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March 29, 2009

Association of Fundraising Professionals
Focusing on What Works: Veteran Fund-Raising Consultants Offer Their Ideas

After suffering a downturn in contributions in the last quarter of 2008, many charities may be seeing an uptick in both the number of donations made and the amount pledged, L. Gregg Carlson, chief executive of the IDC telemarketing and direct-mail company told a group of fund-raising consultants gathered in New Orleans on Friday to discuss trends before the annual Association of Fundraising Professionals meeting opened here Sunday.

Mr. Carlson said he took a preliminary look at how his clients are doing in the first quarter of the year, and he said he was pleasantly surprised. He said organizations that explained to donors that “we need you now more than ever” were doing well.

At a session held by the Giving Institute, an organization that represents big fund-raising consulting firms, veteran consultants said that more and more donors are cutting back on gifts to the institutions they think are well endowed in favor of front-line social-service groups that meet growing human needs. In addition, they said donors were especially reluctant to make gifts for new buildings because they feared the overhead costs of maintaining those buildings would be too much.

In addition, they said donors were asking tougher questions than ever about how their money would be used.

Many of the consultants on the panel and in the audience said they saw a striking contrast between groups that were succeeding even in the bad economy and those that were not faring so well.

Among the ingredients of success:

• Focusing on the mission, not the dollars that need to be raised.

“People that are successful now engage people in what is stake now,” said Bruce McClintock, chairman of the Marts & Lundy firm. He said groups need to do more to train front-line fund raisers to understand the cause and what opportunities exist. Nancy Raybin, head of a consulting firm in New York that bears her name, said her husband, a marine biologist, has been enlisted by his employer to talk about the environmental work he does — and why it matters. She says his letters are so filled with real-world, emotional examples that they persuade donors to give.

• Understanding which fund-raising efforts are productive and which are not.

Edith Falk, chief executive of Campbell Company, said organizations that succeed know which techniques and approaches work for them and which ones are not producing great returns, especially compared with the money and energy they require. She said she is frequently struck by the number of organizations she sees “that have no idea how much time and energy they spend on things that are not productive.”

• Thanking donors.

Mr. Carlson said that in recent months, 20 charities have hired his company to simply make calls to thank donors — not to ask for money. In previous years, he says, institutions “got lazy about stewardship,” and only one charity a year ever hired his business to acknowledge donors’ gifts. He said donors are so impressed that they are writing to his clients to thank them for the calls, sometimes saying that no charity has ever thanked them for gifts. What’s more, he said, donors who receive the calls are being asked how often they want to be solicited — and that some institutions are using that information to trim costs by cutting out unwanted mailings and other appeals.

• Listening to supporters.

Mr. McClintock says that during a downturn in the 1980s, a board member of a charity he worked for told him: “God gave you two ears and one mouth: That is so you’d listen twice as much as you talked.” That is especially important in hard times, as fund raisers need to learn what donors want and expect, he said.

• Asking donors to give now.

Many organizations are asking donors to make a gift this year and base the amount on how much an endowment would have earned when the stock market was strong. For example, they might give enough to allow a university to give as many scholarships as it could have when an endowed scholarship was producing a lot of income. In addition, some groups are encouraging donors to pay off pledges this year — and promising to match any payments made right away.

• Proving to donors what their money will do.

Donors are asking tougher questions than ever and holding institutions accountable, Mr. McClintock said. “People are looking for concrete examples of what I can do now that will do the most good and how you will steward the money so I can be proud of my accomplishments.

The consultants offered examples of the actions they think will cause charities to fail in the bad economy. Among them:

• Cutting programs across the board. Mr. Carlson said many charities are cutting budgets across the board, “using a hatchet when a scalpel is more warranted.”

• Using the economy as an excuse to sit back. Many organizations — and their board members — are slowing or halting their fund raising, said many of the fund raisers in the audience. Mr. Carlson said those organizations that are being aggressive in raising money are finding out that it is possible to raise money even when times are hard.

• Going negative. “You need to be positive about what you can do with the money,” said Mr. McClintock. “If you take too negative a view of the situation, that will work once, but only once.”

The consultants said that some organizations have cut back on their fund-raising staffs or made some fund-raising jobs part-time. Del Martin, founding partner of the Alexander-Haas fund-raising consulting firm, says many organizations are asking her whether she can provide an interim fund raiser to work until the economy improves and the group can afford a permanent employee.

Mr. McClintock said many fund raisers feel under tremendous pressure to fill revenue gaps and that he worries that some of the best people will leave the profession because they see too much focus on finances and not enough on the mission.

Many fund raisers are also being asked to take salary cuts, Ms. Raybin said. In the past, she said, chief executives were willing to pay their top fund raisers salaries that were much higher than those paid to other workers. But now as times are tougher, they are worried that they cannot continue to afford such salaries for people who can’t produce as much income for the nonprofit group. “Salaries are out of whack at many organizations,” she said. “It’s a tough situation.”

— Stacy Palmer

Sunday March 29, 2009 | Permalink

Comments

1. How about the entire article, please? The link doesn’t seem to be directly related to the title of the abstract.

   Thanks.

   — Michael Finney    Mar 31, 12:03 AM    #

2. really awesome. thanks for this info. judith

   — Judith Katz    Apr 16, 03:50 PM    #

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