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June 4, 2010 by royjones 2 Comments

Direct Mail and Major Gifts: What is the biggest mistake in fundraising?

Asking multi-millionaires for $25 bucks…

Roy C. Jones

Fundraising is always difficult, but when you are considering gifts with five, six, and even, seven figure checks the task can sometimes seem gargantuan.

Some development folks are prone to only use the mail to make an ask.  Call them chicken if you want, but the fact is they simply let RFM reports (recency, frequency, monetary amount) be the only guide for dictating their contact approach.   However, what happens if you try to increase the gift amount in any direct mail appeal?  You suppress the response rate, don’t you?

Of course, the majority in our industry are guilty of the other extreme, writing to multimillionaires and asking for just $25 bucks.  What happens when you write a multi-millionaire a letter and ask him for a $25 gift in the mail?  Your response rate goes up, but you only get $25.

Most direct marketers are happy with higher response rates and simply refuse to acknowledge the elephant in the room… namely, that multi-millionaire with both donative intent to your organization and with the capacity to make a five or six figure gift are only being asked for $25 bucks.

The hardest job in development is deciding when to pull a donor name out of your normal cultivation appeals so that you can solicited them face to face and go for the proper ask amount based upon donor capacity, not RFM ask-handles.  The danger, of course, is if you pull a donor out of the mail program and either do not have the resources to call, visit and ask them personally, you will lose huge amounts of money.

It is critical when you pull a name out of your direct mail file that you begin to visit with them “face-to-face”…  Yes, you will use the phone, e-mail and regular mail, but only to set up the opportunity to meet with them.  Remember, REAL RELATIONSHIPS are not built through social networking or phone contacts.  Real relationships are built only one way, face-to-face.  It takes time and the goal of every meeting is to glean enough information and identify the next reason to get together. 

“The Ask” will present itself naturally once you have a REAL RELATIONSHIP with the individual.  Nine times out of 10 the person who has become your friend will tell you when they are ready to discuss making a substantive gift to your charity, cause or not-for-profit.

“The Ask” is something we study, prep for, script, dream about, and love and sometimes avoid.

Board members particularly have trouble asking. Untrained and inexperienced, they often back away from the moment of truth.  I don’t blame them because they are unprepared.  Because if they are properly prepped and in the right mindset, they can ask successfully all the time. Then you can have a whole team of people out there raising the funds you need for your urgent work in the community.

Here are the five steps that my friend Gail Perry www.gailperry.com outlines that will lead you to a “yes” every time you ask:

 

 1.  Identify the Right Prospect to Approach.

Is this person really a good, “qualified prospect” as we say in fundraising or are you just hoping that they are? Don’t spend your time unless you are certain this person can make a gift at this level and that they might want to make this gift.

There needs to be a firm reason that this person can and would make the gift. Spend some time analyzing:

  • their giving potential,
  • their level of interest,
  • Likelihood that they would give at this level.

 Be willing to do a realistic, honest appraisal of where they rate in these categories. Then you’ll be able to target those individuals who are MOST LIKELY and approach only them.

 

2. Get to Know Your Prospective Donor.

Do your research well before you want to ask for the gift. The more you know about your donor’s interests, passions, vision and track record, the better your chance of securing her support.

Spend time in person chatting with her about your cause and her interests.  Listen to her.  Understand what she cares about and what causes she likes to fund. Find out what she thinks about your organization, its leadership, and its vision.

You should know these things:

  • What are her attitudes about your cause?
  • What is she really passionate about?
  • How interested is she really in your organization and its vision?
  • Is she prepared for a solicitation? Have you mentioned a possible number earlier?

 

 3.  Make it a Conversation.

We have an old saying in fundraising: “Listen Your Way to the Gift.”

If you are doing all the talking, then you’ll never “make the sale.” It’s so very important to draw your donor out and get him to react to your ideas. If you don’t know what’s going on in his head, how on earth can you promote your idea in a way that will appeal to him?

  • See if you can pull out any objections.
  • Listen carefully to his questions, because they give you an indication of what’s on his mind.

 

 4.  Make Your Ask into an Exciting Opportunity

Take it to the highest level.  Show the donor what will happen if he makes an investment in your cause.  Talk about the impact and your results.

This is an opportunity to do what? To accomplish what?

Donors want to be part of something exciting. They want to help create a better future. They want to help change or save lives.  Say something like this:   We’d like to talk to you about being the lead in this vision.  Can you help us?

 

 5. After You Ask, Sit Quietly and SHUT UP.

The donor is mulling over your idea and your request. She is probably thinking:

  • Can I do this?
  • Do I want to do this?
  • How can I do this?
  • Do I need to talk to my spouse?
  • Do I need to talk to my investment adviser or my CPA?

 Give your donor plenty of time to consider your request and DON’T SAY A WORD.  There is an old line in sales that goes like this:  “He who speaks next, loses.”

Filed Under: direct mail; big mistakes;, Fund development, major donor; fundraising;, Uncategorized Tagged With: not-for-profit; charity; ngo, Roy Jones

May 23, 2010 by royjones Leave a Comment

Does Your Organization Have Enough Rungs On the Donor Ladder?

Roy C. Jones
Roy C. Jones

Most organizations use “ask handles” (sometimes called an “ask table”) in order to do upgrade giving through their direct mail fundraising. 

 

When the economy is good most charities will use the donor previous highest gift to calculate the three or four ask amounts in the gift array on the reply device in the letter.  In short, the donors previous highest contribution (HPC) is the lowest amount you would ask for… the subsequent amounts might be: HPC;  HPCx1.5; HPCx2; and Other.

 

When the economy is sagging, LIKE NOW, most not-for-profits use the donor’s last gift or average gift as the base to calculate the gift array.  This tends not to upgrade too quickly and in most cases upgrades giving more gradually by simply lifting average giving.

 

Now for the question, “Is a gift array strategy the only tool you should use to upgrade donor participation?”

 

The obvious answer is “NO”.  You must do more in this economy to identify and harvest major gifts from your donor file.  I am a big proponent of creating recognition levels to prioritize and benchmark giving.  I compare it to having “rungs on a ladder”.  Some organizations get frustrated because they only have two rungs on their giving ladder:  the low dollar $25 donors and the high dollar bequest or planned givers.  With no rungs or levels between entry level giving and estate gifts it is almost impossible to take donors to the top of the giving pyramid.

 

Creating giving clubs or giving societys based upon the total of annual giving of your donors establishes a benchmark for your donors as well as your organization.  It also gives you a process for prioritizing your donor visits and event strategies.

 

 Here are a few tips for improving segmentation and moving donors up the giving ladder:

 

1.  Determine giving levels that challenge your donors to increase their financial support: for example, $1,000, $5,000, $10,000, $50,000, $100,000.

 

2. Plan to establish at least three giving clubs so donors see the progression in size of gifts – and thus upgrade their contributions: for example, $1000, $5000, and $10,000.

 

3. Select a name for the giving club(s). Conventional names include Century Club, President’s Society, Founder’s Club, Dean’s Roundtable. Consider, however, names unique to your organization: the name of your founder, a famous member, a historical figure embodying your organization’s mission, or a concept important to your organization.

 

4. Determine the donor’s benefits at each level: plaques or certificates, parking or library privileges, autographed book, listing of name in program or annual report, access to staff or faculty, invitation to special events.

 

5. Decide how and where you will recognize and publicize giving club donors: newsletter, plaque, annual report, program, special brochure.

 

6. Identify board members and key donors who can “seed” each giving club with their contributions. Contact them personally to ask them to serve as charter members.

 

7.  Prepare a brochure for each club or a booklet for all clubs:  Describe how the giving club works, stipulating an annual contribution of at least $ _________ for (usually) unrestricted support.

State whether gift can be made in several payments – and whether deferred gifts will be counted (some organizations have a giving club just for those who’ve remembered the organization in their wills).

Identify and illustrate the benefits of membership. List charter members.

 

8. For higher-level giving clubs, plan an annual special event such as a luncheon, dinner, or seminar. The president or executive director must be on hand. Consider inviting prominent person or special speaker. These events will encourage renewal of contributions.

 

9.  At least once each year, list donors and giving levels for each club in your newsletter, annual report, or (preferably) special publication.

Filed Under: Uncategorized

May 17, 2010 by royjones Leave a Comment

Are Major Gifts Still Sitting on the Table?

Roy C. Jones
Roy C. Jones

In a challenging economy the best way to improve your net revenue is to identify your top one hundred annual fund donors and GO VISIT THEM.

 

All major donors begin their relationships with a charity by giving just 20 bucks.  The key to growing revenue is to identify and then segment your direct mail donors with capacity from those who just have an affinity to your organization.  What normally happens with an organization is that  they continue to ask millionaires for $20 and millionaires, regardless of how much they love your organization, are only going to give you what you ask for.  If you ask for $20 and you will get $20, nothing more and nothing less.  It is a hard lesson to learn.

 

Begin by having your entire active donor file wealth appended.  This way you can begin pulling selects not only by recency, frequency and highest gift, but also by households with the highest capacity.   Most development directors never come to grips with the fact that they are guilty of the worst mistake in the history of fundraising and development: “asking multi-millionaires for 20 bucks…. and continuing to do it again and again.”

 

You do not have to do expensive list rentals of millionaire donor names.  You should begin with your best direct mail donors to cultivate major gifts by simply building a real friendship and relationship.  Start treating middle donors (donors who give from $250 to $999) different than your regular direct mail respondents.  For every donor who gives in excess of $250, along with the thank you letter include a packet, along with a list of benefits for upgrading their annual giving up to $1,000.

 

The main reason that donors do not move past the $1,000 threshold is because they are never asked. 

 

Do numerous queries of your database. Look for your most loyal donors and look for those donors who gave in excess of a set amount. Then pick up the phone and ask them if you could “buy them a cup of coffee”.   Sure you could just continue to mail letters without more personalized approaches, but you do your are going to leave a lot of money on the table with people who are really interested in your work. Ask permission to drop by and see them.  Then just listen.  Donors will tell you the BIG PROJECTS they are interested in and with big projects come BIG CHECKS.

 

It truly is as simple as that!

Filed Under: Uncategorized

April 5, 2010 by royjones 2 Comments

Jesus Was In Los Angeles Today…

 

JESUS WAS IN LOS ANGELES TODAY.  The media did not report His sighting, only the evidence of the lives that were changed by His presence at the L.A. Mission.

 I joined hundreds volunteers on Friday, many of whom began arriving to the LA Mission at 4 a.m. in the midhomelessdle of Skid Row.  Yes, “skid row” is a literal place, a 10 block radius in the middle of Los Angeles that City officials have zoned for missions services to be provided to the homeless; a place where hospitals often bring the indigent when no family or friend will come to pick them up after emergency services; a place where the addicted and abused go in hopes of  a warm meal; a place where more than 40,000 homeless men, women and children are forced to reside so they can wait each day for food, medical care and if they are fortunate enough, a bed or temporary housing. 

The L.A. Mission made Good Friday very good for so many in need.  On Friday we served over 3,000 meals to the homeless and those in dire need. I was simply amazed watching the Los Angeles Mission do so much to help offset a record jobless rate that has been threatening Los Angeles and Skid Row in particular.  While many across the country are staging protests and throwing barbs at Congress and the White House, Herb Smith and the LA Mission’s army of volunteers were lifting up the light of Christ, drawing the homeless in off the street.

Herb Smith, President, L.A. Mission
Herb Smith, President, L.A. Mission

 The L.A. Mission has programs designed to provide hope and healing to those in need.  Not only do they provide food and shelter, but they have an entire aresenalof solutions, including counseling, addiction treatment, GED preparation,  and career and vocational training.  The Mission works with scores of local businesses who reach out and help to put the homeless back to work as productive citizens.

 “The homeless population in the city was up 10 percent this year over last year — which was up 10 percent over the year before, ” said Herb Smith of the LA Mission. “We’re tracking the jobless issues in the economy.” 

 Willie Mays, 56, said he was the proof.

“I just got laid off from my job a few days ago. I was a custodian at one of the hotels around the corner.”  Mays has been staying at a homeless shelter nearby. After enjoying a meal of ham, green beans and mac’ n’ cheese, Mays sat down in a tent where a nursing student washed his feet.

  “It tickles,” chuckled Mays. Then, he walked — with the aid of a cane — to the next tent… to receive a free new pair of shoes.

 imagesVolunteers did foot washing for over 2,000 of the homeless in L.A. and provided new shoes. I was so touched by Alley Mills, most know for her work as the mom in TV’s “Wonder Years”.  Alley spent the entire day on her knees washing the feet of the homeless, bandaging street caused blisters and sharing the love of Christ. There was a touching humility that so many saw in the eyes of both Alley and the homeless she touched today.

JESUS TRULY WAS IN LOS ANGELES TODAY….

Filed Under: Uncategorized

December 3, 2009 by royjones Leave a Comment

Holiday Times are Critical to Development

GET RID OF THE SUGAR PLUM VISIONS…

I know many professionals in the development industry that literally take the last six weeks of the year off.  They move into autopilot mode.  They get off the road and nestle snug in the offices (and beds), with visions of sugar-plums dancing around in their heads…

Christmas is the best time of the year to build real friendships with your supporters and board members.  Instead of getting comfortable with “home for the holidays” development professionals should use the season to demonstrate to their donors that they care about them and that they truly see them as friends and  not a “mark” for the next big gift.  Thanksgiving and Christmas should be a time of “ministering” to your donors.

 

Roy C. Jones
Roy C. Jones

Rest assured of one of thing, money always follows ministry.  If your supporters, board members and major donors know that you care more about your relationship with them than you do their money, the gifts will flow to your charity or cause.  However, if the holidays come off as some contrived marketing technique, donors smell it coming from a mile away.  You may lift giving response rates with such approaches but rest assured there will be fewer zeroes at the end of each check.

 

Cash gifts should be a natural byproduct of connecting with your friends.  In order to develop donor relationships you have to listen and let the donor “tell you” how God is leading them this holiday season.  Knowing where your donors stands and what their priorities are will successfully harvest bigger contributions, many for this year by December 31st.

 So drill down into our donors’ minds and hearts to understand their attitudes and desires.  You can then match up your non-profit’s projects with the need that the donor is feeling led to give.   The economy has had a profound impact on donors and philanthropic attitudes.  They are feeling poor right now, whether they are multimillionaires or not. So they are being more and more careful about their giving (and spending for that matter).

If you will spend this Christmas building real relationships with people who are your real friends, as the economy turns around, giving is going to increase exponentially.  But be careful how you talk with your donors NOW.  Christmas 2009 should be about ministering to them, appreciating them and caring about what their needs are.  Remember, they have survived the most horrific economic downturn in nearly 70 years for the U.S. and the world.

 Gail Perry, one of the industry’s best development trainers, confirms what you already know – donors are less likely to take risks now. They are becoming more conservative. Gone are the days when a person might issue 30 checks at year-end, just because they cared a lot and also because they had ample income.

Now, people are giving to fewer organizations – AND to trusted organizations.  DEVELOPMENT REAL FRIENDSHIPS AND RELATIONSHIPS WITH YOUR SUPPORTERS IS CRITICAL TO YOUR SUCCESS.

Remember that credibility is essential for your fundraising now more than ever. How do you establish credibility?

Gail Perry listed this week several important points that may improve your position with your donors:

  • track record – here are our results
  • transparency – how we are spending your money
  • who is on our board (what community leaders are standing behind us and our cause?)
  • 990 posted online
  • professional looking web site and marketing materials
  • good looking (ie, professional) fundraising appeal
  • longevity – we’ve been in business all this time
  • endorsements from well-known community leaders
  • funding from well-known sources (publicize this because it adds credibility) 

But the most important boost to your credibility in setting the stage for 2010 is that you cared enough to come see your friend at Christmas… while all the other charities and nonprofits were tucked in their beds with visions of sugar plums dancing in their heads.

Push back from your desk, get in your car or get on that plane, go visit your best supporters and do one thing… say thank you and listen to their hearts at the holidays.  If you do you will not regret it… money always follows ministry.

Filed Under: development, fundraising, Uncategorized Tagged With: Liberty University, lynchburg, Roy C Jones, Roy Jones, Roy Jones Reports

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The New Normal for Year End Giving…

December has changed for most non-profits, we have just experienced the biggest decline for a December in more than a decade. Volatile stock markets at year end; combined with expensive, divisive political campaigns and new tax implications from one year to the next are forcing most non-profits to rethink the giving calendar. Is this the new normal?

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Roy Jones has more than 30 years of relationship building, coalition development, marketing and fundraising experience. He is recognized professionally as one of the top relationship managers in the country.
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