DONOR PINGING: Firing Bullets Before Cannon Balls
In their recent book, Great by Choice, Jim Collins and Morten Hansen published the results of a nine-year research project in which they identified three characteristics of what they called “10X leaders.” These were CEOs who led their companies to achieve ten times market value over at least a decade amid the most chaotic, turbulent business environment respective to their particular industry.
It would benefit all of us fundraising executives to understand how those principles apply to non-profit leadership. However, it may be even more important to understand what they mean to executives in the for-profit world. After all, those for-profit executives (board members and major donors) are responsible for the very existence of the non-profit. In order to become a 10X executive in the non-profit world, you must have a intuitive sense about a for-profit executive’s frame of reference.
In order to become a 10X executive in the non-profit world, you must have a intuitive sense about a for-profit executive’s frame of reference.
One characteristic of 10X leaders is what Collins and Hansen call “Empirical Creativity,” which is illustrated by the discipline to fire bullets before cannon balls. Suppose an enemy ship is approaching, and you have a limited amount of gun power. The 10X leaders are characterized as those who would test fire a series of bullets, each requiring a small investment of powder. For example —
- Fire one — miss. Make an adjustment.
- Fire again — closer but missed again. Correct for miscalculations.
- Fire again — closer still. Adjust.
- Fire again — ping. You hear the bullet hit the target.
- Fire again just to be sure — ping again.
- Dump every ounce of gun power into your best cannon and load it with the biggest projectile it can deliver. Muzzle load every other asset on hand into the barrel as well.
- Cover your ears and FIRE!
The concept of pinging comes from sonar technology. A sounding device generates a sharp ping underwater. Then sensitive listening devices measure the sound waves as they bounce back from submerged objects, every object returning its own unique sonar signature. An experienced operator can determine the size, distance, and even the class of various submarines. In the same way, strategic donors have gotten pretty good at pinging and reading the responses of non-profits. They may not all be listening for the same characteristics, but most strategic donors are indeed listening for something that rings true.
I have a client with whom I have been working for about five years (a.k.a. “Sam”). Sam is both intelligent and generous. He is also an extremely wealthy businessman in his early 80s. This year he gave away multiple millions dollars, which he carefully divided among three non-profits.
What they may not know is that my client is simply pinging with those gifts.
When it comes to his philanthropic approach, Sam is a classic strategic donor — cautious, conservative, and meticulous. But he’s also frustrated because he cannot find a non-profit that captures his attention and enthusiasm. All three of the respective organizational leaders seem to be almost giddy with excitement over the multi-million dollar gifts. I would be too if someone handed me a check for a few million. I get the sense, however, that they have greatly underestimated both Sam’s giving-capacity and his generosity. What they may not know is that my client is simply pinging with those gifts. You could think of it as firing a small bullet, listening to see if it hits his target (i.e., accomplishes his philanthropic objectives.)
Sam has methodically invested in these non-profits, watching to see how each handles it. Often the true colors of an organization are not revealed with an average donation, even a very generous one. He intentionally made the donation large enough to see how an institution-changing gift would affect that particular organization. In one way, Sam is pinging the organizational leadership. In another way, he is creating his own benevolent stress test. Whether they realize it or not, in the very near future one of those organizations is likely to be hit broadside with the full force of a philanthropic cannon ball.
Whether they realize it or not, in the very near future one of those organizations is likely to be hit broadside with the full force of a philanthropic cannon ball.
In the words of my client, “I’ve been trying to figure out these non-profits for years.” I think he has a checklist in his mind, and he’s been pinging and evaluating responses for several years, looking for the non-profit that will use his resources to do something extraordinary.
LISTENING FOR SOMETHING THAT RINGS TRUE
Sam and I met for lunch recently. He brought along three articles from the three organizations he had recently funded and placed them on the table in front of me. “What do you see in these articles?” he asked. I began reading though the pages but couldn’t pick out what seemed to be so obvious to him. Finally, he pointed to the photos in two of the article, tapping his finger on the pictures of himself and the respective organizational presidents. Then he pulled out the third publication in which there was a picture of himself and a child that would be helped by his investment.
With regard to the two organizations displaying the photos of the donor and CEO, my client definitively pronounced, “Those two organizations are more about show than anything else.”
Ouch! Can you imagine a recent multimillion-dollar donor making that comment?
Businesspersons are usually as deliberate and decisive about non-profit as they are their own businesses. After all, that is the process that they bring to the table and apply to whatever happens to be on their agendas. They are meticulous in their process, and they won’t waste time revisiting a decision once it has been made.
Is that always fair? Not really. But it doesn’t matter. It’s their time and their money.
Several things you could take away from this real-life example.
1. Strategic donors are more interested in how their contributions are used to change the world than in being recognized or publicly honored by non-profit leaders. That might have been what my client sensed — that the leaders were more oriented towards the gala and the social aspects of such a gift than they were the kids. There are certainly those who primarily give for recognition, but not donors like my client. For them it is all about changing the world, and nothing else matters — not even a photo op with the organizational president.
2. Though strategic donors tend to be meticulous about processing the data, they are not always correct in their assessments. Amid their otherwise busy schedules, they make quick decisions by relying on shortcuts, such as scanning the list of board members for anyone they know.
Were those two non-profits that published pictures with the donor and the CEO really just a show of doing good? Maybe so, maybe not. The point is that it provided my client with a shortcut that quickly eliminated them from consideration. It illustrates the importance of building meaningful relationships with donors, particularly the ones with idiosynchronicities. They have become wealthy because of (or in spite of) those habits, and they are unlikely to change. Someone should have known my client well enough to throw himself in front of the printing press screaming, “Stop! Do not publish that picture!”
3. All donors ping the organizations they support. Major donors, who are more highly invested, do it consistently. Major donors who are also highly invested strategic donors, often do it with great precision and intentionality. They are systemically testing organizations in order to determine where their testamentary gifts will be directed. In other words, they’re firing bullets before cannon balls.
Eddie Thompson, Ed.D.