How To Know If Your Fundraising Staff Is Leaving Money On The Table

Sherry Quam Taylor will show you how your team can align every hour they spend fundraising with maximum dollars.

Full Transcript:

Steven: All right. Sherry, I got 2:00 Eastern. Is it okay if I go ahead and kick us off officially?

Sherry: Let’s do it.

Steven: All right, well, cool. Good afternoon, everybody. Good morning, I should say if you’re out on the West Coast. And if you’re watching the recording, I hope you’re having a good day no matter where you are. We’re here to talk about whether or not your fundraising staff is leaving money on the table. Don’t want that. Oh, I love that topic. So thanks for being here. We’re going to have fun over the next hour. So 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, I just want to let everyone know that we are recording this session. So if you have to leave early, or maybe get interrupted, or just want to review the content, don’t worry. We’ll get you the slides, the recording, and you can review all that content later on. So have no fear. But most importantly, if you are listening live, please do chat in your questions and comments along the way. We’re going to leave some time at the end for Q&A. So don’t be shy. We’d love to hear from you. You can send us a tweet. There’s a Q&A box and a chat box. You can use either of those, although if you use the Q&A box, it might be a little bit easier to see. A little insider hint for you. But bottom line is we’d love to hear from you. And if this is your first Bloomerang webinar, welcome. We do these webinars every Thursday. We love doing them. We’ve been doing them for the whole history of the company, almost 10 years now.

Sherry: Wow.

Steven: But if you’ve never heard of Bloomerang beyond the webinars, we’re a provider of donor management software. So if you’re interested in that, check us out and visit our website. There’s all kinds of great resources on there, videos you can watch and then get a sense of what we’re all about. But don’t do that right now because Sherry QT is joining us from beautiful Chicago, the city of my birth. How’s it going, Sherry? You doing okay? 

Sherry: I’m doing awesome over here.

Steven: Yeah, this is great to have you. You’ve done, what, four or five webinars?

Sherry: You know what, it’s been a handful.

Steven: Which is great.

Sherry: And I got to tell you, it’s one of my favorites. So I’m glad to be with you today.

Steven: You got a spot on the calendar every year.

Sherry: Thank you.

Steven: Don’t worry. And you all, if you’ve never heard her present, I think you’ll be back next year for sure. And check her out. She’s an awesome nonprofit consultant. She’s a coach. She works with CEOs. She works with teams, boards, and has a really cool methodology that I hope you all explore on her website later on. But hey, we all want to raise more money, and that’s what we’re here to talk about. So I’m going to hand it over to you, Sherry. I don’t want to . . . 

Sherry: Okay, great.

Steven: . . . take any more time for you. So I’m going to stop sharing. And let’s see if we can get your slides right here.

Sherry: Okay. Great. We’ll do the official handoff.

Steven: Looks like it might be working. Cool.

Sherry: Okay, good.

Steven: Okay. Take it away, my friend.

Sherry: Okay, great. Happy Thursday? I had to check myself on that. Okay, so today we’re talking about fundraising, leaving money on the table, none of those things that any of us want to think that we might be doing or our teams might be doing. And so I’m so glad that you’re here today. So as Steven said, I’m a long-time friend of Bloomerang. And so if we’re just meeting for the first time today, I’m in Chicagoland, like Steven said. And I’d like to tell you these couple little nuggets because it really positions where I’m headed, I guess, in what I’m talking to you about today. So I started migrating my corporate career a long time ago now, if you do that math, and had some early success in scaling the organization, and specifically scaling the organization’s unrestricted charitable funding. And we tripled that revenue in 18 months, which was a super fun ride, if you can imagine. A little stressful too, but really fun.

Here’s what I want you to hear today. I found out pretty early that a lot of things weren’t quite adding up. And as I got to learn the sector and was talking to other leaders, talking to other fundraisers, I found that a lot of the approaches or advice or industry misconceptions were keeping great organizations from growing. They were doing awesome work, but their revenue was stuck. It had plateaued, where it was a grind every year and it doesn’t need to be. 

And so part of my success is that I think from early on, I saw things differently. And I saw the need to come alongside other . . . nonprofit CEOs were killing it, knocking it out of the park, but they still need more money, and they needed their revenue to grow at a higher rate because frankly, the amount of money they were bringing in was simply not matching their strategic plans or the plans within their strategic plans. And so since then, a decade later, I’ve helped hundreds of nonprofits. I do that all over the country, thankfully I had a virtual business before 2020, really helping teams understand what’s blocking their revenue growth and specifically their unrestricted revenue growth because you know that’s what we need to be able to invest back in growth, and staff, and my favorite word, overhead. And so my clients regularly add six to seven figures of revenue to their bottom line as a result of using my methodology and my programs, which I’m really proud about.

So what we’re going to talk about today, very specifically, and I’m going to tell you three things we’re going to walk through, I really do hope this webinar is different than maybe what you thought I was going to tell you today. I say that because my approach is different. And I’m proud of that, and it gets results. So maybe try to take off the fundraising hat and put on the strategic growth hat as we go through this today. 

So I want to uncover and talk through a bunch of things that your team might be doing that’s actually keeping your revenue from growing and maybe kind of sabotaging your growth trajectory. I want to give some kind of flat out areas where I see the most money left on the table, and perhaps maybe give you some ideas on what to do instead. And then I want to talk about this concept of your teams. We don’t want to leave money on the table. A lot of times, that’s because we aren’t aligning our time, and our schedule, and, frankly, every hour that we are spending fundraising on things that generate the most amount, that generate larger gifts, unrestricted gifts so that we can pour it back into that growth and overhead, which is so important for all of our organizations. I think I’m yet to meet an organization who doesn’t want more flexible cash to really invest in growth and invest in the things that you know you need.

Okay, so I’m going to give you a quick flyover today how my methodology works. I want to talk to you about one of my clients, Jonathan and his team, and how they’ve had killer results here the last couple of years. But first, I want to ask you this question. And I listened to this podcast. It’s probably a month or two ago. And there was this guest, Judi Holler. I don’t know, if you follow her, she’s really dynamic, really out there. But she’s like this fear buster to help you set your goal and just kind of like, “Great, it’s fear, embrace it. That means you’re growing. Let’s push toward it.” And so I was listening to this podcast, and she was talking about goal setting. And I’m a goal setter. I’m the first to admit, my entire life is in all of these Excel spreadsheets because I have a goal, and I’m backing up, and what does it look like this year? What does it look like next year?

But when she talked in this podcast . . . and maybe I’ll link the podcast actually when I send out the slides afterwards, there was this way she framed goal setting that, to be really honest, is super practical and just at first glance is like, “Yeah, makes sense, nothing really new.” But there’s a way that she talked about it that was really fresh. And I thought, “Oh, gosh, this is a really great way to frame revenue growth for my clients.” And so I want to start there today. I want to kind of talk through that. And so these are the steps. And again, they’re really simple. It’s like, “Okay, take your goal.” You have a goal, right? Like, we want to grow from 5 million to 10 million. Let’s just kind of use that today. Okay, so let’s take that goal. And now, we’ve naturally set our boundaries. Our goal because we want to be 10 million, that kind of, backing it up, that sets our boundaries. And then we have to let those boundaries direct our time. We have to be aware of this. Again, it’s so simple, but I was like, “Oh, that’s actually the methodology I teach in fundraising.” So let me build on these three things and show you what I mean.

So when we talk about this concept and really allowing it to be this simple, you as fundraisers, I don’t need to be the ones to tell you or anybody on this who’s growing something, but we have to know what to say yes to and what to say no to. We have to know what to stop doing and what to start doing that maybe got us to this point and got us to 5 million, but it isn’t going to get us to 10 million. And so when we think of that step one, that goal setting, the goal setting is not the problem. Our sector is led from visionaries who are pushing people to . . . like, “We have a goal to end this. We have a goal to change this in our community. We want to scale.” These are my client examples. We want to scale 25% every year for the next year. So we want to double the families. We want to replicate our model across the country. We want to actually have enough money to do what’s in our strategic plan. Our goals are really easy to articulate.” It’s number two and three that actually kind of . . . that’s where we get stuck. And so that’s what we’re talking about today.

Now, let’s cut to the chase here, the number one thing that keeps fundraising teams from reaching that goal, and frankly causes them to leave money on the table, which is we’re never going to reach the goal there, is the misalignment of these three things together. One of them is misaligned and then we try to fundraise in that framework, we’re never going to, (a) reach goals, we’re never going to be securing a donor’s best gift in every scenario, and it’s always going to be difficult. 

And so how do we do this? How do we do this? We have to do it differently. I want you to hear today that there is a different way to fundraise. Like, there’s a different way to fully fund our organizations and to finance your amazing strategic plan. Let’s finance the whole thing, and let’s do it every year because when stats show that over 91% of nonprofits never reached $5 million, that’s a bonkers stat to me because who did we need most these last 18 months, right? And so you have to be okay and be open to thinking differently and breaking free from a lot of these traditional models and things that the sector tells us we should do because many times those things are actually sabotaging our growth and keeping your team from really raising to their full capacity.

Okay, so let me start with a case study and then I’ll move into the details and break it down for you. This is my client, Jonathan, who’s amazing. Now, here’s Jonathan’s situation. In 2018, he took the reins of an historic organization, but it was really struggling financially. And so they had been in the red for quite a few years. And so when he came to me in early 2020, right on the edge of, before 2021 went sidewards, he had moved the organization into the black. They weren’t bleeding anymore, right? This is where he started. Now, that was good. So we got the expenses in line. 

But now, here’s the problem. Now, it was like, “Okay, I got that in line. But now I need more money,” because he’s a visionary entrepreneurial leader. And so now we have to do that. But the problem was, he had never done that before. He never designed, scaled, reorg a development team. And that’s really what he needed to do. So that was the first struggle. The second struggle was his team had historically raised mostly . . . more like transactional gifts. And, again, I want you to get these, these gifts too but really focused on foundations, on corporate sponsorships, the golf outing, the gala, all of these things that we all do, I’m not telling you not to do them, but it was mostly that. And so therefore, the revenue from individuals and those very relationship-based donors was pretty stagnant. And the problem was this team really didn’t have a lot of experience with mid and major-level guests, didn’t have experience leading donors to their best gift because that’s totally different skill set.

Now, Jonathan is an accomplished entrepreneur. But he was kind of guessing when it came to fundraising or growing the team and doing that sort of thing. And so Jonathan heard me on this podcast I was on and came to me and said to me . . . and I’d made this comment on the podcast, and you’ll hear me say it today. I had asked. I said, “Are your donors giving their best gift to the organization? Can you honestly say everybody understands the need?” it’s like, “understands the story, understands the lives that are changing, and they’re giving their best gift? And are they giving that best gift every year?” 

And so he reached out to me and said, “I don’t think so. I’m pretty sure they’re not. I think they’re just kind of giving what they think we need.” He was right. So making the shift, he now has a very donor-segmented financing plan that actually matches his aggressive growth plans. And they’re aggressive, and they should be aggressive because he’s working in educational equity here in Chicago. He’s learned how to take those transactional relationships, where there was money sitting on the table and lead corporate donors from a lot of that traditional transactional type of sponsorship or those kinds of gifts. He’s learned how to lead them into larger unrestricted gifts. He consistently finds and secures six-figure gifts from donors who previously weren’t giving those gifts, didn’t know how to help, they weren’t giving their best gift. And today, he’s raising double the revenue of gifts 10K and above because he’s been using this methodology.

So let me tell you a little detail here. I’m going to focus on this best gift thing. I want you to hear me . . . or maybe I’ll say to you, ask yourself, are your donors giving their best gift? And what would it take for me to move them onto that path? And so if we look at his 10K and above gifts in 2019, there’s 42 people giving above that. Okay, I know some of you’d say, “Oh, it’s small.” Some of you would say, “Oh, I’d kill for 42 people giving above that.” Now, this year they’re finishing, it’s 57. It’s like, “Oh, that’s not that many, Sherry.” It’s a good growth, but it’s slow growth. And it was a wild year in between those two times, we know. Here’s the thing, when we look at those 42 donors, it was under a million dollars in that exact area. And when we looked at the 57, it was over $2 million. And so I want you to see that that best gift scenario is a game changer.

Now, most people come to me and say, “How do I find new donors? I got to find them.” I’m like, “Hunting, hunting new donors.” We can do that. We can work on that. We do that too. But don’t leave money on the table with your current donors. If you’re not leading them, serving them, guiding them, helping them understand, we’ll talk about what that looks like, you’re going to leave money on the table. And they were leaving money on the table. He was correct. Are we leaving money on the table? Yeah, they were. And these numbers show it. But his staff wasn’t leading. They were being very reactive, “Time for the gala again. Oh, then it’s golf. Now it’s fiscal year end appeal. Oh, we got to send that thing out,” and it’s just leaving money on the table. And they’ve never had to do that before. They’re rock stars at all those other things. They’re doing great. But they didn’t know how to take that relationship, grow it in that peer-to-peer kind of CEO to CEO type of investment level conversational language and lead them to their best gift.

And so now the organization is on a completely different growth trajectory, thankfully. And his team is a well-oiled boundary setting, that’s what we’re talking about today. They’ve got their plan. They’ve got their boundaries, and they know how to allocate their time to the things that raise money. 

And so why did this work? Why did this work so well? Well, there’s three main reasons. He had the goal. He learned how to . . . I’m going to say, like, put on different glasses and see that a lot of the traditional things, or I should say only doing a lot of the traditional fundraising approaches, was actually like causing them to be very siloed and was actually causing them to not grow. You saw the bar chart. He set new boundaries, like, “This is the goal, and so now we have new boundaries.” He learned what his team should stop doing and what they should start doing. And what they should start doing was doing the activities that started attracting larger donors, attracting larger gifts that helped his organization lead donors to a deep understanding of what the need was. So he aligned his staff’s time with the boundaries, and that’s all done in this concept of a financing plan. Before we design our fundraising plans, we got to know how would we fund everything we want to do? What is that very nuts and bolt plan because that tells us what our fundraising activities should be for the year?

Okay, I’m getting excited here. I caught myself really getting animated here. Number three, this team was equipped. He invested in equipping his team to really learn, “How do we make that shift? And is it okay to make that shift when we’ve always done that thing for six years and I think people love it? And don’t we have to have that golf outing and all those things?” He learned how to shift his team into the activities that actually started securing a donor’s best gift. And that helped them really see there was so much money left on the table. 

So in order for you to do this, there’s three steps you need to follow. And so the first step, and I’m going to align it with our three things here because this work so well today, so it’s our goal. So I want you to think about how would I pause and really shift into this true and overall financing model that actually sets your whole team, sets your whole board? Everybody knows what to do because they’re aligned. They know what the goal is. We want to go from 5 to 10 million in, I don’t know, three years or whatever it is. So that tells us what we need to do. That tells us how much unrestricted cash do we need? How much of this do we need? Where are the areas we need to grow so that we have that growth flexibility? 

Now, we have our boundaries, we have our goal. Now, we have to train the team, we have to train the board how to do this high ROI fundraising. We have to align every hour your team is spending with results because time is the number one thing I hear from people that they don’t have. So if we’re going to spend those four hours fundraising today, it sure as heck better bring in the dollars that we need. And then those hours, we’re going to go, “Okay, so those are the hours we have,” we have to create exceptional donor experiences. And we have to be doing the activities that are leading donors to that best gift every year.

And so, for the rest of our time together, I’m going to walk through these three steps. So if you don’t have your pen and paper out, now’s when you should do it. These are the exact steps Jonathan took, and you can take to do this yourself. 

Okay. So let’s talk about this number one section about how to shift into this kind of funding model or financing plan that actually is the first domino of your success every year. Here’s the thing . . . and this can feel intimidating if you don’t have . . . if you’re like, “Oh, the numbers thing, it’s not my thing.” Everybody can learn this. Everybody can put together a true numbers based plan that would keep you in the black and that you wouldn’t have to kind of feel like, “Oh, we’ve been in the red the last three years. And so I’m sure it’ll be this way again.” Your financing plan needs to be set up not only for your mission’s need but also your reserve. Everybody needs a reserve. Everybody needs a larger reserve. We learned that in 2020.

So part of this first step, it’s kind of maybe the most fun part, is we got to get you investment level ready. We have to get you positioned as something that large donors see themselves investing in. And I’ll say large donor, for you a large donor might be $2,000. And somebody else on this call, a large donor is $200,000 or $20,000, everything in between. This exact model, I was telling Steven beforehand, I use it on $500,000 organizations and I use it on $30 million plus organizations, exact same thing. But oftentimes, we are doing the things that sometimes are keeping investment level donors from understanding our need. 

I’ll tell you what I mean. So we have to design the financing plan that actually is an all-in number that actually propels the growth and supports all the activities . . . I shouldn’t say support, it drives the activities that your fundraising staff should be doing. Can I talk about budgeting? Everybody is already surprised, “Why are we talking about budgeting when this is a fundraising discussion?” I’ll tell you why, because most everybody who comes to me is not fully funded because of their approach to budgeting, which is tied to this financing plan.

Hang with me here. Here’s what I mean. So there’s a question I ask everybody, if you call me today, I’d ask you this, I’d say, “What do you need this year? What do you need?” A lot of you are starting your fiscal years here. And it’s a little bit of a trick question. I want to know how would you answer that. If I’m a donor saying, “Steven, what do you need this year?” What would you answer? And so often we say, “Well, we’re at that $5 million mark, and we’d really like to grow. And we’re kind of hoping we could do this because we really want to do this. And so that’s kind of what we’re hoping to do.” 

That’s not the correct answer, I guess I’ll say that. What I’m really asking is what do you need? There’s the number your budget is, your probably board-approved budget. And then there’s the number you’re raising toward, And I’m not saying, “Oh, in year one be wild. We need $10 million. We need $20 million. Look, we just need it because if we had more money, we would do more things.” That’s not what I’m talking about. But when that donor says, “What do you need?” I want to hear you say, “Well, you know what, we have a $5.8 million need this year. I would love to walk you through and share with you what that looks like.” We got to know it because, “We have a plan in place. We have a new strategic plan in three years to be at $10 million. And so this is this growth, this is the step we’re taking this year.” You got to be able to answer that. 

This sometimes is a huge mindset shift. What I mean by that is, oftentimes we’re kind of planning, and investing, and budgeting, and if we had the money, we’d do that versus, “Thank you for asking that question. Here’s actually what we need this year.” For a lot of you, maybe you are heavy government funding, or heavy contract funding through foundations, sometimes it’s like, “Well, we have this pledged, well, we have these contracts, but it’s never enough.” That’s great you have those, but the annual budgeting and planning, what it’s based on, well, it’s based on the 16 contracts we have versus, “But gosh, it’s never enough,” and we want to grow in that one community, and we want to serve those people in a deeper way. We have to make sure we’re raising to the right number in the first place. Most teams are not doing that. They have not set their number that they’re raising to correctly in the first place. What I mean by that are . . . or I’m going to go into that.

Secondly, tied to that . . . so we’re not raising to the right number at the first place. Many times . . . and I hate this, if you’re on the development team today and you’re like, “Yeah, that would make sense. But I don’t get access to the budget,” secondly, too many fundraising teams are not intimately familiar with the budget and the numbers and would struggle sitting down and having an investment level conversation. And that might not even be the fault of your own. It’s like, “They just come and tell me what my number is every year.” Well, that’s leaving money on the table because how are you going to sit down with that CEO of a company and have that investment level conversation if you cannot walk them through, in this example the $5.8 million need this year. It only makes sense. 

So oftentimes, with a leader, the first step I’m looking at is, (a) are you raising to the right number from the expense side because before we say 5.8, or 6.2, or 7.1, are you investing enough in your growth in organization that actually is going to propel your growth? I suppose this is already spending enough money to make money. And it could be a number of things. It could be software. It could be your brand, look, and feel. It could be messaging. It could be your reserve, all these things that we think we shouldn’t put in because we don’t know how we’re quite [inaudible 00:27:52]. We’re just a little nervous about that.

I want to encourage you to not be irrationally frugal when you’re budgeting because it’s keeping you from raising more money. The budgeting and being irrationally frugal, I stole that from another podcast, I love that phrase, it’s keeping you from raising money. You cannot do more on less. You cannot do more on less. We know that, right? 

So if your fundraising team is going to secure investment level donations, if you’re going to pick up all that money that’s sitting on the table right now, you have to be able to share and articulate the true need in investment level conversations. When you want to attract larger donors, when you want to lead a donor, like I showed you in Jonathan’s case who’s given $2,000 but we know they could give $2,500, we have to be able to share that need and articulate it. 

Now, the only way to do that is by the organization first, really understanding what they need and creating a needs-based budget. That’s important. Here’s why to the fundraisers, because it’s only until you say, “Yeah, the number is 5.8. We really need that. We are going to put in that new website redesign. We are going to hire that new program person. We are going to invest in development coordinator because you can’t do it all, or we are going to invest in a full-time database manager because we got to have that data, right?” Only when you do that, you know that number, can your fundraising team create a true financing plan that fully funds your organization and hits that goal. 

So much of this is done, so often this is done wrong. We say we have $5.8 million need and then we say, “Okay, well gala brings in this, this brings in this. I don’t know, we have these contracts. Well, it only kind of adds up to 4.2. So, okay, well, let’s just try to grind more on what we were doing last year.” That’s not going to get us to where we need to go.

So I want you to just quickly for like boards, if any board members are in here, I want you to remember that 50% of the budget is the expenses. That’s usually where we focus on approving. Board approved the budget, great. Okay, so that was the expense side. Now, let’s talk about the 50% of the income side. Now, how are we going to do it? What does it look like month to month? What does it look like per donor segment? Okay, how is it going to balance including the reserve? 

So when this part is done right, when you actually have from day one or day one of the annual . . . or fiscal year, excuse me, you naturally move into, “Here’s what we need,” and people want to buy that way over, “Oh, I’m not so sure,” that nervousness, “We’re trying to hit it.” You got to plan it. You move from that squeaked by budget or that kind of scarcity mindset budget. “Doesn’t matter the size of it, it never gets funded,” because you’re not setting the team up for success from day one. You can move into a real budget that reflects what you need, it helps you raise enough for your programs that we want to raise for, and overhead, and the reserve, all in. 

Now, on the income side, we move from that like, “Well . . . ” I even have a client right now who said, “Well, we’re kind of planning to be in the red next year.” I said, “Whoa, whoa, whoa, whoa, back that train up.” I said, “I’m going to show you how to do it. You don’t have to plan to be in the red. Why would we plan to be in the red?” I’m going to show them. I’m excited. It’s never high enough. Actually, that financing plan dictates every step. It’s your roadmap to run a balanced budget. I see people make this change, kind of shift into this all the time and it’s a bit of an aha moment because we’ve been told so long, like, “No, just figure out how to do more on less. Just kind of get it done. Get another volunteer.” And that’s actually keeping us from raising more money.

So when we create these real budgets, I promise the first one is the longest. When we create these real budgets, then we know actually what that financing plan is. That sets our boundaries. And this is really where so much money is left on the table because most people think that in order to get that money on the table or move into these next level types of situations, it’s going to be when that board turns around, “Oh, no, they don’t help right now,” or, “It’s going to be when Chance the Rapper retweets us,” or “When we finally get to that 95% program percentage that one donor is asking about.” None of that is true. 

The one thing that attracts donors and attracts donors who can invest at a higher level is information. They’re dying for you to sit down with them and have the stakeholder conversation with them, and tell them what their gifts can do, and tell them why you have a $5.8 million need, and tell them how you’re funded, and tell them all of these things that sometimes we shy away from in the conversation like, “Oh, I hope they don’t ask that percentage question.” Why not? Let’s talk about it. Let’s educate them. Let’s know our numbers. Let’s sit at the table. Let’s bring it up. Let’s bring up that number in the 990 that we’re a little nervous that they might see.

This brings us to step number two, to my paper airplane here. Let’s talk about the boundaries, how to use these boundaries to drive time. So now we have our financing plan in place. We know how we’re going to hit 5.8 in my example. I picked a random number. How do we use the boundaries to really make sure that we raise to that and again, because I hear you, anytime I do a survey or anything, “So what’s the number one thing that’s keeping you from hitting your goals?” and the answer is time. I get it. I was in your shoes too. 

So most organizations are spending too much of their time, and energy, and budget on the activities that attract smaller gifts or lower dollar donors. Again, I love every size gift. Don’t hear me say, “Sherry doesn’t like events and small dollars.” I love them. But we’re spending too much time on them because it’s like, “I don’t know how we would do that. So let me go over here and spend time on this.” I want everybody giving their best guess. If $20 is your best gift, amazing. Let’s serve them in just as amazing way because they’re giving their best gift to the organization.

Now, on the flip side, 70% of nonprofit revenue comes from just a small percent of the donor database. We have to remember this. So when we always lean into the data and metrics and . . . I love Bloomerang publishes all these trends. And I always love digging through that stuff. We know as fundraisers, when our time is limited, everything we do must be balanced in a model that actually is factoring in our time and that is high ROI because I’ll tell a fundraiser, and you might be the CEO here on this call or executive director and you’re the fundraiser, great, your time is your organization’s most valuable asset, like full stop. And so every hour you are spending fundraising has to be yielding the dollars you need to fully finance the amazing work you’re doing. And so part of that is maybe kind of insinuated is sometimes we got to push harder back some of the crazy ideas that come our way, “You know what you should do, you should start one of those online something, something,” or, “You should move that to some virtual blah, blah.” It’s like, “I don’t know, should we?” We got to go to the hours and the dollars.

Now, so I’m going to ask you as a fundraiser on this call, where can you shift time away from some of the traditional transactional activities? We got to really be reflective and look inside our own time sheet, if you will, so that we can stop doing some things that got us to this point, that aren’t going to get us to the next point, so that we can start moving into the activities that are really in this high ROI generating model. And again, you feel nothing wrong to this point. But you might have to do something different to move forward. 

So this is a math problem. This is just simply aligning everybody on your teams, everybody on your team, their time, with the activities that are segmented appropriately. So a lot of times I’m taking this financing plan, and I’m showing, spreading it out for the fundraising staff. If it’s one person, it’s a little easier. If it’s 20 people, it’s interesting. Who’s in charge of which donor segment, and what does that look like, and how are we going to fully fund the organization? And so when this part is done right, decisions . . . or I would say we kind of move from making fundraising decisions based on, “Well, we always do that,” or, “Yeah, we should submit that. I know it’s a giant restricted gift, we should still do it,” I’ll probably tell you to still do it, but if we’re only focusing there, we get the highs and the low in our cash flow, we’re trying to be kind of everything to everyone and we tend to bring it a lot more restricted cash than we should, which keeps us from growing.

When we’re making decisions based on relationships and when we’re aligning our time on relationship-based donors, we can move into a very heavy unrestricted model. We can have organizations that have steady growing revenue. I see it all the time. But we got to be okay with stop doing something so we can start really focusing. I’ll tell you what I mean by this top 30. What I mean is we can start focusing on the decision makers and a little closer to the top part of the pyramid. 

What do I mean? So this is the funding model I always start with. It ebbs and flows for people, but you could kind of sketch it out today. Now, if we have money on the right and we have time . . . I’m going to say time, energy, and budget on the left, I want . . . here’s where I start, here’s where I set my compass for you, 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% all in. Obviously, you can do the math at 25% at the bottom, which is probably still even a little bit generous. 

Here’s what I want to say to you. Be careful. Then it was like, “Okay, we need to really crank up our individual giving program. Let’s make this our year.” You have to be careful that if we’re going to try to find larger gifts and try to make sure we are securing all the money that’s in the relationships that we have, be careful not to spend all of that time on activities that actually only secure with certain gifts because sometimes we’re like, “If I get $100,000 gift, it has to be that one foundation. I don’t think we have any individuals who would give that.” And then we start doing the things that only are attracting the restricted foundation gifts or the restricted sponsorship gifts and then we leave money on the table. 

On the other side, we have to make sure on our time, and energy, and budget that we’re not only putting most of our time into the things that attract small gifts. Like, “We need to raise money, we should have another Facebook fundraiser. We should have another 5K. We should have another event.” Maybe, maybe not though. 

If you’re going to grow, if you’re going to really get on the trajectory of growth, in my example go from 5 to 10, you have to make sure that the majority of these top gifts are really, really rooted in those deep relationships where they understand what you need and they want to give you unrestricted gifts. These are deep, deep partnerships with individuals, with businesses, with family foundations. I call this single source decision makers, where there’s less of an application, less of a transaction, less of a, “We’ll let you know how the vote goes,” kind of thing, and the opportunity exists for us to sit and talk to the decision maker. This is a huge area where money is left on the table. You know this is the highly relational moment here.

Now, what I want to say here is . . . again, not bashing any of this. These are all amazing. Do them. You got to do them. Don’t spend all your time there. If we go back to my client, Jonathan, let’s bring him back into this, here’s what it looked like when his staff knew how to set their boundaries, knew how to start aligning their time with the activities that yielded more money. 

So how did he do it? Let’s talk practical here. Let’s talk about individuals. Well, they weren’t soliciting a ton, right? There were galas, and events, and golf outings. And so people were coming and they were giving. And occasionally, there’d be a great lunch. And it’s like, “I think they’ll give. That was a really great lunch.” And maybe people would. There were generous people. But they were not giving their best gift. And so to move into numbers like this, he prioritized the time it takes to really guide a larger donor into those meetings where you are finally sitting down and leading them through a conversation that really helps them understand what their gift could do. They weren’t soliciting and having one-on-one solicitations. You have to learn how to do that. 

A lot of times we think we are. I’ll ask, “How are you soliciting donors?” “Well, they get our appeal every year. We have an event.” That’s not a solicitation for the top part of the pyramid. I don’t really want them giving at events. I want them receiving a one-on-one ask, if you will. It’s not scary, but it’s going to take time. You saw his 2019 to 2021. It wasn’t like within three months, it’s this. This takes time to move into that.

Now, from a businesses standpoint . . . okay, pick up your pencil if you put it down because this is where I have seen so much money, especially coming off of 2020 even though we’re now officially in quarter three. So I’ll say we’re coming out of 2020. Businesses, now, guess what? These very transactional sponsorships for our events and for other things, they’re great for some corporations and businesses when it’s a win-win. “Oh my gosh, our logo is going to be on the back of 10,000 t-shirts at that one event and all of our clients are there, and it’s amazing.” That’s a win-win sponsorship. 

Can I tell you how many companies will just give you mission-based gifts because your mission is great, and they like you, and you’ve taken the time to build a relationship with them, and you actually have found the businesses who are mission aligned and they didn’t really want to be sponsoring your gala anyhow, they didn’t get anything from it? But like, I guess we have to do it. So even an example in Jonathan’s case, they had a $50,000 event sponsor that was steady. We took the time for the last year, 18 months, to lead that donor, have those investment level conversations, guide that donor, has doubled the gift and it’s an unrestricted gift. We will never ask that donor again to sponsor something and go back into transaction zone.

There’s so much money left on the table when we assume they’re a business, sponsorship. I have businesses say to me, “What’s the deal with the sponsorships? If they just came and talked to me, I’d actually probably give them a bigger gift.” Sponsorships are never that donor’s best gift. This is what I’m talking about breaking out of some of the things we’ve always been taught to do. It’s good for some businesses, totally great. Not for all. Listen when it’s not a win-win for that business. 

Okay, the other thing I’ll say is family foundation, so these are all those single source decision makers. Now, there’s usually a couple people that are making the decision in a family, but it’s usually not the vote of 30 people. So, again, relied on the application, that sort of thing, that we all have to do. That’s great, right? However, here’s what I want to say. A lot of times when I dig a little bit on that relationship with that family foundation, or sometimes just like it’s a relationship with the individual and they just happen to cut their check through the family foundation, a lot of times, I’ll say like, “How do we thank them? How did we report to them? Tell me about the relationship?” “Oh, they don’t require a reporter. They don’t want to be thanked,” or, “They don’t need that.” Yes, they do. Yes, they do. They need donor experiences. I’m a little frank here on this slide, aren’t I? We got to treat them like humans. They’re not banks. They’re not like, “It’s October again. I know you gave us 10 last year. Could we do 15? Would you be open to that?” We have to serve them in greater ways.

When my client starts serving foundations more closely, kind of looking like individuals, their gifts skyrocket because everybody else treats them like a bank. It’s flat out. There’s so much money left on the table here because we’re just like in application zone, which leads us to number three. We’re doing okay on timing. We have to create these donor experiences every year. We have to create the activities that actually serve that donor and lead them to their best gift. If we’re going to truly . . . it sounds a little buzzy, best gift every year, but if we’re truly going to lead that donor to a yes, we have to deeply serve that donor. 

And don’t hear me say, “Oh, we do whatever that donor wants.” Don’t hear any of that. This is a win-win. This is a mission aligned, wonderful relationship that’s not this or this. This is a partnership. I want to be clear on that. But if our goal is to lead donors to give their best gift every year, we have to make sure that we, as fundraisers, are not standing in the way of that. 

And so when we think of what does that look like with us getting in the way and maybe leaving money on the table, we have to make sure that we are not making the decisions for our donors before we even get in the room. What do I mean by that? Oftentimes, I hear, “Oh, they would never give a gift that big,” or from the board’s side, “I don’t know any donors who give that.” Really? Why are you making that decision? Do you have bank logins to know everybody’s accounts or all that kind of stuff? 

So when we think of this sales relationship, the best results are going to come out of deep relationships that are wonderfully integrated. And it truly is a win-win for everybody when it is more of a peer relationship because we treat them like humans. Like my last slide I said it’s a mission win-win. We’re really stakeholders in our work together. And we can only get to that point when there is a natural comfort level and we’ve taken that time to get to know our donors and get to know why they would give. And they’ve also taken the time to understand what our plans are, “And this is why we need to move to 10 million,” and really us being the educator and saying, “This is what our stakeholders say. This is what it looks like. This is the right way because we are the experts at our mission.” That only happens when we’ve taken the time to build the relationship. It really does.

And so what I want you to hear me say today is leading donors to that ask and being in relationship to that point where they are understanding and giving their best gift, you actually have way more control. What I mean by that is not pushy control, but leading the donor, guiding their next step, knowing what the next step is so that when you do get to the point where you’re sitting down and having the money conversation, you’re like really cool with that. You’re really comfortable with it because you’ve got the tools in your hand, you know how to ask, you know what this is, and you’ve done everything up to now that you’re like, “This is actually kind of the easy part because we’ve checked all the boxes, if you will. And I’m really confident to be able to sit down and share with them what their investment would look like.” 

Now, the tricky part of kind of moving into these activities, aside from we’ve talked about the time, to make sure that we’re moving into all of these strategic activities. I guess it’s a little obvious, but I’ll do a quick recap as we wrap up and answer your questions. You have to know what to stop doing. Sometimes it’s budgeting. Sometimes it’s not raising to the right number. Sometimes it’s how you talk about what you do.

I’ve got a really technical client, really amazing. It’s medical. They’re curing an awful disease. Sometimes, it’s how we talk about what we do that’s keeping donors from understanding our need, “Oh, I thought you guys were just funded by all these research grants,” or, “I thought you guys got all that funding from the state,” or, “I saw on LinkedIn that one person came and wrote through that $8 million check. I didn’t think you needed it,” are we doing the things that are keeping donors from giving their best gift or attracting them, right? Then you have to make sure every year in your annual planning, in your annual strategy, your annual budget, that all has to be set up to attract donors who actually understand the whole need, understand you’re right, it’s not just programs we got to invest in. You need programs, admin, fundraising, and an overhead . . . excuse me and a reserve because that makes you a great organization, a strong organization, a sustainable organization. And I want to give to that. I want to give to the whole need. I want to give an unrestricted gift to that need. 

And then I guess do a lot of coaching of what do we do once we start having those relationships? How do we ask? What do we need to have in hand? How do we start doing all the things that are required for these high ROI relationships? Sometimes it feels like bravery. But I’ll tell you, if you have the tools in hand, then it’s really not that scary. And maybe most important, we talked about stop doing things, you have to be open to starting to do different activities that actually move you closer . . . it might not be exact, but pointing our compass closer to that 50% to 75% of revenue. So frankly, we can get off the spin cycle that I hear so many people on. The spin cycle is kind of keeping us from doing the things that fully fund our organizations and fully fund those things that are in your strategic plan that we want you to do and you want to do and our communities need you to do.

I’ve said in every . . . as I’ve wrapped up, maybe every webinar in the last 18 months, I truly believe there has never been a time when nonprofits have deserved more. You have shown up like nobody’s business, right? I don’t need to tell you. Locally, statewide, nationally, I mean internationally, it’s the most humbling time for those of us who are serving the sector, Steven would probably agree, to serve you and hopefully to serve you well while you’re really solving and fighting all of these crisis that we’ve had in our world. But you might need to embrace kind of a new model, new mindset, new skills to really level you up to that next level. 

So, as we look to the Q&A, I’ll shoot you a link, but I teach this methodology all over the country to groups who are smaller and under that $2 million mark, to executive directors, development directors, boards. I also teach it to bigger teams who really are they’re wanting to scale by millions and know their mission is worthy of that but don’t totally know the path to that. And I also teach to larger organizations who maybe have a national presence but really want to boost some of their regions. So reach out to me if and ever you’re ready. And if not, we’ll see what questions people have from that firehose I just gave.

Steven: Thanks, Sherry. That was awesome.

Sherry: Thanks, Steven.

Steven: Wow. We got a lot of good questions here. We may not be able to answer all of them in the next five minutes. But thank you.

Sherry: I can reply to them too if you give me I’d be happy to.

Steven: Yeah, I’ll send them to you. When you said segmentation, I was like, “Oh, this webinar is for me.” So these are good ones in here. My buddy, Andrew, here one stood out to me and there’s a lot of small shops listening, you’re used to I know. But if you’re a one-person shop, the board, part-time volunteers, what do you think? What’s the role there?

Sherry: Yeah, sorry, I use such a giant . . . I just like to use big round numbers so I don’t have to do math with anybody. But yeah, I mean, the same methodology works if you’re raising $300,000. The compass and the pyramid is still the same. And even Andrew, when I send back the email, I’ll put a case study in there of a client of mine in Houston who was fully a volunteer run. And now they . . . [inaudible 00:54:51] they’re $500,000, $600,000. They’re fully funded at month six of the year. These same principles work. Now, if you’re part time, it’s even more reason for you to be focusing on that pyramid because now we got half the time to really focus on those activities. 

So my point is it works. It might take a little longer. You got to be super strategic. And I would also say to you because my guess is you kind of have a working board then alongside you, hopefully you do, they got to understand this too, they can’t be in the rational frugality over here when you’re trying to grow it over here. So really work on getting them to understand a model like this. If they’re going to spend one or two hours a month of fundraising to help you, it can’t be done on Facebook fundraisers. It’s got to be up on strategic level gifts.

Steven: That makes a lot of sense. Here’s one from Angie, what role would you assign to the board development committee? Their development committee is afraid to ask for money and primary wants reports to development director. Any experience with having a development committee on the board?

Sherry: Oh, I’ve never heard of board member that’s afraid to ask for money.

Steven: It doesn’t. We’ve never done webinars on that.

Sherry: I’ve never heard that. Let me tell you an answer, Angie, that I feel like is a little bit different. So my approach to the board when they’re like, “Oh, we don’t know anybody. We don’t want to do it. And we don’t like to do it,” we have to demystify what fundraising is for them because usually, when they say, “I hate it. I don’t want to do it,” it’s because they think it’s something different than it really is. I think today, I described something as let’s have relationships with people. Let’s talk to them. Let’s be human. 

So my point is, my advice is always sometimes . . . no, all the time I should say, I want you to actually create a great donor experience for your board members, each one of them. It’s different for . . . why are they involved, each one is different. I want you to serve them. Even if you have a give-get, I don’t care. I want you to solicit them every year. Then I want you to thank them in a way that knocks their socks off. And then I want you to lead them back through that journey every year. 

You have to model it to your board members before they understand what to do because they’re experts at something else. They’re lawyers. They’re doctors. They’re, I don’t know, accountants. They don’t know what to do. So instead of like, “Give me more names,” or like, “We got to teach them how to fundraising,” my best and biggest advice would be model it for them. Show them how it’s done because then they’re going to be like, “You’re kind of good at this, Angie. That actually felt good. You know what, I was thinking. I should introduce you to my colleague who’s really interested in X, Y, Z.” You got to show them how it’s done.

Steven: Yeah, it’s not just going to happen automatically, right? You got a guide them. It’s like anything else. That makes sense. Well, dang, it’s already 3:00 Eastern now. I want to be respectful of everybody’s time. And I’ll send you the questions that . . . 

Sherry: Please do.

Steven: . . . we didn’t get to.

Sherry: I’ll answer them.

Steven: How can people reach out to you? What’s a good way to get in touch?

Sherry: Yeah, hop on my website. It’s right there, Quam Taylor. That’s my maiden and my married name mushed together. I’m also, as Steven knows, on LinkedIn a lot. So shoot me a message over there and follow me over there. I put all my first round content on LinkedIn and hop on my website and contact me.

Steven: There’s some good stuff on there. You’ve got some cool freebies and stuff.

Sherry: Thank you.

Steven: Yeah. Dang, this was a lot of fun. It’s good to see you. I hope we can be in-person again soon, Sherry.

Sherry: I hope so.

Steven: But webinar is always a decent way to do it. So thanks for doing this. This is a lot of fun.

Sherry: Thank you. Appreciate it. And everybody have a good rest of your summer.

Steven: Yeah, please do and join us next week. We got another webinar next week. We’ll do a special Wednesday session. So I know we said we do it every Thursday, but we got a webinar on Wednesday on grants. Our buddy, Rachel Werner . . . oh, I misspelled poor Rachel’s name. Let me just fix that since I’m not presenting. That’s embarrassing.

Sherry: Rachel.

Steven: She’s awesome. One of our go-to for grants. And yeah, totally free, totally educational. If grants is a pain point for you, join us because she’s been really looking at what has been going on since COVID, obviously foundations have made a lot of changes and things. So she’s on top of that. And it’ll be fun. And we’re going to record it just like this one. So if you can’t make it, register anyway and then you’ll just get the recording, like all of you are about to. Give me a couple of hours and you’ll have this session, the recording, the slides, and some goodies from Sherry too. So we’ll call it a day there. Have a good rest of your Thursday. Have a good weekend. Stay safe. Stay healthy. And hopefully, we’ll talk to you again next Wednesday. See you.

Sherry: Thanks, guys.