+1(978)310-4246 credencewriters@gmail.com
  

Cultivation strategies should be customized for each type of donor, based on the ability of the organization’s infrastructure to create and maintain donor relationships as well as the needs of the donor types. Creating and maintaining meaningful relationships with individual donors may be a bit different than doing the same with foundation staff or government agency staff. Put yourself in “the shoes” of the donor. How would you like to become and remain engaged with the nonprofit organization? What kind of communication would you appreciate? What would you need from the organization to remain a loyal donor?

In a

3- to 4-page

paper (not including the title page and references), identify and describe cultivating potential donors.

Briefly      describe the nonprofit organization you are using for your Final Project      (NAMI).

https://nami.org/Home

Specify      the donors that the organization currently relies on for financial      support.

Critically      evaluate the existing overall donor cultivation strategies.

Describe      two new donors for this organization. Explain how you would cultivate relationships      with those specific potential donors.

Finally,      evaluate how the documented donor cultivation strategies would improve on      and build the level of trust, loyalty, and engagement that donors have in      the organization.

References

Fulton, K. (2007).

Katherine Fulton: You are the future of philanthropy

[Video file]. Retrieved from

Sargeant, A., & Jay, E. (2014).

Fundraising management: Analysis, planning and practice

(3rd ed.). New York, NY: Routledge.

Chapter      4, “Understanding Giving” (pp. 76–90)

Chapter      7, “Donor Recruitment” (pp. 141–165)

Chapter      8, “Donor Development” (pp. 166–189)

Wagner, L. (2010). Ethnicity and giving. In E. R. Tempel, T. L. Seiler, & E. E. Aldrich (Eds.),

Achieving excellence in fundraising

(ebrary version, 3rd ed., pp. 183-198). San Francisco, CA: Jossey-Bass.

Williams, K. A. (2013).

Leading the fundraising charge: The role of the nonprofit executive

[ebrary version]. AFP/Wiley fund development series. Somerset, NJ: Wiley.

Chpter 4, “Relationship Concepts: Social Exchange, Alignment, Cultivation, and Management” (pp. 175–197)

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CHAPTER
&
4
Relationship Concepts
SOCIAL EXCHANGE, ALIGNMENT, CULTIVATION,
AND MANAGEMENT
This chapter focuses on the development of relationship concepts because they are
so critical to the execution of fundraising. A donor’s view of a relationship is,
however, quite different than an organization’s or a fundraiser’s view. For a donor,
a relationship is not created, it is earned. It results from the synchronicity of
mutual values, not artificially contrived, but authentically evolved. It cannot be
predicted, but is predicated on opportunities found. This perspective is called
donor-focused; a two-way exchange, not a one-way transaction.
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
INTRODUCTION
Fundraising is based on the premise that people are willing to invest in your
mission; it is not based on your need for additional revenue. If you don’t
need or want their investment, you can say ‘‘no, thank you.’’ But a ‘‘yes,
thank you,’’ necessitates a reciprocal relationship between you and the
donor.
Establishing a relationship with a donor does not happen by itself.
As in all relationships, there must be an environment of mutual goodwill,
based on an appreciation of each other’s similarities and differences, needs and
interests. Strong relationships develop when there is openness, respect, honesty,
patience, commitment, and give-and-take from both parties.
Relationships are mutual exchanges of shared values, developed through
effective, balanced interpersonal communications, which over time increase in
frequency, complexity, and intensity.
As in all partnerships, the desire to be in, or to work on, a relationship is not
necessarily equal or 50-50. One person may naturally give more than another;
one may have fewer needs. Relationships ebb and flow in a multitude of ways
but remain strong when both parties’ needs and interests are met. Relationships
Williams, Karla A., and Karla A. Williams. Leading the Fundraising Charge : The Role of the Nonprofit Executive, John Wiley & Sons, Incorporated,
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require a mutual understanding that needs are constantly changing but mutuality
is a continuous pursuit.
Dominance by one party, however, diminishes the essence of a partnership;
without that relationship exchange will not take place.
The unique challenge for donors and nonprofit organizations alike is simply
to maintain balance in the relationships, even under the pressure of self-interest
(from either party).
Relationships are undermined when organizations try to convince their
donors to support something outside their interest under the pressure that the
organization’s needs are paramount. Conversely, relationships are undermined
when donors insist on giving to a program that does not need philanthropic
support or leads to mission creep.
Your role as executive director is to ensure that all relationships are balanced
and beneficial, managed in a way that establishes an ethical, moral, and synergistic partnership with each and every donor, for the long term.
Your responsibility is to say ‘‘no’’ if the intended purpose for a gift is not on
your strategic agenda and to be gracious when a prospective donor says ‘‘no’’
because he or she doesn’t like the project you are proposing. When you and
your organization are able to establish a relationship with someone inclined to
support your mission’s value, your interaction with them must be strategic and
mutually beneficial.
This chapter addresses how the elements of the social exchange and marketing relationship theory play out in fundraising and describes how donor moves
occur by design, and over time.
The following sections describe how a marketing perspective improves constituency analysis, links that knowledge to create matches, utilizes cultivation
techniques to deepen the relationship, and applies techniques to bring a donor
into and up the giving pyramid. This chapter also contains field and academic
research on donor segments who have the highest potential, including those
with high net worth, women with capacity, and Baby Boomers whose time
is now.
Chapter 4 covers:
SOCIAL EXCHANGE in Relationships: Move From Transactions to
Transformations
ALIGNMENT in Relationships: Constituency Analysis Uncovers Patterns
CULTIVATION
of Relationships: Strategies to Build Long-Term
Relationships
MANAGEMENT of Relationships: Techniques to Expand the Donor
Base
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SOCIAL EXCHANGE IN RELATIONSHIPS
Move From Transactions to Transformations
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
Relationship fundraising is an approach that centers on the unique and
special relationship between a nonprofit and each supporter. Its overriding
consideration is to care for and develop that bond and to do nothing that
might damage or jeopardize it. Every activity is therefore geared toward
making sure donors know they are important, valued, and considered, which
has the effect of maximizing funds per donor in the long term.
—Ken Burnett
Philanthropic behavior is stimulated by values. We know that people do not
support organizations whose values they do not connect with. The level of
connectivity, or the match between a donor’s values and your organization’s values, influences the intensity of their actions to give, to volunteer, to associate, to
be reciprocal.
In Chapter 1, the importance of stated values, both personal and professional,
was discussed. To reiterate, to attract high-level and long-term donor investments, your organization must clearly define and articulate your value to the
community.
As Kay Sprinkel Grace has so eloquently articulated, there is an interrelationship of philanthropy, development, and fundraising; all based on values.
Philanthropy is inspired by values; donor development uncovers shared values;
fundraising provides people with opportunities to act on their values.
Theories and practices that integrate this values exchange concept are substantiated by an understanding of marketing theory, the application of reciprocity, and the intentional information gathering that shapes your segmentation and
targeting efforts. Three aspects are explored here:
MARKETING: Social Exchange Based on Shared Values
MOTIVATIONS: Evaluation of Constituency Potential
CONSTITUENTS: Focus on Highest Potential Prospects
MARKETING
Social Exchange Based on Shared Values
Marketing is an organizational function and a set of processes for creating
communicating and delivering value to customers, and for managing customer
relationships in ways that benefit the organization and its stakeholders.
—American Marketing Association
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Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
The notion behind a balanced relationship is explained in social exchange theory or
in relationship marketing.
Social exchange theory evolved from psychology, sociology, and economics
to explain human behavior based on self-interest and achievement of personal
goals. This premise theorizes that people make choices that maximize rewards
and minimize costs. They then base the likeliness of developing a relationship
with someone on the perceived outcomes.
Relationship marketing is predicated on the benefits of donor retention and a
donor’s ultimate value to an organization.
In the past, fundraising relied on transfer- and transaction-based marketing.
Each and every year, donors were asked to give, and a series of one-time transactions took place. Relationship marketing changes the fundraising approach from
a series of one-time transactions to a focus on cumulative donor value and the
exchange of shared values.
Because marketing is a business methodology, it is an orderly process that can
be applied to fundraising by utilizing the following strategies:
1. Donor Focus. Marketing has changed the way our world thinks and
behaves. As we moved from a product-oriented society to a consumerdriven society, savvy business minds turned to the principles of marketing
to guide the way.
Since the mid-1980s, the for-profit sector has literally reengineered
its business strategies from selling the customer what was produced to
producing what the customer wants. The business sector views marketing as the way to gain a competitive edge, to proactively direct the
growth of business.
The nonprofit sector has been less enthusiastic and not as quick to
adopt a marketing philosophy, resisting the idea because marketing didn’t
fit their type of business. The terminology used in marketing—products,
price, promotion, and place—seems foreign to those in the nonprofit sector who use words like clients, services, subsidies, and sliding fees.
Since marketing often gets confused with selling, it has been rejected
by some in the nonprofit sector as manipulative. Others, who mistakenly
see marketing as promotion, do not realize that it is really a constituency
relationship-building approach (as in CRM, or constituency relationships
management).
Resistance to marketing also comes when professional staff see
themselves as the experts, particularly when it comes to designing
and delivering programs that serve recipients. When cultural views
dictate that the organization knows best what the customer, client,
patient, or student needs or wants, it is difficult for them to shift to a
Williams, Karla A., and Karla A. Williams. Leading the Fundraising Charge : The Role of the Nonprofit Executive, John Wiley & Sons, Incorporated,
2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/waldenu/detail.action?docID=821735.
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Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
marketing exchange perspective where they ask their customers what
they want or need.
2. Managed Process. Fundraising requires a constituency point of view,
hence all the references to donor-focus. Relationships require an
exchange between needs and interests, making relationship marketing
and the social exchange concept a logical fit with fundraising.
Until recently, nonprofit practitioners who were interested in applying
marketing techniques to their nonprofit organizations found very few resources to help them. Today, workshops, books, and journal articles
enthusiastically promote the use of marketing in response to the ever-increasing competitive environment.
Today, the use of marketing exchange principles has become a widely
accepted way of determining which nonprofit programs or services to
initiate, to promote, and to eliminate.
To survive and succeed, organizations must know their markets; attract
sufficient resources; convert these resources into appropriate products,
services and ideas; and effectively distribute them to various
constituencies.
No where is marketing theory more appropriate and natural than in
fundraising because it places the donor in a prominent partner position
with your organization, rather than a supplier of money (like an ATM). It
provides a dignified approach, making fundraising more about receiving
than getting, more of an exchange than a transaction, and more of a relationship with the giver than with the giver’s money.
When we apply marketing principles to fundraising, it becomes a systematic managed process of matching donors’ interests with organizational
needs. It strategically targets high-potential markets, rather than the masses.
As executive director, you will need to endorse marketing as a philosophy, not a promotional tactic. It is your role to champion marketing as a
strategic and cultural perspective that identifies people’s needs and, in
turn, designs programs and products to fit those needs.
When applied to your core services and fundraising, a marketing approach can make the difference in driving customers to you or to someone else. A marketing perspective can change your fundraising
orientation from a begging or a selling mode to one that is truly donor
focused. And marketing is, more important, a sound business approach
that is based on information rather than intuition.
3. Social Exchange. The exchange concept can best be illustrated by a balance scale with donors on one side and beneficiaries on the other side.
See Exhibit 4.1. The center pole represents the organizational structure,
Williams, Karla A., and Karla A. Williams. Leading the Fundraising Charge : The Role of the Nonprofit Executive, John Wiley & Sons, Incorporated,
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Donor
Affiliation
Affinity
Affirmation
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
EXHIBIT 4.1
Beneficiary
Acknowledgment
Appreciation
Acceptance
DONOR-BENEFICIARY VALUES-EXCHANGE CONCEPTS
positioning itself to balance both sides of the exchange equation. The
cross bar represents the two-way communications and linkages that are
formed as a result of relationship development, shared values, and voluntary reciprocity.
A marketing perspective in fundraising acknowledges that donors
want to get something in return for their charitable and philanthropic
contributions, albeit intangibles like appropriate recognition, timely reports, invitations to insider events, and being asked for their feedback and
advice.
To donors, those intangibles are the products they are receiving for
their purchase. Without them, donor satisfaction is reduced—akin to
purchasing a new shirt and then getting home to discover it was made
out of newspaper and could be worn only once (you didn’t get your
money’s worth).
In the consumer world, they call this post-purchase dissonance. Without
some form of affirmation or some benefit, donors will have the same degree of dissonance about their gifting decisions. Affirmation comes in the
form of immediate thank-you calls or notes, personalized reports of where
the gift was applied, and follow-ups to confirm that the gift was appreciated and made a difference.
Not only does a marketing perspective encourage the design of more
effective strategies, but it forces us to reexamine fundraising methods:
assessing the benefits of mass market appeals, impersonal so-called personalized computer-generated letters, repetitive telemarketing calls, and laborintensive special events.
Marketing encourages greater emphasis on personal relationships built
through informal telephone conversations, personal visits, handwritten
notes, and social occasions that bond donors as members of the
Williams, Karla A., and Karla A. Williams. Leading the Fundraising Charge : The Role of the Nonprofit Executive, John Wiley & Sons, Incorporated,
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organization’s family. Marketing enables us to put the emphasis where it
belongs: on the donors who give, not on the goods received.
MARKETING Strategies
Marketplace analysis and psychographic research
Market and audience segmentation
Targeting those with the highest potential
Organizational positioning with distinct characteristics
Integrated marketing, communications, and development plan
Targeted and matched case messages and methods
Demonstrated benefits to the donor
MOTIVATIONS
Evaluation of Constituency Profile
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
To survive and succeed, organizations must know their markets; attract sufficient resources; convert these resources into appropriate products, services and
ideas; and effectively distribute them to various constituencies.
—Phillip Kotler and Alan Andreason
Hopefully, your organization already has a distinctive constituency profile,
defined by those who benefit from what your organization does, either directly
(in the case of a hospital patient who wants to say thank you for the great medical care they received) or indirectly (if they are successful business owners and
want to provide scholarships for poor kids from their hometown).
Your current donor base is incredibly important, in that it offers a demographic and psychographic perspective of not only who gives, but who will give.
Any new donor will be but a mirror reflection of your current donors. So, the
more you know about who gives now, the more productive you will be in identifying and cultivating new donors.
What Should We Look For In Our Donor Base? A time-honored practice of
fundraising, is called constituency analysis. It is a comprehensive look at your prospects’ and donors’ demographics, psychographics, giving patterns, and linkages
to predict and project who might give, how much, and for what.
With careful analysis of your giving records, you will have a reasonably
accurate idea of the inclination and the capacity of your defined constituency
(current and potential).
Since this analysis uncovers the subtleties of donor behavior that are unique to
your particular organization, it helps you decide how much time and effort you
Williams, Karla A., and Karla A. Williams. Leading the Fundraising Charge : The Role of the Nonprofit Executive, John Wiley & Sons, Incorporated,
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want to expend, on what, and with whom. In fact, it is even possible to estimate
and predict the market saturation point for the number of donors you might be
able to attract, now and in the near future.
As executive director, you want to insist that analysis of your constituency is
more that an occasional thing; it should be a constant process and, at the least,
utilize sophisticated mapping techniques to ensure that estimates are comprehensive and reliable.
If you don’t have the internal expertise to do sophisticated constituency
analysis, then hire an expert to do it for you.
Going deeply into the details of your existing donor records will illuminate
donor segments under the surface that hold enormous potential for future gifts.
How Can We Estimate Our Donor Potential? As executive director, you
want answers to all the following questions. Your development staff should be
able to answer some, but others will require outside fundraising counsel.
CONSTITUENCY Questions
Who currently gives?
How many give, why, when, how, and in what amount?
Do we know enough about them to be able to segment by their demo-
graphics and psychographics?
How many more (like them) might be caused to give?
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
How much money can we raise, and what is our saturation point?
Given our constituency profile, which fundraising methods will be most
appropriate?
What should our donor base look like five years from now?
As implied earlier, ability to raise money is not a given; some types of organizations stand a better chance of raising money because of their mission popularity, their other funding sources, and their number of natural constituents.
Larger organizations have natural constituencies (education and religious organizations) who are already linked and interested, so their ability to raise money
is easier and greater.
Smaller agencies who don’t have built-in or built-up constituencies have
a much harder time raising money, including those that are old, but new at
fundraising or those that deal with tough issues (incarceration, abuse, mental health).
Public sentiment has everything to do with fundraising potential.
Williams, Karla A., and Karla A. Williams. Leading the Fundraising Charge : The Role of the Nonprofit Executive, John Wiley & Sons, Incorporated,
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RELATIONSHIP CONCEPTS
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What Is My Marketplace Potential? An analysis of your constituency ability can
help you discover both the good and the bad; regardless of what you find, at least
you have the best gauge of how much or how little to invest in your development program.
A recent study of a small but highly respected YWCA in North Carolina predicted they could generate up to $1 million per year from individual gifts and
foundation grants, but not much more. That study included a comprehensive
constituency analysis, as well as a review of like organizations across the
country with comparable deliverable services. The study was able to project the
growth in the number of new donors, as well as estimate future retention and
upgrade rates. The only thing that would increase their donor base would be
an expansion of services at their present location or an expansion to adjacent
geographic locations. More services and broader reach equate to more
donor potential.
Another study of a large children’s home society in the Midwest uncovered a
significant number of loyal but neglected donors. Examination of their very
large and very old donor base revealed more than 1,000 women over the age of
60 who had been making small gifts, every year, for more than 20 years. The gift
size of these double-decade donors kept them under the radar. This constituency analysis led to the creation of a new legacy society to formally acknowledge
their loyalty and open the door for dialogue about other gifts. Within one year
after initiating the legacy society, several women revealed they had already made
provisions in their wills for this organization, and several others were considering other types of planned gifts. More contact and appropriate recognition
inspired additional and larger gifts.
A study for a large statewide child and family service in the South that had
been in existence for nearly 100 years and was delivering a wide variety of social
services and high-need residential programs was very disappointing. In spite of
its important services and its statewide reach, this agency had become dependent
on government grants and had basically ignored every opportunity to generate
philanthropic grants and gifts. After so many years on the government dole, very
few citizens saw this agency as a charity; most thought the agency a department
of the state’s child and family services division. The study concluded that the
cost and effort to start a fundraising program would not be a good investment: It
was too late, a very big price to pay for ignoring the importance of community
involvement via philanthropy. Overdependence on one revenue source results in
a perception of ‘‘no need.’’
If only a few hundred people want to adopt your organization, it would not
be wise to staff a development program because your expenses (estimated at
$75,000 for salary, benefits, and expenses per employee) would generate insufficient revenue (estimated at $50,000 total from 200 donors or grantors).
Williams, Karla A., and Karla A. Williams. Leading the Fundraising Charge : The Role of the Nonprofit Executive, John Wiley & Sons, Incorporated,
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However, if you are an institution of higher learning and you have 30,000
alumni, history tells us that you could expect at least 23 to 32 percent of alumni
will be predisposed to give back, ensuring a reasonable rate of return on your
investment.
A comprehensive constituency analysis will also tell you how long it will
take to achieve your goals (be it one year or six) and determine what portion
of the budget can and should be funded via philanthropy, be it 2, 48, or
90 percent.
CONSTITUENTS
Focus on High Potential Prospects
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
Donors of transformational gifts not only wish to support organizations that are
addressing issues important to them, they often want to become deeply
engaged through board membership or other involvements.
—Kay Sprinkle Grace and Alan L. Wendroff
The goal of all the marketing theories and donor-focused practices outlined in
this chapter is to identify the highest-potential prospects and encourage them to
select your organization for their most meaningful gifts.
Discernment will be necessary. You cannot develop the ideal relationship
with every single donor; you will not have the time, the resources, or even
the desire.
You need to focus on those donors where you have the greatest potential, and
that is not always measured in dollars.
There are donors who can influence others but might not have huge capacity
themselves. There are donors who have given to your organization for a decade
or more, and their lifetime value exceeds someone who has given only once.
There are donors who will give only once, but that once is good enough.
Knowing your potential will dictate your focus; this is integral to your fundraising strategy. You may decide to focus primarily on Baby Boomers who have
another 20-plus years to support your organization. You may decide to focus on
women, whose assets and giving inclinations are greater than men’s. You may
decide to build a strong major gift base and focus on high net worth, both
earned and inherited. Your organization may have a foundation of spiritual values, and you might want to focus on people who have similar beliefs.
The point is, if you can’t determine a focus, your fundraising program will be all
over the board and accomplish nothing more than a little of this and a little of that.
Relationship building with certain markets requires segmented and targeted
approaches. The more you know about each of them, the easier it will be for
you to determine what you need to do first.
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Your highest-potential donors fall into four categories:
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Your Board One measure of a successful organization is the extent to which
its board members understand their governance and their legal, moral, and ethical roles and responsibilities. Another measure is how involved they are in the
organization’s fundraising.
Consider the original premise for the philanthropic sector: a gathering of
people who by association could accomplish what one person could not.
Consider, too, that when philanthropy emerged, it did not involve intimidation.
People voluntarily stepped forward for what they believed in, and their reward
was self-satisfaction, not financial remuneration.
Board members cannot be coerced into fundraising. They can, however,
enthusiastically embrace fundraising on their own terms, when they realize that
they bring unique expertise, objective advocacy, and community credibility that
is needed to achieve your mission in ways that professional staff cannot.
To gauge the level of board engagement, you need to assess their performance
against their fundraising responsibilities.
Given the board’s moral and legal responsibilities to be involved in fundraising, there are specific job duties that have to be pointed out to them. Your job as
executive director is to know what is required and then help your board selfassess whether they are doing what is needed and expected.
The following questions will help you assess your board’s performance. A
survey or a formal board assessment process will help everyone get to the
same page.
Donors: Do they make their own gifts first? Regardless of the size of the gift, a
board member must make the organization they serve one of their top charities.
Anything less (a token gift) reduces their board participation and, worse, adversely influences the performance of other board members. When you let one
board member off the hook, you let them all off. One hundred percent board
giving is a mandate, and so is the requirement of a meaningful gift. A token gift
does as much damage (psychologically to the culture) as no gift.
A caveat: It is unwise to recruit board members who are not already donors.
Board membership should be a reward for past support, not an incentive to give
just because you are now on the board. Sharing what every board member gives
(with everyone else) clarifies expectations and establishes norms.
Goal Setters: Do they establish and endorse the plan, the case, the campaigns, and
goals? Institutional planning is the purview of the board and executive director.
It is also a privilege to be able to craft the overall plan, establish goals, and shape
the case for support. Being involved in all those decisions is the stimulus that
board members need to get serious about the fundraising results. Inheriting yesterday’s plan is a disengagement strategy, for sure.
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A caveat: Forget the rule that strategic plans are revised or updated every five
years. You need to update that plan every single year to keep it relevant. Remind
your board members that planning is a process, not a retreat.
Donor Openers: Do they introduce others, cultivate, and solicit them? Board
members can affirm their own giving by saying to their friends: ‘‘Join with me
in supporting this great organization.’’ To do this effectively and with ease, they
need a little help from you. They need business cards with their names, materials
they can leave behind, training on what to say, and complimentary tickets so
they invite high-potential prospects to join them at your next event.
A caveat: Board members need to know explicitly what is expected of them.
Give them a list of hard goals, present report cards every quarter, and reward
them appropriately for reaching their individual and collective goals. Peer pressure can be a good thing.
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
Advocates: Do they represent your organization in the community? When board
members reach out into the community wearing your organization’s name badge,
they influence the opinions of others far beyond what you can do. Talking about
their passion for your mission and what your organization accomplishes has more
impact than talking only about the needs of the community. Equipping them
with facts, figures, and measureable outcomes can turn them into likable zealots.
A caveat: Advocacy overtly influences opinion; it is not just courteous conversation. It is the promotional endorsement of your organization’s leadership
position in the community. It’s your job to teach board members how to brag.
Stewards: Do they ensure accountability to donors? Stewardship has many faces
and facets, including thanking donors, being accountable for contributed funds,
establishing policies, and evaluating the board’s performance relative to fundraising. When board members are transparent in talking about your organization,
they help to garner the public trust that is so critical to fundraising.
A caveat: It is common for board members to focus more on financial reports
than on most other areas of governance. Your job is to cause them to be equally
as interested in the care and feeding of their donors (no donors, no money).
How about putting the financial report last on the agenda?
Recruiters: Do they recruit other board members who want to fundraise? No one
knows better than current board members how important it is to have board
members with clout and connections. One of the most important roles of a
board member is to replace oneself with someone even better suited for the job.
Satisfied board members take on this responsibility without asking; if they don’t,
you can be sure they weren’t suited to be on the board in the first place.
A caveat: Never ever allow your nominating committee to put forward the
names of people who are climbing the ladder. If they are not already up the
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ladder, you don’t want them on your board. Help your board members to set the
bar high when it comes to recruiting.
Invite board prospects to get involved in fundraising, beyond making their
own contribution.
Board Fundraising Suggestions
Ask their employer to match their gifts
Identify cases that would attract other donors
Suggest names for the prospect list
Mail information to known qualified prospects
Host an information session at your home or work
Invite a prospect or donor to lunch
Introduce friends who are prospects to staff
Participate in a fundraising event
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
Make personal thank-you calls and write thank-you notes
High-Net-Worth Individuals The amount of new research on wealth donors is more expansive than any other constituent group. This verifies that
major gifts from individuals are a significant strategy for most nonprofit
organizations.
Experience and some research suggest that wealth, in and of itself, is not a
predictor or motivator of philanthropy. Rather, it is a belief that private contributions and nongovernmental organizations (charities) are integral to the American way of life (Odendahl 1990).
That being said, those with wealth to distribute will always be the fundraiser’s
primary target. With more wealth being generated in the past decade, with social needs rising, with the maturation of nonprofit organizations—the opportunities for raising money from high-net-worth individuals is huge.
Grace and Wendroff, authors of High Impact Philanthropy, suggest we have
entered a new age of philanthropy with an outpouring of what they call transformational gifts that have a high-impact.
Transformational gifts are large, major gifts—the ones that have the capacity to
alter how organizations do business. They are ‘‘inclusive investment of the donor’s
values made in organizations whose values the donor shares . . . the resultant
values exchange results in high impact philanthropy’’ (p. 16).
Transformational high-impact gifts always constitute the upper portion of
your giving pyramid, reaching or exceeding the 80/20 rule. It goes without
Williams, Karla A., and Karla A. Williams. Leading the Fundraising Charge : The Role of the Nonprofit Executive, John Wiley & Sons, Incorporated,
2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/waldenu/detail.action?docID=821735.
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saying that you the executive director need to spend most of your time with
these donors.
In recent years, more research has been done on high-net-worth donors,
helping delineate who they are and how they behave.
Many studies have affirmed that high-net-worth donors do have distinctions
that are invaluable to the fundraiser. The new high-net-worth individual is more
likely to have earned his money than to have inherited it. And he may be a she
who has built her own entrepreneurial business from her basement or her laptop.
These twenty-first-century donors seldom wait to be solicited (and they are
hard to find, because they still drive their old cars); they, instead, research and
select organizations that are capable of delivering high impact. This new breed
of donors treat philanthropy like a financial investment. Their goal is not a tax
deduction but a social benefit generator. A first gift could have six figures, and it
may be a test of your reciprocity and responsibility.
The best research on high-net-worth donors comes from the Bank of
America studies in concert with the Center on Philanthropy, all available online.
Another study of wealthy male donors (Prince and File 1994) developed a
framework called The Seven Faces of Philanthropy. It placed affluent donors into
one of seven distinct segments based on needs, motivations, and benefits. Each
personality type represented a characteristic and distinctive approach to philanthropy, a set of typical attitudes and beliefs, a range of considerations, a process of
evaluation, and a style of involvement with nonprofit organizations. They are
called the Communitarians, the Devouts, the Investors, the Socialites, the Altruists, the Repayers, and the Dynasts.
In another study and book, Women, Wealth & Giving, Damen and McCuistion
examined giving habits of women Boomers. They pointed out the differences
between women who earned their own money and those who did not; selfgenerated incomes allowed female donors be more reflective, independent, and
generous with their philanthropy.
HIGH-NET-WORTH Suggestions
Use statistical and measurable outcomes.
Be project specific; prove community need.
Do not assume they will support you.
Allow them to be the decision makers.
Demonstrate business savvy.
Exhibit innovative leadership.
Clarify their philanthropic values.
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Baby Boomers The supposition that certain generational groups have higher
potential than others is not new, but generational differences have become more
obvious and more interesting.
The Great Generation, once our largest loyal group of donors, is diminishing
in size, being replaced by Baby Boomers, who have very different behaviors as a
result of when they were born and raised. For many charities, Baby Boomers
now represent as much as 75 percent of their total donor base.
Boomers represent the largest single sustained growth of the population in
American history (77 million). They are expected to become the most generous
givers and have more time to do volunteer activities as they approach retirement.
Boomers are far more likely to be college educated, with more discretionary
income. According to a recent study, Boomers now contribute more to charities
and causes than the previous generation. A third of them plan to increase their
contributions in the next five years.
They are more results oriented. They want to see clear, measurable, tangible
results of their gifts and the work of the organization. They will not be comfortable with simply writing a check without seeing how the community actually
benefits.
Boomers have less brand loyalty. They shop around and test organizations much
like they would shop around for a new bank. To win them over as donors, organizations must prove themselves and cultivate involvement. They tend to favor small,
local organizations over large, national ones, as well as different types of charities.
Boomers do not give as much to religious causes as the previous generation did.
Still, they resemble older Americans in the way they divide their donations
(health, education, social needs, disaster relief, arts and culture, advocacy and
political groups). But Boomers are more likely to support organizations that
help needy Americans.
BOOMERS Suggestions
Respect their schedules.
Treat them as colleagues.
Develop opportunities that really matter.
Remember that volunteering is optional.
Make sure you are organized and professional.
Reach boomers through their peers.
Women Other than research on high-net-worth donors, no other constituency group has attracted more interest in the past 20 years than women.
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Facts substantiate the level of enthusiasm for women as a high-potential group
that every organization needs not only to include, but also to strategically focus on:
Of the nation’s top wealth holders, 43 percent are women (more than
1.5 million).
Women own 40.2 percent of privately held U.S. businesses.
Women will control more than 60 percent of U.S. wealth.
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
Of all philanthropic giving decisions, 84 percent are made by women.
What motivates women to give? Several themes have emerged that answer
this question. First, women like to be agents of change. As such, they tend to
support innovative projects rather than the status quo, and they may take a longer time before making what for them is a significant gift. Volunteer involvement is key to their engagement, coming before their financial support.
Second, women retain a personal interest in how their donation is used; they
expect the charity to be accountable to them for how their money is being spent.
They want to have some control over their donations. Women see their gift as an
ongoing relationship with the charity. They feel they have established a personal
connection and want the charity to keep it alive by sharing information.
Third, women may not wish to appear to give more than their peer group.
Older women are sometimes diffident about public recognition because it will
make them stand out from the group. However, younger women may expect
public recognition. Women like to feel they belong to a group, a team that is
making the world a better place. This may explain why women like to work on
special events.
Fourth, women’s giving is often dependent on their age group. Older women
may defer giving decisions to their husbands or accountants. Women who have
earned their money have fewer problems deciding on their own about making a
major commitment.
WOMEN Donor Suggestions
Approach them on a personal level.
Meet their desire to have a social impact.
Be prepared to answer a lot of questions.
Involve them, and ask for a small gift first.
Introduce them to other women donors.
Remember that recognition is not an incentive.
Offer them cases they can relate to.
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ALIGNMENT OF RELATIONSHIPS
Constituency Analysis Uncovers Patterns
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Having researched the needs of donors, fundraisers should be able to group
donor preferences together in such a way as to make it profitable to meet them,
while ensuring that all donors feel that their individual needs have been met.
—Adrian Sargeant and Elaine Jay
When fundraisers apply marketing principles, fundraising becomes a systematic
and managed process that allows us to develop a compelling case and message,
and to select the appropriate methods to create a match.
How do the concepts of relationship marketing and social exchange change the
way we look at our donor base? They mandate that we discover and uncover,
connect shared values, and cause inclinations to be acted on in intentional ways.
An exchange perspective demands that we use research to understand why
people want to give to us and gain insight into why people do what they do.
It requires us to ask why donors choose to affiliate with us rather than someone else. What causes them to have an affinity for our mission, leaders, programs, and clients? What unique characteristics does our organization have,
according to our donors?
The more research we gather, the more we know how to meet the needs and
interests of individual constituents and how to build lifelong relationships. The
knowledge we gain through qualifying research informs our segmentation of donors
into smaller and similar groups, enabling us to target more effective messages that
will optimally cause a trusting relationship that will elicit meaningful exchanges.
This knowledge ensures a donor focus and aligns it with our organization’s
mission and vision. Three steps are needed:
RESEARCH: Identify Donors With Shared Values
SEGMENTATION: Organize Similar Donors Into Smaller Groups
TARGETING: Rate, Rank, and Match Donors With Cases
The art of creating and nurturing exchange relationships with individuals
who have an affinity or linkage with our organization is referred to as constituency building, constituency development, or constituency relationship management (CRM).
The key to building constituencies, cultivating them, and retaining them is
linking people to people and connecting interests to issues. The old adage
of ‘‘people don’t give to causes . . . people give to people, with causes’’ remains
as true today as it was when organized fundraising began more than 130 plus
years ago.
Using a marketing perspective to build relationships begins with qualifying
questions and ends with donor-focused strategies.
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MARKETING Principles
1. Research and Analyze Prospects and Donors
How, what, and when do they give?
Who are they (demographics)?
What do they think, need, and want (psychographics)?
2. Segment Prospects and Donors
What external motivators elicit a response (influences)?
How can they be segmented into smaller similar groups?
How many, small or large?
3. Target Prospects and Donors
Which groups have the greatest potential?
What methods should we use for each of them?
What happens to the others with less potential?
RESEARCH
Identify Donors With Linkage and Interests
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
Research is as close as the real world comes to owning a crystal ball. You ignore
research at your organization’s peril.
—Tom Ahern and Simone Joyaux
Philanthropic motivations are complex and varied. Social scientists have
searched for answers about why people give and why they don’t, so we have a
pretty good idea and a growing list.
As fundraising has become more sophisticated, we have been digging a little
deeper into the donor psyche, asking not only the basic motivational questions
but also what makes people respond differently to different situations.
Why do certain donors give to our organization and not others? What are we
doing, or what can we do, that will strengthen the relationship?
The need to better understand our donors’ motivations is especially
pressing, given today’s environment of intense competition and uncertain
economy. It is ineffective to spend time and money on appeals to those
who are unlikely responders. A better understanding of donor motivations
makes it possible for us to carry out fundraising tasks more effectively and
efficiently.
The place to start is your donor base. The more you know about what motivates your particular donors to give, to give again, to give more, or not to give,
the more you can advance your personalized approaches with new prospective
donors.
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Key research questions to ask about each donor:
What caused our donors to make their first gift to our organization?
What did they expect as a result of having made a gift?
Were they satisfied with what happened with that gift?
What program or project interests them most, going forward?
Who and what influence their giving?
In what ways do donors benefit from being associated with us?
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
How do our donors want to be communicated with?
With research about your donors, your philanthropic exchange process will be
vastly improved, donor fatigue will be tempered, and resources will not be wasted.
Your job as executive director is to insist that your staff spend at least 20 percent of their time on constituency research. Without your approval and your
insistence on allocating time to research, staff will resort to making assumptions
about what donors might want or do, which could prove costly, because they
may not target the right prospects or build the right relationships.
Research is the systematic acquisition and recording of important information
on current and prospective donors. The goal of research is to identify shared values between the organization and prospects to build and maintain the exchange
relationship.
Constituency analysis must be cumulative and ongoing, adding pieces of information as they become available, leading to additional searches for specific
information. Obviously, a computerized storage and sorting system is key to
extracting the right kind of information when needed to evaluate and manage a
donor’s relationship with your organization.
There are many research tools to use; the three most popular ones are LIA
analysis, database and electronic research, donor surveys, and focus groups.
LIA Analysis One of the most obvious questions about your organization’s constituencies is: How do we qualify individual prospects and donors to determine high
potential? A relatively easy way, particularly when supported by other research, is
LIA: linkage, interest, and ability.
Although people have individual, complex, and varied motivations for their
philanthropic behavior, the LIA formula focuses on the three primary experiential indicators observed by fundraisers over the years: linkage, interest, and ability. This time-honored LIA principle has represented the easiest method to
quickly assess the readiness of someone to make a philanthropic gift.
People’s linkage with other people not only affords access but also brings credibility from someone they know. Connecting with others influences the way
values are shared and deepened.
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For instance, if a donor is a close friend of the current board president, they
have a social relationships link. A donor who is a former client or student of your
institution has a beneficiary-relationship link. A donor who is also a volunteer at
your organization has an affiliation-relationship link. The stronger the link with
or through someone, the greater the inclination to give because of deepening
shared values.
People’s interest is shaped by their life experiences and values, which in turn
give clues about what they are willing to fund. Being able to express oneself
through giving is personal and powerful.
For example, we all have special interests that play out in our philanthropic
giving. Our values might cause us to support institutions and causes that address
children’s issues. A donor with an affinity for children will not just give to
any children’s charity but select those that address certain familiar issues, such as
children’s rights, medical care, child care, school achievement, athletics, or
safety. Very few charities address all of those issues, so the donor will select those
that get closest.
When you know what the donor’s key values and interests are, you can rank
them accordingly or help deepen their interest with more information and more
involvement in your organization.
People’s ability or capacity to give is often tied to life situations or timing.
While sometimes limited to financial situations, people’s perception of what
they want to fund and how much, is influenced by their linkage and interest,
not just their financial ability or status.
For instance, donors who rank high in the linkage and interest areas may actually come looking for you because they know exactly what they want to accomplish. As donors get older, they become even more selective in their giving,
causing them to reduce the number of charities they give to while increasing the
size of the gift. If their earnings increase or their expenses decrease, they will be
motivated to give to those who properly stewarded their past gifts. For donors
with high linkage and high interest, a wish list is advisable because you cannot
be sure what their real financial status is. Their ability is a figure in their minds,
not yours.
You could devise a rating or ranking chart to assign a numerical value to
each of the LIA values and come up with a list of the highest to lowest
donor prospects.
Database Scan One of the best ways to look at who might give is to look
at who currently gives. There is a saying that your new donors are just like
your old donors.
Carefully and regularly examine your current donor base to see what it might
reveal statistically about donor giving patterns or about donor characteristics.
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Your donor profile (whether it is primarily women and couples over the age of
50 or highly successful graduates who own their own businesses) will give you all
the clues you need.
A donor profile is not necessarily limited to one or two types of donors—in
fact, there are probably many types—but there will be dominance in similarities.
For instance, an opera company is likely to attract donors who are middle to
high income, educated, musically trained children, annual subscribers, and the
children or grandchildren of opera buffs.
As executive director, you want to insist that your development staff and your
database are capable of extracting enough information to be able to do some
profiling.
To develop a giving pattern profile, you must examine all giving records by
source, date, amount, recency, and frequency (how many, how often).
DONOR DATABASE Checklist
How many are new donors?
How many are renewing at the same level?
How many are renewing at higher levels, over time?
How many donors are making more than one gift a year?
What percentage of donors are flat givers?
What is different about each donor? What is the same?
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
Is retention of donors within industry standards?
If solicitation strategies are different, what are the response rates for each
type?
To develop a constituent personality profile, you would have to examine their
demographics, their psychographics, and their motivating elicitors. (If such data
is not available, you will need it going forward so that you can apply marketing
principles to your fundraising program.)
Research tells us that each person in your database has an ultimate gift potential. For some, that may be zero; for others, it may be to give every year and stay
flat; for others, it could be a major or planned gift. The last category is typically
about 15 percent of your donor list.
Hot lists include:
Donors with at least one gift of $250 to $999 in the past year and a $1,000þ
annual giving capacity
Lapsed donors who have given $1,000 gifts but not within the past 18 months
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Donors with two or more gifts of $100 to $999 in the past three years with
$1,000þ annual giving capacity
Prospects with $10,000þ giving capacity and an identified affiliation with
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
your organization
As you look at your donor list to identify your best prospects for major gifts, it
is important to invest in reliable prospect research, which effectively allows you
to mine the data using a customer modeling service. Modeling helps develop
donor profiles by incorporating information on wealth indicators (real estate,
stock holdings, etc.). Data mining and predictive modeling are proven methods
for the identification of your best potential donors.
Screen all records by looking at RFM: recency, frequency, and money. These
three indicators provide insight into your donors’ giving history and help predict
their future giving patterns.
By outsourcing your donor file to a firm with the ability to discern major gift
potential, your research will really pay off. You provide an electronic copy of
your database, and they append additional data fields compiled from the best
sources of individual household and aggregated data available. Their analysis
provides deep insights into the characteristics that distinguish donors from nondonors and major giving prospects from planned giving prospects. They use
these data sources to construct models that address your specific fundraising
objectives. With the models complete, your prospects are then analyzed against
these models and assigned scores based on how closely their attributes resemble
those of each model. Finally, the resulting scores for the models that you’ve chosen to develop will enable you to identify the best prospects in your file.
Exhibit 4.2 is an output showing the number of prospects and their likelihood
to make a major gift at different levels.
EXHIBIT 4.2
Major Gift
(Excellent)
Major Gift (Very
Good)
Major Gift
(Good)
PROBABILITY RATING OF PROSPECTIVE MAJOR DONORS
Gift Range
$5,000–
$10,000
Gift Range
$10,001–
$25,000
Gift Range
$25,001–
$50,000
Gift Range
$50,001–
$100,000
Gift Range
$100,000þ
741
166
133
80
43
378
56
49
11
2
76
5
4
2
1
Donor Surveys Donor surveys and focus groups often do more than the highcost, time-consuming research done individually on donors. Surveys and focus
groups collect information, not from one, but many donors, giving comparative
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RELATIONSHIP CONCEPTS
169
analysis on perceptions, behaviors, and opinions. As such, they give us statistically
relevant samples, representative of the much larger numbers of donors.
Surveys and focus groups, functioning as feedback systems, take a limited
amount of time, give us pertinent data, and are relatively easy to undertake,
inexpensive, and even enjoyable.
As in all research, there is a science to preparing an instrument that doesn’t
influence the answers or skew the data. In the case of donor surveys (be they
written or scripted), you need someone with expertise to help clarify what you
need to know, construct the survey questions, and guide you toward the number
you need for statistical significance.
Surveys are the preferred choice when you need immediate feedback from a
wide variety of donor types. It is best to use a mail or e-mail survey to gather
data from a large number (over 1,000) when you have numerous questions. If
your list is qualified and your instrument professionally crafted, it’s not unusual
to generate a 30 to 40 percent response rate. Mail and e-mail surveys are
extremely effective, in part, because they are less intrusive to the donors.
Telephone surveys are the preferred choice when you want sample research
from a modest number of donors (under 100, with a 75 percent reach), and
when your questions are more complex or sensitive. A telephone survey utilizes
fewer, more open-ended, subjective questions; a mail survey collects answers
that are more quantifiable.
Surveying your donors helps to identify your typical donors (gender, income,
education, values, and lifestyles). Surveys allow you to explore how satisfied
your donors are with your fundraising program or with one particular campaign.
A survey can pose questions about solicitation methods, donor recognition, and
volunteer experiences. You can even inquire about your organization’s status as
compared with other charities by asking: ‘‘Please share with us your top three
charities’’ or ‘‘Where do we rank in your list of favorite charities?’’
Focus Groups Behind every prospect or donor are sometimes simple, sometimes complex philanthropic motivations, which are themselves constantly affected by changing external influences.
Hence the purpose of a focus group is to gain both objective and subjective
insights into what’s going on out there. Concurrently, we want to elicit our donors’ concerns, provide an opportunity for suggestions, and determine the key
elements affecting how others might be encouraged to give.
There is no better method of involving people who are influential to your
organization than to invite them to participate in an opinion focus group. In
one room, in about one hour, you gather 8 to 10 people in the know and in
return for their input, you will receive cards and calls from them thanking you!
A focus group is an exploration process, unstructured except for a few predetermined questions. As such, it is one of the best ways to get at underlying
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perceptions and attitudes. Ideally, a trained facilitator (not employees from your
organization who think they know how to facilitate) provides the assurance of
objectivity in leading the discussion. Participants are selected, not simply based
on their familiarity with your organization, but on their diverse views and community involvement.
You will need to personally invite 10 to 15 donors to assemble a focus group
of 8 to 10. Due to the number and nuances associated with the comments, you
need to have a note taker so the facilitator can concentrate on the process. The
following questions are typical:
1. What influenced you to get involved with this organization?
2. What prompted you to make the first or your largest gift?
3. What do you see as the fundraising strengths of this organization?
4. What challenges exist in our seeking philanthropic support?
5. If you were the organization’s CEO, what would you focus on?
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
6. What would it take to get you to be more involved?
One of the most effective ways to look at an organization is from the eyes and
ears of the donors, and this is just the perspective that well-executed surveys and
focus groups provide.
The information you gather will prove essential for strategic planning and visions. Moreover, your development department will find the feedback invaluable and often inspirational. You can be sure it will stimulate new ideas and
create energy for positive change.
And there is one more beneficial aspect, which few other research methods achieve. This is the engagement it draws from friends of the organization. By seeking their advice, their input, their concerns, and their
aspirations, you will be involving them deeply in your organization, and in
all likelihood they will become some of your staunchest, most generous donors in the future.
SEGMENTATION
Organize Similar Donors Into Groups
Hidden inside any database are opportunities to raise more money, if only you
could dig them out; ‘‘Segmentation’’ is your pick and shovel.
—Tom Ahern and Simone Joyaux
Segmentation of constituencies will rely on what you are able to find out
through research about your existing and potential donors. The more you discover, the greater your segmentation potential.
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RELATIONSHIP CONCEPTS
171
For instance, if your research reveals that Great Generation donors give
higher average gifts than your Baby Boomers, you should segment the Boomers
into a separate group. We know from research that Boomers are not institutional
supporters: Instead, they are interested in giving to programs and projects, and
therefore we need to present our case differently. We also know from research
that women and men give differently, and they must be cultivated differently.
But having just one segmented group of women is not enough; you will need
segments for different generations.
Donor segmentation is a mandate in today’s sophisticated fundraising
environment. Segmentation is the identification and assignment of donors into
small groups with similar behaviors, demographics, psychographics, and giving
potential. Once segmented, communications can be tailored to influence
philanthropic motivations from the different groups in different ways.
The extent to which your organization is able to segment your constituency
base is reliant on how many resources you have: staff, computerized systems,
research expertise, and time. Not all organizations are able to do as much
segmentation as fundraising experts recommend, but studies show that doing so
increases their base of support in both number of donors and increased gift sizes.
As executive director, you must insist that your staff not only research donors
but also identify characteristics to segment them into high-potential groups. Ask
your staff to tell you what criteria they used to establish each segment; ask what
their plans are for cultivation and messaging; ask about their tracking devices to
evaluate results.
Each organization will have to approach segmentation differently, based on
who their prospects and donors are, how they behave, and what their needs and
interests are.
The most frequently used determinant of segmentation is level of giving,
followed by the frequency of giving. For instance, it is relatively easy to segment
donors into giving levels of under $50, between $50 and $100, between $100
and $500, between $500 and $1,000, and so on.
It is equally easy to segment by frequency of giving: first-time donors,
renewed donors by number of years, upgraded donors by years, and so on. Both
level and frequency can be combined into segments and the time of year added:
$50 first-time donors who made a gift last year in November, $100 donors who
have lapsed during the past three years, and so on.
Marketing specialists point to advantages of segmenting by age group. Research
has demonstrated that older generations make purchasing decisions differently
than younger generations (check versus debit card). So the obvious segmentations will be Great Generation, Baby Boomers, Gen Xers, and Gen Yers.
You could group your donors into demographic segments (age, education,
geography, family size, income, giving history, and types of gifts) Eventually,
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you will learn enough about them to be able to segment by psychographics (values,
attitudes, and lifestyles, including spiritual beliefs). Over time, you will gather
enough information to be able to segment them by multiple indicators (women,
not married, over 65, repeat gift giving, gifts over $1,000).
The goal of successful segmentation is to start simple and become more
sophisticated as donor information increases. Remember, all donor information must be recorded in a donor file so it is used appropriately.
Once you have determined how many groups you want to concentrate on,
it’s very easy to establish targeting parameters.
TARGETING
Rate, Rank, and Match Donors With Cases
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
The same message will not work with every audience . . . Targeting helps
you solve the problem of finding needles in a haystack.
—Tom Ahern and Simone Joyaux
The concept of targeting and matching rests with deciding which of the many
constituency segments you want to target or focus on.
You can’t focus on all of them. You need to select the highest present-day
performers, those with the greatest impact for the long term, or even those who
might be major donors in the future. The goal of targeting is spending quality
time and effort on quality prospects, using quality tactics and quality communications. Targeting improves effectiveness and efficiency because it keeps the focus on those with the greatest potential and puts the rest on auto-pilot.
The concept of matching the right case with the right constituent is simple in theory and at times, but challenging in practice. The more you know
about both your cases and your constituents, the easier it is to put the two
together, after which you can construct your approaches, your campaigns,
and your communications.
Matching is a process that takes intuition, logic, and creativity to cause an
exchange to occur between the donor and the recipient organization. A match
exists when the need for funds matches the interest of the donor.
Ideally, you will have more than one potential match for each individual donor or donor segment. You must anticipate that the donor may wish to support
one project over another and prefers choices.
Our goal is to assist donors by providing factual information that guides them
toward a wise decision. Designated giving is integral to the matching concept.
Matching implies trust, entails flexibility, dictates the sharing of power, and
accomplishes the philanthropic exchange.
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Let’s review a few concepts that are pertinent to achieving a successful philanthropic exchange.
The relationship process is essentially the match between values and goals.
The variations and variables are limitless.
The manner in which a match occurs is ideally by plan, but in reality it is
more prone to circumstance.
Given that fundraising tends to be more art than science, there are many
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
paths to the same outcome. Ambiguities, uncertainties, and judgmental requirements come into play.
As executive director and an agent of philanthropy, you will have to rely on
whatever donor research you have. You need to trust your intuition to lead you
to the best decisions. You must proceed (with a solicitation) in spite of risk because of the potential benefit.
Maintain an optimistic view, no matter what the outcome, and embrace the
fact that matching takes more effort and creativity than raising funds by playing
the mass marketing game.
In pursuing matches, you must also accept that donors are entitled to support
causes that interest them, and that when appropriate we have to tailor our institutional needs to fit those interests. Be ever mindful of the need to assist donors
by providing unbiased information that guides them toward a wise decision.
Designated giving is integral to the matching concept.
Matching implies trust, entails flexibility, dictates sharing power, and
accomplishes the philanthropic exchange. It goes beyond linking a donor’s
interest with an organization’s program. It also matches the donor’s financial
capacity with a budgetary element, the timing of a donor’s gift with an
organization’s fiscal year, the type of gift with the type of solicitation, and
the amount of effort put toward the relationship with the anticipated
potential.
Matching is marketing with four steps:
1. Collecting information from the donor (constituency research).
2. Developing a mission-driven, donor-focused product (case for support).
3. Offering the product at the right time, place, price, and person (selection
of solicitation method).
4. Ensuring that the product delivers the benefits offered (stewardship
practices).
Communications theory tells us that a match is viable when perceived as such
by those being matched, rather than by the matchmaker. If both parties believe
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their needs are addressed, met, or exceeded, the match is achieved (as in twoway communications when the encoder and decoder send and receive the same
messages on the same channel).
Simply put, the giver and the receiver are then in sync. It should be noted that
early perceptions at the beginning of a relationship, when satisfaction is high or
low, may be different from later ones. However, positive and frequent interactions will nurture the relationship, increasing the perception of satisfaction
over time.
The old way of raising funds—the demand-pull methods, in which the
organization appealed for funds on demand and pulled in donors who
would support it—is pass e. Technology has made it possible for donors to
seek and gain access to information about charities on their own. They are
creating their own demand, initiating their own pull. Interactivity is the
new paradigm.
There are many implications for the fundraising process as the matching
or exchange concept is fully incorporated into the time-honored solicitation process. Matching takes more information, more time, and more
resources.
If you have taken sufficient time researching your prospective donors and
have carefully matched them with compelling cases, determining what method
to use to solicit them will be a no-brainer. Those decisions will be obvious. See
Exhibits 4.3 and 4.4.
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
EXHIBIT 4.3
EXAMPLE #1: TARGETING/MATCHING OF CASES,
CONSTITUENTS, AND COMMUNICATIONS
Constituency Segments
Cases
Communications
Foundations
Summer camp
Day & residential
Letters from children
Phone conversations
Lunch with director
Formal proposal
Local businesses
Homeless shelter
Visits
Fact sheet
Evidence of outcomes
Family foundations
New jobs program collaboration
Presentation
Facts
Details of training
Benefits to community
Women’s groups
Holiday assistance program
Photos
How it works
Volunteer opportunities
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Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
EXHIBIT 4.4
175
EXAMPLE #2: TARGETING/MATCHING OF CASES,
CONSTITUENTS, AND COMMUNICATIONS
Constituency Donors
Cases
Communications
Ray Glass
Boys & Girls Club
Bob Meek
Christmas program
Tour
Statistics (fact sheet)
Written/verbal ask
Phone call
Ask letter
Follow-up
Robert Henderson
Transitional living program
Phone call
In-person visit
Tour
George Hendricks
Boys & Girls Club
Phone call
Attend graduation
Written proposal
Helen Novak
Former foster child
70 plus
Children’s Village
Benefits of IRA gift
Lunch & tour
Artwork thank you from child resident
Church Missions Board
Rural agricultural area
Hispanic ministry
PowerPoint
Summary of solutions
Wish list
Testimonials
Mr. & Mrs. Knight
5th-generation
Orange Grove
Transitional housing
endowment
Home visit w/officer
Benefits of endowment
Legacy now for later
Annual report
CULTIVATION IN RELATIONSHIPS
Strategies To Build Long-Term Relationships
Through an ongoing process of exchange, interaction, and genuine choice,
donors begin to feel that they are important to the organization and have an
important role to play, in return, by supporting the organization’s programs.
—Adrian Sargeant and Elaine Jay
As a process of interactions, relationship building is not left to change. Fundraisers go to great lengths to manage each donor, by strategizing what their next
move will be.
In the industry, this is called ‘‘donor cultivation.’’ Kim Klein distinguishes it
from selling or stalking, saying: ‘‘Cultivation is where you treat the donor like a
whole person.’’
Cultivation is what you do to build the loyalty and commitment of the donors
to the organization.
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The following models are used to illustrate the reciprocity or exchange movement
that occurs in building relationships between donors and charitable organizations.
DONOR PYRAMID: Donor Movement and Monetary Distribution
CULTIVATION CYCLE: Process to Engage Donors Toward Mission Affinity
MOVES
MANAGEMENT: Relationship System Involves Multiple
Contacts
DONOR PYRAMID
Donor Movement and Monetary Distribution
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
The primary value of the Donor Pyramid is in demonstrating the interrelatedness of all the components of the integrated development plan. Effective fundraising recognizes that the component are interdependent and manages the
process of developing the components as mutually reinforcing.
—Timothy L. Seiler
The relationship pyramid is the best visual known to describe the conceptual
stages of increased involvement as donors move up to a higher level of interest
and, hopefully, giving. It is used to describe how interests, needs, and desires
grow upward in direct proportion to the ways in which the organization informs
and involves them.
As donors move from annual giving decisions to major giving decisions, they
require more influences, inputs, and rational justification. At the top of the giving pyramid (as in Maslow’s theory), the philanthropic partnership is fully realized: Donors have achieved their aspirations, and the organization has fulfilled its
mission (implied). See Exhibit 4.5.
I would be remiss not to point out that this pyramid is a more figurative
example of relationship development, than a literal one. The steps are not
always sequential, nor are they all encompassing.
Relationships don’t follow a fine line; they are more fluid and not always predictable. Still the concept of moving from a decision to make a first gift to
a charity to the ultimate decision to make that charity one of your favorites
follows a logical path of affiliation and affinity.
The time-honored pyramid model helps explain how large numbers of small
donors enter the pyramid at the bottom, and as they increase giving, they move
up the pyramid. Eventually, a few donors become major donors, forming the tip
of the pyramid. This constitutes the 80/20 rule of donor giving: 80 percent of
the regular donors give 20 percent of the dollars, while 20 percent of the major
donors give 80 percent of the dollars.
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The pyramid portrays the interlinking concepts of prospect research, leading
to donor acquisition, encouraging donor renewal, and materializing in donor
upgrading, sequential steps used to create a donor giving pyramid.
These seem like simple concepts on the surface, but their applications are
complex. The day-to-day cultivation of activities and motivational nuances
associated with helping donors move from one level of giving up to the next is
not a simple process, nor can it be left to chance.
Experience demonstrates that a donor’s upward movement takes place only
when there is a well-managed relationship process in place. Such a process is
referred to as cultivation moves, which facilitate exchanges between a donor and
your organization, growing in intensity over time. Cultivation moves are designed to increase a donor’s affinity for your mission.
As executive director, you need to know that cultivation moves are not onesided, employed by professional staff alone. They are strategic activities,
employed at each stage of the relationship, that also involve key volunteers and
other organizational leaders. They are developed as external elicitors of internal
donor motivations or as exchanges. They are not attempts to convince people to
do something they are not inclined to do. They are, instead, authentic outreaches of expressions of gratitude for a donor’s benevolence. Cultivation moves
embody the following assumptions:
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
1. Relationships as partnerships are developed through effective, balanced
interpersonal communications that, over time, increase in frequency,
complexity, and intensity.
2. Strong relationships develop when there is openness, respect, honesty,
patience, commitment, and give-and-take from both parties.
3. Ongoing relationships depend on mutual goodwill and an appreciation
of each other’s similarities and differences, needs and interests.
How much of your time and energy should be devoted to the management
of cultivation moves? For the answers, picture an inverted pyramid laid on top of
the relationship pyramid. It would suggest you must allocate the most time and
energy with donors who are at the top, giving the least effort to donor relationships at the bottom (unless research suggests high potential).
We can apply these relationship principles to our development program in a
few ways, including:
Today, with relatively little effort, we could identify our top 50 donors and
determine where they are in the process. We can record their giving history,
primary contact, and relationship stage in our database.
Tomorrow, we can articulate how we intend to cultivate each of these key
relationships as a managed case. The process continues with the identification
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LEADING THE FUNDRAISING CHARGE
of the staff person who will oversee each case and each move, who else should
be involved, and when and how certain techniques should be applied.
By the end of the week, we can print out that list and tape it to our desks or
our wall, to ensure that our top donors get our primary attention every day,
not just when we make time at the end of year to ask for another gift!
Next week, we could begin scheduling meetings with staff and volunteers
whose involvement is key to a particular donor. This helps keep the
relationship-building process front and center, not only for the development department but also for the entire organization.
Next month, the idea of creating an individualized plan for each donor has
encouraged us to look at this particular relationship as unique, moving us
from stereotypes of donors as similar.
The Donor Relationship Pyramid
Inspire
Actualized
Donor
Invest
Major, Committed
Donor
Upgrade Programs
Involve
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
Loyal, Frequent Donor
Inform
Established Donor
Identify
Repeat Donor
Renewal Programs
Interest
First-Time Donor
Introduce
EXHIBIT 4.5
Prospect
Acquisition
Programs
RELATIONSHIP PYRAMID
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179
CULTIVATION CYCLE
Process to Engage Donors Toward Mission Affinity
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
Cultivation is a two-way street. It is the series of steps you take with each
person to learn as much as you can about him, and he in turn needs to know as
much as he can about your organization.
—Laura Fredricks
The second model is used to describe the cultivation and commitment process
to manage the donor-organization relationship. It is a more dynamic, fluid, synergistic model. Its conceptual framework is a ball of energy that describes the
attraction between a donor and an organization, moving from an outer surface
incrementally toward the center.
The cultivation and commitment cycle describes how donors pass through a
series of cultivation steps designed to increase their commitment to the mission
over time or, in the absence of satisfaction, are spun off. As the donor is cultivated and grows more committed, the connectors grow stronger, the exchanges
are more frequent, the interactions build in quantity and quality, and the satisfaction multiplies.
Over time, a synergy develops that brings the donor and the organization’s
mission into sync. In the absence of positive synergy, donors may decide to leave
because their experiences were unsatisfactory, their interests have changed,
and/or their needs were not met. Others may come into your system to replace
them. The goal is to add more donors to the cycle over time and to build a
larger, stronger, more sustainable donor constituency that is propelled forward
by the infusion of energy gained.
The cultivation and commitment cycle shows the donative relationship
stages—the sequence of moves that donors make to form an exchange relationship and the corresponding moves that the organization makes to facilitate the
philanthropic partnership. See Exhibit 4.5.
They are the following:
1. Prospect: Introduction Stage. Information has been collected about
the prospect that indicates a relationship might be developed. The organization introduces the prospect to its charitable mission, using appropriate
communication methods: in person, by phone, by mail.
The introduction stage may include three steps: presentation of the organization’s mission (a newsletter), a cultivation activity (invitation to a
benefit event), and a direct solicitation (an annual appeal).
This stage may start with donors who introduce themselves to the organization by visiting the website, researching your mission, asking questions of others, and possibly sending you an unsolicited gift.
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2. First-Time Relationship: Interest Stage. Having made a first gift,
the donor has indicated some level of interest in the organization’s
mission. Of greater importance is the affirmation donors receive that
their gift was needed and will be used appropriately.
The organization’s interest is expressed by the way the donor is
thanked, recognized, and resolicited. The communications now shift
from why support is needed to what a difference the donor’s gift has
made.
The organization now needs to collect additional information about
the donor and begin to explore areas of mutual interest, shared values,
and future support.
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
3. Repeat Relationship: Identify Stage. Interest should now be growing, as the donor decides whether to make repeat gifts, as if unsolicited.
There should be a desire on the part of both parties to learn a little more
about each other and to make more frequent contacts and to identify mutual values.
The organization might make contact by mail or telephone to thank
the donor in a more personalized way. The donor may now be initiating
contact in other ways: by attending special events, supporting a particular
program, or having a discussion with a volunteer or a board member
about their investments.
Exchanges are growing and increasing: Observations are taking place,
information is being processed, questions are being asked, and opinions
about the relationship are forming. The communications shift from what
I can do to what we can do.
4. Established Relationship: Information Stage. Having initiated personal contact, communications turn to sharing more detailed and
personal information about the donor’s interests and the organization’s specified or special project needs. Personalized invitations are
made to donors that call for a response—an offer to tour the facility,
attend a luncheon, join a giving club, or participate on a volunteer
committee.
By now, the donor has likely revealed interest in particular areas
(or something about themselves that would lead to an area of obvious
interest). Dialogue will be more open, with questions about the mutual interests, stronger rationale as gift decisions grow in size.
The donor’s expectations and needs are being met, and the organization is evaluating the benefit of further investment of time and effort in
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181
the relationship. Agreement about the relationship is established, and if in
sync, the contacts are increased.
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
5. Loyal, Frequent Relationship: Involvement Stage. At this stage,
both parties are actively involved in the relationship exchange, voluntarily. Common interest is apparent; pride of association is obvious.
Interpersonal communications are occurring on a regular basis.
Exchanges are open and challenging. The donor wants to be involved in activities that demand more time and talent, such as committee work or board membership. The level of giving is substantial
and relatively stable.
The organization wants the donor’s involvement in leadership
aspects: as a volunteer fundraiser, advocate, and community representative. The donor is receiving information that is typically reserved for insiders, attending events designed for the organization’s
best friends, and having a personal relationship with the organization’s leaders. At this point, the donor is beginning to consider the
relationship as long-term and may even consider the possibility of a
legacy gift, in addition to lifetime gifts.
6. Major, Committed Relationship: Donor Investment Stage. By
now, the organization and the donor have a significant investment in each
other as partners. Time, talent, and treasure have been received; appreciation, recognition, and stewardship have been given.
The exchange has reached an important level; involvement is at its
highest. The donor may be involved in decision making that affects not
only how the organization delivers services, but also where the organization is going in the future. The donor may be a trustee and a leader in a
major capital campaign.
The organization values the donor’s counsel, input, and leadership.
Given the high level of investment in the organization’s mission, this is
the time when tensions may arise around roles, relationships, and directions. Reciprocity is needed, so the relationship can reach its final stage
with trust and appreciation.
7. Actualized Relationship: Inspiration Stage. At this stage, the relationship is stable and predictable. Both parties are focused on the mission
over the money and are engaged in a true partnership.
Given the accomplishments, inspiration takes over, setting the stage
for a donor to realize his or her lifetime aspirations and the organization’s focus on what can be done, rather than what can’t be.
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MOVES MANAGEMENT
Relationship System Involving Multiple Contacts
Copyright © 2013. John Wiley & Sons, Incorporated. All rights reserved.
The moves concept focuses major gift fundraising on changing people’s
attitudes so they want to give. To do this, we take a series of initiatives or
moves to develop each prospect’s awareness of, knowledge of, interest in,
involvement with, and commitment to the institution and its mission.
—David Dunlop
Many years ago, a couple of successful fundraisers (G.T. ‘‘Buck’’ Smith and
David Dunlop at Cornell University) devised a term and a process called
Moves Management. (Moves Management is a registered trademark of The Institute for Charitable Giving, Chicago.)
Moves Management is the set of processes nonprofits use to develop constituent relationships and move them toward higher-level giving. But simply adopting
a moves management strategy is not enough; it needs to be supported by tools
that help you identify and foster personal relationships that are essential to giving.
As a conceptual framework, this process keeps track of every communication
between the donor and the organizations while strategizing which ‘‘moves’’ will
be most beneficial to deepening a relationship that will translate into a philanthropic exchange.
But this process was not just an attempt to track activities; it was designed as a
management and cultivation strategy that involves a team of staff/volunteers in
the ‘‘moves’’ process. Each donor is assigned several key individuals to develop
the relationship with a prospective donor. By assigning one member of the team,
at a time, to send the donor a note; at another time, another member of the team
will invite them to an event—all part of the strategy to ensure that the ‘‘right
person’’ is eventually the one who asks for the gift.
Moves Management requires an organizational buy-in to be effective, given
the high number of cultivations occurring among many staff members and volunteers. Obviously, the process needs to have a core moves team to provide the
strategic assignment of donors/prospects and to limit the number to those with
the highest potential.
In Moves Management there is not a deadli…
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