A Transactional Nation October 30, 2006 By Steve Fafel

Are your relationships with donors merely transactional?

About 10 days ago I was at the Social Venture Network conference in Tucson, and heard Michael Lerner speak about the nature of our relationships in American society (Canadian friends and others, you'll appreciate this). Lerner is what he calls a "spirtual progressive", a Rabbi who talks about the power of generosity and trust.

At the conference he said something to the effect that relationships in America have become harmfully transactional, with people asking "are my needs being met" in marriage and friendships, and "looking for a better deal" elsewhere, a "competition of win or lose vs. anyone else.

Then he said one of the most powerful things I've heard in a long time: "is your personal income compensation for a wasted life?" Wow.

Let me try to tie these two concepts together and relate back to your donor relationships. You work at your mission for a reason. There are plenty of jobs that pay better (and btw, you deserve comparable private sector pay for your analogous nonprofit job), but you work where you do because you want to help change the world, people's lives, your neighborhood, etc. Or you want to promote something for the greater good. It's your mission, It's not just a job. Your salary is very unlikely to be "compensation for a wasted life"; if it were, you wouldn't be there.

Tell your donors that. Not in those words, but I think it's important to lose the scarcity mentality so common in nonprofits, both in how we compensate ourselves and in how we promote our causes. Your cause and your mission are shared with your donors, except you are the one on the front line doing the difficult part. You show up, and that's harder than writing the check. And your donors are supporting the shared mission with you through your work.

It's a shared mission. Asking your donors to step up and support your shared mission is easy. You provide the labor, passion, plans, and direction, and they provide the cash to keep it running. You are, in fact, doing them a service.

So when you nurture your donor relationships, understand that they must not be merely transactional. Yours is a shared mission, and while you should be grateful they share the mission enough to share the burden of keeping it going, they are also grateful for your part of the shared burden, which is the dedication of most of your waking hours to the daily tasks of improving the world through thousands of small steps. When you ask for donations, it is not for you or your expenses, it is for your shared mission.

And your income, then, is a necessary part of the shared mission, the completion of a partnership between you and your supporters. Thoughts? Click Comments below.

Giza-Googled 3: The Campaign Pyramid October 29, 2006 By RussBurke

Folks:

An important tool for any fundraising campaign is the oft-used Campaign Pyramid.  Let's say our small nonprofit is planning its first capital campaign....for $1.5 million over five years.  We believe our cause is just and our need pressing.  We've looked at the possibilities and agree (board and staff alike) that this level of funding will further our mission in strategic ways.  Just as important, we believe we can make a solid case to our constituencies.

But who will fund it?  Do we have a large enough base of support?  Do we have donors with the capacity and commitment to help us meet this goal?  Obviously, because we're new to this process, we don't have direct experience to tap.  This is an ideal time to engage a consultant to help us answer these questions.  Every campaign, with which I've ever been associated, always conducted this phase of consultant-assisted research, called a feasibility study.

Consultants work for you.  With their experience and expertise, they can ask you probing questions, solicit information from your current donors and prospects, and tell you things you are not likely to hear on your own.  One critical thing they will help you do is construct your Campaign Pyramid.   Here's a start:

This basic pyramid is just the starting point for your action planning.  Ideally, you'll be able to identify several prospects who could make a five-year commitment at each level you have pictured here.  And, hopefully, these are commitments that stand above current giving...i.e. they won't impoverish your annual giving program. 

Of course, as you refine your understanding of the capacity and affinity of your current propsects, your consultant can bring you additional information "from the field" that can help confirm or deny your assumptions and conclusions.  You can adjust your pyramid and populate it with detail that reflects the 3 to 5 prospects identified for each position.  Certainly, as you subsequently move through the campaign, you can adjust the pyramid to show commitments in hand and who will earn those important naming opportunities.

A Campaign Pyramid is a very useful tool for envisioning your prospects for achieving your goal.  But, if you haven't cracked a campaign before, and even if you have, a good consultant can make all the difference with a clearer view.

Good Luck...

  -- Russ Burke

Giza Googled 2: Giving Stages Pyramid October 29, 2006 By RussBurke

Friends:

The Giving Stages pyramid is an oft used device to help non-fundraisers better understand the total advancement effort.  It is a graphic representation of the various affinity levels you enjoy, or hope to enjoy, with your publics. 

   

In its generic form, like that above, is recognition of donor affiliation in its rawest form.  It describes the typical progressive stages that our donors move through as they become more committed to your mission.  The next step, of course, is to attach your numbers to those categories.

Don't know how to characterize your donors in this scheme?  Take a look at the aggregate annual giving per donor in your Annual/Recurrent Giver category, pick the figure that represents the median gift level and multiply that by a factor of 10.  Try that as your lower threshold for Major Givers.  See how that fits your organization's experience.  Feel free to adjust this process to better fit your organization.   

With your numbers attached to the graphic, you and your planning group can ask relevant questions, like:

Where are our resources (budget and time) currently focused?

Does each level receive appropriate stewardship?

Does each level have a specific operational plan for moving participants to the next higher level?

If we look at multiple years, can we see trends that can suggest revised planning and execution.

Another question, often is overlooked in planning discussions about new dvelopment efforts, is just where that contemplated allocation of resources will impact your Giving Pyramid.  It is easy to get overwhelmed if you live in an event-driven environment.  Organizations need balance and purposeful programming to maximize opportunities for donor realization.

Doing this exercise can be an eye-opener.  I believe it is critical for resource-strapped npos to be sure that both planned and current efforts are clearly understood and focused appropriately on the continuum represented in the Giving Pyramid.

Your thoughts are welcomed.

-- Russ Burke

Friends:

The Giving Stages pyramid is an oft used device to help non-fundraisers better understand the total advancement effort.  It is a graphic representation of the various affinity levels you enjoy, or hope to enjoy, with your publics. 

   

In its generic form, like that above, is recognition of donor affiliation in its rawest form.  It describes the typical progressive stages that our donors move through as they become more committed to your mission.  The next step, of course, is to attach your numbers to those categories.

Don't know how to characterize your donors in this scheme?  Take a look at the aggregate annual giving per donor in your Annual/Recurrent Giver category, pick the figure that represents the median gift level and multiply that by a factor of 10.  Try that as your lower threshold for Major Givers.  See how that fits your organization's experience.  Feel free to adjust this process to better fit your organization.   

With your numbers attached to the graphic, you and your planning group can ask relevant questions, like:

Where are our resources (budget and time) currently focused?

Does each level receive appropriate stewardship?

Does each level have a specific operational plan for moving participants to the next higher level?

If we look at multiple years, can we see trends that can suggest revised planning and execution.

Another question, often is overlooked in planning discussions about new dvelopment efforts, is just where that contemplated allocation of resources will impact your Giving Pyramid.  It is easy to get overwhelmed if you live in an event-driven environment.  Organizations need balance and purposeful programming to maximize opportunities for donor realization.

Doing this exercise can be an eye-opener.  I believe it is critical for resource-strapped npos to be sure that both planned and current efforts are clearly understood and focused appropriately on the continuum represented in the Giving Pyramid.

Your thoughts are welcomed.

-- Russ Burke

Giza-Googled 1: Simple Gift Pyramid October 13, 2006 By RussBurke

Folks: 

There is power in this simplest of pyramids.  With the increasing popularity of recurring giving, a raw count of gifts is less revealing than a listing of donors by their aggregate giving for that period.  With that picture in your head, the issue becomes one of how to set your giving levels.  For example, is the base group, aggregate giving of $0 through $499...or $0 through $299?  Most fundraisers will choose breakpoints that are matched by pre-existing giving recognition cohorts.

While general shape of your pyramid is telling, this information can help you see if you should, perhaps, be modifying your recognition levels.  For example, you might see that, after years of giving club promotion, what you regarded as your most promising donors were stuck at that that level.  Your pyramid had a sharp thining at that point!

For context, let's say you have a giving group of Angels who are giving at the $1,000 level. That group has grown considerably over the past five years as you have promoted and cultivated this group and status. But hardly anyone has opted, despite your efforts, to make the jump to the $5,000 Founder's Club.  What to do?

You can move the minimum commitment for Angels to $2,000 or $2,500; reduce the Founder's Club to shorten the gap, or add an interim recognition that will stand between the Angel and the Founder.  Personally, I think it is easier to add the interim step.  It provides a a more accessible "bite" for donors to swallow and doesn't abandon or devalue current givers in any way.  By gradual allocation of attention to the new level, Angels can be gradually moved to "stay in the mainstream" focus.

Got another idea?  I'd love to hear your thoughts.

-- Russ

Giza-Googled October 13, 2006 By RussBurke

Hi Folks:                                                                            (Originally posted 10/2/06)

What's that doing in a development/advancement post?  Its an allusion to the Pyramid at Giza in Egypt

The term "pyramid" comes up often in strategic or conceptual discussions of fundraising.  Off-hand, I can think of three.  There's the traditional Gift Pyramid, the general Giving Stages Pyramid, and the Campaign Pyramid...and they come from various environments:  Yours, your nonprofit cohort community, and nonprofits at large.  For now, I just want to establish some definitions for our discussion so we can discuss their value and the processes required to construct them.

The first pyramid is closest to you.  Often limited to a time span of one year, it depicts the number of gifts, sorting them in terms of size, largest at the top, divided into ranges.  It is a simple, yet powerful, graphic that is easy to construct.  Using similar charting from year to year can often reveal trends.

The Giving Stages Pyramid refers to that oft-used graphic discription of the affiliation and commitment of donors.  The "grass-roots" Occasional Giver community forms the broader base.  Your Annual Giving group typically occupies the next narrower level.  In the simple scheme, the next narrower level are Major Donors.  And the top of the pyramid is occupied by Planned Givers.  This pyramid depicts what is typically the case.

The Campaign Pyramid is a tool often used by campaign consultants to depict the scarcity and likelihood of gifts needed at various levels to complete your campaign successfully.  For example, working from the top, for a $5 million effort, there might be projected a single lead gift of $1.5 million.  At the second level, you could see two $500,000 gifts.  Perhaps a third level will propose four commitments of $250,000.  And so on.  These projections are based upon your organization's past experience, past campaign experience, feasibility interviews with key constituents and the considerable experience that consultants can bring to the process.

In future posts, I plan to look more in depth about what each pyramid really shows and how you can use them to help you--and your Board and leadership--come to terms with the resource development challenges you face.

Your comments and observations about this perspective are most welcome...