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Identifying Donor Prospects

The Only Difference is Zeros: 10 Steps to Improved Nonprofit Development and Fundraising

Step #4: Identifying your Donor Prospects

One of the most critical steps in achieving improved development and fundraising for your organization is also one of the most energizing—putting down on paper for the first time a list of actual names that represent potential donors. And truth be told, there are as many ways to identify potential donors as there are donors themselves. While there are a handful of consistent characteristics found in each prospecting model, what is most important is whatever process you choose to identify potential donors, embrace it, use it, work it, and measure the results.

I have found that no matter the fundraising effort, capital campaign, or major gift effort, there are three fail-safe questions to ask to determine if the potential donor is truly a “prospect” rather than a “suspect”:

1.   Does the name in question have the financial ability to donate?

2.   Does the name in question have the willingness to participate?

3.   Is there someone on staff, or do we know someone, who can initiate?

There are situations where a certain person may be a HUGE fan of your organization and the work you do—but they are not in a financial position to donate at the level you may be seeking. Or, on the other hand, the person may have HUGE financial resources but has either shown very little interest in your organization in the past, or perhaps has never been exposed to the great work you do. In both instances, and while this is no reason to exclude them from your target list, it means the solicitation/donation process will be harder and take more time.

Once you have formulated your potential donor list based on the preliminary qualifications of one, they do the financial ability to donate, and two, they do have the willingness to participate (meaning the person seems to have a pre-disposition and affinity for your organization or cause), the third and final filter questions is this, “Is there someone on staff, or do we know someone, who can initiate an introduction to this person, or better yet, help initiate a presentation meeting with the potential donor? Is there a supporter of your organization (Board member/Advisory Board member/existing high-level donor/corporate sponsor) that would be willing to provide an “I know this organization and you will want to know them, too” introduction on your behalf?

With myriad organizations doing splendid work, and an endless array of opportunities for donors to contribute and make a positive difference, what becomes the game-changer in prompting a high net-worth individual or a philanthropically-minded family to choose to investigate and explore your organization? Time and time again that game-changer is the potential donor is familiar with, does business with, or admires the person who makes the call or sends the e-mail on behalf of your organization.

As you further refine your list of potential donors, remember Step #3 (Information is Currency), and begin to search out as much information as you can about those names that have risen to the top of your list. What charitable organizations have they supported in the past? What are the nonprofit boards they currently serve on, or have served on in the past? When they support an organization, is it in name and contribution only, or do they become actively engaged in furthering the mission of that organization?

Finally, if you are the person in your organization who leads the development effort, or you are a member of the fundraising team, remember that you have no greater ally than your active, researched and confidential list of potential donors. As charitable giving is most oftentimes a very deep and personal process and experience for the donor, you must also view the very formulation of your prospect list as not only essential and invaluable, but it must be handled with sensitivity and discretion.

While there obviously comes the moment when the time for preparation is over and the time for action and results begins, the focus, energy and care spent in formulating your list of potential donors will undoubtedly yield positive fundraising results—now and in the future.

Next Installment: Step #5: Get Inside the Door!

This is the fourth part of a 10-part series The Only Difference is Zeros: 10 Steps to Improved Nonprofit Development and Fundraising

-Don Stirling

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Excellence in Giving

Not too long ago I had the opportunity to listen to a wonderful speech that was given by Thomas Tierney, chairman and cofounder of Bridgespan, at the 2009 Philanthropy Roundtable Annual Meeting.  For those who have not had the opportunity to listen to it, the speech can now be found on the Philanthropy Roundtable’s website. It was a refreshing oration which I believe every donor (and nonprofit leader) would benefit from listening to. One of the focuses of the speech was to identify several brutal facts facing donors who are seeking to achieve greater impact through their contributions. Since this year, more than any other in recent memory, donors are interested in seeing their seeing their contributions stretched a little further to help more people, recognizing these facts is essential if you want to optimize the impact your philanthropy is having.  

The first brutal fact that Tierney identifies is that donors are only as good as the organizations they give to. This becomes particularly tricky when a donor considers the sheer number of nonprofits that are out there – more than a million at the latest count.

The second fact is that excellence in giving is self-imposed. It is very easy for a donor interested in average returns to stroke a check to the organization of his choice and continue on his or her merry way.  However, donors who want to see more children helped with their donation must raise the bar in their giving.  It was easy to appreciate his view that, unlike the for-profit sector, there are no predators in the nonprofit world.  In other words, if a charity underperforms, there is no larger charity that will come and absorb it. Underperformers, although often quite well-intentioned, abound in this sector.  It is left up to the donor to determine what nonprofits meet their high expectations.

The third fact that donors must face is that there are obstacles and handicaps that appear in the nonprofit sector, which are not present in the for-profit world that most donors are familiar with.  There are no capital markets for nonprofits, nor any sort of pipeline for identifying and promoting talent. Effective nonprofits must be repeatedly asking themselves the difficult questions about how they define success and how they are going to achieve that vision if they want to have the kind of impact that discerning donors are looking for.

Compound those brutal facts by this week’s press release issued by a collaborative of nonprofit watchdogs, including GuideStar and Charity Navigator, which essentially encouraged donors not to rely on overhead and fundraising ratios as a measurement of effectiveness in their favorite nonprofits: tools that have been historically used to determine a nonprofit’s efficiency.

I completely agree with what the press release had to say.  Overhead ratios do not relate to the impact that a nonprofit is having on its target population.  Not to mention these ratios encourage nonprofits to sacrifice investing in resources and talent that would increase their effectiveness but would negatively affect their ratio. On top of it all, I have never seen two nonprofits interpret the rules for determining overhead costs in the same way.

So what does that leave donors? Since excellence is self-imposed, how can donors interested in achieving more than average returns on their donation navigate the obstacles presented by the nonprofit world and find the partners that deliver the results the donor is looking for? It can be terribly overwhelming. The good news is…there is help. 

Our role at Operation Kids is to provide the research and resources necessary so that our clients can make informed giving decisions and achieve the impact they are hoping for – without taking any fees. We do this because we firmly believe that more donors giving to more effective charities results in more lives changed. If you are interested in raising the bar in your charitable giving this holiday season (or any time), contact us and see if we can help you.

 -Christopher Lindsay

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Filed under Initiative: Charitable Giving & Accountability

Giving Time.

Last fall, it was easy to get bogged down and think that the brink of economic disaster was upon us. At the same time, it was easy to become jaded as story after story ran about companies and people serving their own self interests, which helped spiral into one of the worst economic recessions in world history.

Nine months later, there are glimmers of hope – Standard and Poor reported today that the housing market might be showing the first signs of coming back, stocks have stabilized and the job losses have slowed some. What gives me the most hope, however, is realizing that humanity is still alive – that we as people aren’t letting the economic times get us down, but rather are reaching out to lend a hand to others.

Earlier this week, The Corporation for National and Community Service issued a report on the state of volunteerism throughout the U.S. in 2008. Last year, 61.8 million Americans donated 8 billion hours of service to organizations, neighborhood causes and community action groups, up 1 million from the prior year.

What is most startling – and exciting – however, is the number of people who joined together to solve community problems in less formal ways. Last year saw a more than 30% increase in the number of people joining with neighbors and community members to solve local problems – at a time when many were likely on less-than-solid economic footing themselves.

It is inspiring to hear, it is even more inspiring to see. We are lucky to be based in the state that had the highest rate of volunteerism among every state in the nation – 43.5% of residents donated their time in some fashion to a cause or community endeavor. More than a third of the population of Salt Lake City were actively engaged in volunteer work in 2008 – the third highest rate among large cities. The spirit of people helping people is contageous, and we’re grateful to be based in a community that is so committed to helping others.

Another thing that inspired me as I read this week’s report was the increase in the number of teens and college-aged youth who are volunteering – kids giving back to communities that have raised and nurtured them as they begin life on their own. These survey results and others indicate that the millenial generation really means it when they say they want to see change – they are willing to roll up their sleeves and work alongside everyone else to make an impact in their corners of the world.

With the economy and traditional nonprofit funding sources still on shaky ground, nonprofit organizations are more dependant than ever on people giving of their time – helping keep operations and programming viable as charities shore up reserves and work to help an fill an ever-increasing need.

I have been involved in a number of community organizations over the years – from literacy to helping the blind to youth programming – and my life has been richy blessed as a result. I issue a challenge to all of our readers and supporters to take a few hours of time out of your day this summer and volunteer – in your neighborhood, your community or for an organization that could use your help. Besides the warm fuzzies and feeling of accomplishment you get, it is also a great way to network, meet others and become more aware of what difference you can make as a single person.

Let’s make August a month of giving back – in gratitude and appreciation for everything we have.

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Helping Families in Need

This spring, Operation Kids teamed with musical artist Collin Raye to raise awareness and funds for families of children facing extraordinary medical expenses. One of the songs on Collin’s new CD Never Going Back, “She’s With Me,” was written as a tribute to his granddaughter, Haley, who suffers from an undiagnosed degenerative neurological disorder, helping him understand first-hand the challenges that parents of children with serious medical conditions face.

Over the course of two months many supporters helped raise several thousand dollars to help with the medical and logistical costs for families facing extreme challenges. This week, we sent a check to the Children’s Organ Transplant Association (COTA), an organization that helps provide funding assistance to families of children who need or have had a life-saving transplant. We have worked with COTA in the past and know that the money will make a great impact in the lives of several families, thanks to your generosity.

As part of the campaign, we also asked for people to submit their stories to share with others who were going through similar experiences. Several of you posted your stories on our online story hub here. We invite you to read them and share your own if you have one.

We sincerely appreciate people like those who in these economic times are so generous and willing to help where help is so desperately needed. As we receive the stories of the families who received funding as a result of your donations, we will be certain to share them with you.

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Americans Still Generous Even in Troubled Times

For some nonprofits, surviving in a time of a down economy is a double-edged sword. As both corporate and private donors tighten their belts, giving tends to trend downward. Yet, as the global economy continues to falter, demand for those same nonprofits increases. These organizations are faced with the very real problem of trying to fill a growing need with diminishing resources.

I read with interest Tuesday’s reports from the Giving USA Foundation, who does an annual report on how much American’s gave to charity the prior year. In 2007, Americans gave more generously than they ever had before – to the tune of more than $3 billion dollars. Tuesday’s report indicated that while that number had fallen during the economically turbulent months of 2008, that figure still remained above $3 billion, a generous amount, given that Americans as a whole “lost 2 percent of their wealth last year.

Still, even with the smallest of declines, nonprofits have been hit as hard as anyone else by the rough economy. People nationwide are struggling to make ends meet, to keep the lights on, their children fed and clothed. Food banks, community service programs, children’s programs and other organizations providing first-line relief are feeling the pinch more than ever, especially in some of the hardest-hit communities.

There is good news however; individuals are still contributing – even if it is slightly less. In 2008, individuals contributed an estimated $229.3 billion (more than 2/3 of all charitable giving!) – a rate of giving that fell less than corporate donations. And corporate giving as a part of the gross domestic product still hovers just above 2%.

This means that even in our toughest times, Americans are still striving to be generous people, carving out something for those less fortunate, even if it means a smaller amount. It may also be good in the long run for some nonprofits, as their leaner operations may pave the way to more transparency, better operations and more efficiency.

In the last few months, we have certainly seen evidence of incredibly generous donors, as well as improved efficiency in the way charities are thinking. I hope that this generosity and this collaboration and move to efficiency continue, because even with recent signs that the economic downfall may be slowing, it’s going to be a long time before the least of us is back on his or her feet – and there are so many programs in need of help as we say … Until Every Child is OK.

-Sara

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What Does “Transparency” Really Mean?

There is a lot of talk these days about “transparency,” the government, business and nonprofit buzzword of late. Have you ever wondered just what it reallyreally means?

To me, it means accountability, clear messaging and an open and direct path to who we are.

We at Operation Kids just concluded our annual presentation of the independent audit to our Board of Trustees. The auditors gave us a clean bill of health. This should be important to you because there is an ongoing concern over the lack of oversight and accountability in the not-for-profit world. That concern is at the very heart of our mission. We are determined to bring greater accountability and results to charitable giving and believe it must start with our own organization.

I recently read two articles that any charitable supporter or donor should find important: Searching for Red Flags Donors Might Wonder About and Charity Web Sites Come Up Short in Survey of Financial Disclosures.

A couple of quick highlights.

In Charity Web Sites Come Up Short in Survey of Financial Disclosures, the article discusses where some organizations fall short in providing transparency on their websites:

Most nonprofit groups do not offer enough detailed information about their finances, programs, and leadership on their Web sites, according to a new report that documents how much information charities disclose online. “The findings suggest that charities need to better respond to donors’ growing demands to know more”, says Dan Moore, vice president for public affairs at Guidestar.

“There’s a whole new level of engaged donors searching online for causes or for information about causes that meet their desired impact, and charities need to have that information available for them.”

This new level of engagement, means more people are looking at nonprofit organizations’ websites, financial information and their processes to evaluate efficiecy, transparency and impact.

But what, exactly, are donors looking for? According to Searching for Red Flags Donors Might Wonder About, H. Art Taylor, chief executive of the Better Business Bureau’s Giving Wise Alliance, in Arlington, Va., advises donors to focus on three key things when they research a nonprofit organization:

“First, I try to gather the seriousness of the organization from the quality of its mission statement. If the mission is vague and does not clearly articulate the programs of the organization, I lose patience. Secondly, …look to see if there are conflicts of interest among the board and staff. Third, …how long they have been in business. Given the number of organizations already in existence, a newer organization has to [be] better positioned than one that’s been around for a while.”

I welcome this type of advice, and in fact, we would push it a step further. We make it a point to get on the ground with each and every charity we support because there is no substitute for getting to know the people and seeing a program in action before we can endorse it, recommend it or act as fundraising partner. Not everyone has the ability or the access to do that, however, which make articles like these so valuable.

And while I’m talking transparency, we have just posted our updated financial statements for 2008. Check our website for updates on our operations, structure and financial reports. We hope you will find it useful and that it will guide how you look at other organizations. 

-Rick

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A Raye of Hope

I want to personally thank Collin Raye for his friendship and for caring so much about kids.

 

Collin has been on a media blitz this past week promoting his new album “Never Going Back”.  Not only has Collin been promoting his new album, but he has also been raising awareness and support for children with extraordinary medical expenses.

 

Raising money for children with medical issues is very dear to Collin’s heart because his granddaughter Haley was diagnosed with a debilitating neurological condition. He wrote a song for her called “She’s With Me”, a real tearjerker. You can hear him discuss Haley’s story and his engaging musical performances on NBC’s “The Today Show”, CBS’ “The Early Show”, FOX’s “Huckabee”, and “The Morning Show with Mike & Juliet”.

 

Also, you should check out the dozens of stories we’ve received from people all over the country who want to share their stories of heroic children and families facing serious illness. You can read these stories here and additional stories here. If you have a “She’s With Me” story of your own, feel free to leave it for other fans/parents/families to read. 

We are entering the last week of our fundraiser with Collin Raye and Time Life, and we really want to make this last week spectacular. Help us out by sharing with your friends on Twitter, Facebook, MySpace and your blogs – or via e-mail – as we work toward making a significant donation. For any donation of $5 or more, we will give you a free download of Collin’s .mp3 “She’s With Me,” the song he wrote for and about his granddaughter Haley.

A lot of artists “lend” their name to charity programs. Some lend the heart. Collin has certainly given us both and I wanted to thank him and sing his praises a little.

-Rick

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