Developing a Fundraising Strategy (that works)

Building on proven principles that lead to sustainable fundraising and thriving non-profits

I’m Malcolm Sproull…

• Christian Broadcasting Association• Oxfam New Zealand• Presbyterian Support Northern• Shine (Safer Homes in New Zealand

Every day)• RNZSPCA

Malcolm Sproull before…

• Press photographer• TV sound tech and cameraman• Small business owner• Pharmaceutical sales and marketing

Common denominator is…

• Relationship sales and marketing

Today I will…• Show you a fundraising strategy that is based

on profit• Show you who should be working in

fundraising and who shouldn’t• Prepare you for the way that your strategy is

most likely going to be sabotaged.

The core principles1. Rush to be second2. Create a fundraising enterprise 3. Start from the donor and yet-to-be donor and

work backwards

4. Track your donor touch points on a BIG wall calendar

5. Measure what is measureable and make measureable what is not.

Creating a fundraising enterprise

• (Most) Non-profits are NOT the same as businesses –

• (Most) are two enterprises, not one. • The good cause enterprise• The fundraising enterprise

The business model

A business exists as a single enterprise to make PROFIT…

…serving one customer who pays for the service or product

PROFIT $$$

COST $$$

The two enterprise non-profit modelA non-profit exists for the good cause

PROFIT $$$

COST $$$

And serves TWO customers…

The DONOR

The BENEFICIARY

The two enterprise model

• The mission-aligned fundraising enterprise is the same as a business.

• Build it around the pursuit of …

PROFIT $$$

PROFITCompassionate

The two enterprise model

PROFIT $$$

COST $$$

Administration and marketing support

Mission aligned

What you are deeply

passionate about

Critical to organisational

success

Equally critical to

your donors

What you can be the best in the world at

What drives you economic

engine

GOOD CAUSE CLARITY

The economic denominator

• Pursue and market the most profitable product only

• And that product is the

RE-OCCURING PHILANTHROPIC

GIFT

The economic denominator

• The re-occurring philanthropic gift becomes your base unit of measure determining your economic strength

• Economic strength comes from having thousands of strongly pre-disposed financial supporters who are raving fans of your cause.

What is a philanthropic gift?

The deliberate giving of money by an individual or

group of individuals where the giver is pre-disposed towards seeing the mission of the cause succeed and where the giver expects no material reward in return but does expect the answer to two questions:-

• Will my money do what you say it will do?

• Can you prove it?

What is a philanthropic gift?

• Do not restrict the word “philanthropy” to the domain of the known wealthy

• Anonymous little old ladies who give $10 a month are equally philanthropists.

NZ philanthropic giving

Personal58%

Business6%

Trusts and Foundations

36%

Giving NZ donations 2011 ($Millions)

Personal Business Trusts and Foundations

Personal in-cluding be-quests

US philanthropic giving

Personal72%

Bequests7%

Business6%

Trusts and Foundations

14%

Giving US donations 2012 ($Billions)

Personal BequestsBusiness Trusts and Foundations

Why the philanthropic gift?Its more profitable than…

Events of any typeBooks or merchandiseSocial enterpriseOp shopsEtc…

YES! Do these…IF

…they lead to RE-OCCURING PHILANTHROPIC GIFTS

from INDIVIDUALS !

Sell the most profitable product

The philanthropic gift becomes significantly more

profitable when it is a RE-OCCURINGpledge based multi year gift• Such as regular givers • Such as major donors making multi year pledges• Such as mid-range donors doing the same

The result on turnover

20% 80%$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

Net Profit $$$; $100,000

Net Profit $$$; $100,000

Income required; $500,000 Income

required; $125,000

Net Profit $$$ Income required

Fundraising results - gross profit compared

The fundraising enterprise mission becomes

“To inspire, acquire, cultivate and retain philanthropic donations for the work of [fill in the name of your good cause]”

Scarcity thinking• The idea that there is some finite capacity

for individuals and organisations to give more money to charities than they currently are is more delusion than truth. For no fault of your own, if you subscribe to this view you have probably been miss-informed.

• Malcolm Sproull 2014

I believe that New Zealand contains more than enough favourably pre-disposed people capable of philanthropic giving to keep your non-profit financially viable indefinitely. (In most cases)

Sell the most profitable product

“One person with a belief is equal to a force of 99 who have only interests.”John Stuart Mill, Nineteenth-century English economist

and philosopher (1806 –1873)

Hunt out the “pre-disposed”

So what!!!???

So why is it that so many non-profits struggle financially if what I have just pronounced has an ounce of truth about it?

I have found …1. The charity is invisible to those people who would be

enthused by what it is the charity is doing, i.e. invisible to those who would be favourably predisposed in the charity’s favour.

2. Lack of stewardship of people equally passionate about your cause even prior to and after them making their first donation.

3. Lack of a fundraising enterprise to address items 1 & 2 and maintain the structure that keeps finding and cultivating those who are predisposed.

The right people

• Get the right people on the fundraising enterprise bus• BEWARE of people switching over from the good

cause enterprise• BEWARE of people with a commercial marketing

back ground and no sales experience• BEWARE of people with a background marketing

“trinkets” to thousands of people. • BEWARE of people boasting of “corporate”

experience

• The IDEAL fundraiser: • Is comfortable asking people for money• Likes building one to one relationships• Made a living for at least a year selling something

to someone• Understands philanthropy and a philanthropic

culture• Is computer literate especially in CRM systems• Understands free-enterprise and business• Is profit driven

The right people

Starting with the donor……and working backwards….

• Start with your ideal donor who is most predisposed to see your mission succeed?

• They want to know the answer to two questions (remember?)• Will my money do what you say

it will do?• Can you prove it?

Starting with the donor……and working backwards….

• There are two types of human• People who donate to your cause• Yet-to-be donators to your cause

• Engage with them on your customised donor pathway

• Which looks like this…

Louanne with “Tardy”, her rescue cat.

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

-5 -4 -3 -2 -1 0 1 2 3 4 5

Start with the donor and work backwards

RetentionAcquisition

A BIG wall planner (the bigger the better) that sits on a wall in your board room (preferably) and serves as a bill board promoting a culture of philanthropy throughout your organisation

What you need to succeed

1. A case for support based on the philanthropic gift

2. New donors you can reach cost-effectively3. Dedicated fundraising software4. An obsession with your data and metrics5. A dedicated team6. A commitment to donor-centered

fundraising7. A commitment that lasts decades and a

system that works after you leave

Acquisition channelsYour websiteYour websiteYour websiteYour websiteYour websiteSocial media …

More than 70% of people making a first time donation do so after checking the charity’s website

-5 -4 -3 -2 -1 0 1 2 3 4 5

Acquisition

Self promoting your expertise…

Emotional engagement (Trust increments)

Conversational strength and delivery on promises

Fundraising

Marketing

Marketing &

FundraisingEmot

iona

l eng

agem

ent

(Tru

st in

crem

ents

)

Sabotage• Lack of understanding the two customer

reality throughout the organisation• Lack of giving the donor a status at least

equal to the beneficiary• Lack of board competencies• Lack of vision clarity for the good cause• Lack of CFO understanding• Lack of CEO understanding• Your structure (God help you if you have a

federated model)

Sabotage• Your staff commitment to a long term

strategy• Failure to set and meticulously track the

metrics• Fear of mathematics• The tendency to not rush to be second and

try every new toy in the store• The wrong people on the fundraising

enterprise bus

Rush to be second…

• None of what you have just heard is new

• All of what you just heard creates PROFIT for non-profits

• All of what you just heard can be sabotaged

• But all of what you have just heard can be learned and applied successfully

Thank you

Go make it happen. Donors are waiting out there for you.

Malcolm’s “Must Read” list…• Good to Great: Why Some Companies Make the Leap and

Others Don’t / Jim Collins• Book Yourself Solid: The Fastest, Easiest, and Most Reliable

System for Getting More Clients Than You Can Handle Even if You Hate Marketing and Selling / Michael Port

• How to Write Fundraising Materials That Raise More Money / Tom Ahern

• Type & Layout: Are you communicating or just making pretty shapes / Colin Wheildon

• Growing Givers’ Hearts: Treating Fundraising as Ministry / Thomas H. Jeavons & Rebekah Burch Basinger

Malcolm’s “Must Read” list… Switch: How to Change Things When Change is Hard / Chip Heath &

Dan Heath

Try Giving Yourself Away / David Dunn

The New Rational Manager / Charles H. Kepner & Benjamin B. Tregoe

Keep Your Donors: The Guide to Better Communications and Stronger Relationships / Tom Ahern & Simone Joyaux

The Mercifully Brief Real World Guide to Raising $1000 Gifts by Mail / Mal Warwick

• Revolution in the Mailbox: Your Guide to Successful Direct Mail Fundraising / Mal Warwick

Malcolm’s “Must Read” list… Asking Properly: The Art of Creative Fundraising / George Smith

Strategic Fund Development: Building Profitable Relationships That Last / Simone P. Joyaux

Data Mining for Fund Raisers: How to Use Simple Statistics to Find Gold in Your Donor Database – Even if You Hate Statistics / Peter B. Wylie

The Benevon Model for Sustainable Funding: A Step-By-Step Guide to Getting It Right / Terry Axelrod

The Mercifully Brief Real World Guide to Raising More Money With Newsletters Than You Ever Though Possible / Tom Ahern

Malcolm’s “Must Read” list… Relationship Fundraising: A Donor-Based Approach to the Business of

Raising Money / Ken Burnett

The E Myth: Why Most Small Business Don’t Work and What To Do About It / Michael E. Gerber

Seeing Through a Donor’s Eyes / Tom Ahern www.aherncomm.com

Underdeveloped: A National Study (US) of Challenges Facing Non-profit Fundraising / Jeanne Bell & Marla Cornelius. A downloadable PDF from http://www.compasspoint.org/underdeveloped