BIG’s Blog: The “Big Change” in Fundraising

If your number one focus when you approach somebody about your organization is only on raising money, like it has been for the past 60 years, then going forward your strategy will fail.  This means that your organization, starved for revenue, fades to irrelevance.

I can almost hear it now; "What planet does this guy live on?"

Okay, let's start at the beginning ... literally. The whole “big change” in fundraising revolves around the “chicken or the egg” question, the idea of “what comes first?”

We all know that there has been a major change in attitude towards charitable giving by baby boomers and younger generations. If you've somehow missed this memo, you may be in the fundraising business, but you're not in the game. And that last point of "not in the game" describes way too many professional fundraising leaders today.

In fact, in introspective moments, several leaders of charities have shared with me that they are wondering if their fundraising efforts, and, hence, their organizations, are dead and they just don't know it yet.

What are they talking about? Unlike the commercial world where even if a company has built up a great brand over the years, if things change and sales start drying up, they feel it immediately. Not so in the fundraising world. All the work you've brilliantly done for decades with the Depression and WWII generations is paying off today in large gifts and bequests. But these riches today hide the fact that your future ... your donor file ... is growing older and shrinking. Take away bequests and ... you get the picture.

So what is the major generational attitude towards philanthropy that has changed with the boomers and younger generations compared to the WWII and Depression era cohorts?

Beginning with the boomers, institutional trust is gone. Boomers do not trust institutions and your organization (by any definition) is an institution.

Yet boomers do give … after you build their trust.

How do you build trust?

First, you build trust by not focusing on the transaction first. If you want to be successful, you don’t send a letter to a boomer and ask for money, especially if they have never heard of you before. Rather, you offer them information about the work of your organization. Information is Good but Selling is Bad. Nobody ever … ever … wants to be sold. And whether you try to pretend that sending an appeal letter isn’t selling … if you are asking for money up front … you are selling.

Second is the recognition that, beginning with the boomers, they don’t give gifts. And by gifts I mean “no strings attached.” You give a gift to your nephew at a birthday party. There are no circumstances under which you are going to take that gift back. That is what I mean by “no strings attached.”

But for boomers and younger generations, when making a donation to charities … there are always strings attached. Boomers don’t give gifts (even if they call them gifts); boomers invest in charities … and an investment is a very different animal than a “no strings attached” gift. Investments are made with certain expectations, the top two of which are Accountability and Transparency.

So, can you do all the above through a direct mail appeal program or even events?

Not even close.

When you have a mailing program, you start with some significant costs like printing, postage, etc. Let’s face it; you have to ask for a donation upfront to re-coup your upfront costs. But then, you’re back to starting with a transaction … which is selling. When you hold an event, everyone knows that you are going to ask for a donation … a transaction. The question people answer before they ever show up is, are they going to donate or not? If they choose to give, they show up, if they don't, they stay home. For those that show up, you have a chance to share what you are really about … and that’s a good thing. But those who didn’t show up never got your information.

The big change in fundraising is that you must build trust up front. Building trust leads to developing a relationship. A relationship can progress to friendship. And then … and only then … can you ask a friend to support your Cause/Mission/Ministry.

So the answer to the chicken or egg question is this: Trust comes first.

Drip, Drip, Drip.

-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com