Deductions: Volunteer Time, Honorariums & Gala Tickets
Our tiny nonprofit has an accountant who has been doing our bookkeeping for free. I told her she should deduct the value of her time from her taxes and, to my great surprise, she told me that is not legal. Why would that be? She could have made money during that time from a paying client.
~Time is Money
First of all, let’s be clear that time is NOT money. Time is time. It is our most precious non-renewable resource. We all have the same amount of time—24 hours in our day, but we have vastly unequal amounts of money. Few people have trouble asking for time, (“Maria, will you come to a meeting on Wed at 5?”) whereas most of us have trouble asking for money. And the reason you cannot deduct the value of your volunteer time from your taxes is that the IRS doesn’t care how much of your time you give away or how much of your time your work for pay. They care about how much money you make, and whether you have paid your fair share of it in taxes. You are correct that your accountant could sell her time to someone else, but the same is true of any volunteer. Whatever time someone spends with you doing work for free could have been spent doing work for pay. The fact that she uses her expertise for free is a very nice gift from her—a gift of time!
I recently gave a speech for which I was to be paid an honorarium. I asked that the check be made out to a nonprofit I am involved in, and that happened. I got a lovely thank you note for doing that. But then I wanted to deduct that gift from my taxes and asked the nonprofit to give me a tax receipt but they said no. I am miffed! They would not have gotten that money except for me.
You were very generous to forgo your honorarium and have it sent to a nonprofit instead, but since the money did not come from you, they can’t thank you for giving it to them. You didn’t give that money yourself and we can only get tax receipts for money we actually give. I know you don’t mean it like this, but basically this is what you are doing: you don’t declare that income because you didn’t get it, but you want to declare a gift that you didn’t give. Don’t be miffed: be pleased that the nonprofit understands and abides by the law.
I recently met with a donor who came to our gala. The tickets are $75 but the fair market value is $55 so the donation is only $20. The donor was really mad that the event cost so much. I tried to explain that we have sponsors to offset our costs and so we make more than $20 on each ticket, but he just didn’t understand. I couldn’t really explain it either and I think I damaged our relationship. What should I do?
Don’t be so hard on yourself. You stumbled through an explanation in a not satisfactory way but that doesn’t make you a nitwit. The concept of fair market value is not easy to explain to donors who are thinking, “I got this great dinner and the whole thing is a write-off.” And then thinking, “I paid all this money and most of it went to the food and hotel.” The donor probably feels a little like a stumbling nitwit himself.
In those situations, the best thing to do is apologize that you weren’t clear in the beginning with the donors but you hope he had a good time and knows that the money he paid for the ticket helps the cause he cares about. Then explain that by law, a donor cannot receive any goods or services for a donation. (This is at the bottom of every thank you letter.) When goods or services are received, the value of those must be deducted from the gift. This is to prevent egregious deductions, like people who go to a nonprofit auction, successfully bid on a very expensive item and then want to deduct the cost of it from their income taxes. This is an abuse of the tax deduction and is, appropriately, illegal.
As to what you should do with this donor, my bet is he will get over it pretty fast. Even if he could have taken the whole $75 as a deduction, the value of that on his taxes is minimal. Invite him to your office or to something related to your mission that doesn’t cost money. All relationships have bumps, but they are not permanent scars.
I am the chair of the board of an organization with a big problem. We had a great year-end appeal and a lot of people gave money. As we are getting ready to put together our spring appeal, I have learned that none of them were thanked. Several board members said they had run into people who wondered if we had gotten their gifts, but I (stupidly) didn’t think much about it. It turns out the development intern just didn’t get around to it, and because we are transitioning to a new executive director, this fell through the cracks. Anyway, I have no real good excuse and it is mostly my fault. But what should we do now?
I first want to say that although it’s a problem that thank you notes were not sent to the folks who contributed to your organization at the end of last year, the fact that you’re taking it seriously and wanting to make things right with your donors is important too. We all make mistakes and acknowledging it and not making excuses goes a long way.
Here is what I’d suggest for next steps:
Better late than never is my philosophy with thanking donors, so as soon as possible send thank you notes to everyone who donated. Apologize for the delay in thanking them without making excuses, and then include a brief paragraph that describes some of the things the organization was able to do with their support. It’s important that you do this as soon as possible and certainly before you send another appeal.
In addition, with a new executive director coming on, you have an opportunity for them to reach out to everyone to introduce themselves, saying how much they’re looking forward to meeting and getting to know the organization’s donors and acknowledging that thank you’s were not sent out in a timely way. The message this sends to your donors is that the organization takes transparency and honesty seriously and cares about how its supporters are treated. This will go a long way to repairing any damage done.
Then make sure systems are in place to insure this never happens again. Donors will forgive you once but not more often than that.
I have been reading a lot about the concentration of wealth and giving among the top 2%. Some articles claim there is a parallel decline in the number and level of people making smaller gifts. What are the implications of this for fundraisers? And do you believe that the bottom 98% of people are actually giving less? I've loved your work on grassroots fundraising for smaller organizations, and I believe in the power of the many smaller gifts and donors, but I feel pressured to focus on the 2%. Help me keep my faith in the power of the people! Thanks.
~Power of the People
Dear Power of the People,
Your question is very timely and on-point. I have also been reading these depressing reports. For readers who haven’t, and want to be depressed but also knowledgeable, this is one of the better ones: “Gilded Giving: Top Heavy Philanthropy in an Age of Extreme Inequality” by Chuck Collins et al.
However, there is also this recent report, about the amount of money that aggregating a lot of smaller gifts can create, which indicates the evidence people are using is not definitive. A huge problem in calculating who gives what is that 70% of Americans file a short form for their taxes, which means they do not itemize their charitable deductions. We really don’t know with any certainty how much they give. There are predictive models, surveys, and reports from nonprofits themselves, and these are useful but I remain skeptical that we have the whole picture of giving. A lot of very small gifts are made in cash—a bake sale by the kids in your neighborhood benefitting a local immigrant rights organization, or the legion of street and door-to-door canvassers who we give $10 to because we empathize with them but don’t want to formally sign up for the organization they represent. And of course, this doesn’t even count the amount of money given to people and organizations that have no formal status with the IRS.
Having said that, I do believe there is ample evidence that fewer people are giving, and that the vast majority of that loss is from middle and working class people. This has been going on for some time. When I first started fundraising, eight out of ten adults gave away money; today it is has dropped to just below seven out of ten. This loss reflects an overemphasis on major gifts. Very simply put, someone who works all day for minimum wage is not going to give $25 which took her at least two hours to earn when all she reads about is how wonderful it was that So-and-So gave $20,000, and someone else gave $100,000, and a foundation gave $50,000. On the websites of even a lot of social justice organizations, there will be lists of funders and major donors. Message to small donors: “We can’t even be bothered to list you in virtual reality.” My advice here is list them all or don’t list them at all.
On the brighter side, it is clear that all kinds of people from all walks of life and access to money, are giving. Will we in the nonprofit sector be able to step up and take advantage of this? Show people how much we appreciate their help? Tell them what we did with the money? That remains to be seen.
Finally, most of the people reading this column are from organizations with budgets under $2,000,000 and often way under that. So, the good news for you is that you don’t need someone to give you $2,000,000. I know one organization with a budget of $500,000 and their biggest donation is $2,500. Giant gifts can swirl all around you, but you can focus on building the power of people! This is analogous to people who are out of work and complain, “There aren’t enough jobs.” But job counsellors will tell you, “Focus on that fact that all you need is ONE job.” That only changes your attitude, which changes everything. Focus on the donors you need and pay attention to the ones you have. Build movements, not bank accounts.
Small, Local Groups Struggling to Keep Donors
I work in an arts program that serves very poor public schools in a very poor state. Without us, 2nd -5th graders in public schools in our area would have NO arts program at all. We have no government funding and little foundation funding. We have built a base of donors and we squeeze every nickel. This year I am so discouraged by the number of donors who have said they are cutting back their giving so they can give to the ACLU or Planned Parenthood. For the record, I totally support those organizations and what they do, but how can I keep our donors? What we do is still important.
I feel for you. People are freaking out and they think donating to these iconic organizations is the only hope we have of remaining a democracy. What small organizations like yours have to do is stay the course. You said your donors have cut back, which means they did not cut you out altogether. I am hearing this from many small local organizations and I think your donors will return to you when things settle down a little. Meanwhile, keep in touch with them, thank them for what they have done, and keep looking for more donors. Also, make a list of the donors who are closest to your organization and who give the biggest gifts and contact them. Either go to see them or talk to them on the phone and ask them to increase their gift. You can easily make a case that children must be able to experience art in order to appreciate beauty, express their creativity, work with complexity and have fun. You are so right that what you do is still important. Your donors will soon remember that and will return.
Hang in there.
Re-asking in Honor/Memory Donors
We receive a significant number of donations in honor/memory of individuals. Most are one time donations. Is it proper to add these donors to our ask list?
~Alone with My Memories
You ask a great question for organizations like yours who get a lot of these gifts, but the answer is fairly simple. People who make gifts to an organization in honor or memory of someone are supporting that person’s charity. The people making the gift may or may not even care that much about the charity. So what you need to do is thank the donor for their gift, leave them on your list for two rounds of asking or one year (hoping you do more than two asks in a year) and if they don’t give a second time, take them off your list. If you have an e-list open to anyone, you can add them there and keep in touch with them, but chances are they will opt out shortly. Essentially people who give in memory or in honor of someone make a good list for an acquisition appeal. And one reason this is important is that people get very irritated when they keep being asked when they have only given once. This irritation can spill over to all the charities they give to, and we don’t need disgruntled donors.
The Pros and Cons of Engaging Volunteers in Fundraising
For years I have been told that board members and volunteers need to be trained and enlisted in reaching out, meeting with donors, thanking them and asking for support. I work somewhere that has prioritized that. But all of that comes with the cost of a lot of staff time. Some volunteers aren’t very good at it with training. What’s the downside of just having staff do that work?
~Wondering about Volunteers
Your question is excellent. If we were to make a list of pros and cons of having volunteers engage in fundraising, the con list would include a number of powerful arguments: as you note, some volunteers aren’t very good, and I would add many more simply won’t do it. You can’t really make volunteers do fundraising, but you can hire staff for these positions, and if they don’t work out, you can fire them. But the downside of just having staff do the work is also long:
- At a practical level, organizations which have done a good job building a broad base of donors are rarely big enough to afford the number of staff it would take to truly steward those relationships, and even when the money is available, there is a moral question as to whether you should spend it that way.
- Donors who want to meet with staff, often want to meet with the Executive Director. A big complaint of development staff is how hard it is to set up meetings with donors.
Now we get to the important reasons:
- Many donors like to be contacted by board members and volunteers. Everyone knows fundraising is hard and so when a board member or volunteer is willing to do it for free, the donor knows that the volunteer really must care.
- Donors are often friends and colleagues of the volunteers and board members. Board members will know what is happening in donors’ lives, whether they like to come to events or not, whether this is a good time to ask for an increase, etc.
- Staff come and go with much greater frequency than board members or volunteers, and even when someone leaves the board, they remain in the organizational family in a way that a staff person rarely does, unless that person becomes a volunteer or board member.
- Having a broad base of people willing to ask, to thank and to engage with donors, builds power in the organization. Board members and volunteers who are out asking are also talking about your issues, educating friends and family about what your organization does and why it is important, and these same people are all available to write to a legislator, show up at a rally, sign a petition. Friends and family themselves engage in peer-to-peer fundraising, hold house parties, name your organization as the one to honor for a birthday, or give to in memory of someone.
- Every nonprofit organization is part of something far bigger than its own mission. We are part of building communities and even a country we can be proud of. We cannot “staff up” to meet our bigger mission and so the time it takes to work with volunteers is always worth it, even when they are not terrific. Successful fundraising requires a focus on the big picture and in that picture—the picture of a successful and equitable democracy—activist engagement is critical.
Preparing for the Trump Administration
How bad are things going to get under President Trump and what can we do to prepare?
~Sick at Heart
First I have to say I am not a psychic. I have no idea how bad things are going to get. For some people, things are already bad. We have not been living in an idyllic universe. Much of what will happen was already underway—racism, sexism, fracking, drone strikes, environmental destruction, concentration of wealth, deepening poverty—name your issue and you can easily see that oppression is not starting from scratch with this new administration.
To prepare, I would suggest forming your own opinions about all kinds of questions that affect fundraising. Learn the arguments for and against and be willing to engage in deep conversation with your donors, your board members, other staff, and whomever you can.
Many organizations have discovered that their donors are stepping up in a much bigger way than ever and wanting to connect in a way they haven’t in years. Those of us whose activism is fundraising need to use this time to raise big questions with our donors: What is the role of taxes? What should be privately funded and what should be publicly funded? Should there be a cap on the charitable deduction? Should the estate tax be higher? Should Donor Advised Funds be subject to a 5% payout? And so on.
And we must ask ourselves if we really believe that ‘the arc of the moral universe is long but it bends toward justice’ or do we not? This election is a setback; it is not the apocalypse.
What Is the IRS Rollover Provision?
Would you explain in plain language the “IRA Rollover Provision”? I know it has been made permanent and it is a good thing, but I am still hesitant to mention it to anyone because I am not exactly sure what it is.
~Rolling Over With Anxiety
The Independent Sector has a pithy explanation: “The IRA Charitable Rollover provision allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their Individual Retirement Account (IRA), without treating the distribution as taxable income.” What I think is puzzling to people younger than 70 ½ or who don’t have savings in an Individual Retirement Account is why pick that age? The reason is because you have to start taking money from your IRA when you reach that age. When you take money out of an IRA, you pay income tax on the distribution (which you avoided when you put the money in your IRA). This tax rate is generally much lower than the tax rate was when you earned the money, but it is still taxable. For people who have other sources of income and don’t need the distribution this is apparently annoying. So, off and on for many years, the IRS has said if you are the right age, and if you give the money directly to a nonprofit, you can again avoid paying taxes on that distribution. This law is now permanent as part of the PATH Act (Protecting Americans from Tax Hikes) signed into law by President Obama on Dec 18, 2015.
I would also say that if you want to see this information in plain English, go to any website of any large nonprofit (a hospital, university, large museum) and look at how they describe it.
Build Your Fundraising Team to Expand Your Reach
I am a development director in a big, if still civil, disagreement about the allocation of my time—should I spend less time reaching out to annual fund donors giving unrestricted donations under $1,000 so that I can spend more time on major donors, many of whom support specific projects? I feel strongly that neglecting smaller donors would be a disservice on many levels, including the value of community building which may not be as obviously useful as the financial implications.
Could you give me your opinion about whether you think it is worthwhile to have a development person allocate time more evenly versus what my ED wants, which is for me to double up efforts to reach out to major donors and just do the bare minimum to keep everyone else donating.
~Go Wide or Go Deep?
Dear Deep and Wide,
Many decades ago, I was in a women’s consciousness-raising group and a harried mother of two toddlers said she just could not get everything done and had asked her husband if he would rather have a hot dinner or a clean house? Imagine her surprise when the leader said, “How about if you ask him, ‘would you rather make dinner or clean house?’”
Your instinct that all the donors deserve attention is correct, but the work culture in which you are the contact point for all donors is not. There is no reason why you can’t reach all the donors, if you work on finding volunteers and moving your ED into much more active fundraising. The board is an obvious place to start, but they may not be a possibility. Major donors are sometimes happy to help with other major donors and long time donors are often flattered to be asked to do something besides just giving money.
So my first piece of advice is to build a team of people which you manage and take yourself out of the center of donor relations. My second, and unsolicited piece of advice, is to start asking major donors for unrestricted gifts. Most of them understand the need for that and often will move away from project based giving. In fact, when we trace back why Major Donor X only gives to Project Y we find that is because she was asked for Y and not because she said, “I only love Y!” The great gift of individual donors is the lack of strings on their giving.
Good luck with this culture shift. It will not be easy but it will be worth it.
A Kind & Common Sense Approach to Donor Relations
I solicited many of my personal contacts for my organization a couple of years ago. About ten of them gave, and of those ten, two or three have continued to give in response to appeals from my organization without any follow up from me. This year I signed up to follow up with about eight of my personal contacts that are still on our donor list but haven’t given since I asked in 2013. I felt obliged to be upfront about letting me know if we’ve been asking too often and/or if they’d rather us take them off our list—that it’s OK if it was just a one-time donation in 2013. A couple of them responded by giving generously again, while other asked politely to be removed. Am I undermining our efforts or is this just good donor relations practice?
I think what you did is exactly right. All of us who give away money (and remember this is about 70% of the adult population) have multiple motives for making the donations we make. Sometimes we just want to make a friend happy so we give to her cause. We are probably not against the cause, but it is also not going to be a regular thing for us. In those cases, it is a little annoying to be asked over and over. For you to let your friends know that their gift was put right to work and if they want to give again, you invite and welcome that, but there is no obligation seems kind and thoughtful. “Good donor relations practice” ought to be built around kindness and common sense, both of which you seem to have in abundance.
Thanks for writing.
The Psychology of Fundraising Goals
My organization is in the middle of our fall campaign and each staff and board member has committed to reaching individual goals. I was close to reaching my goal last week and entered some “offline” donations to my fundraising page. Then I remembered that I had just sent out a couple of email asks, and didn’t want to dissuade people from giving if they saw that I was at or over my goal. So I upped my goal by $500. Does any of this matter? What’s the psychology behind this? Are people more or less likely to give if you’re way behind, almost at or over your goal?
May be over thinking this,
~Close to goal
The purpose of a fundraising goal is to let donors know how much a project or program is going to cost. When you create your own fundraising page with a specific goal, that amount is presumably the share you have agreed to take on in order to help the organization meet its overall goal. In general you don’t add to the goal. The goal stays constant so donors can feel happy when the goal is reached or exceeded. However, I doubt you have done any damage so I wouldn’t worry too much. The people who have already given may not remember the goal and will probably not return to your page. You can also always send an email to everyone who gave saying that the interest in the project was so great, you decided to raise the goal, and now you have met the raised goal amount! Yay! To answer your last question, people rarely give when the goal is already reached, and they often don’t give when you are way behind, which is why we try to start our fundraising with some of the money in hand. But ultimately, the goal is not why people give. They give to meet a need or make something happen—keep focused on that.
Tooth Fairy Fundraising
How would a small nonprofit go about securing a major gift of $500,000-1 million? I know it’s not impossible. My organization is almost 30 years old and we haven’t really grown since 1990. I have just started here, but I can already see that half our time is focused on fundraising. We could do a lot more for the community if we could just take a year or two to be mission focused. Being mission focused would be the purpose of the large gift and we could stop raising money in nickels and dimes. How can we find a really major donor?
~Small Group Seeks Big Donor for Meaningful Relationship
The only way I know that an organization finds major donors is by asking the people who already give money for referrals. “Do you know anyone who could help us with a gift that is the same or bigger than yours?” People tend to have friends in their own economic bracket, but some are a little better off and some are a little worse off. We ask our donors to introduce us to their better off friends. It is often surprising how quickly we find major donors using this method.
Personally, I do not see the separation you are making between fundraising and program. The strength of your program is measured in part by the number of people who take their hard earned money and give you some of it. To want to take a couple of years off from fundraising is a sign to me that your organization needs to work more on integrating fundraising and organizing. If you were to find a major benefactor, and take two years off from fundraising, what would happen in the third year? Your donors would be gone and you would be worse off than you were before. And do you want to be so beholden to one person? And do you really think that one donor would want to be the sole source of support for your organization for two-three years?
Rather than using this tooth fairy approach to fundraising, I would invest in an organizational assessment to see why you haven’t grown in all these years. What is the organization doing well and what needs improving? This assessment and the plan that would naturally arise from it will strengthen your organization far more than a one time very large gift, even if you could find such a thing.
I am about to take the plunge. For years I’ve listened to many fundraisers stress the importance of segmenting your donor lists. For a variety of reasons including laziness, being too busy, and poor software, I have not yet done this.
But there are other reasons that I never see anyone mention. I just processed a donation from someone whose last gift was in 2003. He was responding to the newsletter. This has happened many, many times in the years I’ve worked here. Had I gotten around to segmenting, I would probably have left this person off the newsletter list and might have missed this donation.
So, I’ve been loathe to actually remove anyone who is still alive from the mailing list without their request to do so. This also leaves me in a quandary about how to segment and what categories to use.
~Leaving them off without leaving them out
I am an enormous fan of segmenting and my experience is that, when it is done right, it saves time and results in greater donor retention (which can be measured) and greater donor happiness (harder to measure but very important).
Segmenting basically means trying to meet the donor where they are. For example, organizations that have large galas or other kinds of big events often find that there are people who only go to those events and do not respond to any other requests for money. In fact, if the organization doesn’t have the event one year, those people don’t give at all. So, I wonder, why send them extra appeals? Just invite them to the event and keep them on your e-newsletter list.
Some people only give once a year. No matter how often you ask them, they give once. And they may be complaining about you to their friends, “they ask me all the time.” So, suppress their names for multiple mailings. On the other hand, some donors (and may their numbers increase) give every time they are asked. We might add an extra appeal for that segment or invite them to become monthly donors.
One segment of donors I think about are those who are working low wage jobs who really stretch to make a donation of $35 or so. I don’t think they assume their money is being used to keep people on the mailing list who don’t give or who only give every few years. For that reason, I don’t worry about taking someone off the list who gives very infrequently.
But let’s look at how segmenting could help in the case of the person who responded to your newsletter after 12 years of silence. From now on:
- Take all the people who have not given in two years or more and send them a friendly letter saying, “We love having people on our mailing list who want to be on it, but feel badly if we ae sending you mail you really don’t have time to look at. Can you use the enclosed card to let us know whether you want to stay on the list or not?” The card has three choices, “YES” “NO, I wish you well but have too much to read already” and, “You can move me to your e-list and will keep up with your wonderful work on-line.” I am assuming the donor you reference would have sent this card back. But there are people who are getting your newsletters who don’t want them–no offense—and they will use this as a chance to tell you that. The majority of people who haven’t given won’t send back the card because they throw away everything you send them. SO, now a segment arises: take them off your mailing list for one year, then write to them and say words to this effect, “Did you miss us? We missed you and would like to have you back on our list. Please contribute.” You want people on your list who have indicated they want to be on it, and I would say have indicated it more frequently than one gift every 13 years.
Rewarding Good Work with More Work
I have been a development director for the same organization for five years, and everyone agrees I have done a good job. Every year we have increased the number of donors we have and the income from them; we have more foundation grants and we have a board that, for the most part, helps with fundraising. Obviously I haven’t done this alone, but people give me a lot of credit. I work hard and I work a lot. Here’s my problem: Every year, the board and the executive director increase the amount of money we need to raise by at least 20%. That means that since I have been here the budget has doubled. I feel like the reward for doing good work is more work. I can’t keep up this pace. Should I quit?
~Morale Sinks As Income Grows
You could quit, but before you do that, I would suggest following the old adage, “When all else fails, try honesty.” Talk to the executive director about how you can’t keep up this pace. It is possible that everyone feels the same way but no one wants to be the wet blanket that asks whether the organization can maintain this pace. Also, how about asking for some more staff? You are overseeing a development operation twice as big as when you started with the same number of people. Even one more person would be a big help. Finally, your income increases need to be tied to mission and program needs. Is this kind of growth in your strategic plan? When does this pace of growth end? You are taking far too much responsibility on your shoulders and it is time to share the burden.
Our organization has been asked to present our request for funding in person to a panel of decision makers, along with a number of other organizations. They call it an “Oral Docket.” Have you ever heard of such a thing? We are not very good public speakers and I feel we will be at a disadvantage because of that. It seems really unfair but we have to do it. Do you have any tips for us?
~Frothing with Fear
Actually I am a big fan of oral dockets, and I would reassure that the funding does not just go to the best presenters, but often goes to the presenters of the best projects. Oral dockets are used by some community foundations, local United Ways and service clubs as a way for decision makers to meet the people involved in the organization and to ask questions directly. While it may seem unfair, it is no more unfair than relying on a written proposal which favors people who are good writers. Good fundraisers need to learn presentation skills, so think of this as a crash course in something you need to know. Here are a few tips:
- Pick the two or three points you most want the funders to remember and build your presentation around those.
- If you use PPT or handouts, don’t read from them, but look at the audience and address them directly.
- Give examples and tell stories. Your own story is always interesting—how did you get into this work? Why is it important to you?
- Use statistics sparingly and compare them to something. For example: Compare these statements of the same statistics:
4% of CEOS of American corporations are women.
4% of CEOs are women—in fact more men named John are CEOS than the total number of women.
115 people were killed by police in the United States in March.
115 people were killed by police in the United States in March, which is more than have been killed by police in Great Britain since 1900.
- Say how much you want at the beginning of your talk and again at the end.
START: “We are seeking $25,000 to deliver healthy fresh vegetables and fruit to the food deserts in our communities. Before we get into that, let me tell you what a food desert is and where they can be found here.”
END: “And so that is why we are seeking $25,000 to put an end to food deserts, and thus to insure that the residents in our poorest neighborhoods are not deprived of basic nutrition.”
Finally, keep in mind that the people listening to you are on your side. No one wants you to do badly. Further, you know your issues and you care a great deal about the work you do—this is your chance to share your passion and your commitment. The secret of a good presentation is preparation and practice, practice, practice.
Focus on your mission and not your fear and you will be fine.
Best wishes to you.
Accepting “No” & Moving On
I am the executive director of a small environmental justice organization focused on organizing a community to stand up to a large and highly polluting CAFO (Concentrated Animal Feeding Operation.) We have recently had some victories but need to keep pushing. One of our board members comes from quite a wealthy family and he has been very generous himself plus raised a lot of money from family and friends. But recently we needed an extra $10,000 very quickly so I went to him and he said he couldn’t give anything right now. I didn’t say anything but I was really upset. The man has more money than all of us put together! I need to get him to change his mind. How can I do that?
~Frustrated in Pig Land
I can’t help you “get him to change his mind.” What I can hope to do is get you to change your mind. You are letting his wealth get in the way of your common sense and of what you know about fundraising. You exercised your right to ask him for an extra gift and he exercised his right to turn you down. That is all that happened. Fundraising is an invitation, and when anyone is invited to do anything, they can accept or turn down the invitation or take a rain check. Fundraisers should not be in the business of “getting people” to do anything. We are not in law enforcement. What you need to do is find some other way to raise $10,000 and not be so dependent on one person.
I wish you luck with the important work you do, and I can tell you that many, many people are rooting for you and will help you if you reach out and ask.
The Case for Building a Broad Base of Donors
We are being advised by a consultant to stop trying to build a broad base of donors and instead to focus on high net worth individuals and seek six figure gifts from them. The consultant says it will be faster and more lucrative which makes sense to me. Why do you advise focusing on small gifts?
Seeking Efficiency and a High ROI
My focus (and the focus of all good fundraisers) is on asking people you know for money, and then asking the people you know who they know who might also help you. If you hang out with high net worth individuals who are also generous donors, then I would agree with your consultant that you should ask them. But why would you only ask them? Why not ask everyone you have access to who cares about your cause? I have the feeling, though, that you don’t know these people which is why you are writing to me. Your consultant will probably advise a number of ways of meeting these people and that will keep you busy. In the meantime, you will not have small or big gifts. Whatever strategy you choose, keep these things in mind:
- Wealth has little relationship to generosity. Many wealthy people give very generously, and many more give relatively little compared to their ability. The same can be said for middle class, working class and poor people. Don’t confuse having with giving.
- You are not the first person to think of asking high net worth individuals for money. These people are offered endless opportunities to give away their money and, like all people, are more likely to give to an organization where they know someone than an organization where they don’t.
- A person’s ability to give changes over time. People get better jobs or inherit money or make good investments. Someone who starts out at $35 may, ten years from now, be your biggest donor. But I can tell you that this person won’t be your biggest donor if you don’t respect the gift he or she gives now. The same is true for your biggest donors: the market crashes, their house goes underwater, they are a victim of a Ponzi scheme, and they have to stop giving.
You want your fundraising to be efficient, and that is not a bad thing. But fundraising is about building relationships, and relationships are based on respect, affection, shared interests, and so on. Relationships are not built on efficiency. Nor do donors love to be thought of as part of your ROI. They want to be part of accomplishing your mission, and you may want to return to that in order to determine what fundraising strategies make the most sense for your organization.
The Importance of Having Honest Conversations
I am the sole staff for a small literacy program in a suburb of Chicago. We have a wonderful board except for one member who is new and is proving to be quite difficult. We invited her on at the suggestion of our biggest donor. She is very critical, bossy, and constantly saying, “I don’t think Ellen (our big donor) will like this.” Some of the board members have just stopped coming to meetings and the last meeting we didn’t have a quorum! She has now volunteered to head up our year-end fundraising efforts. She does give generously and seems to know a lot of people, who seem to like her. What is it about us that brings out this side of her? We don’t want to offend our big donor, but we can’t go on like this and no one is going to want to work with her on fundraising, which is going to set off a new round of criticism.
Feeling hopeless, but otherwise fine
I have been in several conferences recently where a keynote speaker begins by saying, “XYZ issue is the biggest challenge facing our world.” It could be climate change, unemployment, rising income inequality, racism, human trafficking, etc. So even though I am not a fan of saying, “The biggest thing…” since there are so many big things, I would certainly say that a major reason why organizations get into the situation you are in is our inability to have honest conversations. Here is what I would do: Start with the Quaker adage, “Assume good intent.” Assume she wants to be a good board member and she wants to be well thought of by you and the other board members. She may be nervous and showing off. The board chair and you can ask her to lunch and tell her that you know she means well, and has good ideas, but her way of expressing herself is driving people away. Name specific examples, particularly of when she had a good idea that she expressed in such a difficult way that no one could hear it. I know it will be hard, and she may not be at all receptive. If she is not, then you can say, “The way you are reacting is making it hard to have this conversation.” Stick to focusing on her process of communicating. She may not act like she has heard you at all, but wait one more board meeting. If she continues to act out, the chair will have to ask her to leave. If you are close to your biggest donor, you could consider asking her how well she knows this woman and if she has ever found her to be a little critical. No matter how hard this conversation is, keep in mind it will be harder to let her stay on the board with no feedback.
In a few months, when this is resolved one way or another, please invest in conflict resolution training. That goes for all of you who are reading this who have difficult people in your organizations!