Author’s Note: This is the fourth 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.
It is a fallacy that nonprofit organizations and educational institutions with small development budgets are unable to drive big gifts to the organization. Indeed, smaller development offices and even organizations without development offices can dramatically increase the flow of big gifts, no matter their budget or lack thereof.
As discussed in this series, the key, of course, is to attract the interest of wealthy members of the Eisenhower generation. Before I discuss how to go about finding wealthy Ikes, let me state the obvious: The first place to look is to your organization’s or institution’s own constituencies. Is there already an identifiable pool of high-net-worth Eisenhower-generation constituents? If so, start there. Identify, cultivate and make the ask of those relatively few but potentially amazing prospective donors who are, by virtue of age and net worth, capable of making immediate and near-term big gifts.
Now, let’s assume that you are not kept blissfully busy focusing on your organization’s existing pool of wealthy Ikes. Either you don’t have many (or any) of them, or you’ve done a bang-up job with them and want to extend your organization’s reach to attract more. How?
Nill’s Amazing Truth of Fundraising No. 8: You don’t need to know who the wealthy Ikes are. You need to know who knows the wealthy Ikes.
Wealthy Ikes, as a demographic cohort, utilize an array of advisors to help them with their financial planning and investments, to handle their tax returns and other accounting needs, to handle their estate planning, and so on. Such advisors include attorneys, accountants, insurance professionals, real estate and stock brokers, bankers, asset managers, and so on.
The key to finding the right Ikes is to leverage your development reach by cultivating the allied professionals most likely to have clients who include wealthy members of the Eisenhower generation. My rule of thumb is that if you select the right allied professionals to cultivate, you will receive from each advisor on average two referrals to wealthy Ikes per year. Your results may vary, of course—but I’m now into my third decade in building and advising such programs, and my little rule of thumb has survived the test of time across quite an array of programs.
So, how many prospective donors of big gifts would you like to be introduced to in a year? Divide that by two, and that’s how many professional advisors to cultivate.
Once you’ve decided that you will go down the path of cultivating allied professionals, you need a methodology. Whatever methodology you choose, the key is to give it your full time and attention, and to be consistent month in and month out—year after year. If you are not prepared to sustain such an effort for several years, think twice about beginning such a program.
Below I discuss two proven methods. These are only illustrative of how you might go about things. No doubt there are other, maybe even better, methodologies.
One methodology, which I dubbed several years ago “Nill’s Breakfast Rule,” is so simple and inexpensive that just about any nonprofit organization, large or small, rich or poor, can use it to drive big gifts. It is the second of the two I suggest considering. Here is the first:
Build a Professional Advisory Council.
Your organization needs to offer three ingredients to attract and hold the attention and loyalty of allied professionals:
- A mission that resonates with the professional.
- The prospect of referrals from other professionals on the council.
- Ongoing professional education in the area of gift-transaction methodologies.
One way to draw such professionals is to create a professional advisory council. Invite the kinds of allied professionals likely to routinely encounter wealthy Ikes. Note that few such professionals focus exclusively on such clients; what you are looking for are those who, as part of their day-to-day services, advise members of this key cohort on a regular basis. Consider attorneys, accountants, financial planners, insurance professionals, real estate brokers, stock brokers, bankers, and so on.
There is no “right” way to construct such a council, and the “how to” aspect of creating and sustaining such a council is beyond the scope of this article. However, the successful councils I have created and observed elsewhere tend to have these attributes:
- The development officer in charge of creating and nurturing the counsel takes great care in identifying the kinds of allied professionals to invite, and does sufficient homework to be certain that those invited are likely to encounter wealthy Ikes and are willing to serve as facilitators in setting up at least the initial contact between the development officer and the individual.
- The council meets at least quarterly though monthly meetings are my own preference. I like to keep the organization firmly in the minds of the allied professionals on the council.
- The allied professionals are encouraged to network with each other.
- Experts in charitable gift transactions are brought in to address the group on a regular basis, thereby helping members to be better and more skilled in working with wealthy Ikes to make big gifts to the organization.
- The development officer visits each member of the group on a regular basis.
- Professionals who are successful in closing big gifts are provided ample recognition by the organization or institution. A recognition dinner at an expensive restaurant is just one idea.
Nill’s Breakfast Rule.
The rule, in its purest form, states that the development officer should take one allied professional to breakfast each day of the work week. Tempting as it is, don’t laugh at its simplicity or the off-the-wall name. Rename it if you want, but respect it. It is one of the most powerful techniques you can employ to drive big gifts. Indeed, if you follow this program, you will build a powerful network of professionals, each of whom will refer, on average, two wealthy Ikes to you per year. Here’s how:
Working from a well-thought-out list of allied professionals, invite them, one at a time, to breakfast. Some tips:
- If you can manage it, set aside two or three mornings a week for these meetings.
- At the breakfast meeting, talk up your organization or institution and its goals for raising six-, seven- and eight-figure gifts.
- Talk about your strategy of attracting big gifts from wealthy members of the Eisenhower generation. Show them this series of articles, if that helps.
- Talk about how you are building a cross-referral network so that your guest might receive referrals of business from others in your network, or from your organization.
- Ask the professional to identify clients who are Ikes, and who have a net worth of at least $1 million.
- Involve the professional in finding the best approach for particular prospective donors that the professional has identified.
Now, why focus on breakfast meetings and not, say, lunch? Simple. You are going to do a lot of these meetings. If you pick up the tab — as you should, since you invited the other person — the cost of the breakfast for two of you is under 10 bucks. The cost of lunch is typically at least twice that. In a year’s time, that can add up.
Suppose you meet with only two such professionals per week, on average. In a year, you would have met with 104 carefully-selected allied professionals. On average, this pool will facilitate meetings with 208 wealthy members of the Eisenhower generation. It will take time for things to build, which is a blessing because you will be gaining valuable experience in working with prospective donors who are introduced to you by the system you’ve created. As time passes and your program gains momentum, you will be amazed at how productive it is for you. In fact, it will become a challenge to keep on top of it.
One of the biggest challenges of Nill’s Breakfast Rule is keeping up with the care and feeding (literally!) of these professionals after more than just a few months, because they will be taking up more of your time in bringing you into a relationship with the wealthy Ikes they know. Your time will be pulled into the direction of working with prospective donors of big gifts, and, experience shows, there will be temptation to slow down or even stop the time you spend introducing your organization to new allied professionals and supporting the ones already working with your program. When that happens, I suggest that you find the resources to keep cultivating these professionals. Once you have begun to close big gifts, you can take some of those funds to grow your development staff and thereby to support the program’s growth. The main point is this: Avoid stopping your cultivation of new and existing allied professionals. The power of your program only grows with the growth and health of your sustained effort to cultivate allied professionals.
How many big gifts do you suppose you will receive from meeting with 208 such persons in a year (or even half that number)? Not surprisingly, there are a number of variables that will dramatically change results from program to program. For many organizations and institutions, only one such big gift of $100,000 or more would make an amazing difference. The likelihood, however, is that several such gifts will be closed within just a year or two from the start of the program. The cumulative funds raised from such gifts likely will far exceed any other fund development strategy that can be pursued.