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Dane Shumak, CFRE, BBA

About Dane

Unrestricted Giving is Dead, Long Live Unrestricted Giving

“The King is Dead, Long Live the King” is a sentence full of medieval meaning. It’s emblematic of grief and loss – an era is over, a monarchy ends, something that once was is no longer. It’s also symbolic of hope for the future, one where something new and perhaps even epochal can begin. Historically, humanity has clung to these funny little paradoxical statements, chock-full of meaning.

And so it now is with fundraising for unrestricted giving.

Unrestricted Giving is Dead

If you’re an annual giving fundraiser or any fundraiser that has a target related to unrestricted or “area of greatest need” monies, you know exactly what I’m talking about. Now dead — perhaps even long dead and we failed to realize it — is the era in which supporters will feel it is enough to send checks to your organization’s mythical big bucket of funds and trust your charity to do right by that gift. This era bred the necessity of the traditional annual report, including therein the list of all of those people who gave money to the big bucket and all of the things that pot of funds helped the organization to accomplish. It was an era built on trust, where donors felt that by giving to the area of “greatest need” that the organization might truly spend that money wisely and appropriately.

With more and more stories (whether fair and accurate or not) about misappropriation of donor funds, overspending on charitable administration, and reliance on this type of giving to inform so much more-of-the-same-ness, many donors (especially major donors!) have left this type of giving in the dust. They crave knowledge and understanding of precisely what their funds are going to accomplish before they make the gift. They demand to know the impact their monies have had. They care less and less about recognition for their giving and more and more about associating themselves with real causes doing real work. In a prior article I speak about the primacy of cultivating trust in advancement – and it holds true here, too.

In her opening plenary at the 2018 Canadian Council for the Advancement of Education summit in annual and major giving, Penelope Burk said that merely asking donors to “give to your brand” is not only ineffective, it doesn’t meet the needs or wants of the donors themselves. Given the long-standing donor-focus mantra in advancement, we’d be wise to take heed of this advice and how it might inform the best practices of the future.

We’re now entering into an era where social media, digital communications, and the democratization of the “inside scoop” has bred the need for charities to be receptive and responsive to the emotional needs of why donors actually give. They give because of a craving to understand that in some way, big or small, they’re doing right by something that has meaning to them. When donors give to an unrestricted fund without clear idea of what the fund is actually going to support, they’re also giving up their autonomy in determining how they might like those funds to actually be spent by your organization. From an organizational point of view, I don’t need to tell you the incredible advantages of this type of philanthropy. From a donor-focused point of view, it’s critical we find another way of doing this.

As a fundraiser, it’s imperative that you connect donors to this meaning in a way they want to hear. It is no longer enough (and truly, perhaps never has been enough) to tell them that your charity does good and the donor should help them do that good. It maybe isn’t even enough, anymore, to give them a good story with a strong call to action. And it definitely is not enough to tell your donors once every year what you did with your big bucket of their support.

No, that era of “Greatest Needs” and unrestricted giving is a dead one. Let the trumpets sound the end of the epoch, and may we all pay our respects as we walk past the casket.

Long Live Unrestricted Giving

As we modernize fundraising practice, so too must we modernize how we discuss unrestricted giving – and how we prioritize and celebrate this case among our respective donor bases. So far, I have seen three incredible tactics work wonders at organizations to help to revitalize the case for “greatest needs” giving – and I’ll be discussing them below.

The first is quite simple – tell people what you did with their money last year and tell them what you’re going to do with it this year. It sounds relatively basic, but this forces you to do a few things. The most important thing it forces your organization to do is to actually track down what it spent its unrestricted funds on – something that many organizations don’t accurately track. At my organization, I can tell you (to the cent!) where every unrestricted donation went last year and, with almost the same accuracy, where it’s going this year. That kind of effort builds trust among the donor base and helps to really flesh out the impact of donor support to this case.

Of course, where the money is going isn’t enough – and this is where the story comes in. If your donor knows where it’s going, telling them what it’s currently doing or what it’s going to do becomes intrinsically meaningful to them. It’s going to build long-term and loyal support, and it’s going to give meaning to solicitations for gift renewals and to stewardship materials alike.

The second is a bit more risqué, but along the same vein – I call it the restricted unrestricted. This means that you limit what you can spend donor dollars on to ensure that it’s impact-focused, donor-focused, and meaningful spending. Admittedly, this can only work in charities that receive funding from other sources (either revenue generation, sponsorship, or government funding) that is significant enough to cover the less sexy administrative elements of the charitable organization.

For example, in higher education, ensuring that every cent raised in unrestricted giving benefits a student in some way is a really meaningful way to inspire as many donors as possible to give, when they otherwise may not feel inspired to give to the big-bucket organization (especially considering that, if they’re an alumnus, they’ve just spent tens of thousands of dollars on tuition).

An addendum to the above, if yours is a charity that is exclusively or majorly funded by donor dollars, such that you need to spend money on administration, then tell that story, too. Let your donors feel connected to the staff members whose salaries they help to pay. As a charitable staff person, your connection to the organization’s mission is personal and relevant, and it’d be dishonest to try and tell your donors otherwise. Is it sexy to tell your donors that you’re going to pay for office supplies with their donation? No. But telling them they’re building the necessary infrastructure to support your organization’s operation (something that absolutely includes pens!) is. New meaning to the “sell me this pen” adage, for sure.

Thirdly – does your unrestricted case have a distinct, discernible, and meaningful case for support? If not, it’s time it does. As mentioned earlier, the concept of “giving to brand” ensured that we didn’t need to build cases for annual giving, because they are so inextricably tied to all of the various needs of the organization, and other cases therein. It wasn’t necessary to build a case for the broad-based donor; rather, we told a meaningful story and hoped that’d inspire participation.

However, I don’t think we can simply rest on our laurels in this way anymore. I think we need to build a case for support for unrestricted giving, not just because it’s going to inform critically important donor-focused communications, but it will also create a paradigm-shift within your organization too; one that acknowledges and identifies your unrestricted donors for the important, meaningful, and autonomous supporters they are. Why does it matter that donors give unrestricted gifts? Tell them!

Finally, and perhaps most effective overall, is an idea that I’ve absolutely stolen from Shaun Keister, the Vice-Chancellor of Advancement for UC Davis. In a recent talk that Shaun gave, which I was lucky enough to see, he spoke at length about the marriage between annual and major giving. Each major giving officer has unrestricted targets to reach, and each proposal they write must include an unrestricted ask. For example, if you’re asking a donor for a million-dollar contribution, then you should also ask for a hundred-thousand-dollar unrestricted contribution on top of that. As you can imagine, this inspired murmurs from the crowd at the talk, and the question of, “but doesn’t that make the donors angry?” Shaun’s answer was no!

Many major funders might decline this type of giving option, but if you’re just including it as a line item in a proposal, honestly, who is it harming? And for the many who say yes, it helps to boost your unrestricted case significantly when that case is receiving investment from your most transformational and major donors. The added bonus? It frees up your annual giving staff to not always have to hammer home the story of “unrestricted, greatest needs, give to the big bucket” – and tell real stories about real cases and real impact that might inspire your broad-base donors to give deeper, give more, or even write you into their wills. That sounds like the future to me.

So, When’s the Funeral?

If you’ve read this far, then hopefully you’re with me – you agree that we have to revolutionize the way we speak to our most loyal and most core donors about their long-standing support, and we must absolutely change the way we speak to constituents who we hope to convert into the donors of the future. I hope I’m not the first one to tell you that as our donor population ages, we’ve been seeing a trend toward less participation, but higher average giving, that has essentially ensured a balance in annual giving. Well, if you’ve not already cottoned on to the fact that this is a short-lived and unsustainable balance, I’m sorry to be the bearer of bad news.

Do you have to change? Absolutely, yeah, you do. Does it have to be in a way I described? Nope, those are just some ideas. Does it have to be now? Probably. Without a fundamental shift in how you’re doing annual giving, if your program is still operating as a more-of-the-same, three-times-a-year, our-organization-is-cool model, you’re going to see the bottom drop out in the next few years. And if you’re like me, and you see the writing on the wall… well…

I hope you packed your funeral blacks.

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3 Comments

  1. Debbie Mason on May 21, 2019 at 11:30 am

    I so agree with Dane on this. I've been saying this for the last decade to organizations with whom I consult, particularly big box style fundraisers like United Ways, Community Foundations, etc. When I took a position as a CEO of a Healthcare Foundation three years ago, I said the same to the board hiring me. Since then, in our strategic planning, we've addressed focus areas giving, initiative area giving and other ways to bring to life the specifics of our work and investments. Even with our annual campaign donors, we focus on a three - year commitment for underwriting the staff team and operations to do our leading and convening work - and give examples of how that is making an impact. As I continue to speak at conferences, write articles and consult - I share this message repeatedly. Great work, Dane, on this article!

  2. Sophie Penney on May 23, 2019 at 6:17 pm

    Great article! I know Shaun and agree with his advice. I often recommend the dual ask to campaign clients, particularly those that rely heavily on annual gifts for operating support.

  3. Anna Bland on May 25, 2019 at 2:33 pm

    This is brilliantly written. Who is this guy?? I’m hooked.

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