centered University, and 3) Strengthen Our Financial Situation”

As you know from reading my other articles, I am very passionate about the importance of strategic planning. Thanks Ms. Fredericks for giving me ammunition for my next staff and board discussion about the importance of planning.

Permanent Link: Asking for Major Gifts – Highlights from Laura Fredericks book (part 1 of a series)

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Nonprofit Board Governance NYC Style

Nonprofit Board Governance NYC Style

By Tom Wilson Major Gifts Guru

In a recent article in The New York Times, the New York Philharmonic noted that banker Gary W. Parr, 52 and deputy chairman of Lazard, will be the next chairman. He succeeds Paul B. Guenther who became chair in 1996 and indicated he was seeking to retire from this position several years ago.

As you know, I’m not a believer in board term limits, but I’m not quite sure how the New York City arts world works in terms of board chairs duration and responsibilities. 13 years is a long-time to be volunteer leader of an organization.

And yet, one of my hospital clients in the Los Angeles area has had the same board chair for 25 years.

If your board chair likes the job, is giving generously, and raising money for your organization, then I guess they can stay. If you want great major gifts, keep your best board members . . . forever.

What patterns have you seen? I welcome your comments.

Permanent Link: Nonprofit Board Governance NYC Style

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Mega Donor Values Warren Buffett (Part 2 of a series)

Mega Donor Values Warren Buffett (Part 2 of a series)

By Tom Wilson Major Gifts Guru

This article is part of an ongoing series of excerpts and insights from the recent biography The Snowball: Warren Buffett and the Business Life by Alice Schroeder.

One of the other business and philanthropic legends of Omaha, Nebraska, U.S.A. is Peter Kiewit. His construction firm, Kiewit Construction is still highly respected throughout the world.

Warren Buffett noted that Peter Kiewit: “. . . it may well be the most profitable business of its type on the country, an achievement possible only because Kiewit was able to transmit, throughout an organization of thousands of employees, an unremitting insistence on excellence and efficiency. Kiewit was overwhelming a producer, not a consumer. Profits went to build the capacity of the organization, not to provide opulence to the owner.”

With assets of over $400 million, the Kiewit Foundation is the second largest charitable foundation in the state of Nebraska.

Mr. Buffett’s view that owners should reinvest in their companies not their salaries or offices should make some nonprofit CEOs pause. Too often, high salaries, fancy large offices, and free-spending contradict a nonprofit organization’s need for contributions from donors.

If Mr. Buffet were to tour your offices next week, what would he find?

This article is part of series. To read the other articles in the series, please click the links below:

Permanent Link: Mega Donor Values Warren Buffett (Part 2 of a series)

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Mega Gift Donors -- Trying to Understand Their Values

Mega Gift Donors -- Trying to Understand Their Values

by Tom Wilson Major Gifts Guru

I've never met a billionaire or asked one for a major gift. So, every time I read an article about one of them in a philanthropy context I'm eager to read on.

As some of you know, KT the youngest of our 4 children, is a dancer in New York City with the Rockettes. She's getting ready to start her third season. We get to NYC a couple of times a year and I read The New York Times every day to keep up on The City.

Mayor Michael Bloomberg is a very interesting character. He's getting ready to run for a third term as major of New York City. For someone of his wealth, his political work is highly commendable.

I new he was wealthy and I knew he was generous, but I had no idea.

In a recent article in The New York Times, it noted that Mayor Bloomberg had just reported an estimate of his last year's taxes with income and expenses in rough categories. It noted that his networth was $16 billion and that he had lost about $10 million last year in the stock market. That is an amazingly low number compared to most investors last year.

The story went on to say he gave $235 million to 1,221 organizations in 2008. This topped his giving in 2007 of $205 million. Wow. In running for office, he doesn't even mention this generosity.

To provide context. The 2008 amount is 1.5% of his networth. Not huge giving, but remember that networth and liquidity are two different issues. He owns a lot of stock in his company which he cannot spend. So of his liquid assets, this may be pretty spectacular giving. I wish I knew more about his motives and values.

On behalf of my adopted second city, New York. Thanks Mayor.

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Critical Role of Physicians in Fundraising (part of the healthcare series)

Critical Role of Physicians in Fundraising (part of the healthcare series)

By Tom Wilson Major Gifts Guru

One of the most highly respected fundraisers in healthcare is Claudia Looney, senior vice president for development at Childrens Hospital Los Angeles. She recently co-authored an article, “The Critical Role of Physicians in Fund Development” in AHP Journal (Spring 2009), with Walter W. Noce, Jr., retired vice chairman, president & CEO of Childrens Hospital LA. They will be co-presenting this topic at the AHP International Conference in San Francisco, September 2009.

Children’s Hospital Los Angeles has raised more than $750 million since 2000. “Campaign leaders need to create an environment where employees and physicians realize, and actively support, the notion that philanthropy is the lifeblood of the institution.”

Looney and Noce restate an item I stress in healthcare fundraising – for physicians it’s not so much asking for money as being open to working with the fundraising staff to cultivate donors through formal presentations, facility tours, and informal discussions. They also tackle an important fundraising planning issue.

“At Childrens Los Angeles, we used multiple concurrent campaigns built around strong medical programs. Before we committed to a campaign, each of these programs had to develop a business plan. This effort was physician led. We asked each medical area what their needs would be over the next 5 years; how they would spend the money, if raised; and what the benefits would be to patients and the community. If the physician leaders couldn’t develop a credible case statement, we would not commit to support a mini-campaign.”

“Open ended, undocumented requests for money are simply not acceptable. But if physician leaders can clearly articulate goals, and the resources required to achieve them, the organization can confidently commit resources to try to raise philanthropic dollars.”

“All the mini-campaigns we ran concurrently at Childrens Los Angeles had physician co-chairs. These campaigns needed a physician spokesperson for the community, as well as a peer leader who would ask colleagues to get involved.”

“Physicians have the credibility to explain how patients will benefit from a new building, a new piece of diagnostic equipment, or a new specialist being recruited.”

“It is important to continually point out to all physicians that their engagement is the driver. Physicians who are active in fundraising activities generate more donor prospects.”

“If a physician’s program receives significant donations, they need to participate in developing the stewardship report.”

“At Childrens Los Angeles, like most institutions, we never asked physicians to directly request a gift from one of their patients, although some did so voluntarily. We did ask them to be alert for grateful patients expressing an interest in helping.”

Congratulations Claudia for your great fundraising work on behalf of the children of the LA Basin. You’re a real pro.

Permanent Link: Critical Role of Physicians in Fundraising (part of the healthcare series)

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Structural Foundation Proposals: Why they are important to major gift fundraising

Structural Foundation Proposals: Why they are important to major gift fundraising

by Tom Wilson Major Gifts Guru

A reader asked what I meant by a structural foundation proposal. It's a great question.

Many foundation proposals go to family foundations and therefore need to be very brief. Other philanthropic foundations (defined as highly staffed foundations with a rigorous, formal review process) require an in-depth proposal, a structural proposal, that covers all aspects of the project and your fundraising for it.

A U.S. national foundation that puts you through this process is the Kresge Foundation of Michigan. In the American Pacific Northwest, the M.J. Murdock Charitable Trust, is one of the toughest and most thorough. Serving Washington, Oregon, Alaska, Idaho, and Montana the Murdock Trust has a long and storied history of kind, but tough-minded trustees and program officers.

After a letter of inquiry (LOI) to Murdock, a full proposal can take up to 20 pages to complete. Staff reviews your proposal over 6 to 9 months and will come for a site visit of several hours to interview team members involved with the project. Follow up questions and clarifications are all part of their due diligence.

I've had another foundation give a client a million dollars for a project then go to the Murdock Trust with an updated proposal only to find we had to do 15 drafts to get all of the details in place. After two sets of written questions with 10 pages responses each, we finally had our act together and eventually got funding.

While the Murdock Trust asks for 40% of the project to be funded before approaching them (and the Kresge Foundation 65%, although this may be changing now with new leadership), I always encourage my client to start drafting these "structural" proposals early in the campaign as they force the organization to be thorough. These proposals can be used for donors who want the whole story and as a template for shorter, less rigorous foundation proposals.

Let me know if this answers the question.

Permanent Link: Structural Foundation Proposals: Why they are important to major gift fundraising

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Philanthropic Fundraising from Investor Types

Philanthropic Fundraising from Investor Types

By Tom Wilson Major Gifts Guru

Having worked on the West Coast of the United States for more than 20 years now, I’ve had the opportunity to work with many venture capital investors, angel investors, and mid-cap investors. In presenting a major gifts proposition to them there are unique challenges.

What I’ve found that works well is:

  • 12 to 20 slide PowerPoint outline presentation with pictures, charts, graphs to be able to engage the potential investor (major gift donor) in our organization, its impact, its challenges, and its return on investment for society.

  • An everything you might want to know set of documents that enable a serious investor “to go deep.” Structural proposals to your toughest area foundation work well as a basis for this document.

  • A comprehensive internal team of both management and all employees and staff so when the investor does their due diligence by wandering around (either on person or on the phone) they are getting a consistent, unified response from all parties within your organization no matter what the job level.

  • Be respectful but be ready to push back if unreasonable questions are asked. This means you have to have done your homework. A strong institutional and project plan are critical to knowing what you know and what you don’t know. It’s okay to say “we haven’t thought about that yet.” Or, “I don’t know, that’s a great question.” Sometimes these investors want to see how tough you are.
A recent article in The New York Times “In Pitching to Angel Investors, Preparation Outweighs Zeal” by Brent Bowers brought back some of these concepts. Mr. Bowers noted:

“Don’t get carried away when you pitch your product as your investors may lose interest.”

“One misstep – like stammering a vague reply instead of saying you do not know the answer, can also kill the deal.”

There are an estimated 260,500 active angel investors in the United States according to Jeffrey Sohl, director of the Center for Venture Research at the University of New Hampshire. In 2008 $19 billion was invested in 55,000 ventures; in 2007 $26 billion. Mr. Sohl noted:

“With time at a premium, it is imperative for entrepreneurs to come to both meetings (an informal session to see if an idea has promise and then a PowerPoint presentation followed by a Q&A) with solid arguments.”

At a Babson College conference Richard Sudek, an angel investor and assistant professor of entrepreneurship at Chapman University in Orange, California stated: “We like you to show excitement but don’t force it. Being authentic is much more important. There is such a thing as quiet passion. Anything that comes across as slickness is a negative. Angels put a high value on trustworthiness. If you don’t know the answer to a question, say so, and promise to get back to them. Don’t fake it. In fact, acknowledging gaps in your knowledge and other weakness, and letting angels know you need their help, can add to your credibility.”

Advice from three research studies presented at the Babson College entrepreneurship conference include.
  • Memorize an “elevator pitch” of 90 seconds or less
  • Consider hiring a speech coach
  • Attend pitching contests
  • Be upbeat but realistic in your revenue projections showing optimistic, middle-ground, and pessimistic projections
  • Don’t ask people for money unless you have invested your own
  • The business plan should be precise (look at the software on Angelsoft.net)
  • If you get a “no,” ask for suggestions on where else to make a presentation, get referrals of other investors to see
I love these articles that have nothing to do with major gift fundraising . . . and everything to do with it.

Permanent Link: Philanthropic Fundraising from Investor Types

http://majorgiftsguru.com/2009/07/philanthropic-fundraising-from-investor.html

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U.S. Giving to Nonprofits in 2008



U.S. Giving to Nonprofits in 2008


By Tom Wilson Major Gifts Guru


The Giving U.S.A. Foundation reported their yearly research results in June 2009 for contributions in calendar 2008. This work is done through the University of Indiana Center on Philanthropy. Giving research has been done for nearly 60 years. 2008 was only the second time a decline in giving was measured.

As the chart above shows, an estimated $308 Billion was contributed with a third of that money going to religious causes from individual donors.

An ongoing trend is the great proportion of dollars contributed by individuals through direct giving (75%) and bequests (7%). With 13% coming from foundations, separate research by The Foundation Center shows that half of foundation funders are still alive and three-quarters of founders and their families members are still around – all individuals that you could talk to about a gift for your nonprofit organization.

Corporate giving continues its downward trend standing at 5%. This proportion as displayed on the chart above is critical information that must be understood by nonprofit board members and staff leaders. The small value of corporate giving is counter intuitive as most corporate giving tends to be noisy and expanded through non-charitable sponsorships and marketing support of nonprofit organizations. Individual giving “feels” smaller because 50% comes through small donations from people making less than $100,000; and many large donors wish their giving to be either anonymous or low-key.

A year ago Giving U.S.A. announced giving of $306 Billion. But, as usual they keep collecting data and announced an adjusted 2007 number of $314 Billion (an adjustment rate of about 2%). Thus, the newly announced total is about 2% lower than last year’s giving.

Most of this decline came in the 4th quarter of 2008 and this trend can be expected to continue in 2009.

What will we see a year from now? Another 5% to 10% decline in giving could easily happen again. Many corporations have cut back this year and foundations are challenged because of the asset drop many experienced. While the market is coming back, foundations will be far more conservative as many learned that multi-year future grant commitments have put many into a “giving glacier.” It’s moving, but extremely slowly and to the outside world appears to be frozen.

Even with a 10% drop, there will still be nearly $300 Billion contributed to nonprofits in 2009 so keep connecting with donors. Ask for a major gift that fits their econonic situation to help your nonprofit achieve its mission.

Permanent Link: U.S. Giving to Nonprofits in 2008

http://majorgiftsguru.com/2009/07/us-giving-to-nonprofits-in-2008.html

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Understanding Short Term Philanthropic Foundations


Understanding Short Term Philanthropic Foundations


by Tom Wilson Major Gifts Guru


When major gifts officers seek mega gifts now and/or legacy gifts through a planned estate gift, a key question of the donor is the importance of perpetuity.

Everyone assumes that all donors want an endowment fund, or a personal foundation to last forever, but for many donors this long-term vision isn't the right one. They want impact now, in the next 10 years, not small doses of help over centuries.

The Beldon Fund, is a good example of this donor viewpoint. An article in The New York Times noted that this fund, started by John Hunter of the Steelcase office furniture family, recently closed its doors after spending its $100 million of assets. The article noted a similar pattern for the now closed John M. Olin Foundation and for a current active foundation, the Atlantic Philanthropies.

To learn more about Mr. Hunter's motivations in running a short-term philanthropic foundation, check out the Beldon Fund website by clicking here.

"When I decided in 1998 to spend the Beldon Fund’s $100 million endowment in ten years, the goal was to use these resources to help build public and policy support for environmental protection. The decision reflected my belief in the urgency of this mission and a strong sense that making large investments over a shorter period of time would be more effective than making smaller grants over many years. Looking back on the Beldon Fund’s 10-year arc, and with the benefit of three external evaluations conducted in our last year, I can see that spending out and focusing on policy change had a synergistic effect. By spending out, Beldon was able to concentrate the resources necessary to strengthen environmental advocacy. And by focusing on public policy, the foundation’s programs were able to achieve some concrete results that will last long after our exit. As the Beldon Fund prepares to close its doors, I thought it might be helpful to share with others what we learned from our spend-out experience."

Also see Mr. Hunter's advice to other foundation founders at “Giving While Living: The Beldon Fund Spend-Out Story” on the Beldon Fund website.

Permanent Link: Understanding Short Term Philanthropic Foundations

http://majorgiftsguru.com/2009/07/understanding-short-term-philanthropic.html

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