The Fundraising Executive

CULTIVATION STRATEGY: Fundraising for Your First Quarter

By Eddie Thompson | January 16, 2014 | Donor Communications

quarter-clock-2What you as a nonprofit executive do in December and January each year is a “tell”—that is, it reveals a lot about your (or your institution’s) fund-development mentality. Are you a year-end closer or a springtime cultivator? Most nonprofits spend enormous an amount of time, effort, and emphasis on end-of-year appeals. Some of those organizations try to plant the idea for a donation (i.e., make an appeal) and harvest that gift at the same time. However, appealing for year-end giving resolutions that you have not yet planted or cultivated is a silly thing to do.

On the other hand, there are development professionals who understand that the most strategic and effective donor appeals take place in January, not December. They talk face-to-face with their donors about their annual gifts at the time when those same donors are talking to themselves about their resolutions for the coming year.

A cultivation strategy operates under a basic assumption: the longer you give a donor to think and plan for a gift, the greater that gift tends to be…

My wife, Sheryl, and I began thinking in December 2013 about what we would do with regard to our 2014 giving. We have allotted a certain amount of money for charity but are still trying to decide which organization(s) will benefit from our total 2014 giving resolution.

Most thoughtful donors, typically your A-list givers, don’t like to do big things in a short amount of time. A cultivation strategy operates under a basic assumption: the longer you give a donor to think and plan for a gift, the greater that gift tends to be—that is, if you start that planting and cultivating process at the proper time of the year. For a planned gift from one’s estate, the timing could be at a particular event or stage of life. For next year’s annual gift, the planting season is from January to March.

I have followed a similar cultivation strategy for about 35 years—since my first job as a fundraiser when I scribbled my annual development plan on a 12-foot piece of butcher paper.

In the first quarter of the year, I call on the top 25% of our organization’s donors. I set an appointment with my number one donor as early as I can in January; next, I meet with my second best donor, and so on. By the end of March I have visited all the top 25% of my donors.

The first objective in those first quarter meetings with my A-list donors is to first thank them for what they had done. In those January visits, I hand deliver a tax-deductible receipt along with an aggregate statement showing lifetime giving. It’s my way of emphasizing the long-term impact of a donor’s investment.

handing-receipt-2“I want to give you this,” I say, holding out the receipt and giving statement. But when they try to take it, I don’t let go. After a moment of tugging, donors will instinctively look up at me. This is my opportunity to look them straight in the eye and say, “I want to thank you for doing this. It means a lot to the people we serve.”

Besides fundraising for your organization, I know that many of you are also generous givers. But how many times have you had an organizational representative hand-deliver your tax receipt, look you in the eye, and say, “Thank you!”? It’s a pretty rare practice and one that will immediately set you and your organization apart. I’ve followed that same procedure a dozen times with the same donor, and it continues to have the same impact. A sincere “Thank You” never gets old.

My second objective in those first quarter meetings is to provide an investor report, explain what we will try to do in the coming year, and ask them to make a pledge that they will fulfill by the end of December.

I devote the second quarter to the B-list donors (the next best 25%) and the third quarter to the third 25%. I spend October through December planning for the next year and making phone calls to follow up on pledges. Of course, I’ve been cultivating the seeds I’ve planted all year long. If I sensed any hesitation in the phone conversation, I’ll try to schedule a face-to-face visit. Otherwise, I’ll send off a note the next day summarizing our conversation and confirming the pledge.

By planting seeds in my most productive field early in the year, I can predict with remarkable precision what the organization can expect to receive. Since 20% of the donors typically give 80% of the money, by meeting with the top 25% of my donors in the first quarter, I know by the end of March what 90% of our annual income will be.

GIFT-CLARITY---BLUE-BKGI no longer have to use large rolls of butcher paper to organize my year, though that original roll of paper is still in my office. The key activities, reminders, and communication tasks of this gift cultivation strategy have been converted to an amazingly effective piece of software called Gift Clarity.

Read the story of planning on the original roll of butcher paper at MANAGING DEVELOPMENT: Getting the System Right.

Since 20% of the donors typically give 80% of the money, by meeting with the top 25% of my donors in the first quarter, I know by the end of March what 90% of our annual income will be.

Leftover Mentality
Most of my efforts these days are dedicated to charitable estate planning—soliciting gifts from net worth. Unfortunately, many organizational leaders think of the planned-giving and the annual-giving processes as separate and distinct endeavors with a different strategy applied to each. In fact, planned giving and annual giving functions are often located in different departments, different offices, and sometimes even in different cities. However, there are two very important common denominators of an overall gift cultivation strategy that apply to every type of gift.

Common Denominator #1: Whether I’m soliciting gift for the annual fund or a planned gift from a donor’s net worth, I employ the same strategy of long-term cultivation. Fundraisers plant the seed with an appeal early in the “planting season.” Then, they water the ground, pull weeds, and fertilize the soil in which the gift proposal is growing. With a consistent cultivation strategy, both estate gifts and annual gifts are equally dependent on a gift planning process.

Common Denominator #2: Both reject the strategy of appealing to donors for the leftovers. Organizations that rely so heavily on year-end giving without a concerted effort of planting the seeds of giving resolutions early on are like the poor, going out into the fields, gleaning for leftovers after the crop has been harvested. That is to say, they are waiting till the end of the year, hoping that their donors have something LEFT OVER from all their spending out of discretionary income.

Discretionary spending is usually not the issue with major donors; it’s discretionary giving. By the end of the year, most major donors have already decided how much and to whom they will give. A successful development program is all about getting ahead of the game verses playing from behind. You’ll still get end-of-year gifts. It is, however, a lot more effective and a lot less stressful when you are simply reaping what you have planted in January rather than begging for the leftovers in December.

Eddie Thompson, Ed.D.

Copyright 2014, R. Edward Thompson