The Ritter Group

Guest Post: Fundraising Thoughts from a Financial Advisor – An Interview Part 2

Greg Ritter — Wed, 18 Aug 2010 13:06:04 +0000

Guest Blog Post: Yvonne Hundshamer

Yvonne Hundshamer is the founder of Blue Grotto Inc., a Minnesota business that works with organizations to document culture and values, celebrate milestones and articulate vision. As a corporate history and culture consultant, she has directed both the research and project management on client projects including: 3M, Despatch Industries, Medtronic and National Car Rental. Before becoming a self-proclaimed ‘corporate anthropologist,’ she spent six years in the communications office of Minnesota Governor Arne Carlson.

Guest Post: Fundraising Thoughts from a Financial Advisor – An Interview Part 2

By Yvonne Hundshamer

Please click here to read the part 1 of this post.

Each time I hear you speak about Allodium’s nonprofit clients, I am impressed with your proficiency and knowledge of the nonprofit field. How have you built that expertise?

Our financial advisors have extensive experience working with both individual and institutional investors.

Individuals are philanthropic, and they think about giving. Nonprofit institutions think about donors and receiving. If you can look at it from both sides of that same coin, you understand the connections between donor intent and a nonprofit’s mission.

When those align, that’s when a nonprofit gets gifts. In my twenty years of financial experience, I know that the really big decisions individuals make, they make based on their core values. Organizations, similarly, are driven by a mission and set of core values.

An individual investor who has taken care of their priorities – put their kids through college, taken care of their retirement – may then turn their attention to charitable giving. They get very values-oriented, and become increasingly thoughtful about how an organization fits their values before they make major gifts, whether through planned gifts or campaign contributions, like a capital campaign.

How can a nonprofit be more strategic about their development efforts?

Personally, I am very planful and strategic. So, things like planned giving make a lot of sense to me. Estate planning makes a lot of sense to me, retirement planning makes a lot of sense to me.

We have seen a trend in development – nonprofits are becoming more knowledgeable about the importance of planned giving and that donors want to do more than simply write a check. So the idea of estate planning, and planned gifts and trusts, is becoming far more important

It is all about planning. Investors make plans. They make estate plans, retirement plans, etc. They think ahead five or ten years and make plans. Organizations need to emphasize the strategic planning element of their development efforts, and how that dovetails with donor values.

Why do you think values are so important to the development-philanthropy relationship?

Donors make decisions based on their values. The larger the financial amount, relative to their financial situation, the greater likelihood it will be a values-based decision.

If you asked me for $100 for your organization, I might give you $100 because I’m trying to be nice to you. But, if I have to decide how to carve up a $10 Million estate between three organizations when I die, I’m going to think about what three organizations are the most important to me and my life, and what I want to leave as a legacy. Those are going to be values-based decisions, not seat-of-the-pants decisions. They will be very values driven.

People tend to go to their core values when they are forced to make hard decisions. In periods of stress or duress, you’re going to revert back to your core values. And there are different sets of values that drive people’s decisions.

You’ve talked about converting that $100 donor into a significant or a lifetime donor. What do you think nonprofits can do to help make that conversion in their donor base?

I think the most important thing is for organizations to develop a relationship with donors – relationships that enlighten the donors about how the organization’s mission dovetails with the donor’s core values. The better that the organization can get at that enlightenment of the donor, the larger the gift they can achieve. Or the larger share of the wealth from that donor.

It’s all about enlightening the donor about what the true mission of the organization is, and connecting it to the donor’s core values.

Nonprofits also have an opportunity to demonstrate their own strategic map to donors– for growth, or a narrowing of focus, for improvement or delivery of service, even fundraising strategies. Donors of large gifts want to know that you, too, are being strategic in your stewardship of their gift.

Sometimes it’s a chance to more deeply engage a donor in the organization. One organization I think does a good job is St. John’s University in Collegeville, MN. They often invite alumni to give counsel on a specific issue. For example, if they want to build a new library, they include donors in the discussion on their approach to launch such a major capital campaign.

Getting donors involved in that strategic planning process engages them more deeply with the organization, and reminds them how much they value the organization and its mission. Increasing their commitment to the organization philosophically will inevitably increase their commitment to the organization financially.

David Bromelkamp is President and CEO of Minneapolis-based Allodium Investment Consultants, an award-winning independent investment advisor. Contact him at 612.230.3702; dbromelkamp@aicria.com.

Guest Post: Fundraising Thoughts from an Investment Consultant – An Interview Part 1

Greg Ritter — Wed, 18 Aug 2010 12:57:54 +0000

Guest Blog Post: Yvonne Hundshamer

Yvonne Hundshamer is the founder of Blue Grotto Inc., a Minnesota business that works with organizations to document culture and values, celebrate milestones and articulate vision. As a corporate history and culture consultant, she has directed both the research and project management on client projects including: 3M, Despatch Industries, Medtronic and National Car Rental. Before becoming a self-proclaimed ‘corporate anthropologist,’ she spent six years in the communications office of Minnesota Governor Arne Carlson.

Guest Post: Fundraising Thoughts from a Financial Advisor – An Interview Part 1

By Yvonne Hundshamer

As nonprofits become more knowledgeable in the areas of planned giving, they are all trying to better understand the process donors go through in deciding how they want to allocate their estates.

According to David Bromelkamp, President and CEO of Allodium Investment Consultants, his team takes their clients through a detailed planning process as they prepare them for the future. Many of Allodium’s clients are philanthropic, and take their giving decisions seriously. Bromelkamp says that nonprofits need to be more strategic and planful as they approach donors, working to connect people to the organization’s core values and to engage them in its mission.

I have heard Bromelkamp speak on several occasions about a variety of topics regarding investment and best practices for nonprofits. Each time, what impresses me most is not just his strong financial advice, but his ability to speak the language of nonprofits. With his background as a CPA and financial advisor, I find his proficiency in the nonprofit world a rare combination.

His own volunteer involvement includes serving on the Board of Catholic Charities of St. Paul and Minneapolis.

I interviewed David recently in the hopes of bringing some of that knowledge and perspective to Blue Grotto clients and my blog readers.

Each time I hear you speak about Allodium’s nonprofit clients, I am impressed with your proficiency and knowledge of the nonprofit field. How have you built that expertise?

Our financial advisors have extensive experience working with both individual and institutional investors.

How can a nonprofit be more strategic about their development efforts?

Why do you think values are so important to the development-philanthropy relationship?

Donors make decisions based on their values. The larger the financial amount, relative to their financial situation, the greater likelihood it will be a values-based decision.

Click here to read part 2 of interview with David Bromelkamp.

David Bromelkamp is President and CEO of Minneapolis-based Allodium Investment Consultants, an award-winning independent investment advisor. Contact him at 612.230.3702; dbromelkamp (at) aicria (dot) com.

Guest Post: Fundraising Thoughts from an Investment Consultant – An Interview Part 1

Greg Ritter — Fri, 13 Aug 2010 20:03:17 +0000

Guest Post: Fundraising Thoughts from an Investment Consultant – An Interview Part 1

By Yvonne Hundshamer

As nonprofits become more knowledgeable in the areas of planned giving, they are all trying to better understand the process donors go through in deciding how they want to allocate their estates.

His own volunteer involvement includes serving on the Board of Catholic Charities of St. Paul and Minneapolis.

I interviewed David recently in the hopes of bringing some of that knowledge and perspective to Blue Grotto clients and my blog readers.

Each time I hear you speak about Allodium’s nonprofit clients, I am impressed with your proficiency and knowledge of the nonprofit field. How have you built that expertise?

Our financial advisors have extensive experience working with both individual and institutional investors.

How can a nonprofit be more strategic about their development efforts?

Personally, I am very planful and strategic. So, things like planned giving make a lot of sense to me. Estate planning makes a lot of sense to me, retirement planning makes a lot of sense to me.

Why do you think values are so important to the development-philanthropy relationship?

Donors make decisions based on their values. The larger the financial amount, relative to their financial situation, the greater likelihood it will be a values-based decision.

Part 2 Will be posted next week. Please be sure to sign up to receive the blog in your inbox so you don’t miss out.

Room to add one nonprofit staff member? Which One?

Greg Ritter — Tue, 13 Jul 2010 13:53:13 +0000

As the recession eases it will be time to consider rehiring staff members. Which one will make the most difference to the bottom line? I suggest you make room for a major gift officer. Here’s what s/he can do for you:

1. Keeps up to date. Stays abreast of legal and technical developments in the
different vehicles of major giving through workshops, seminars, conferences
and publications; remains conversant with the organization and the field of
service in general.

2. Provides general information on major giving. Initiates informational mailings
to friends; responds to inquiries; speaks to interested groups.

3. Identifies prospective donors. Determines where to spend time to the best
advantage; researches respondents to mailings or those who come to the major
gift officer’s attention through referrals or direct inquiry. Maintains an effective
record system and an efficient follow-up procedure to ensure that all contacts
receive appropriate attention.

4. Develops the prospect’s interest and commitment. Patiently but persistently
cultivates the prospect through correspondence, phone calls and personal
visits, both by the major gift officer and other officers and volunteers.
Answers the prospect’s questions, keeping the prospect mindful of the organization
and its programs; gains the prospect’s friendship and trust.

5. Determines the feasibility of various contribution options. Elicits information
about the prospect’s assets and needs and chooses the most appropriate option
available; considers the major gift program as a part of the total development
picture and remains open to the possibility of deferred as well as current gifts.

6. Prepares the ask. Commits the plan to paper in a manner that is both convincing and understandable to the prospect, and the prospect’s agents if
necessary.

7. Closes. Discusses, clarifies, and possibly modifies the plan to meet the
prospect’s approval; gains the prospect’s endorsement.

8. Ensures that arrangements are properly executed. Oversees and initiates
arrangements through the proper business office channels and communicates with the prospect about them.

9. Maintains the commitment of the donor. Ensures that the donor retains
confidence in the college and in the wisdom of the decision to make a
major gift; keeps the donor informed of developments at the organization
keeps the donor open to the possibility of another gift or referrals to
other prospective donors.

A pretty good return on investment! When searching for a gift officer it may help to use a seasoned fundraising professional to help you find one or interview your prospects. From my personal experience it is very helpful to hire a consultant to mentor a new major gift officer.

Pause or Pounce? Timing your nonprofit capital campaign.

Greg Ritter — Tue, 06 Jul 2010 16:30:16 +0000

I have found that when a campaign goes on too long, year after year, its spirit begins to sag, leaders get tired and donors wonder if it will ever end.

You can sustain a great, upbeat campaign experience for 18-24 months, in my experience. This is the period of active asking for leadership and major gifts, and the broader, more public campaign events.

But there are special situations that call for a revised time schedule. My most recent new church building campaign was one of these.

The feasibility study was positive, and the first six months of campaigning was right on schedule. The present church building was 80 years old, and an early gift of land put the project within reach, or so it seemed.

But a group opposing the project was forming. This was of great concern to the pastor, who saw her role as pastor to all the members. How could she put aside her excitement for the project to listen attentively to some members’ objections?

Early in the planning process, the finance committee had asked the opinion of a local construction company about remodeling the present building, rather than building a new structure. An elevator would need to be added for those unable to handle the steps – up for worship and down for fellowship and the rest rooms.

The construction company’s verdict was clear. It would surely cost more to remodel, and at the end you would still be in an 80 year-old building.

So the campaign proceeded on the strength of their assessment. Then it became clear that not all members were in favor, especially those whose homes were older than 80 years, and were just fine, thank you.

In order not to lose these members, we decided to take a year off to hold a series of listening groups and to spend some money on a thoroughgoing remodeling analysis.

The land donor was kind enough to extend his offer to allow for this extended period. At the end of the year, the verdict was the same. It just wouldn’t be worth it to remodel.

So the campaign resumed and was successful. No members were lost in the process.

In this case, it was better to pause than to pounce.

A Golf Tournament Alone is NOT Enough to Advance Your Mission

Greg Ritter — Sun, 04 Jul 2010 21:24:43 +0000

We are certainly well into the nonprofit special event season. Our incoming mail gets more colorful this time of year with all those four-color brochures enticing us to golf, fish, run, shoot clay pigeons, taste wine, drink scotch and eat chocolate, all in the name of our favorite nonprofit cause.

In my first few nonprofit benefit golf tournaments, I was amazed at the wad of big bills players would pull out for green fees, Mulligans, merchandise, the banquet, the silent auction. “We’ll make a bundle tonight,” I thought to myself, “and look at all those new faces.”

What I realize now is that big wad of bills was not the golfer’s own money, happily given in support of our nonprofit mission. In many cases it was their company’s or their employer’s money provided to the golfer for a day of fun and networking.

It was great to collect the money (“take the money and run, Greg!” I remember my old mentor saying). It was fun to strategize about how to increase the number of foursomes each year and increase the proceeds.

But when golf season was over and our nonprofit capital campaign began I found many of the golfers and sponsoring companies did not participate. “We support you through the golf tournament,” they would say.

Even the new faces I remembered from the course, who listened to our program at our banquet that night and saw our client stories posted at each tee, did not feel close enough to us to support the nonprofit capital campaign.

There is no substitute for good old-fashioned one-on-one cultivation of prospects, especially before a capital campaign. They need to see the mission in action, meet Board members, and maybe serve on a committee to feel part of things.

Then let the special event be a celebration of progress. It is also a great cultivation of the volunteers who worked on the event, and a great first introduction of friends who are new to the mission. But keep cultivating, especially when there is a capital campaign in the future. In the meantime, take the money and run!

Does Your Nonprofit Have a Donor Communications Calendar?

Greg Ritter — Thu, 01 Jul 2010 23:54:45 +0000

A successful communications plan should include a year-long calendar to easily track when different messages need to be delivered and how to deliver them. For nonprofits it is essential to have a structured communications calendar to ensure you are reaching your donors on a regular basis.

I was thrilled to see nonprofit consultant Lori Jacobwith (@LJacobwith) sharing a sample communications calendar (it’s an Excel document that can be used as a template) in her recent post: Keep Track of Donor Communications With this Awesome Tool! Lori also shares some great tips for connecting with donors in this article. I highly recommend you read the post and download this tool to use with your communications planning.

Thank you Lori for sharing this amazing tool!

Making a List, Checking it Twice…Capital Campaign Readiness Checklist

Greg Ritter — Thu, 01 Jul 2010 04:00:17 +0000

The following checklist provides nonprofits with one test to help them assess their readiness to launch a capital campaign:

1.   Compelling statement of the capital need(s).
2.   Engaging case for support.
3.   Strategic plan.
4.   Audited financial statements.
5.   History of balanced budgets.
6.   Enthusiastic Board Chair and Board Members.
7.   Executive in place for at least three years.
8.   Strong volunteer leadership.
9.    Trusted campaign counsel to provide guidance (if goal exceeds $500,000).
10.   Attractive and consistent look to publications and web presence.
11.   Community image that is strong and positive.
12.   Positive report from the feasibility study which should:

Test the plan and the feasibility of the financial goal
Highlight the areas of the case for support that need to be strengthened
Identify planning assumptions that need to be revised
Suggest strategies that will contribute to the campaign’s success

Positive responses to the items on this checklist give your organization an excellent chance of succeeding. I recommend you involve an experienced nonprofit consultant who specializes in capital campaigns as early in the process as you are able. An expert consultant will help guide the process saving you time, energy and money in the long run.

Is Your Nonprofit Ready for a Capital Campaign?

Greg Ritter — Mon, 28 Jun 2010 14:48:25 +0000

The goal of any nonprofit capital campaign is to be successful in reaching the campaign goals. In order to be successful there are certain critical elements that must be addressed. Some of these elements an organization can assess for itself. Others come from the findings of a professionally-conducted feasibility study. Still others are best determined through targeted prospect research and interactive communication design. Through my years of experience one thing I have learned is that bringing in qualified nonprofit capital campaign consultants early in the process is the best way to save time, energy and money. A good nonprofit consultant will help guide you through these critical elements and lead your nonprofit to reach the capital campaign goals and find success.

Worried about expense?

Remember that the first couple of gifts in a well-executed campaign will more than cover the cost of careful campaign preparation.

How much should we expect to pay?

Hourly rates will vary from one consultant to another. You have to ask. The total amount for professional counsel for an entire campaign will probably average in the range of 7-10% of the campaign goal. This amount should be included in the campaign budget along with architects’ fees, permits, expense for contractors, etc.

When is it worth it for us to pay?

I have asterisked (*) the items below where I believe it is most important to pay for special expertise.

Does the organization have a master plan for growth?
Do you have detailed, accurate estimates of cost for each stage of growth?
Has your annual income grown to a point of including sufficiently large numbers of big-gift prospects and can you identify others who are capable of and may be interested in giving substantial amounts?
Is there whole-hearted agreement among the Board members and staff concerning the importance of your expansion plans?
Are the Board members and staff determined and committed to the success of the project?
Is your organization well regarded and highly respected in the community?*
Is your website and social networking presence up to date?*
Is there a valid and urgent need for the funds to be sought? Can this need be dramatized easily and effectively for emotional appeal?*
Is top-level leadership available for the campaign – leaders who are interested in and committed to success?*
Is it possible for the largest gift to represent 10-15% of the campaign goal, and can it be secured prior to formally launching the campaign? And… can one-half of the campaign goal be secured from 10-15 donors. And…can 65-75% of the goal be secured from approximately 100 donors?*
Can a sufficient corps of enthusiastic and dedicated volunteers be recruited to work on the campaign?*
When you succeed in this campaign, are there resources available to provide the annual operating support for the projects funded through the capital campaign?

Although there is no guarantee of success, these seem to be the areas that are best to address before further campaign activities begin. How does your organization stack up?

BRINGING A GOOD IDEA TO MAJOR GIFT PROSPECTS

Greg Ritter — Thu, 24 Jun 2010 19:46:19 +0000

To take a major step forward, a nonprofit organization needs to become successful at bringing their best ideas before potential donors for consideration and funding.

I have worked with nonprofits who believe in their mission so sincerely, they can’t imagine that a donor would not join in support, just hearing about the program. But major donor prospects are bombarded with many such program descriptions every week, and don’t have the funds to support them all.

How do you make the case for your nonprofit program or project stand out so it gets the consideration it deserves? It is worth it to bring in professional expertise to help create this case for giving? It will be useful all year long, but needs to be reviewed and updated each year as circumstances change in the organization and/or in its service community.

Does the case state the right set of needs in the vocabulary of a major donor?
Organizations make a common mistake by describing their own needs instead of the needs of those they serve. Another common mistake is to miss the all-important balance between statistics and emotional appeal.

Have you described your program in a nutshell that follows naturally the needs you just described?
Major donors are busy people and have a whole stack of program literature they try to plow through. Don’t make their job harder by going on and on about program details. It’s easy for us to miss the boat on this one, as we are so used to talking about our program.

Are you able to describe to the prospect why it makes the most sense to fund your organization (rather than someone else) to meet these needs? Remember the stack of proposals in front of the donor. One or two of them might present a similar program idea to what you are presenting.

Are you able to describe the costs of the project, with just the right amount of detail for the donor to grasp quickly? Although some prospects like spreadsheets of figures, the case for support is not the place for this. In this document we want to establish an idea quickly and in a compelling way. Supporting detail belongs in an appendix.

Have you painted a verbal picture for the reader of what success will mean? Suppose all the needed funds are raised. Can you leave the donor with a mental picture of how life will be different, and for whom?

You can see that writing a compelling case for support is practically an art form. It uses words and paragraphs, but the writing is as tight as poetry. We’ll get once chance with this donor, better invest a little up front to make it shine.