Stephen C. Nill, JD
Imagine the next 25 Years of Philanthropy
Have you wondered what contributors will be writing about over the next 25 years? What changes they will be talking about?
Just where are we heading, as a profession?
By coincidence, CharityChannel is also celebrating its Silver Anniversary. In celebration, CharityChannel recently held a 10-day, 30-session online event called CharityChannel’s Masters of Fundraising Summit. In the Summit, I had the opportunity to interview a panel of our sector’s master fundraisers, chosen because they were doing their work demonstrably well (the Best Practices track), leading an evolution in how we deal with donors (the Evolutionary track) or boldly changing our approach to donors (the Revolutionary track).
You can’t interview such amazing professionals and not come away with a glimpse into the future. In the spirit that has imbued the contributions to Advancing Philanthropy from its inception, let me share some of the highlights of what I learned at the Summit from these forward-thinking practitioners:
Will We Escape the Fundraising Matrix?
There is nothing new about the mantra of putting the donor’s interests first. When I first came into this profession 40 years ago, one of the first things I learned was that we must not let our objective of raising support for the organization get ahead of the donor’s philanthropic inclinations and best interests. If there is a single principle that unifies our profession, this is it.
Yet, as Steven Meyers explained to me, the very way that we organize our development office and the way that we discuss gifts with donors is inherently in conflict with truly putting the donor first.
Did you catch that? The very way we organize fund development offices is institution-focused!
Meyers shows us that most fund development offices are composed of one-dimensional, hierarchical and highly structured departments that promote and value different kinds of giving – annual, capital, endowment, planned, special events – based on immediate financial value and utility, with the institution’s current fundraising needs and goals at the center.
This how-we-do-things structure dictates our posture with our donors when having important discussions about giving. Meyers explains that today’s theorists who write and speak on donor-focused giving operate in the theater of annual giving, major giving or planned giving. Without realizing it, they are complicit in a deep irony of trying to lead us to the Promised Land of true donor focus while trapped in a matrix that blinds them – and us – from truly seeing the donor.
Meyers believes, and I agree, that if we are truly going to put the donor first, we must crash the fundraising Matrix. If this reminds you of the 1999 film, The Matrix, it should. In the film and its two sequels, machines trap humans in a Matrix where they are asleep but in a simulation indistinguishable from “true” reality. According to Meyers in his book, Personalized Philanthropy: Crash the Fundraising Matrix (CharityChannel Press, 2015), it “often appears that we operate in a fundraising Matrix – a synthetic, artificial environment in which the development office grapples with a need to feed the campaign of the moment, rather than the desires, needs and true interests of our donors.” The only way to “wake up” and see donors – truly see donors – is to crash the fundraising Matrix.
To do that, he says, we need to destroy the silos of annual, major and planned gift functions or campaigns and instead shift to “achieving something of moment both for the donor and the organization.” To accomplish this, Meyers tells us that we need to staff our fund development offices with a new type of planner who is not part of any particular silo or campaign. This professional will be well-trained in structuring gifts to truly meet the needs of the donor. Such a professional, who Meyers suggests might be called an “enlightened generalist,” would not have today’s transactional approach to “selling” individual gift vehicles such as annual gifts, gift annuities, bequest, and so on, to meet the organization’s goals. Rather, the enlightened generalist will engage donors holistically and help them shape comprehensive, meaningful plans to achieve their philanthropic goals.
If fundraising silos are to be crashed, we need fund development professionals to come together and work as one. So, as part of the Summit, we brought together Kent Stroman, a consultant in major gifts and author of Asking about Asking: Mastering the Art of Conversational Fundraising, 2nd Edition (CharityChannel Press, 2014). We also brought in A.J. Steinberg, a consultant in fundraising events. The idea was to see how their two fundraising disciplines could merge into one with a focus on the donor rather than on the institution. We called their session, “Alchemy: Turning Fundraising Events into Major Gifts Gold.”
Stroman and Steinberg discussed how a fundraising event, such as, say, a gala, should be viewed not just as a vehicle to generate funds from the event itself (though that’s still an objective, as A.J. pointed out), but as a way of furthering and strengthening relationships with existing donors.
This is not a new concept since experienced fundraising professionals will agree that all components of a fund development program should work in concert, including, of course, fundraising events. What made it a special discussion, and why I include it here, was how difficult it was to distinguish the perspective of Stroman from the perspective of Steinberg. (I admit I was hoping for at least some difference of opinion and maybe even some fireworks!) Though each is an expert in a different discipline from the other, with just a little imagination I could see that both were an example of the enlightened generalist Meyers envisions. Stroman had a considerable appreciation for the opportunities and challenges of putting on successful fundraising events, and Steinberg had a considerable appreciation for the broader fund development process and, indeed, advises her clients to look well beyond “just” the support raised by the event.
If Meyers were to stop there, at eliminating silos, what he is suggesting is profound enough. But he then introduces us to new ways of viewing how to structure gifts. He calls them his “Killer Apps.” They are particular approaches to structuring gifts that view a gift over the lifetime of the donor and that, frankly, defy traditional means of gift measurement. (Fortunately, through the work of Meyers and others, substantial advances in how gifts are measured have been made.) Space does not allow for me to get into the details of these approaches, so if you want to go further, Meyers covers it in his book.
Will We Adopt the Donor Lifecycle Map?
I cannot imagine a fundraising 101 course that doesn’t teach about the donor pyramid, can you? You know this well. Its base is wide, representing the large number of contributors who give the smallest gifts and the top narrows to a point reflecting the fewest number of donors who provide the most money.
The very nature of the donor pyramid is organization-focused rather than donor-focused. Worse, it is a kind of snapshot of the moment, showing donors according to their propensity to give at the moment.
But donors are living, breathing human beings on their own unique philanthropic journey. What has been missing is a model that enables us to view a donor throughout the donor’s philanthropic lifetime. If we could do that, we could learn to approach donors in a much more sensitive and enlightened manner, thereby truly putting the donor’s interests first but also, as explained by Deborah Kaplan Polivy in our Summit interview, ultimately achieve long-term financial growth and stability for our charitable organizations.
As you can see in the illustration from Polivy’s book, The Donor Lifecycle Map: A Model for Fundraising Success (CharityChannel Press, 2017), Polivy wants us to map a donor according to gifts already made to the organization, starting with the first gift and ending with what Polivy terms “ultimate giving,” the final gift such as estate gift or gift into an endowment fund. She points out that many organizations would find, upon mapping their donors, that not even half of first-time donors make a second gift. And herein lies the power of mapping donors in this fashion: Once you can plainly see where the donor is on the donor’s lifecycle, you can engage in a conversation with that donor about meaningful giving throughout the donor’s lifetime. Far more donors are retained and, over time, they are giving far more than they would have.
Polivy points out that the simple act of properly mapping a donor’s giving lifecycle and engaging donors based on it will enable the organization to raise much more money over time because it focuses on retaining donors as opposed to concentrating on major gifts or one-time-event contributors.
She also explained that budgeting and planning would also be considerably easier by focusing on retention and larger gifts over the long term because there would be more predictability.
The Donor Lifecycle Map is also a dramatic visual of how well an organization is retaining its donors, Polivy says. The key, she says, is to carefully move the donor along the lifecycle toward the ultimate gift, without losing the donor to the organization. By retaining the donor, the organization will, over the donor’s lifetime, receive the maximum possible giving.
There is, of course, much more to this than I can write about here. But if you are beginning to see how what Meyers and Polivy have to say move us toward truly focusing on the donor, you are beginning to glimpse something truly powerful. You are beginning to glimpse our future.
Will We Move to Value-Based Healthcare Philanthropy?
I realize that only some of those reading this article will be involved in healthcare philanthropy. But even so, stay with me. This is important because it shows an example of how our profession is beginning to truly put the donor first.
In my Summit interview with William Mountcastle, the revolutionary who introduced the concept of value-based healthcare philanthropy in his new book, Fundraising for Hospitals: Value-Based Healthcare Philanthropy (CharityChannel Press, 2017), I learned there is a sea change taking place in healthcare. He explains that, at the core of efforts to improve the quality of healthcare in the United States, there is a shift to value-based care, a drastic transition from the long-standing focus on volume-based healthcare. He explained that “the now outdated fee-for-service model had incentives to ‘do’ more. Order more tests. See more patients. Do more procedures. Make more money.”
Healthcare philanthropy is also in a state of transition, he told me. Like healthcare professionals, hospital fundraisers are also being asked to challenge assumptions and look for ways to do better instead of just doing more.
Most importantly, I learned that value-based philanthropy puts its focus on people, not money.
Mountcastle draws parallels between the fundamental changes in patient care and in healthcare fundraising. Just like “value-based care” focuses on value, not volume, Mountcastle sees “value-based healthcare philanthropy” as focusing on people, not money.
Mountcastle points out that the medical community is coming up with strong incentives to encourage doctors to spend more time with their patients, more time educating their patients and more time listening to their patients and soliciting input when considering various testing and treatment options. He urges hospital fundraising teams to come up with strong incentives to spend more time listening and building relationships with philanthropic investors, learning about philanthropic investor needs and preferences and building strong personal connections based on trust, responsiveness and mutual benefit.
Mountcastle has developed a methodology to help hospital fundraising teams succeed with value-based healthcare philanthropy based on these five key drivers of value-based philanthropy:
- Demonstrating your value to clearly show impact
- Maximizing the value of your core programs
- Measuring your value to ensure high performance and effectiveness
- Investing in value to build an amazing organization
- Sustaining value to make a profound difference in the health of your community
Mountcastle’s work meshes beautifully with the work of Meyers and Polivy. Indeed, Meyers developed, tested and refined his Matrix-crashing ideas over two decades in healthcare philanthropy, where he recently retired as Vice President in the Center for Personalized Philanthropy at the American Committee for the Weizmann Institute of Science.
Enter the Digital Storytelling Campaign
It may seem a little incongruous to shift gears from discussing such major shifts in the fundraising profession to “digital storytelling.” But hear me out. I’d be remiss if I did not include this because, frankly, the last time something this powerful came along was when Robert F. Sharpe, Sr. coined the term “planned giving” 45 years ago (and I say that as one who, as a recovering lawyer and consultant, has transacted several hundred charitable trusts and established or advised dozens of gift planning programs).
Attracting new donors is essential to the health of any organization. In recent years we have seen the emergence of digital storytelling as a powerful means of attracting new donors as well as building long-term retention from existing donors.
Through digital storytelling, smaller and even struggling nonprofit organizations can instantly and cheaply reach millions by digitally sharing compelling stories about themselves and their work. So can larger, thriving nonprofits and institutions, of course.
This is not particularly new. The first nonprofit that put up a website with a story about its work launched the fundraising methodology of digital storytelling—though you could argue that it started even earlier with, say, those electronic kiosks you would see at performing arts centers and elsewhere.
The rise of social media, particularly Facebook, YouTube, and Twitter but including a whole zoo of others, creates the opportunity to push out stories that are highly targeted to recipients likely to respond to an appeal or at least to trade an email address for something of perceived value.
Digital storytelling that harnesses social media is a powerful means of acquiring new donors. But the challenge is in getting started and keeping up with it all. One pioneer who has come up with the solution is Julia Campbell, who has introduced the fundraising method of building a digital storytelling campaign. When something becomes capable of having a campaign, it leaves the realm of “fad” and enters the pantheon of fundraising methodologies. (Think capital campaign, annual fund campaign, major gifts campaign.)
In my Summit interview with Campbell, author of Storytelling in the Digital Age: A Guide for Nonprofits (CharityChannel Press, 2017), she explained how to go about creating a powerful digital storytelling campaign in just 60 days. Being able to create such a campaign so quickly would be of enormous benefit to small- and medium-sized organizations that lack the resources to attract new donors in traditional ways.
See what’s happening here? Campbell is showing us how to move from an essentially passive digital storytelling process to one that is proactive. By advancing the concept into the idea of a full-blown campaign, Campbell makes it easy to imagine that it will continue to be a methodology employed over the decades to come – particularly so because the 60-day (or similar) campaign approach can be repeated with only short intervening periods. Each time it is, new supporters are attracted to the organization where they become part of the larger fund development program.
Ushering in the Future
Space does not allow me to cover all of the change that was predicted by the masters I interviewed at the Summit, but I’ve tried to give you a sense of where they are leading us. I look forward to reading these pages in future issues down the years to see how far we, as a profession, progress. I think it’s going to be epic.
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