Connecting, part 2: Stories can build giving, community

By Todd Cohen

The giving sector needs to do a better job telling stories.

Giving is all about community.

We give to help one another, to make our communities better.

In giving, in sharing who we are and what we have, we improve our communities and ourselves.

Change, fixing what is wrong, is what charities and givers are all about, and telling stories lies at the heart of change.

Stories capture charities’ and givers’ vision for change.

Charities, which consist of groups of people who work together to make a difference, can make a greater impact by becoming better at telling their stories.

Stories are tools charities can use to show the problems they address,
share their ideas for fixing those problems and help people see how
they can give their own resources -- their time, know-how, energy,
connections, money -- to making our communities better places to live
and work.

Nonprofit leaders who want to improve their organizations and communities need to push for change continually by telling stories that capture – simply, clearly, passionately and authentically -- the need for change and share their vision for how to make it happen.

Sadly, many leaders in the giving sector who should be leading the charge for change are terrible at communication.

They hoard what they know, sharing only shreds of information, and only with a small circle of insiders among their staff, board, funders and partners.

And when they speak, it often is in the vague, dense, righteous or overblown jargon of their field and their profession.

They also fail to truly try to find out what their co-workers, clients, partners and colleagues think and want by asking for their stories and actually listening to their answers.

That is not leadership.

Leadership and change are collaborative, requiring leaders who listen, include, reach out and share what they know.

A leader who listens and connects with people can tell stories that create common ground with the organization’s board and staff, and with people outside the organization, including clients, givers, funding organizations and partners.

Leaders tell stories that capture their passion for their cause and share their vision for the change that is needed and how to create it.

Leaders do not impose change; they build teams and help their teammates work together to map the future.

The heart of that work is storytelling, which requires listening, asking and sharing, not dictating, managing and controlling.

Storytelling is hard work that requires clarity, simplicity, directness, patience and persistence.

Leaders need to repeat their stores and continually ask to hear the stories of the people they work with.

Only through repetition and constant questioning, sharing and tinkering will the stories connect and change emerge.

Change depends on teamwork and trust, both of which depend on open, honest and continual communication.

Leaders in the giving sector talk a lot about the need for transparency.

But until leaders move beyond business as usual and learn how to listen, share what they know and tell stories that engage their staff, board, funders and partners in their cause, true transparency and change will be an elusive grail.

Next: Connecting, part 3: Media relations critical for nonprofits

Connecting, part 1: Giving sector needs media smarts

By Todd Cohen

Marshall McLuhan, the Canadian media thinker who died in 1980, theorized that “the medium is the message.”

The communication tools we use and the way we use them, in other words, speak volumes about the stories we tell.

Sadly, that insight is lost on many people in the giving sector.

Giving is all about connecting and building community, which are all about telling stories.

And as McLuhan showed, the tools we use to tell stories shape and play an essential part in those stories.

Yet charities and givers can get so bogged down in the process of their work that they end up speaking only in the jargon of their trade, and so they become terrible storytellers.

But if, in telling their story, they can capture and convey the passion, caring and resources they invest in the causes they care about, they ultimately will do a better job serving their clients and their cause.

If they are authentic storytellers, nonprofit executive directors can inspire their boards, staff and givers, and engage them in the job of improving their organizations and services.

As part of their challenge of becoming better at telling stories, the giving sector needs to better understand, invest in and make use of new media tools that are creating new ways to give, communicate and participate.

In Understanding Media: The Extensions of Man, the book he published in 1964, McLuhan traced throughout history the way breakthrough technologies, such as the wheel, the printing press, the automobile and the radio, transformed culture and redefined the way people live, work, express themselves and connect with one another.

Although he died on the eve of the age of the personal computer and long before the Internet, McLuhan already had seen that “electric” media would spark radical changes in organizations, communities and culture.

He is believed, in fact, to have coined the term “global village,” reflecting the impact new media would have on bringing people throughout the world closer together.

In a networked world, he wrote, information would be shared, representing an asset for inclusion and collaboration, not a tool or weapon for exclusion and control.

McLuhan’s media message is critical for the giving sector at a time of economic crisis, a massive breakdown in ethics, and accelerating changes in technology that are rearranging the very nature of work and community.

America’s giving sector is rooted in the idea of community: We give our time, our money and our know-how to help fix social and global problems, pooling our resources with others who want to give back and make a difference.

To slightly tweak McLuhan’s idea that media represent an “extension” of human beings, a way for us to connect with one another and our environment, it also is true we extend and connect ourselves through giving.

Yet the giving sector, which embodies what is best in our civic life, has failed to keep pace with new media’s impact on our lives and jobs.

Nonprofits could make much better use of new media to understand and engage their givers, clients and partners.

New media never can replace but certainly can make more productive use of the indispensable knowledge, common sense, personal relationships and passion that nonprofit professionals have developed over time.

It also is critical for nonprofits and giving organizations to find ways to use new media to reach their target audiences and the public because newspapers, which traditionally served as a trusted source of news and information, are shrinking or disappearing.

While websites, email, blogs and social media like Facebook and Twitter are filling that information gap, the overwhelming and fragmented nature of new media can overwhelm consumers with too much information.

So charities need to find ways to make the most effective use of media by shaping and targeting their messages to reflect their constituents’ specific needs and interests.

Many nonprofits and foundations, for example, have invested a lot of money developing websites that are heavy on self-promotion and self-congratulation.

Instead, they should be thinking about how to use their websites and other social media to educate people about their causes and get them involved.

Charities also should be looking for ways to truly work together with one another in using new media to raise money, run their shops, deliver services and tell their stories.

While they are indeed the message, media represent only a means, not an end.

The sooner charities can build media into the way they do business, the sooner they can move beyond business as usual and tell stories that truly inspire and engage their supporters and partners.

Next: Connecting, part 2: Stories can build giving, community

Fundraising, part 5: Time always ripe to seek bequests

By Todd Cohen

Bequest giving represents a seriously underappreciated and untapped opportunity for nonprofit fundraising.

That is the view of Bob Hartsook, chairman and CEO of Hartsook Companies, a Kansas City-based fundraising firm.

Eighty-five percent of gifts intended for endowment are generated through death, and 97 percent of realized estate gifts result from simple bequests.

Yet research shows that while over 80 percent of individuals give during their lifetimes, only five percent of people who die leave a bequest to charity, a number that has been flat for over 100 years.

What’s more, Hartsook says, the teaching and training of planned giving focus on structuring the technical “gizmos” of planned gifts, which typically are complex, deferred and involve assets other than cash such as stock or real estate.

Charities’ emphasis, however, should be to “figure out how to get a bequest pledge,” Hartsook says. “You don’t need to know how to do a charitable remainder trust.”

Wills and changes to wills represent the easiest and most common strategy for bequest pledges, and they are “not a complicated vehicle,” he says.

And a “bequest can be given by anyone, not just someone who is wealthy,” he says.

Charitable bequests totaled $22.66 billion in 2008, or seven percent of total giving in the U.S., according to Giving USA 2009, written for Giving USA Foundation by the Center on Philanthropy at Indiana University.

Hartsook cites “Identification, Death and Bequest Giving,” a research paper on bequest giving, at www.legacyleaders.com, published in September 2008 by Adrian Sargeant, the Robert F. Hartsook professor of fundraising at Indiana University, and Jen Shang, an assistant professor at the school.

Funded by Legacy Leaders through a grant to the AFP Research Council, the research by Sargeant and Shang looks at individuals motives’ for giving through bequests, and offers recommendations for fundraisers on targeting their appeals for bequest gifts and tailoring their communications message.

Their research also looks at how donors’ “identification” with charities they support affects their bequest giving.

Among their findings:

* A lot of charity supporters already have made a will, so messages to givers under age 60 targeting bequest gifts should focus on including the charity in their will the next time they change it. And because charities cannot know when that will be done, they should send their bequest messages all the time.

* Givers at all levels, not just major givers, might be willing to make a bequest gift, so bequest messages should be aimed at all supporters.

* Because “self-esteem” is important to givers, charities will have better results asking for bequest gifts for a specific purpose “because of the real and tangible difference” the givers can make.

* Charities should send the message that “every bequest they receive will have a real impact on the nature of their work.”

* Taxes are not a motive for leaving a charitable bequest to a particular nonprofit, although taxes can be a reason to open talks with a giver. The best approach would be to focus on the extra benefit the giver could provide to the particular charity through a gift that would reduce their taxes.

* Messages promoting bequest gifts should focus on the continuing impact of the gift on the charitable cause.

* Bequest appeals should be inspirational and focus on the charity’s “realistic future needs.”

* Individuals invited to make a bequest pledge are 17 percent more likely to make one, according to one study. Yet only 25 percent of givers making a bequest pledge say charities treat them differently after they make their pledge. So charities should prompt individuals to consider a bequest, and should develop a separate “standard of care” for givers who make a positive response.

* Prompting a bequest should be “an integral part of every journey” a charity plans for all categories of givers.

The research by Sargeant and Shang also addresses the fact that bequests, or the failure to make them, often depend on the way individuals view death.

When they view death with anxiety, the effectiveness of a prompt for a bequest depends on the way the individuals identify themselves with a charity or a stakeholder or social group, Sargeant and Shang say.

Because organizations have an “enduring nature,” compared to a stakeholder or social group, a bequest message that identifies the giver with the organization rather than with a stakeholder or social group will be more effective in securing a bequest gift or pledge.

The bottom line is that charities can be a lot smarter about bequest fundraising.

Anyone, regardless of how much or little wealth they have, can give through a simple bequest, yet bequests account for only a sliver of overall giving, and offer only a hint of the level to which overall giving could grow.

So charities should ask all their supporters to consider bequests.

They also should shape their bequest messages to reflect what research shows about the concerns of bequest givers, and develop strategies for working with individuals who show they are interested in bequest giving.

Charities, in short, can make a big improvement in their fundraising by working harder to help their supporters see the impact that making a bequest can have on their own legacy, their family and causes they care about.

Fundraising, part 4: Bequest pledging seen as opportunity

By Todd Cohen

While charities in the U.S. need to do a much better job in their fundraising, including development of bequest pledges, they also have created a strong culture of philanthropy by engaging their boards in fundraising and setting the stage for major gifts and planned giving.

That is the view of Adrian Sargeant, the Robert F. Hartsook Professor of Fundraising at the Center on Philanthropy at Indiana University.

Nonprofits do a “dismal” job developing bequest pledges, Sargeant says.

While over 80 percent of individuals give during their lifetimes, only five percent or so of those who die leave a bequest to charity, a percentage that has remained virtually unchanged for 100 years, Sargeant says.

That is partly because nonprofits treat bequest pledging as part of planned giving, which traditionally has focused on wealthy individuals and helping them with their estate planning, Sargeant says.

While living individuals accounted for 75 percent of overall giving in the U.S. in 2008, bequests accounted for only seven percent, or $22.66 billion.

Bequest fundraising should be “ubiquitous,” he says. “Everybody should be making that gift.”

So nonprofits should be communicating all the time, in every communication to constituents, about providing for the charity in their wills.

Research into bequest pledging , including the type of language that should be used in talking about bequests, also has been inadequate, Sargeant says.

Overall, he says, nonprofits are “too hung up on the mechanism” of fundraising and not enough on why people give.

“Donors are interested in solving problems and making a difference,” yet nonprofits talk to donors by using terms like “annual fund” and “capital campaign,” he says.

“We need to organize fundraising programs,” he says, “around the things that matter to donors.”

Fundraising strengths

Sargeant does see strengths in charitable fundraising.

Nonprofits in the U.S., for example, do a good job integrating board members into fundraising, he says.

“There generally is a cultural expectation that if you join a board, you’re going to give and get other people to give,” he says.

Nonprofits historically also have done a good job organizing “networks to raise gifts from high-value individuals,” Sargeant says. “Major gift fundraising is one of the things that is done incredibly well in the U.S.”

The U.S. has “much more of a cultural expectation that you’re going to participate in giving here than you’d find in most European counties,” he says. “It’s less about convincing them why giving is important than convincing them of the cause.”

And while it tends to overlook bequest pledging, he says, planned giving in the U.S. is “pretty well developed” and offers a “good range of financial vehicles which make it easier for people to give that makes sense for them financially.”

Fundraising in the U.S. also has placed a greater focus on donors and is one of the first countries to have developed a donor bill of rights.

Impact of recession

The recession is likely to reduce individual giving by roughly four percent this year, based on giving patterns in past recessions, Sargeant says, while foundation giving likely will drop by 0.1 percent, although that decline likely will be bigger in 2010 because of a lag in the impact on foundation endowments from the decline in the capital markets.

Ultimately, the challenge for nonprofits is to focus their fundraising on current givers.

“The tough thing in a recession is acquiring new donors because nobody wants to expand their [charitable] portfolios because they’re feeling less wealthy,” he says. “In a recession, the key thing to focus on is retention. That’s an easier ask in terms of recession, compared to trying to ask new people to give.”

And retaining donors can have a huge impact on long-term revenue, he says.

“Increasing loyalty by 10 percent can increase the lifetime value of the fundraising database by up to 200 percent,” he says. “Even a small improvement in loyalty can make a big difference to the lifetime performance of the lifetime database.”

Next: Time always ripe to ask for bequest gifts

Fundraising, part 3: Research-based training urged

By Todd Cohen

Adrian Sargeant, the Robert F. Hartsook Professor of Fundraising at the Center on Philanthropy at Indiana University, has a bleak view of the practice of fundraising.

“We have no mechanism for learning from the latest research,” says Sargeant. “We are about the only profession that has never defined it’s body of knowledge, what we would expect every competent fundraiser in the U.S. to know.”

Every competent fundraiser, for example, should know that satisfaction, trust and commitment are the three factors that drive donor loyalty, and they should know how to manage information about those donor characteristics.

“That would be part of our collective body of knowledge, but it’s not mapped out anywhere,” Sargeant says.

In Britain, by contrast, national occupational standards for fundraising that Sargeant wrote map all the skills that fundraising professionals need in their back-office, management and fundraising roles.

That set of skill-based standards “informs professional practice because organizations can use standards for recruitment, retention, staff appraisal, and it drives the qualifications for fundraising,” he says.

Britain also has spelled out the knowledge that fundraisers should have to perform their role in the areas of fundraising, direct-mail appeals, and managing the public trust.

Fundraising accreditation

By contrast, fundraising professionals seeking accreditation in the U.S. as a “certified fundraising executive,” or CFRE, must take a test that asks only multiple-choice questions that focus on what fundraisers actually do rather than on what they should be doing.

A question, for example, might ask if the fundraising professional knows what a case statement is but does not ask the professional to actually write a case statement.

The tests are based on surveys of the current work of fundraisers and assume current practices are “best practices, and that’s not always the case,” Sargeant says.

“There’s no mechanism for exposing people to the latest research and challenging their thinking,” he says. “I think what we need in this country is to accredit professionals for taking their professional development seriously. If you read widely, go to conferences, take your training seriously, you would be rewarded for that.”

What is needed, he says, is a “knowledge-based route of qualification for people coming into the profession, where you do have to write a case statement and fundraising plan, a kind of traditional academic syllabus, exposing people to a body of knowledge, the same as a lawyer, doctor, plumber or accountant.”

And people wanting to enter and remain in the fundraising profession should be required to learn that body of knowledge and be subject to regular review and keep up with the latest research.

Fundraising profession

Sargeant gives poor grades to the fundraising profession.

Donor retention is “terrible,” he says, with 60 percent of givers who give to a charity for the first time typically not giving a second time.

And while first-time givers typically give only small amounts, many nonprofits invest a disproportionate level of resources retaining those givers, typically by focusing on the impact their organizations have on customers.

Yet research has shown that the single biggest factor in determining whether givers keep giving to a specific charity is how its fundraising staff treats them, Sargeant says.

Nonprofits also need to understand more about online giving, which accounts for roughly two percent of all giving by individuals, he says.

“We need to grow that by understanding more about donors’ behavior online, and making sure fundraisers are technologically literate,” he says “We haven’t defined what we would expect fundraisers to know.”

That would include, for example, knowing the precise elements that make a website effective in attracting donations.

The profession also lacks a “mechanism for feeding knowledge into a knowledge base so anyone studying fundraising is going to be exposed” to new research, Sargeant says.

Next: Bequest pledging seen as big opportunity