No idea where to start interacting with your prospects?

"I have to start raising funds from individuals in a country where HNWIs have a very poorly developed culture of giving.

"...We have no idea where to start interacting with our prospects"

This message could have come from any number of schools and universities that I know of and, I suspect, a large number of other nonprofits. It has certainly been true of several organizations where I have worked either as a manager or a consultant. I've seen the problem, heard the challenge and felt the anxiety. Or you might say "Been there, done that and bought the T-shirt!"

In my experience there is a simple solution. Get out there and start talking to these HNWI prospects. It's not as difficult as you might think. The second part of this reader's problem – "a very poorly developed culture of giving" – could be precisely the hook on which to start the conversation.

The process starts as with almost all fundraising by identifying and researching the people whom you want to go and meet with. The criteria that you used to identify such people will vary according to your situation. However, in some way it will be related to their capacity to give (not just money but also experience and networks) and the strength of their connection to your institution or cause[1]. Writing this causes me to hope you are reflecting on the importance of fundraisers or someone on your fundraising team doing proper prospect research.

Having identified and qualified a list of prospects with whom you have some connection then the message I suggest you send them goes something like this:

Dear Name

You are one of our most significant supporters/friends/alumni and we are very proud of our connection with you. We know we haven't spoken with you a lot in recent times and now we would like to do so with a very specific purpose.

You, I am sure are aware, that institutions such as ours thrive, grow and make a difference in the community because of the support we receive from many quarters.

However, we recognize that one area where we have a challenge is that we have a very poorly developed culture of asking for gifts.

The purpose of this letter is to ask if we can come and talk with you to get your advice on how we might begin to approach this challenge. We feel that because of your experience and success in your field you will have faced similar challenges and will have a great deal of wisdom to offer us.

I will telephone your office sometime next week to see if I can arrange a time when we can meet you.

Yours sincerely

Of course the actual wording of such a letter will vary with your specific situation. However, the basic structure suggested above is:

• One or more opening factual statements showing that you identify with the reader.  Put yourself in their shoes. What is true about them and what is important to them enough that they will continue to read the letter?

• A short phrase summarizing your mission or case for support.

• State the specific problem (note the re-frame as “asking” not “giving”. Us not “them”).

• A request for their advice (remember the fundraising adage, "Ask someone for money and they will give you advice. Ask them for advice, and they will give you money")

• Timeframe and an indication that you intend to follow this with an action.

Then, do follow-up. Make a time to go and talk. When you do have the conversation remember another important piece of fundraising wisdom: "you have two ears and one mouth - use them in that ratio!" You will learn more and develop a better rapport by listening. 

Ask them what they think about you. How well do they think you are performing? What could you do differently? What would they do in your shoes? Who else do they know who it would be worth having a similar conversation with?

Then you will exit by saying “Thank you for those important suggestions. I will keep you up-to-date on our progress and, if I may, come back and bounce a few ideas of you at some other time.”

Of course, this is only the start of a relationship. However, you will have broken the ice. In all likelihood, you will come away having gleaned some valuable nuggets of information about the prospects, her interests, values, and connections.

This first interaction should only be the beginning of a series of interactions which you will use to bring that person closer and closer to what your organization does. If you treat their ideas and connections with respect you will undoubtedly when their support and that of others like them.

In another blog, I will suggest some ideas on how to continue to bring major prospects closer and closer.

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[1] Your target here will be someone who is one of the “wealthy, wise and well connected”.

Don't research, don't ask

One university Vice Chancellor whom I have worked with takes the view "just ask!"

Luckily for him, his fundraising team doesn’t take this to heart.

Many years ago, when I should have known better, I accompanied another Vice Chancellor on a visit to ask a prospect for a seven figure gifts. I had only been engaged by that particular university a few days previously and didn't think it politic to dissuade him from the ask. The ask was made around a boardroom table with several other people in the room. The temperature dropped several degrees and had a pin hit the floor it would have sounded like a dropped dumbbell.

I should have known better because as a newcomer to major gift fundraising I had the good fortune to share an office with a then, little-known breed of professional called a Prospect Researcher. Until then I hadn't known such a job existed. Since then I have been enormously grateful to the skills I learned from her and a growing number of other professional prospect researchers with whom I've worked.

Success at major gift asking depends on you asking (or as I prefer to say offering an opportunity) for a gift that will make a significant difference in an area which is central to the giver's moral universe. Research will help you understand that person’s moral biography[1].

Research also help you know the size of gift that a potential donor is able to make. This is likely to be a product of their past giving record, where the opportunity that you are offering fits within that moral universe, and their wealth (assets and liquidity).

Research will also help you identify the prospects social and professional networks. This will help you work out whom to involve with you as you begin to draw the prospect towards the opportunity to give and who can help you weave the narrative of your case for support.

It will also help you know the prospects social and cultural tastes and enable you to plan a series of events and moments which are likely to develop the bonds of friendship between the donor and your organization.

To be more concrete, this is what you want to discover through prospect research

• Basic contact and demographic details, including addresses, occupation, family circumstances, age and education.
• Networks and affiliations such as particular recreations, clubs and societies professional and personal), professional networks including board and trustee roles
• Already existing philanthropy (ideally including amounts given) and volunteering
• Income, which can often be inferred from occupation and other indicators; and wealth, which is often much harder to know and seldom has a basis in appearances.

It is my belief that the majority of major gift prospects will expect you to have done this homework. Not doing it and wasting someone's time with an ill judged ask is a major discourtesy. 

The biggest ask I've managed was the leading gift to a medical research institute.  The final stage was a dinner hosted by the chief executive of the organization, in an exclusive and hard to obtain historic venue. There was live classical music (another of his interests) and a formal presentation by the leading researcher and a full table of the institution's leaders and existing supporters. A proposal that had been carefully shaped to conform to the giver's well known tastes and inclinations had previously been submitted. We knew this was what the donor expected.

It was the discourtesy of not doing research that resulted in the frosty silence that I first described above.

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[1] ‘Moral biography’ is the term used by Paul Schervish, the leading researcher of HNWI philanthropy. The term moral biography refers to the way that individuals conscientiously combine in daily life two elements: personal capacity and moral compass (Schervish, PG 2006, 'The Moral Biography of Wealth; Schervish, PG 2008, 'Why the Wealthy Give').

The crack cocaine of fundraising?

Feasibility studies are the crack cocaine of fundraising, says the author of a forthcoming book.

The Chronicle of Philanthropy has run two pieces canvassing the for and against  this provocative suggestion.

Disclaimer alert! I happen to believe that one of the best, if not the best service people like me can offer you as a fundraiser is a feasibility study. I make my living, in part, from doing them. And, curiously, I have heard campaign director after campaign director stand up at fundraising conferences and say just exactly the same: how important it is to engage a consultant to conduct a feasibility study before embarking on a major fundraising campaign.

By major fundraising campaign, I am talking about major capital campaigns. 

A capital campaign, briefly explained, is a fundraising campaign aiming to raise a) a significant amount of money, b) in a defined period of time, c) mainly from very large gifts from wealthy individuals and institutions, d) for a specific, or series of specific projects.

A campaign of this nature can be extremely effective and extremely demanding of all those involved. And all those involved will include your CEO, chair and board and most of your senior colleagues. You will also need to budget spending somewhere in the region of 15% of your campaign target. So immediately, you are talking about a very major investment of your organisation's resources.

You are also going to be 'nailing your colours to the mast' by focusing a lot of your communications and publicity around your capital campaign once it is underway.

Should you seriously consider any of the above without having had a good look at the feasibility of your plan and its likelihood of success?

Could you do a feasibility study yourself? Yes, possibly. But would it be as expert and robust? Well here in essence is what a capital campaign fundraising feasibility study does. When you have finished reading ask yourself these questions again.

The feasibility study will put your case for support to people both within and outside of your organisation and ask, does this make sense? Can this be done? Would you support it? Do you know anyone else who would support it? How can it be improved?

The feasibility study will look at the leadership of your organisation and assess whether it is strong and focused enough to withstand the scrutiny that major gift givers will give it. The study will ask tough questions about the abilities of your chair, CEO and board to achieve what your case for support proposes.

The feasibility study will look at your existing donors and other connections. It will ask what research you have done? Who amongst these people are wealthy and well-connected? How strong is your relationship with them? How likely is it that they are either going to make large gifts themselves or lead you to large gifts?

It will test the information received from these last questions using a tried and tested algorithm – the capital campaign gift chart. From that study will conclude the likelihood of you achieving your target.

Now, back to those questions. Is this a process that you can see, hear or feel yourself undertaking? How honest will the people you know and work with be about your case for support? How rigorous will your questioning be of the leadership, the people who pay your salary?  How objective  do you think potential donors are likely to be when you test your case for support on them? What indication of the likelihood of a gift and the size of that gift will they make to you?

It takes money to raise money

One of the challenges many of you will face in major gift fundraising is convincing your CEO and board that it takes money to raise money.

Sometimes, this happens because by the time  your nonprofit comes around to thinking seriously about major gift fundraising its finances are already constrained. Other times, it may be simple naiveté. A byproduct of the notion that somehow nonprofit means low-cost and that paring administration or overhead to the bone is the right thing to do.

Major gift fundraising is by far the most cost-effective of many fundraising strategy. The return on investment generally achieved by a focused major gift or capital campaign will be around 4 to 5 times the amount expended. However, this means if your target is to raise, $1 million you are going to need a budget of somewhere between $200,000 to $250,000. Do the math and add zeros depending on how much it is that you need to raise.  

Let's have a look at some of the reasons why. First, for anyone of you new to major gift fundraising here is a quick rundown of the basics. You will need a case for support. That case is a well researched and tested argument which will be the basis of your communication and asking for donations. Next you will be to identify and understand who your most likely major givers are. That done, you will need to reach them, have conversations with them, and eventually win their support. All of this will cost money.

To develop a good case for support you will need to develop a thorough understanding of whatever it is for which you are fundraising (this could include your entire organisation, a particular program or project, or building or facility). This does not mean taking for granted and using your organisation’s operational strategies and documents as your case. You will need to flesh these out into language that will resonate with potential donors. This means talking to those responsible for generating these documents. It means talking to those who will be involved in actually doing the work that these documents describe. It means talking to those who will benefit from this work. And, most importantly, it means talking to some of your most likely major givers to test their likely response to your case for support. All of this is going to cost in time and travel. You will probably need to undertake around 20 interviews of say an hour each. The travel costs will depend on the location of your personnel, beneficiaries and major gift prospects. If you are fortunate they are local.  But for many of you the gift prospects may involve airfares and accommodation.

To be successful asking for a major gift it is important that you have a thorough knowledge and have developed an effective plan about how you are going to approach the potential major giver. There is only one way to do this is to carefully research that person or organization. You will need to know what they are likely to support, how much they are likely to give and also how best to approach them. You can do this yourself.  A thorough research profile will take half to a day of work if you have access to the right tools (there are many sources of free information but sometimes really good, accurate information requires paying for subscription services). The alternative, is to use a specialist professional prospect researcher who will charge in the ball park of $250 to $350 per prospect. For larger campaigns, or ongoing major gift fundraising, a full-time in-house prospect researcher as part of your fundraising team, is almost certainly the best way to go.

Having done your research, you will need to plan how you are going to take your case for support out to your major gift prospects and persuade them to make a gift. The general consensus among experienced major gift fundraisers is that you will need to have had somewhere between three and five ‘conversations’ (used here in its widest sense) with a prospect before they are willing to be asked.  Your best major gift prospects will probably be scattered around a wide geography and you won’t always be able to wait for them to come to you.  Proper conversations will usually involve more than one person from your organization, often your CEO or Chair and therefore their travel and accommodation.  Effective conversations and persuasion to support you also will also often require expenditure on hospitality of some sort or another.

Asking, thanking, and looking after your major donors once they have committed will likewise involve more than one person and their travel plus expenditure on additional hospitality, the costs of visits to view results and other communications about outcomes and progress.

Added to this are myriad other expenses related to communication and administration. You will probably want to produce some campaign collateral materials. Usually there will be some events associated with the campaign – the campaign launch, site visits and ultimately some form of completion celebration. There will be phone calls, invitations, thank you cards, progress reports, receipts, data entry and so on all of which will be additional to your normal routine costs.

Have I missed anything? Please feel free to add to this list with your own experience or conjecture. It is vital that you are able to convince your CEO and board that you are given sufficient budget to run a campaign successfully. Anything less is courting disaster.

Words or Numbers?

One of the enduring debates in the not-for-profit world is what I loosely label words versus numbers or  qualitative versus quantitative. It can take many forms.

I hinted at it in my last blog about the two organisations in India that connect donors with nonprofits. In this blog I aim to look at it further.

This argument has its parallels in other fields, including in the social sciences where it is framed as an argument between positivists and ethnographers. I blogged about another aspect of it under the title Whiteboards and herbal tea. In that I was alluding to an important debate about foundation funding criteria between two leading thinkers in contemporary American philanthropy William Schambra  and Paul Brest .

However, my mind at present is focused on making your case for support and how you might construct appeals. My contention is that words and stories (i.e. the qualitative elements) are far more powerful than numbers and statistics (the quantitative). Another argument might be that pictures are vitally important: but that's an argument for another day.

The argument could also be framed in the heart versus head rubric. Of course, I am not arguing that some numeric data may not be important. For example, when you are making a case for support for a capital campaign it will be important to explain the costing which your campaign is based. It may also be important to provide some information about your organisations overall finances and its balance sheet. Those potential donors who may be considering making very large gifts might (and I emphasise might because it is far from always the case) apply their ‘investment logic’ before they commit to a gift. Supposing, for instance, that they come from the world of business investment decision-making? 

However, it is my belief that for major gifts decisions, in particular, donations are more often made for moral, ethical or even emotional reasons. Donors support medical projects because of a personal history touched by health and medicine. They support educational institutions, again because of a personal history touched by education: and, often as an alumna/us of the institution that they are supporting.

In less biographically touching appeals, I still believe that the emotional, 'heart' pulling effect of stories and the words are far more convincing than statistics. This is true even when the statistics are grim. It is shocking to point out that more than 10 percent of the world lives on less than a dollar a day or, that 17,000 children under age five die every day. 

However, if you can really tell the story, or paint the picture of  a child born in a village in sub Saharan Africa to parents whose every waking moment was devoted to scouring for such miserable sustenance that the harsh environment provided. And that even this survival was everyday threatened by effects of climate change and political upheavals. And then your story continues, that the future of that child can be met  with appropriate help and that they will survive and even thrive. Or better still,  you can show how existing funding is changing the ecosystem and infrastructure in the community where that child lives. In summary, tell a story or paint a picture showing there is hope. Isn't that far more compelling than bare statistics?

The great advantage of storytelling over fact-telling is especially reinforced in these examples from the SOFII website *, each of which uses various combinations of media and technology. Another advantage of making your case with stories is that they lend themselves to being retold in multiple ways (and there's only so much you can do with numbers!!)

• Every day in developing countries thousands of women (mainly) face the difficult task of fetching and carrying water from its source to their homes. It's a grueling daily duty most donors would find very hard to imagine.  This is the story told by WaterAid 

• Martin was volunteering in Afghanistan with when he met a young girl called Hadisa. At eight months old, she was carried hundreds of miles by her father to receive treatment after the village elders tried to stone her to death for the shame they thought she brought to their community. The medical facilities in Kabul were not equipped to deal with the severity of Hadisa’s condition. This was the story that led to  Martin founding Facing the World.

• It’s easy for you to ignore a homeless person as they walk past them on the street, but  if you had a homeless person telling their story on your phone for three days you would see that the issues behind youth homelessness are complex and varied.

Please add your own examples of compelling stories, well told (or even the compelling use of numbers!)

* BTW Here also is the story of SOFII told by its founder - himself a master of storytelling.  

Indian Giving Circles: Qual vs. Quant

Schools, universities, leading cultural organisations and a handful of medical charities aside, nonprofits are rarely successful at attracting support from the very wealthy.

Small and medium-sized nonprofits generally are even less likely to engage with high net worth supporters. One of the reasons may be that, the rich support organisations with which they are connected through their own networks. One solution to this that is beginning to achieve positive results has been the formation of giving circles.

It has been my privilege to have met the founders of two such groups in Mumbai, India where I have been this month. Both are successful. What is interesting is their quite different approach. The difference is one that fascinates me and has wider significance in the discourse around evaluating nonprofits (For examples,  here or here) . The difference can be summarised in my view by that hardy perennial phrase 'qualitative vs. quantitative'.

In the quantitative corner is the better known of the two, Dasra. It was founded 15 years ago by husband-and-wife Deval and Neera. It is Deval whom I have met more than once. He is an engaging, articulate and urbane late thirty something. Both he and Neera are US educated and both former Wall Street analysts. They came to India determined to make a difference using their financial-analytic skills (though of Indian origin, neither are Indian by birth). Over the 15 years, they have developed a formidably successful organisation. It now employs some 40 plus staff, crammed into a ramshackle two-storey building in a downmarket part of West Mumbai. Nowadays, too, it boasts two small outposts (most likely working from home offices) in New York and London.

Dasra says it has assisted inject some US$37 million into nonprofits and social enterprises. It also runs a very successful Indian Philanthropy Forum, which brings together some of India's most active philanthropists and successful nonprofits. A version of the Forum was recently staged in New York for the first time.

Dasra identifies and thoroughly researches both key areas for intervention and potential partner organisations working in those fields. As well as working to thoroughly understand the problem, it investigates which nonprofits and social enterprises may have the skills and capacity to solve it. More often than not it works closely with these organisations to encourage and train them to think and act more analytically. The mechanism it advocates is 'the theory of change'. Their goal is to create solutions that can be 'scaled up' and achieve as big an impact as possible for the resources invested. I once, tongue-in-cheek described this style of approach in an earlier blog as ‘philanthropy for bankers’: I  had Deval partly in mind!

Once, Dasra is satisfied that it has a grasp of the problem and suitable partners it will begin to recruit donors to a 'giving circle'. Members of a giving circle agree to provide a fixed amount over three years to achieve a significant change in the problem area.

The second organisation I have just met on my current trip. It is a semi-formal organisation called Caring Friends. I met its founder, Ramesh in the tiny two room office, up a narrow staircase, that he shares with a former business partner. His support staff comprises a team of two administrators and a driver. Ramesh was a senior manager of a well-known Indian corporation. His travels through India had brought him into contact with the notable activist, Baba Amte and his centre for leprosy patients and the disabled called Anandwan.

Moved by his initial experience he sent an article together with a letter to around 50 of his friends and acquaintances inviting them to support the work of Baba Amte. He became a regular visitor and supporter and his subsequent outlook has been much influenced by the friendship that developed between him and Baba Amte.

Ramesh then began to take an interest in other nonprofits and became aware of their challenges and limitations. These in particular he described to me as the lack of financial resources; their limited vision; and deficiencies in human resources and training. He began to apply his own skills as a business executive to assist nonprofits.

He later found an ally, Nimesh, and together they created Caring Friends. The name is taken from the quote usually attributed to anthropologist,  Margaret Mead: “Never believe that a few caring people can't change the world. For indeed that's all who ever have”.

Caring Friends is not a legal entity and does not fundraise. Its website makes the point, "In fact, Caring Friends does not have a Bank Account.  We do not accept cheques in our name. Cheques are made directly to the NGOs, hence 100% of the funds go to the NGOs." It adds that “we have zero overheads.”

The group has grown into a network of around 200 wealthy (some very wealthy) individuals who support the nonprofits that Ramesh and Nimesh identify and on which they have undertaken 'due diligence'. These supporters meet every 2-3 months and invites a nonprofit to present their work.

Ramesh describes the due diligence as based on visits to the nonprofits and the areas where they work. These visits are undertaken by Ramesh and Nimesh. Above all, they are looking for integrity. They focus on whether the nonprofit is well ordered, and maintenance aspects such as record-keeping and cleanliness of the premises. Often, he says, they will support the nonprofits out of their personal resources before recommending them to others of the Caring Friends.

Ramesh, who is now in his 70s has retired from his corporate role to become a partner in the small business whose office he still occupies.  This allowed him the flexibility to continue and fund his philanthropic work . Nimesh too, runs a  business.

The support  nonprofits receive through Caring Friends may vary from between 25 to 80% of their total financial resources. Projects featured oin Caring Friends' brochure are making a difference to hundreds of thousands of individuals spread across India.

Both Dasra and Caring Friends are exceptional organisations that - though, very different in approach- are making a major difference. Which, I wonder would be the approach you find most attractive: the very quantitative, methodical approach of Dasra; or the more subjective, qualitative approach of Caring Friends?

And which, are likely to work best to attract wealthy donors where you are? I would be fascinated to hear your answer.

A degree in fundraising? It’s a no-brainer

Is it a case of the cobbler's shoes? Universities are increasingly turning to philanthropy to funds their needs. But how many of them actually teach fundraising?

Charles Keidan asked a similar question recently in Times Higher Education.  "While universities arm themselves with a “philanthropy workforce” and sophisticated donor-profiling software, another question has received far less attention: where is the academic scholarship and teaching about philanthropy?"  Where indeed?

I should declare an interest. It is my fond hope that one day I will find a nook in academia somewhere, where I can devote my time to researching and teaching new generations of practitioners about philanthropy and fundraising.

And I’d like especially to focus on ‘fundraising’. What is the state of play with regard to researching and teaching fundraising at present? I'd be grateful to anyone who can add to the following roll call.

In the US, the two best-known centres for research and teaching of fundraising are the Schoolof Philanthropy at Indiana University  and the Hauser Center at Harvard . (Although, from their brochures it looks as though neither of these offer fundraising as a major).

In the UK, there appear to be three places. A new course has been launched at the University of Chichester. The University of Plymouth is home to Adrian Sargeant, as Professor of Fundraising . Lastly, Cathy Pharoah holds the position of Visiting Professor of CharityFundraising at CASS Business School, University of London. 

Apart from these places in the US and UK, from where will we find any tertiary trained fundraisers?

There are, and this is no bad thing, a growing number of university research centres studying and teaching philanthropy and civil society more widely. Unsurprisingly, the majority of these are in the US. However, according to Times Higher Education, Europe is home to eight dedicated academic centres of philanthropy and two chairs. 

Australia has its Australian Centre forPhilanthropy and Nonprofit Studies, and The Centre for Social Impact ( a four university partnership which includes the  Asia-Pacific Centre for Social Investment and Philanthropy). Of course, the more we understand philanthropy, civil society, the various distinct and hybrid forms of social investment, nonprofit management, NGOs and so on the better.  But none of these in Australia teach (as a major) or research fundraising.

However, it still begs the question of where any of this (including social investment) would be without fundraising? (And, of course, this also links back to where would the institutions where these research and teaching activities exist, be without fundraising?).

Perhaps we can take some comfort from the fact that only recently the question was being asked, “Where is the research and teaching on philanthropic foundations?” In preparing to write this blog I came across this 2010 blog entitled 'Is there a future for the academic study of the philanthropic foundation?'. My own PhD supervisor, Michael Liffman, wrote an article this year in Alliance Magazine, explaining how he came to found what in 2002 was the first Australasian course offering a professional education in grant-making, philanthropy and social investment

I hope that Michael will share my view that a degree in fundraising (given universities are increasingly dependent on fundraising) is equally important in 2014 - and will forgive me stealing his Alliance article's title!