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Successful Fundraising
by Joan Flanagan
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Reprinted by permission of Contemporary Books. |
How Do You Define Major Donor?
First of all, define what is, for your organization, a major donor. Some grassroots groups consider any donor who gives more than $100 a major donor. Other groups put the trigger at $5,000. It does not matter what you choose, but your organization must be intentional about the size of gifts it wants to get.
After you set the dollar size of a donor, then do the research to learn where you can find people who can pay that amount and more. Giant charities and universities employ several full-time professional researchers. Smaller charities make donor research one of the jobs of the director of development. Volunteer groups can make donor research a job for two people who are too shy to ask for money.
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Respect
Before you get started on prospect research, be sure to review the big picture, especially with your staff and leaders. Prospect research can seem like candy-land, with all these multimillionaires waiting in line to donate to your group. In order that you do not lose all sense of focus, remind yourself and your committee of four important things:
- We in America begin with a very distorted vision of what being wealthy means. Remember that 55 percent of the world’s families earn less that $725 a year. Only 15 percent of the world’s population earn more than $9,000 a year. We are all rich, in financial and many other ways, and we need to be reminded of that before we start throwing around million-dollar salaries and billion-dollar net worths as everyday conversation.
- This kind of research can tempt us to think in stereotypes that are not appropriate. Just as we fight against name-calling and labeling when we work with people with disabilities or other groups, we need to fight labeling when we do our prospect research. It is morally wrong to think of any people by stereotypes.
- It is also unprofitable. Experts in demographics, especially, love to make up catchy names for clusters of similar people. But creating clusters of people from what brand of cars they drive does not encourage you to learn about the people as individuals. Clusters do not give you major gifts; individuals do. Downplay the demographic lingo and spend the time getting to know the people instead.
- We are called to respect every person’s gift. Once we find that Jerry Seinfeld made $225 million a year to tell jokes, or Michael Jordan made $30 million a year to play basketball, plus another $50 million to sell hot dogs and sunglasses, it can seem like the only things of value are trivial and materialistic. Just as you did when you began to look for small gifts, review the mission and values of your organization when you begin to look for major donors. Fundraising is just the means to an end—the mission—and everybody, rich and poor, has something to offer.
First, and always best, are your own donors. Who loves the organization? Who has seen his or her children flourish because of this group? Who has volunteered? Who has donated consistently?
The best place to look is your own membership and your list of annual donors. If you do not have a membership that pays dues or a donor base that donates every year, build that base before you launch the major gift campaign.
Your Donor Base
Recruit two of your board members who have extensive connections in the community. They need to do the intensive, vital, and boring hands-on job of going through your current list of prospects name by name. Is the information current? Who is missing? Who should be giving more? Does every donor have a board member or volunteer assigned as a "worker"?
On your own lists, look for (obviously) the largest gifts and (not so obviously) the people who have given to you every year for more than three years. Even small gifts, given consistently, can indicate the possibility of giving a larger gift if asked.
Look for people who give an odd amount of money, like $27 or $358. An odd dollar amount can be a clue that the donor is allocating his or her total annual charity budget among several nonprofits. This suggests the donor plans his or her charitable giving, and your group is already on the short list of good organizations. Look for the best addresses, multiple addresses (summers in Lake Wobegon, Minnesota, and winters in Lake Okeechobee, Florida), the names of the local aristocrats, celebrities, and entrepreneurs, and other indications of commitment or wealth.
For new organizations, you have to start with your own board and active volunteers, and then branch out. For older organizations, look for second- or third-generation members and multiple members from the same family.
Then ask the grapevine who won the lottery, inherited money, sold the ranch, or made a fortune by inventing a better mousetrap. For old money, look for people who went to elite schools, belong to private clubs, or summer and ski at exclusive resorts. For new money, look for the entrepreneurs, especially people of color, women, and immigrants, who want to leverage an entree into the established (white-male-Anglo) power structure.
You can also tailor your research to match the mission of the organization. Historic preservation groups can check the historical society and genealogical society to find the people with deep roots in the community. Environmental, hunting, and fishing clubs can find wealthy outdoorsy types by checking their state department of motor vehicles for owners of campers and recreational vehicles and their state department of conservation of game and wildlife for owners of boats and yachts.
In order to continue doing business in a small town, merchants have to be very discreet about their customers. Especially now that people can shop on the Internet, they can easily take their business elsewhere. But even if merchants may not be willing to name names, those who handle high-priced products may be able to verify prospects. For example, one of the best fundraisers in a small town in Iowa was the travel agent. The richest family in town would pay for their monthlong winter cruise in cash because they did not want the people at the bank (who would blab) to know where they went or how much they spent. Since the travel agent proved she could keep her mouth shut, she got their repeat business. She could guide her charity’s fundraiser to the right people in very discreet ways that helped the organization and preserved her business relationships.
After you have worked the names already on your list, ask your board members to think of new names. ... [A]sk each board member to give you names of new people they could ask for larger amounts. Depending on your organization, try for three names at $200, one at $2,000, and one at $20,000. Review the kinds of people your committee members know. Then think about who has access to money through family connections or their professions. Even if you want to ask the bank for a donation, somebody signs the check. Asking for names of prospects for larger gifts may produce new people you have not asked before.
Outside Research
Charity begins at home. The first place to look for major gifts must be your own board of directors, active volunteers, and senior staff. Do not think that total strangers will support your group if the cause cannot compel your own leadership to give.
After you get support from your own leadership and your own donors, then you can research outsiders who share a commitment to your cause and can make a large gift. All these research sources, from corporate annual reports to divorce court records, are legal sources of information available to the public. Reading them is how gossip magazines, venture capitalists, opposing lawyers, political parties, and giant charities collect their ammunition. These resources can help your organization, too.
Many of your best prospects for major gifts can give not only from their own personal accounts, but also from a business account or a corporate foundation, plus a family foundation, a supporting organization, or a donor-advised fund at the local community fund. ...
There is a surprising amount of information you can find out about other citizens. Although people are often horrified when they discover what anyone on-line can learn about them, this is all public information. Major donor research is a great place to put your introverts, the people who do not want to ask for money, anybody who is housebound, and anyone who likes to play detective. ...
Cautions
Assume that any research using books or databases is incomplete and out-of-date. Especially families with old money pride themselves on avoiding publicity. They find ways -- get married, change their names, move to Montana -- to stay off these lists. Merry pranksters have been known to fill out the Who’s Who questionnaires with the names of their pets and other nonsense.
Doing research is a way to expand your prospects beyond your own list. Just be sure you take anything in print or on-line with a grain of salt. Whenever possible, verify your research with another source; ideally, insiders who know the prospect.
Do not be misled by people who flash a lot of cash. With easy credit, almost anyone can look rich. I knew a salesman who dazzled his clients with a $130,000 sports car. He confessed to me that it was 102 percent financed; he even financed the license plates and insurance. On the other hand, there are people worth millions who drive the same compact car for fifteen years. Ken Wolfe at the Colonial Williamsburg Foundation found that one of his most generous donors, who left more than $2 million to the Foundation, was living very modestly in a $65,000 house and getting Meals on Wheels because she used to volunteer at Meals on Wheels and liked the people.
Actually, most of the millionaires in America are not flamboyant movie stars or sports idols; they are boring types who get up and go to work every day. Demographic research tells us that the average American millionaire is John Doe, age fifty-seven, who has been married for thirty-two years to the same woman, owns a highly productive small or medium-sized business, has two children, and works ten to fourteen hours a day, six days a week. The wealthiest 1 percent of the population hold 33 percent of the private wealth, 60 percent of the corporate stocks, and 9 percent of the real estate. Nearly twice as many are in sales or marketing than are doctors. They do not work for big corporations, but instead own their own businesses or shares of private companies. Less that 1 percent are movie stars, entertainers, athletes, or (har-de-har) writers.
Your goal is to find the people who share your values and to give them a chance to help your organization. Always begin with a broad base of annual givers, and then add on the wealthier people who can and will give you more if you ask them. According to a U.S. Trust study the wealthiest Americans—those with annual adjusted gross incomes of more than $225,000 or net worths of at least $3 million—gave an average of $29,400 in 1997, and they can give more in future years. It will take time to find, educate, encourage, and involve these people, but on the other hand, how much time will it take to sell twelve hundred $25 memberships? You need and want both large and small donors.
More information about this book appeared in The Chronicle on January 27, 2000.