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Nill’s Amazing Truths of Fundraising: A Series (Part 3)

Author’s Note:  This is the third in a series of articles growing out of a session I conducted at the CharityChannel Summit 2003 in Palm Springs in March.  In this series, I present a strategic perspective on fund development that will, if adopted, substantially increase the volume of funds raised in the near-, medium-, and long-term.  Warning:  My perspective does not come from a text book on fund raising.  Rather, it is a perspective gained in my two decades in the trenches, where I’ve built, managed, and/or advised several hundred fund development programs.  My having a front row, center seat at CharityChannel these past 10 years, where I’ve carefully followed thousands of forum submissions around the topic of fund raising, convinces me that it’s more important than ever to gain clarity on the role of the fund development function for nonprofit organizations and educational institutions.  I hope this series will stimulate new thinking and help more than a few substantially to increase fund-raising effectiveness.

In my years building and consulting to fund development programs, I have observed that they tend to fall into two camps. One consists of those with relatively rich budgets and a full complement of fund development officers composed of, say, a vice president, one or more development directors, grant proposal writers, annual fund director, special events officer, prospect researcher, lots of support staff, and so on. Many have gift-structuring experts on-board—even attorneys and other financial professionals—to work with donors to make big gifts. The other is the smaller, struggling nonprofit organization that, if it’s lucky, has one or two development officers and little or no budget for much else.

Thus, we divide the world of fund development into two camps.  I call this:

Nill’s Amazing Truth of Fundraising No. 7:  There are rich fund development programs, and there are the rest of them.

In this installment, I am speaking to the senior management of rich fund development programs.  In next week’s installment, I will show how even a poor (the opposite of rich) development program can attract rich Ikes to make big gifts. The term “Ike” is slang for members of the Eisenhower generation, aka older people who are the parents of baby boomers.

Warning:  If you do not have what it takes to make changes in your program, stop reading.  Go to the movies instead.

The degree to which development programs, rich or otherwise, succeed depends very much on how effectively they consistently attract big gifts from rich Ikes. In this installment I roll up my sleeves and suggest how larger, better funded development programs can quickly increase their effectiveness—without increasing expenditures.  Conversely, such programs can reduce expenditures, while maintaining equivalent results.

If development offices were orchestras, some would make beautiful music. In fact, the name of the music is “Let’s Focus on Rich Ikes.”

Others, though, “play” the wrong music. Their music is called “All Donors Are Created Equal,’ or, sometimes, “Let’s Cultivate, Cultivate, Cultivate Everybody, Everybody, Everybody.” Worse, some seem to be playing this: “I’m Playing My Music, You Play Yours.” The results are, well, cacophonic. Each part produces sound, but the end result is discord. As development offices, they are ineffective in raising funds.

If a larger, well-funded development office wants to produce extraordinary results, it must first decide to “play” the right “music.” In such an office, each person knows why he is there. From the senior-most development officer to the support staff, it is to play a key role in cultivating older, rich people.

The senior-most administrator in such an office—typically a vice-president — must conduct the fund-development orchestra with one thing in mind: To have each part of the development office play a key role in attracting, cultivating, and asking for the big gift from a member of the Eisenhower generation with the means to make such a donation.

That means, for example, that traditional development-office roles have to be re-tasked. It would take considerably more space than I have here to walk through the various development office roles and apply the new paradigm. This is a management exercise that goes to the heart of the development program. Once the decision is made to re-tool the office, some dramatic changes will take place:

  • First, some roles will emerge as more strategically valuable in attracting rich, older donors. Management should identify those roles and steer more resources toward them.
  • Second, some roles that are weak can be re-tasked so that they become strategically powerful in attracting big gifts.
  • Third, some roles will be identified as strategically weak in attracting the wealthier Ikes. These roles, unless they can be re-tasked, should be eliminated.

Here are some thought-provoking questions for you to ponder. Believe me, this is only the beginning of the questions you should be asking:

  • Which roles in your development office are already focusing on attracting members of the Eisenhower generation who have $1 million or more net worth? How can you free up resources from other less-strategic areas of the office in order to bolster these strategic roles?
  • Which roles could be attracting the Ikes if they were to be re-tasked to that purpose?
  • Which roles could be creatively teamed up with other roles to form a synergistic and powerful unit that focuses on the wealthier Ikes?
  • Does the annual fund as presently constituted continue to make sense? Can it be more tightly focused on identifying the wealthy Ikes? Should it be eliminated?
  • Do special events continue to make sense as fund-raising activities? Should they be eliminated or substantially curtailed? Could they be changed to focus on attracting the wealthier Ikes—and work with other roles in the office to cultivate them and make the ask?
  • Does grant seeking continue to make sense? (Hint: Money raised by foundation grants is a much smaller category of giving than the largest category—private giving. See any annual Giving USA report.)
  • Does your development office have the ability to properly advise an older, wealthier person on the many gift structures available? Could it use beefing up in this area?
  • How well does your office leverage itself by cultivating allied professionals and educating them on your interest in their older, wealthier clients?
  • How focused is your prospect-researching staff on identifying, from your natural constituents, wealthy Ikes?
  • Does your office behave as if there are walls between the units? What do you need to do to bring down the walls—to get your development staff to work together and collaboratively to attract wealthy Ikes?
  • Are you prepared to make the tough decisions to make your development office powerful and productive of a quantum leap in big gifts?

Next week, I focus on the nonprofit organization with scant development resources, and show how it does not take a lot of resources to drive a powerful big-gift program.

Stephen Nill

About the Contributor: Stephen Nill

Stephen Nill founded CharityChannel in 1992 as a means of connecting his nonprofit hospital chain’s fund development staff over the Internet to their colleagues at other organizations. That first discussion community grew into what is today the oldest and largest community of third-sector professionals in the world, comprised of well over 100,000 participants worldwide. He has been working in the US and international third sector for more than 30 years. He has served as the Chief Development Officer at a major Southern California university, the CEO of a large health care foundation, a vice-president of fund development of a U.S. west-coast nonprofit hospital chain, as a founder and acting director of development of a parochial school in his community, and as a founder of an organization dedicated to providing food and clothing for homeless persons in Southern California.

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