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Dear Friends and Colleagues: I had just given a talk at an NYU nonprofit conference when a man with a no-nonsense look came up to me and introduced himself as the executive director of a mid-size nonprofit. He was seeking to hire a development consultant. He knew exactly what he wanted. After explaining the mission of his agency, he said, "I'm only willing to pay for results. If I can pay for results, we're in business." I am aware that nowadays many savvy entrepreneurs prefer to pay sizable bonuses to attorneys, publicists, and other professionals in proportion to the results they achieve, rather than retain them on the basis of monthly fees. In nonprofit fundraising, this attitude, in my opinion, is both costly and unwise. The underlying mindset of the person who wants to pay a development professional "for results" is that the fundraiser is a lone wolf working outside of the agency. It is an attitude that says to the fundraiser: "You're not really part of the team. You're on your own, buddy, and you're under close watch." This is a mistake. I was an executive director three times prior to heading up LAPA. When I ran a nonprofit, I always invited my development team to staff meetings. I wanted them to know that I considered them an integral part of the team. Having worked on both sides of the divide, I am convinced that part of what makes a fundraiser successful is the person's ability to connect with the client's mission. The fundraiser must have a passion for that mission and must also feel that the fundraising effort is fully integrated into the organization. The fundraiser and the executive director cannot have an adversarial relationship. The fundraiser knows that the agency's programs must generate measurable outcomes in order to register with potential donors. The fundraiser can help the executive director align a program in such a way as to facilitate the tracking of data central to the mission of the agency. The executive director, in turn, must understand that the fundraiser is looking at a bigger picture. An executive director who distrusts the consultant or has no time for the consultant's input is deflecting the passion that the consultant brings to the difficult and often frustrating task of raising funds. I cannot accomplish anything for you if you act as if my every query is an imposition. Fundraising is a long-term, relational process. Initial rejections can lead to future acceptances. That's why they call it "development." The "results" mentality often spurs the fundraiser to go off chasing money, to seek huge, immediate funding opportunities that may only have a glancing relationship to the mission of the agency. The agency's revenue may increase in the short-term, but will probably lag in three years or so. The results over the long haul have to be the "right results" for that organization. The possibility of producing the "right results" is stronger if the consultant and executive director have the right kind of working relationship. Nothing is produced in a vacuum. The outcome depends as much on the interpersonal environment established by the players as on the accomplishments of the agency. So I looked at the no-nonsense executive who had buttonholed me, and said, "I can give you better results than the results you're willing to pay for. But those results aren't my results. They're ours, yours and mine, and they can only be obtained if you trust me and will work with me and my team to achieve your fundraising goals. Then we can do business." Following this same theme of looking for results, in this issue of News and Views we also assess the value of planned giving and grant writing and address the question, "How do nonprofit administrators determine that they are getting the most out of these programs?" Enjoy. - Laurence A. Pagnoni, President Planned Giving—Thinking Beyond the Checkbook
Most people spend 40 years building their wealth, 10 years protecting it and only two hours determining its disposition through their estate plans. Contrary to popular belief, most attorneys, even those who prepare wills, do not understand the tax-benefiting and legacy-creating role of estate planning as it relates to their clients' interest in nonprofit organizations. Consider the real story of Victor and Linda who had been faithful donors to several organizations in their community for the past 35 years. Victor gave most significantly to a local private secondary school that he helped found more than 20 years ago. Every year he wrote annual checks to them for about $6,500. During the past four years, his annual gift had been $7,500. Recently, the school's Headmaster received word that Victor had died. Not long after, he received a letter from Victor's attorney informing him that the school would receive a bequest of $30,000 from Victor's estate. At first the Headmaster was pleased to see that Victor had left a significant bequest that was four times as large as any gift he had made in the past. On second thought, however, he realized that he may have missed a significant opportunity. He investigated further and discovered that Victor was one of the wealthiest men in town. Victor and Linda each had made simple wills that basically left everything to the other with some provisions for each of their favorite charities. Since Linda was the primary beneficiary of Victor's will, all of his wealth would be transferred to her with the exception of three bequests of $30,000 each. The Headmaster realized that the school that Victor helped to found and to which he dedicated much of his time, had lost an important donor. Victor's legacy to the school was only four years' value of his former gift. After that, Victor's contribution would be forgotten. Linda had different interests. The responsibility for educating donors about planned giving falls to non-profit organizations themselves. Unfortunately, most nonprofits give planned giving about as much time as donors give to it — almost no time at all! Some have passive marketing tools such as brochures or a link on their Web site and believe that is enough. Relatively few make an active effort to treat planned giving with the same approach as other individual fundraising efforts. The larger nonprofits such as universities, hospitals, and national organizations have known the value of planned giving for a long time and have sophisticated systems of educating their donors and procuring planned gifts. Small and mid-size nonprofits must get up to speed and establish active planned giving strategies as an important part of their development function. If they do not, they will have no assurance of a long-term future. In order for a planned giving program to be effective it must regularly identify, cultivate, educate, listen to, meet with, and solicit donors. Donors must be persuaded to think beyond their checkbooks and take a look at how the accumulated value of their estate portfolios can help establish a legacy that truly makes a difference during their lives and in perpetuity. The concept of planned giving is neither mysterious nor mystical. It is not just for the elderly, but for any donor who wants to make sure your nonprofit has financial security. Nonprofits can be assured of a future by creating conditions for donors to give from their portfolios as well as their checkbooks. The cost of developing a solid Planned Giving Program is far outweighed by its results. If you want more information on how planned giving may work for your organization and how LAPA can help you create a planned giving program, please give me a call at 212-932-8001, ext. 5 or e-mail me through the LAPA website. -Ed Winters, MBA, Senior Fundraising Counsel "ASK LAPA": ANSWERS TO YOUR QUESTIONS ABOUT MANAGEMENT AND FUNDRAISING ISSUES
Q. Over the past year, my full-time grant writer has submitted 500 grants to 500 different private foundations and corporations, resulting in 12 awards. Is she giving me a good return on my money? --Roger, Executive Director, Brooklyn, NY - Roger, Executive Director, Brooklyn, NY A. Dear Roger, The Better Business Bureau recommends that the overall cost of your fundraising program be no more than 35% (65¢ spent for every dollar earned). Here at LAPA we pride ourselves on an average cost of $1.00 spent for every $4.24 earned for the client. (See our ten-year assessment report located at www.lp-associates.com.) If the number of dollars you are spending is more than 35% of your grant earnings, you may want to consider other options, such as hiring a grant writing consultant and/or finding an earned income venture that not only will bring in money, but will attract private foundations and corporations that like to see some self-efficiency in the organizations they fund. In submitting grants, you deal with uncertainty. Yet, even given this uncertainty, there are steps your grant writer should be taking to put the odds of success in your favor. Ask yourself if she does the following:
Finally, don't forget individual donors. Make sure you are getting your money's worth there as well. Today, individual donors constitute the largest provider of charitable dollars in the U.S. Therefore, it might behoove you to adopt a multi-layered development program. Here at LAPA our consultants provide not only private and government grant-writing expertise but also expertise regarding individual donor solicitation, capital campaigns and planned giving programs, as well as strategic management services. Call us. We're here to help. DO YOU HAVE QUESTIONS FOR LAPA? Please contact us by clicking here. Our team will answer as many of your questions as possible in future newsletters.
Click here to contact Laurence A. Pagnoni, MA, MPA. To reach a LAPA associate, click on the name below: Sheldon
Bart, MA |
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Laurence A. Pagnoni & Associates |
Phone: (212) 932-8001 |
