Before the Big Ask: Four Questions You Must AnswerHoward Stevenson and Shirley Spence | Georgia Nonprofit NOW, Winter 2014
As major gifts have become more important to nonprofit success, and large donors are increasingly sought after, some donors have responded by becoming more sophisticated in their philanthropic decision-making. Others are just confused, even overwhelmed: Who should I support? Meanwhile, nonprofit leaders wonder: How can we compete? How can we survive and thrive? The fact is that large donors have many places to invest their dollars. Why should someone give to your organization, and to the particular giving opportunity you may be proposing?
In our experience, people—especially affluent people—are sincerely interested in making an impact on something they consider important—not just getting a tax break. As one generous donor (who’s also a great fundraiser) observed: “I’ve found that there are many more people with resources looking for meaning, than people with meaning looking for resources. As a nonprofit, you create meaning by raising money.”
Your challenge is to convince a potential donor that your organization is uniquely positioned (or at least extremely well positioned) to address a problem that he or she cares about deeply—to turn their raw resources into meaningful results. The secret is not just targeting people who share your mission, but making sure they understand your organization will be a responsible, effective, and appreciative steward of their gifts. That will require addressing four key questions that every smart donor asks:
1. Are you doing important work?
2. Are you well managed?
3. Will my gift make a difference?
4. Will the experience be satisfying to me?
The first two questions are about your organization, and the second two are about the giving. The most important question of all is the first: Are you doing important work? Of course, what they mean by that is: Are you doing what I consider to be important work? If your mission holds no interest for them, don’t waste your time trying to convince them.
Most people, unfortunately, have heard stories about nonprofit mismanagement; some have even seen it firsthand. So the next question to anticipate is: Are you well managed? You have to take the question seriously, offering a clear economic model and financial transparency.
If you can get over that hurdle, attention will turn to how the money will be used: Will my gift make a difference? Most people who give a significant gift are truly interested in making a positive impact. They want reassurance not only that their money won’t be wasted, but that it will be used effectively. Can you demonstrate the impact of your work, with metrics and compelling stories?
Assuming they’re interested, even enthused, they’re still not going to toss their money into a black hole.
And, finally: Will the experience be satisfying to me? This is the question you start answering from the moment you meet a prospective donor, and that you keep answering through the receipt of the gift—and, hopefully, for much, much longer than that, as part of an ongoing relationship (with regularly-scheduled donations).
The experience of National Public Radio regarding Joan Kroc, wife of the founder of McDonald’s Corporation, is instructive:
After Ray Kroc’s death in 1984, Mrs. Kroc inherited his fortune and turned her attention to philanthropy. A staunch supporter of an informed civic society, she believed in the power of public radio.
When Mrs. Kroc began planning her bequests, she approached NPR executives regarding a gift. They were startled—and delighted—and immediately flew to San Diego to meet with her. Mrs. Kroc quickly made it clear that she would insist on an extensive due-diligence process. Was the organization well managed? How could it guarantee that her bequest would be used in accordance with her wishes, in perpetuity?
NPR evidently cleared these hurdles. When Mrs. Kroc died in 2003, her will specified substantial gifts to a number of familiar institutions. But there were several new beneficiaries, as well. NPR received more than $200 million, and an additional $5 million went to a member station in San Diego.
NPR executives heard later that Mrs. Kroc had initially approached another public media group, but found its responsiveness lacking. If true, that other organization made a $200 million mistake. All four of the questions outlined above had to be answered to Mrs. Kroc’s satisfaction before she would make a gift.
My cardinal rule is: Be prepared to answer all four questions, even if they’re not all explicitly posed. Why? Because, from the donor’s perspective, they combine to tell a compelling story. So ask these questions of your organization, and make sure that you are personally satisfied with the answers. You have to be convinced before you can hope to convince anyone else.
Howard Stevenson is an entrepreneur, professor, and author, whose positions at nonprofit institutions have included vice provost of Harvard University, senior associate dean of Harvard Business School, chair of the Harvard Business School Press, and chair of National Public Radio. He has been a donor and a fundraiser for most of his life.
Shirley Spence is a researcher, writer, and management consultant whose work spans the business and nonprofit worlds.