Parking Lot

Strategies to Leverage Donor Advised Fund Philanthropy

The use of Donor Advised Funds (DAFs) as a means for individuals to make philanthropic gifts continues to rise. So much so, in fact, I felt it imperative to help you understand how they work and how they may be of benefit to your charity.

Why?

  1. You don’t want to leave money on the table.
  2. You want to best serve your donors.

Today we’re going to take a look at:

  • What a DAF is/is not
  • Who DAF donors are/common characteristics
  • How you can best serve DAF donors
  • What you can do to leverage DAF philanthropy

Let’s begin at the beginning.

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Get Up Close and Personal with Major Donor Prospects

Be Up Close and Personal with Major Donor Prospects

I couldn’t possibly write this any better than the inimitable Jerry Panas (as told to his partner of many years, Jerry Linzy), so I’m not even going to try.  Please read the entire, brief and to-the-point article: listening with your whole body.

It covers five important ‘rules’ to guide you in all human interactions.  Don’t forget them when it comes to meetings with major donor prospects:

  1. Face people directly.
  2. Maintain positive eye contact.
  3. Use open gestures.
  4. Use your head.
  5. Activate your smile power.

Now, let me add a few things from my experience, plus some actionable tips.

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BIG Tips to Raise BIG Money for Your BIG Mission

If I had to tell you what you need to do to succeed with major gift fundraising in one sentence it would be this:

Identify major donor prospects… qualify them so you know they want to build a deeper relationship with you… cultivate them… visit with them… listen to them… reflect back to them what you heard… ask them for something specific that resonates with their passions… steward their gift and communicate in an ongoing way to make them feel like the hero they are!

Whew – that was a mouthful!

A shorter way to say this is: Meet with donors. Listen to donors. Ask donors.

See — it’s simple!

It’s definitely not rocket science. It’s just good old hard work. Satisfying and rewarding work. And it’s a type of work anyone can learn to do. [If you want to learn, please sign up for my upcoming Winning Major Gifts Strategies e-course that begins January 22nd. It may be the most important investment you make all year. Just one major gift will more than cover the cost].

Over my 37 years in fundraising, 30 of them working in the trenches as a director of development for organizations with budgets ranging from $1 – $40 million, I have asked for a lot of major gifts.  I know what works, and what doesn’t work. Today I want to give you:

(1) some of my best words of wisdom, and also

(2) answers to some of the questions folks frequently ask me .

I hope these tips will help you tweak your mindset and invigorate your systems so you can be more successful fundraising in the coming year!

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Pensive woman

10 Approaches to Inspire Philanthropists to Help Your Nonprofit Cause

How Do Major Donors Think About Philanthropy? 

To a large extent, they think about it the same way as anyone else.  They just have more money.

It’s good to remember that major donors are, first and foremost, just people.

And like all human beings, they are on a continual quest for meaning. It’s the existential search to be all that one can be. To feel self-actualized.

And you can help them!

In fact, this is your job. This is part and parcel of your organization’s mission.

You (as executive management, development staff or board member) are a facilitator of philanthropy. Your organization exists, in part, to facilitate your donor’s quest for meaning and teach the joy of giving. To do this effectively, you must be attuned to your donors. And, since the wealthy have the ability to make a larger impact when it comes to furthering your mission, you especially must be attuned to these folks.

In the past I’ve looked at five major donor philanthropic triggers. You need to know about these things, because if you can key into any of them you’ll have a strong basis for pursuing a major gift from the prospect whom you’re approaching:

  1. They feel economically secure.
  2. They are in a reflective phase of life.
  3. They’ve demonstrated a desire to build a closer connection with your cause and community.
  4. They are looking for meaning and a sense of purpose.
  5. They are seeking to identify themselves as the person they want to see reflected in the mirror.

Today I’d like to review six more things you should be on the lookout for; then I’ll suggest four strategies to help you enter into your prospective donors’ worlds so you can make a win/win match – one that will help your major donors simultaneously help your cause and themselves.

Coincidentally, I found a back issue of Lifestyles Magazine from 2008 (yes, I’m a bit of a hoarder) and was struck by some of what the publication had to say—a veritable peek inside the minds of major donors. There’s a clue right in the way Lifestyles (now out of publication) describes their mission (highlights are mine):

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Unless You Do These 7 Things, Your Major Gifts Program Won’t Succeed

Every nonprofit should have a major gifts program.

That’s where the lion’s share of the money is.

It’s a rare organization that has a mailing list large enough to raise a million dollars from a million different $1 donors. But most nonprofits do have major donor prospects hiding in plain sight.

It’s up to you to find them; then move them along a cultivation path that prepares them – and you – to make an ask that results in a win/win values-based exchange.

Let’s review 7 secrets that will guarantee your major gifts program is a success, whatever your size.

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3 Nonprofit Secrets to Rock Major Gift Fundraising

There’s a treasure trove of knowledge and research around major gift fundraising. What works well.  What doesn’t work at all.  What’s, at best, half-baked.

It’s not rocket science.  But there’s definitely art, and some science, involved.

The gestalt way of thinking about the three secrets boils down to simply being:

(1) smart,

(2) systematic and

(3) passionate.

But, I’m pretty pragmatic. So I’d like to give you something more practical.

If I had to pick the top three practical secrets to success, they would be the following:

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Are you reading your major donors right?

Are You Reading Your Major Donors Correctly?

Some years ago I had the opportunity to present a major gifts master class where Jay Love, Founder and President of Bloomerang (and a board member and major donor himself) offered his thoughts on major gifts development from the donor’s perspective.

SO important!

The more that you know, the less they’ll say “No!”

The more you know:

  • what floats your donor’s boat,,,
  • what other things compete for your donor’s attention (not just causes, but also career and family)…
  • how your donor prefers to communicate…
  • how your donor prefers to be wooed…
  • how your donor prefers to be recognized…

… the more likely you’ll get a “Yes.”

If you can’t show your major donor prospect you really know them, how can they trust you’ll be a good steward of their passionate philanthropic investment?

We all want to be known before we enter into a major engagement.

Which brings us to the crux of successful major donor development. Not surprisingly, it begins and ends with the same thing.

Can you guess what that might be?

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Major Donor Fundraising: What to Know about New Tax Law

When the new Tax Bill passed, I wrote How Worried Should Your Nonprofit Be? That was back in January, when the impacts of the new law on philanthropic giving may have seemed remote. Now the end of the calendar year is closing in, so it’s worth taking a look at some of the ways you can help your major donors get the biggest bang for their donation.

Keep in mind, of course, the primary reason people give is not to get a tax deduction. It’s to see themselves reflected in a mirror as the person, deep down, they really want to be.

That being said, if you want gifts you must give them.  Help more than you sell.

And one gift you can offer is a little bit of wisdom about ways donors can maximize the impact of their gift and minimize the cost to themselves. Especially when you’re talking to major donors.  Because, for most of them, the impact of the new tax law will truly be icing on their philanthropy cake.

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Rock star

Are You Really Rocking Major Gift Fundraising as You Should?

Studies show over 88% of all funds raised come from just 12% of donors. 

In fact, the top tier of donors account for the lion’s share of all philanthropy.  Just 3% of donors give 76% of all gifts.

If you’re not focusing your fundraising resources on these donors, this should give you pause.  You’re missing a really big boat.

Plus, chances are good you’re fundraising in a manner that’s not exactly cost-effective.

You’re not alone. I run into this problem all the time. Board members want to do events.  E.D.s want to focus on grants. New staff think the future is all in digital fundraising. Existing staff are wedded to increasingly less productive direct mail fundraising.  There’s nothing wrong with any of these strategies. However, generally they won’t give you the biggest bang for your buck. You get a huge return on investment from an individual major gifts program, which costs you roughly 10 cents on the dollar vs. 50 cents or more on the dollar for special events fundraising and actually losing money on direct mail donor acquisition.

If you know the Pareto 80/20 Rule, you might want to focus just 20% of your resources on the lower-yielding strategies and 80% on major individual and legacy fundraising.

What’s holding you back from doing something so sensible?

Usually I find it’s one of the following reasons:

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If You Get Nonprofit Donors to Ask this Question, You’re Home Free

There’s a simple six-step process to assure you secure a philanthropic gift.

The heart of this process — your key to success — is to flip the philanthropic asking equation on its head and get your donor to ask you, not vice-versa. 

That’s right.

Just get your donors to pop this one little question, and you’re home free.

Of course, you have to set them up to pop this question. But it’s easy, once you know the formula.

And I’m going to share that formula with you today.

Guess what else is really great about this?

It’s not scary!

If fear has been holding you back, today is your hallelujah moment.  Because I’m here to tell you exactly how to get your donors to ask you for a gift, rather than the other way around.

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