Three random musings on end-of-year giving

Special to Philanthropy Journal

Lawrence Henze

Editor’s Note: Philanthropy Journal will present Jan Doolin’s workshop, “How to Successfully Raise Planned Gifts,” from 9 a.m. to 4:30 p.m. Nov. 7 on the NC State University Campus in Raleigh. For details and registration information, click here.  

For most nonprofits, colleges and universities, giving significantly increases around the end of the calendar year in conjunction with the late fall and early winter holiday season.

Personally, because I prefer to analyze rather than follow trends, most of my giving is earlier in the calendar year in my dual effort to ease the processing burden on my favorite organizations and to recognize that I will need the extra time because I will be hopelessly behind in holiday shopping!

MUSING #1: OOPS!

At the beginning of the calendar year – perhaps in response to a screening project – you segmented your database and identified your top major and planned giving prospects for personal cultivation and solicitation. And, for reasons that now seem questionable, at that time you decided to remove the assigned prospects from the normal annual giving or membership solicitations.

Now it is October, many of your best prospects have not been solicited to give at all this calendar year, and not surprisingly, giving from your best prospects is lagging. What should you do?

• • Avoid the temptation to make up for all of the “skipped” solicitations in the last 90 days of the year. Inundation and cultivation are not synonymous.
• • Attempt to contact as many of the overlooked prospects personally through high-touch personalized mechanisms, including volunteer and board member participation.
• • If the previous step is not completely successful in reaching all of the remaining prospects – and it will not be – use highly personalized direct mail solicitations, but limit those efforts to a maximum of two.
• • Begin 2014 with a new plan that includes an ongoing communication stream with your top prospects, including a light sprinkling of annual solicitations complemented by informative materials that build engagement with your mission. And, without doubt, identify and remove the obstacles that thwart efforts to personally cultivate donor relationships!

Musing #2: CASH IS KING, BUT SECESSION PLANNING IS NECESSARY

I am not sure what the title of this musing means either (and I created it), but I am trying to impart the importance of planned giving messaging in your end-of-year appeals. Did that help?

Analytical data suggests that, for most nonprofit and educational institutions, as many as 10 to 50 percent of your constituents are most likely to make their largest gift in the form of a planned gift. You may ask, as many do, “Why do we not receive more planned gifts if that is true?” My response would be threefold: You do not ask, you do not ask the right prospects, and when you ask, it is very passive!

If you have not recently screened your database to identify planned gift prospects, plan to do so in the near future. For this year, focus on your loyal, low dollar-amount donors above the age of 45 and include a “P.S.” in the solicitation letter referencing the opportunity to make a planned gift. Or include a thank-you insert after they make their year-end gift. Or both!

And next year, include a comprehensive planned giving marketing effort in conjunction with personal cultivation and solicitation of planned gift prospects.

Musing #3: BE THE DONOR, A PHILANTHROPIC VISUALIZATION TECHNIQUE!

Slowly, yet without huge momentum, the nonprofit industry is switching to a more donor-centered approach. I say “slowly” in a very thoughtful manner. In spite of significant evidence from the donor community at large, and our donors in particular, we stick with “time-honored” practices that are behind the times and losing some of their honor.

In other words, we solicit too frequently, we fail to integrate all outbound communications to demonstrate a cohesive strategy, and we miss opportunities to further engage our donors.

It may be too late to implement many of the following suggestions this year, so for 2014 let us resolve to:

• • Begin, ASAP, an audit of your communication stream with all our constituents. How frequently are you in touch with our donors, members, volunteers and prospects, and what are the purposes and contents of these communications? Venture outside the development and membership offices to see the entire communication stream, and put the results into a spread sheet that tracks audiences, timing and contents.  If you are surprised with how often you communicate with your “besties,” imagine how they feel!
• • Use this audit to determine the appropriate balance of your communications, and definitely adjust the contents if you find you “ask” more than “thank” or “inform.”
• • For your 2013 year-end donors (those consistently giving at year-end), replace early-year solicitations with stories of mission success and examples of donor engagement that support mission success. Begin solicitations closer to the time they customarily give, and share examples of what increased support would mean for mission success.

Have a happy and successful end of year!

Lawrence Henze, managing director of Target Analytics, has extensive experience in fundraising, market research and the application of predictive modeling services to the nonprofit marketplace. The founder of Core Data Services, which Blackbaud acquired in 2001, he has also served as vice president of predictive modeling services at USA Group Noel Levitz and president of The Philanthropic Division of Econometrics, Inc. Henze has 15 years of experience in development, raising more than $125 million, primarily for higher education institutions.