revitalizing the capital campaign
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Revitalizing the Capital Campaign. AHP Webinar March 3, 2011 J.B. Michael Farrell FAHP Principal www.philanthropycoach.ca. Session Outline. Positioning your institution and your board for success. Revisiting case development…Is it urgent…does it matter? - PowerPoint PPT PresentationTRANSCRIPT
Revitalizing the Capital Campaign
AHP WebinarMarch 3, 2011
J.B. Michael Farrell FAHPPrincipal
www.philanthropycoach.ca
www.philanthropycoach.ca
Session Outline
Positioning your institution and your board for success.
Revisiting case development…Is it urgent…does it matter?
Case studies and observations on fundraising that works in good and bad times
A look at a “New Normal” for the Campaign Model.
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What we Learned in Recession
Our weaknesses were exposedHealthcare demand was constant
relative to some other businessesSome urgent capital projects weren’tSome urgent capital projects were put on
hold anyway…fearWe didn’t have the relationships we
needed to weather the storm
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Where we were vulnerable
Leadership…rubber stamp or stagnant board
A routine caseTop-up equipment Goal by subtraction
Tactics…Annual Giving and special event driven programs
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Donor Relationships are the key in bad times…John Hope Bryant
“In this difficult period that began in 2008 …I have had to call on supporters to ask for their help… at a time when they are having to restructure and lay off people. And everyone I’ve called has been helpful. I haven’t had one person tell me no. They haven’t always given me the answers I wanted but they have given me the best answer they can give me. That is the result of relationships.”
Love Leadership pg 157-158
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View from the Board Chair
Revenue is fallingCosts are staying the same or going upIn all likelihood he/she has been stung
by recession too.He/she has to answer to a board and
wants to be seen as doing something
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Keeping the Board’s focus on raising more money rather than cutting costs
85% of costs in a service industry are people. Growth by subtraction won’t work.
Board members are often not the same profile as the major gift donors. We start making decisions for “them”… them being your cohort of major gift prospects.
Keep the dialogue with major gift prospects open. Get direct input from “them” and involve volunteers in these discussions.
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Making the Case for Campaign Investment ROI vs. Cost Per dollar raised
If you invest $1 million dollars with me and I promise to return $1.5 million at the end of the year? Would you take the deal?
What if I could return $3m over 5 years?Expectations for fundraising are out of
sync with businessMargins in grocery retail are 3-4%
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Give the Board Context for Decision Making
Growth needs investmentPresent the campaign budget in a
tangible 5 year growth chart.
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Present 5 yr. Campaign Income/Expense Projection
Income 2011 2012 2013 2014 2015 2016 5 yr total
Direct Mail Program 250,000$ 276,250$ 298,250$ 314,438$ 326,429$ 1,465,367$ IMO 40,000$ 50,000$ 50,000$ 50,000$ 50,000$ 50,000$ 250,000$ Special Events 200,000$ 150,000$ 150,000$ 150,000$ 150,000$ 150,000$ 750,000$ Major/Planned Gifts 15,000$ 2,000,000$ 3,500,000$ 4,500,000$ 3,500,000$ 2,000,000$ 15,500,000$ Estate Gifts 10,000$ 10,000$ 200,000$ 300,000$ 500,000$ 500,000$ 1,510,000$ Interest 10,000$ 30,000$ 40,000$ 50,000$ 75,000$ 100,000$ 295,000$ Total 275,000$ 2,490,000$ 4,216,250$ 5,348,250$ 4,589,438$ 3,126,429$ 5yr. Total 19,770,367$
Expenses
Salaries 70,000$ 260,000$ 278,200$ 297,674$ 318,511$ 340,807$ Benefits 15,400$ 57,200$ 61,204$ 65,488$ 70,072$ 74,978$ Major Gift Officers 160,000$ 160,000$ 180,000$ 180,000$ 190,000$ Contract services 75,000$ 25,000$ 15,000$ 15,000$ 2,000$ Printing 300$ 10,000$ 10,000$ 10,000$ 10,000$ 10,000$ Direct mail 43,000$ 40,713$ 43,236$ 44,094$ 44,726$ It upgrade/Maintenance 1,200$ 20,000$ 5,000$ 5,000$ 5,000$ 5,000$ Foundation Newsletter 25,000$ 25,000$ 25,000$ 25,000$ 25,000$ Board/Staff Development 12,000$ 13,000$ 13,000$ 13,000$ 13,000$ Comm Promotion/Website 45,000$ 45,000$ 25,000$ 25,000$ 25,000$ Meetings 1,200$ 4,000$ 2,000$ 2,000$ 2,000$ 2,000$ Postage (general office) 400$ 10,000$ 12,000$ 12,000$ 12,000$ 12,000$ Staff mileage 1,500$ 1,500$ 1,500$ 1,500$ 1,500$ Donor/Volunteer Rec. 50,000$ 50,000$ 50,000$ 50,000$ 10,000$ Audit 4,000$ 4,000$ 4,000$ 4,000$ 4,000$ Bank Charges 1,000$ 1,000$ 1,000$ 1,000$ 1,000$ Miscellaneous 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ Total 88,500$ 782,700$ 738,617$ 754,898$ 781,178$ 766,010$ Exp. as % of revenue 32.2% 31.4% 17.5% 14.1% 17.0% 24.5% Net Revenue 186,500$ 1,707,300$ 3,477,633$ 4,593,352$ 3,808,260$ 2,360,419$ 15,946,964
Campaign Period Operating Plan Ilustration
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Strategic Resource Deployment
Universe
First gift
Repeat Gift
Major Gift
Legacy
ResourceAllocation
If you have to cut, make the cuts strategic.
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A Look in the Mirror
The economic down turn paralyzed our offices.
Are we making the recession a good reason not to ask and not to give.
We have to have expectations of success or no one else will.
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CDOs as Leaders
Your staff are vulnerable to the “sky is falling message”
Keep true to activity based goals…Make the calls.
You must lead. The staff and volunteers are watching. If you lose faith they will.
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What About Our Case?
The Case is really the conversation that you will have with donors.
Now, more than ever, it is not about the statistics or buildings it is about hope…
Move the discussion from money to your mission and you will get more meetings
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Paradox of Need in the Case
Need can be paralyzingNeed is universalSolutions set your organization apartYou must be the right organization…a
champion, to right the wrong, cure the disease, relieve the suffering
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Your case hasn’t diminished. In all likelihood it has become more urgent. Find your Big Idea
Saving lives Changing livesCreating hopeEasing painCalming fearRestoring dignity
“Honor thy father and thy mother.” Shalom Village, Hamilton, Ontario a Long Term Care Facility
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Big Ideas
“Many believed angioplasty would never be available here. Others made it sure it was… The journey ahead will be distinguished by achievements that will save lives and change forever the way we provide healthcare”Thunder Bay Regional Health Sciences Foundation …
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There are still resources available …but
The economy has certainly been tough but for the best gift prospects the sky, is in fact, not falling
Recession Hangover…we aren’t in the clear yet. They are not poor but feel vulnerable for the first time.
Home values…the biggest investment of a middle class family is devalued
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Dealing with Donor Angst
“I won’t live long enough to recover my losses”…She did and she has.
Astute investors are back to, or even ahead of where they were before the recession.
We need to have conversations about our mission…about the people and lives we are saving…about hope.
In an uncertain world we know we are making a difference.
Case Studies
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A Campaign Reboot
A $8m is stuck at $6m Did a mini study to re-engage volunteers and
community.... talked to donors and prospects Revisit what was a comprehensive case…
build a new plan around specific case elements…it’s a do over.
Re-focus on major gifts. When campaigns stall good volunteers seek activity. They want to do something so they go after smaller gifts. You can’t raise $2m with $5,000 gifts…
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New energy…
Kept context of $8m campaign but in reality the new campaign is for $2m
The campaign proposal was focused on the new case element
The Volunteers were reenergized and the project got back on track.
When staff and volunteers believe in any plan it takes on new life.
“Don’t mistake activity for achievement” John Wooden
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Hitting the wall on a $30m Campaign for a small Midwest facility …An "insider's perspective"
$30 million campaign declared with no study (Heart Centre, Maternity and Hospice)
Annual foundation revenue under $1 million A $7 million injection from a partner hospital plus $8
million in low hanging fruit to $15m Economy hit the wall…Campaign hit the wall. Staff hit the
road. Best prospects had been asked and many donors were
tied up in 10 year pledges
A Case Study
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An "insider's response"
New foundation leadership reboots the campaign
Critical to keep the public face of the campaign positive
Hospital CEO is loved and respected “we engaged him successfully on gift calls ranging from $100-$500,000”
Direct Marketed the Planned Giving program # of confirmed gifts up from 10 to over 50 ($9.9m pledged)
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An "insider's response"
Ramped up a golf event from a $300,000 to $951,000 to close the Campaign. (Strategic use of some Campaign gift announcements)
Introduced a new event that raised $260,000 and helped replenish the Major Gift prospect pool
Closed out at $33.8m
Strategic Use of Special Events
Advice
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Doug Dillon…Panas, Linzy & Partners
Those organizations that moved forward have been rewarded, in part, because so many decided to "wait".
A clients voice message : "Here at the Boston YMCA, our mission is NOT in recession!“
Some donors have reduced their giving--it is a fact. But, with some major donors, they have increased their giving. They are more attuned and sensitive to those in need--and to the few who are bold enough to ask.
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Doug Dillon…Panas, Linzy & Partners
Campaigns are taking longer to complete. I didn't say: "taking longer to start"! It is on average taking 3 to 5 months longer
Either the need of the community is important and urgent or it's not! We are in the business of saving and changing lives. URGENCY is the key--has always been and will continue to be what motivates our constituency.
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Jim DeLauro PHD, DeLauro & Associates Consulting
The CEO and fundraising staff believe in the project
An external study provides a 3rd party professional validation of the case and spreads the optimism
Optimism and confidence driven by the urgency and importance of the case is the common denominator in campaign success
“Generosity is a function of Optimism”
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Jim DeLauro PHD, DeLauro & Associates Consulting
There is a penalty for procrastination. Those that have delayed having these conversations with donors will now find themselves in a crowded market place
If you didn’t have the building blocks in place the recession was a tough time to start
Organizations that haven’t been stewarding donors have a smaller list of leadership prospects and have to spend time warming up old relationships
“Stewardship is the key to everything”
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Strategies for Securing the Gift
In a perfect environment what would you like to do?
The Good Samaritan approach…those with assets are the only ones that can help.
Matching gifts as campaign incentive10 year gift agreements with a revisit
clause
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The Gift Agreement (attached)
In this example there is a 7 year pledge but with a commitment to revisit
The power to vary purpose clause The reputation clauseMoney management clause
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Cautions
Tying your best donors into 10 pledges means they will still be tied up when the economy is rolling again
Pushing too hard can be seen as “hitting them when they are down”
On balance there is more risk to your case in not asking
Discussions have to be mission based…the case is not in recession
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Cautions (2)
An elderly benefactor told us to "go ahead" and build a hospice. He would wrote a promissory note for $1.6 million. In the fall of 2008 when his bank stock plummeted, he covered only $600,000. We wrote off $1 million
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The New Normal in Campaigns
This new normal for campaigns isn’t exclusively the outcome of the recession.
The old model was a function of a “prospect rich environment”
New normal is good prospects but fewer prospects
More donor involvement and more gifts for specific purpose…and the resulting need for stewardship
The planning study is more essential than ever.
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The Planning Study…New Normal
It is more than “How much can we raise?” Crafting the right questionnaire…can you
make the case resonate, can you find heroes? Trying too hard to be objective is a waste of an
important prospect visit. The case is the solution.
The activity surrounding the Study call can be powerful and is often the first and the most interaction the prospect will have with your organization.
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7 Points of Contact
1. A respectful letter from senior volunteer outlining a new direction and asking that he/she meet with an expert.
2. Development Assistant calls to make the appointment
3. Thank you letter with case summary sent in advance of call by senior volunteer
4. Development Assistant confirms visits on day before.
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Process…Points of contact (2)
5. Expert makes call6. Immediate thank you card sent to
Prospect by expert (interviewer)7. Summary report is mailed to prospect
by senior volunteer
You need to be very particular about what is in the questionnaire and who is making those calls.
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The New Normal in Campaign Management
Much smaller, tighter campaign organizations driven by an absolute focus on leadership gifts.
Shorter leadership terms and use of joint leadership roles…co-chairs even leadership by committee
More staff making solicitation callsHeightened competition…this is no
time to snooze
Thank you
Questions
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Acknowledgements
Doug Dillon, CFRESenior Partner,Jerold Panas Linzy & [email protected]
James DeLauro, Ph.D.PrincipalDeLauro & Associates [email protected]
Love Leadership, John Hope BryantPublished by Jossey-Bass