What's Wrong With Major Gifts?

Larry Johnson recently joined us for a webinar in which he showed us the indispensable role asset giving plays in creating sustainable revenue, and how any nonprofit organization—large or small—has the capacity to generate major gifts.

In case you missed it, you can watch the replay here:

Full Transcript:

Steven: All right, well why don’t I go ahead and get started if it’s okay with you, Larry?

Larry: Absolutely.

Steven: All right. Well, good afternoon everyone if you’re on the East Coast, and good morning if you’re on the West Coast, or perhaps somewhere in between. Thanks for joining us for today’s webinar, “What’s Wrong with Major Gifts”. And my name is Steven Shattuck, and I am the Chief Engagement Officer here at Bloomerang, and I’ll be moderating today’s discussion.

So happy you’re all with us today. Just want to go over a couple of housekeeping items before we begin. We are recording this presentation, and I’ll be distributing that recording as well as the slides just in case you didn’t already get those. So if you have to leave early or if you perhaps want to review some of the content, have no fear, you’ll be able to do that. Just look for an email from me later on today with the recording.

And as you’re listening today, please feel free to chat in any questions or comments you might have right there on your webinar screen. We’re going to save some time for Q&A. Actually we have more of an extended Q&A in this session, which will be really fun. So don’t be shy, don’t sit on those hands, we want to keep this as interactive as possible. We love to answer your questions live.

And you can follow along on Twitter with #Bloomerang and our username is @BloomerangTech. Love to keep the conversation going there for sure.

And if you are listening today via your computer speakers, if you have any trouble with the audio, we recommend that you dial in by phone. There is a phone number on the email for ReadyTalk. Usually that is a little bit better quality. If you don’t mind using the phone, if you can do that, do switch over in case you have any trouble through your computer.

And in case this is your first webinar with us, we want to say a special welcome to you folks. We give you these webinars just about every Thursday where we bring in a great guest like Larry to give an educational presentation. We love doing that. We also love making our donor management software. That is Bloomerang’s core business. And if you are in the market for a new donor management software or a new database, we’d love for you to learn more about Bloomerang. You can click on our website, you can even download a quick video demo, and get a look inside the software. You don’t even have to talk to a salesperson if you don’t want to.

So check us out if that is something that is of interest to you. We’d love to learn more about you.

And right now I want to go ahead and introduce our guest. I’m super excited to have Larry back, he’s been a webinar presenter for us. Larry C. Johnson, one of my good buddies, super nice guy. Larry, how’s it going? Thanks for being here, my friend.

Larry: It is my pleasure, Steven. Thank you.

Steve: We always love having you back. He’s joining us from beautiful Idaho as some of you might have heard him describing earlier.

Larry, I just want to brag on you for a minute before I turn things over to you officially. If you guys don’t know Larry, you’ve got to know him, you got to follow him. He is the Founder of The Eight Principles. He is the author of the best-selling and award winning book, “The Eight Principles of Sustainable Fundraising” book. I’ve got it right here on my shelf, would recommend you guys pick that up.

He is ranked among the top 15 fundraising coaches in the U.S. according to the Wall Street Business Network. He’s coached volunteers, executives at hundreds of non-profits. He’s got a really cool training program called The Oracle League that he’s going to tell you guys about towards the end. Definitely check that out.

He’s a CFRE, he’s a graduate of Yale University. He’s an avid outdoors man, and just a great guy. So, Larry, I’m really excited for you to talk about major gifts today. I’m going to turn it over to you.

Larry: Well, thank you. And that’s what we’re going to talk about. And so far the technology is cooperating. Wow. All right. Let’s see. I just double-clicked, okay, all right. You know, I spoke . . . come on. Okay, it’s not moving. What am I doing? Okay. All right. Okay.

What’s wrong with major gifts? Now, what I’d like for everyone to do, as they’re thinking of this . . . you know, everyone kind of has their own take on this. But I’d like you, if you would, to put in the chatbox as it comes to you, what would be what you think is your most significant challenge in getting major gifts? And that could be either you’re starting a program or you want to move up to them, or how do you keep them flowing. What is really stumping you with this? And I see things coming in. So that’s good.

We may address some of these along the way, I’d like to know what you’re thinking, because this isn’t . . . this needs to be of value to you. This isn’t just a talking head. Okay. All right. Let’s see here if I can get this to work here. All right, how do I make this . . . okay. Show the next slide. All right. Okay.

Here’s what we’re going to learn today. First of all, I’m going to give you knowledge of what a major gift is, and what it is not. I think there are a lot of misconceptions out there, and I want to show you the major gifts, the role that major gifts play in producing sustainable revenue. Those of you who know my work know that it’s all about getting money to come in. Not just today, not just tomorrow, but next year, 10 years, 20 years. How do you build a program that sustains itself? That is always going to be the filter that I will use as I make comments. I’m not much into getting a big hit here and a big hit there, and sort of living from pillar to post in between. I’m going to show you how major gifts actually form a very critical role in producing that sustainable revenue pipeline.

And then the third thing we’re going to do is a clear path for how you actually achieve that. And it may surprise you a little bit.

First of all, we’re going to talk about fundraising zen. All of you know that I’m a big guy that focuses on concepts. Process is important, you’ve got to execute, if you don’t, you’ll never get there. Absolutely, 100% agree. However, you must really focus on the concepts first. Get your head in the right space because I’m going to challenge some preconceptions.

Resist overthinking this. I see this all the time, people make it way more complicated than it really is. It is based in human nature. We all belong to that species that are on this phone today, and so let’s tap into what we already know about ourselves and about other people.

And the third thing is, put your mind in that zone of sort of suspending judgment for a little bit as we go through this. That’s what I’m going to ask you to do.

So, what’s wrong with major gifts? Well, I’m going to tell you, from what I see in the landscape, just about everything. You know, the first thing is what in the world is major? Okay, we’ve got a picture in front of us, two pictures, the two definitions of major there. There’s major muscle and major fat. So what are we talking about? I hear this all the time. Some people think a major gift is a cash gift, a one-time gift. It could be as little as $1,000, it could be $500,000. It could be $7 million. Some people think it has to be a multi-year pledge. Some people think it has to go for general operating, or it has to be specific use.

Notice that most people think there’s some sort of amount that triggers this. And that’s the reason why major gifts are usually seen as something that is defined by the receiver, not the giver. And that’s one of the big problems. So let’s talk about that. How big is major?

Well, depending on who you are, that number is going to change. If you’re a small community-based charity, that number could be $1,000. But I’m telling you right now that because it’s $1,000 doesn’t make it a major gift. At my alma mater,, you don’t even get on the radar screen till you’re talking seven figures. So there again, it’s a matter of scale. But what’s operating each time is the same dynamic. It’s not really about the money. And it’s not about you deciding what is major. And that is most assuredly true, this is not about money. I want to pause for that for a minute, because that is so essential.

Major giving has nothing to do with money. Now, money is involved, don’t get me wrong. Money is a part of the process, but it is not really what’s involved in generating that kind of investment. In fact, setting an amount can actually be a deterrent to receiving these gifts.

Now, the unfortunate thing about that is . . . I just told you something that most of you think is probably pretty radical, it’s not about money. The vast majority of people that are in our space would tell you that it is all about money. What you’re looking at are four quotes that I just listed from other training literature, and other promotions for major gifts. Let’s just read them.

“Don’t get left behind in the major gifts gold rush.” Major gifts – the fundraising machine.” “Want to raise big money? Everyone is doing it with major gifts.” “Experience the magic of major gifts.”

I can’t decide whether these people came out of the used car market, or they’re selling household cleaners. This is what gets in the way of understanding what’s really going on here.

So there’s one crowd that kind of makes it all about money, and I can guarantee you, donors aren’t in that crowd. That isn’t what donors are. Number one. But there’s another group out there, and they make it all about themselves. And you know, we’re all guilty of this. I’ve worked in organizations, I’ve been a coach to organizations. You’re in an organization, you’ve got a wonderful mission, you’ve got a wonderful thing that you’re doing, and you think the rest of the world thinks so too.

Well, I’ve got news for you, they don’t. And it’s really not about you. And this is something that is perhaps the hardest thing that organizations can really begin to get a grip on. It’s not about their programs, it’s not even about what they’re doing.

And so what they do is . . . the traditional way of doing this is what’s called pull marketing. I’m going to pull people in because . . . excuse me, I’m going to . . . excuse me. I’m going to push things out, got that confused, push things out, and then people will come to me.

Seth Godin says that’s all wrong because now, in the day that we’re living in, people want you to ask their permission to do things. They want you to identify with them. And so more and more donors are rejecting this, they’re getting a lot more wary. And you’re getting to a point where the millennials, most especially, and people sort of discount them at times, in six years, they’ll be the majority of the workforce and the giving public. Six years. And yes, we have some very good years left with the baby boomers, and they’re out there. But as they begin to fade from the landscape, things are going to change pretty radically.

But for all donors, as I said, it’s not about you, it’s not about money. Guess what, it’s about them. And what they’re interested in is not necessarily your cause per se, they’re interested in realizing their own personal values. And the degree to which their values and your cause align is what you’re looking for. That is what you’re looking for. And that’s why the focus is on donors to learn what is important to them. And that when you make an outreach to donors, you’re doing it from that point of view.

Now, you’re being strategic about it, you’re crafting your approach in a way so there will be alignment. But you never make it about yourself. You make it about them. And that’s why just doing a little research, asking people questions, that tells you a lot right there.

Now, this whole approach has always been the case for major donors. It’s about to get a lot more serious in the entire donating public, and there again, it’s millennials. I’ve been in this business 30 years, and/or almost 30 years, and I never would get the outcomes or effectiveness question or values question from a donor, unless they were talking six figures. With millennials, you routinely get these for a gift of $50. And they’re being very demanding about it.

I talked to a millennial yesterday who already has his own foundation at 26 years old. He is the executive vice president of a major wealth management firm at 26. And he tells me, well, there are just far too many non-profits, they’re going to have to get their act together. We’ve got to consolidate, we’ve got to focus on outcomes here. And so these people are just very upfront about this. And for someone who’s just kind of beating the drum for their particular cause without reference to a larger framework, or without the values of the donors, it’s going to get increasingly more difficult.

So then, what then is major? We’re getting a little closer to the definition now. One condition is it’s major when the donors are transformed, not the giver. Let me repeat that. Major gifts occur when the donors are transformed, not the giver. That is not to say that those investments don’t have tremendous impact in the communities where they end up. Of course they do. That’s the whole point. But that’s not what really donors are looking at, and that’s not what makes it a major gift.

A major gift, let’s go back to what I said before, the filter I’m using is to create a sustainable revenue stream so that these are not one-off gifts. They’re gifts that continue to occur over time. Maybe not all from the same person, but they’re all related to each other.

So if you’re looking to do that, and you’re trying to engender this, and you’re trying to create this, what is it you should be shooting for? What is it you’re aiming for? Well, you’re looking for a high level of emotional commitment from your donors. That’s what you’re looking for. And that’s where a lot of conventional moves management tracking falls down. Because it’s made on these very concrete sort of steps that really don’t take into account what’s going on with the donor or the emotions that are going on with the donor.

So you’re looking for that high, personal involvement, you’re focusing on their values and visions, you want their emotional commitment. That’s what you’re trying to engender. And there are ways of measuring that, there are ways of gauging that. But how do you know when you’ve really arrived at that point? And there’s a very clear way and very precise way of knowing that you have shot to the major gift category for any donor. And that quite simply is to decide, is this gift coming from income, or is this gift coming from assets?

There are lots of people who can write you check for $25,000 out of their discretionary income. That in my view is not a major gift. Because that requires a much lower level of emotional commitment, than dipping into your assets, accumulated assets, stocks, bonds, other liquid assets, real estate, all these other things that can be converted to cash.

When someone is willing to dip into their assets and make an investment in your organization, they have achieved the very highest level of emotional commitment. They are with you, they are one with you, they want you to succeed in a way that no one else does. And this is why gifts of assets can be at $1,000, they can be at $10 million, and everything in between. But the key is, you’re looking for those donors who are going to give you out of assets over and over and over again, because they are so committed, that no matter what happens, they’re going to be there with you. This is what helps create the sustainability pipeline.

And we could talk a lot about how you get to that point. There are other . . . there’s steps . . . I’m going to show you a couple of charts that will kind of give you some ideas. And it’s like there’s a whole chapter that’s developed in The Eight Principles. But this is what you’re looking for is gifts of assets. And that’s why the amount per se really doesn’t matter.

So in the mind of the donor, here’s what’s happening. If someone comes in the door, they make a few low involvement gifts, maybe you invite them to participate in some things, maybe you ask them to volunteer, you get them to do it on a repetitive basis, the key is repetitive, and eventually it will get the high commitment.

I want you to look at this chart for a minute. Notice that for someone to have high commitment, they almost never come in at the high commitment level. Large gifts of any kind, I can count on one hand that I’ve ever experienced or known about, that were unsolicited like that. And they really weren’t major gifts in my definition that I just gave you. They were large gifts, but they were given for some other reason. I’ll give you a story of one very quickly.

I was vice president of a college back East, and one day the phone rang and my assistant put it through and they wanted to speak to the vice president. This man wanted to make a million dollar gift to the college. And where I was sitting, that was a pretty big number. We did the research on this person, we didn’t know who they were. They were not an alumnus, we never had any prior involvement. So, my antenna and my radar went out immediately. So what is going on here? I mean, is this some sort of fraud? Is it drug money? What’s going on?

And so I said, “Well, Mr. Smith, I’m very flattered that you would be willing to make such a commitment. But I’m kind of curious. You really have no prior relationship with us, why would you want to do that?” And he told me very simply. He said, “Well quite frankly, Mr. Johnson, I’m in a very ugly and nasty divorce. If I can’t keep it, my soon-to-be ex-wife sure as heck is not going to keep it.” And he wanted to give me the money immediately.

So I thought, well, this is above my pay grade. So I called the president. I said, you’ve got to decide whether you want to take this money or not. And here’s the situation.

So the point is, these gifts just don’t happen. You just don’t find them under bushes. You don’t go out and do the big game hunt for them. They come from people that are already involved with you, at whatever level.

In terms of a fundraising point of view, this is what it looks like. An entry gift, a renewal gift, an asset gift.

The studies show that if a person is able to write you a check out of income for $10,000, it will generally be anywhere from their third to their fifth gift to your organization. And this is another reason why donor renewal is so absolutely critical. And yet as all of you I’m sure already know, the overall donor renewal rate in this country for a first time giver has just dropped under 40%. I mean, that’s pretty pathetic when you think about it. And you compare that to consumer product renewal rates, which are at 95%-96%.

So the way I put that to people is, people are more loyal to their soap brand or shampoo, than they are to their charity. And why is that? Well, largely because they’re getting more value or perceived value from their soap or shampoo, and not their charity. And so who’s fault is that? We’ll leave it at that.

So how do you get there? I mean, is this something you sort of do one night, or is this something that you decide to kind of launch out in the next six weeks, the latest and greatest? I’ll tell you what it takes. It takes consistent, strategic effort. It is not an overnight thing. It is not magic. It is not something you can do independent of everything else. It is part of full-blown program where you’re focused on moving donors to a high level of emotional commitment over time. That’s what it takes.

Typically, if you’re starting from absolute ground zero, it can be three to five years before you have a really functioning program. I liken it to like a garden hose. The garden hose is sitting there and it’s connected to the faucet, but the end is open, and when you first turn the faucet on, there’s kind of a pause before the water starts to flow, and then when it does start to flow, there are a couple of sort of gushes that happen, and then finally there’s a constant flow. And that takes a little time. But that happens. So think of major gifts the same way.

And that’s why for instance, major giving confounds what we see in some of the promotions, because it’s a lifestyle. It’s not a diet. You have to be in this thing to win. You have to want to do it.

And here’s what you really have to want to do. You have to want to be with people. You have to want to be around the messiness that is dealing with people’s lives. And you have to understand that this kind of fundraising is a flesh and blood enterprise. It’s not something you fill out on a piece of paper and drop it in the mailbox. And if you’re uncomfortable with that kind of contact, then your success with major gifts will be pretty limited. You have to really enjoy it for its own sake. And that’s what gives you the results that I think everyone really wants.

One of the questions that people often ask me is, or they often say to me, “Well, we’re not very big and we don’t have a lot of donors and we’re this and this and this and this.” Well, I can tell you right now, based on what you’ve seen, hopefully you’ll know that size does not matter. Any organization can do this. Maybe you’ll start smaller, maybe you won’t have quite as many major donors, but anyone can do major giving.

For those of you that are looking at the screen, that slingshot is the one based on the model where David went after Goliath. And we know what happened in that story. So, the key is approaching it in the right way. That’s the key.

So let me just say to you, success is waiting. It’s there. It’s there for you if you really want it, and if you really want to achieve it, it’s there for you.

Let me just give you a little something here before we go into questions and answering. I have a little interactive PDF that is a little quiz or a little exercise you can do, it’s called a Sustainable Fundraising Matrix. And it will show you pretty quickly in about 10 minutes, where you stand in regards to sustainable fundraising. It’s very easy to fill out. If you’ll text the word “matrix” on your phone to the number on the screen, we’ll send it to you free of charge. And I’d be curious to know what your results are. You feel free to email me and let me know.

That’s going to stand there for a few minutes while we go into questions and answers. And so, Steve, I’ll turn it back over to you.

Steven: Cool, I’m excited about this. Most people who have listened to Bloomerang webinars before know we don’t do a whole lot of Q&A, but Larry brought me the idea of maybe just making this an extended Q&A and I was excited about the opportunity because we have a lot of people who say they wish our Q&As were longer. So now is your chance to ask questions about major gifts. We’re going to spend probably the next 30 minutes or so, just talking about major gifts and being super interactive. So send those questions our way, we will be sending Larry’s slides and the recording this afternoon. So don’t worry about those not getting to you at all.

We’ve got some questions coming in already, Larry, I’m just going to kind of pick out the ones that look interesting to me. Wondering here about . . .

Larry: I have a couple. Can I take a couple?

Steven: Yeah, I . . . yeah, why don’t you check them out, that would be good.

Larry: I’m looking at a couple right now.

Steven: Sure.

Larry: Well, there are two here that really leapt out at me. I think they’re probably pretty common.

I had asked people about what are the big challenges and Cora says the ask. Well, let’s go back and talk about what I said a major gift is. It’s something that comes after you’ve gotten to know the person, you know what their values are, you know what they want to do. And if you’re not focused on the money, but you’re focused on the outcome, then the ask becomes almost perfunctory. They actually will size the gift by getting them excited about what it is they want to accomplish. They’ll size it for you.

I mean, capital fundraising is a little different. I mean, I’ve done that for years, I’ve got a couple of clients right now. So you have to be a little more focused and more . . . but then again, it’s still a project. But typically in a major gift setting where you’re looking for a long-term investment or you’re looking for something that’s significant – and the word significant is significant to the donor – then if you’ve done your homework and you’ve brought people to that level of emotional commitment, they’re almost waiting to be asked.

By the way, asking is one of those double-edged swords. People expect to be asked. But at the same time, every year it comes out as the number one donor negative, being asked too often. And that generally is because they ask at the wrong time or they nickel-and-dime people, this kind of thing.

And then there was another one I liked. It says getting in front of donors before they make a preemptive, smallish gift. I call that the hush-and-go-away gift.

Sometimes that happens, and depending there again, if you know the individual, hopefully, or you’re approaching this in the right way, you haven’t rushed them, so they feel they’re going to sort of put you off, that’s sometimes how these gifts come. There are also the people who are sort of what I call the circlers. They kind of want to stand back.

Here’s what I do. And this may sound kind of counterproductive. I have declined gifts like that. In fact one happened just I guess two months ago, where I was working with a client and a board member stepped up and we knew what the board member was capable of doing and he wanted to write a check for a tenth of that, and I had already counseled the CEO and I said, here’s what you do. You just tell Mike, thanks, but we’re not asking now and just keep it and we’ll be back and we’ll talk. And it so took the man aback. He said, okay. Fine.

This, by the way, was a $10,000 check he was offering. And I know a lot of charities would kind of like glare at that and go, “Please, don’t tell him no, don’t tell him no.” But we knew what we were looking for, we knew we wanted a commitment, we knew we wanted something far more significant in terms of his long-term involvement with the organization. Because it wasn’t even just about that immediate gift.

So those are two right there that came to me.

Oh, I see one more. Expanding major gifts not always the same donors. From Megan. You know, Megan, interesting thing about that, if you’re working from the inside-out, and you’re developing a strong network – and that’s one of the principles, The Eight Principles – people are interconnected. And the studies will show you that when you move to a new level of giving, and when I say new level, new financial level, 6, 7, 8, within a very short period of time, about 18 months, another gift of similar size will occur.

I had that personal experience happen to me. Vice president of the college back East, I closed their first eight-figure gift. It was really quite a phenomenal thing. And by the way, I was simply the result of many years of preparation, and I came along, and was at the right place, at the right time.

But, the end of the story is, you know, in the 89-year history of that institution, there had never been an eight-figure gift. Within 16 months after that one was closed, we had yet another one. So that’s the way those things work is that is you have to be properly networked. And by the way, the $50 million donor did not want to be identified so we simply said it was anonymous. And here’s what’s operating there. “You know, oh, well, if someone else is giving at that level, they must be investing. This must be a good place to put my money. So it’s this whole peer idea.” That’s what’s going on.

So those are the ones that like . . . oh, I’m going to take a potshot at someone, I won’t identify. How to identify the low hanging fruit in order to have some immediate successes and not get discouraged. There’s no such thing as an immediate success, and I really don’t like people referred to as fruit being picked off trees. I don’t like that.

How not to get discouraged? Let’s go back to what I said. It’s a lifestyle. You’ve got to love being around these people. You’ve got to like them. And if you’re having trouble with that, you’re going to have trouble with major gifts and you’re going to struggle. Let me give you an example, something that actually took me aback.

I’ve had some pretty nice experiences in my career, and I’m very grateful for them. And one of them was working with a gentleman who was the founder of one of the country’s leading tech firms. Everyone in this thing would know his name if I mentioned him. And I was working with an institution that was working, that was . . . I was a major gift officer in an institution where he was a donor, and I used to go to California regularly to visit this individual. He knew what I was there for, he knew what the story was, and we got to know each other over the course of time.

And at one point he says to me, you know, Larry, I’m really concerned about making a significant gift. And of course significant to him was going to be at least seven or eight figures. And so right away I thought, okay, so what’s he going to say? Well, this was an academic institution, so I was thinking, what was he upset about what’s going on with the students, does he not like the president? You know, any number of other conventional sorts of reasons that people give. And I said, well, I said, “John,” and that wasn’t his name, I said, “John, so what concerns you?” He looked me right in the eye and he said, “I’m really concerned that if I make this gift, you’ll never come back and see me again.” I’ve never forgotten that.

This is a man who as a tech leader, I felt honored to be in the man’s presence. And yet this was his concern. These are real people, with real concerns, and real needs. And the minute we treat them in some other manner, it’s a slow sliding thing downward.

Steven: Okay.

Larry: What’s going on?

Steven: Well, we’ve got a lot of good questions in here, we’ll try to get to all of them.

Here’s one from Andrew, just came in. If you are moving to a non-profit that there have only been four to five donor families giving an average of about a quarter million dollars per year, how do you build a culture of major gift giving in the organization? So it sounds like Andrew is just kind of starting out, he’s kind of got a base of a small amount of people. How should Andrew get started? And I’m sure there’s a lot of people in his shoes there, maybe haven’t started this before, but want to get into it.

Larry: All right. Well, let’s go back to my definition of a major gift and that would be gifts given out of assets. I’m going to presume, Andrew, that you’re talking about cash gifts or current use gifts, gifts that are coming out of some form of income. Let’s look at the overall picture of what the capacity of these people are. How long has this gone, is there a way to raise their emotional commitment, is there a way to involve them more? And then how do you grow this thing? How do you grow the donor base?

Well, I don’t know where you are, I don’t know the kind of charity it is. But would you work to build a network? And of course when I say this next thing, I can hear the groans already. And that is, this is one of the central roles of your governing board. Everybody says, “Oh, my board doesn’t like to ask money, my board doesn’t like to do this.”

Well, what I’m suggesting is not really asking. What I’m suggesting is that it’s an inside-out networking process where you begin to share your story with other people, and they bring people in the fold, and they bring people in the fold. This is why boards need to be constructed strategically. And when I say strategically, there needs to be a person on that board that represents every major constituency you hope to reach out to.

There are other ways of being strategic. You want their professional skillsets not to be all in one barrel, you want that to be spread around. But they don’t all have to be deep pockets. That’s a misnomer. You want them to be representative from these various constituencies. Give you another example.

So working with a client, it’s a five county welfare relief agency, and they were bemoaning the fact that this one county, practically nothing came out of it in terms of gifts. I said, “Well, who on your board is from that county?” They looked at each other, then they looked at me, and they said, “Well, no one.” I said, “Well, there’s your problem right there. You’ve got to be in with them.”

So the place for you to start, is your board, to grow your base. Because you’re not going to grow major donors, you’re going to grow donors that become major donors over time. They don’t come in full blown out of the head of Zeus. They come in with a small gift, then another gift, then another gift, then another gift.

Steven: Makes sense. Here’s one from Puja. Puja is asking, how do we keep major gift donors engaged over the long term beyond just things like events and personal meetings? So you’ve gotten a major gift from them, you want to keep them engaged, how do you kind of do that? You don’t want to just say thanks for the check and then never hear from them again, right?

Larry: Well, that’s correct. But neither do you want to become a pest or a nuisance. And that’s also a potential issue.

When you’re dealing with major donors, I ask them, “What would you like me to do? What’s meaningful to you?” Some people will say, “Well, I’d like to get a letter every month,” other people would say, “Well, call me, come see me.” “Hey, I’d like to come to campus, or I’d like to come see what you’re doing.”

One of the concerns that I’ve often heard expressed, and I don’t know if this person is thinking of that or not, but is that, “Oh well, if we build too much of a relationship, they’ll come in and try to run things for us.” My experience has been very, very, very few donors will want to do that. And the reason for that is they’re just far too busy. They’ve got lots of things to do. And keeping their attention is more difficult than keeping them out of your hair. But how do you find that out? You ask them.

Now, one thing you can do that’s very practical and very immediate on your end, you can do what’s called a communications assessment, where you can take and do a bracket of what these people are getting in their mailbox completely every month. And when I say mailbox, I’m using that in an euphemistic sense. From you. Because that’s their total impression of who you are. Whether it’s a solicitation or whether it’s a phone call or whether it’s a visit, whatever, or it’s a newsletter. Whatever it is. You see? And then you begin to look at how strategic that is.

One thing that a lot of small non-profits do, but big ones make this mistake as well, is they’ll send an annual report or a newsletter with a donor response envelope in the middle of it. That ceases to be awareness. That ceases to be cultivation. That immediately becomes a solicitation. And this is one of the things as I said before, donors are very, very sensitive about this. They always say, “Well, we’ve got your gift and thank you very much. And how would you like to give again?”

Now, I know there are lots of people that would say, you want to be in their face, you want to get this going. And yes, it does work, I won’t say it doesn’t work. But if you’re looking to build a program that will really reach your potential and be sustainable over time, you’re really limiting yourself by that approach. And you’re going to alienate as many people as you’re going to get money from.

Steven: Larry, could you talk a little bit about donor recognition? We’ve had lots of questions surrounding sort of how to recognize the donor. And you kind of touched on this with the engagement piece, but is that the similar advice? Ask them how they’d like to be recognized? Is that kind of a good starting point?

Larry: Well, yes. And let me draw a distinction between the word “recognition” and the word “appreciation”. Donors want to be appreciated. That’s true. Everybody wants to be appreciated. Some donors want to be recognized in some ways, in other ways, and then other donors just really don’t care. That’s not really on their radar screen.

We as fundraisers always want to do something nice for our donors. We want to do things for them. And sometimes we’re in our head so much, we don’t have a clue what the person would really, really want. It’s the proverbial uncle necktie. Or the ghastly scarf at Christmas. “Well, I liked it. It looked nice to me. I thought he would like it.” Well, no.

So, donors like it when you ask them. Recognition of donors really serves more of a fundraising purpose. All those donor names in the annual report, the reason they’re really there is to promote this pure level of giving. Oh, there are five people that gave $10,000 last year. Wow. Maybe I can step up and do that. Even if those five people aren’t named by name, they’re all anonymous. Wow. That’s the purpose of those kinds of things, the donor recognition walls.

Now, that’s not to say that some donors don’t want their name in lights, they do. And you’ll figure that out pretty quickly. They want it in neon. And then it becomes an issue of is it appropriate for the gift? Is it appropriate . . . the naming rights fit the same category. And there again, you never really know, if you’re giving someone naming rights, who they’re going to name it after. You might presume it’s yours, yourself, but it’s not necessarily.

I had a situation where an automobile executive made a permanent scholarship endowment. This man was a leading executive in General Motors, and he was established, and I just assumed he’d want to name it after himself, he said, “No, Larry, I don’t want to do that. I want to name it after my brother who’s a high school math teacher, because he gives so much more than I do.”

So there again, it’s being alert, it’s listening more than telling. And that’s my approach. So just draw the distinction between recognition and appreciation, those are two different things, and then often ask the donor how they would like to be appreciated.

Steven: Larry, here’s a question from Kathy that I really like. I wonder if you could chime in on it. Kathy is wondering, how do you go about finding a major gift officer? So maybe this is a large organization that can hire a dedicated major gift person. How do you find that person who can really understand and care deeply about the cause and the donors and all the things you talked about? Any advice for hiring a major gift officer?

Larry: Absolutely. I’ve done quite a bit of that in my career.

I take them to lunch. And that’s sort of a simple answer, but it’s also a longer answer. I’m looking for people of a certain character. I’m looking for people of a certain integrity. I’m looking for people that like other people. Naturally there has to be a degree of personal polish and a degree of being sort of ready for prime time. That’s one of the reasons why I take them into a fine restaurant or the club I belong to, and I watch how they behave, what are their manners like, what are their conversational skills.

But I pay very close attention to how they treat the service staff. That is really telling of the person’s character. If they treat them with respect, if they engage them, that’s a person who likes people. If they’re dismissive, if there’s a sense of arrogance there, that is a real red flag. And I eliminate people.

I dislike people who give me a roster, or show me their what I call a scalp belt. This is not about being a bounty hunter. That’s not what this is. I get very weary of people who talk about all the money they raise. I just keep looking.

The best major gift officers that I’ve ever hired function more like matchmakers. They’re looking for the match between the donor values and the cause they’re representing. And you can decide whether a person believes in your cause or not. I mean, that’s something you can decide. But the key is you’re looking for someone that has more of a personality of a matchmaker. “Oh, you’d be perfect for this.” Or, “I’m perfect . . .”, or, “We’re perfect for this other person over there.” That match. And then that imminent respect for others. Willing to be able to pass, willing to understand that it’s a win-win or it’s a walk away. Both of you have to win or you shouldn’t be involved at the table. So that’s what I look at. But I take them out for lunch.

Steven: I like it. Larry, we’ve had a couple of questions about the roles of volunteers. Jenny here specifically says she’s having issues motivating her volunteers to make those asks. So maybe they’re board members or other volunteers. Can you speak to leveraging volunteers? Is that a good idea? Any best practices for that in general?

Larry: Well, most of my capital fundraising experience used volunteers very heavily. And there are pluses and minuses to using volunteers. When done correctly and in the right setting, they can get results that a staff member can never get. However, that being said, a volunteer that’s poorly prepared or poorly motivated can really, really throw a monkey wrench into things. One thing that I have done is I use volunteers as door openers, people who are willing to make connections with people.

Now, the volunteers have to be committed themselves. Number one. If they’re not donors, don’t even go there. Because you’re dealing with krypton, if you do that. Let’s see here. My thing just . . . okay, fine. I have a screen perturbation here. Hold on.

Anyway, so, if they’re not donors, don’t even think about it. But even if they are, you have to remember that there is that unscripted element of a volunteer. And you do get into situations where you wish you’d never used them. But if they’re not comfortable asking, then don’t let them ask. They’re just going to screw it up. But you can use them to open the door.

But they all must be donors. Because if they’re not donors, they’re not helping you. Because they will use their discomfort, and it will come through in any meeting, and they’ll let donors off the hook, or they’ll discourage them for one reason or the other.

Perfect example. A friend of mine who is VP at a college, she told me this story. They’re in with the president and with a potential major donor, who ended up did endow their business school later and put his name on it. But they were trying to do that at this point. And they had one of his close business associates, not a partner, but the business associate who is a board member, and he was the person that had sort of brought this meeting to fore and the donor prospect, the investor knew what this was all about.

But during the course of the meeting, the volunteer starts to pipe up. His own discomfort became very obvious. “Well, you know, Jack, I know the economy has been kind of flat this year. My business has been off too and I just don’t know and, well, you don’t have to rush this, Jack. And why don’t we just wait until things are better?” I mean, there you go. The whole thing went down the tubes. It was a $30 million gift. And it wasn’t until five years later that it came to be.

And my colleague and good friend of mine for a long time, he told me that when the volunteer left and the potential donor left, the president looked at him and said, “Don’t ever, ever, ever use that man for anything again.”

And so you have situations where you get volunteers . . . you can’t control everything, but they’re very powerful if used in the right setting. So if a donor is not comfortable asking, and you can’t train them to be comfortable, you let them assume some other role. But they still have to be donors.

Steven: Yeah. How do you coach those volunteers to make the ask? Let’s say they meet all your criteria, they’re enthusiastic, but they’ve never actually made asks before, should they be disqualified because of that, or how can you kind of coach them to feel confident in making that ask?

Larry: Well, I run them through situations. I assume the role of the donor. I sit right in front of them. And if they’re really that willing . . . I have a client right now who’s the CEO of a major health system, and she really wants to learn, and I said, “All right, we’re going to learn.” And she’s very open to learning, she’s very open to knowing what she doesn’t know. And in a very short period of time, she’s become incredibly effective. But I would go through it with her and I’d say, “Okay, I’d like you to do this, Carol, not this. Think about this. This is what the donor is thinking when you say this.”

And so it’s a one-on-one thing that I do with them. And I spent several hours with her, because she’s coming out of a setting where she wants to tell everybody how great her program is, and she wants to shower you with statistics and she wants to . . . and I’m begging, “Carol, don’t do that. That’s not where you need to go here.” And now that she’s in the groove or in the zone, it’s like, wow. And she’s doing very well.

I want to continue to take . . . I want to continue to take questions. I want to tell everybody about The Oracle League before we get off.

I’ve been in this business 30 years, and I worked for Ketchum for the first seven years, which is one of the big five firms for many, many years. And I learned very quickly that it’s all about mindset. It’s not so much about process. The business model of these firms, they’ll make it so that only a handful of non-profits can really benefit from that advice. And it always troubled me.

And now with the Internet and some other platforms, I’ve been able to develop a program and a platform that really gives this approach, the same approach you get from any top consultant, in a package that anyone can appreciate, can incorporate, and can even afford. And my millennial friends love it. Because it’s a video-based course, it has interactive PDFs. It’s a membership program, so each month you get a new course. There’s an exclusive podcast with a top practitioner. These are not other talking heads like me.

One of the podcasts is a lady by the name of Tammy Tibbetts, she started the non-profit, She’s the First, she was Seventeen magazine’s first social media editor, Diane Furstenberg Award, 30 under 30, she’s been on The Today Show. Delightful lady, and she talks about how she grew her non-profit from zero. From nothing. And then there’s a monthly live pure coaching session on an audio conference line. And then the CFRE people are giving it for CE credits for each month. So that’s the actual structure of it.

And how do you benefit? Well, it’s constructed to be a step-by-step learning program. And then you have a permanent training library. Because as each month goes by, that course remains open. And it gives you a high touch training with peer-to-peer effort with me and others on the line, but it’s on your own schedule. You can work through the exercises on your own.

So then it multiplies knowledge with your peers. It’s not just me, it’s other people. And the course, as I said, it optimizes your time.

I’m really, as I said, very excited about this, and it’s $49 a month. That’s what it costs. Now, today, for those of you who are on this line, it’s a dollar for the first month. If you go to that URL, it will remain active for 24 hours. And you can sign up for a dollar for the first month. You don’t like it, you can cancel it. But I’m warning you, you’re probably going to get hooked because it is really, really good. I’m very impressed with it myself. I’ll just say that. And I’m just really pleased with it. It’s fully mobiley adaptive, I have several members that actually do this completely on their phone. I wouldn’t try that, my eyes are too old. But they do.

So, I’ve said what I need to say. Steve, what else do we need to do here?

Steven: We’ve got a couple of questions here, I think we probably have maybe three or four minutes left.

What about legacy and planned giving, Larry? How do you move major gift donors into planned giving donors? Any advice for some folks here asking about that?

Larry: Well, legacy and planned giving is simply a subset of major giving. The difference is, is that a planned or legacy gift has a secondary motive, and it usually involves some sort of deferred timing. That’s the only difference. And those are with the donor. But the motivations are very much the same. The reasons are very much the same. How you get people to that point, are very much the same. In fact, for the most part, planned gifts are by definition, major gifts, because they’re gifts of assets.

Steven: We’ve got one question here about the sort of annual campaign. Should you weave these major gift donors into that? Is there any sort of role that the annual campaign plays in any of these strategies?

Larry: Well, sure. Because remember, major gift people don’t start at major gifts. I mean, your major gift potential is sitting right now in your annual fund. That’s where it’s sitting right now. And that’s why it’s so important that you work with these people, and that you begin to . . . well, principle . . . six of the eight principles is treat different donors differently. And so as these donors begin to identify themselves either through affinity or through their ability, you’ll begin to give them the kind of attention that they need, to be move them to those next levels of giving.

Think about that chart that we used. You know, there’s an entry gift, there’s a repetitive gift, and then there’s the asset gift. It comes in that order. It doesn’t come the other way.

See, this goes back to the thought that somehow major gifts are standalone things that sit off to the side. They do not. They’re part of a natural progression. So, every one of you right now have potential major gift donors sitting in your annual fund. They’re there. They’re sitting there. But it’s up to you to bring them closer to the organization, to identify who they are by affinity and ability, and then raise their level of emotional commitment. That’s what it’s about.

Steven: Larry, you’ve talked a lot about volunteers who don’t give and board members. We got a question here from Jennifer. How do you get those people, non-giving board members, non-giving volunteers, to become donors? It seems like they’re really good people to be a part of this process, but if they’re not giving as you said, they may not be the best people after all. So how do you kind of move those board members who aren’t giving to do so?

Larry: All right. Well, first of all, I’m really hard about this. And that is, if a person is going to be on the board, they’re going to be a donor, or they’re not going to be on the board. Pure and simple. And it’s not about giving a lot of money, it’s about the equal sacrifice, not the equal amount. And if people are currently on your board, that are not giving, something’s wrong. Either they weren’t listed in the right way, or they weren’t outlined.

See, when you ask a volunteer to do something, there are two things they want to know. They want to know what success looks like, and they want to know how much time it’s going to take. And if you’re real clear upfront, what you’re expecting of them, those that aren’t willing it give you that will say, thanks, but no thanks. But we are so eager to get any warm body in some of these seats, that we will look the other way, or we’ll sidestep that and we won’t be direct.

So that’s the key. That’s the key. So if you’re stuck with someone on your board, and I’d use that term quite literally, if you’re stuck with them, there may not be a whole lot you can do. As to a volunteer, I just stand by what I say. And that is the clearest indicator of commitment is a financial commitment of any size. If they’re unwilling to do that . . . and I mean, I don’t mean $500, I mean $5. You see? If somehow they think their time is enough, there’s something that’s wrong here. There’s something that’s not right. And you simply sometimes have to go to the next person, if they don’t get it.

I feel for people, for development officers especially who are stuck with what I call non-performing board members for one reason or the other. But in the…when you recruit them, that has to be a requirement. And if they’re unable to do that or unwilling to do that . . . it’s not that they’re unable. If they’re unwilling to do that, then you say, well, thanks, but no thanks. It’s a win-win or no deal. That’s what it is. As Stephen Covey says, it’s win-win or no deal.

Steven: I agree. I don’t mind being tough either. Well, Larry, we’re right about at the hour.

Larry: Let me say one thing. And that is, you’re far better off with a very small group of core people, than a whole room full of seat warmers.

Steven: Yeah. I’m with you.

Well, Larry, this was fun. We’ve got maybe 30 seconds or so. Any last words for the folks listening here?

Larry: No. But I just hope you’ll take me up on my free offer. I’d love to share that with you, and then tell me the results. And then as I said before, The Oracle League today is a dollar for the first month. Try it out. I just very eager for you to tell me what you think of it.

Steven: And would you be willing to take additional questions via email? I know we didn’t get to quite all of them, so sorry about that. But would you be willing to field some emails from some folks, Larry?

Larry: Absolutely.

Steven: Well, we’ll include all of that contact information and all these great resources in our follow-up email. We’ll be sending the recording later on this afternoon. Got lots of great resources on our Bloomerang page, we’ve got of course our blog, our webinar series, lots of downloadables, some goodies there.

I want to highlight an upcoming webinar. It’s not our next webinar, we do have two webinars scheduled before this one, but extra special. Simone Joyaux is going to be our guest in about three weeks. She’s going to talk about board governance. Simone is one of my favorites, that’s going to be a great one. We’ve got lots of other webinars scheduled out in advance on our page. You can perhaps find a topic that looks interesting to you. And we’d love to hear from you again.

Larry: Ask Simone about the board. She’ll tell you.

Steven: Larry I think is alluding to a book that Simone wrote entitled, Firing Lousy Board Members. So I think she’s a kindred spirit with you there, Larry.

Larry: Yes, she is. Good friend of mine. You think I’m hard on the subject, just ask her.

Steven: You are gentle compared to Simone, actually.

Well, Larry, this is great. Thanks again. And thanks to all of you for taking an hour out of your day. Definitely appreciate it. I know it’s a busy time of year, perhaps a fiscal year coming to an end. So thanks again. And we’ll be in touch later on with all these resources, and hopefully we will see you again next week. So have a great rest of your day, have a great weekend, and we will talk to you again soon.