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Five Tips for Cultivating “Expiring” Donors

It happens. Five years ticks by quickly. Before you know it, the wonderful donors who made those generous five-year pledges (of $1,000 or more per year) to join your Multiple-Year Giving Society have just made their third year’s pledge payments and no one from your organization has gotten to know them yet. In fact, they are still complete strangers to you.

Take this as a serious wake-up call and get to work. Set up your donor cultivation plan now, starting with the donors who are nearest to the end of their five-year pledge payoff cycle. If you don’t get to know them and cultivate them systematically now, you will lose most of them at the end of the five years, if not before.

I’m always surprised when people tell us they don’t want to “bother” these loyal Multiple-Year Giving Society Donors. They think they should invoice them dutifully each year, call them at the start of the sixth year, and ask them to re-up on their pledge. That is precisely the opposite of what is needed.

The whole purpose of having donors who make five-year pledges at this level is not for your organization’s financial security. After all, if a donor does not pay their annual pledge, you are not going to take legal action against them. Rather, the purpose of the giving society is to identify those donors who want to be closer to the organization. These donors did not have to make a five-year pledge. They could have opted to give the same amount of money one year at a time. By joining your giving society they are communicating something critical: they want to give to your organization, they want to stay connected to you over the next five years, and they expect you to give them updates, ask for their advice, and include them in major milestones in the life of your organization.

In other words, you should interpret their five-year pledge as their permission to stay connected with them.

We say you should have two personal contacts per year with each donor in your giving society, plus attendance at one Free Feel-Good Cultivation Event. If you have fifty donors, that would be 100 personal contacts. A telephone conversation (not just leaving a message) counts as a contact. But the best contacts are one-on-one and in person, focusing on the donor’s particular area of interest.

Even if your donors are in their third year of their pledge cycle and you have never reached out to them to talk with them or meet them in person, it is not too late. But you need to get going quickly. Here’s how:

  1. Invite a small group of five to seven Multiple-Year Giving Society Donors to a special, private “CEO Golden Hour” with your CEO and board chair in the CEO’s office. Offer a full one-hour Point of Entry Event either before or afterwards. This is a mission-focused event (not merely a nice social event), like a group of five donors having a light lunch.
    • Start the hour by having the board member and CEO thank them for their gifts and give specific examples of what their gifts have made possible.
    • Have a testimonial speaker from one of the programs that benefited from their gifts talk about how your organization changed their life for the better.
    • Resist the temptation to share only the positives. Have your CEO and board members share some of the actual challenges they are facing as well. These donors need to hear your needs and know that their money is making a difference—and will continue to be needed after their first pledge is paid off.
  2. Follow up within two to three days to get their feedback and ask if they would like to serve as an Ambassador by hosting a private Point of Entry for ten or more of their friends or colleagues in your offices, their home or workplace. Tell them you can bring the Point of Entry to their home or workplace if needed. If they prefer not to be an Ambassador, how else might they like to become involved?
  3. After they serve as a successful Ambassador, invite them to host a table at your upcoming Ask Event and fill their table with the same friends and colleagues they invited to the Point of Entry.
  4. If they are not able to come to one of your private lunch events, find another way to meet with them in person, ideally at your offices or program site where they can see your work in action.
    • Offer to meet with them one-on-one or arrange a private meeting with your CEO if appropriate.
    • At the very least, talk with them on the phone and ask them what interested them in giving to your organization.
    • Establish enough of a personal connection so that you will have something to refer back to in future contacts.
    • Set a date for a subsequent contact after each contact.
    • Do not close out their record—always schedule a next step.
  5. Before your next Ask Event, you can approach a small group of these donors to ask them to increase or extend their pledges. For example, you could tell them you are looking for five donors who will each extend their pledges for five more years or increase from $1,000 a year to $5,000 a year as a leadership gift to inspire other donors to do the same thing next year (either at your Ask Event or in a follow-up phone campaign to “expiring” donors who do not attend the Ask Event).

Above all, reach out to these donors now, by telephone. Do not wait until the next event, the next “right time.” Include them in your organization’s family right away. Make sure they know how much you value them. And vow, in the future, to cultivate your five-year pledge donors starting the day after they make their pledge, rather than waiting until their pledge is close to “expiring” before you get to know them.

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Rate of Pledge Pay-Off

Recognizing Major Donors

Q: What percentage of Multiple-Year Giving Society pledges ($1,000 or more for five years) do people actually pay off?

Mary in Oklahoma

A: The rate of pledge pay-off is typically about 95%.

While that might sound exceptionally high, put yourself in these donors’ shoes. They feel connected to your organization because you keep in touch with them personally. They never become strangers. They only become closer friends of the organization’s family.

In addition to attending at least one Free Feel-Good Cultivation Event during the year, all Multiple-Year Giving Society Donors are cultivated one-on-one two times per year. Many choose to become Ambassadors and then Table Captains in subsequent years. By inviting their own friends and family to their private Point of Entry and the Ask Event, they are deepening their own resolve about the good work of the organization.

Not paying off their pledge is never a consideration for the great majority of these donors. In fact, many Multiple-Year Giving Society Donors pay them off early and increase the amount of their pledge or extend their existing pledge after the initial five years.

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Recognizing Multiple-Year Giving Society Donors

Inviting Guests to the Point of Entry

Q: We are working on our recognition plan for our Multiple-Year Giving Society Donors. What are your thoughts on giving thank-you gifts or offering benefits for each level?

Katherine in Colorado

A: We do not recommend any type of premium or special benefits for membership. You want to focus your thanking and cultivation of these donors on mission-focused activities. When someone joins your giving society newly, it would be appropriate for them to receive a small token of appreciation that highlights the impact of their gift. For example, a framed picture of a piece of land they helped to protect, or the hand print of a child with the words “thank you” written in a child’s handwriting.

These donors are true supporters of your mission and work and would not be looking for perks in return for their support. What they want is to be closer to your mission and to be reminded of the difference they are making with their gift. The best way to do this is to focus your cultivation and thanking of this donor on personal, mission-focused contacts. These can range from phone calls, emails, or face-to-face visits from your organization’s leadership, to Free Feel-Good Cultivation Events, where you will have special ribbons on their name tags indicating that they are a member of your giving society.

You can always ask each donor directly how they would like to be involved or communicated. That is the best way to find out the type of recognition that would be most meaningful to each donor.

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The CEO Golden Hour—Option 2: Small Group Lunches

What does it mean to “cultivate” a donor and how would a busy CEO find the time to do that even if they knew what to do?

This is a question we are asked regularly by the groups in our Sustainable Funding Program, now that they have an ever-increasing number of donors in their Multiple-Year Giving Society.

Rather than merely invoicing donors and expecting them to dutifully make their pledge payment for each of the next five years, these wise CEOs and development directors have discovered that with a high-touch system of personalized contacts, even the busiest of CEOs can begin—and even enjoy—the donor cultivation process!

This is the second  feature in our three-part series entitled the CEO Golden Hour, highlighting the top three things your busy CEO can do to impact donor cultivation and major gifts if they are willing to dedicate merely one hour a week to this critical process.

Option 2: Small group donor meetings with CEO and a board member

Purpose: CEO and board members become more comfortable with the donor cultivation process, while giving your loyal donors an inside, personal view of the organization

Preparation:

  • Development director:
    • Confirms five to ten donors for a special meeting with CEO and a board member
    • Sends the guest list to the CEO, including two to three sentences about each guest, time and amount of their last gift, name of the person who engaged them, bucket area of greatest interest, and any other recent participation

Suggested Agenda:

  • Welcome and introductions:
    • CEO starts right out welcoming people and introducing the board member and development staff present (2 minutes)
    • Each guest introduces themselves, tells their involvement with the organization (8 minutes)
  • While people are eating:
    • CEO talks about three things she is most excited about that are happening right now at the organization. Link these three things to your bucket areas (3 minutes)
    • Questions and discussion (5 minutes)
    • CEO talks about three greatest challenges right now, tying these to the three bucket areas (7 minutes).
    • Questions and discussion (10 minutes)
  • After lunch:
    • CEO poses open-ended “focus-group” questions (15 minutes)
      • How do you think we could better convey our needs?
      • What advice do you have for us?
      • How could we be doing a better job of telling our story?
    • Wrap up and thanks from CEO and board member:
      • Be sure to say the development director will call them for feedback in the next two to three days (5 minutes)
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How Many Donors Can One Staff Member Manage?

Dealing with Table Overflow at the Ask Event

Q: I am new to my organization and they’ve used the Benevon Model for about six years now. I would like to know Benevon’s thoughts on a manageable number of multiple-year donors a single employee should realistically manage.

We currently have about 60 multiple-year donors throughout four counties. I am required to continue to cultivate these donors, while working with the board and new Table Captains to increase this number next year. It doesn’t seem practical to do this to its full potential throughout four counties.

Elena in Florida

A: By the third year using the model, the organizations we train and coach in our program should have at least two full-time staff dedicated to the model. One staff manages the cultivation and major gifts process with the existing multi-year donors in your giving society. The other staff member is accountable for keeping the pipeline full and ensuring a sustainable process for generating volunteer Ambassadors who fill the Points of Entry.

One major gifts person can manage relationships with approximately 200 Multiple-Year Giving Society Donors if that is all they are doing. That person would be responsible for ensuring that each of these donors receives two personal cultivation contacts (minimum) every year, and that these contacts specifically relate to each donor’s particular area of interest and passion in your work. The goal of each contact is to get to know the donor better and to deepen their connection to your mission.

These contacts might be what we call CEO Golden Hours, which can take three forms: small groups of multi-year donors meet with your CEO for an update on current issues and challenges at the organization,  one-on-one phone calls with the CEO or one-on-one meetings with the CEO.

In addition to personal cultivation contacts, it is this person’s responsibility to ensure each multi-year donor attends at least one Free Feel-Good Cultivation Event each year where they are further connected to the impact of their giving on the people you serve.

Finally, this person determines when the donor is ready to be asked for an additional gift, an extension on their pledge, or an increase to a higher level of giving, and coordinates that ask taking place. This leverages all of the work you’ve done to get the 60 or so Multiple-Year Giving Society donors you already have by ensuring that those people stay with you. Eventually, they will get involved in ways beyond their financial support. As an example, many of these faithful multi-year donors will become some of your best Ambassadors, by hosting and filling private Point of Entry Events with ten or more of their friends or colleagues.

At the same time, you will need a full-time staff member accountable for keeping the pipeline full with at least two private, Ambassador-hosted-and-filled Point of Entry Events per month with 10 or more guests in attendance. This person oversees your volunteer Ambassador Manager, who in turn supports Ambassadors on fulfilling their short-term commitment to fill and host one tour.

They manage the conversion from Ambassador to Table Captain, where they invite your successful Ambassadors to host tables at your Ask Event with guests who have already been well cultivated and have attended Point of Entry Events in the prior year.

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The CEO Golden Hour—Option 1: Calling Donors

What does it mean to “cultivate” a donor and how would a busy CEO find the time to do that even if they knew what to do?

This is a question we are asked regularly by the groups in our Sustainable Funding Program, now that they have an ever-increasing number of donors in their Multiple-Year Giving Society.

Rather than merely invoicing donors and expecting them to dutifully make their pledge payment for each of the next five years, these wise CEOs and development directors have discovered that with a high-touch system of personalized contacts, even the busiest of CEOs can begin—and even enjoy—the donor cultivation process!

Today we begin a series of three features entitled the CEO Golden Hour, highlighting the top three things your busy CEO can do to impact donor cultivation and major gifts if they are willing to dedicate merely one hour a week to this critical process.

CEO Golden Hour
Option 1:  Personal cultivation phone calls to donors in your Multiple-Year Giving Society (who have pledged at least $1,000 a year for the next five years)

Purpose:  Getting to know your donors

Preparation:

CEO/Executive Director: Block out one hour per week for calls on CEO’s calendar

Development director:

  • Schedule four calls in advance. Tell each donor the call will last ten minutes at most.
  • Use the five minutes before each call to brief your CEO on each donor’s background.
  • Bring a back-up list of other donors in case you finish early.

During the Call:

CEO/Executive Director:

  • Ask questions to engage donors in a dialog and learn more about their particular areas of interest and passion for your work:
    • How did you first learn about our organization or become involved with us?
    • Is there a particular area of our work that most interests you?
    • Do you have a personal connection to our mission?
    • Where or how do you think we’re really missing the boat?
    • What advice do you have for us?
    • What cues might we have missed from you?
    • How better could we be telling our story?
    • What could we be doing to involve more people?

Development Director:

  • Listen quietly.
  • Take notes and enter into donor database.

Stay tuned for Option 2 next week, Small Group Lunches.

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Choosing Units of Service

Q: We want to structure our giving units based on the Benevon suggestion of $1,000, $5,000, and $10,000 annually. 

Looking at our individual giving over the last two years, only 4% of our donors have given above $1,000 annually. In this situation, are the units of $1,000, $5,000, and $10,000 too aggressive?

Richie in Colorado

A: We have a formula for determining your units of service:

Look at your organization’s single largest, unrestricted gift from an individual or a family foundation in the past two years.

  • If that gift was less than $10,000, you should be using the levels $1,000, $5,000, and $10,000 for five years.
  • If the largest gift was $10,000 or more, you should be using $1,000, $10,000, and $25,000 for five years.

While either of these options may sound too large given where you are now with your fundraising, you should keep in mind that the giving society is a pathway to building a major gifts program. The levels are intentionally high so that you can grow into them as you engage more people in your organization and grow your donor base.

You may only have people join at the $1,000 level in either scenario in your first year, but some of those very same donors will increase to those higher levels even in their first five years if you cultivate them and bring them closer to your organization and your mission.

If at least 40% of your Ask Event guests have attended a Point of Entry Event in the prior year, you should expect 10% of the Ask Event guests to join the giving society.

Also remember (or see the sample pledge form on page 186 of Terry’s newest book, The Benevon Model for Sustainable Funding: A Step-by-Step Guide to Getting it Right, Second  Edition) that there are two additional boxes on the pledge form beyond the three larger giving levels:

  • Box 4 is a fill-in-the-blanks box where donors can tell you how much they want to give and for how many years. This box is where your smaller donors can make their gifts or where larger donors can make gifts for less than five years.
  • Box 5 says: “Please contact me. I have other thoughts to share.”
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Creating a Major Donor Pipeline

Q: In the Benevon Model, are there any resources you can share for a creating a pipeline between our annual donors and major donors? We are beginning discussions about how to honor and engage long-term supporters.

Elodie in Minnesota

A: The Benevon Model is a pipeline-filling system for major gifts. In addition to using the model to engage new people who have no prior connection to your work, this process is also a method for further engaging and cultivating your existing donors.

Many groups have a base of donors from prior fundraising events or annual direct mail appeals. While these faithful supporters have been sending in an annual donation or contributing at an event each year, it’s possible that little else has been done to further engage them in the mission.

You can use the Benevon Model to launch a campaign to get to know your donors and to evaluate who would be prospects to become major donors down the road.

Begin by stratifying your list of donors based on the amount they have given. Start with the donors who give the most each year and have done so for the longest period of time.

Identify the best person to serve as an Ambassador for each individual. This should be the person who knows the donor best, and who agrees to personally invite the donor to attend a Point of Entry Event that they are hosting. The relationship between this Ambassador and the donor will make all the difference in your ability to get the donor to a Point of Entry! Tell them that you are hosting these one-hour events to showcase the impact of all that you, and how their support over the years has made a difference.

Once they attend a Point of Entry with the Ambassador who invited them, make the follow-up call within two to three days. Listen for what the person learned and what interested them about your work. Find an immediate next step to further engage this person. Perhaps they want to serve as an Ambassador and host their own Point of Entry Event!

For others, it might be attending a small group meeting with your CEO and other donors to learn more about your current gaps and vision for the future. Make it personal and tied to that individual’s interest in your mission. Keep cultivating until you know the person is ready to be asked. Some donors will take just a few cultivation contacts while others may need several contacts before they are truly ready to be asked.

When the person is ready to be asked, invite them to become part of your Multiple-Year Giving Society by making a commitment of at least $1,000 for five years. This can be done one-on-one or at your Ask Event, whatever works best for each donor.

This five-year pledge gives you even more time and permission to further engage that donor. It’s not just about invoicing them for five years and calling them back in year six to re-up. It’s an opportunity to build a deeper relationship with each donor. Eventually these same donors will be prospects for larger major gifts, capital, and even endowment.

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Ask Event vs. Individual Asks

Q: At what point do you decide not to hold an Ask Event and focus on individual Asks instead? We have very small communities in which it might not pay off to hold large events.

Bryant in Utah

A: Start with an Ask Event in your main location. It is best to launch the Multiple-Year Giving Society at an Ask Event, even a small one. Then you can do one-on-one Asks in the outlying communities, inviting donors to join the Multiple-Year Giving Society that you have just launched at your Ask Event. Otherwise, if you just start with one-on-one asks, the levels seem surprisingly large.

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Multiple-Year Giving Society Board Buy-In

Inviting Guests to the Point of Entry

Q: How am I going to convince my board that asking is okay at these Multiple-Year Giving Society pledge levels?

Katherine in California

A: As veterans of many fundraising events, most board members presume their guests will be pressured to give at the Ask Event. They presume this event will be the first time a guest learns about your organization and therefore they rightly fear that asking for these “large amounts” will be off-putting.

Once your board members understand that all the Table Captains at the Ask Event will have served as Ambassadors, hosting and filling their own private Point of Entry Event with ten or more guests, and that these prior Point of Entry guests will be the same people they invite to sit at their tables at your Free One-Hour Ask Event, they will begin to see how different this event is.

We recommend you let these skeptical board members observe and enjoy your first Ask Event, and they will come along at their own pace.

If you focus on having privately hosted Points of Entry, you will naturally meet our metric for having 10% of your Ask Event guests give at one of the three larger multi-year levels. The fourth box on the pledge card lets donors fill in the blanks for their own gift level. We only expect 40 to 50% of Ask Event guests to make any gift at all at the event.

For those board members who do not want to participate in the process, invite them to the Ask Event, seat them with other board members or friends and let them be a part of the whole experience. Do not ask them to be Table Captains.

If your event follows the Benevon Model, your board members will be so proud of your organization, they will likely become supporters of this process and volunteer to serve as Ambassadors over the next year.

Remember our golden rule about treating board members as if they are your most cherished major donors. You would never force your most cherished major donors to do anything. Let them determine their own preferred form of participation.