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Fund Raising PAít~ a sign of weakness. We fear it will obligate us to do something in return C] ow many of you," I ask, that we don't really want to do. " . "would be uncomfortable Let's be honest - when we're .,~ asking friends and family to raising money, we are asking for help. donate to your favorite group?" If we individually had enough money Most of the people in the room _ or energy or power to solve cammu- dozens and dozens of them _ raise nity problems alone, we'd probably their hands. just do it ourselves. "Why?" Unfortunately, big challenges such "I don't want to take advantage of as making art and culture accessible my friends," says one. to everyone require big solutions. "I don't want to be seen as None of use can solve them individu- mercenary," responds another. ally. We need each other. "Friendship Let me suggest a way of asking and money that might ease your mind. "Maxine," don't mix." you say, "I'm involved with a great "They're going cause. We're doing terrific work to to turn around and ask improve our community and we need me to support their groups," your help. If you could support us says a third, and everyone laughs with a $500 donation, it would mean appreciatively. "I can't afford to say a great deal to me. If you choose not yes to everyone." to participate, that's OK - we'll still "How many of you have done it be friends no matter anyway?" I ask. what. But I sure Nearly every hand goes up. hope you can help." "So has anyone ever lost or In other words, damaged a friendship because of a when you ask, you charitable request?" give the person The room goes quiet. We all look at explicit permission each other, sitting on our hands. to say no. There's no I've asked this question of thou· pressure involved. sands of people. Perhaps one out of 50 Given your will talk about a friendship gone sour passion and the due to miscommunication or inappro- power of your cause, some will say yes. priate expectations. The other 49 of us I promise you that they will be grateful sit silently, wondering why our fears for the opportunity to participate. are so disconnected from reality. "But I don't know anyone who Most of us have been raised to has money!" solve our own problems and not Almost a decade ago, after several trouble anyone else. Independence, positions with a variety of grassroots we've been told, is the great American groups, I left a steady job to start a virtue. Asking for help somehow consulting practice. Financially implies we're not clever speaking, I leapt into the void. My wife enough or strong enough _ it's was working at the time, finishing up a ,ç""", REACH . www.artsreach.com. 1·415·883·3414 "I Can't Ask My Friends!" And Other Board Fundraising Fallacies Thisl\ftide is a~ted from BiI'~ ~ $,!nijiGI'OU~: 'A ~~ Membllr'S I~ Çã ¡¡øe :to ~~\I,,",~ of $§Ðå·tðß;OØØ. I;~W\tñ permission of Emerson & Church. publisherS. To order. caU5Oa.359.ool'tOrvisit www.c°Mribution!t~~.riM.cOm. long career as a Montessori preschool teacher - another highly paid profes· sion. The two of us, working full·time, had a combined income of about $35,000, which I guess landed us somewhere in the middle class. We gave away money: $25 to one group, $50 to another, sometimes as much as $100. At the end of the year I added up our donations and discovered we had contributed a total of $2,500. That startled me. I added the numbers twice, because I didn't believe it. Apparently we were "major donors." Let me tell you about our lives. We lived with our daughter in a tiny rented house; a sweet and comfy home, but less than one thousand square feet. Many of my trousers were (and are) frayed, because I hate to go shopping. I drove a 1981 Toyota with 200,000 miles and no air conditioning - in Tucson, Arizona. If you saw me in that car, the last thing you would have said is, "There goes a major donor!" I'm happy to report that business is good. I now earn about twice what my wife and I used to earn together, which has made it possible for her to stop working. We have a policy of tithing, or giving away 10 percent of our earnings. In a recent year, this totaled about $7,500 in charitable donations distributed among nearly one hundred groups. Until a few years ago, when we abandoned the desert for the woods of Vermont. I continued to drive my hard· working (and very warm) Toyota because I wanted to prove a point. There's only one way to figure out how much money individuals can give you - and it's not what they drive, not where they live, not what they wear. You don't have access to your neighbor's bank statement. right? The only way to find out how much someone can give you is to ask. In my ongoing campaign to demystify fundraising, I tell a lot of groups about my income, car, house, giving, and so on, and it generates some interesting responses. One man stood up and talked about his grandfather, a farmer in North Dakota. "He lives pretty simply," he said, "but I know he supports his favorite organizations. If my grandfather knew that people were sitting across town saying, 'We can't ask Pete for money. He's too poor. Look at his tractor,' it would make him crazy. He would say, 'Have you studied my checkbook? Have you looked at my bank account? How dare you make that decision for me.''' So let's keep this simple. Fundraising boils down to two jobs: . The asker - that's you - asks for the gift. . The decider says, "Yes, I choose to give," or "No, I'm sorry, I choose not to give." Do not confuse these two jobs. Don't make decisions for other people based on your extremely limited knowledge of their finances. Don't screen them in Of out based on rumor, hearsay, or the condition of their automobiles. You may have seen a story in the New York Times that profiled the work of two philanthropists: Ted Turner (you know who he is) and Oseola McCarty, an African-American woman from Mississippi. She made her living as a domestic worker, taking in laundry. When she reached her eighties, she donated her life savings - $150,000! - to create a scholarship fund for black students at the local university. "I can't do everything," she said, "but I can do something to help somebody. And what I can do, I will do. I wish I could do more." When you hear "major donor" and "philanthropist," you probably don't think of people like Oseola McCarty, and that's too bad. For every story like hers featured in the news media, hundreds of thousands remain untold. Remember, 70 percent of American families donate to nonprofits. You're surrounded by philanthropists. Knowing people who have money is Ready for professional e-marketing? Are you still using Outlook? Are you building segmented e-mail lists? Is your e-mail getting deliv- ered? Are you complying with the anti-spam law? Let us show you why over 350 arts & cultural organi- zations use Patron Mail. We focus on the arts - and combine our industry expertise with the most affordable and comprehensive e-mail marketing system. irrelevant; the question is, do you know people who give money? Of course you do. And you won't know how much they can give until you ask. Prospecting: Looking Beyond the Locals We often use the word prospect to describe potential donors. Generally speaking, prospects meet the follow· ing criteria, which are arranged in order of importance: · Contact: Do they have relationships with you, other board members, staff, key volunteers, or other donors to your group? A direct personal relationship is best, but an indirect relationship - for example, a friend in common who opens the door - is often sufficient. · Belief: Do they care about your cause, issue, programs, or constituency? · Ability: Do they have money or other resources to give? It's wise to See ASK, page 4 ~ttJuJidu .- anltlllns-ffllt!! TIll follo:nri.., data an alDlllltJolIkuI: _....,.'..1.. (V.....IIo~'. Uo~' s....)"...u s._.,......2aI Contact us to request a free 1 S-minute demonstration and see how easy and affordable PatronMail is. (212) 271-4328 ext.117 info@patrontechnology.com ¡:aLrg~!:gy.com ,cr,úREACH. www.artsreach.com. 1-415-883-3414 ASK continued from page 3 assume the answer is yes, since you won't really know until you ask. People who meet these three criteria are prospects and should be asked for support. According to demographers, the average American adult knows roughly 200 people, so most of us have the raw material to develop a good list. When looking for prospects, it's appropriate to start with your neighbors, since you probably have the strongest relationships with people who live in your community. These folks are most affected by the problem you're trying to solve. They're the ones most likely to use your services. However, savvy fundraisers understand that relationships are more important than geography. Don't limit yourself to the locals. In compiling your prospect list, consider the following folks. Former locals. About twenty percent of Americans move each year, but many retain ties to their former homes. Children grow up and move away, but still feel connected to the places they were raised. Even if they see no direct benefit from your work, these people appreciate what you do from a distance. Friends and family elsewhere. Stay in touch with family and friends who live somewhere else. They might surprise you. Part-time locals. Many rural areas include second home owners. Some of these folks spend long periods in their second home: Florida all winter, www.artsreach.com SUBSCRIBE TODAY 1-888-881-5861 LQÍdJ REACH .- John Zorn Publisher & Editor Kira Ruvo Art Director - Volume XIII Issue 4. 2005 Advisorv Council Carl Bloom, Carl Bloom Associates, Inc. Bob Budlow, Consultant Josi Callan, Museum of Glass Robert J. Cohen, STIR Project Mark Grimes. Grimes Communications, Inc. Judith Heir, New York Philharmonic David Kitto. Kennedy Center for the Performing Arts Jim Kouzes, The Tom Peters Group Charlie Wade, Atlanta Symphony Orchestra cçý"k,REACH. www,artsreach.com. 1·415·883·3414 Maine all summer, and so on. Others visit their vacation home nearly every weekend and holiday. Many second home owners intend to move or retire there and identify strongJy with the landscape, people, and values of their adopted community. Given their financial circumstances - it's not cheap maintaining two residences - these people are also candidates for major gifts. Keep flipping through your mental Rolodex. (Going through your real Rolodex, personal database, or little black book is a good idea, too.) Who do you know who might be willing to help? Thy Neighbor's Donor If the word you hear most often in fundraising is "no," then my vote for the most annoying word is "competi· tion." With more than one million -", I'I""~ -.... /:"' ('j"~""'''I:;'',,1 !.,., ,,! ~,h<h" ~ *, ,I I' .:.11....1 -..... /' . ",""'"'c- r~''''-'''-'~'- . " ~~;~:;;:~'ft, ...... - ............... ..............,..- Arts Reach serves as an interactive forum far arts management professionals, and it wekomes articles, opinions. questions. and letters. Please send typed manuscripts or letters to Arts Reach, 38 Holliday Drive. Novato, CA 9';949. To be returned, all materials must be accompanied by a self_addressed,stamped envelope.Thank you. Arts Reach.lsSN \065-81 30, is published eight times each year (january, March. April, May,July, September, October, November.) by Arts Reach Unlimited. 38 Holliday Drive, Novato, CA 94949. Phone 1-800-793-3342, Fax 415-883-7565, email ceo@ArtsReach.çom.Copyright2003. Third-class postage paid at San Anselmo, CA. POSTMASTER: Send address changes to: Arts Reoch, 524 San Anselmo Ave., San Anselmo, CA 94960. Annual Subscriptions: $119 USA. Canada and foreign:$129 (U.S. funds only). Back issues are avail- able at $11.90 each. Reproduction in whole or in part is allowed with written consent only. Views expressed herein are those of the author exclusively. All articles are true and factual to the Publisher's knowledge: however. the Publisher accepts no responsibility for any errors contained herein. nonprofits in the U.S., it's undeniably true that donors have a lot of options. They also have to sort through a maddening degree of duplication, since thousands upon thousands of organi- zations have overlapping missions. Unfortunately, "competition" implies winners and losers fighting for finite resources. As I hope you've seen by now, philanthropic scarcity is a myth - individual Americans give away more than $200 billion per year. There's plenty of money to take care of us all, especially if you're willing to invest some time and energy in the $500·$5,000 neighborhood. Most people who donate money spread it around. According to some studies, the typical donor family supports five to eight organizations per year, and millions of contributors support ten or more charities annu- ally. They often cluster their giving by category: some focus on the arts, others on health, still others on education or the environment. So how do you find the names of likely supporters outside of your immediate circle or network? Fortunately, most nonprofits are nice enough to acknowledge their donors in their newsletters, annual reports, event programs, and other publications. They often sort their donors by gift levels - Benefactor, Angel, Archangel, Suo preme Deity - which gives you a pretty clear idea about how much each person contributes. To expand your own prospect pool, consider the following: Contact all nonprofits operating in your area whose mission or constitu- ency overlaps yours in any way, including local, regional, and national organizations. Ask for their most recent annual report and request to be put on their mailing list for newsletters. If they only distribute newsletters to paid members, consider a donation to join the group. Photocopy donor lists from these publications and share them with Our campaigns are known for stimulating growth. your board, staff, key volunteers, and significant contributors. Ask them to mark off any names they know, especially if they have postal ad· dresses, phone numbers, and/or email addresses. Compare these lists to your own. If you see any of your supporters, note how much they give to other groups. With luck, you'll discover that some of your $50 members are giving $500 or more to other organizations. These folks should be prioritized for major gifts visits. If you diligently collect lists and "screen" names, your fundraising effort will benefit in at least two ways: you'll have lots of people to solicit, and you'll begin to build your fundraising team by engaging board, staff, and volun· teers in the process. I!I] Andy Robinson is a trainer and consultant based in PlainfieJd,Ver- mont. His other books include Grassroots Grants, Second Edition and Sellin. Social Chan.e fWithout Selline Out).You can reach him at andyfund@earthlink.net. ..,' .~ f, ~ ... ... '..~". At SD&A, we understand that the arts are about people: those who perform, those who attend, and those who provide the resources and infrastructure to make each performance possible. SD&A Teleservices, Inc. The Industry's Only Provider of Call Mattager, a Computerized Lead Management and Dialing System that Delivers Increased Speed, Performance and Efficiency to Onsite Campaigns For more than 20 years, our people have been working with great success to meet the marketing and fundraising needs of arts organizations across the country, striving to make the world a little brighter with every campaign we design. For more information contact Mary Jane Avans (678) 904-1583 or mjavans@sdatel.com. Visit us on the Web at www sdats com .""~ + ._"m"","w" + wõ"~~" II Before ou Begin Your Fundraising Campaign ead This $ Gift Range # Gifts # Prospects Total $/Range Prospects Solicitors g,. ~ uccessful fundraising begins _ ],,>_ with an interesting conun· ,. drum. The most effective strategy - face to face solicitation - tends to make board members and volunteers (not to mention many professionals) the most uncomfortable. In other words, we tend to avoid the approach that raises the most money for the time and energy invested. Instead, we focus on less effective strategies that feel less risky but offer smaller rewards. (For an analysis of these barriers and how to work through them, see Arts Reach, Volume XIII, Issue 4.) Face to face fund raising has several advantages: ,/ You can talk with prospects to learn how their interests dovetail with the work of your organization. .I By communicating your passion for the mission, you make the case in a personal way. ./ You can respond directly to questions or concerns. .¡ You can bring visual aids - maps, charts, photos, site plans, or blueprints. ,/ It demonstrates your commitment to the cause. Not only are you giving your time and money, you're showing courage by meeting with donors to solicit their support. When making visits to your prospects, in most cases you'll have better luck going out in teams of two. Novices are some- times afraid the donor will feel "ganged up on" when two solicitors $5,000 Chart 2 "¡",,,REACH. www.artsreach.com. 1·415·883·3414 $ Gift Range # Gifts # Prospects Total $/Range PA~~ . . . come to call, but the advantages far outweigh any potential problems. ./ In the traditional model, one solicitor - often a board member - "opens the door," while the other solicitor - typically a staff member - provides more detailed knowledge of the program. ./ At any given moment, one of you can be the "designated listener" and fully concentrate on what the prospect is saying, rather than thinking three steps ahead in the conversation. ,¡ It helps to ensure continuity with the donor. If one solicitor moves on to a new job or a new city, someone within your group (the other solicitor) still knows the donor on a face-to-face basis. ./ Prospects are sometimes flattered by all the attention: "They sent a delegation to see me, so I must be important." II' Finally, two solicitors strengthen each other's resolve and provide moral support Regardless of whether you make these visits alone or bring a colleague along, do everything you can to meet with your donors and prospective donors in person. If You Don't Have a Goal, You Won't Reach It When raising money from individu- als, we're concerned about two sets of numbers: how many danors participate and how many dollars they contrib· ute. In a typical annual campaign, $5,000 $2,500 $1,000 $ 500 Chart 1 3 15 (5.1) $15,000 This article is adapted froII'I 8\2 Gifts for Small Groups: A Board Member's I-Hour Guide to SecurinC Gifts Qf $590 to s.s,Q( Q,l\eprin~ with permission of Emerson & Church, publishers. To order, call 508-359-00 19 or visit www.contributionsman:zine.com. ,¡ The top 10 percent of your donors contribute 60 percent of the financial goal; ,¡ The next 20 percent of donors contribute 20 percent of the goal; ./ The remaining 70 percent of donors provide the balance: 20 percent of the goal. In other words, most organizations rely on a handful of major donors to generate the majority of their unre· stricted income. Using this principle, you can set a campaign goal and then calculate how many donations at each level you'll need to meet that goal. With the title of this book as a guide, it would be possible to create a $50,000 gift chart focusing on major gifts of $500 to $5,000 (see Chart 1). This is a flexible model. sO adapt it to your own circumstances. Note the ratios: 5: 1, 4: 1 and 3: 1, These are estimates, but the implication is clear: for every $5,000 donor, you will need to identify about five $5,000 prospects. After you have compiled a list of prospects, a team of board, staff, and other solicitors corne together to review the list, match prospects to amounts, and assign them to solicitors. This is often called "rating" the prospects. For example, the expanded internal version of the first line of the chart would look like Chart 2. 3 5 12 21 15 (5: I) 25 (5:1) 48 (4:1) 63 (3:1) $15,000 $12,500 $12,000 $10,500 I. 2. 3. (continue the list to include 15 slots) Prospect rating is an exercise in organized gossip. "Ed, you put Sandy Yang on your list. How much do you think we should ask her for? Does anyone else know Sandy - maybe you have an opinion? Okay, let's put her down for $_. Ed, are you willing to be the solicitor? Great - who would like to help Ed with that one?" Bring lots of pizza and beverages, because the process takes awhile. It's also a good way to test the feasibility of your goal. From the sample chart above, it should be evident that you'll need lots of prospects - about 150 in this case - so you'll want lots of helpers combing through donors lists, thinking about their own contacts, and compiling names. As mentioned before, fundraising is a volume busi- ness. If you can't fill all the slots - in other words, if you're lacking enough prospects, solicitors, or both - you may have to lower your sights or delay your campaign. Before You Ask Others, Give Money Yourself There's karma in fundraising, and I can pretty much guarantee that if you're not giving, you're not getting. I don't believe in setting board quotas - in other words, "Every board member has to give at least $1,000" - but I strongly believe that all board members must give to the best of their abilities. Here's appropriate language: "Because you're a leader in this organization, we expect to be one of the top three charities you support this year." There's no way to enforce this - you're not going to subpoena everyone's check· books - but it sets the right tone. It also means that if $100 is a stretch for you, your organization should graciously accept your check for $100 or perhaps your commitment of $8 per month. Maybe you're one of those board members who say, "I give my time, which is more valuable, so why should I give money, too?" You're right about the time commit- ment: it is more valuable than money. But in your role as board member you need to give both time and money. Here's why. .t Fundraising is part of your job, and you'll be more effective if you do what you're asking others to do. .t Despite what you've heard, time and money are not convertible - neither the phone company nor the landlord are willing to accept your time in lieu of cash. ¡ Sooner or later, you'll be asked this question by an individual prospect, foundation officer, or corporate funder: "How many of your board members give to the organization?" And if you can't say, "One hundred percent - every single one of us!" the prospect will reply, "Well, if you can't get your own folks to give, why should I?" To put it bluntly, board members who refuse to financially support their own organizations can end up costing their groups a lot more money than they can give themselves. Before you ask others, please be as generous as you can be. See CAMPAIGN, page 8 CAMPMGN continued from page 7 Three Keys: Honesty, Follow· Through, and Reasonable Expectations The process of soliciting a big gift generally includes three stages: I) A letter requesting a meeting. 2) A phone call following the letter to set up an appointment. 3) A visit to solicit the gift. In the next Arts Reach issue, we will walk through each step in more detail. Before we travel that road together, I must emphasize three key points. .I Honesty and transparency generate the best results. At each stage - letter, phone call, and visit - you must be completely clear about your purpose, which is to raise money for your organization. If you ambush people - if you go to see them on other pretenses and then spring the fundraising question like a loaded trap - you will annoy them and conse- quently not raise much money. "Transparency" means naming numbers right from the start: "Alice, I am writing because we're launching our first major gifts campaign and I would like to have the chance to meet with you to discuss a gift of $1,000." If that seems too direct for your comfort - or perhaps you don't know how much to ask for - try this: "Alice, I am writing because we are launching our first major gifts campaign and we're looking for gifts of $500 to $5,000. I'm not sure how much to ask you for, so let's sit down together and talk about it." ./ Don't start what you can't finish. Once you begin, you must follow through. The worst thing you can do is to mail a letter to prospect that says, "I will call you," and then studiously avoid the telephone. If you plan to lose your nerve, do so before you begin. The credibility of your organization (not to mention your personal credibility) depends on you and your teammates honoring your commitments. ,/' Begin with reasonable expectations. The beauty of a straightforward approach is that it screens out those who are less likely to give. True, you will lose some candidates at each stage, but the ones who remain will be strong prospects. If you start with a letter that focuses on fundraising, and follow up with a phone call that also explicitly mentions fundraising, any prospects who agree to meet will seriously consider your request before you even walk in the door. Furthermore, if you mention numbers in advance, they won't be shocked by the amounts when you sit down together. As for what you might expect, if you send ten letters to legitimate prospects, you will eventually reach six or seven by phone, and three to five will agree to meet. As they say in the commercials, your results may vary. With persistence and a little luck, they may be signifi· cantly better. I!'I] Andy Robinson is a trainer and consult- ant based in Plainfield,Vermont. His other books include Gras,roots Grants, Second Edition and Sellin~ Social Chan~e (Without Sellin~ Out).You can reach him at andyfund@earthlink.net. I -UPDATE What If Your Donations Were Automatic? If donations were made automatically, your arts organization could benefit in more ways than one. Guidin~ your donors to the American Express~ Donation Site (amerieanexoress.com/donate) can make it easier for donors to make ongoing contributions, and can actually increase charitable giving. Most importantly, it can reduce your or~anization's administrative costs and help increase donor loyalty. Retain Donors With Recurring Donations Leverage American Express Marketing Programs to Help Increase Donor Reach · Automatic payments with American Express are growing dramatically, fueled by strong drive-to-web marketing programs that delivered over 170 million impressions in 2004. · During the fourth quarter of 2005, American Express is offering double Membership Rewards® points for contributions made through the American Express Donation Site. · The average donation made through the American Express Donation Site is significantly higher than the industry average for charitable donations. Save Valuable Time · Recurring donations mean less time contacting donors and requesting contributions. · No need to wait for checks to clear. Donations are collected immediately and deposited in 3 business days. · Participation is easy and no cost. GeUing Started is Convenient and Easv Simply link your website to your organization's existing donation page on the American Express Donation Site (americanernrp.s.....com/donateJ · Over 1 million 501(c)(3) organizations are on our site. · American Express can assist you with tools to increase awareness of Recurring Donations on your website. Contact us tor more information on how Recurring Donations can help increase contributions to your organization. IIEElI EXF.! ESS ® Paige Bridges (212) 640·4994 paige.l.bridges@aexp.com For more information about Automatic Bill Payment go to mylifemycard.coml automaticbill.lfyouwouldliketo become an American Express merchant, please call 1-800-528-5200. In order to receive points, cash,ormiles,yourCard must be enrolled in your program of choice atthetimeofyourcharge.lndividuai program terms and conditions apply. See your program agreement for details.