Common Myths about Major Gift Fundraising for Causes in India (Part One)
by Alex Counts, Executive Director, India Philanthropy Alliance
The India Philanthropy Alliance works to help leading U.S. nonprofits that do all or most of their work in India to be more successful. One way it does that is to assist them in raising more money for their programs. The India Giving Day Campaign is IPA's most visible campaign to grow the pool of resources available to top India-focused nonprofits. A related effort is convening a monthly webinar on securing major and mega gifts, with the hope that some of these large donations will be announced on India Giving Day each year to help grow the movement for more, better, and more joyful American giving to India. During the webinar, we explore sound practices for securing major gifts, and common myths. In this blog post and one to follow, I identify and briefly describe 12 common myths about successfully pursuing major donations. The six below are focused on the early stages of cultivating a major gift, and the ones in a follow up post will be focused on the latter stages. If you would like to join our monthly webinar, please contact me at alex@indiaphilanthropyalliance.org.
Many of the points I make below are commonly accepted good practices by fundraisers, though I am sure that there are some skilled development professionals who would not agree with a few of them. Furthermore, there are certain situations when I change my approach from what I recommend below based on the logic of a particular relationship or situation. So don't take my ideas as gospel. But I do firmly believe that in most scenarios, the strategies I recommend below work well.
In your first meeting with a potential major gift donor, forcefully make the case that you are a great organization deserving of their support. In most cases, you actually should spend the bulk of your first meeting with a potential donor listening to them talk about their philanthropic philosophy and objectives. Naturally, you will want to make it clear that you hope to form a strong bond with them around supporting your mission, which you may want to describe very briefly. But early on in the meeting, the nonprofit representative (whether volunteer or professional staff) should ask an open-ended question like, "Can you tell me about your philosophy and approach to philanthropy?" In some cases, it will take asking the question a different way to get the person talking. And once they start talking, your job is to engage in active listening. Of course, if the potential donor directly asks for a pitch, give it to them. Otherwise, avoid spending most of the time talking about how great your organization is. That information can be shared at subsequent meetings, after your prospect has felt heard and after you have learned more about him or her. I discuss my approach in more depth in this short instructional video, which is by far my most popular.
Most potential major donors are motivated to give by the same few things. Many fundraisers assume that people give for the same handful of reasons that motivate them, such as making the world a better place or meeting like-minded people. In fact, the list of what motivates people to give is much longer than most people imagine. Those motivations can change over time (usually gradually) for each donor. Understanding each person's unique motivations helps a fundraiser craft a customized and effective strategy for cultivating them for a major gift. Among the many motivations I have seen are: combating boredom, social climbing, supporting the causes of a loved one or someone they admire, networking, burnishing their reputation, assuaging guilt, making up for the limitations of their career choice, or advancing an ideal or idea (such as a religion they follow).
To raise more money, the most important thing is to attract new donors. In fact, most nonprofits, especially small (under $1 million) and medium ($1 million-$10 million) sized ones, can increase revenue faster by working more intensively with their most capable current donors. Furthermore, the best way to attract new potential major donors is to have your current ones introduce you to them, another argument for putting more energy and creativity into engaging your current donors.
When it comes to fundraising events, the bigger, the better. Large gala dinners and other events with hundreds of attendees have their place in mature and effective fundraising programs, but smaller and more intimate gatherings are usually much more efficient in terms of drawing your most capable donors closer to your organization. They are the bread and butter of most effective fundraising programs, whether they are community nonprofits or major universities. Typically, you will want a host, a speaker who represents the organization, and 8-20 attendees including a few who know your organization well and will serve as connectors and educators during the mingling period. Ideally the venue is the host's home, but it could be their office or the private room of a club or restaurant. After some social time, the host should welcome everyone and explain why they support the organization, the speaker should present the problem the organization addresses and how they solve it in 8-15 minutes without audio-visuals unless absolutely necessary, and then there can be an interactive session with the attendees. Normally, the attendees will be mostly friends, family and associates of the host, plus a few invited by the beneficiary organization. Your goal should not be to raise money that night, but rather to have your host feel very good about the event (which requires understanding and helping set their expectations) and getting agreement from some of the attendees to meet with a representative of the organization soon to explore getting more involved.
It is big advantage in soliciting major gifts to claim a low overhead rate. Most donors care about their gift's impact and about making a donation that is meaningful for them in the context of their motivations to give (see myth number 2 above). Yes, a few unsophisticated donors get hung up on overhead rates, as they see the nonprofit as a kind of middleman between their money and the intended beneficiaries of their grants. Emphasizing how low your overhead rate is in your discussions with major donors positions your nonprofit as transactional and as practicing a crude form of philanthropy that may turn off or be a distraction to all but the most inexperienced donors. Instead, focus on your past and hoped-for future impact and on how you can meaningfully involve the donor in your work through being excellent stewards of their gifts of money, time, talent, contacts, and ideas. For more on this and related issues, check out this statement about good philanthropy practices published by IPA.
If something goes seriously wrong in your relationship with a major donor or potential major donor, have the good sense to write them off since they are never coming back, and focus on other donors and prospects. When something goes awry in your dealings with a donor, which does happen from time to time in even the best-run nonprofits, organizations often blame themselves (or the donor) and write off the relationship as beyond repair. In fact, such instances are opportunities to demonstrate your professionalism and how much you value the relationship. A leader within the organization can take responsibility for what went wrong and propose a path for rebuilding trust. This approach can work faster than expected and can in fact make the relationship better than it ever was before. Problems create opportunities for your nonprofit to show its true colors, capabilities, and values in action.
Here's wishing you success in securing major gifts to support your noble missions, and let us know how we can help you succeed! To continue on to part two of this series, click here.