What are three ways charities can develop long-term sources of funding?
* Change your focus.
Creating long-term funding requires a fund-development mindset. Fundraising is always going to be a key component of what charities do. About two-thirds of their efforts will be on fundraising, but the remaining third should be on fund development, or laying the groundwork for planned gifts.
For fund development work to work, charities have to reach beyond knowing what door to bang on to raise money. That’s the tyranny of the urgent for most charities.
If you go back to 1990’s, most charities became lax in relationship management because everyone was rolling in money. After 9/11, donations dried up, in part because scandal at the corporate level and among charitable organizations caused people to hold back.
Fundraising and fund development need to be interrelated through the use of strong donor relationships, the appropriate use of planned giving tools and by building intergenerational relationships, which will be important with the coming shift of Baby Boomers’ assets to their children and grandchildren.
* Build relationships.
You need to get to know the donor at the heartstrings level.
To do that, charities should ask donors what they find important about five key areas — personal freedom, personal financial freedom, family, community and heritage.
If you spend three or four engagements discussing those questions, you’ll have an understanding of donors’ plans and where their hearts’ desire is. You begin to understand who they are and what makes them tick.
It creates a sense of purpose with the donor, and giving becomes more than just writing a check.
* Communicate your vision.
You need to think about how you are casting your vision and communicating with your donors.
There’s an amazing lack of focus among many donor communities. They give out of their income, but they do not engage. They just throw their wallet at problems they see.
Some of that is due to the educational curve. People want to make a gift, but they aren’t sure how to do it.
Business owners, for example, often want to give back to their communities, but they want to take care of their families too. We need to help them understand how to do both.
Through planned-giving combinations like the charitable lead annuity trust and irrevocable life insurance trust, donors can create win-win situations in which charities receive support and financial assets are passed to the family in the next generation.
Donors also can have a greater impact by focusing their donations.
Because there’s such a huge need out there, giving can be so fragmented that donors are merely putting a band-aid on something rather than focusing on cures.
But focusing on five or six charities can have a major impact. That’s where you cross the line between fundraising and fund development.
If you have donors that do it this way, they’ll make larger gifts currently, and in the long-term.
Frank Simon is president of P.R.O.F.I.T. Financial, a fund-development organization based in Findlay, Ohio, that provides turnkey services to connect charities and donors.