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Monday, November 20, 2017

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Rating and Evaluating Prospects: Whom Do You Ask For How Much
Tony Poderis

May, 2006

No one would argue the fact that every fund-raising campaign needs a goal and that everyone connected with the campaign, including prospective donors, needs to be aware of that goal. Then why do people so often fight the setting of a goal for each prospective donor and sharing that goal with the prospect? Trustees often blanch at the idea, and it is the rare solicitor who the first time he or she is told that there will be a suggested giving amount for each of his prospects does not respond with, "I can't tell people what to give!"

They're right. Solicitors shouldn't try to tell prospects what to give, as this will engender a great deal of resistance. Yet setting a personal goal for all prospective individual donors, letting prospects know what their goal is, and helping them see where and how it fits under the umbrella of the campaign goal is probably the most important element of a campaign. No matter what sources you are approaching, you need to be ready with a suggested giving amount in line with what each prospective donor is capable of giving. Dealing with foundations, corporations, and government funders in this manner is easy. In fact, it is usually required. Grant application forms have a blank space where you fill in the amount requested. But when it comes to individual donors, we seem to think it is a different kettle of fish. It isn't.

Individual Donor

If a fund-raising campaign is to have a realistic chance at succeeding, we must in the case of every prospective individual donor:

1. Rate and evaluate the ability to give.
2. Seek a realistically large--hopefully the maximum--potential gift.
3. Provide the donor with a suggested gift amount.

Prospect rating meetings for individual donors are usually the most important meetings that will be held for any fund-raising campaign. They work best when participation is limited to a few people comfortable with discussing the personal finances of others. Such meetings are fraught with the opportunity for unnecessary comments. That temptation should be resisted. Remember, those doing the evaluating in one meeting are likely themselves to be rated in some future campaign. Courtesy, discretion, and respect are the watchwords here.

Perhaps the most damaging and the most common negative aspect of these meetings occurs when participants after rating a prospect at a certain level expound on why you won't get a gift at that level. You'll hear everything from, "They're giving a million dollars this year to the XYZ institution," to "He's the cheapest guy in town." The proper response is, "If they have the potential to give that amount, never mind the reasons why they won't. We must never say no for prospects. That's their job. It's ours to talk them out of it--to give them the opportunity."

You begin rating prospects by establishing a sizable database of caring and financially capable individuals. This list will be generated from an organization's past fund-raising experience, suggestions of new prospects from participants in rating meetings, and analysis of those known to give to similar organizations and causes.

Years ago, when we were planning to go to Akron, Ohio, for the first time to raise money for the Cleveland Orchestra's summer home, Blossom Music Center, which is actually located considerably closer to downtown Akron than to Cleveland--we had a problem identifying prospects. We had been selling tickets in Akron for only two years, and the Orchestra had virtually no donor constituency there. We took the annual reports of the seven or eight largest cultural institutions in Akron and went through each, identifying donors and the sizes of their gifts. This was long before the advent of the desktop computer, so we made a three-by-five card for each donor listed by each institution. Then we assembled the cards in alphabetical order. Many names appeared on seven or eight cards, with most of them indicating they were giving $1,000 a year to each institution. You can bet we rated each one of these donors at $1,000 when it came to making our prospect list.

Once you have made the determination that an individual is capable of giving at a certain level and has the proclivity to give to your organization or similar programs, you must be willing to go after that amount. This is what is meant by seeking a realistically large--hopefully the maximum--potential gift. Is it really the maximum? Probably not. You would have to be an awfully good evaluator and a particularly brave fund-raiser to go after a truly maximum potential gift every time. But you must seek the largest potential gift you feel is achievable from each donor. To do otherwise needlessly inflates the list of prospective donors required, increases the amount of work to be done, and lengthens the amount of time a campaign will take.

Now back to the problem of telling people what to give. Remember, you aren't telling, you're suggesting! No one wants to be told what to give to any fund-raising campaign, but most prospects will welcome a suggestion of what would be appropriate. People nearly always want to know what the "price" of something is. It is rare that anyone decides to purchase an item without first looking at the price tag. The same is true when it comes to making a philanthropic donation. People want to know how much the soliciting organization needs, and fund-raisers should always have a ready answer.

That answer should be a specific dollar amount determined by a rating and evaluating process, but far too often it is:

1. Give what you can: Requesting that multimillionaires give what they can is silly. You seldom are likely to be asking any one person for resources of that magnitude.
2. Give what you are comfortable with: People can be comfortable with giving $10 when you need $100 and they could give that and more.
3. We would appreciate a gift in the range of _____ to _______: Asking for a gift in the range of $100 to $1,000 tells the prospect you haven't determined what your real needs are.

You should always suggest a specific number, and that suggestion must be presented in a way that is neither annoying nor demanding. There is only one person who can and will decide the size of a gift--the individual making that gift. However, most prospects will welcome and consider a request made in the following manner:

We are going to the community to raise $250,000 that we plan to place in a permanent endowment fund to provide income in perpetuity, assuring that we will continue to meet our financial needs; be able to maintain, improve, and enhance our current programs and services; and have the opportunity to implement new ones to meet the growing needs of our community.

To help us meet our campaign goal, we hope that you will consider making a gift of $10,000. We are suggesting this amount because, as you can appreciate, a campaign of this magnitude and limited time frame requires a certain number of leadership gifts at significant dollar levels. While this suggested amount was developed with that premise in mind, we recognize and understand that in the final analysis you will consider what is right for you. Of course, whatever you give will be deeply appreciated.

I have used this suggested gift statement, with obvious modification, in numerous campaigns, and it has worked well. It succeeds because it approaches prospects as each of us would want to be approached-thoughtfully, courteously, and enthusiastically.

Remember, chances are that a careful and thoughtful ratings process will result in your asking for an amount heard many times before by the prospect. Your request is not going to be shocking or offensive. Even if it is high, when presented respectfully and politely, you are likely to be told, "Gee, if I really had that kind of money, I would be glad to give it to you." At that point the prospect has said he will give. Now all remains is for him to decide how much, and you have started his thinking at a far higher level than a low-ball request would have prompted.

Foundations and Corporations

When it comes to rating and evaluating prospects, fund-raisers spend the lion's share of their time on individual donors. After all, in nearly every campaign, they are the primary source of contributions. However, it behooves us to take a look at the process as it pertains to other giving sources. For our purposes, let's assume that governmental funders can be handled like foundations and private and community foundations can be viewed as essentially the same.

For foundations, the best and most comprehensive source of information is The Foundation Center. It maintains reference libraries in New York City, Washington, D.C., San Francisco, Atlanta and Cleveland. The Center also publishes The Foundation Directory, a reference book listing each foundation in the United States and including:

1. Its name, address, officers, and trustees
2. Its purposes and year of incorporation
3. Its total assets
4. The number of grants it typically makes, total annual distributions, and the size of its largest and smallest grants in a given year
5. What programs and activities it supports (i.e., endowment, capital projects, operating expenses, annual campaigns, new programs, personnel expense)
6. Information which must accompany a grant application
7. Specific projects, programs, and entities to which it will not make grants
8. Proposal submission and review dates

My experience with The Foundation Center library and its staff in Cleveland has been nothing but positive and most beneficial. The library maintains a complete microfilm record of all IRS Form 990s. (This is the tax form that all private foundations must file, showing to whom each gave money in any given year.) I have frequently used the library's 990 microfilm to search for donor prospects among private foundations.

The best sources of information about corporations are the local chambers of commerce and a book called The Corporate Giving Directory, published by the Taft Group in Rockville, Maryland. The Directory lists which corporations gave what to whom in each state. Be mindful, however, that when it comes to gaining corporate support in your community, there is no substitute for the same kind of hands-on knowledge which you should be collecting about prospective individual donors. The best sources for this type of corporate information are remarkably similar to those you would seek out for data about individual donors. In addition, the chamber of commerce can provide a list of its members, usually the businesses of any size in a community. This and any other available list should be reviewed for the names of new potential donors by a committee which has an understanding of the local corporate community and its giving patterns. Once again, don't overlook past experience and the experiences of similar organizations.

As part of the process of rating and evaluating prospective donors, you should take into consideration the causes they are known to support or avoid. Except in the case of individual donors, the record is pretty clear. Many foundations and corporations have published guidelines which indicate whether they will give to the following types of campaigns and requests:

1. Annual
2. Capital
3. Challenge
4. Endowment
5. In-kind
6. Multiyear grants
7. Sponsorship and underwriting

These guidelines also spell out where grants are restricted as to location, type of organization, or content of program.

With individual donors, the lines are usually less clearly drawn. Even if an individual has refused to give to a category of request in the past, he or she still might be worth a try, particularly if the circumstances are unusual. People do change their minds. However, it is generally wise not to solicit individuals who have made it clear they will not give either to the type of campaign being conducted or its underlying purpose.

Tony Poderis was for 20 years to 1993 Director of Development for The Cleveland Orchestra and its Summer Home, Blossom Music Center. He was responsible for Cleveland's largest annual institutional fund-raising campaign. Since 1993, Tony has been a fund-raising consultant serving all non-profit institutions' needs to develop and to maximize their potential to raise Annual, Endowment, Capital, and Sponsorship & Underwriting funds.

 



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