Executive directors, are you tired of chasing after those $20 donations like a squirrel on espresso? Yeah, me too. And let me tell you, focusing all our energy on foundation grants and corporate donations because they seem easier is a bit like preferring instant noodles over a gourmet meal—it sort of does the job, but we’re left feeling unsatisfied. 😖
Let’s talk about moving away from survival-mode tactics that leave us feeling icky and instead, start nurturing genuine relationships with our donors. I’m dishing out all my secrets on identifying prospects and building a donor pipeline of people who are as excited about our cause as we are—because let’s face it, sending a million “just checking in” emails is about as fun as watching paint dry.
In this episode, I’m breaking down why it’s crucial to focus on those individual donors and how creating meaningful connections can lead to those juicy, significant gifts we dream about.
Remember, folks—desperation is the world’s worst cologne. It’s time to start fundraising with confidence, swagger, and a whole lot of heart. 💖
Important links:
https://go.rheawong.com/wheredodonorscomefrom
Episode Transcript
RHEA 00:00
Hey you, it’s Rhea Wong. If you’re listening to Nonprofit Lowdown, I’m pretty sure that you’d love my weekly newsletter. Every Tuesday morning, you get updates on the newest podcast episodes, and then interspersed, we have fun special invitations for newsletter subscribers only, and fun raising inspo, because I know what it feels like to be in the trenches alone.
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Welcome to Nonprofit Lowdown, I’m your host, Rhea Wong.
Hey, podcast listeners, Rhea Wong with you once again with Nonprofit Lowdown. Today I’m providing a snippet of a training that I did about cultivating a donor pipeline. It’s a much longer training. So listen in, and if you want the full training for free, there is a link in the show notes that you can click and register to get the free training along with the podcast.
fun spreadsheets. So I hope you enjoy. And by the way, if you enjoyed this episode, you will love my big ass gift program, we are actively recruiting for cohorts for June start. So if this is of interest to you, click the link in the show notes and apply today. I, once upon a time, was an executive director, like I think many of you are, and I was a 26 year old ED.
My first two Google searches on the job was, what does an ED do and how do you fundraise? I’ve dedicated this next stage of my life to help the 26 year old me to get good. not make the same mistakes I made because I made a lot of mistakes and really to get you the resources that you need to get the work done because the world needs you to be successful.
We have too many problems are pressing and we need resources to them as soon as possible. I’m really focused on major gifts. So major gifts is relative, like a major gift to a small nonprofit, maybe 1, 000 to the Metropolitan Opera, a major gift might be a million dollars. So it’s all relative, but. When we’re talking about significant gifts, and generally speaking, my clients are focused on five to six, in some cases, seven figure gifts.
It usually takes about 10 months from start to finish to close the gift. The biggest mistake that I think a lot of us make, and we’ll get into this, is that we spend a lot of time. Talking to people who don’t want to talk to us. And so that’s when you’re in that loop of sending a million emails to catch up and touch base and have coffee.
It is an exhausting, soul sucking exercise. So we’re going to talk a little bit here about how we actually identify people with who want to talk to us. Because the truth of the matter is consumer behavior and donor behavior are very linked. And I don’t know about y’all, but I don’t remember the last time I walked into a store and talked to a salesperson, right?
In fact, I would strongly prefer not to talk to a salesperson. A lot of us have moved on to online buying. So going on Amazon, doing a one click. And the truth is that is mirrored in donor behavior. So a lot of donors self solicit and self cultivate. And so the old models that we have of we’re going to reach out and have coffee and are dead.
They’re just dead. I think the, it was dying pre pandemic and the pandemic has effectively put the nail in the coffin. So we’re going to talk about that. But the problem that you have, which all of us have, is that we are chasing people who do not want to talk to us. When I look at the overall pie of giving, I focus on major donors.
So what major donors means to me are the people who are at the top level of your organization. So for a lot of people, a major gift for an individual will be the 10x of their past gifts. And this is an art and a science. It’s not like hard and fast. But let’s say you have someone who gives 100 a year. If they’re consistently giving 100 for the last 3 or 4 years, A major gift for that individual might be a thousand dollars.
Why I like to focus on major gifts by individuals, two reasons. So if we look at giving overall philanthropically, we can see that an overwhelming majority, 64 percent of giving gifts by individuals totaling 319, 000. Billion with a B dollars and that’s 2022. Why I think we spend a lot of time talking about like foundation giving and corporations etc is that it feels a lot more formulaic.
I like individuals and in specific major gift individuals because I think of it as the jazz of giving, like it’s very improvisational, it’s very specific to a particular person or a particular set of circumstances. And then just in case you didn’t know, bequests are basically wills, like people who die and leave organizations in their wills and their estates.
So I like to go where the money is. Seeing that 64, if you include bequests, and that’s 3 percent of all giving is by individuals, let’s focus on individuals. And what’s interesting is some of you may know the Pareto principle, where 20 percent make up 80 percent of the output. In giving, it actually is more like 90 10.
So what we know is that 10 percent of all givers make up for 90 percent of giving overall. So let’s focus on that 10%. So here’s some rules of the road to major donor fundraising. We need to keep it simple. The simpler it is, the simpler it will be to track, to keep track of your successes. in your conversations.
Part of nursing is simply a math problem. It’s asks minus knows equals guesses. So the more asks you put out, the more knows you’re going to get, but the more yeses you’re going to get. And the best way to figure out if someone will give is just to ask. So a lot of times we spend so much time trying to guess at what people’s intentions are and try to guess at what they may or may not do.
The only way that you’re going to know is to ask because they know a lot more about their situation and their priorities than you do. There should be a bias towards action. Again, because we are, we tend to be a little bit nervous about asking, we spend a lot of time on our spreadsheets, we spend a lot of time doing wealth screenings, we spend a lot of time on Google figuring out what else that you give into.
Is this sounding familiar? Is it just me? I call it Procrasta Learning or Shelf Help. We, we’re spending time in the spreadsheet versus talking to people. At the end of the day, it’s not personal. If somebody does not give to you, it’s not a Judgment about you as a person or your mission or the good that you’re doing in the world.
It’s just they’re saying it’s just not for them. It’s not personal. And then a lot of times when we’re out in the world fundraising, we attach our value to whether or not we got the gift, right? If I get the gift, I’m a good fundraiser. If I didn’t get the gift, I’m a bad fundraiser. I’d like to reframe that for us a little bit because it can be very stressful and it burns us out because at the end of the day whether or not someone says yes to you is not up to you.
You literally have no control over whether or not you get a yes. The only thing you have control over is did you set everything up the right way and did you get the ask out of your mouth. If you did, that’s the win. And so I think we need to be unattached to the outcome that we have no control. control over and instead attached to the things that are within our jurisdiction of control.
And ultimately, major donor fundraising is about listening and asking good questions. How I’d like us to reframe our position as fundraisers is not, how can I say this particular set of words to get someone to give me something? Instead, how can I, as a fundraiser, be a facilitator of the wildest philanthropic hopes and dreams of my donor?
So before we get started, Fundraising. We need to get our head right. So I’m going to talk about what that means. Then we have to just set a threshold for what we consider to be a major gift. Again, that’s incredibly subjective, right? It will depend on your organization. But what I would do is look on all your individual gifts.
And again, I want to be clear, Right now I’m talking about individual gifts. And, by the way, that also means gifts that you get from DAFs. So if anyone has ever gotten a gift from Fidelity or the Jewish Communal Fund, or, what’s another one? Schwab. It’s wealthy individuals that have donor advice funds. So I really consider that to be indiv It can also be family foundations.
So not family foundations like the Gates Foundation, because I would consider that an institutional foundation run by a family, but Family foundations are usually foundations that are run by members of the family that make decisions. So when I think about individuals, I think about are the decisions made by either the individual themselves or a fairly small group of decision makers versus an institutional board.
So when we set a threshold for what we consider to be a major gift, what you do is you just look at all the individual gifts that you’ve received over the year, and then look at the top 10 percent throw it in the major outliers. So sometimes I hear We got this one time gift of 500, 000, but our average gift size is like 5, 000, so I would just throw out the 500, 000 because it will skew your numbers.
Take your top 10 percent and then just add 10 percent on it, and that should give you a good idea of what it may or may not be. threshold would be. Then you have to set a monetary goal with a specific date for a specific purpose, right? So if we are, for example, we are in March of 2024, if your fiscal year, let’s say, is the end of 2024, what is the amount that you want to raise by a specific date?
Because if we don’t have a goal, if we don’t know where we’re going, it’s going to be very hard to know if we’re getting there. And then we’re going to think about potential cultivation and stewardship activities. Like a menu, right? And so what I mean by that is when we’re thinking about bringing people into the fold, do we have things like Site visits, coffees, invitations to special things, dinners, et cetera.
See who’s on your board. When we are creating our budgets, we tend to be in a scarcity mindset and think about, okay, at least this is how I’ve seen budgeting done. We look at all of our expenses for the year, and then we add 3 percent on it. And then we back in our revenue into our expenses, whether or not we know where the revenue is coming from.
Instead, I would encourage you to maybe think about it differently. Let’s start with the zero base budget. Let’s start with all assumptions. What is it that you need to do in order to meet your mission this year? What are the big audacious things that you are trying to do and how much is it going to cost?
So instead of coming from the lack of what can we raise, come from the abundance of what are we trying to achieve and how are we going to get the resources? Okay, then we’re going to, this is very data driven too, so we’re going to need to look at your current donors, their giving history, and their relationships to the organization because that’s where we’re going to start.
But before we begin again, I want to talk about your money mindset. 80 percent of your fundraising success is your mindset. So Sarah, to your point. I could give you strategies and tactics all day long, but if your mindset is that you can’t do it or you feel anxious about it or you’re afraid of judgment, but we have to believe that the money is out there and that this is a noble cause in the world.
Because if we don’t have that belief, if we don’t believe that the work that we’re doing is to invite people to change the world with us, then we are going to burn out very quickly. We are going to be coming from a place of being on our knees when I say this. all the time. You are giving your donors a gift and an opportunity to change the world.
And so if you believe this to your core, you operate in the world differently. You move through the world differently. I’ll just give you a quick example. I’m married. I’ve been married for a long time, but like once upon a time I was single and I would go through these periods. And this is, Free internet dating, so maybe it’s different now.
But I was definitely in this period where I could not catch a date to save my life. Couldn’t do it. And then the minute I had a boyfriend, everyone wanted my number. And I was like, what’s up with that? Like, where were you a month ago when I couldn’t catch a date? And I think the real answer here is that my vibe was different, right?
Desperation is a stinky perfume. Nobody wants to be part of that. But when you are able to step into the possibility and abundance, and it’s, I don’t need. anybody’s money, but I invite people to partner with me. You put out the, I like to say BDE, that big donor energy, right? You move through the world with a confidence because you are convinced utterly of the work that you were doing and it just changes the energetic dynamic.
Why do people give money? Back in the 90s, they did a fun study on people who give money, and they basically broke it down into seven big chunks. They called it the seven faces of philosophy. And so basically, there’s seven profiles of people who give, and it breaks out like this. And obviously, Not necessarily one or the other, but these are generally the main motivators for why people give money.
So when we think about giving money, when we think about a donor, we have to think about it in terms of a courtship. How much time on a percentage basis do you think that we should spend in identifying? So that’s literally who are people. So it can be 0 to 100%. How much time should we be spending on identification?
It’s actually 10%. How much should we be spending on cultivation? 5 percent is the answer. How much time do we spend on solicitation? How much time? 10%, 15%. It feels like a thousand. All right. 2 percent y’all, which means it’s 53 percent should be stewardship. So a couple of things I want to flag here. Number one, we spend so much time being anxious about the solicitation when it’s really just 2 percent of the overall.
So I think we need to right size our anxiety. And then the second thing I just want to flag here is that the vast majority of the time should actually be spent in stewardship because it is cheaper to raise money from someone who is already given than to raise money from a new donor. Let’s pretend we live in a world where you’re not going to get any other new donors.
How might you actually treat the donors that you have differently? The difference between stewardship and cultivation, that’s a good question. So cultivation usually indicates the things that you do to build a relationship for the first gift. Stewardship indicates the things that you do after you’ve received the gift to deepen the relationship.
Now, the activities can be similar, right? Let’s say, for example, that maybe dinner is one of a cultivation and a stewardship activity. However, the difference would be that you would have a, you would have difference in messaging. So like the way that you would talk to a first time donor is different than the way that you would talk to a previous donor.
Again, going back to the beginning, when you Think about the menu of things that you could offer. They could look very similar, right? Dinner, site visit, giving them the annual report, et cetera, et cetera. The difference, though, is that, is around how we are building the trust and how we’re thinking about the messaging.
So once I give money, I should be treated like I’m in the family. There should be a level of familiarity and, hey, you’re one of us, versus the cultivation that’s, hey, we’re inviting you to be one of us. Does that make sense? So when we think about donor relationships, when we’re thinking about Landing gifts.
Your job is not to close a deal. It’s to open a relationship. So we’re spending more time and energy on the stewardship of continuing to invest in the relationship. And this is my personal pet peeve, so much of what we do as non profits, and I speak for About this as both a fundraiser and a donor is once we get the gift.
It’s almost like I don’t exist anymore, right? It’s like I get the thank you email and then I don’t hear anything as a donor. I want to know three things I want to know What did you do with my money? I want to know, would I be better served giving to some other organization? Ultimately, what I really want to know is does this organization make me feel good or bad?
And so if you’re out there thinking about your donors and they don’t have positive responses to these three questions, I think you’re probably looking at a leaky bucket problem, which is that you’re pouring in new donors, but you’re losing it out the, out of the holes in the leaky bucket, which means you continuously pour more in.
Versus if you just plug the holes a little bit, you wouldn’t have to find as many new donors. And I say this with love. I don’t want you to feel like I’m coming from a place of judgment. I’ve been there. I know how hard your job is. And I think we need to think differently about how we’re retaining first before thinking about donor acquisition.
So I’m building a donor pipeline because that’s what y’all want to know. So when we think about donors, we need to think about it like a funnel. So what is the funnel? So the funnel is the widest part is. Awareness, because obviously I’m not going to donate to an organization I’m not aware of, right? Then I have to do, go down the list of, am I interested in it?
Am I engaged? And then, am I committed? And commitment looks different. Commitment can look like a donation, it could look like signing a petition, it could look like volunteering your time, etc. The mistake that a lot of us make, and I think that I, and I also made this mistake, is that Just because somebody is aware of you does not mean that they are going to be committed to you.
That’s when we get into a lot of yelling into the void. If people just knew about us, of course they would donate. Would they though? Do you donate to every single thing that you’ve ever heard about? Probably not. I want you to think about, when you think about your donor pipeline, where are you missing steps?
Because if you’re not leading folks step by step through a funnel, and you’re trying to jump from awareness to commitment, if you’re not paying attention to the other steps, you’re probably losing a lot of folks out of the funnel. So let’s first talk about awareness. So that means people know who you are, so that means that they either I’ve seen you on social media, I’ve heard about you from a friend, maybe they saw a news article on you.
But the thing that we’re really trying to get here is engaged prospects, right? So it’s no good to you if it’s just a person who happened to hear about your organization. What we’re really looking for are who are actually engaged, who are people that want to be contacted by us and are willing to be engaged on some level.
So let’s take a step back. Your prospects have a problem or they have a desire, right? They want something to happen in the world that you may be doing. As a fundraiser, if you solve this problem for them, you build trust. By building the trust, you build a relationship. And by building relationship, you build not just a potential for a donation, but a partnership.
And I really want us to underline the word partner here. We’re not looking for, in fact, I would even say we’re not even looking for donors. We’re looking for philanthropic partners in this work. So the reason people give money is that they want something to happen in the world, right? They want the oceans to be clean.
They want kids to go to college. They want animals to be saved. They have this desire and they have resources. You also have a desire and you also have resources. And by combining the two, you create a partnership. And so often we come from the place of, Oh, I’m begging for this thing. You’re not begging for anything without you.
The thing that they want to have happen is not going to be possible. They need you and you need that. I did a little analysis on the giving pledge. So for folks who aren’t familiar, there’s this thing called the giving pledge where billionaires essentially agree to give away the bulk of their fortunes and.
sometimes they write letters about why they’re doing it. So I did a little chat GPT analysis on it. And the number one reason why people give away their fortunes is that they want to make an impact. Then the second reason is giving back the personal enjoyment, et cetera. So when we are helping people to make an impact, and then we are also communicating to them about the impact that we, that they’ve made, that is when we help them to do the thing that they want to do in the world.
And I think the mistake that we make as a sector is we live in a world that’s so instantaneous right now. Like I can order something on Amazon. It’ll be at my door tomorrow. Giving to a cause is not instantaneous. Like you all know the work that you do takes time, takes effort, takes, you may not see the fruits of your labor for weeks, months, even years.
If we want to have people coming back for more, we have to close the story loop for them about what you did with my money. Even if it’s an intermediary thing, it’s the equivalent of going to the store and giving you 20 and having someone say, I’ll get the thing to you next week. Okay, fine. It’s less satisfying than handing me the things right away, but you better be sure to get me the thing next week.
Otherwise I’m not going to give you my money again. Is this making sense so far? So when we’re out here fundraising, when we’re out here building relationships, we need to think about planting the seeds and nurturing it before we harvest. We need to nurture before we harvest. And what that means is when we’re in this transactional mindset, we want people to give us straight away.
And this is like particularly pervasive in political fundraising. I don’t know if y’all fundraise, but like I gave money to a campaign and somehow I ended up on everybody’s list. Don’t love that. Not the point of the story, but the point is there’s not a lot of nurturing that gets done. It’s very transactional.
I want the money and I want it now, right? Sure. That might be good for the small gifts. That’s good for a 20 gift. But if we’re talking big gifts, that takes time. It takes on average 18 months. So what do I want to see nurture? When we’re nurturing a relationship, we are adding value. We are building trust.
We are building a relationship so that we can then harvest the fruits of it later on. And when we try to rush it, when we try to get transactional, when we want the money, when we want it, and we want it now, that’s small dollar giving. I’m interested in the big dollar giving. about the world. I have a little framework here.
Essentially, when we think about where to find prospects, we can think about the world in two different ways. There are people who know you and people who don’t know you. And then there are two ways that we can reach people. We can do one, one to one, and that includes email because essentially email is just one to one at scale or one to many.
People who know me personally, the metric here is do they know you from Adam? Either you or someone that you That’s associated with the organization or the organization in general. Okay. Let’s talk about work. So there are really only four ways that you can get people to know about you who then enter into that funnel.
of prospects. People who know you, one to one, that’s warm outreach. People who know you and you want to reach them at scale, that’s posting free content, social media, etc. People who don’t know you and you want to do one on one, that’s cold outreach. So I’m sure you all have received random cold outreach emails in your inboxes or your Facebook inbox or your DMs, right?
That’s cold outreach. And then there are people who don’t know you and one too many, and that’s paid advertising. So I’m going to talk about each of these in turn. What I would say is that I recommend that folks really focus on the first three quadrants of warm outreach, posting free content, and cold outreach before you get into a paid ad strategy.
Now, you can tell me that you’ve maxed out on your warm outreach, but until you’ve literally reached out to every single person that you know, And every single person that your board knows, and every single person personally who’s on your email list, I really doubt that you’ve maxed out on your warm outreach strategy.
Warm outreach, that looks like emails, texts, DMs, voicemails, and you can reach out and touch base with your list. You can use the ACA framework, acknowledge, compliment, and ask. Do you know anybody who might be interested in blank? Name the impact. Interested in sending more kids to college? Interested in college?
clean oceans interested in blah blah blah blah. I’m looking to specific event or action. I’m looking to add people to our list. I’m looking to get people to sign a petition. I’m looking for people who want to financially support. Last year we were able to XYZ impact and people love the chance to make a difference.
Does anyone you like come to mind? If they say no, you can, they can go, okay, does anyone you hate come to mind? You can do this via, thank you Siri, you can do this via phone calls, you can do via emails, you can do text, etc. So that’s your warm outreach strategy. Generally speaking, with a warm outreach strategy, you can use this to build your list.
Oh, speaking of which, how many of you here have email lists that you are regularly using? And by regular, more than once a month. Alright, okay, fantastic. So that is your worm list. So your email list, and I’m just going to underscore, highlight, your email list is your goldmine. Nurture that email list like you would a little baby.
Because, You, we can talk about, Oh, I have this many followers. The truth is Mark Zuckerberg owns that list. I don’t care how many followers you have on Facebook or Instagram or Tik TOK or whatever you are building on borrowed land. So let’s talk about posting free content. I didn’t understand this for the longest.
Now I understand it. The reason we post free content. And so that looks like podcasts. It looks like your social media. That looks like your newsletter. It looks like posting white papers on your website. So the first thing that you want to do is it is that the on ramp to your newsletter. So this is in the vein of building awareness.
So social media is really good at the awareness building is not good at the conversion. So when you’re doing social media, there should be an off platform action you want them to take. Usually it’s sign up for a newsletter, or it could be sign a petition, or it could be show up for a volunteer thing, or it could be show up for an event.
But for The idea here is that social media is at the top of your funnel and your newsletter list is the conversion mechanism. The content that you put out there helps to establish trust and authority and helps to build a brand awareness that you’re out there in the world, but it is usually not the mechanism through which you are going to raise money.
Now, the exception would be if you do Facebook fundraisers or Giving Tuesday, but again, I’m gonna really guess that y’all are not raising serious big money on social media. Like in order to raise serious money on social media, you have to have a pretty large brand. If you were the, I don’t know, like the American Heart Association, you might be able to raise some big money.
Because it’s a volume game because online gifts tend to be small. In person solicitations tend to be big, bigger. Hey there, if you enjoyed this training and want the rest of it, head on over to the link in the show notes and you will get the rest of the training along with some free worksheets to help you out.
See you there.
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