Simply put, charities need to change the way they think. In the past, it always has been cause first. After all, the cause is what the charity is there for, isn’t it? But that kind of one-way-street thinking now leads to a dead end.
Today, in order to thrive, charities need to think about what would help the donor first. This requires a new mindset, a new skill set and new tools. It also will take an investment of time and money to retrain the way charitable executives and their teams communicate and structure operations. Charities that heed the need for change will thrive. Those that don’t will become merely another casualty of this economic downturn.
The point being made here is mission critical when the donor's financial capacity is high and when the donor's engagement or potential engagement with the fundraiser's charity is high. That is, for high net worth donors who have the capacity and the heart to be major donors, it is important in todays market driven world to look at things from the donor's perspective, not your own only. Donors of high capacity are courted by (well) courtiers trained by the top financial firm in consultative selling, and in high value planning processes. When donors who have learned to expect such deluxe, time-intensive, processes are treated as if they were just an ATM or a person to be pitched, they feel handled, disrespected, misunderstood, and used. Charities have been very slow to catch on to this. As a result they are getting beaten mightily by financial advisors who funnel "charitable gifts" into vehicles and funds they manage. The fundraisers are very often just not in the game when the client gets serious about giving, at the estate planning table, for example, where advisors speak in percentages of the total estate. What percentage to heirs? What percentage to charity? What percentage in tax? Such conversations with advisors move the client's entire estate. Meanwhile, the fundraisers are fighting over nickels and dimes from cash flow.
Example: Client is worth $10 million. Cash flow is $150,000. Giving Budget is $10,000 a year. A given fundraiser exults in getting $2,000 of that. Wow! A major gift. Meanwhile, the client is talking to the advisors about giving his children 10% of the estate, taxes to consume zero, with the balance to unnamed "charities in general."
The sad part about advisor driven, donor-centered, planning is that it lacks heart, passion, and impact. Advisors consider charitable gifts to be a tax category. Hence they plan for "the charity of your choice." Fundraisers understand that philanthropy is about passion and impact as much as it is about effective and efficient financial planning. What we need - what donors need, what the planning team needs, what our country needs and what your nonprofit needs - is to have the fundraiser in the game when the full estate is planned. But for that to happen, the fundraiser has to back off and stop soliciting the minor money. That is an annoyance and a distraction. Instead, take a deep breath, and stop pitching! Get inside the donor's head and heart and talk about impact - what the donor wants to see changed or preserved in the world. Then convene the advisory team to make that happen.
Well, Phil, I hear you asking nervously, what do I get out of that for my charity? What you get out of it is a percentage of the total giving. You had been getting 20% of the annual giving budget of $10,000, or $2,000 a year in gifts. Now you just might get 20% of the charitable portion of the estate ($9 million), or $1.8 million. Or, since you drove the process, maybe you find good reason why you should get all of the $9 million. Do I know what the good reasons are? No! I have not talked to your big donor. Nor with you. The big gifts flow when a) all the money is in play as part of an overall planning team effort and b) there is a real mission alignment between the organization and the donor. Hard to generate that mission match until you start asking good questions rather than pitching a good story.
Yes, I know, it is not fundraisers only who need to know this, but more importantly their supervisors. It is the bad habit of managers to want quick results from lots of small transactions. Life insurance agents, stock brokers and fundraisers all live, early in their careers, under the pressure for immdiate and repeatable transactions. That means pitch, pitch, pitch. For small donors with low engagement, fine. For big donors, well, go ahead. They will throw you a bone, in this case $2,000. But if you want to be at the table when the $9 million is discussed as moving to "the charity of your choice," you as a fundraiser had better rise to a higher level and be a custodian of the client's overall philanthropic intent, passion, and desired impact. Out of that you might only get 20% of the $9 million slated for charity at donor's death. And the gift might be deferred. And it might have taken 18 months and many meetings, often with advisors, to create the deferred gift, but that is the game. You play the game at the table where the big dollars are moved, or you get the chump change effectively and efficiently, over and over, until the smile freezes on your face, and you wonder how you got into this racket at all. Your heart, vision, listening skills, care and concern, your commitment to the nonprofit sector, as well as to your particular charity, are much needed at the planning table where the conversation is so cold and numerical. Bring your gifts, please! Bring your own passion and giftedness. We on the advisory side need you more than we yet know.
Those who are fundraisers - please comment on this post. My background is training advisors to step up to advanced sales with high networth clients. Will these strategies work for fundraisers? Tell me why not. I am collecting excuses. I have hundreds on my wall from advisors as to why they don't get into charitable passion, intent, and impact. I want now to add hundreds of alibis from fundraisers as to why they don't take the time to discuss the donor's overall passion, intent and desire for impact, rather than just talking about the one charity that the fundraiser represents. I will spot you a few excuses, see i you can come up with more:
- Too time consuming
- Under too much pressure from my supervisor
- I work for one charity, not all, so why bother being generally useful to the donor?
- What do I know about the field as a whole; I just raise money
- I don't work well with advisors, they are from the dark side
- I am not skilled in techncial stuff. If I sit at the planning table where the big dollars are planned I will feel foolish.
- My peers are not donor centered
- If being donor centered worked, everyone would already be doing it
- Donor centered planning is not taught at the conferences I attend, so it can't amount to much
Help me with another 92 excuses so I have the fiirst full deck of 100.