In this webinar, Larry C. Johnson will show you how you build a fundraising machine that is simple, powerful and lasting.
Steven: All right. Larry, I got one o’clock Eastern. Is it okay if I go ahead and get this party started?
Larry: Let’s roll.
Steven: All right. Cool. Well, welcome everyone. Good morning I should say if you’re on the East Coast. Good afternoon if you’re on the West Coast or somewhere in between. Thanks for being here for today’s Bloomerang webinar, “A Motorcycle Ride to the Land of Nonprofit Impact.” And my name is Steven Shattuck, and I am the chief engagement officer over here at Bloomerang. And I’ll be moderating today’s discussion as always.
Just a couple of housekeeping items for you all before we get going. Just want to let you all know that we are recording this session. So, if you have to leave early or maybe you want to review the content later on, don’t worry I’ll get that to you today. I’ll get you the slides as well as in case you didn’t already get those. Just look for an email from me later today with all that good stuff.
But most importantly, as you’re listening today, please, please, do feel free to use that chat box right there on your webinar screen. One thing I like about today’s guest in particular is there’s going to be a lot of interactivity. So, do not be shy, don’t sit on those hands, send us your questions and comments. We’re even going to try to save some time at the end for a more formal Q&A session. You can do the same on Twitter, I’ll keep an eye on the Twitter feed for questions in comments.
And one last note, if you have any trouble with the audio by phone or by computer I should say, we find that the audio by phone is usually much more . . . much better to be completely honest with you. So, if you got a phone nearby and you don’t mind calling in, if that’s going to be comfortable for you, try that before you totally give up on your computer speakers. There’s a phone number you can dial in the email from ReadyTalk that went out about 15 or 20 minutes ago. Hopefully, you got that. So, give that a try if you have any technical difficulties.
And if this is your first Bloomerang’s webinar, I just want to say extra special welcome to you folks. If this is your first webinar with us, so glad you’re here. We do these webinars every single week, practically every single week. We only miss a couple weeks out of the year. One of our favorite things here we do at Bloomerang.
If you don’t know what Bloomerang is, we are provider of donor management software. So, if you’re interested in that, if you want to check out what we have to offer, you can look at a quick video demo of our software. It’s probably the best way to kind of get introduced to what we have. So, just check out our website after the presentation.
Don’t do that now because you all are in for a real treat. It would not be a Bloomerang webinar series without having Larry on, at least once a year. You’ve heard him before hopefully. But Larry C. Johnson is joining us from the beautiful Rocky Mountains. Hey, Larry, how’s it going? You’re doing okay today?
Larry: It’s going just fine. And I mean, you know, and you were surprised I was in Indianapolis just two weeks ago. Hello.
Steven: I know. We should have gotten lunch or something.
Steven: I enjoy run into Larry, a couple times a year. But it’s good to have him here on the webinar series. He’s done a few sessions for us over the years. Always well received. This is going to be the good one. I just want to brag on you real quick, Larry, for the folks who don’t know you. You got to know Larry. He is an internationally recognized fundraising coach and a philanthropy coach. He is the founder over at The Eight Principles which he’s going to tell you a little bit about at the end. But definitely a resource that you should be aware of, lots of really cool fundraising advice and services that they offer over there.
But he’s been helping out nonprofits for a long time. He just let me know about a 30-million capital campaign that he helped that with, pretty much took the lead on that only had a goal of $2 million. So, that gives you a sense of the caliber of type person we’re talking about here. He’s an author. He’s got a great book also called “The Eight Principles of Sustainable Fundraising.” AFP, named him the Outstanding Development Executive in 2010. And the Wall Street Business Network named him one of the top 15 fundraising consultants in the U.S. And like I said before, you’re going to find out why. So, I don’t want to take any more time away from you, Larry. Take us on that motorcycle ride. Go for it, my friend.
Larry: All right. Okay. Let’s see if my computer works here. Well, welcome everybody. And now, this is going to be a participative session. So, there’s no opportunity to be shy here. I can’t see you, so that’s one help. But I want some, I want some feedback as we get through this. So, use that text box, use that Q&A. And Steven is going to be checking that and he’s going to be responding. And that’s the best way for all of us to learn something, because everyone here has something to contribute. And that something is very important. It all contributes to a much bigger and broader picture, a deeper canvas.
So, let’s talk about the motorcycle ride for impact. Those of you who know me, know I love to ride bikes. I have a big Harley and being out in the West it’s a great place to ride it. That’s what it looks like when you’re sitting astride a motorcycle, for those of you have not done it before.
But the reason I’m calling this “motorcycle ride for impact” is we’re going to move through these things pretty rapidly. Things are going to whip by you because we only have a limited amount of time. So, you need to be very . . . listening carefully, you need to get off your phone, and get off doing your nails, or doing your taxes, or whatever else is your doing, or doing a fantasy football, or whatever it is you’re doing. And focus because you’re going to miss some stuff even if you look away for a couple of seconds. Those of you who ride motorcycles also know that when you start looking away, that’s when you have wrecks. You got to keep focused on that road 100% of the time. So, that’s my reason for saying, it’s a motorcycle ride today.
The first thing I’d like to ask everyone this morning, is I’d like to ask everyone and . . . how many of you out there really enjoy what you’re doing right now? Just say, yes. And type it in the box if you do. How many people really, really enjoy what you’re doing? Oh, I see some yeses coming in. That’s great. Great. Terrific.
Steven:Yeah, mostly yeses.
Larry:Because if you’re not enjoying what you’re doing, you’re in the wrong place. Because you’re not going to be that effective and you’re going to be borderline miserable most of the time. So, now, here, we’re getting a little more pointed with the question. How many of you out there are willing to do whatever it takes to raise the money so that your organization can have a greater impact in the world it serves? How many yeses we’re going to be out there for that? Okay, you’re committing yourselves. All right. You know, you’re going to jump out of an airplane with me? Oh, yes, within my boundaries and within the bounds of the law.
I don’t exceed the bounds of the law, but I suggest that your boundary or your personal boundaries are probably a little broader than you think they are. Here at The Eight Principles, we follow a technique called Radical Honesty, Radical Transparency. For those of you who know Ray Dalio, who wrote the book “Principles.” We are an idea meritocracy. And everyone from the person who answers the phone to myself can contribute and challenge anyone else and come up with an idea, and all ideas are considered. And those who work with me will tell you that, so you can call in after and find out the real scoop. But that’s what we do.
So, we’re going to be talking about impact today. Impact. You know, that’s the whole purpose of your organization is to achieve something greater in the world. So, money is simply a means to an end. And I’m using that word very carefully. I’m using the word money, because we’re going to be talking about different concepts that are closely related.
You’re going to find out that when you work with me, being successful in this business is very much more about what you’re thinking and where your mind is than the physical or mental things you’re doing. Now, we live in an organization . . . we live in a world where it’s all about doing. And that’s fine, you got to do, you got to execute. But you’ve got to start with the right point of view.
So, impact, how do you get the impact? You get it through sustained growing revenue. You’ve got to have that money coming in the door. And it’s got to be coming in on a consistent sustained basis growing over time. Now that’s very counter to a lot of thinking. That’s looking to the next gala, the next mailing, the next whatever, to keep going. That just sounds utterly exhausting to me. And it probably is to you. But it’s not sustainable, not for very long. And it certainly won’t grow past a certain point.
So, we’re going to . . . let that kind of marinate for a minute that that’s what we need, we need sustainable, growing revenue. And then we’re going to talk about how you get that and how you need to adjust what you’re doing to achieve that. That’s the role of the next 45 minutes.
Now, this is a chart that many of you have seen before. This comes from Giving U.S.A. This shows you, I think this was last year, last year’s number. They’re always kind of a year behind, the way they do the accounting. That $410 billion was given in the United States to philanthropy. And as you can see, the big source there are living individuals.
But let’s look at that a little closer. Corporations are 5%, that’s true. However, half of corporate giving are gifts in kind, not cash or cash equivalent. And then foundations, yeah, it says 16%, but guess what? Half of those are family foundations. So, they look, feel and act not as big corporate entities like the Ford Foundation, or Kresge, or any of those, but as individuals because that’s the way they make their decisions. And then that last 9%, well, that’s just dead people.
So, if you add up all of those things that I just talked about, then individuals are directly or indirectly responsible for over 90% of all philanthropy in the world. Wow. So, you need to be thinking of focusing and building your core program around individuals in the way they come to you. Very important. So, the next time that your organization wants to spend 60% of its budget hiring a couple of grant writers, you may want to think twice about that.
All right. Now, this is where it gets a little more tricky. You see those two, those two photographers there. Both that fundraising, the act of raising money, and philanthropy, the act of giving money are mirror images of each other. That’s very important. Because when you don’t recognize that as a fundraiser, you can go about it in such a dysfunctional way that that other mirror side just disappears because nothing’s reflecting back to you.
All right. So, let’s look a little closer at that word and a concept, philanthropy. All right. I’d like to know, who can tell me the country where those windmills are located? Just type in the country name. All right. I see a couple people with the right answer. The answer is Greece. Yes. It’s Greece. So, let’s examine the English word philanthropy. It comes from two Greek roots. The verb philios which is the verb for brotherly love. And then anthropos which is the verb for mankind, the generic mankind. So, if you put it together, you have brotherly love and mankind. And you put that together and you have philanthropy for the love of humankind. So, that’s what philanthropy is. Did anyone mention the word money? No. No. That’s because philanthropy is not about money. I say that again, it is not about money.
Now, that’s not to say that money isn’t involved someway somehow. But that is not the driver of this. And this is a cardinal mistake that fundraisers make when they’re focused on the money. Because by focusing elsewhere, the irony is, you actually raise more money.
Now, let’s go back to that $410 billion. That figure is extremely elastic. Research has been done, primarily at Boston College, but I think also at the Lilly School too. That demonstrates that philanthropy or the amount of it is clearly elastic. That means, it expand or it contracts dependent on a specific variable. All right. And that variable is the degree in which donors are connected or engaged to your organization.
So, and the estimates are, that you could actually double what’s out there. Other words, not 400 billion but 800 billion. So, I tell my clients and those that attend my workshops, there are hundreds of millions of dollars on the table every year that you walk away from, because you’re simply not engaging or connecting with that money.
And you know what? And that has a pretty deleterious effect on nonprofit help. How many of you have worked in a nonprofit that looks like that little building there? Get some yeses here. How many work at a nonprofit that looks like that now? All right. Let me give you what those numbers mean. Fifty percent of all nonprofits, (c)(3)s, public charities in the United States have 30 days or less of cash-on-hand. Anyone want to venture what the standard number of days of cash is considered healthy for any organized business? Anyone want to put that number down there? Who wants to guess? Yeah. 180 days.
Any of you who are business school grads will know that, 180 days of cash in the bank that you could pay out with nothing else coming in. So, half of all nonprofits are teetering on the edge every single month. Thirty percent of them have lost money in the past three years. Thirty percent of them have liquidity issues. That means, freeing up money that they can actually spend. And 8% are technically insolvent, meaning, bankrupt. More liabilities than assets.
So, something’s wrong, something’s not right. And we can talk about this all day. One of the reasons why is that many, many nonprofits do not have a viable business model, meaning, the governance of revenue and how that’s treated coming in the door. And there’s all sorts of reasons for that, we’re not going to add today. But anyway, that’s an issue.
So, just kind of, let that sit for a minute. I’m building to a conclusion. Who wants to tell me what this lady’s doing in the picture? What’s she doing? People are thinking. Scratching her head. The right answer, I see it. Great, great, great. All right. For those of you and that includes most of us I guess who been on a commercial aircraft. That lady is the stewardess/flight attendant whatever you want to call her. And she stands up in the front when everything is getting ready. And she demonstrates how to put on the oxygen mask if the aircraft should lose pressurization.
One thing that she always says is, “Put your own mask on first before putting it on someone else.” Why do you think she says that? Why do you think she says that? It’s a very specific reason that she says that. Well, almost. It’s not so you don’t . . . Well, it is sort of so you don’t pass out. That’s right. Because if you don’t put it on yourself first, you will pass out before you can help anybody else. So, you both die. All right.
Now let’s translate that concept to the way nonprofits handle a lot of money. They’re so busy spending money saving the world, they’re not generating enough money and building an infrastructure and building a machine that generates enough money to keep themselves going. I mean, I can’t tell you the number of times that when I’ve suggested to a client, “You need to pull back up on some of your programming for a few years until you build this infrastructure so you can begin to deliver more things. “Oh, well, we can’t do that. We can’t . . . we can’t, we have to keep expanding our program.” Of course my response is, “With what?” You see, then that becomes an issue.
So, you combine that attitude with the lack of a business acumen and you figure out real quickly the problem is not the fact that there’s no money out there. I never want to hear that from anybody, because that’s just a crutch. That’s someone who either doesn’t want to understand or they’re avoiding the issue.
So, we’ve looked at some things. So, what really is holding people back? What’s really holding you back? Well, let’s look at some of those things that are really, really hampering the fact that you’re not raising sustainable, growing income. And these are all things you can change. And I have nothing to do with how much money you can spend, or how big you are, or how much talent you’ve got to throw at the problem.
Number one, your resistance to change. Nonprofits are notoriously risk-averse. You know, I do believe there’s some out there that would prefer to use a rotary phone if they have the opportunity, really. That’s the first thing. That’s probably the biggest thing. And another thing is, they’re also scared to death if anything goes wrong. Oh my god, well, what if this happens? What if this happens? You know, what if . . . you know, things that if they did happen it wouldn’t be . . . we would have to worry about anything anyway. All right.
So, because of their unwillingness to make changes or their fear of trying to approaches, you know, you’ve heard . . . and that gets expressed in certain ways. “Oh, we’re different here.” No, you’re not. To, “We’ve always done it that way.” Oh, and you want different results? So, because of that, you end up with, you know, the same party and the same mediocre results.
Does that look like some of your galas you’ve been to? Type yes if it does. You’re not kidding. There you go. And I’m just seeing some of these things. So, where does a lot of this come from? I mean, you know, these are smart people. People on your board are smart people. You know, you’re pretty intelligent yourself, if you’re doing this kind of work. So, where does all this come from? Well, the biggest obstacle to raising money. The number one, obstacle to raising money has nothing to do with skill. It has nothing to do with how many courses you’ve taken. It has nothing to do with manipulating technology. It’s everything to do with your dysfunctional attitudes about money. That’s what it is.
Now, we can’t really get into that too much today, but let me just tell you, it’s the attitudes toward money. And imbuing, endowing it with all sorts of qualities that it doesn’t have, moral qualities, emotional qualities, all these things that are irrelevant. Money is simply fuel, it is simply a tool. And you have to remember that fundraising is not about money, it’s about something else.
And so, we have a, you know, when we do workshops of The Eight Principles we have an assessment we put you through that shows you how functional or dysfunctional your view of money is, and how that’s hampering your ability to work with donors. And we get into that in some detail but we can’t do that today.
Come to a workshop, signup for a workshop then you can do that, but just bear in mind, this is what’s holding you back more than anything else. And as a result, what happens is that your donors are disconnected from you. They’re not interested. They’re doing something else. You know, we live in a world with all sorts of distractions. It’s hard to believe that the smartphone is only about 10 years old. Wow, you think it’s been here since Moses but, oh, no. It’s just about 10 years old. And it’s so changed the way so much stuff is done. But even before that, people’s lives are very busy and they’ve got lots going on. And so, for you to engage them and connect them, takes effort and it takes time.
So, if we’re going to make, if we’re going to start building fundraising programs that have sustainable, growing infrastructures. And believe me, as we saw, there’s plenty of money out there. It’s not for lack of resources. And I don’t care whether you’re a small million dollar agency or a big hundred million dollar agency. That is irrelevant. And I don’t care if you’re in a small town, big town, middle sized town. That’s also irrelevant. There’s a great deal of money out there that it’s not being tapped.
I have a new partner that I’ve just brought into the business and he’s not really from the fundraising business. But he’s doing something else and he’s gotten into this. He said to me . . . well, last evening he said, “You know, Larry, there is a lot of money out there. I didn’t realize there was so much money that . . . ” Yes, there is. It is just waiting for you. But what it requires is a different mindset. You’re going to have to change the way you’re thinking. And this is not easy. You know, it’s easy to run out and, you know, well, I’ll mail this thing, or I’ll call people this way, or I’ll use these tips, or whatever. Those are surface things. You’re going to have to change the way you’re thinking before you start getting different results. And here’s the way I suggest you do it.
Most of us live in the world a process. It’s what we do, it’s our techniques, it’s mailings, it’s interviews, it’s all this stuff that we do, it’s, you know, emails, all that, that’s process. It’s technique. Even something as good as Bloomerang is process. It’s a good tool. But that’s all it is, is a good tool. And you can’t expect it to raise the money for you because it won’t. And I’m sure, Steve, would wholeheartedly agree with me on that. All right. It’s a tool and it’s effective tool if it’s used properly.
Okay. So, process is not where you need to have your initial focus. And the reason for that is, there’s so much stuff out there. But all of our organizations, they differ a little bit. There’s a lot of similarities, but they differ a little bit. And that difference is called the paradigm, the mental framework and view of the world that we look at in our organization. And that will influence the way you raise money to some degree.
And so, how many of you have ever been to the auto parts store or to Best Buy, the electronics store, and you knew you needed some sort of part or widget but you didn’t know exactly what you needed. How many of you been in that situation? Yeah. It’s very familiar, isn’t it? So, you go in there and you talk to a clerk that might know 10% more than you do, believe it or not. And you tell this person, you tell them this, and then you buy something or maybe a couple of things. And you get into your car and you go, “What the hell do I have? What is this?”
Well, that’s the way you feel when you get all this stuff in your email box and they’re all promising these unbelievable results overnight, and then you go to process and you wonder why it ain’t working six months later. Well, because you didn’t . . . first of all, to take a real mental piece of what your paradigm is and we can talk about that. But there’s something even more important than that. Believe it or not, there are underlying unchanging principles that operate that govern all fundraising and philanthropy. They’re there. And they’re not going to change and you’re not going to escape being subject to them just like gravity.
And when I wrote my book, “The Eight Principles,” I simply put names on them. That’s all I did. I didn’t invent these things. They’ve been around since the beginning of the world. This is a function of human nature. But I do call them The Eight Principles of Sustainable Fundraising. And I can take any given nonprofit. I can take your nonprofit. And I can show you very quickly how you’re either aligned with or in opposition to each one of these principles. And that determines how much of a tail wind or headwind you have.
And I’m going to talk about a couple of them today that I think are important for . . . specifically for impact and I think they kind of fit together. The first one is, principle one is donors are the drivers. Donors drive philanthropy. They’re in charge. They’re in charge. They’re making the decisions. But they don’t drive it with their money. No. No, money is involved. But it’s not about money. It’s about their, and I underline the word their, personal self-fulfillment. Their personal self-fulfillment. Donors drive philanthropy through their desire to actualize their personal values and beliefs.
Why do you think, 30% of philanthropy goes to religion? That’s your best friend, is a person who is focused on their faith because you’ve got their ear. And the closer you can align your organization with their personal values, the more they’re going to hear you, the more they’re going to be interested in you, and the more they want to invest in your future.
So, just remember, I’m sorry to say, you’re going to have to get over it. It’s not about you. It’s not about you wonderful organization or the wonderful things you do. It has nothing to do with that. That is simply tangential to the donors’ needs. It’s not about you. And that’s hard to get over for a lot of people, because all of you are mission driven, you’re doing things you believe in, and that’s just fine. There’s nothing wrong with that. But when you’re working with donors in an attempt to get them to invest in your organization, they’re investing for their reason not your reason. So, you need to come to terms with that. So, that’s going to get you sustainability. You know, donors that are investing because they believe in you.
Principle six is divide and grow. And that’s simply the principle of treating different donors differently. Okay. Donors come to you in different sizes, at different points in their life, with different capacities, and so you need to treat each of these donors in a way that makes sense for them. The principle of treating different people differently.
And as I said to you, this is the key to growth. This is what grows your program over time, because if you don’t adhere to this principle, what you end up and get are a lot of entry-level gifts from everybody. The one that can write you a check for $25, the one that can write your check for $25,000, you’ll get the $25 from everybody. All right. And that’s what you don’t want.
So, the first thing you need to understand is sort of part of principle one. Donors are on a journey. They’re on a journey, a personal self-fulfillment journey. And there, you know, you see those [Bedu 00:28:58] there. They’re out there in that desert, and they’re on a journey. There are too many landmarks out there. You know, and that’s why they need a guide. And that guide is you. You’re their guide. You see? You’re not coming along to extract anything from them. You’re guiding them on their personal self-fulfillment journey, because guess what? They’re the hero.
Now, most of you know there’s this big push in the last couple of years on nonprofit storytelling. Well, I’m going to be very upfront, and very bold, and just tell you, 98% of what’s said at those conferences is absolute bunk. And here’s why? They think the story is about them. And it’s not. The story is about the donor. The donor is the hero, not the organization. And so, they totally missed the point. They make it narcissistic, they make it about themselves, and they wonder why donors are only marginally interested. Or they’re being guilted into giving.
I think one of the things that I find most revolting and most exploitative is these children’s charities that put these photographs of these pathetic children who are dying of starvation in an attempt to get you to make a gift. I just find that so obnoxious. I’ll just let it go at that. And there’s no need to do that. So, if we’re going to adopt a new way of looking at this, if we’re going to look at . . . if we’re going to put donors in the seat of being the hero, we’re going to treat them differently as they go along.
How do you do that? Well, this is something that we call the Donor Progression Pipeline. It comes right out of my book. You can buy the book, it’s in there and there’s a full description of it in there. What this shows — this is not a moves management system. This is not a tracking system. That is not what this is. What this is showing is how donors travel through your organization emotionally. Emotionally.
All donors come to you through some sort of acquisition vehicle. Somebody recommends it, they get picked up, they make a gift through any of these . . . any of those vehicles you see there. And then over time, if you’re attentive to them and attentive into their needs, you can upgrade their gift into something a little larger. That’s cash. And then over time, as they grow closer to you, you can actually get them to give you a gift of assets. It doesn’t have to be a large gift of assets, but it’s very distinct. We’re going to talk about what that means in a minute. And then of course at the very end are the deferred gifts and bequests which are simply asset gifts that are given with a secondary motive. That’s all they are. There’s no big mystery there. Okay.
And then wrapping around all this as you see is the fact that it’s a continuous program of bringing people closer to your organization. That takes time, that takes effort, that requires a deliberate focused program to do this. Now, you’ll see over here that from left to right that it gets more a . . . that the very left when you’re acquiring donors or lots of areas there, that means, it’s really expensive. It costs a lot more to get new donors in, dollars and cents. Mailing, postage, staff time, all that stuff that costs money. It costs a lot.
If you keep your donors and you maintain that, the cost to keep them as you see gets down there, gets to almost nothing. And so, that their lifetime value to the organization is huge, huge. You know, I can’t tell you how many organizations focus all the left-hand side of this graph and they wonder when I’m raising any more money. Well, they’re spending it all. Their donors are going out the back door as fast as they’re coming in the front door. You can’t get sustainability and growth with that. No.
So, let’s go back to the idea of an asset gift. How many people have heard the concept major gift? Just type in yes if you have. Okay. Great. Well, you know, for those of you who think I just like to debunk things, I spent most of my life in capital fundraising, I’ve negotiated eight figure gifts, I’ve done . . . I’ve been with the big players that’s sort of the big part of what I’ve done in my career. However, the question I’m asking is, what the hell is a major gift? What is it?
Well, it depends on who you’re talking to. Both in its size, how it’s paid, whatever, so, and it’s internal, it’s an internal thing. You know, I don’t know of many donors that rush up to you and say, “I just can’t wait to make a major gift.” Whatever the hell that’s supposed to be. And what I think it is, is a meaningless moniker. It’s self-serving.
So then, what is important? What should we be tracking? What should we be aware of? Well, I’m going to suggest to you, it’s the type of gift not the size. And that’s why a gift of assets is so very, very important, and so indicative of the growth potential and the sustainability of your program. And I’m going to show you the chart to prove it. Here it is.
This is a chart that shows you five-year revenue comparison of a program that focuses on annual cash but versus a program that we teach is called The Eight Principles which focuses on the acquisition of assets. An asset can be anything as small as a $5,000 dollar IRA or mutual fund that the person isn’t using any more. And this is based on 200,000 organizations with over a million data records. So, this is verified. You know, I’m not smoking anything here.
So, if you look from left to right, organizations that have annual revenue of a 100,000 to 500,00, in five years they’d be doing 400% more than they are doing now. And so on the up, 500,000 to a million, 175 more, percent more. One million to two million, you’ve got, you know, 100% more. So, there you go. When you’re focused on assets, you raise more cash and assets because that’s a revenue number we’re looking at. That’s a revenue number. That’s are converted to cash number.
So, if you’re focused on that, you know, you’re going to see some pretty heavy growth. Pretty quickly. But you’ve got to build a system like I just showed you, and then maintain it, and then it becomes a machine over time. Success is never a one-time effort. It’s a way of life. You know, please, please, please, please, please, cover your ears when the sirens of the silver bullet arrive because there is no such thing.
And I give you an example of history. I’m sure all of you know about the American Gold Rush in the mid-19th century. Well, who do you think, what group of people do you think made most of the money out of that Gold Rush? Anyone want to put . . . what kind of . . . what group of people that were involved in that thing? Yeah. The people who sold the shovels. That’s right. The merchants. They’re the ones who made the money, not the miners, not the people who quote struck it rich because they usually didn’t stay rich very long. But it’s those people who were there day in and day out, and day in and day out and provided the needed service. They’re the ones that walked away with fortunes.
Anyone ever heard of Leland Stanford? Stanford University? Okay. That’s the source of his wealth. That’s where it came from. All right. So, fundraising is about people, it’s not about money, even though money is involved. When you focus on people, however, you raise more money than ever. I guarantee you.
So, all right. I’m sitting here in my office and I’m going so, what do I do now? How do I make this work? Okay. I’ve got a board that’s only mildly engaged. I’ve got an executive that looks at me funny every time I tell him to do something or her to do something. So, how do you do this? Well, here’s the way to do it. First of all, you need to have your leadership and your executive learn “The Eight Principles.” You need to internalize those. And you know, you can do it on your own. We can also do a workshop for you. Sometimes it’s better if somebody outside says the hard things.
But once you know those principles and you’ve internalized them, the next step is to figure out who you are as an organization and how you is the best way the framework in which you raise money. The framework. And then once you have those two things in place, guess what? Choosing the methods whether it’s a mailing, or whether it’s a peer-to-peer, or whether it’s this or that, or whatever it might be. That’s the easy part. And then you just go out and do it. And you keep doing it over, and over, and over. And guess what? You get the result you’re looking for.
I want to offer you some free resources today that I think will help. There’s a one-page principles of . . . of the one-page summary “The Eight Principles.” There’s a paper that we have that’s called “The Three P’s,” and it talks about principles, paradigms, and process. It explores some of these ideas that we’ve talked about. And then, there’s the idea of growing with assets. How you do that? And if you simply send an email with the subject line saying resources, up there at the top to, info@theeightprinciples, it will be sent to you and they’re all PDFs. And you’ll be able . . . they’re yours to have. And I hope you get some value out of them.
For those of you who want to find out a little bit more. We have something called “The Four Corners Profile,” and that’s a very easy little thing you can do. It is 20 minutes, you fill out a survey that anyone can do, you don’t have to be a fundraiser or financial guru, and you give us your five-year goals, and you come back and we score it, and then we tell you you’re in one of four boxes. This is just like the Boston box, of those of you familiar with that model. And you’re either thumbs up questioning face, money bag or bomb depending on how sustainable or how much growth you have.
And then we’ll tell you, we’ll tell you the actual three to five big steps you’re going to have to take to be successful. And then if you decide to go ahead and have you help us in some other way either in workshop or something else, you know, the cost of this is counted against the cost of any other service. So, it’s not an extra charge. But this . . . we’ve used this. People love the simplicity of it. And that’s the key. It’s very simple, it’s very literal, and it doesn’t lose any of the sophistication in that literalness.
So, Steven, I’m going to go back to this thing here so people can get that info@theeightprinciples. And then “The Four Corners” is you just say profile and use the same email, if you’re interested and we’ll get back to you and talk to you about it. So, why don’t we have some questions?
Steven: Yeah. I love it. But first, just want to say thanks, Larry, for taking, you know, the time to share your expertise. And for being here today. So, thanks for doing it. It’s really cool presentation. Glad I heard it.
Larry: Well, it looks as though we have a very active group, and I like that. I like that.
Steven: It usually is over at the Bloomerang series, usually some participatory people. So, if you’ve got a question, we’ve got probably I’d say maybe 13 to 15 more minutes that we can hang out as long as you all want to for questions. So, if anything’s on your mind or maybe you’re struggling with something specific. Now is the time. We got an expert here that is willing to hang out for a few minutes. So, maybe I can get things started, Larry, with my own question if that’s okay.
Steven: So, we’re recording this on November 8th. It’s nearing year-end. Is there anything that you think that people should be doing this time of year specifically that maybe gets overlooked or overshadowed by all the other things that seem to take precedence of year-end?
Larry: Well, principle six really comes into play here. There again, the focus is usually bringing a lot of money in at the end of the year. And there’s nothing wrong with that. In fact, many organizations bring in a good chunk of what they bring in, in the last quarter of the year. And that’s just the nature of a couple of things. It’s a nature of the tax structure. People want to get something in before the end of the year. And it’s also the nature of people or what people are thinking about. People tend to think about giving back more during the holidays.
And so, if you think about those two motivations, they appeal to two different kinds of people. And this is where segmentation is so very important. Those who are already giving to you or have given to you, could very well respond very well to another ask for another gift that they could get in before the end of the year. This is also a time when people give a lot of assets.
So, if you already . . . if you’ve already done your segmentation, you already know who your people are. You should know if you don’t, you better be planning for next year. You’re missing the boat. Then you know, that okay, I know, I have these donors and I know they may be interested in giving appreciated stock. They may want to write off something they don’t need anymore, and you have to be ready for that. You need to have a brokerage account in place and ready to receive it. Because they may call you New Year’s Eve and at four o’clock in the afternoon.
Larry: And you better be ready. Yeah. And you know, if they get voicemail, guess what? You just lost a $50,000 gift, just like that. They’re going to go to somebody else because they got to get it done. All right. Then there’s the group, then there’s the motivation of, “I’m feeling more generous. I want to give back.” That appeals most the people who haven’t given to you yet. It’s a wonderful time to acquire new donors.
Now, don’t expect to, you know, big bucks to come in from these people. But when you acquire new donors, you have their attention, then you’re ready to start working with them over the next year, so that this time next year, you can say to them, “Hey, how about that second gift? How about that third gift? How about the gift of assets? You know, you gave last year but you didn’t give this year. Let’s do it now.” Those are the appeals you give to people who already are in your fold. And the other appeal about the season and being helpful. You know, that’s the people you to get into new donors. I hope that’s an answer.
Steven: I love it. Great advice. Especially the New Year’s Eve thing. I mean, all the data shows that it dwarfs Giving Tuesday and I always see, you know, organizations kind of put themselves into a tizzy over Giving Tuesday when the last day of year can be, you know, it’s 10 to 50 times more.
Larry: Let me tell you, Steve. You know, I was vice president at four universities. I was not popular when I said, “We had to have staffing on New Year’s Eve.”
Larry: I was not a popular fellow. So, yeah.
Steve: I think it was the right thing to do.
Larry:Yeah. Of course, it was.
Steven:Here’s one from Alexandra. Kind of dovetailing from the segmentation issue. You know, where you mentioned kind of finding those true believers, the people that are really, you know, in step with the mission and really believe in you. How do you identify those people? Is it a matter of, you know, maybe surveying donors or, you know, having events, you know, get and calling people? What’s been your experience and kind of finding that cream-of-the-crop people that really, really believe in what you do?
Larry: All right. Well, I’m going to give you a low-tech and a high-tech solution. Okay.
Steve: I love it.
Larry: So, the low-tech solution and I’m from the low tech era. Okay. Is that you do a lot of asking and a lot of listening which means is a lot of face time with people. And there really is nothing that the substitutes for that. There really isn’t. And so, I would advise to do that first. You can usually do it with a smaller group of people than trying to amass great amounts of data because you’re going to find that your patterns develop pretty quickly. And you’ll begin to see, you know, what the donor profile is that will support you.
And you might be surprised. It may have, some of the profiles pieces of it may have nothing to do with your mission. And I’m just choosing something maybe for some reason, a lot of people who love sports cars happen to like your mission. Well, see that’s . . . I’m sure there’s no connection there that you can see. But somehow there’s a connection in the mind of that person in the way that person thinks. See there’s the key, you have to look outside of the obvious. Number one.
Then there’s the high-tech version. Some of you may be familiar with the DDS concept. That’s the Deep Dive Survey concept. That is an automated system that is a series of surveys that are sent out that eventually moves people down into a bucket and puts them in a series of identified buckets as to their primary needs or primary challenges. And the book that starts this is the book with the title “Ask,” that’s all it is, and it’s written by Ryan Levesque. This is not inexpensive. You have to get someone who knows what they’re doing. It has to be programmed. But it’s a very effective thing and it’s being used in a lot of different fields. For instance, it’s being used in the financial services field to identify potential investors for management. And you see, that’s something that’s not that far from fundraising. And it’s being used very effective in that.
And so, what happens is, if you use it that way then you get to someone that is a lot warmer to you from the start, and so you have kind of gone through all the dead ends and you’ve gotten to people that are relatively warm.
Steve: That makes sense.
Larry: So, those are the two ways you go about that.
Steve: Very cool. Speaking of low-tech and high-tech, here’s a question from Paul. Larry, do you think that prints, marketing, direct mail, still has a place and given all the attention that, you know, email, social media, and online seems to get, is there a balance? What’s kind of your take on the whole analog versus digital debate?
Larry: Well, yes, direct mail still works, but it doesn’t work uniformly or universally. And so, you need to know who your audience is. The better you can make a direct mail appeal and when I say better, I mean, the more appealing, and the less salesy, you’re going to get more opens. You obviously with current donors, have the option, and I would give them the opportunity of asking whether they would like things to be done through email or through mail. And then when they respond, you actually honored their request.
I mean, I had the organization once, went to all this trouble of asking and they never did anything with it. Well, what hell is that about? I mean, why bother? You know, some of this stuff, I wonder where people’s heads are but, anyway, so that’s . . . yeah, it can be very effective now.
And let me make a comment about that. A lot of you do something like newsletters or annual reports, don’t you? Yeah. And a lot of you do this stapled donor envelope in the middle. Well, I’m going to tell you something about that, and I know that not everybody agrees with me but it’s been my experience. The minute you put a donor envelope or a request like that, saddle stitched or stapled into a newsletter or annual report, that piece ceases to be a piece of content communication and becomes a solicitation. And that’s how donors receive it.
And people you should know that those kind of blanket things, it’s the spray-and-pray approach to fundraising, it’s not very effective, and it has the potential of turning people off because all the research shows consistently that the number one negative among donors and how they deal with fundraisers is being solicited too often.
Larry: And this is something that’s especially an issue in independent schools where their nickel and diming you for everything that comes down the pike. And I work with independent schools and that’s the first thing I tell them, “Get off this thing of soliciting everything from basketball, to football, to the choir, to everything else. Get off that. And let’s do a uniform annual fund and build school loyalty.” And it’s amazing, when they finally get around to doing that, how much more money they raise?
Steven: You’re saying really keep the stewardship pieces separate from . . . .
Larry: Stewardship, yeah.
Steven: . . . real deal. Yeah.
Larry: You know, one thing that you see in my book is we do what is called The Communication Grid. So, what you do is you separate your constituencies into the four or five major groups, whatever they are. And then you look at a calendar, you know, a January through December calendar. And then you put in each box, what that group is going to get from you that month. And you’ll be surprised when you do that, you’re going to find that certain things are all lumped together and there’s no consistency and some people are missing other stuff because the people whether it’s an electronic mailbox or physical mailbox or social . . . whatever it is. They only know what they see. They only know what they see. They don’t have the big picture. For every donor, they’re looking through a keyhole at your organization.
Larry: Even the most well-designed communication programs, it’s a keyhole.
Larry: And so, you need to be very careful and focused as to what that keyhole, what’s coming through that keyhole? And each group is different. Each major group has different needs. They have a different interest. And it’s . . . you know, it’s really not as hard as it sounds. I mean, hey, folks, I came from the era of doing capital campaigns on three by five cards for heaven sakes.
Larry: So, this ain’t that tough. It’s just a matter of being focused and deliberate about it.
Steven: It seems like if you do that, you could probably ask more often than you did before. And have more success with it, right? Because it’s to your point, it’s the lazy, it’s the lazy asks that annoys people, but if you’re making a really personal contextualize ask, you could probably be making dozens of those throughout the year. And be really successful with them, right?
Larry: Mm-hmm. Notice that little word you used, contextualize.
Larry: That means, it’s not give us money because we’re going broke. Okay. That will never work. Okay.
Larry: Instead is, “Steven, I know how it’s important to you that the society has a functioning level of literacy and we have a project that’s really doing well. I really want you to be able to give to our general operating fund so we can grow that program and strengthen the others as well.” Okay.
Larry: I’ve got your attention, right?
Steven: Yeah. I love it.
Larry: Now, and of course, but if you were interested in fish and not reading, I wouldn’t slam you with reading.
Larry: I’m being facetious but you’d be surprised how some just subtle differences can make because you want to be . . . you want to feel like your organizations know you. And know who you are. That’s the key. And with the tools today, it is not tough at all. You know, in the old days you have to do all this by hand. But it’s not that tough anymore and it’s not all that expensive anymore, either. I mean, when I first got to this business, CRMs like yours, first of all they really didn’t exist and the ones that did, they were ten times the price they are now.
Steven: Right. Right. I love it.
Larry: So, they did limit. It did limit the use of that tool to the top 1%.
Steven: Yeah. Well, here’s a comment from Barbara. And I’m kind of interested to get your take on it because I think it’s a aligns well with what we were just talking about. Barbara said, that recently they had a donor that came in and paid for a new roof, you know, just pay off the roof for the organization. And they have another one come in and just pay off the mortgage. And that was really successful for them obviously. Do you think organizations should focus on very, very specific usages for those funds? You know, fund designations that are kind of locked in. What kind of place is that hold in segmenting the appeals?
Larry: Well, it can be very effective.
Larry: You want to be careful and keep them relatively large because you don’t want it to become balkanize, where you have all these little silo funds that you can’t do anything with. And you have to be careful that it’s a real need. For instance, I was at college once where they were working with a donor and they didn’t work . . . I kind of inherited this problem. And this lady decided what she really, really, really wanted to give was this ornamental garden light house. Okay, please, get real.
So, I mean, how do you tell this lady . . . said, “We just don’t want a light house.” So, I wasn’t going to take this thing. This is worthless. And so, I went to her and I just began to speak with her. And she gave the light house because she thought that would help the landscaping. What she really wanted to do is improve landscaping. So, instead of this ticky tacky light house that would have been a total waste to everyone, we got a half a million dollar gift to redo some landscaping. Hello. So, you have to work with donors. So, yeah, and you know, listen to what you . . . listen, Barbara, think about what they gave. They gave major basic infrastructure project funding.
Larry: Don’t tell me that isn’t important to donors because it is. Because if they understand that these things are critical to your overall success, then they will give. If they are vested on it in your success. If they are vested in your success.
Steven: Isn’t it amazing what happens and you actually talk to a donor rather than just, you know, get annoyed with them and write them off.
Larry: Oh, let me tell you. I attended a luncheon several years ago, and I was next to this young lady who just gotten a new job at a local, pretty good-sized charity and I won’t name it because someone might know it. And I said, “So what are you doing these days?” She said, “I’m donor relations director,” or whatever. “Oh,” I said, so.
Larry: I’m just making small talk at this lunch and I said, “So, tell me how you like working with donors?” “Oh, I don’t have any donor contact,” she said.
Larry:Well, when I manage not to spit my soup in her face, when I managed to get beyond that point, I said, “So, what do you do? What do you do?” She was . . . all she was it was a damn data recorder. She put in stuff into their system. That’s was their idea of donor relations. I was like, okay, fine. Conversation over.
Steven: Right. Well, hopefully you’ve helped out some people today. I think that you probably have.
Larry: I hope so.
Steven: We’re about out of time. I wanted to kind of give you the last word, Larry, to plug your website. I know you’ve got lots of free resources that maybe tell people where, again, best way to get and contact with you.
Larry: Well, you know, if you can even send an email to this info box, and I’ll get it. And I’ll respond to you. I respond to all the emails that are sent to me. It may not be in the next 30 minutes, but I do respond. I want you to really look at these resources, if you’ll take them seriously, they will begin to change the way you’re thinking.
For those of you who are serious about making some serious change, and you want to know where you really stand, “The Four Corners Profile” is a very affordable vehicle for doing that. And it’s not even an extra charge if you go ahead and do something else.
What I offer people is a platform of training and tools. We have a live training platform that’s interactive. It’s based on the Covey Leadership Model. We come in, we do that. We also have the same curriculum that we can license to you and you can deliver it as much as you want. We train somebody on your staff and you can do that. That’s a wonderful way for developing a culture. And then we have an online program, a full video of MOOC interactive, MOOC program, that’s mobile adaptive called the Oracle League. That’s an individual plan for teaching fundraising, and so, all video based. And then we have this “Four Corners Profile” which will get you very clearly.
This is especially useful for boards because boards don’t think in fundraising terms. And when you show this to people they go, “Oh, oh, it’s very clarifying.” So, let me hear from you, you know, as I said, if you send the profile, put profile in the email line, if you want the resources, just put resources in, if you have a personal comment, or gripe, or complaint, or praise, I’ll take them all. You know, just do it in the info and I’ll get back to you. So, it’s been a pleasure, Steven, as always.
Steven: Yeah. Thanks for being here. We’ll have to have you back next year, obviously. Sure we will, but yes, there’s a lot of fun. Let’s try to get some positive comments in the chat box too. So, looks like it was indeed helpful. I didn’t have a doubt. It’s always good to know.
Larry: Oh, mahalo, we have someone from Hawaii, mahalo.
Steven: Mahalo. Yes.
Steven: I love it.
Larry: Yes. I love Hawaii. Okay. All right. Steven . . .
Larry: There you go.
Steven: Yeah. This is awesome. So, thanks to all of you for hanging out today. I know it’s a busy time of year, so it’s always a good to have you give up an hour of your day to be with us. Hopefully, you’ll join us on our next webinar. We’re going to take next week off. But we got Gail Perry here to talk about major gift fundraising a week from Monday. So, if that works for your schedule, join us. It’s totally free. Gail is awesome. It’s going to be a fun one.
If you’re not interested in major gifts, don’t know why you wouldn’t be. But if you’re not, that’s okay. There’s other webinars you can peruse on our schedule. There’s a lots of sessions scheduled out even into next year already. So, check that out and hopefully see you again on another session. So, have a good rest of your Thursday. Have a good safe weekend. I will send you all the recording later on today. And we’ll talk to you again soon. Bye now.