[VIDEO] Why Fundraisers Should Press “Play” Not “Pause”

Larry C Johnson will show us how to step back and create fundraising programs that are impervious to broad swings in the economy, and how to develop revenue streams that liberate your organization to truly deliver on its mission.

Full Transcript:

Steven: All right. Larry, we’re rolling. Okay if I go ahead and kick us off officially?

Larry: Please do.

Steven: All right. Awesome. Welcome, everyone. Thanks for being here. Good afternoon. Good morning, if you’re out on the West coast, just barely. If you’re watching the recording, hope you’re having a good day. Thanks for watching it. We’re going to be talking about Why Fundraisers Should Press “Play” and Not “Pause.” Thanks for being here.

I’m Steven over here at Bloomerang. My Bloomerang home office, not the actual Bloomerang office, probably some of you can relate. But I’ll be moderating today’s little chat here, as always.

Just a couple of housekeeping items real quick. We’re going to be recording this session. We are recording, so if you need to leave early or maybe you get interrupted or just want to watch the presentation later on or share it with a friend, don’t worry, I’ll be sending out the recording to you later on today. We’ll also send you the slides. We’ll get you all those goodies. Don’t worry.

But most importantly, as you’re listening today, please feel free to chat in any questions or comments that you have. We’re going to try to leave some time for Q&A towards the end. So don’t be shy. I’ll keep an eye out. There’s a chat box and a Q&A box. You can use one or the other. It’s okay. I’ll keep an eye on both of them, but we’d love to hear from you.

If you haven’t already introduced yourself, go ahead and do that. We love to know who we’re talking to. Tell us about yourself, where you are, what your organization does. You can send us a tweet. I’ll keep an eye on the Twitter feed as well. But we’d love to hear from you either way.

If this is your first Bloomerang webinar . . . we always have a few first-timers, so I just kind of like to explain Bloomerang just for context. If you’ve never heard of Bloomerang, we are a provider of donor management software. So if you’re interested in that, you can check it out. We’re not really going to give you a commercial there, but that’s what we do.

We do these webinars just about every Thursday. In fact, we’ve been doing multiple webinars since mid-March. I don’t think I need to tell you why. So if this is your first session, thanks for checking it out. Hopefully you’ll come back. We have lots of webinars scheduled on even through the summer now. So don’t make it your last one.

But speaking of webinar series, my buddy, Larry Johnson, is joining us from beautiful Idaho, literally my favorite state in the union. Larry, how are you doing? Are you doing okay?

Larry: I’m doing just fine.

Steven: Your picture disappeared. There’s supposed to be a picture of you there. I can see it in my previous slide, but they can see you there on your webcam avatar.

Larry, you’ve done lots of webinars for us. I think you’re someone we always like to have back every year. If you don’t know Larry, he is over at The Eight Principles. Check them out. They’ve got a brand new website Larry just informed me. It’s really cool. I was just browsing through it.

Check out his book “The Eight Principles of Sustainable Fundraising.” I love “The Eight Principles.” It’s a really nice framework for what folks should be doing and concentrating on. So check that out later on.

Super involved in the nonprofit sector. Have been doing this for a long time, over 30 years of experience. He’s worked in your shoes. He’s a consultant now, but he’s been in the sort of ED and chief advancement officer role before, so he kind of knows what he’s talking about. Serves on tons of boards, including at the Carter Center. That’s President Carter, right, Larry?

Larry: That’s right. That’s correct.

Steven: Yeah. That’s pretty cool. And he went to Yale. I mean, geez, he’s got horses. He rides motorcycles. He’s a cool dude.

Larry, I’m going to let you share your slides, so I’ll stop sharing and we’ll see if we can make this work again.

Larry: Okay. Let me see. There we go.

Steven: There it goes.

Larry: You see me?

Steven: Yeah, we see your slides. You’re on, man.

Larry: Okay. Well, I’m going to be talking for about 25 minutes. Steve’s going to keep me honest in that regard. And then we’re going to open it up to questions, because I think questions really is . . . what I present really gets down to the retail level. I’m not going to be giving you any secret tips, techniques, or secrets. We’re going to be giving you some real structural advice and it will be up to you to be able to interpret that and apply it to your particular situation. So questions are absolutely critical.

So thank you for taking your time to do this. Of course, now with the way things are, hopefully you’re having a little more time to do this kind of thing.

So we’re going to be talking about . . . let’s see here. Okay. I can’t make the thing . . . what do I need to do? Hold on. Okay. That’ll work. I got the technology. Here we go.

What we’ve just experienced in the past couple of months is what economists and other people sometimes call a black swan event. For many years, black swans, they were thought not to exist until they were discovered. But yes, there are black swans and they do occur from time to time and they are generally . . .

What does a black swan do? Well, it is an unpredictable surprise, which exploits and magnifies vulnerabilities. In this case, we’re going to be talking about vulnerabilities in your fundraising. What’s going to happen to your fundraising as a result of what we’re going to see?

So the black swan event generally causes losses that are beyond what you could predict. We’re going to talk about what can be predicted in a moment, but generally this hits you, you didn’t see it coming, but yet there it is.

And the goal is not to try to predict these things, which you cannot. By definition, black swan events sort of come out of the blue. But what you can do is build a robustness in your program to the negative event and exploit it to your advantage. And that’s what we’re going to be focusing on today.

Now, a black swan depends upon the perspective of who’s looking at. Your black swan may be somebody else’s white swan. For instance, a black swan surprise for a turkey is not a black swan for its butcher. That’s a white swan for the butcher. It’s a black swan for the turkey.

So what we’re going to be doing is . . . of course, the objective is to avoid being the turkey. You don’t want to be the turkey in this situation. You want to be the butcher. You want to be the one who exploits the situation and uses it to your advantage. You can’t predict it, you can’t control it, but you can develop internal systems that will exploit it and provide you defense against it. So we’re going to be talking about identifying areas of vulnerability that will turn your black swans to white ones.

So now, let’s be more specific with what we’re dealing with right now. Sure, all of you have asked the question of “So what can I expect in the short term? What’s going to happen to my fundraising now in the next 3, 6, 9, maybe even 12 months?” Well, that depends. That depends on where you are on the scale of fundraising, whether you tend to do more transactional work or you do more relational work.

Now, what do I mean by transactional? I mean things that are quid pro quo. You buy and sell stuff. That would be all of your revenue-bearing events, your cause-related marketing, anything where there’s a “this for that.”

And then what I would call also blind solicitation. There’s a lot of that out there. “Let’s just get the list and just mail it to everybody.” Well, that’s transactional because you’re attempting to acquire something where there isn’t anything there before. There’s no prior relationship. That’s one side.

If your fundraising is more relational, you focus more of your revenue efforts on direct asks using donor interest in situations and then you target them with thoughtful content communication. Every one of those words has meaning, by the way. Content communication. Notice I didn’t say solicitation. That’s a [inaudible 00:08:01].

So if you’re more relational, then here’s what’s going to be your differences. Let’s go back to the 2008 financial crisis. And on that note, today’s headline in “Wall Street Journal” said that the economy has contracted about 4.8% in last quarter, and that’s not quite as bad as it was during the financial crisis. So from a financial point of view, where people put their money is a large degree as if it’s availability to them. This is what we’re dealing with, something about like that. It could be a little bit worse in the next quarter, but right now we are.

Well, in that particular event, during that period of around 12 to 18 months, if your fundraising was focused on transactional efforts, you could have lost up to 60% of your revenue during that period, mainly because that revenue is discretionary.

If, on the other hand, the bulk of your money or your program was focused on relational efforts, overall you experienced about a 1% reduction. There you go. There’s the difference between the robustness to buffet the black swan and then the one where it just hits you full force.

So what do you need to do now . . . of course, you can’t go back and change what maybe you would have liked to have done by focusing on relationships if you’re heavy in the transactional world. But right now, let’s talk about what you can do, and it’s going to be a balancing act at this point.

First of all, if you’re primarily in the transactional camp right now, you’re going to have to fasten your seatbelt, number one. And I would recommend that you continue current channels as appropriate. For instance, I’ve seen a lot of what they call virtual events. We’ll wait and see how they work out.

But I think the most important thing you could be doing now is preparing for the next black swan event. And I would recommend that you begin an aggressive program shift toward the relational model.

If you’re already doing relational work, you’re going to have to fasten your seatbelt because there are going to be some ups and downs. You’re going to be on a roller coaster there for a while.

And then I would go ahead and continue to inform and solicit . . . the epidemic has refocused a lot of people’s attention, but you need to understand that philanthropy does not totally refocus based on external events. Philanthropy is driven by internal values. So you need to be aware of that. It will focus some income there temporarily, but it usually will expand philanthropy during that period. It won’t just completely shift it.

And then thirdly, if you’re already in the relational thing, you should be focusing on strengthening what you already have. You’re in a good part. Let’s make it stronger. Let’s keep it there.

So how do we go about asking people for money at a time like this? Which is what you’re doing. Well, the first thing you don’t want to do is you don’t beg. I’ve seen some things out there that I really . . . I know these people are well motivated, but they say things like, “Well, now that we’ve got this epidemic on us, we need it more than ever,” or they say, “Things look bleak out there,” or, “Here’s how you can help us,” instead of saying, “Here’s how we, the two of us, can help others.”

So when you use any of those three bullets up there, here’s the message you’re giving your donors: “We’re incompetent. We didn’t plan ahead. We need it now because it caught us flatfooted. Things are bad and we need your money.” And the response from a lot of donors is going to be, “I don’t trust you. I’ll just look elsewhere.”

Definitely don’t shame people. I see a lot of this. This is sort of the entitlement mentality. “Well, we deserve this. You have too much. You’re not aware of what’s important.” Well, who’s determining what’s important? It should be the donors, and you have to appeal to them on that basis.

I see some of these comment strings on some of the blogs and people were whining about the fact that why weren’t foundations just liquidating their portfolios to hand out more cash? I’m not going to get into the specifics of that, but that’s their business. And when you try to shame people, here’s what you’re saying to people: “Well, we’re morally superior.” And people’s response is just going to be, “You’re only interested in my money. And who the hell do you think you are?” You’ll just turn people off with this kind of thing.

I really recommend that you invite and engage people. “Together, we’ll succeed.”

I don’t often name organizations, but there’s an advertisement on the TV from the Salvation Army that really, really does this very, very well. I was pretty touched by it. I thought, “They did this very well.” And that’s the whole message, “Together, we’ll succeed.”

And then, “We’re sacrificing by . . .” What is it the organization is cutting back on in order to make this work?

“Let’s make decisions together. You’re our donors. You’re important to us. We want more than your money.” The message is, “We want a partnership. Success involves everyone.” And the response is likely to be, “I’m ready. Let me help.”

Let’s look a bit at what motivates people to actually make gifts. This is so important. There are about 20 of these top motivators and they can really be categorized into 3 categories. The quid pro quo, the something-for-something crowd, that’s about 10%. Pure altruism, “I give because it’s the right holy thing to do,” that’s about 10%.” But enlightened self-interest is 80%. What do I mean by enlightened self-interest? I mean something that is enlightened to benefit the community, but is in my interests, which means it’s in line with my values and my visions. And so you need to remember that when you’re reaching out to people.

Now, as we go forward and we’re into this black swan event, there are opportunities within chaos. You need to know that stability and constancy are simply not normal.

Some of you may be young enough not to even remember a recession or any kind of serious upheaval. Well, they come periodically. Disruption and uncertainty are the normal. And I think that’s one of the reasons that has caused the reaction that we’ve had. I’m old enough to remember regular summer epidemics of one disease or another, and it was a part of life. It was just there. You had to deal with it. So the point is nothing is static.

So let’s go back the black swan event again. You need to resolve now to grow revenue streams that are impervious to broad economic swings, and you can do this. And they are the ones that draw from relationships that create emotional ties with your investors. Emotional ties. And it’s ties of their emotion, not yours.

Why should you do that with individuals as opposed to corporate foundations or other things? That’s because 90% of philanthropy is controlled by individuals one way or the other, either directly, through bequests, or through family foundations. Ninety percent of it, 89.8% or whatever it is.

So as you strengthen emotional ties, the philanthropic revenue becomes impervious to economic swings. We saw that in the last one. We saw it in 1987 when the stock market had its one-day hiccup. And I was old enough to be there for then.

So how do you go about doing this? How do you do this? Well, let’s take it step by step.

I think the first thing you must do is to confront your own reality, your personal organizational reality. This can be difficult because you think you’re doing something a certain way or you convinced yourself that you’re this or that and it’s kind of hard to get out of your head.

We do something we call the four corners profile, which is very simple. If you’re familiar with the Boston Consulting Group, Boston Box Model, it’s built on the same model, although it’s in fundraising, not corporate management.

But what we’ve focused on are the two things you should be focusing on: How sustainable am I right now? How scalable am I right now? And so we put organizations in one of those four boxes: thumbs up, high sustainability, high growth; questioning face, high sustainability, low growth; moneybag, high growth, low sustainability, and that would be your transactional crowd; and then low sustainability, low growth, that’s you’re almost on the edge organization, that a good shove will send them over the cliff.

Number two, once you have a real sense of where you are right now, and you could be in any one of those four boxes, the next thing is to start moving to the right box, and that would be the thumbs up box.

And so the way you do that is you internalize the natural laws of philanthropy throughout the entire organization. The entire organization. Fundraising is not an isolated activity. Yes, you may have a professional fund development officer, but the entire culture of the organization comes into play. And whether you’re in the boardroom or the reception desk, you need to understand what these laws are because you’re not going to break them. You’re going to have to work within them.

And so what are they? Well, I call them the eight principles for sustainable fundraising. And I didn’t invent these. I simply put names on them. And for those of you who’ve been in the business a while, you’ll probably recognize a few of them.

The first one is donors are the drivers. Donors drive philanthropy, but they don’t drive it with their money. They drive it with their visions and their values. But guess what? They’re in charge.

Two, you must begin at the beginning, and this means that you need to begin to formulate your message to your donors in a way that they will understand. I can’t tell you how many nonprofit websites I get on and it reads like a tax form or some sort of . . . it’s full of jargon. It’s full of stuff I don’t even know what they’re talking about. They’re talking to themselves. They’re not talking to me.

Principle 3 is leadership leads. This is why your governing board and your executive staff are so critical. If they’re on board, if they believe in philanthropy, if they’re making it a priority, the rest of the organization and your donor base will as well. If they’re not, other people will. Wherever they lead, others follow.

Principle 4 is learn and plan. No, it’s not plan and learn. It’s learn and plan. And the reason why is you must first learn who would naturally support you through affinity, and ability, and profile. And then once you know what that profile is of your typical donor, then you make your plan on how to reach out to them.

So many organizations, it’s a pray and pray thing. We make a general announcement on TV. We buy a list and mail it to everybody. I mean, that’s an incredible waste of money and time. Those things are expensive and they don’t net what you need to be netting. Your costs go sky high.

Principle 5 is work from the inside out. Start with those people who are closest to you by their affinity to you and by their proximity to you. You don’t try to reach the whole world at once.

Principle 6 is divide and grow, and that’s a way of saying treat different donors differently. Donors come to you in different shapes, sizes, giving abilities. They also come to you at different points in their life, which impacts the level and direction of their philanthropy.

Principle 7 is renew and refresh. First, renew your donors at the highest possible rate. Then, and only then, begin to refresh donors as they go away by acquiring new ones. Usually, people flip those around. So we have these pathetic . . . When you consider that the average consumer product renewal rate is 95%, people are more, what, loyal to their toothpaste than they are their charity? Whose fault is that?

And then Principle 8 is invest, integrate, and evaluate. You have to invest in the program, but you need to invest in it wisely. You need to put the money and the time that are going to leverage the money the most so that way you don’t spend all your time with events that cost you 50 to 75 cents on the dollar. You build a strategic program that’s going to cost you 15 to 18 cents on the dollar.

You integrate your efforts. You don’t have six different appeals to the same people.

And then you evaluate them. You never, ever usher those words, “Well, we’ve always done it this way.” That’s the kiss of death.

So those are the eight principles.

Number three, once you kind of know what they are . . . and that’s only the first step, being able to recite them or tell me what they are . . . you have to embed these in your living culture of your organization. They have to be a part of who you are, and that takes work.

And then as those are internalized, you need to create a plan to address methods, resources, and timeline. This is where it becomes retail. And the problem is most organizations start here. They start at the process. “Oh, the five tips to do this. The three techniques to do that.” Well, there’s only one problem with that, and that is that techniques and methods are situational.

And then as these principles inform your work, then you select the methods that work for you, and they will be different depending on who you are. So when you hear the latest webinar about, “Oh, right now you need to be doing these three things to raise this money,” well, that’s a tactic. It might or it might not work for you because your situation is not like everybody else’s.

I’ll give you an example. Steve talked to you about I live in the Rocky Mountains. Well, I love motorcycles and I’ll be out on a bike like that in wonderful, wide-open, dry pavement. That’s a great experience. But I would never, ever use that vehicle to drive in these conditions. That’s out near Sun Valley, by the way, near where I live. I wouldn’t be on a bike doing that because the situation.

I still want to get from Point A to Point B, but I have to get a different mode of travel, a different method. And it’s the same thing with your organization. Whether you’re a youth group, or education, or a church, or a social group, whatever it is that you are, healthcare, your niche is going to be a little different. So then you’ve got to focus on knowing the principles and how they affect your organization before you can begin to choose methods that make sense for you.

So then you must create a program while you’re doing this, which builds on relationships with your investors. “So what does that look like, Larry?” Well, here’s what it looks like. It’s a path where donors reach their dreams. Let me repeat that. A path where donors reach their dreams. It’s not your dreams. It’s their dreams. So you’re thinking, “Well, obviously, if this is going to work, somehow those two dreams need to match up.”

And if you do this and do it consistently over time, what am I going to get out of this? Well, this is the beautiful part. I’ve always known this was the case, but it wasn’t until it was a few years ago that it was actually quantified.

This is research that was done out of Texas Tech based on 200,000 organizations. And you’ll see the size of the organizations at the bottom and on the left-hand side, on the ordinate, you’ll see the gain that’s achievable when you focus on this asset-based giving approach, which is what this is. It’s where you’re building relationships with donors to the point where the critical mass is about 20% of your donors [inaudible 00:24:34] at least once. And it doesn’t have to be large gift.

You see, I spent most of my career on what they call major giving or capital giving and some of those gifts are assets, some of them were not. But the key is the asset gift, and what that tells you is that you’ve achieved those high levels of relational ties because people are closest to you and they’re willing to cut a check out of an asset, not income.

And this is the kind of growth you get. It’s incredible. It’s absolutely incredible. And this, as I said, is based on 200,000 organizations over a five-year period, so this is verifiable.

Here’s also some good news. This is an act of the will. You don’t have to spend a lot of money. You don’t have to have high-powered development officers to do this. It helps, but it’s not determinant. It’s a matter of [inaudible 00:25:25], and that’s where most of this breaks down. Do you have a board that’s willing to do this? Do you have an executive that’s willing to do this, or do they just want to kind of lurch from one emergency to another?

From the right perspective, this could be a white swan. It’s a difficult time right now. No question. We will get through this. Life will go on, and all the cries of doom and gloom and irrevocable whatever, in two years, that will all be forgotten, at the most. So the key is to plan for the next black swan.

One final thing, and then we’ll go to questions. What do I do? Well, we provide training to teach you how to do this, is what we do. And most training that’s out there is only short-term. They don’t really give you a plan. They just give you isolated techniques. It’s usually not available when you need it, meaning it’s only through a cohort or it’s only available when a consultant shows up. A lot of it is pretty expensive, and then much of it is not really accessible by people who are not professionals, and that’s really going to be critical if you have people you’re trying to convince this is the way to go.

And so what we do is we provide affordable and accessible training that does create this stable growing revenue base. And if you want to learn more, you go to theeightprinciples.com. And we have a full-blown online program that is custom videos, interactive exercises, online forum, and live coaching twice a month. So check us out.

All right, Steven. Let’s have some questions.

Steven: Yeah, my favorite part. This is why we like to have Larry on, by the way, because we have an extended Q&A period, which I think is sometimes better than 60 slides.

So if you haven’t asked a question already, please do. I know a lot of you already have. Probably about maybe 20, 25 minutes for questions, which I’m excited about.

But first, Larry, thanks for that. One of the reasons we wanted to have you on . . . we’ve had a lot of people on. If folks have been following Bloomerang webinars, they know that we’ve been covering this topic for basically the last six weeks.

I want to ask you the question that I’ve asked all of our guests first. So I’m going to take the first question, if folks don’t mind.

What I’ve been noticing and hearing a lot, not just from Bloomerang customers but just nonprofits that I’m connected to, is even among the ones that do have that relational kind of baseline going, which is good, there is still some hesitancy to be reaching out to those supporters of theirs, the true believers that they have cultivated over a long period of time, because they think their cause is not relevant right now. They’re not feeding people. They’re not helping with joblessness. Maybe they’re a feeder, or an animal shelter, or environmental group.

What would you say, and maybe you’ve heard this from some of your clients, to those people who say, “We’re not the right cause right now”? My answer to them is, and I’m curious your take on it, “The people who care about your cause last month, they still care about it now regardless of what’s happening in the world.” What’s kind of your take on the folks who don’t think their cause is worthy or relevant right now?

Larry: Well, they’re making the mistake of trying to violate Principle 1. Principle 1 is donors are the drivers. You said, “What they, the organization, thinks.” It’s not up to them what they think, right? It’s up to the donors. You’re actually insulting the donor when you’re assuming and making decisions for that person.

Now, that doesn’t mean that you are insensitive or rude. You would never want to do that anyway. But assuming you have these relationships, they probably want to know what you’re doing, how you’re faring. You see, this is something that affects everyone across the board, whether it’s the financial crisis, health crisis.

For instance, start with saying, “Well, we’re healthy here and we’re still working and we wanted to let you know that we’re still out there working for this and this.” Because you already had that relationship. You already know that’s an interest. You’re not inventing this thing. So let them make their decision what they want to do, the donors. Let the donors make the decision. Don’t make it for them.

When I was in capital fundraising . . . you’ve seen it before. We plan a nice high-end event for high-end potential donors and we only get like 15 people to show up and they want to cancel it. I’m going, “Are you kidding me? I’m not canceling it even if there’s one person showing up,” because that is one person that said they are interested. It’s not a matter of numbers.

See, there we go again. That’s Principle 5. Work from the inside out. Start with those that are closest and build from them.

You see, a lot of this is you’re thinking about yourself. You’re not thinking about the donors, and that’s where the issues are. That’s my response to it.

Steven: I love it. Yeah we’re getting we’re getting some people agreeing with that already, which is good.

One person said, “My answer to the folks who don’t think their cause is relevant is what would the community be like without you?” Yeah, they want those things to be here when this all is said and done. I mean, I’m thinking of some organizations that my family enjoys the benefits of that aren’t food banks and things like that. So I’m glad you said what you did.

Your answer segues into a good question in here, which is those people that are really loyal, can you over-communicate with them in any way? You mentioned, “Here’s what we’re doing. We’re still here. Here are the updates.” Do you think there can be too much of that? I think people are trying to kind of find the sweet spot of the amount of communications they should be giving in these times.

Larry: Well, you can always overreact. You can always over-communicate. Bear in mind that the number one negative for donors is over-solicitation. I’m real sensitive about this and I know there are people that don’t agree with me, but for me, anything that includes any reference to making a gift is a solicitation.

For instance, when you get a hard copy report or newsletter in the mail, what do so many nonprofits, especially the smaller ones, do? They saddle stitch a giving envelope in the middle of it. Well, to me, that ceases to be news and becomes a solicitation.

Now, I know why they do it. “Oh, I want to save money because of blah, blah, blah.” Well, this isn’t about saving money. It’s about [inaudible 00:32:08] cost overall, and if you’re doing it well, the additional cost of mailing separately will be more than compensated for with the gifts you’ll receive.

One of the groups that does this religiously, over-solicit, are independent schools. Parents are bombarded. In September, it’s this club. In October, it’s that club. In November, it’s something event. And by the time April rolls around, they are absolutely whooped so that when they do mail for the annual fund, they go, “What? I’ve just been giving you money for the last nine months and I’m paying tuition on top of that.” You see?

So when schools can budget those individual things and then only have a once- or twice-a-year annual fund, they actually raise a lot more money. I have worked with a couple of clients like that, and they’re amazed at the change. But it takes two or three years to make that shift because you have to begin to budget those things in.

Steven: Here’s one on the topic of relational. Speaking directly to the high turnover rate that fundraising professionals tend to have, how do you balance the relationship between the donor and the fundraiser, or maybe the ED or someone at the organization, with the relationship between the donor and the org? Should that fundraiser or whatever that staff person is exit the organization? How do you kind of balance those two things? Is staff retention kind of the main goal in your mind?

Larry: In a simple word, yes. We could talk about staff retention for a whole session, and there are all sorts of reasons why. Some of them are based on the fundraiser’s decisions. Some of them are based on what I call dysfunctional expectations and amateurish hiring. It’s those three things really that are combined together to make a perfect storm.

When I’ve worked with clients in the past, I say, “The fundraiser is a project manager. The fundraiser is not a gunslinger.” And that comes as news to a lot of people, especially board members when they think they’ve hired someone that’s going to go out and bring home the bacon. That’s sort of how they see it.

And the very best fundraisers are project managers because they understand that it’s a team that makes this happen. Not that they are afraid to go out and ask. Of course, they go out and ask. But they’re not a paladin sent out to clean up Dodge, right? They involve a team.

Then I think a lot of organizations put dysfunctional goals onto these . . . [inaudible 00:34:56] fundraising capacity is of your current fundraising system. I can tell you the theoretical capacity of what you’re doing now. I mean, I can put a number to it, a dollar and cents number to it, and yet you have these people who set budgets based on their “needs,” whatever the hell those are. The system has a maximum regardless of what you need. So then if you need to raise more money, you need to change your system.

And that’s where I’ve had head-to-head battles with executives both as staff and consultant on, “It’s not about what you need. It’s about what your system will raise. Now, let’s set about raising what it’ll raise, and then we’ll talk.”

When you have these organizations that put these absolutely unreachable goals onto people, it’s going to burn them out. It’s going to scare them away and they’ll go and get another job. But in terms of the relational aspect, that kind of revolving door does incredible damage to fundraising programs.

When you have a staff change, it’s going to take you six to nine months to recover from that staff change. So if you’re changing every 18 months, you’re never moving ahead. You’re barely keeping where you are.

Think about that. In any kind of professional situation, if you lose someone, it takes you six to nine months by the time you’ve hired somebody else and brought them up to speed to be back to where you were when that person left. And if they’re cycling in and out of your organization at 18 months, you’re not getting anywhere. Think about that. No wonder you’re not growing. No wonder you’re not building a fundraising juggernaut.

Steven: Yeah. Makes sense. We’ve got a couple questions about how to maintain the relational kind of strategies when things like face-to-face visits are not possible, at least in the short term. What do you recommend folks do to maintain those connections? Is it phone calls? Zoom meetings like this? Can technology be an aid there? What would be your . . .

Larry: Absolutely. And don’t count the old folks out. A lot of them are really into that mainly because they’ve been limited in [inaudible 00:37:23]. They don’t like to get out and travel the world necessarily. They like to stay at home a little more.

And the [inaudible 00:37:30], because here, again, it’s a method. It’s a one size doesn’t fit all. But the beautiful thing about that is the digital tools that are available allow you to segment your audience way down to the nth. It’s so easy now. Thirty years ago, everything was on pen and paper. You didn’t have this. And so you were limited what you could do. But if you’re creative, you can do a lot of things.

But the key is don’t assume what your donors want. Let me get back to that again. You have to ask them. If you want to know, “Hey, tell me Sally, tell me Steve, would you like it if I called you up? How about a Zoom meeting?” They’ll tell you, and respect that choice.

Steven: Yeah, I agree with you on the age. My in-laws who are in their 70s, they’re doing their weekly Bible study over Zoom with other church members in that age cohort. And they weren’t on Zoom before all this. So yeah, I think people may get surprised by the technology adoption.

Larry: And in that regard, recognize that most people, meaning over half, maybe three-quarters now, do this sort of thing on their phone. If you look at nonprofit websites, less than half of them mobily-adapt. What does that mean? The gal that does my operations just turned 30, and I said to her, “Danielle, what do you do when you come to a website that doesn’t adapt?” “Oh, I just keep looking.” If she can’t read it right away, she’s just going to go to something else. And of course, there, again, a lot of organizations would say, “Oh, but that’s expensive to do that.” Okay, fine, but look how much money you’re missing out on when you don’t do that.

Next question.

Steven: We’ve got some people asking about leadership. I think there are a lot of people listening to this who like what you’re saying, but maybe the board or their boss, the person in charge of the organization, tends to lean more towards those transactional type things. We had someone ask about . . . their boss was encouraging them to do Giving Tuesday and people, obviously, like events.

What advice or pep talk would you have for those people who want to do what you’re saying, but maybe they’re getting kind of a roadblock from their bosses or other people in the organization?

Larry: Well, it’s going to sound a little commercial, but I’m going to tell you the answer.

Steven: Send them to you?

Larry: Well, that’s the short answer, but the long answer is this. For people to adopt a different approach, they have to have a different mindset. People do what they know and feel comfortable doing. That’s period. Whether they’re well motivated or not, they’re doing what they know and they feel comfortable.

So if you’re going to do something different, you have to change the way they’re thinking. And this is the bulk of what we do our work in, is training that changes the way people think about this whole process.

I say to people that effective fundraising is 90% what you’re thinking and 10% what you’re doing, and that’s so critical. And so anything that’s going to change the way they think . . . and that’s one reason everything we do is in Standard English. It’s all media-based. It’s easy to understand. I mean, one of the things we even do is call it the aha moment, because it’s like, “Aha, now I get it. Now I understand this.” But until that mind shift changes, you’re going to be pushing uphill. You really are.

And so I think if you can persuade individually, if you can talk about it, the key is to get people to understand that triangular operation, and you are simply trying to encourage a third party to fulfill their values by funding your organization. That’s what you’re doing.

You’re not asking people for money for a worthy cause. Not really. When it comes to fundraising, if you want to raise money, you need to understand what’s actually happening, and that is your organization is merely a conduit to fulfill the donors’ desires. And until that really is driven home, you’re going to have this push.

But it’s a matter of changing mindsets. That’s what it is. No amount of slick CRMs, Bloomerang notwithstanding, or other tech tools or anything else is going to make up for it.

Steven: Yeah, you’re right.

Larry: The tools are only as good as the person using them. You buy a cheap violin at a dime store, give it to a 5-year-old, you know what it’s going to sound like. Take that same one and give it to Isaac Stern, you’ve got a whole different thing going on. And it’s the same chief instrument, right? So there you go. It’s all about the mindset. It’s all about who’s using it. I hope that was helpful.

Steven: Other side of the coin, a lot of people in here have supportive boards and leadership, but not really sure how to kind of channel that energy. What should board members be doing right now? Is it calling donors? Is it calling those corporate sponsors who may be feeling the pinch? What can they be doing right now other than the core governance things, which you don’t want to lose?

Larry: The thing they should be doing right now is just calling everyone and just finding out what’s going on with the donor and don’t ask them for any money, and offer what’s going on with us and just say, “Hey, we just wanted you to know.” Just check in. People love that. Don’t ask them for anything.

Now, if someone offers, you say thank you and then you follow up. You don’t drop them off. That’s worse than anything. If someone’s offered something to you and you say, “Fine,” and then someone in your office doesn’t follow up, oh my god. Just don’t ever count on them again.

Oh, yeah, this is the easiest part for board members, because presumably at a board like that, they’re excited about being on the board. They’re engaged. They believe in what they’re doing.

And if they [inaudible 00:43:59] like other people, you say, “Hey, Steve I’m at the board at XYZ. I’m [inaudible 00:44:06] with you and see what’s been going on. I know it’s a difficult time for a lot of people. Is there any way I can help you?” And you’re going to tell me.

And then you’re probably going to say to me, “Well, what’s going on at the animal shelter?” “Well, let me tell you, Steve. And so just to let you know we’re still here and we’re hanging in there and we’ll all get through this.”

Well, you’re going to get off the phone and go, “What a hell of a guy. Wow.” You see? Everybody’s going to feel good.

Steven: I haven’t gotten any of those calls.

Larry: Of course not. They’re too afraid that they’re going to insult you. Wrong.

Steven: A couple people are saying they’ve been doing that. Donors love it. You’ll never be more likely to talk to them than now. That’s true because everyone is at home and they’re not going anywhere. You’re not going to catch them out on an errand.

Larry: Yeah. This is a perfect time.

Steven: I love it. There are some organizations here in the chat that are truly in crisis. Their services are all out of whack. The schools are closed, so they can’t be doing the things they’re normally doing. Maybe there is a funding gap for some of those organizations.

If you’re truly in crisis right now, what do you recommend how they reach out to those folks? Maybe they have that relational support or not. Is it like what you said? Give the donors a chance to be change agents in that story? Should they talk about the fact that they’re in crisis, I guess, is the main question?

Larry: Well, I think what you do is you . . . and however you do this, it depends on what channel you use, whether it’s face-to-face or video or whatever it is. What you’re doing is you’re making an outreach to your existing committed donors, number one, and you’re saying, “I just want you to be aware of what’s happening with our organization, because I know you’ve supported it.” You see, when you put money into something, you already believe in it.

But then you say, “Now, we’re doing these things to try to stop the bleeding,” which should be some sort of program curtailment. You’re making cuts. You’re not expecting things to be as usual. Not this, “Oh my god, if we don’t do this, the world is going to come to an end.” No. “We’re making these cuts. We’re making these restrictions. We’ve done these things. We still have a funding gap, a serious gap. Is there any way that you could help us during this critical time?” And you just throw it out there.

But you don’t do this shaming thing or begging thing. That’s the worst thing you can do, because it just turns people off. But you show that you’re taking some . . .

Well, look at what’s happening in the for-profit world. The companies that are saying, “All our C-suite executives are forgoing their salaries and we’re doing this and we’re doing this and we’re doing this,” okay, equal sacrifice. Then you’re going to be more likely to step up and help them instead of, “Well, we’re not making any changes and we still think we need to save the world. So we’re not going to make any drawbacks, but we expect you to fund us anyway.” How arrogant is that? No matter if it is a good thing, that’s not the point. The point is the way it’s coming across to people.

Steven: I see. I have encountered a lot of resistance from people saying, “Well, we don’t want to ask for money because people are hurting right now economically.” And that may be true of some people, but is that just another example of deciding for the donor before you really know what the situation is?

Larry: Of course it is. Well, first of all, you don’t say, “Steve, I need another 50 bucks. I need 500 bucks.” You say, “Steven, is there any way you can step up and help us more during this period?” Well, the implication is it’s going to be money.

And you’re going to say to me, “Larry, I wish I could. I’ve been laid off. I’ll stay with you, but I just can’t afford any more money.” And I’m going to say, “Thank you for your consideration. God bless you, Steve.” I’m not going to say, “You deadbeat. Why aren’t you giving me more money?”

So it’s all in the assumption. I’m assuming that you’re a goodwill, and so I’m going to treat you like that and I’m not going to make the decision for you, but I’m going to put it out there for you to say yea or nay, and I’ll accept whatever you tell me.

That’s what builds friendship. That’s what builds relationships. It’s being out there.

See, the people who say that, they’re the ones that make fundraising all about money in the first place. And it’s not about money.

Steven: Speaking of getting to know your donor, a couple people are asking about how to get that information about the reason for giving, the rationale, why they care about your cause. It might be a little too late for this event, but thinking of the next black swan event, as you said, what should people be doing? Is it formal survey? Is it those phone calls? It seems like those phone calls could glean a lot of information about the donor.

What have you seen work maybe for a new relationship, a first-time donor, getting to know them, and finding out what kind of makes them tick?

Larry: Well, surveys can work. The difficulty with those is that they can come off very packaged and stilted.

Steven: Kind of formal, yeah.

Larry: And then people will think, “Oh, I’m being marketed to.” We live in a pretty cynical community in that regard. People love to let you tell them what’s on their mind. They love that. And my experience has been is that if you go about personal phone calls, whatever, in a systematic way . . . maybe you got your board members and they have a script they’re more or less going through so that you’re getting consistent information from everyone. Once you have a pretty good sample of people, and you would take a segment from each giving level probably is what you would do, then you’re going to have pretty good idea.

You don’t have to sample everybody in your organization. In fact, I know that the profiles will start emerging pretty quickly. It’s not a matter of numbers here. It’s a matter of choosing your sampling base correctly and then allowing them to tell you in a very unstructured format, like a phone call with people taking good notes.

I mean, one of the things I did my career a lot of was feasibility studies for capital campaigns. I worked for Ketchum. The pre-preeminent consulting firm for how many years? So they taught me all my bad habits. Anyway.

But those things were conducted where I sat a person’s home or their office and I asked them pretty much a set list of questions, but I did not do it in a rote way. It was a conversation.

Steven: Yeah. It wasn’t an interview.

Larry: It wasn’t an interview. And I’m going to tell you a little secret about consultants. The consultants out there are going to hate me when I say this, but when fundraising studies are sold, they’re sold on the basis of so many interviews. And typically, it’s the client that wants all these interviews.

Now, I know that you’ve got to have certain numbers in each category, but you don’t have to have all those interviews. They add little breadth to it, but they don’t really change the results.

And so I can remember doing these studies and I would be into the first three or four days of a two- or three-week assignment and my vice president would call me and say, “So, Larry, how’s it going?” “I think it’s going to be blah, blah, blah.” “Okay. Well, finish the interviews, come back, and write the report.” So I’d get a flavor for it.

So, from someone who’s been through this, I can tell you that if it’s done correctly, you don’t have to interview 600 people to figure it out. Maybe 20. Maybe 30 at the most.

Steven: Makes sense. Wow. We’re about five minutes until the hour. Maybe a good last question would be . . . there are a lot of small shops listening in that tend to be a big piece of the Bloomerang committee. And there are some new fundraisers listening, and we’ve had a couple of questions and comments come in from people that are in their first development job ever right now. Certainly feeling for those folks. Any specific advice for them that are kind of getting thrown into the fire for a unique situation early on in their career?

Larry: Yes. You need to get some grounding really fast, and I would do that by getting some good training. And quite frankly, I’ve got the best online thing that’s out there. I’m being honest with you. This is full bore online with live coaching. This is not getting an open source PDF in an email. No. And so you’ve got time. I mean, I’d take the time to do it now because you’re not going to go to any conferences lately.

Steven: Yeah, good point.

Larry: I’m not sure conferences are the way to go anyway, but they’re all episodic. But I’d get some good grounding. That’s what I would do.

Steven: Well, there are tons of webinars. There’s obviously good training, like what you provide. And we funded some research a couple of years ago that found a strong correlation between dollars raised and amount of training, formal training, that the fundraiser had participated in. So if you liked this webinar . . . this is more of a Q&A webinar, not a complaint, but we’ve got a lot of other ones.

Larry: It’s a multiplier. Any kind of training, if it’s a quality training, it’s a multiplier. It is. I mean, I’ve always wanted to learn more. I’ve always taken all the courses I could find. When I was running programs, I had a pretty sizable personal and professional development budget for people because they knew that was critical to keeping people. By the way, the programs that I ran, we didn’t have any 18-month revolving door. No.

Steven: Yeah. I’m not surprised to hear that.

Larry: We didn’t have that.

Steven: That may be a good thing to look for if you’re applying for jobs. Is there a professional development budget? Maybe an interesting question to ask. This isn’t [inaudible 00:54:50].

Larry: And then how many times has the job turned over in six years? And if it’s more than two, my next question is, “So what’s the problem here?” What’s your problem? It can’t always be the people that you hire.

Steven: Well, this was fun, Larry. I always appreciate you coming on and being willing to just answer random questions with, with no prep, from total strangers for at least a half hour. So thanks for doing it.

Larry: I love it.

Steven: Yeah. You love it.

Larry: I love it because I feel people’s . . . the situation they’re in, because I was in large organizations, but I also spend a lot of time counseling and consulting and coaching small organizations and I know the challenges they’re up against.

And let me just end with this point, and that is you as a small organization can succeed. It is not a question of how much money you can throw at this or how much high powered talent you’ve got at it. If you adopt the right mindset, you will succeed. Period.

Steven: I love it. Larry, this was awesome. Thanks for hanging out with us.

Larry: Oh, I enjoyed it as always. Everybody, I hope you had a good time and you learned something and it wasn’t a total waste.

Steven: I think there were a couple of nuggets for everybody in there, even if it took a whole hour. I know we didn’t get to all the questions. I’m really sorry we didn’t get to all the questions that I tried to touch on. We did as many as we could.

Larry: I’ll make the offer to you. If you want to email me, info@theeightprinciples.com. For the next day or two, I’ll answer questions that just come in. And come and check me out.

Steven: He’s a good guy. I had a feeling he was going to offer that. I didn’t think I would have to ask him, but take advantage of it. If I didn’t get to your question, I really am sorry about that. I tried to cover all the subjects that were in there. There are a lot of good questions. This is always an active group.

I’m going to bring up my slides, Larry, so if your screen changes, don’t be worried.

Some webinars coming up. This is a nice way to end the week. We’ve got a couple coming up next week. My buddy, Sandy Rees, down in Tennessee, if you’re an animal welfare organization, you might want to tune into this one because Sandy almost completely specializes in animal welfare groups. And if you are a new nonprofit, brand new organization, this one is also for you. That’s on Wednesday at 1:00 p.m.

But we’ve got lots of other webinars. I can only put one thing on one slide. So check out our webinar page. Lots of cool sessions coming up. We’re covering some really kind of diverse topics that I don’t think get enough attention. And we’ve got all of our recordings of all of our past webinars if you missed them.

So reach out to Larry. Sign up for his newsletter. I like getting Larry’s newsletter because it’s always got a nice pep talk tidbit in there. And that’s a freebie. Come on. Why not do it? I know you’ve got a lot of newsletters out there, but I think he’d appreciate it.

So we’ll call it a day there. I’m going to email everyone the slides and the recording. If you missed it, you’re not hearing this message, but you’ll get it anyway.

So hopefully we’ll see you again next week on another Bloomerang webinar. Have a good rest of your Thursday. Have a safe weekend. Please stay healthy out there. We’re all thinking about you, and we’ll talk to you again soon. Bye now.

Larry: Bye.

Kristen Hay

Kristen Hay

Marketing Manager at Bloomerang
Kristen Hay is the Marketing Manager at Bloomerang. She also serves as the Director of Communications for PRSA’s Hoosier chapter.
Kristen Hay
By |2020-06-22T09:19:02-04:00May 2nd, 2020|COVID-19 / Coronavirus, Webinars|

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