Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

August 22, 2011

In crippled economy, asking is believing

By Todd Cohen

With the second wave of a “double-dip” recession looming, nonprofits cannot afford not to be asking for money -- continually, vigorously and methodically.

Indeed, particularly in the face of the current economic gloom and doom, asking reflects the promise of hope and should flow from a vision of growth and change that is essential for nonprofits if they expect to engage donors in addressing community problems they care about.

That is the message of Eileen Heisman, president and CEO of the National Philanthropic Trust.

The Trust, a national public charity that functions a lot like a community foundation, reached a big milestone recently, for the first time exceeding $1 billion in assets under management.

Launched in 1996, the Trust has raised $2.5 billion and given away nearly $1.5 billion.

And the fiscal year ended June 30, contributions to donor-advised funds at the Trust grew $197 million to a total of $418 million, compared to growth of $36 million to a total of $221 million a year earlier.

The key to raising money in a tough economy, Heisman says, is to keep in touch with donors, make a clear and compelling case for support, enlist at least a third of the board to cultivate prospects, and make sure the executive director devotes at least a fourth of her or his time to fundraising.

“Whenever the economy falters, people get nervous,” she says. “Donors get nervous and fundraisers get nervous, too. People are reluctant to part with money when the economy is not stable.”

So fundraisers must keep everyone’s eye on what is possible, she says.

“If donors are nervous, fundraisers have to be persistent and creative to keep the money coming in,” she says.

Inexperienced fundraisers, in contrast, tend in a sinking economy to act as if “the sky is falling,” Heisman says.

“So they sit in the office and get paralyzed, or get told by the CEO or the board that they should not ask,” she says. “And the worst thing a fundraiser can do is to stop asking.”

When financial markets dive, “you have to keep asking and talking to people and making the case and keeping the cause in front of donors,” Heisman says. “Unless you’re in front, talking to donors about your organization and what you’re doing to make the world a better place, donors may forget you.”

Communicating is a fundamental job for fundraisers, not only with donors, but also with their staff and board, Heisman says.

“Fundraisers’ job is to translate program needs to donors,” she says.

So fundraisers should be talking to donors about the organization’s programs and general operations, inviting them to breakfast or lunch with a board member or the CEO, and inviting them to see a program the organization delivers on the front lines, while continuing to generate direct-mail and other solicitations that are part of the nonprofit’s normal fundraising program.

Fundraisers also should be vigilant about thanking donors, letting them know how their funds are being used, and treating each gift as “cultivation for the next gift.”

It also is essential that fundraisers work internally, with their executive director, board and staff, to develop a clear “case statement, an ‘elevator speech,’ that explains to donors what’s going on,” Heisman says.

Fundraisers need to “create a climate” for that internal discussion and “build consensus about what to say.”

In fact, she says, fundraisers should be feeding into that discussion the feedback they get from donors about the organization’s strengths and weaknesses.

Fundraising primarily is a staff function, Heisman says, and executive directors should be spending at least 25 percent to 30 percent of their time each week on donors and development.

“If you don’t, it’s going to be really hard to keep the place afloat,” she says. “You can’t lose the connection to your donors, and that takes time and effort, and you have to be thoughtful.”

A good board, she says, can supplement the executive director’s job in development but cannot replace it.

A key board role is to help cultivate donors, Heisman says, and the executive director must make sure the board knows its role, tell board members which donors and prospects they need to work with and what they need to do, including the message they need to deliver and the cheerleader they need to be.

Most board members, however, may not be able to “close” gifts and likely will need staff help.

So if the executive director is not comfortable closing a gift, he or she needs to get some training in that skill.

“Boards need to understand what they can do,” Heisman says. “Sometimes boards are like deer in the headlights: They either don’t know what to do or are terrified.”

Development, she says, is a staff-driven activity.

“A board that’s doing their job will respond to staff direction and suggestions and ideas about what to do in development,” she says. ‘A board usually doesn’t initiate or create a development plan.”

The fundraising role of the executive director or development director is akin to that of the conductor of a musical group, with the board and other staff members functioning as the musicians.

“The person at the top with the baton is from the organization, not the board,” Heisman says.

Ultimately, she says, the job of fundraising is the responsibility of the executive director, who needs to be actively asking, particularly in difficult economic times.

“Nobody wakes up in the morning and says, ‘I’m going to make a gift to XYC organization,’” Heisman says. “You have to ask them, you have to ask them repeatedly, and you have to ask in all different ways.”


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