Author: Diane Remin

Major Gifts: Resist the urge to negotiate unless you hear an absolute “no”

by Diane Remin
Posted in Major Donors Major Gifts Making the Ask

Only negotiate if you hear a flat-out: “there is no way in the world I/we can do that” or “I/we can’t possibly afford that much.”  You are listening for an absolute “no” that will be expressed through words, voice tone and body language.

 The following are not negotiating triggers:

  •  “Wow, that’s a lot of money.”  [An observation, not a definitive statement that the donor can’t or won’t make the gift.  Respond with an “impact statement,” e.g., “With that gift, you will be <describe impact>.”]
  •  “I wasn’t expecting that.” [Surprise is not a definitive “no.” Donors are often surprised. Keep the focus on the project and help the donor determine how involved s/he wants to be in the opportunity.]
  • “How did you come up with that number?” [Respond with impact, not process: “We know how much you care about <nonprofit> and thought you would want to take a leadership role” [or thought this might be the level at which you would want to be involved].
  •  The classic: “Let me think about it.”  The donor may simply need time.  Your job becomes to understand what the donor is thinking about and to determine if you can help that process.  If not, let the donor think.

Donor-respectful Negotiation steps

  1. If you do receive a flat-out “no way” and want to negotiate:If you asked for the gift as a lump-sum, e.g., for an outright $50,000, test a timing solution:  “Would you be able to fund this project the way you’d like to if we spread your gift over time—would $10,000 a year for 5 years for a total of $50,000 make it possible?”
  2. If timing doesn’t get you to “yes,” then negotiate the amount.  Reduce the amount by 50% and re-ask using the “ask” format:  “So John, would you consider a gift of $25,000 to support this project?” 
  3. If a 50% reduction does not get you to “yes,” then shift to letting the donor tell you what amount will work: “So John, I can see that you want to support this project–what amount will make that possible for you?”

 Why 50%? 

  1. If the donor could come close to the amount you asked for, you wouldn’t hear an emphatic “no way.”
  2. You want the donor to feel listened to and respected.
  3. This is not a bazaar—you don’t want to be in the position of haggling.

Note:  There may be different advice for potential gifts of $10M+.  That’s not my space.

10 reasons I like the For Impact | Suddes Group Donor Engagement Tool

by Diane Remin
Posted in Case for Support Major Gifts Making the Ask

When you are visiting with donors, the conversation is the point.  Put away that Case for Support and pull out a donor engagement tool.

What is a donor engagement tool? 

It’s a large (minimum recommended size is 11×17) sheet of paper divided into 3 sections:

  1. 30,000’:  Why? Purpose simply stated plus 3 compelling core stories.
  2. 14,000’: What? 1000-day priorities. Three interlocking circles, each with a 1-2 word priority.  Additional information focused on impact and success around each circle—any combination of text, graphs, pictures.
  3. How? Funding Plan:  Champion, Invite, Support Today, Tomorrow, Forever. 

Why it is effective?

  1. You have to distill why you are doing what you do (purpose) and what your priorities are for the next 3 years (1,000-day priorities).
  2. You get to have 3 priorities, which keeps it simple for the donor.
  3. You are encouraged to include stories—and stories create emotion.
  4. The format invites having a conversation vs. making a presentation.
  5. It quickly reveals the initiative(s) of greatest interest to the donor.
  6. It promotes the use of a permission-based approach to discussing the funding opportunities. This means you may end up talking about a gift on the first visit–with the donor’s permsission.
  7. If the donor is hesitating along the journey, you go back up a level and find the point of commitment.
  8. The Today, Tomorrow, Forever format leads you right into legacy gifts without talking about death and dying.
  9. Today, Tomorrow, Forever also make it easy to make a double or triple ask.
  10. And finally, the tool captures some of the excitement of drawing on the back of a napkin with enough elements to structure the discussion, allow the donor to quickly enter your world, and support less experienced volunteers making donor visits.

Thank you, For Impact | Suddes Group. To learn more, visit: www.forimpact.org.

Major Gifts: When a donor says, “Let me think about it,” don’t negotiate against yourself.

by Diane Remin
Posted in Major Gifts Making the Ask

You’ve just presented a donor with a big opportunity—whatever that means for your organization. “Let me think about it” is a perfectly natural response.

Without knowing more, do not jump into negotiations (you will be negotiating against yourself) or rush to end the visit.

P.A.T. Yourself on the Back (Program, Amount, Timing)

Your goal at that moment is to better understand what the donor is thinking. It may be about the amount – but it also may be the timing or even about the project, itself. Project/program, amount and timing encompass much of the possible terrain. It is also possible that “Let me think about it” is a brush-off. If it is, you want to know that, too.

Step 1: Acknowledge the reply: “Yes, Susan, I understand you want to think about a gift like this. I would, too. But I would like to be sure that I have it right that: “

Step 2: Confirm that the donor is enthused about the project/program. Game over, if not. That said, it is unlikely that you have arrived at this point only to discover the donor doesn’t value the opportunity. Most of the time, this question will elicit a “yes,” returning the donor to positive ground. (There is a sales element to this work!)

Step 3: Is the amount a figure the donor will, indeed, consider, e.g., “I suggested $50,000/year for five years as an amount that you would consider for this project.  Am I right that $250K is a possibility here once you’ve given it some thought?”

  • You are listening for any form of “yes, I just need to think it over” (or talk to my spouse, accountant, etc.). With a “yes,” move to step 4.
  • Only negotiate if you get an absolute “no” about the amount, i.e., “There is no way we can/will do $50,000/year.” In response to a clear “no,” do a re-ask: “Let’s talk about the amount, then. Is $30,000/year for five years for a total of $150,000 an amount you would consider?”

Step 4: Timing issues sometimes pop right up when you make the “ask,” i.e., my daughter is getting married, I have two kids in college, I have other commitments, etc. If not: “Given your interest, I want to be sure the timing is not getting in the way.” If a timing issue is raised, try offering a start-date that is one year out or expanding the payment horizon, depending on the donor’s situation. Not everyone wants to make commitments out into the future. No matter what, you want to get permission to keep the donor updated and come back for another visit.

Step 5: Do not leave without a specific follow-up plan or you will find yourself chasing the donor. This is a certain path to frustration – for everyone.

  • Propose an in-person follow-up meeting to answer any questions that may have arisen and find out what the donor is thinking.
  • If the donor pushes back on an in-person follow-up visit, come to agreement on a time for a follow-up phone call.

Note: If the donor won’t agree to a specific time for follow-up, you may be getting the brush-off.

Conclusion

Continue the conversation when a donor says, “Let me think about it.” “P.A.T. yourself on the back” and learn more about what is on the donor’s mind – is it the Project, the Amount, and/or the Timing —while acknowledging that a gift like this certainly merits some thinking. Then, set-up a follow-up visit.

Capital Campaign Feasibility Studies: Yay or Nay?

by Diane Remin
Posted in Capital Campaign Readiness Donor Cultivation Fundraising Major Donors

You’re planning a capital campaign.  Then it’s time for a feasibility study — or is it?

For years, nonprofits have retained consultants to visit with potential campaign donors to learn how they feel about the organization and its proposed project. The consultant typically poses hypotheticals (if nonprofit ABC were to conduct such campaign how much might you hypothetically be willing to give) to better understand the donor’s willingness to make a gift. The study results are used to refine the project’s case for support, assess how realistic the campaign goal is, and determine if there will be adequate campaign leadership. The practice of conducting feasibility studies is being called into question. Let’s take a look.

Feasibility Studies: The nay-sayers

James LaRose’s forthcoming book will have a chapter titled, “Feasibility Studies: the Crack Cocaine of Nonprofit Consulting,” reports Holly Hall in a March 17, 2015 Chronicle of Philanthropy article. Mr. LaRose is quoted as saying: “Eighty percent of nonprofits don’t need to spend $25,000 to $50,000 to find out what they already know, that they aren’t ready.” He also points out that the consultants conducting the feasibility study stand to earn hundreds of thousands of dollars if the campaign moves forward. He recommends using different consultants for the study and campaign.

A November 6, 2012 blog post by Tom Suddes on the forimpact.org website is titled: “No More Feasibility Studies.” Mr. Suddes focuses on the failure of such studies to involve and engage donors. Instead, as he puts it, internal leaders enlist external consultants for “justification, CYA and backup.”

Feasibility Studies: The Advocates

Most of the capital campaign consulting industry.

Rationale for Feasibility Studies:

  1. You don’t know your donors very well… and truly have no idea how they will respond to the campaign.
  2. Prospective donors are more likely to tell outside consultants what they really think. How do people feel about the organization? Do they care about his project? Do they have pent-up frustrations or specific concerns?
  3. Being included in the study is part of the donor cultivation process. Donors are flattered to be asked. The conversation gets them thinking about making a gift.
  4. The prospect of a campaign falling flat is scary. Well done feasibility studies provide a measure of assurance about how much you can raise—and from whom.
  5. You’ll find out if the necessary volunteer leadership in place—is the board ready and are there campaign co-chairs in the wings?
  6. You may learn about external events that should be taken into consideration, e.g., a competing campaign.

Rationale Against Feasibility Studies:

  1. You already know the answer, in which case the study is a waste of money.
  2. Involve your donors early on and you will find out what they think, engage them more deeply and have no need have an outsider “study” them.
  3. In this day and age, a small number of donors typically account for 90-95% of the campaign.  If you have them lined up, then you are good to go.
  4. Beware consultant bias: If the consultant knows that a lucrative campaign gig is riding on a positive outcome, there may be unconscious bias in play. Think of the studies of physicians who have financial ties to test facilities compared to those that don’t. Physicians with the ties order more tests. Their patients do not have better health outcomes.

My take:

To Mr. LaRose’s point, it is ridiculous to spend $25,000-$50,000 if you already know the answer—and the answer is: “not ready.” If you answer “no” to the questions on the Capital Campaign Readiness Litmus Test™ below, then you don’t need a feasibility study. You need to build your board and/or donor base or get a handle on the project.

  • You can’t name at least three donors with the potential to give 10-20% of the campaign goal. (You’ll likely need four or five, but can you name three right now?)
  • You don’t have at least 20 qualified prospects you could send a capital campaign consultant to talk to if you were to do a study.
  • You don’t have a campaign goal (estimated project cost along with endowment or other components, if applicable) .
  • Your board doesn’t have at least two members who can make an impact gift—a gift would situate them among the top 10-15 donors on your campaign gift chart.
  • You can’t identify two volunteer campaign co-chairs who are well-known in your community and would likely commit to making a campaign gift and picking up the phone on your behalf.

Feasibility studies and deep donor engagement need to work hand-in-hand.

  • Mr. Suddes is right—it makes sense to involve your donors early on. Include key stakeholders in the preliminary conversations about the need, the project and the messaging—a “leadership consensus building” model he calls it.
  • Skip the feasibility study and go for it if you know your donors well; have multiple potential donors for each of the top spots on the gift chart or have lined up the top three gifts; have engaged a core group in “leadership consensus building;” and witness enthusiasm for the project.
  • Otherwise, use “leadership consensus building” to get key stakeholders involved and to refine your messaging and case. Then, get ready for the campaign by visiting a wider group of donors as part of a feasibility study.

Even if you ordinarily might forgo a feasibility study, re-consider if your donors have a particular reason to want to vent or be re-assured, e.g., the organization has:

  • Shifted direction or leadership;
  • Endured recent financial struggles; or
  • Been embroiled in controversy.

Feasibility studies are likely to be helpful if this is your first capital campaign; the campaign goal is unprecedented; or the project is unusual or unexpected for your organization.

Confidence matters. There is value to the board and senior leadership in a research-based report from an experienced consultant that answers the question: “Can we reasonably expect to attain the campaign goal?”

Author’s note: MajorDonors.com focuses on non-capital major gift revenue streams and campaign readiness for small-to-mid-sized nonprofits. This post was edited on April 7, 2015.

Major Gifts: It’s All About Donor Impact

by Diane Remin
Posted in Donor Engagement Fundraising Major Gifts Storytelling

Donors don’t care what you need. They care about their impact.

I had just finished presenting a workshop titled, “Opportunity Knocks: Major Gift Fundraising for Smaller Nonprofits.” It covered the topics you’d expect: how to use donor research, setting up the visit, the case for support, making the “ask” and responding to, “Let me think about it.” But I always add a segment about emotion driving individual giving, the power of storytelling to convey emotion and what donors want: to know they are having an impact.

The workshop ended. A participant came up to me and described her situation: Her nonprofit recently lost one of its larger grants. She was about to go out and meet with individual donors (that’s good!) and make the case around the need to replace the lost grant with individual gifts.

I just started to say, “No…. ” when another participant waiting to speak with me said, “I have to tell you this story.”

And here’s the gist of what she said:

We were near the end of a multi-million dollar campaign. Our Chief Development Officer went to a long-standing supporter and asked if he would donate $1 million to close out the campaign. The donor said, “no.”

Shortly thereafter, the Chief Development Officer discovered that the donor had just made a $2 million dollar gift to the American Cancer Society. He calls the donor to see “what gives” (more politely than that, of course).

Here’s what the donor told him: You asked me to close out a campaign. They asked me to help cure cancer.

And there you have it! Need vs. Impact. Impact wins, every time.