Become Less Dependent on Government, Program, and Event Revenue

Sherry Quam Taylor will outline the things you should stop doing that will help you prepare for a better future of funding.

Full Transcript:

Steven: All right, Sherry. I got 2:00 Eastern. Okay if I go ahead and get this party started?

Sherry: Let’s do it.

Steven: All right. Awesome. Well, welcome, everybody. Happy Wednesday. So glad you’re here. If you’re watching the recording, hope you’re having a good day. We’re here to talk about how to become less dependent on government program, event revenue, all that stuff that’s not individual donations. One of my favorite topic. If that’s you, you’re in the right place. And we’re just happy that you’re joining us today. I’m Steven. I’m over here at Bloomerang, and I’ll be moderating today’s discussion as always.

And just a couple of housekeeping items. Just want to let everyone know we are recording the session. We’ll be sending the recording, the slides, all the goodies. Don’t worry. We’ll get that to you. I’ll email it to you today. If you have to leave early or maybe you get interrupted, have no fear. I’ll get that stuff to you. But most importantly, use that chat box. There’s chat box, there’s a Q&A box. Ask questions. We’re going to save some time at the end for Q&A. Introduce yourself in the chat. If you haven’t already, we’d love to know who we’re talking to, where you’re from, what your organization does. We’d love to hear from you. You can also send us a tweet. I’ll keep an eye on the Twitter feed as well. So don’t be shy. Don’t sit on those hands.

If this is your first Bloomerang webinar, I just want to say an extra special welcome to all you folks. We do these webinars a couple of times a week. We love doing them. Always bring on a great guest. Today is no exception.

But if you’re not familiar with Bloomerang, just for context, we’re a provider of donor management software. So if you want to learn more about us, check out our website. We’re pretty easy to find. You can watch all kinds of videos. Don’t do that now because we got a friend of the program coming back triumphantly to the Bloomerang webinar session. Sherry Q. T. from beautiful north of Chicagoland. How’s it going, Sherry? Are you doing okay?

Sherry: I’m doing awesome. I’m doing awesome.

Steven: It’s good to have you. You were back with us, I think, last October we were talking. Great presentation.

Sherry: It was. Seems like forever ago.

Steven: I know a different world. But that’s kind of what we’re here to talk about.

Sherry: Yup. Absolutely.

Steven: If you all don’t know Sherry, go check her out over at QuamTaylor LLC. She’s got a lot of cool things going on. Got a really cool 90-day coaching accelerator kind of class that she does. Actually, she was telling me before that someone who attended her last webinar with us in October went through that program raised six-figure gifts from it. I think it was a mutual client of ours. So happy to hear that. And one reason I really like Sherry is she specializes in kind of a gap, a question that we get a lot, which is, “Hey, we want to grow individual fundraising. We want to move beyond some of these other funding sources we have relied on. How do we do that?” And that’s what Sherry’s here to talk about. So I’m not going to take any more time away from that because it’s going to be awesome. So, Sherry, I’ll let you share your screen.

Sherry: Okay. Good. How does that look, Steven?

Steven: It’s going. It’s going. Yeah. You’re in business. All right. I’ll shut this down. Floor is yours, my friend.

Sherry: Okay. Awesome. So thanks for having me again, Bloomerang, and everybody that’s come on today. So as Steven said, we are talking about that challenge that some of us have faced in this 2020 world that we’re in, and that is really realizing that, “Oh, yikes. We have been too dependent on whether it was that big event you always had,” whether it’s the government grants and you’re realizing, “Gosh, we just need more charitable funding.” Maybe it’s program revenue or foundation funding. I’m glad that you’re here. We’re going to talk about how do we start moving into more individual gifts.

And so, as Steven said, I’m Sherry. And so today what we’re going to really look at is how we’re diversifying those funds. And so I want to talk about . . . and this is maybe . . . if you follow me on LinkedIn, you know, this is my favorite topic to talk about. I want to talk about how overhead . . . I love that word, and your budget are actually your best-kept secrets or your best secret weapons when raising more funds. So I’m going to really tell you what I mean there.

I also want to talk about what you should be doing and what you could be doing right now to really move into a stronger future of funding as we think about putting 2020 behind us and really pushing into 2021. And then I also want to just inspire you and really share some success stories of what organizations were maybe doing in 2019 that kept their funding really strong during 2020, and we can learn from them. And if you weren’t doing those things, you can start today. So we’ll hop right into it.

Now, I’m going to start by giving you a really quick flyover of my own story, my own journey into growing, leaving my corporate career and leaving . . . excuse me, joining a nonprofit in 2010. I have to be careful to say that. Now, 2010, if anybody remembers that, followed some challenging years in ’08 and ’09. Very different, you know, challenges, but they weren’t our best years, right? Like unemployment was high and the housing market was sidewards. And I had left my corporate career and joined an organization that I was super passionate about. And so I tell you this story because I really want to look at, you know, what has worked through these challenging times. And so when I joined this organization, I mean, my passion and vision were a bit on fire, maybe a little bit annoying. I was like, “Everybody get on my train. Like this is the mission. This is really something that has changed my life.” And I was super excited about it.

Here’s the challenge. We still needed more money. We were not fully funded. You know, we were struggling. And my personal challenge was I had never done that before, right? Like I had never needed to know how to do that in my previous career. And so this was also the time when we were like, “Gosh, we need more individual gifts. We need larger gifts. We need unrestricted gifts.” And this was the time when everybody said to us, “Yeah. But you can’t ask individuals right now. Like nobody’s giving, like, don’t offend them. Don’t ask individuals.” And so I struggled with that a bit because our mission was awesome and it was worthy of being funded. And so I really went on this journey at that time to really look like, what does it take to successfully, sustainably fund a nonprofit so it will grow with unrestricted larger gifts, right?

And so I struggled a little bit during this time because I had never been like working for a nonprofit, even though I’d been on boards and I’d been volunteering and I knew some elements of it, right? Up until that point, I kind of felt like because I hadn’t worked for a nonprofit, it was a bit of a disadvantage. But I can look back today and see that that, I guess I’ll call it like beginner’s mindset, was actually the biggest gift that I could have been given during this time.

And so as I started to dig about like how can successful nonprofits grow? A statistic I share in every webinar, if you’ve been on any of my webinars, I always share this because it really drives me. Of the 1.5, 1.6 million nonprofits, 77% of nonprofits are under a million dollars of revenue and 91% are under $5 million revenue. And I share that because we have to fix this because I know the work, the sacrifice, my goodness, that you’ve done in 2020 and we have got to get you more funding to grow and scale your missions. So that statistic, like I am all about helping people, you know, level up to that next level.

So here’s the thing. This concept of nonprofits can do more with less bothered me. It never made sense to me. And so this whole like kind of fresh mindset was great because this whole like, you know, don’t spend too much money, don’t spend too much on overhead, don’t have too much money in the bank because donors won’t fund that. None of that made sense.

So what did we do? We invested in things that maybe felt a little risky but we knew they would help us grow. You know, we pushed against a lot of the standard misconceptions of the organization. And, you know, as you can imagine, you know, with boards and supporters, I got some pushback too, right? But a lot of this advice was really rooted in these old misconceptions that, “Gosh, if COVID can do one thing for us or 2020, I should say, I really hope it leaves a lot of those in the past.”

And so this whole concept of, you know, “Donors won’t do this, be careful of this,” I just never bought it into it. We didn’t take that advice. And as a result, the organization tripled its funding in 18 months. And so I knew I was really on to something. And so this set me, personally, on a new trajectory where I started my own business. And I knew that this approach was different because I had people coming to me and asking me about that. But I also realized that in times like this in 2020, it’s really given me a unique perspective in these times. And we grew this with individual gifts.

And so, hear me today, as we get into this, the number one thing that keeps nonprofits from being fully funded is really buying into these misconceptions and actually like trying to cobble together the fundraising activities and plans kind of within that framework. And so I have really chosen to pivot and drive in the different direction to support organizations who are doing awesome work and need more funding and need to be fully-funded program, admin, and ops.

Okay. So let’s get into this first secret weapon I talked about. Overhead. I love this word. It’s not a bad word. You know, let’s all say it together, right? Here’s what I mean by that. You have to invest, put it in your budget, your time and money into all three areas if you’re going to grow. What have you needed most during this time? You’ve needed cash in the bank. You’ve needed a strong reserve. You’ve needed staff you can pay. You’ve needed flexibility of funding. You needed unrestricted funding. We have to be investing in all parts of our organization. There are going to be years where your fundraising is at 20%. Own it. Why is it? What are you going to do the next year? What are you going to do the following year?

So as you’re thinking of planning and how will this turn into fundraising, I’m going to get there, right? I’m starting with kind of a taboo topic, but I’m going to connect this to fundraising. When we think of your budgeting process and we think of spending overhead, you know, this just makes sense, right? You know, what do I need to put in my budget that helps my programs get to the next level? That’s the easiest. That’s the absolute easiest. But from an administrative and a fundraising standpoint, like, okay, then what do I also need to budget for and put in there that actually helps me support that and actually helps me know where I need to spend money, but helps me raise money so that we can actually grow and do both of the above?”

So here’s the thing. Here’s why I say this, especially during this time. If you haven’t been in a pattern of investing in all three of these areas all along, it, obviously, leaves you vulnerable to a funding plateau. So even in non-COVID years, you know, if your 990s, like we brought in a million, a million, a million, a million, you’re going to . . . Excuse me, your funding is going to plateau. It leaves you landlocked when an opportunity comes your way and you don’t have the unrestricted cash to take advantage of it. And especially right now, it leaves you, you know, it’s really risky in times of crisis because not planning in this way keeps us dependent on kind of our engine that we’ve been feeding, that list that I gave at the top of the hour, but it also doesn’t allow us to raise a reserve or a strong cash balance.

I’m going to actually share with you a couple case studies today. This is my student, Tre, who’s so awesome. He was struggling a little bit with what I’m sharing. And I’m going to show you how he turned it around, how he grew into more individual gifts. So one of their challenges was they were way too dependent on one funding source and actually lost a lead gift that was 22% of their annual budget. Yikes. Like, you know, and it wasn’t their fault. It wasn’t their fault. It was a whole nother story.

The organization really had a history of spending way too much on programs, right? We send the majority to the field and really skimping on admin and fundraising. So their funding, you know, was reflecting that. But you know what? We also knew, you know, it’s a challenge and an opportunity, the donors, they had some donors, right? They had quite a few donors, but we didn’t think they were really giving their best gift, right? Like why is that person giving $1,000? We know they can give $20,000. Like what’s the misstep, right?

And Tre is really relational, super great guy, but he’s a pastor by training. He’s not a major gifts, you know, donor-trained professional. And so he was kind of just guessing when it came to individual fundraising. And he said to me, “I kind of don’t know what I don’t know.” Right? And so, when Tre’s organization lost that lead gift, it sent them on a trajectory that none of us want to see in our organizations, right?

But here’s what I want to tell you, the pivot I want you to see. So we created a development plan with the tools to actually replace and then growth the money lost, a real plan based on a real budget. I’m going to talk a little bit more about that. And within 90 days, he’d actually secured quite a few of his top gifts. And today he attributes raising about 25% more over last year for this. And so I always tell people, “When you text me, information is going to be on the next webinar I teach.” And so I told that to him today. And so this is what I want, to show proof and I want to celebrate that anybody, anybody can move into individual gifts.

So what happened here? What did he do? What can you learn from this? What can you do? At this point where he’s now shifted his funding to a great path and pattern back on track, scaling the organization, he invested in overhead. He invested in learning how to fundraise, learning how to solicit individual gifts, and investing in admin and overhead costs, right? Because that helps you make more money.

Now, if you’re on this and you’re hearing your board, you’re hearing people say, “But hold on, Sherry. We want to put as much money into programs this year as possible. We couldn’t ever do that.” Here’s why that doesn’t add up. Because time and time again, when you spend money, when you plan to invest in admin and fundraising, more money comes in. And then, of course, you can put that back into program. So that is the hurdle and the misconception we have to leave in the back, in the past. And what this does is this attracts individual donors.

So big question I get is how do I find them? I want to talk about how do we attract them as we talk together today. And so, because of this, you know, Tre’s really grown his individual giving. He had the freedom to invest in overhead and he actually hired dedicated support and still grew. Even with more spending, he consistently found and secured five-figure gifts from people who before didn’t really understand what he needed, right? And now he learned how to lead them and guide them through this. I’m going to share that with you today. So he knows how to attract them and beat them at attracting the donors that helps you find the donors. How to lead a donor all year long to their best gift and how to ask for what he needs, right?

And so you need funds for program, funds for admin, and funds for fundraising, right? Okay. Well, I’m going tie this second secret weapon onto this. So I’m going to talk about your budget, right? It’s like, “Sherry, why are you talking about budgeting when we’re talking fundraising?” I’m going to tell you why. I want you to hear me today when I tell you your budget and then the need, that number you’re raising to are two very different things. So this is a huge mindset shift in your planning and budgeting that helps you raise more individual gifts. It helps you diversify your funding. And what I mean by that is I’m shifting from that answer to the question of like, “So what do you need? What do you guys need?” Right? Well, you know, “If we had this, we would do X, we would do Y. You know, we’d love to grow, you know, beyond a million.” Right? The shift into your need is, “Thank you so much for asking me that. Here’s what we need this year.” Right?

And so I’m going to really challenge you, as you’re thinking about how can we raise more funds, I want to make sure that you have set that number correctly in the first place to what you need. If you are always raising towards your squeak-by budget, you’re never going to grow. And I will tell you, the majority of nonprofits that are not fully funded, it truly, truly is the approach to planning, investing, feeling comfortable, spending money, and budgeting. It’s crazy, right? And people are always looking at me a little like, “Really? Okay. Tell me more about that.” I’m telling you, this is the game-changer.

So I want to ask you today, what have you not put into your budget that actually might be keeping you from growing, right?

And so it might be things like technology or, you know, investing in fundraising, or your brand look and message, or are you spending too much time on administrative staffs and there’s . . . tasks? And there’s no way you could think of adding five extra hours to your week, right? You know, donor management software, financial processes, or you’re just putting travel on your credit card and it’s not in the budget. You’re not raising to it. Maybe you’re running a multimillion dollar organization but 95% of it is government funding, right? And all of that contract goes away like, “We’d love to do that, but get it in the budget, right?” Reserve fund, you know, it’s got to be bigger now. Going forward, we can’t have our three-month, four-month reserve funds. It doesn’t get us through. That’s got to be built. We got to get it in the budget and fundraise to it.

Hear me say this. Until you create a needs-based budget, a true budget . . . one time a client called it, “You want an honest budget? I want an honest budget.” Only until you do that can you actually create a fundraising plan that actually reaches that number? Right? And so it feels scary to say like, “Oh, I don’t know. We want to make a million, but gosh, we really do need 1.2.” Only until you can hang your hat on that, then you can create a plan that actually hits that. So when this whole part is done right, when the whole budgeting, and planning, and kind of coming to the table is done right, you move from that squeak-by budget that never gets funded and you never grow, or it’s you struggle to grow. I shouldn’t say never. You struggle, right? The struggle is harder than you want it to be. And you can move into a real budget that reflects your organization’s needs. And that is what individual donors need to hear from you.

And so, when you do that, it helps you raise enough for program, and admin, and fundraising and then you’re not falling back into that pattern of, “Oh, they only want to fund programs.” It helps you build a reserve and cash balance, which was what you’ve needed these last few months. It allows you to think ahead. And it allows you to reduce your dependence on restricted gifts because you can then put a true development plan in place to hit that real number. Right? And so what most people think is, you know, like after we’ve kind of looked at their budget and I’ve created their real needs-based budget, like, you know, that . . . I should say, if they’ve created a regular budget and like they share that and people will kind of be inspired and will just, you know, “If they see it, they will come, right?”

And so here’s the big secret. Your donors, they want information from you. Individual donors want information from you. The secret is it’s not like we have to have the perfect board. We have to have that celebrity endorsement like that, you know . . . I’m in Chicago, so like Chance the Rapper, you know, has retweeted us, right? It’s not that we have to have the best event and give them the best takeaway, the best experience. It’s not that you have to be spending over 90% on your programs. It’s not. Your donors, to find and attract individual donors, they want information. They want you to sit down and have an investment level discussion with them and share with them. They’re dying for it. What your need is and how they fit into it, and what you’re going to do with their gift. When my clients move into these investment-level discussions with individuals, one-on-one, treat them as stakeholders. They grow their gifts and they retain their donors.

So I’m going to give you more details on that, but here’s what I want to say. As we think of Tre in the example I’ve already shared with you today, why did this strategy work for him? And like, what can you take from it and really learn from it? So, first, he learned how to create a financial plan, his need and budget that actually attracted larger donors because he knew what he needed. And I got to tell you, they gave him the confidence at the table. It gave him the confidence to share what he needed. And donors felt confident in giving to the mission. He also learned how to prioritize his time, you know, how to spend his time on the activities that lead to larger donors giving. So I want to talk about that activity shift.

And then best thing is, you know, he really didn’t have to rely on his gut. You know, he actually knew how to make that ask, right? For those of you who are like, “Please don’t make me ask, or my board doesn’t want to ask.” He learned how to lead a donor to a yes, right? And so, to move into individual gifts, which I call investment-level gifts, you have to be able to share the need in these investment-level conversations.

Like think of it as like business person to business person, right? Who are these individual donors? They’re successful business people in your community. They’ve probably asked for an investment-level, you know, investment. I should say, they’ve asked for an investment and maybe the business they’re running, they’re entrepreneurs. You can have a business person to business person discussion about your need. And anybody can do this, whether you’re, you know, you started a nonprofit and you’re a pastor, doctor, lawyer, teacher, social worker, engineer. Everyone can do it. I can do it. You know, I learned how to do it.

So it’s this huge shift from, I should say more like how you’re coming to the table and really understanding what you need to ask for and moving from, “Yeah. Well, if we had the money, we’d do it,” to, “Here’s what we need to accomplish our mission.” So when you do that and the donor says, so “What do you need? What do you need?” You know, to move from that, well, “We’d like to get to a million this year.” To, “Thank you for asking me that. We have a $1.2 million need this year. Can I share with you what that looks like?” And to confidently pivot into exhibits and a discussion and to really be able to lay out the plan on what you would do with their gift.

So here’s why this is so important. I want to give you a little context here. So at the top of the hour, like I, you know, this is what I do. I teach people how to become less dependent on all of these things that we just tend to become dependent on like, you know, it is what it is. And into securing larger gifts from individuals. I do that through my 90-day program.

Here’s why I tell you this. Thirty days of it at the end are the ask, how do we do, what are the questions going to be? Like, you know, all those things we’re all nervous about or maybe like first-time askers are nervous about. Or they’re all the nuances of the ask, right? Sixty days, because it’s so important. And this is always what surprises people, is getting you investment level ready. Getting you to the point where you can speak that donor language in a way that helps them say, “I got to be involved here. I now know how to enter a partnership with this organization. It’s crucial. It’s crucial.”

So I want to take this as our new groundwork and new approach as we plan and think like, “Get me past 2020 and let’s get into 2021.” I want you to think about how you could be not only creating kind of the infrastructure, and the budget, and the plan, but then now how do we balance the fundraising activities to not only meet that number, but also move you into individual gifts. And I’ll just say also a very diverse portfolio. That’s been the name of the game these days, right? So I want to talk about five concepts that you can be focusing on, starting this afternoon, today for a more sustainable future of funding.

So first one, I want to talk a little ROI. This is one of my favorite topics to talk about. So I showed you that. Sorry. So most nonprofits, when I think ROI, time spent with money, most nonprofits default to really spending, I would say, too much time on more of the activities that actually are attracting and yielding low-dollar donors. Now, that’s the pipeline. Don’t hear me say, that’s not, you know, we shouldn’t be doing that, but we cannot spend all of our time doing that.

You know, the thing is, though, small gifts actually make up a very small percent of the overall giving. And on the flip side, you know, 70% of nonprofit revenue comes from such a small part, that top part, the donor base. And so I always go to the data. Glad to go to the data. Let’s see what it says. And so, when we look at those types of things, and there’s so many other reports that, you know, there’s been some really great and fresh reports out even, you know, this last month, we go to the data and we look at what is the model, where do we need to point our compass so that we can hit these numbers?

And so we’ve got to root your fundraising plan and your model in ROI. Here’s what I mean. So this is my pyramid. There’s always a pyramid on presentations, isn’t there? So if you look on the right, if we think of our annual revenue, right? And on the left, we think of our time and budget. So my methodology, I teach, I want your top 10 donors yielding between 25% and 40% of your revenue. And then I want your top 30 donors yielding between 50% and 75% of your revenue, right?

So here’s the shift. If most of your revenue does come, you know, from this top part, like stats show it, we all know it, and it can come from there. It can. We have to be very careful and really have to make sure we’re staying on course so we’re not spending all of our time, and energy, and budget on the activities that are actually yielding the small dollars.

And so, like that makes sense, right? This always makes sense when I show people this, but our default, when we are not, you know . . . Well, I shouldn’t say, I shouldn’t make the assumption. You know, most people, my guess is, on this call, didn’t go to school for fundraising, right? We’re subject matter experts at something else, but gosh, we need more money, right? And so we default to a lot of things we see other groups doing. So we have to make sure your time is spent on the right things. And so hear me say that your time as a leader, or the fundraiser, or the board member is the most valuable asset to the organization. Full stop.

So every hour you do spend fundraising, it has to be yielding that top part of the pyramid of gifts, right? So this shift of time to the activities that will yield those large gifts is a game-changer. It’s typically a little bit of a math problem, right? Because I want to also make sure your board, you know, any hour, they’re going to spend one extra hour in between board meetings on fundraising. They also want it on the top part of that pyramid, right? And I want those to be rooted in deep relationships.

So in this first one, I want your takeaway to be that you have to prioritize your time. And the number one complaint valid that I get when I say, you know, “Why do you think your fundraising or your revenue’s not growing?” “I don’t have the time. I don’t have the time.” Right? So any hour you’re spending fundraising, we must prioritize on the activities that actually lead to yielding those . . . or I just say growing relationships with those top 30 donors because it can yield 75% of your revenue, right? Okay. I’m going to build on that.

So this whole concept of quick fix is a lie. Here’s the problem with this. Lots of content, and my goodness, we’ve had a lot of content in 2020, maybe the most ever, but a lot of content resources will really tell you that like, “Oh, you just do this and you just do this and then you build it, they will come.” Right? And some people even say it’s very easy. If anyone tells you fundraising, it’s easy, you need to pivot and walk the other way, because fundraising is not easy. There’s a clear path and there’s a step-by-step way to do it. But it’s not easy. It’s hard work and discipline. I’m preaching to the choir here, right? We hope it’s true. I like it to be easier, right.

And so, too often, we default to a lot . . . or in the past, often, we’ve default to the transactional activities that we see a lot of the other groups doing and we believe they’re having success with, right? But that’s not always the case. So a lot of times when we default to, you know, only foundation submittals, or very event-based heavy types of fundraising or very transactional ways, we’re still stuck because it typically doesn’t yield unrestricted gifts and it typically doesn’t lead to large individual gifts and we dread doing it because it’s so, you know, it’s like we got to go back to our friends and family, right? “Oh, no. That corporate donor sees me come and it’s golf season again, right?”

So what I want to say to you that ties back to this pyramid is to grow this top part of the pyramid, I want those gifts to be unrestricted. Wouldn’t that be glorious, right? Those gifts have to be rooted in deep relationships. I call this, or I call this group, I want them to be single-source decision-makers. I want them to be individuals. I want them to be private family foundations, right? Where you have access to that single source or private business. And so, ironically, these three areas are actually where I see the most money left on the table because it requires the deepest relationship. It requires the, you know, leading the donor and it’s the long game, right? It’s not a transaction, it’s the absolute long game.

And so, if you can really think of the single source decision-maker, like your takeaway in this section would be really make sure you’re prioritizing the building relationships, I would say, with single-source decision-makers over the transactional element. And sometimes I’ll even tell people, “In your database, like, you know, create a field that you can track that with and really actually run that report and say, yeah, how much of our top 100 donors are really single-source decision-makers. You know, why has that been important in 2020 and why is that important in every year, frankly?” You know, a lot of the advice I’m giving you today, I really would have given you in 2019 and ’18. I want to make sure that that we’re spending time on those types of things and that we’re not leaving money on the table.

And so, when we can have access to that single-source decision-maker, what I’m trying to say is we can pick up the phone and call them, right? And so, if we weren’t doing this earlier in the year in our fundraising careers, it probably did feel a little awkward in 2020. Like, “You don’t want me to call that person, do you?” Like, “I don’t know. I haven’t talked to him forever.” Right? But if you have access in a deep relationship with the person you can pick up the phone and call, it didn’t feel so awkward to you in 2020 when you needed it.

And so my students who got into that pattern of being able to pick up the phone and call that person talk and make an ask have stayed really steady through 2020 because they were already in that pattern. So if you’re today saying like, “We don’t ask. We do a little bit, but I don’t know.” Like you can start today. Pick up the phone, right? “Hey, Hey, Sue. I just wanted to take 10 minutes and share with you what your gift has been doing during 2020. You know, I know you gave the gift last year, but I want to share with you what that looks like.” Just give them an update, right? Start building that relationship with that person.

Okay. Third one. Investment-level leading. Leading is the keyword on this one. So let’s get clear on two things. Everything that I teach, you know, I guess my core belief, maybe I should say, is really rooted in the fact that your goal should be to lead your donors to give their best gift to you. And I want them giving that gift every year. Right? And so, if you stop and think, like if every donor was giving their best gift to you and like if it’s a $25 a month donor, and that’s their absolute best gift, oh my goodness. I want to serve them. I want to make sure they understand the impact that they’re having on the lives that are being served.

But if a donor kind of gives you that, “Oh, here’s the $2,000 check,” they send every Thanksgiving. But we’ve done a little research and we know that their name is in a totally different bracket on somebody else’s annual report. We have some work to do, right? Because your job is to lead that donor to understand what your need is and then to ask them to give that best gift. When we can do that and we can get your donors in that cadence every year, that’s the ticket, right? That’s the pattern and flow of giving that we really want to get to. And so, if you’re going to secure that best gift, you have to lead the donor and look further out on the horizon to really lead them and help them to say yes.

And so . . . I don’t know. If you want to put it in the comments or not. Like I always like to ask people you know, before COVID, let’s kind of put COVID aside for just a second here. If you think about like, how many in-person solicitations, like were you making, right, maybe per month? You know, we just don’t do that. We don’t do that. Or we only do it with appeals, you know, we only do it, you know, through events. “I hear you. I’m glad you’re doing that. But were you sitting down . . . Thank you, people for commenting. Were you sitting down and asking, right? And so, if you weren’t and you started doing that during COVID, perhaps that did feel a little like, “Oh gee, like, I feel like I’m taking advantage of the situation.”

And so, so many people are not asking. Your donors need you to ask them. Once in a while I sit in solicitations. That’s kind of fun for me. And I do some coaching and I’ve literally heard donors say to my clients, “Oh, my gosh. I had no idea you needed that. You’ve never asked me.” Right? And I’ve watched gifts go from $10,000 to over 6 figures because they asked. So I want to encourage you to get comfortable with that. And that’s why I start with the investing in the budget because when you have that knowledge and when you understand how to sit and ask and really share the need of the organization, you know, your mission is worthy of being supported, right? Whether you’re frontline or not, you are worthy of being supported. You still have a need in 2020, right?

So I am a big believer in . . . And kind of maybe put your top 30 hat on as I talked a little bit through this. I want you to think about, “How am I going to lead these donors all year long to ask?” Right? How am I going to serve them so that when they do make that decision, like we’ve really served them to the best of their ability and we’ve really made sure that we’ve understood their mission for giving and we’ve tailored that for those top three donors all year long?

So this is what I want you to hear in this. I could spend a whole hour talking through the nuances of really creating a great donor experience for your top 30 donors. That’ll be the next one. Here’s what I want you to hear. You have way more control of this process than you think. I need you to have control of this process. Now, I don’t mean be that salesy slimy person, I don’t mean that. I mean is you need to lead the donor through this cadence.

And so, when I hear, “Hey, we got a gift from somebody last year, it was $2,500. Came out of the blue.” “That’s great.” “Didn’t hear from them again.” Right? How did we lead them through this donor experience? How do we get them back in the pipeline for next year? That’s all about your thinking. Again, a whole another webinar we could do. Did we exceed their expectations and how we reported back to them once they did get that gift? But I want you to really put that hat on of, we’ve got to move from the reactive to really put the proactive leading in place in a real service mentality, right? Again, not brash, not those misconceptions that we have about fundraisers. This is a wonderful relationship-building approach.

But if we’re going to start having you attract larger donors, those top 30 donors, I want you to think of it less as, you know, we’re going to ask them in the spring, we’re going to . . . you know, we’ll ask them through that appeal or I’m going to send them an email and ask them. I want you to think of it more as you really planning out what that donor’s experience is with your organization for the year and you really making those strategic moves to serve them so that when you do get to that time, when, you know, “I’d love to share with you a couple of different ways you could invest in the work this year.” If you’re really good about it and you really feel good that they’re going to give it a yes.

Now, one little point I do want to make on this, and I haven’t talked too much about the board today, but one question I always get, so I guess I’ll just hop out in front of that, is what do I do if my board won’t help fundraise, right? Or how do I get my board to introduce me? Or, you know, how do I get my board to give? All of these questions?

Here’s my extra tidbit for the day. If this is a situation, I would suggest for you to model this to your board members. Create a great donor experience for your board members. Solicit each one of your board members. You know, whatever the give get is, if it’s not what that donor’s best gift, I want you soliciting for their best gift, right? And so you oftentimes have to model this for the board and when that happens and when you can show them what you’re doing, and I even sometimes say, “Hey, I’m going to be actually creating donor experiences for our top level donors this year, and so I’m actually creating one for you. And so, you know, that’s what I’m doing.” Right? I’ll tell them and I’m doing it because usually the process needs to be demystified a bit in their head. And so once we can show them how it’s done and show them that solicitations aren’t scary or not, it actually could be really great, once you can show them, then they’re like, “Oh, that was actually great. I thought you were just going to like walk up to my colleague and ask them for money.” No. Right? So we have to model that for them.

Now, I’m almost wrapping up here. Number four, don’t settle. This is a big one. I love talking about this, especially right now. Here’s why this is relevant. I see so much money left on the table. When you decide what this person, you know, can give, right? We don’t get to make that decision. So here’s what I mean. Sometimes we hear things like, “Well, yeah, at least I got my company to give 5,000 during this time. Yeah. Isn’t that great? At least we got them to do that, right?” Or maybe right now you’re thinking, “Well, I know that couple gave $20,000 in 2019, but they’re not going to do that during COVID, so like let’s just ask them for 10. We don’t want to offend him, right?” You don’t get to make that decision. When you’re tempted to jump in and make that decision for your donor, you have to really make sure you’re looking what’s behind that. And so, oftentimes, it’s because we’re nervous and we’re afraid to commit to actually sharing what the need of the organization is.

I’m going back to need here. So you have to commit whether it’s rain, sun, shine, whatever that phrase is, snow, sleet, hail. Whatever the situation is, you have to share the financial need of the organization and then ask for that need. And if you’re not doing that, it’s typically a symptom of something bigger. It can oftentimes mean that maybe you’re just not super confident in the process or it’s like, you know, like Tre, that I said, he’s like, “I kind of don’t know what I don’t know. Am I doing it right?” Right? So like, “Let’s just get the money because I got to get past this.” It could also mean if you don’t have enough individual donors in your pipeline or donors in general. So if you have so few prospective large donors, like any gift is a win, is, “We just got to get it. We just got to get it.” Right?

It could also mean that you’re just like really uncomfortable with asking and like, there’s a kind of a mental block there. The problem is then you really undersell your mission and for far less than its impact, and especially this year, like we cannot be doing that when you all have served us so well. And so your takeaway in this section would be, I want you to release the pressure of like finding the donors, right? Sometimes it’s you just having different conversations and really sharing the need and offering the opportunity to participate in it, right? We’ve got to be thinking of it more as attracting the donors.

And then I’d also tell you, stop making financial decisions for your network. Like, you know, you haven’t seen their bank statement, right? You don’t know what’s going on in there their life. And so, when you do that, when we do that . . . and that’s across the board for corporations, and individuals, and, you know, your job is to share the need of the organization that’s worthy of being supported.

Okay. Last one. And I see some questions coming in. I’m excited to talk through. Last thing I want to share you is learning how to do these types of things, learning new things so that you can move into individual gifts is really not scary. It’s not risky. Right? And so here’s what I want to say. Just because you are an absolute expert at your mission and programs, it’s the best part of my job to learn from you, learn from experts in all these different fields, all over the world. You might still struggle with like leading large donors, like that is still very uncomfortable or you don’t feel confident. It’s okay. It’s okay. Everyone can learn.

And so I think typically do a little digging when I hear the, like, “I hate fundraising. I don’t like asking for money. My board doesn’t know they’re supposed to fundraise.” Whatever those types of things are, sometimes I’ll try to check a little bit and say like, “Does that really mean that this process feels like a bit of a mystery, I’m not sure what to say, or I actually don’t know how to even tell my board what to do so they could move into these activities. Or I don’t know how to kind of manage up on the board.

And so this was exact situation. I want to show one other little case story with you. My client, Sandi, who’s just fantastic, she was also struggling because the donors didn’t know the organization really needed money. Isn’t that a crazy concept? Don’t assume your donors know you need money, even though you’re a nonprofit. Partially because, I mean, she had a very high dependence on program revenue. So from the outside, it was like, “Oh, great model. You’re making money over there. Cool. Love it.” Right? They didn’t know what she needed. And so, because of that, she really couldn’t like ever get ahead to invest back in the organization or get a reserve built enough so that she could double her program into a second city that she was ready to do but couldn’t ever kind of like feel confident enough to do it because she didn’t ever feel like she had enough money in the bank.

And so she’s an absolute expert at her mission. But she’d just never done major gifts fundraising before. And so, you know, she lacked confidence and therefore wasn’t really moving into these stakeholder discussions or in investment-level conversations. And so, because of that, she wasn’t really making asks, but she was defaulting to an annual event where most of the asks were made. So we knew she was leaving money on the table.

And so, when I talked to her in mid-February, if we can all think back, life was very different that short amount of time ago. What she said to me as I hung up the phone with her, she said, “I feel so weird because have so much money in the bank.” And I thought, “You know what? Don’t feel weird. Feel proud and feel like excited that you get to invest in your organization going forward.” And so, you know, she went up by 70% of revenue when she learned how to do a lot of the things I told you today.

Now, here’s the best part. So if we look at her dependence, right? On her program revenue and then the donations that were coming in, it was about 50-50 in 2018. And then 2019, she started learning how to ask, learning how to pivot into these larger gifts. And so, you know, moving from 49% to 57%, you know, what does that look like? Well, I got to tell you, it looks like an extra over $200,000. I mean, that’s a game changer, right?

So when you think of like, “What did investing, learning how to actually ask, learning how to ask for what you need, learning how to attract and spend time on the activities of individual donors, what did that do for her in 2020?” Right? She has the largest reserve and largest cash balance she’s ever had. And so that’s given her like a growth mindset even in this time, right? It’s allowed her to be calm in the storm. We can’t think ahead too far if we’re always on the spin cycle. It’s given her the confidence to replicate her program. Even in 2020, she’s not on the front line. She’s not on the front line.

Best of all, she started reducing her dependence on her program revenue. She will still bring it in, but now her donors or people around her who already loved what she did, they love her mission, they now understand what the need is. So she started that, you know, to lessen that dependence on the program revenue. And here’s kind of, for me, the best part is she reduced her dependence on that event that really was bringing in a lot of the revenue.

And so her event donors became annual donors. And so we worked really hard to move those asks that typically happened at the event and we knew people were coming and not giving their best gift, we moved them out ahead and really led the donor to their best gift outside of the event. And therefore, now she’s not dependent on that event, right?

And so, you know, to anyone on this call whose event was canceled, that stinks. I’m so sorry because I know the work that goes into the events, but I would have asked you, you know, before COVID, I would have said, “Hey, if that event goes away, are those donors still going to give to you?” I ask that to everybody, right? And before about March 15th, the answer was, “Well, I don’t know, like maybe. Like we don’t know.” Right? And, you know, that question was hypothetical before March 15th and now it’s not, right?

And so I want you to hear, you have the opportunity to move event donors to annual fund donors just like Sandi did here. And so, when you do this right, out lot of everything . . . I’ve thrown a lot at you today. Thanks for tagging along here with me. When you do it right, you can fully fund your organization. You can. It’s truly fully funded and you can be less dependent on those restricted gifts that like handcuff us and don’t let us grow our organizations and our missions. You can align your time that’s so valuable . . . I know you’re wearing so many hats with these investment-level gifts for the most ROI. And also, really maximize your board’s participation. They’re only going to spend one to two hours, you know, a month outside of your meetings. You know where it got to be. It’s got to be aligned, right? You really can run in and establish a truly sustainable organization.

So hear me say this today. We have to really often sometimes think about what we need to stop doing so that you can start doing new things that lead to new ways of generating revenue. You’ve done nothing bad up to this point, right? You’ve done nothing, nothing that like we should regret. The change in the pivot where I’m seeing like really creativity and bravery these days is saying, “We have to move into a different future funding and we have to learn and start doing different things so that we can yield different results.”

And so the best investment you can make is to really prioritize your time and energy in learning how to pivot into these top-level gifts. So your takeaway in this section is really just . . . for me, I say this to myself too, be a constant learner, right? Align your overhead dollars with the learning skills that actually are going to lead you to this unrestricted funding from individuals and thus reducing your dependence on a lot of the things we’ve talked about today.

So as we pivot into questions, I just want to say to you, like thank you for serving our country, our states, our communities, the way that all of you have during this time. There’s never been a year when nonprofits have not deserved to be fully-funded and I’m just really humbled just to serve this sector during this time. And so, if you want to reach out to me, you know, at any time for just help or advice, like Steven said, I do private coaching through my 90-day accelerator mainly and I’m really proud to say that my students have been exceptionally strong during 2020. And so that’s where you can go for it, quamtaylor.com/letsgrow. So I’ll pivot into question, Steven, if you if we’ve got a few more nuggets hanging out there that we can dig into. I’ll open that chat box too.

Steven: Yeah. We got some good ones here and we got a little bit of time too. So if you have a question, do it. But, Sherry, first of all, thank you. That was awesome. I love your optimized pyramid. I was imagining you pulling that, you know, donor sombrero, Pareto principle pyramid, just loop them in.

Sherry: You know I was.

Steven: That’s beautiful. I love that. Couple of questions about budgeting. People are wondering if they should be involved in the budgeting process with maybe the finance and the ED as a fundraiser. Do you have any experiments or experience with kind of those silos?

Sherry: Oh, my goodness. Love this question. One hundred percent. And this is always the biggest . . . You know, here’s the thing. You know, if you’re a development director asking this question or maybe your ED also doesn’t totally know the process of major gift development and doesn’t totally understand that you got to know those numbers inside and out. I want you sitting down, I want you presenting the budget, I want you to live, breathe, eat, and sleep that 990. I want you to know the data on it. I want you to talk metrics. I want you to have a business person to business person discussion. You cannot do that if you are not involved in the budgeting process and you don’t understand it intimately.

So you asked the best question because you’ve just nailed what keeps a lot of individual programs from growing is because it’s like, “Oh, I’ll just go share the need and it’s . . . I mean, my goodness, our mission sells itself and it’s great, and, you know, I know they were touched last time, you know, we talked to them.” But someone has to translate between, “Wow, what a great mission and need” to, “So what do you need me to do?” Well, if you’re talking about numbers and budget and knowing that and saying, “So here’s what it looks like to invest in the organization.” You can’t do that if you haven’t been involved in that backend planning. It’s a great question and 100% yes.

Steven: I love it. Sherry, we’ve got a lot of small shops on here, just kind of where our community makeup is. A lot of folks that . . . they don’t have the individual donors, because maybe they’re new. They’re just starting out. Where should they start? Is it board members, friends, and family? How can they kind of get that going for the first time ever, literally?

Sherry: Yeah. Yeah. And right . . . I mean, literally right now, I have people like that I’m working with who if only ever brought in $25,000 and people who are multi-million. So the general principles and methodology works for whatever size. I want you to kind of have that as a takeaway. Where would I start? Hundred percent with your board, right? And so maybe think of it, like, I’d be interested to have you kind of digest what I talked about of how can you serve your board members? How can you early on show them how it’s done, right? You can even tell them that. You know, early on, you know, be a solicitor, tell them you’re going to come every year, you’re going to serve them every year, and you’re going to solicit them every year because it’s really important for each one of them to be giving their best gift.

And so I would definitely start with your board and then I would say to your board, “You know, are there two other people in your world . . . ” I wouldn’t say are there, I would say who are because there are, “Who are two other people in your world where we could actually kind of create a donor experience together, serve them together, and then lead them to an ask? And don’t worry, I’ll do the ask. You know, you don’t need to do the ask, I’ll do it.” And so I would start there. I would also start with, you know, maybe you have volunteers, right? Like the biggest challenge or one of the biggest challenges I always hear is, “How do I get my volunteers to give,” right? Actually, I’ve talked about that on this morning on a phone call with somebody. I said, “They don’t know you need the money. You have asked them to volunteer. They don’t know you need it.”

So you have to be constant educator on what you need. And even if it’s $50,000, even if it’s $100,000, you all have to be singing off the same sheet of paper. “Yeah. We’re really excited. Even now in our second year, we’ve $100,000 need.” Really? Wow. Wow. Right?

Steven: I didn’t know that.

Sherry: They don’t know. They don’t know if you’re . . . You know, it’s funny, I think in the general or kind of like donor, they don’t know if you’re big or small, you know, like people don’t . . . We know the scale, like you told me your dollar amount, you took . . . Okay. I kind of got a picture. People don’t know if you’re a $50,000 organization or 5 million. It’s really kind of a weird thing. Only one person can tell them.

Steven: That’s so true, right? I never heard that before, but that really resonates with me as a donor myself. Like, I have no idea how big or small these guys are and, you know, part of it is they haven’t asked. Love that.

Sherry: Yes. Right. And you have to know the financials to be able to do that.

Steven: Wow. Jeez, it’s almost three o’clock I feel like, Sherry, we could talk all day. I want to be respectful of everyone’s time, especially yours. How can folks get a hold of you? Do you mind taking more questions offline if anybody wants to get a hold of them?

Sherry: Absolutely. Because I see these questions about reserves and I’m like, “Yeah. It’s nine months. It’s now nine months, you know?” Yeah. So reach out to my . . . you know, also you can reach me at sherry, S-H-E-R-R-Y @quamtaylor.com or my website, quamtaylor.com. Just reach out to me if you have any questions or if there’s something I didn’t answer. I’m happy to make sure you get that answer. So thanks for your time.

Steven: You’re on Twitter. You’re on LinkedIn. You’re all over. You’re easy to find.

Sherry: I am. Find me on LinkedIn. That’s where I’m hanging out.

Steven Yeah. Okay. Yeah. People go there. Sherry, this was awesome. Thanks for doing this.

Sherry: Thanks, Steven. I really appreciate you having me.

Steven: Yeah. This was fun. And we’ve got some other great webinars coming up. I’m going to bring back my slides real quick including tomorrow. That’s right. I’m doing back to back sessions because I don’t have anything else to do, apparently. But we got Amy Eisenstein coming on, to talk about capital campaigns. So if any of you are going to start a capital campaign, maybe did start one in like February, I’m sorry if that’s the case. But whatever the case is, she’s going to come on. She’s one of my go-tos for capital campaign. So if you want to know whether you should stop, speed up, slow down, be there tomorrow at noon Eastern. So less than 24 hours from now. Totally free. It’s going to be a great one. And we’re going to record it just like this one if you can’t make it. Go ahead and register anyway, you’ll get the recording by email, no big deal to me.

But hopefully we’ll see you again tomorrow. If not, we got some other webinars coming up. I think we have three next week. Lots of cool topics. So just check out our webinar page, would love to see you again. Look for an email from me with the recording, the slides. I’ll send all that stuff out this afternoon. Scout’s honor. And hopefully we’ll see you again. So have a good rest of your Wednesday. Hopefully, see you tomorrow, but if not, have a good week, stay safe, stay healthy. We’re thinking about all of you, and we’ll talk to you again soon. Bye now.

Sherry: Thanks, guys.

Steven: See you.