1. Raising Money During Challenging Times Lawrence Henze July, 2009

2. Lawrence C. Henze, J.D. | Page #2 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Our Agenda  Impact of challenging times on fundraising  Action items –Donor relations –Special events –Annual giving –Major giving –Planned giving  Summary and Questions

3. Lawrence C. Henze, J.D. | Page #3 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Recession  Our economic situation is officially a recession  How does a recession affect: –Donors and prospects? –Nonprofit organizations? –Your work?

4. Lawrence C. Henze, J.D. | Page #4 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. The Effect of a Recession on Donors, Prospects  Know your constituencies  Different types of donors have different reactions (more later)  Remember, they don’t stop caring about your mission during these times!  However, it may limit their ability to support your mission

5. Lawrence C. Henze, J.D. | Page #5 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. The Effect of a Recession on Your Organization  Some organizations realize that these times are temporary and act internally as if very little is different  Some organizations have not reacted yet  Most common: –Budget freeze or cuts –Programmatic changes –Hiring freezes –Layoffs

6. Raising Money During Challenging Times Understanding Donor Development

7. Lawrence C. Henze, J.D. | Page #7 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Ultimate Giving  Every individual has an “ultimate gift”  Ultimate gifts may be any level, any type (including $0)  Ultimate giving does not place a higher value on “major” gifts  Find ultimate giving profiles, develop appropriate marketing strategies, close more gifts!  Most major donors are also planned giving prospects, not true in reverse!

8. Lawrence C. Henze, J.D. | Page #8 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Steps in the Donor Pyramid Donor Loyalty is Critical!!!

9. Lawrence C. Henze, J.D. | Page #9 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Donor Profiling  Highest scores and high assets  Further qualification and research  Immediate individual cultivation  Lower likelihood scores, but high target giving ranges and assets  Need to be sold on your mission  Longer term cultivation  High likelihood scores and mid-level target giving ranges  Implement targeted upgrade, mid-level major gift strategies  Increase annual giving  Low likelihood scores and low target giving ranges  Minimize investment  Consider reduced resource application

10. Raising Money During Challenging Times Donor Relations

11. Lawrence C. Henze, J.D. | Page #11 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Donor Relations – Internal Review  Now is a good time to conduct an internal review of your outreach efforts  Analyze the following: How often do your constituents hear from you? Your Organization? –Via direct mail, email, telephone? –Solicitation vs. thanking or informing –Other contacts exclusive of fundraising, including the activities of other offices

12. Lawrence C. Henze, J.D. | Page #12 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Donor Relations – Donor-Centered Style  Now that you know how, and how many times you contact your donors and prospects…  Perhaps it is a good time to ask them what they would like to see  Significant evidence that engaging donors and asking them to participate in this fashion leads to better donor relations and increased giving

13. Lawrence C. Henze, J.D. | Page #13 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Surveys: Learning More About the Loyal  Survey loyal donors to determine their interests, wants –Why do they give? –Which programs do they like the most? –What would they like to change about their relationship with your organization? –What would they like to receive from you—and how? –Act upon the information—and provide feedback  Also survey other individuals on your database to determine their interests and feelings

14. Lawrence C. Henze, J.D. | Page #14 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Donor Relations – Special Events  Probably not a good time to launch a new event  Furthermore, a good time to review the purposes of existing events  Are these events meeting their goals?

15. Raising Money During Challenging Times Annual Giving

16. Lawrence C. Henze, J.D. | Page #16 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Annual Giving  Number of Solicitations: How many is too many?  Are we able to solicit loyal donors more efficiently?  Conveying other information through annual giving solicitations and thank-you efforts

17. Lawrence C. Henze, J.D. | Page #17 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Annual Giving – Question Everything  Are you using an outside vendor?  Statistics may be used to point in many directions!  Question all recommendations as they fit with your organization  How do you want to be perceived in recessionary times? –More aggressive? –More effective/efficient?

18. Lawrence C. Henze, J.D. | Page #18 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Research Project  How do nonprofits solicit $10 donors  Frequency and type of solicitations  National trends  Again, what is the image you wish to project?

19. Lawrence C. Henze, J.D. | Page #19 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Anniversary Date Observations  How many donors give at the same time every year?  Do you solicit them at other times of the year?  Do you need to, or is this an opportunity to demonstrate fiscal responsibility

20. Lawrence C. Henze, J.D. | Page #20 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Multiple Opportunities  Seeking donor loyalty through the annual fund supports major and planned giving  Provide a donor check-off opportunity on annual giving response cards related to planned giving  Thanking annual donors and including a brief planned giving insert

21. Raising Money During Challenging Times Major and Planned Giving

22. Lawrence C. Henze, J.D. | Page #22 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Major Giving  Major gift activities, cultivation and solicitation, do not stop during these times  Be open and honest with your best donors about how your organization is affected by the challenges of the current economy  Show these donors the positive steps you will take to make the organization more efficient and effective

23. Lawrence C. Henze, J.D. | Page #23 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Recession and Planned Giving  February 7, 2008 edition of The Chronicle of Philanthropy –Several articles on this and related topics  Basically two points of view: –Contract marketing efforts and avoid long-range gift maturity dates, or –Planned giving, particularly bequests, fit in conservative economic times

24. Lawrence C. Henze, J.D. | Page #24 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. My Thoughts on a Recession and Planned Giving  But we like planned giving opportunities, particularly bequests and annuities, during these times  Do not forego future opportunities for current savings –2007 study reports that 50% of bequests are first inked between the ages of 40-60  Act intelligently based on strong market research– This is the best way to be more cost effective

25. Lawrence C. Henze, J.D. | Page #25 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Page #25 © 2006 Blackbaud Planned Gifts that Work in a Recession  Bequest – A provision in your will to pass money to a charitable organization upon your death or the death of a spouse. Typical clauses include an outright amount, a percentage of the assets, or the residual of the estate.  Charitable Gift Annuity – You give money to a charity, which promises to pay you a fixed amount regularly for life. Although part of the annuity payments are taxable, you’ll also receive an upfront income tax deduction for the amount estimated to end up with the charity

26. Lawrence C. Henze, J.D. | Page #26 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Planned Giving Facts  Bequests constitute almost 90% of all planned gifts made –More than 80% of these are unknown at present  Annuities constitute another 5-6% of all planned gifts  You can have a successful planned giving program without focusing on trusts (the complicated stuff!)  Fiscally conservative gifts for challenging times

27. Lawrence C. Henze, J.D. | Page #27 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Planned Giving Facts  You may have more dollar potential in planned giving than major giving  Why people give (NCPG, now PPP, survey) –97% say they care about the charity –87% desire to do something special –35% tax planning –22% know charity’s representative

28. Lawrence C. Henze, J.D. | Page #28 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Planned Giving by Gift Type  Bequests: –Two primary age groups: late 40s to late 50s, and 65-78. –Loyal donors, lower amounts –Comfortable with debt –Mid-to-upper middle income –Tend to live in one home for longer times –Children in college or have education-related debt –Charitably inclined –Volunteers

29. Lawrence C. Henze, J.D. | Page #29 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author.  (Traditional) Charitable Gift Annuities: –Ages: mid-70s and older –Retired –Fiscally conservative –Uncomfortable with debt –Not wealthy (or do not think they are) –Are or were loyal donors, usually very low amounts –Charitably inclined –Worried about outliving their resources –Frequently single (widowed females) Planned Giving by Gift Type

30. Lawrence C. Henze, J.D. | Page #30 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Profile Summary  Strong correlation with annual giving loyalty and planned giving  Do not let giving amount control decision to solicit for planned gifts  Do not let cash rule the day

31. Lawrence C. Henze, J.D. | Page #31 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. In Summary - More on Cultivating Loyalty  One concept to act upon  Loyal donors give at least 60% of the time  Often exhibit habitual giving patterns  Habitual giving offers opportunity to reduce solicitations and create more donor-centered environment –Anniversary date giving  Look at all types of loyalty: –Volunteerism –Membership –Ticket buying

32. Lawrence C. Henze, J.D. | Page #32 © 2008 Blackbaud Raising Money During Challenging Times This presentation contains confidential and proprietary information. It may not be used, distributed, copied, or printed without the expressed permission of the author. Summary and Questions  Contact: Lawrence Henze Lawrence.Henze@Blackbaud.com 843-991-9921 Lawrence.Henze@Blackbaud.com  New Book: http://www.blackbaud.com/files/resources/downloads/Book_CreatingALegacy.pdf http://www.blackbaud.com/files/resources/downloads/Book_CreatingALegacy.pdf  White Papers: http://www.blackbaud.com/company/resources/whitepapers/whitepapers.aspx http://www.blackbaud.com/company/resources/whitepapers/whitepapers.aspx