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Revitalizing the Capital Campaign. AHP Webinar March 3, 2011 J.B. Michael Farrell FAHP Principal www.philanthropycoach.ca. Session Outline. Positioning your institution and your board for success. Revisiting case development…Is it urgent…does it matter?
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Revitalizing the Capital Campaign AHP Webinar March 3, 2011 J.B. Michael Farrell FAHP Principal www.philanthropycoach.ca
Session Outline • Positioning your institution and your board for success. • Revisiting case development…Is it urgent…does it matter? • Case studies and observations on fundraising that works in good and bad times • A look at a “New Normal” for the Campaign Model. www.philanthropycoach.ca
What we Learned in Recession • Our weaknesses were exposed • Healthcare demand was constant relative to some other businesses • Some urgent capital projects weren’t • Some urgent capital projects were put on hold anyway…fear • We didn’t have the relationships we needed to weather the storm www.philanthropycoach.ca
Where we were vulnerable • Leadership…rubber stamp or stagnant board • A routine case Top-up equipment Goal by subtraction • Tactics…Annual Giving and special event driven programs www.philanthropycoach.ca
Donor Relationships are the key in bad times…John Hope Bryant “In this difficult period that began in 2008 …I have had to call on supporters to ask for their help… at a time when they are having to restructure and lay off people. And everyone I’ve called has been helpful. I haven’t had one person tell me no. They haven’t always given me the answers I wanted but they have given me the best answer they can give me. That is the result of relationships.” Love Leadership pg 157-158 www.philanthropycoach.ca
View from the Board Chair • Revenue is falling • Costs are staying the same or going up • In all likelihood he/she has been stung by recession too. • He/she has to answer to a board and wants to be seen as doing something www.philanthropycoach.ca
Keeping the Board’s focus on raising more money rather than cutting costs • 85% of costs in a service industry are people. Growth by subtraction won’t work. • Board members are often not the same profile as the major gift donors. We start making decisions for “them”… them being your cohort of major gift prospects. • Keep the dialogue with major gift prospects open. Get direct input from “them” and involve volunteers in these discussions. www.philanthropycoach.ca
Making the Case for Campaign Investment ROI vs. Cost Per dollar raised • If you invest $1 million dollars with me and I promise to return $1.5 million at the end of the year? Would you take the deal? • What if I could return $3m over 5 years? • Expectations for fundraising are out of sync with business • Margins in grocery retail are 3-4% www.philanthropycoach.ca
Give the Board Context for Decision Making • Growth needs investment • Present the campaign budget in a tangible 5 year growth chart. www.philanthropycoach.ca
Present 5 yr. Campaign Income/Expense Projection www.philanthropycoach.ca
Strategic Resource Deployment If you have to cut, make the cuts strategic. Resource Allocation Legacy Major Gift Repeat Gift First gift Universe www.philanthropycoach.ca
A Look in the Mirror • The economic down turn paralyzed our offices. • Are we making the recession a good reason not to ask and not to give. • We have to have expectations of success or no one else will. www.philanthropycoach.ca
CDOs as Leaders • Your staff are vulnerable to the “sky is falling message” • Keep true to activity based goals…Make the calls. • You must lead. The staff and volunteers are watching. If you lose faith they will. www.philanthropycoach.ca
What About Our Case? • The Case is really the conversation that you will have with donors. • Now, more than ever, it is not about the statistics or buildings it is about hope… • Move the discussion from money to your mission and you will get more meetings www.philanthropycoach.ca
Paradox of Need in the Case Need can be paralyzing Need is universal Solutions set your organization apart You must be the right organization…a champion, to right the wrong, cure the disease, relieve the suffering www.philanthropycoach.ca
Your case hasn’t diminished. In all likelihood it has become more urgent. Find your Big Idea • Saving lives • Changing lives • Creating hope • Easing pain • Calming fear • Restoring dignity “Honor thy father and thy mother.” Shalom Village, Hamilton, Ontario a Long Term Care Facility www.philanthropycoach.ca
Big Ideas “Many believed angioplasty would never be available here. Others made it sure it was… The journey ahead will be distinguished by achievements that will save lives and change forever the way we provide healthcare” Thunder Bay Regional Health Sciences Foundation … www.philanthropycoach.ca
There are still resources available …but • The economy has certainly been tough but for the best gift prospects the sky, is in fact, not falling • Recession Hangover…we aren’t in the clear yet. They are not poor but feel vulnerable for the first time. • Home values…the biggest investment of a middle class family is devalued www.philanthropycoach.ca
Dealing with Donor Angst • “I won’t live long enough to recover my losses”…She did and she has. • Astute investors are back to, or even ahead of where they were before the recession. • We need to have conversations about our mission…about the people and lives we are saving…about hope. • In an uncertain world we know we are making a difference. www.philanthropycoach.ca
A Campaign Reboot • A $8m is stuck at $6m • Did a mini study to re-engage volunteers and community.... talked to donors and prospects • Revisit what was a comprehensive case…build a new plan around specific case elements…it’s a do over. • Re-focus on major gifts. When campaigns stall good volunteers seek activity. They want to do something so they go after smaller gifts. You can’t raise $2m with $5,000 gifts… www.philanthropycoach.ca
New energy… “Don’t mistake activity for achievement” John Wooden • Kept context of $8m campaign but in reality the new campaign is for $2m • The campaign proposal was focused on the new case element • The Volunteers were reenergized and the project got back on track. • When staff and volunteers believe in any plan it takes on new life. www.philanthropycoach.ca
Hitting the wall on a $30m Campaign for a small Midwest facility …An "insider's perspective" A Case Study • $30 million campaign declared with no study (Heart Centre, Maternity and Hospice) • Annual foundation revenue under $1 million • A $7 million injection from a partner hospital plus $8 million in low hanging fruit to $15m • Economy hit the wall…Campaign hit the wall. Staff hit the road. • Best prospects had been asked and many donors were tied up in 10 year pledges www.philanthropycoach.ca
An "insider's response" • New foundation leadership reboots the campaign • Critical to keep the public face of the campaign positive • Hospital CEO is loved and respected “we engaged him successfully on gift calls ranging from $100-$500,000” • Direct Marketed the Planned Giving program # of confirmed gifts up from 10 to over 50 ($9.9m pledged) www.philanthropycoach.ca
An "insider's response" Strategic Use of Special Events • Ramped up a golf event from a $300,000 to $951,000 to close the Campaign. (Strategic use of some Campaign gift announcements) • Introduced a new event that raised $260,000 and helped replenish the Major Gift prospect pool • Closed out at $33.8m www.philanthropycoach.ca
Doug Dillon…Panas, Linzy & Partners • Those organizations that moved forward have been rewarded, in part, because so many decided to "wait". • A clients voice message : "Here at the Boston YMCA, our mission is NOT in recession!“ • Some donors have reduced their giving--it is a fact. But, with some major donors, they have increased their giving. They are more attuned and sensitive to those in need--and to the few who are bold enough to ask. www.philanthropycoach.ca
Doug Dillon…Panas, Linzy & Partners • Campaigns are taking longer to complete. I didn't say: "taking longer to start"! It is on average taking 3 to 5 months longer • Either the need of the community is important and urgent or it's not! We are in the business of saving and changing lives. URGENCY is the key--has always been and will continue to be what motivates our constituency. www.philanthropycoach.ca
Jim DeLauro PHD, DeLauro & Associates Consulting “Generosity is a function of Optimism” • The CEO and fundraising staff believe in the project • An external study provides a 3rd party professional validation of the case and spreads the optimism • Optimism and confidence driven by the urgency and importance of the case is the common denominator in campaign success www.philanthropycoach.ca
Jim DeLauro PHD, DeLauro & Associates Consulting “Stewardship is the key to everything” • There is a penalty for procrastination. Those that have delayed having these conversations with donors will now find themselves in a crowded market place • If you didn’t have the building blocks in place the recession was a tough time to start • Organizations that haven’t been stewarding donors have a smaller list of leadership prospects and have to spend time warming up old relationships www.philanthropycoach.ca
Strategies for Securing the Gift • In a perfect environment what would you like to do? • The Good Samaritan approach…those with assets are the only ones that can help. • Matching gifts as campaign incentive • 10 year gift agreements with a revisit clause www.philanthropycoach.ca
The Gift Agreement (attached) • In this example there is a 7 year pledge but with a commitment to revisit • The power to vary purpose clause • The reputation clause • Money management clause www.philanthropycoach.ca
Cautions • Tying your best donors into 10 pledges means they will still be tied up when the economy is rolling again • Pushing too hard can be seen as “hitting them when they are down” • On balance there is more risk to your case in not asking • Discussions have to be mission based…the case is not in recession www.philanthropycoach.ca
Cautions (2) • An elderly benefactor told us to "go ahead" and build a hospice. He would wrote a promissory note for $1.6 million. In the fall of 2008 when his bank stock plummeted, he covered only $600,000. We wrote off $1 million www.philanthropycoach.ca
This new normal for campaigns isn’t exclusively the outcome of the recession. The old model was a function of a “prospect rich environment” New normal is good prospects but fewer prospects More donor involvement and more gifts for specific purpose…and the resulting need for stewardship The planning study is more essential than ever. The New Normal in Campaigns www.philanthropycoach.ca
The Planning Study…New Normal • It is more than “How much can we raise?” • Crafting the right questionnaire…can you make the case resonate, can you find heroes? • Trying too hard to be objective is a waste of an important prospect visit. The case is the solution. • The activity surrounding the Study call can be powerful and is often the first and the most interaction the prospect will have with your organization. www.philanthropycoach.ca
7 Points of Contact • A respectful letter from senior volunteer outlining a new direction and asking that he/she meet with an expert. • Development Assistant calls to make the appointment • Thank you letter with case summary sent in advance of call by senior volunteer • Development Assistant confirms visits on day before. www.philanthropycoach.ca
Process…Points of contact (2) • Expert makes call • Immediate thank you card sent to Prospect by expert (interviewer) • Summary report is mailed to prospect by senior volunteerYou need to be very particular about what is in the questionnaire and who is making those calls. www.philanthropycoach.ca
Much smaller, tighter campaign organizations driven by an absolute focus on leadership gifts. Shorter leadership terms and use of joint leadership roles…co-chairs even leadership by committee More staff making solicitation calls Heightened competition…this is no time to snooze The New Normal in Campaign Management www.philanthropycoach.ca
Thank you Questions
Acknowledgements Doug Dillon, CFRE Senior Partner, Jerold Panas Linzy & Partners douglasdillon@panaslinzy.com James DeLauro, Ph.D. Principal DeLauro & Associates Consulting jim@delauroassociates.com Love Leadership, John Hope Bryant Published by Jossey-Bass www.philanthropycoach.ca