Many nonprofit organizations don’t have defined (written) core values. Others think they have them, but what they are calling “core values” are actually something else. Still others have them but aren’t successfully implementing them. Correctly conceived and applied, core values are critical to creating a culture of philanthropy.

What are Core Values?
Core Values written in block letters.A core value is principle that defines and guides an organization’s internal conduct as well as its relationship with the external world. Core values clarify who you are as an organization by articulating what you stand for. Core values communicate to employees exactly what is expected of them and informs their decision-making and actions. Without core values that support the care and service of donors, a culture of philanthropy cannot exist.

Identifying Your Core Values
The CEO of a large retail company I used to work for frequently reminded employees that our goal should never be to make money, instead we should, “fill the other guy’s basket to the brim, then making money becomes an easy proposition.” Of course, when he said “fill the other guy’s basket” he did not mean literally; he was using a metaphor to remind everyone to focus on customers’ needs. Virtually all successful companies with written core values have one, if not several, core values that relate directly to delivering superior customer service. The centerpiece of FedEx’s core values is their famous purple promise, “I will make every FedEx experience outstanding.” The #1 core value at Zappos, a company famous for their 10 core values is, “Deliver WOW through service.” Nonprofit organizations have two clients – those whom their mission serves and donors (including volunteers), who make their mission possible. Central to creating a culture of philanthropy must be a core value that recognizes the importance of serving donors and meeting their needs. In addition to customer service, other areas that successful companies include in their organizational core values typically address: teamwork, communication, personal growth and learning, employee empowerment, ethics, and community.

What are our core values?The first inclination in tackling a project as important as identifying core values is to develop a team. In a nonprofit organization this might include key leadership and the board. The problem with this approach is that large teams are often dysfunctional and reach watered-down solutions in the name of compromise. To be effective, politics need to be put aside and ruthless decisions about membership must be made; not everyone who wants to be on the team should be included. Ideally, the team should be two or three people at the most.

Looking at the core values of other successful organizations is another good way to begin the process. The organizations do not have to be nonprofits and do not have to have any common ground in order be a valuable resource. Keep in mind that the purpose of core values is to guide the decision-making and actions of employees. Done correctly, they are also an indispensable tool in making the right hiring decisions.

Although this may sound counterintuitive, an important characteristic of well-written corporate values is that they are often open to interpretation. Zappos “Create fun and a little weirdness” indicates that the organization values employee happiness and individuality and encourages employees to be proactive in pursuing these values but it doesn’t tell them how to create fun or what “a little weirdness is.”

According to the website Delivering Happiness, when Zappos set out to identify their core values in 2005, leadership sent out an email to all employees asking them to provide four or five values that were significant and meaningful to them personally, not necessarily having anything to do with the company’s values. Using this information as a List of Zappos core valuesspringboard, leadership developed their ten corporate core values. They then sent out an email to managers saying, “We’ve been working on a “Zappos Core Values” document, and the first draft of it is below. Please take the time to read it over and email me (do not CC everyone) any suggestions, additions, subtractions, or other feedback. In particular, think about any employees that you think represent the Zappos culture well, and whether what you like about those employees is covered by the 10 core values proposed, below. Conversely, think about any employees that you think do not represent Zappos well, and whether the reason behind it is due to them not representing one or more of the core values below.

This will be a very important document, as we will give the final version to all employees. It will be more or less permanent for all the future years of Zappos, so your input is very important. Please make sure you set aside time to read and think about it.” In this approach, everyone was aware of the process and had input, but it was one or two people who crafted the values and made the decisions.

When is a Core Value Not a Core Value?
Having a written list of core values doesn’t make them core values. To actually be core values, they must be ingrained in such a way that they are used every day in everything an organization, its leaders and employees do. Core values are the guiding principles that direct virtually all the actions of an organization.

Implementing Core Values
To successfully implement core values in an organization requires true leadership. Achieving the title of “executive director,” “president,” “CEO,” or even “founder” typically ensures that one is a good manager, but not necessarily a good leader. Leadership means “the ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of the organizations of which they are members.” (diffen.com) Leaders inspire, Leadership pyramidguide, and facilitate others to make a positive difference and to contribute to a larger good. To create a culture of philanthropy, leadership must embrace, enact, and evangelize the core values that support employee focus on philanthropy.

Earlier in my career, I had the privilege of working for a very successful and profitable company that has consistently been on Fortune’s 100 Best Companies to Work For (16 years running). Both the CEO and the president were adept at internal marketing (the process of promoting the organization’s mission, vision and core values to employees). They used stories and storytelling to bring the core values to life. We heard the same stories over, and over – and over – again. You might think everyone would come to dread those oft-repeated stories, but they didn’t. Instead, everyone embraced them as their own. It was a company where the customer was king, communications on all levels of the organization were excellent, new employees were thoroughly and formally onboarded and received ongoing training, all employees were empowered to make decisions, and turnover was low. All of this is attributable to good leadership coupled with well-defined and executed core values.

What does a culture of philanthropy look like?
As stated earlier, the most important aspect of creating a culture of philanthropy is having a core value that communicates that donor relationships/partnerships and donor needs are a top priority for everyone and are critical to the organization’s mission. It is then important that the executive director/president/CEO, the development director and other senior management partner in being cultural drivers, acting as role models, cheerleaders and actively engaging in promoting and living the organization’s core values. Everyone in the organization must be committed to the nonprofit’s mission, vision and core values. New hires and board members must share the organization’s core values and orientation/onboarding should be an immersion in core values.

One of the most amazing things about core values that are carefully considered and effectively implemented is that it creates an environment for employee empowerment. The organization hires and keeps people based on their ability to embrace and live the core values. Employees know how to make good decisions because the entire organization is on the same page regarding what’s important and what the expectations are for decisions and actions.

If developing and maintaining donor relationships is a core value and it and the organization’s other core values become the guides for organizational behavior, you’ll ultimately have an organization where everyone acts as an ambassador and relationship builder, everyone can articulate the case for giving, and board members are actively engaged in fund development and share responsibility for meeting development goals.

In the coming weeks I will talk about core values related to customer service, teamwork, communication, personal growth and learning, employee empowerment, ethics, and community and that support success in many types of organizations and why they are important in creating a culture of philanthropy.

Written by Lee Neel, Vice President of The Fundraising Resource Group. The Fundraising Resource Group helps non-profit organizations across the United States with fundraising feasibility studies, capital campaigns, annual giving campaigns, major gift fundraising, non-profit marketing, fundraising training, and other high-impact, high-return fundraising activities. For more about how we can help your non-profit achieve fundraising success, visit our website or call 888-522-1492.

Early in my career as a fundraising consultant, I was working with a church on its capital campaign. On the eve of one of the most important gatherings with top donors, I was preparing the pastor for his presentation. We went through the objectives of the evening, the talking points, and the call to action. All was ready to go. As we were getting ready to leave the church to swing by his house on the way to the gathering, the pastor said, “By the way, there is something that may come up tonight. My wife left me today. She took the dog and the meat that was in the freezer but left the kids. Word is getting out, so I thought you should be aware. Do you think it will impact the campaign?”  

It may come up?! Ya think?! Then as we approached his home he counseled me that if I saw an angry woman with a pistol, I should either call 911 or run. Of course it was a very sad situation for the family. But needless to say, the collateral damage for the church was devastating.

The Unvarnished Truth
As long as humans are involved, there is always the possibility for things to go off the rails. We are passionate, sensitive, and sometimes emotional creatures, often acting on those feelings.

For nonprofit organizations that are filled with, and who depend on partnering with us oh-so-fallible human beings, the question often becomes, how do you keep everyone happy and everything copasetic? The answer is you can’t, but you can be aware of the consequences of not dealing with concerns – real or imagined – and address them appropriately when heading into, or in the middle of, a major fundraising initiative such as a capital campaign.

Two questions that must be asked when considering or conducting a capital campaign are: 1) what is your organization’s external image, and 2) how is your internal health?

Capital Campaigns 7 Deadly Sins #5 - Anger

Three Types of Anger
There are basically three types of anger that can derail capital campaigns: unknown, unacknowledged, and unresolved. Ryan Martin, Ph.D., in an article in Psychology Today points out that people get angry under fairly predictable circumstances. “People become angry when faced with situations that they see as unpleasant and unfair. They will get even angrier if they blame someone else for the situation or think that it could have been avoided.”

The kinds of situations I have dealt with in preparing for or conducting capital campaigns include everything from the hangover effect of a strong-armed campaign approach from twenty years previous and loss of confidence in leadership, to concerns of mismanagement. I have even witnessed volunteers nearly come to blows with organizational leadership over disagreements about direction. All of this upheaval serves only one purpose: to keep you from engaging donors in a way that maximizes giving so that you can reach more with your mission.

How Do You Know if There are Issues?
confidential discussionIn dealing with the first type of situation where you are not aware of the undercurrent that is occurring, how do you address it or even know there is an issue when preparing for a capital campaign? A true planning and feasibility study conducted by an objective and experienced third-party (a.k.a. fundraising consultant) answers more than the question of how much money you can raise. It also identifies how you are perceived by your constituents. Simply put, donors will tell us things in confidential interviews they sometimes have not shared with the organization. Our experience helps us extract those concerns during the conversation.

In a recent feasibility study, I uncovered two different potential concerns that an organization was not aware of, each requiring a different response. The first was from a potential donor who certainly had the capacity to consider a seven-figure gift if so inspired. He told me he would likely give a six-figure gift for the construction of a new gymnasium, but would give $1 million if they fired the basketball coach. Having pledged confidentiality to the interviewee, I asked his permission to share his concern with appropriate leadership and he agreed. In the same study, almost 50% of those interviewed had some complaint or significant issue regarding their relationship with a key leader of the school. The damaged relationships were to the point where those donors said they could not see themselves giving to the campaign unless the situations were addressed.

Let me say in both of these instances, it is not my, or any third-party’s place to make a recommendation on what to do about personnel matters based on a feasibility study. It is our responsibility to appropriately communicate the concerns that may have an impact on an organization’s ability to conduct a successful capital campaign or that simply need to be addressed for the health of the organization. We raised these concerns with the CEO and he dealt with each as he deemed appropriate. Both situations were addressed prior to the campaign. The coach kept her job (we did not get the $1 million gift). There was a transition of leadership to address the other concern and the campaign moved forward to focus on the needs and the kids.

Don’t Stick Your Head in the Sand
When dealing with the other two types of issues, unacknowledged and unresolved, sometimes an organization thinks it can stick its head in the sand, and that matters of concern won’t become enormous problems for a capital campaign. Wrong. Many times it is simply a lack of communication or a miscommunication that is at issue. One of my favorite quotes comes from George Bernard Shaw who said “the danger with communication is the illusion it has been achieved.”

Most often what people are looking for is to have their grievances acknowledged.  Many times during the feasibility study I hear concerns about lack of financial transparency, misuse of previously contributed funds, perceived injustices, slights from leadership, or other concerns. I label these as “Obstacles to Overcome” in a feasibility study report of findings with recommendations to address them prior to launching a campaign. Sometimes the organization tells me they are aware of the concerns and the issue has been dealt with, or that it is not valid. Unfortunately, “perception is reality.” Choosing not to deal with real or perceived concerns is a sure way to keep a capital campaign from even getting off the ground, much less maximize its potential.

It is wise to direct your anger towards problems, not people.Another article on anger from Psychology Today says, “Studies show that the ability to identify and label emotions correctly, and talk about them straightforwardly to the point of feeling understood, makes negative feelings dissipate.” It goes on to point out, “Psychologists believe that the relief we feel (by simply telling someone we are angry) results not from venting the anger but from identifying the anger-arousing circumstances and working towards a solution.” And that points to the positive value that anger has. It’s a great motivator for change. It encourages us to deal with the issues and allows for a hearing from all perspectives leading to resolution.

Self-Inflicted Wounds
Most of what I have described are external angers that can stymie the success of a capital campaign. Then there are the self-inflicted wounds. We were working with an organization in its early planning for a potential capital campaign. This organization does wonderful work with disadvantaged children and from the outside-looking-in, appeared to be the model of a healthy organization. Then came the implosion. A handful of disgruntled board members and past staff began a campaign to oust the Executive Director. To their credit, the Director had apparently given them plenty of ammunition. Many board members simply resigned. Ultimately there were allegations and investigations and the Executive Director resigned. The press got involved and the dirty laundry of the organization was laid bare for the entire community.

Knowing that the organization intended to push forward with a campaign, we counseled them that they had to get their house in order and re-establish trust with donors before they could be successful. To test our instincts, we talked with some of their major supporters. One donor in particular who we had a close relationship with, and who had literally given millions to the organization was so turned off by leadership on both sides of the issue (who had talked to her about their grievances and defenses, but never once mentioned the children) that she decided to withdraw her support in favor of other ways to aid the children. Others in the community followed.

Deal with It
This is just one example among many. I have seen daughters remove parents from boards, directors removed because of scandals, and petty arguments for control or positioning snatch defeat from the jaws of victory during capital campaigns.  The victim is always the same: those whom the organization serves. Problems and issues can’t be avoided, but when identified early and dealt with appropriately the effects of anger can be mitigated and sometimes even be turned into a positive.

Yes, we humans are passionate. That is part of what brings us to this work of service and philanthropy. But beware to acknowledge and deal with concerns and that passion does not turn to anger lest we have a hand in destroying what we care most about. Take the advice of William Arthur Ward, “It is wise to direct your anger towards problems – not people; to focus your energies on answers – not excuses.”

This is the seventh in a series of nine posts.
You can see the first post and full INFOGRAPHIC here.
Read the previous post on Capital Campaigns Deadly Sin #4: Greed (Part 2).

Written by Daniel Neel, President of The Fundraising Resource Group. The Fundraising Resource Group helps nonprofit organizations across the United States with fundraising feasibility studies, capital campaigns, annual giving campaigns, major gift fundraising, nonprofit marketing, fundraising training, and other high-impact, high-return fundraising activities. For more about how we can help your nonprofit achieve fundraising success, visit http://www.thefundraisingresource.com or call 888-522-1492.

A farmer and his wife had a goose. Every day that goose laid one golden egg – which made the couple very happy – for a while. But soon it wasn’t enough. They asked each other why, if this goose could lay one egg each day, it couldn’t give them more or more often. What a stingy goose. They knew there had to more in there. So they strategized and decided to go for broke. They cut open the goose to get all of the eggs out at once. Needless to say this did not make the goose more productive. In fact, there were no other golden eggs hiding inside, and worst of all the goose died. Not only did they not get the bounty they were accustomed to, they killed the goose and got nothing more ever again. 

Capital Campaigns sin #4 - Greed
Last week I shared a finding from a study on high net worth philanthropists who said they stopped giving to organizations primarily because they were asked for an inappropriate amount or too often. I dealt with the issue of the inappropriate amount in my last blog post. This week let’s talk about how many asks is too many, particularly in the context of a capital campaign.

Annual Giving During a Capital Campaign
First let me tip my hand and say that, as often as possible even when there is no capital campaign, I coach organizations to ask their major and principal donors to give only once per year. This takes planning and discipline. It also takes discovering what your donors’ passions are and matching those interests with your needs to make a specific, comprehensive request bestowing all of the benefits a donor might expect at that level. But what if you add a capital campaign? Is it possible to ask only once? The answer is, most often, yes. There are several ways organizations tend to approach annual giving during capital campaigns:

  1. Suspend the Annual Fund. One way you could achieve only one ask is by removing the other, namely the annual gift ask. Yet you can’t go without supporting the organization’s ongoing programs and operations. The way that this approach is achieved is by adding your annual operating needs for the next three to five years in as a case element of your capital campaign, asking for a multi-year pledge that will cover both the capital and/or endowment needs as well as operations. I am not a fan and do not recommend this approach.give, gain, grow
  2. Allocate a Percentage. Another way is to eschew the ask for an annual gift from those you approach during the campaign and allocate a percentage of every gift to ensure you cover your annual needs during the active fundraising for the campaign. You then resume annual gift requests the following year. As with the approach above, this approach, while making sure you have the funds you need for annual needs, will likely have the unintended consequences of losing momentum when you resume your annual giving activities. You lose opportunities to grow major donors during the time of suspended giving and send a message that maybe the annual ask isn’t all that critical, raising less than you might have otherwise achieved for both the annual and capital campaigns separately.
  3. Business as Usual – Many times an organization will continue all of its annual activities and requests on schedule and just add one more ask for a capital gift on top whenever you get around to asking that particular donor. After all, you are probably already bombarding your donors with multiple asks, what’s one more? Besides, they are probably just holding back on you any way. This approach is a sure way to ultimately kill the goose.
  4. One Ask. Multiple Requests. A capital campaign presents an opportunity to educate donors about the difference between faithfully supporting the annual work of the organization and considering a gift over-and-above for an extraordinary and urgent opportunity. This can be achieved by sitting down with them once during that year with a thoughtful, comprehensive, but specific request for their support. Many times this is called the “dual-ask.” This, in my experience, is the most effective approach.

Every gift request during the capital campaign should be an opportunity to thank the donor for their generous and crucial support for the mission, explaining the specific impact their personal giving has made and showing the positive outcomes the donor intended. The proposal and conversation should include what the capital campaign will allow you to do that you can’t otherwise accomplish without over-and-above giving. It should also detail the impact on growth and operations including new and incremental revenue and operational costs, with a plan on how those incremental costs (if they exist) will be met.

One Ask, Multiple Requests
When it comes time for the ask, you should say something like, “Continued faithfulness to the ongoing mission is our first priority. Above all, we are asking our donors to continue that support. We are also asking you to consider prioritizing a gift over-and-above your annual giving for the next three years to accomplish the vision we have discussed.” The annual ask should be a specific gift request, for an in-budget need that matches their passion. The capital gift should also be a specific amount to ensure the success of the campaign. If you are asking your major donors multiple times during the year to support the golf classic, buy a table for the gala, renew their membership, etc., stop it! Include all of that in this one request, as a thank you. They will reciprocate with a very grateful sigh of relief.

But what if we also need endowment funds, or if they are a candidate for planned giving? What if they say, “I will continue to give my annual gift, and would love to support the capital campaign, but right now is not the time?” There may be instances where a “triple-ask” is in order. It is a perfect opportunity to discuss how this donor, who you believe loves you enough to support your capital needs and your ongoing mission, would like to include the organization and its mission in his or her legacy giving.

The goose that laid the golden egg.You may ask, how is this not trying to extract all of the golden eggs at once? When you dig deeper into what a donor means when they say they are asked too often, they mean multiple times during the year. Asking once per year for multiple needs is only one egg, with multiple yolks. An example I often give is of a donor who had given multiple gifts in a year to an organization totaling over $16,000 as well as a capital gift of $1 million to the previous capital campaign. As we approached them to renew their capital gift to continue the vision, we also combined the other multiple asks into one request, totaling $70,000 to expand a program they were passionate about. Their first response was shock they had only given $16,000 the year before. With all of those request it felt like more. The next was thanks that this would be the only time this year they would be approached for a gift. The last was a yes: for both request.

One thoughtful request for a comprehensive gift focused on what the donor cares about will most often be appreciated, particularly when it’s understood it will be the only time you ask them this year. They also will not hide from you in the grocery store the next time they spot you. The rest of your interactions will be to thank them, show them the impact of their giving, and talk about how they want to continue to make a difference with you as you look to the future.

Keep Annual Giving Your Priority
Lastly, the message should be, if you can only respond to one of the requests at this time, stay faithful to the annual support. The organization doesn’t need a new building if you can’t accomplish the work you exist to provide. However, continue to explore ways the donor can achieve what he or she would like to do for the capital campaign over-and-above either through delayed or deferred giving. There may be another golden egg down the road if you are patient, persistent, and professional.

This is the sixth in a series of nine posts.
You can see the first post and full INFOGRAPHIC here.
Read the previous post on Capital Campaigns Deadly Sin #4: Greed (Part 1).

Written by Daniel Neel, President of The Fundraising Resource Group. The Fundraising Resource Group helps nonprofit organizations across the United States with fundraising feasibility studies, capital campaigns, annual giving campaigns, major gift fundraising, nonprofit marketing, fundraising training, and other high-impact, high-return fundraising activities. For more about how we can help your nonprofit achieve fundraising success, visit http://www.thefundraisingresource.com or call 888-522-1492.

Executive directors report that 26% of development directors overall – and 38% among the smallest nonprofits – have no experience or are novice at securing gifts. Furthermore, one in four executive directors (24%) say their development directors have no experience or are novice at “current and prospective donor research,” according to the study, UnderDeveloped: A National Study of Challenges Facing Nonprofit Fundraising.

Some people reading this may ask, “Why did they hire them?” or simply conclude that these organizations made bad hiring decisions. I’m going to give them the benefit of the doubt and assume these people were hired because they have the characteristics needed to be a good major gift fundraiser. 

price tag with "fundraising training?"The bigger question to me is how and how much are they investing in fundraising training and if they aren’t, why not? The reason I hear most often is, “we can’t afford it.” What many organizations fail to realize, however is that, as Sir Claus Moser put it, “Education costs money. But then, so does ignorance.” The question is, how much is ignorance costing you?

Unrealized Financial Potential
The short answer to that is “more than you realize.” Our president, Daniel Neel likes to say that the biggest expense in self-led capital campaigns is “the money left on the table.” The same could be said of your ongoing fundraising efforts when you have an inexperienced or novice fundraiser in charge and their “fundraising training” is what they pick up through trial and error. Not that I am against “errors” (or failure for that matter). Some of our best lessons are learned through our mistakes. However, major gift fundraising and communicating with your most important constituents isn’t really the place to take that risk.

Better Quality Hires
But the cost of not investing in fundraising training for your director of development and other fundraising personnel goes beyond the money that isn’t raised. Organizations with a reputation for training and development attract better quality hires. According to Jim Geier, President of Human Capital Consulting Partners, “The great companies don’t succeed and then seek out the best and brightest. They find the right people first. Success of any business is predicated on having the right people in the right jobs with the right skills. This is true not only for executive positions but also those on the front line. If you don’t have the right people, you simply will not succeed.”

Years ago, I took a huge pay cut and demotion to go to work for a retailer because I liked their stores and the products they carried. I had done my research on them but what compelled me to take the position was a belief that I could be happy working there. I know lots of stories like mine. Yes, money is important and yes, it is a motivator, but it is not the only motivator nor is it necessarily the most important one.

Other Hidden Costs
doorAccording to one estimate, for entry-level employees, it costs between 30% and 50% of their annual salary to replace them. For mid-level employees, it costs upwards of 150% of their annual salary to replace them and for high-level or highly specialized employees, you’re looking at 400% of their annual salary. There are many studies on the cost of employee turnover and much variance in the estimated costs, in part because there are just so many hidden costs. One thing they do all agree on, however, is that it’s expensive.

Unfortunately, the cost may be especially high for nonprofit organizations who can’t keep a development director. In Underdeveloped, Jeanne Bell and Marla Cornelius report, “The development director is commonly labeled a ‘revolving door’ position, and ‘the hardest to fill and retain’ by executives, board members, funders, and capacity builders alike.” They go on to say high turnover in this position has “…significant negative effects on the capacity of organizations—especially small and mid-sized nonprofits—to develop and sustain the skills, systems, and culture that undergird effective fundraising over time. While repeated turnover and long vacancies are costly in any position, not having consistent leadership of a fundraising program almost guarantees that an organization will not achieve consistent results.”

What if They Leave?
There’s an old adage about employee training. “You can either train employees and risk they leave, or choose not to train them and risk they stay.” Monika Hamori and Burak Koyuncu, in a study of 1,200 top young managers published in the July-August 2012 Harvard Business Review, concluded, “Employers are understandably reluctant to make big investments in workers who might not stay long. But this creates a vicious circle: Companies won’t train workers because they might leave, and worker leave because they don’t get training.”

There will always be some employees who move on; you can’t keep everyone. However, if you consciously work to create an environment that keeps employees happy you will be surprised at the positive effect on your organization’s productivity and turnover rate. Fundraising training, and employee training in general, are one piece of the puzzle that leads to attracting better talent, retaining that talent, and improving productivity.

Why They’ll Stay
A 14-year ongoing engagement and retention survey found that within the nonprofit sector, Career Growth/Learning & Development was the second most cited reason for staying with an organization, behind Exciting/Challenging/Meaningful Work. According to the Nonprofit Times, in their article that accompanied their annual NPT Best Places to Work, “Some organizations benchmarked at higher-than-average percentiles for salaries while others provided generous benefits to try to offset potentially lower salaries.” When organizations asked employees what they are looking for, they frequently cited “the ability to grow and learn.” 

business people holding smiley facesDan Pink, the NYT best-selling author of Drive, whose TED Talk, The Surprising Science of Motivation, was cited in Mashable’s 15 TED Talks That Will Change Your Life, exposes the gap between what science knows and what most organizations do to try to motivate people. He identifies three scientifically proved elements of true motivation – purpose, autonomy, and mastery. Nonprofit organizations inherently fill a person’s need for purpose but often don’t meet a person’s needs for autonomy (empowerment) and even more so, mastery (the ability to master what they do).

Dr. Laurie Bassi, an internationally-renowned HR analytics expert, has measured how well employees are trained and developed (Delahoussaye, et al., 2002). She writes that organizations that make large investments in people typically have lower employee turnover, which is associated with higher customer satisfaction, which in turn is a driver of profitability.

Earlier, I mentioned a job I took that began where I accepted a lower level position and a huge pay cut. The company turned out to be a great place to work and not coincidentally, they invested a lot in employee training. It’s a retailer, an industry where turnover rates are exceptionally high (approximately 24% for fulltime and 75% for part-time workers). Their turnover rate has consistently stayed in the 10% range for years. I stayed there eight years.

Investing in Fundraising Training
I’m not in any way suggesting that investing in fundraising training will be the panacea for turnover among nonprofit fundraising executives. What I am suggesting, however, is that not investing in fundraising training is costing nonprofit organizations a lot more than they realize. Investing in fundraising training is an important step that can begin to change the mindset of those who believe high turnover is just a way of life and smaller organizations can’t compete in terms of employee satisfaction.

The Fundraising Resource Group offers customized fundraising training, often as part of their other fundraising services. Although no substitute for in-depth fundraising training designed specifically for your needs, fundraising professionals, executives and board members from all types of nonprofit organizations can benefit from our FREE Fundraising Webinars no matter where you are as an organization in the maturity of your fundraising programs.

Written by Lee Neel, Vice President of The Fundraising Resource Group. The Fundraising Resource Group helps non-profit organizations across the United States with fundraising feasibility studies, capital campaigns, annual giving campaigns, major gift fundraising, non-profit marketing, fundraising training, and other high-impact, high-return fundraising activities. For more about how we can help your non-profit achieve fundraising success, visit our website at http://www.thefundraisingresource.com or call 888-522-1492.

Did you know that 42% of high net worth philanthropist say they stopped giving to an organization because they were either asked for an inappropriate amount or asked too often? This is according to the U.S. Trust Study of High Net Worth Philanthropy, and leads to the questions, “How do I know exactly what to ask for?” and “How many times I should ask?” The answers to both are simple: first, ask for an “appropriate” amount, and second, ask only once per year. It’s the execution that’s difficult.

Greed pulls us in a different direction. “If I don’t know how much they can give, what if I ask for too little or not often enough?” Or “I know they have the money so let’s ask for the moon. What could it hurt?” But if the research tells us anything it’s “greed in the end fails even the greedy.”

Over-simplifications? Absolutely, but because there is so much to talk about here, I will split this topic into two parts (look for part two next Monday), the first dealing with how you get to an appropriate amount and the second with the appropriate number of asks.

Capital Campaigns sin #4 - Greed

A Tale of Two Donors
Let me share a tale of two donors. An organization in the midst of a capital campaign was pondering how to best approach a well-known philanthropist in the community for a leadership gift. As it turned out, there were those on the Capital Campaign Leadership Team with a personal relationship who could open the door to the conversation, the wealthy donor came to an information gathering, and in fact stood at the end of the presentation and said the community should get behind the project.

The group took this as an invitation to ask her for a gift. Capacity was not in question. This individual has multiple buildings bearing her and her family’s names. Certainly she could easily write the $1 million check that it would require to provide her with yet another edifice in her honor. So they asked. While she received the request cordially and promised to consider it, word came back through another source that she was taken aback by the request. “What on earth made them think I would consider that kind of gift?” Do you know where they went wrong?

quote: what on earth made them think I would consider that kind of gift?The second story is one we wish could happen more often. I was working with an organization in conducting capital campaigns in multiple areas across the west and southwest. Through the planning process we conducted a feasibility study to talk with some potential leaders and donors for the campaign. One person in particular, who had recently sold his business and who had a profound personal experience with this organization, was identified as someone who could both lead and give. I had a personal, confidential conversation with him about his support for the project and his willingness to lead, if asked. It was clear he was interested in both, yet didn’t fully tip his hand on the amount of a potential gift, although he indicated it would likely be significant.

We conducted additional research and talked with others who knew him well regarding his other philanthropic activities, leadership abilities, and potential capacity and determined he would make a perfect Chair and had given substantial gifts to other organizations. Above all, he was passionate about the cause. After extensive planning and several conversations, we asked for both his commitment to serve as the volunteer leader of the campaign and for a pace-setting gift of $1 million.

To cut to the chase, he accepted the role as Chair but did not commit to give $1 million. He gave $2 million. He was a dream volunteer leader for the organization and motivation to others. As he became more engaged with both the organization and campaign he was introduced to the strategic approach that was taken with donor research, planning, and cultivation before asking others to give. I asked him, as a donor, how he felt knowing there was that amount of planning and research before asking him to give. He told me, “I would not respect an organization that did not do their homework before asking me to give.”

What Went Wrong?
What went wrong in the first scenario? So many times organizations make the mistake of skipping steps in the process on the way to asking someone to give. Their greed and impatience leads them to something like this: We need money. We know who has money. Let’s go ask them for money.  The organization loses sight that it is not about them, it is about the donor and his or her passions. But how can you know if the donor cares, and if so what they might give? Here’s a thought: ask them.

The first mistake made in scenario number one was the organization did not conduct a feasibility study of any kind to gage the interest of prospective donors and leaders. Leadership believed that such an endeavor was a waste of time and money. They were flying blind.

By taking the time to conduct personal, confidential, and impartial interviews with those whose opinions and engagement will make the difference for success, an experienced interviewer and interpreter of the information can:without research

  • gage philanthropic interest,
  • evaluate organizational readiness,
  • test understanding and perceived urgency of the need,
  • explore specific volunteer and financial resources available for success, and
  • protect from a negative experience.

The study, to have value, must, in a confidential, non-threatening way, get to the question of what the donor might give if appropriately inspired and what will motivate them to do so.

The second mistake made in scenario one was to rush the process. Yes the potential donor had begun to show signs of interest, but it was far from clear how passionate she was, much less exactly what she was passionate about. How long do you wait before you ask? As long as it takes to cultivate a deep sense of care and ensure the appropriate inspiration that meets the donor’s needs, not yours.

Information Is Key
So how do you find out what someone cares about and what they can potentially be asked to consider for a capital campaign gift if not included in a feasibility study? There are three primary sources that help you develop an educated approach:Photo of keys on a keyring

  • institutional knowledge,
  • external research, and
  • anecdotal information.

Institutional Knowledge
Institutional knowledge goes beyond the giving history of a donor to your organization. In some ways that information can be the least important indicator of someone’s capacity to give over-and-above for a capital campaign or a project they care about. We know, for example, volunteer activities matter. Again, in the U.S. Trust study, about 74% of high net worth philanthropists said they volunteer to organizations they contribute to. Many times it is the knowledge that a prospective donor was the recipient of services provided, such as a medical care, that can help indicate their interest. There are many such pieces of data within other areas of an organization that are outside the donor database that must be explored when determining the starting point for a capital campaign ask.

External Research
External research, whether conducted on your own or by engaging a third-party research vendor, can be extremely helpful in determining both the capacity and inclination to give for donors already giving to you today. The value of external research is twofold: 1) to validate what your internal knowledge suggests related to capacity, and 2) to identify donors with greater potential giving capacity who you may not know that are buried deep in your database.

The danger is in using this research as the ending point to determine the appropriate ask amount, rather than the starting point. I have seen organizations get themselves into trouble by not understanding what the data is or isn’t telling them. They take the information at face value and, without further investigation, use it as a “gift capacity” guide for the ask amount.

One area where external research can be extremely beneficial is identifying other philanthropic giving. Research clearly shows one of the greatest indicators of what a prospect might give for a capital campaign gift is their giving to other organizations and campaigns. Capacity, coupled with generosity, is a winning combination. Research, combined with internal knowledge and other information, helps gage an appropriate ask amount.

In donor scenario number two, internal giving alone would have shown an incomplete picture. Although his giving to the organization had been growing, it still did not give a clear indication of capacity or inclination. Through publically available information, i.e. external research, we discovered information related to the sale of his business. We learned that he had set up a charitable trust from which he had given sizeable (seven-figure) gifts to others. We learned that he sat on national boards of organizations with missions that aligned with our organization. All of this information, along with what we knew internally, gave us comfort that a seven-figure gift request was not outside the realm of possibility.

Anecdotal Information
Anecdotal information are the things we observe or that others share with us that may help to turn data into a more personal understanding of the donor’s capacity and interests. Just as with other data, we have to be careful to not take things at face value. I wrote a blog post on this topic sometime back using Jed Clampett and James Bond as examples of prospective donors you would not want to judge by their outward appearance only. Using a process that asks others who know your donors well in the real sense of the word (not just on paper) helps us understand what a donor’s passion might be, what their lifestyle indicators are telling us, and any major life events that might impact their giving (good or bad). Taking the time to validate the data through personal conversations to bring it closer to home will help keep you from making big mistakes in the ask amount. The types of information we typically explore in confidential one-on-one prospect review sessions include:

  • other philanthropic activity,
  • areas of interest specific to the capital campaign,
  • lifestyle indicators such as family, business interests, liquidity events, and luxury items,
  • closest relationships to the organization for access,
  • suggested ask amount relative to the need, suggested solicitors based on relationship, and suggested case interest or naming opportunity if appropriate.

In conducting these review conversations, we are not looking for anyone to divulge deeply personal or private information that would put the reviewer in an uncomfortable position. When you grasp that the intent is to ensure that you approach a donor in the most appropriate way, you begin to understand that the purpose is to connect that donor to something they care deeply about in the most meaningful way, and not just “how much money do they have so we know what they can give?”

In both of the scenarios above, it was clear that the prospective donors had resources to give. The big difference is we had anecdotal data about the personal impact the organization had on donor number two, his deep sense of care for the mission, and his desire to help others in the same way.

Part of Something is Better than All of Nothingdog with bone looking at his reflection in the water
Sometimes, greed can cause you to take your eye off the prize. You remember the story of the greedy dog and the bone? The dog went across the bridge looking for food and found a delicious bone. Returning across the bridge he saw another dog in the river with an equally appealing treat. Thinking he could have both, the dog growled then barked at the other dog to scare it away, but, not realizing it was his own reflection, when he opened his mouth to bark, his bone fell into the water and he ended up with nothing.

Sometimes we risk losing it all because of our desire to have more and that is what the U.S. Trust findings are telling us. Gandhi said, “There is a sufficiency in the world for man’s need but not for man’s greed.” Just because someone has the resources to give you a sizeable gift doesn’t mean your cause will meet their threshold for capacity giving. Developing an approach, with all of the information available, that maximizes the donor’s interest in your cause is what is appropriate.

The jury is still out in the case of donor number one. Have they lost out or can they engage the donor in a more meaningful way and ask for a gift that is appropriate for her? Remember, a bone in paw is better than two in the river.

Next week we will tackle the story of the goose that laid the golden egg and the dual (maybe even triple) capital campaign ask to combat greed of the multiple asks.

This is the fifth in a series of nine posts.
You can see the first post and full INFOGRAPHIC here.
Read the previous post on Capital Campaigns Deadly Sin #3: Lust.

Written by Daniel Neel, President of The Fundraising Resource Group. The Fundraising Resource Group helps non-profit organizations across the United States with fundraising feasibility studies, capital campaigns, annual giving campaigns, major gift fundraising, non-profit marketing, fundraising training, and other high-impact, high-return fundraising activities. For more about how we can help your nonprofit achieve fundraising success, visit http://www.thefundraisingresource.com or call 888-522-1492.