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How’s Your Oxygen Level?

Oxygen: a colorless and odorless gas that people need to breathe.

For nonprofits, this essential element comes in the form of engaged individuals.

Without a base of truly passionate and committed individual supporters, no nonprofit organization will ever be fully sustainable.

I believe that nonprofits exist at the behest of the community. That 501c3 tax exempt status is not a right, it’s a privilege. Way back when each nonprofit got started, someone said: we need that service in our community so much that we as individuals are going to pay more taxes so that organizations providing those vital services don’t have to pay taxes.

As soon as a nonprofit organization forgets that fact and stops focusing intentionally on engaging the individuals in their community at whose behest they serve, they have moved off the path of long-term sustainability.

It’s not about the money. It’s about the engagement of those individuals in the real work of the organization.

It’s about having a steady stream of individuals who could genuinely move you to tears in two minutes with an authentic, compelling story or personal experience of why your work is needed.

Like the community organizer at one of our advocacy organizations who knew just the three questions to ask me to take me back to a time in my own life when I had witnessed or experienced injustice and had failed to take action.

It’s about the authentic, continually “refreshed” engagement of individuals who breathe so much life into your organization that, even if they never personally need your services, they are passionate about that need being met in the community.

It’s about being able to leave your organization knowing that dedicated people are looking after it wisely, growing it appropriately, and above all, holding the organization true to its main purpose: fulfilling its overarching mission.

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Are You Guilty of Board Envy?

Are You Guilty of Board Envy?

This week’s feature is an excerpt from The Benevon Model for Sustainable Funding: A Step-by-Step Guide to Getting it Right, Second Edition. For more information and to buy the book, visit our store. Also, see below for an account of how the Benevon Model benefitted one organization’s board.

Most nonprofits aspire to have their board become a “fundraising board,” either because they think that is what an ideal board should be, or because they think it would handle their fundraising needs forever. They berate themselves for not having this ideal fundraising board. I refer to this as “board envy,” and it is not rooted in any reality I have ever seen.

When you pull back the curtain from those well-established organizations with “fundraising boards” that are the envy of every other group, you will find a team of dedicated, hard-working staff who coordinate the process of strategically cultivating each donor and engaging volunteer board members at every step of the way, including the ultimate Ask.

The fantasy of the magical fundraising board that will do all the work and raise all the money is just that: a fantasy. Those organizations with “ideal” fundraising boards have a systematic plan for how they grow and cultivate relationships with donors. While they involve their board members strategically in the cultivation and asking process, they certainly don’t rely on their board members to save the day.

We work with many groups that have well-established fundraising programs, including groups that are already raising many millions of dollars each year before they come to our workshops. They often tell us they still do not feel they have a system for keeping their board members engaged. They experience board burnout and turnover, just like the small and mid-sized organizations do. They use our model as a mission-centered strategy for ongoing donor— and board—engagement.

If you are truly committed to leaving the legacy of self-sustaining funding, there is no better place to start than with your board. Rather than distracting your focus and wasting time comparing your board to others, get to work on specific strategies for keeping your board engaged.

Watch this testimonial from a board member at Respite Care in Fort Collins, Colorado, about how the Benevon Model provided a system for involving their board members in the fundraising process.

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It’s Counterintuitive

It’s Counterintuitive

People refer to many aspects of the Benevon Model as counterintuitive. Why is that?

They point out seeming inconsistencies like:

  1. Not asking for money at a Point of Entry Event once you have educated and inspired people about your work.
  2. Having a Wish List at a Point of Entry Event if the model says you cannot ask for anything there.‌
  3. Leaving a voicemail message when you are trying to get one-on-one telephone feedback.‌
  4. Having a free fundraising event where the guests are told in advance that they do not need to give money.‌

It is true. Each of these points—as well as many others—about the Benevon Model seem to run counter to our intuition, yet in working with more than 5,000 nonprofit teams and tracking the data closely, these are based on what works. The common thread is that they each leave the donor in the driver’s seat.

Let’s revisit each point, looking at it from the donor’s point of view.

  1. Not asking for money at a Point of Entry Event after you have educated and inspired people about your work.

    ‌Just because someone is inspired and educated doesn’t mean they have had the time to digest the information or ask the questions they would need to have answered before they could become involved long-term.

    ‌If we were to ask for money at the Point of Entry, the entire process would be collapsed into a one-step, modified strong-arm approach, which leaves the donor feeling like a victim of a “bait-and-switch,” well before they have even had the opportunity to absorb what they have learned and let you know what they think of your organization.

  2. Having a Wish List at a Point of Entry Event if the model says you cannot ask for anything there.

    ‌The Wish List is designed to connect people to the day-to-day needs of your program and to remind them that, in the face of the wonderful Point of Entry Event they are attending, you still have many unmet needs.
    ‌‌ ‌
    ‌‌‌The Wish List is a handout for each guest and is not discussed as part of the program. It is not an Ask. It is also a touchstone for the Follow-Up Call after the Point of Entry, when you ask people, “Is there any way you could see yourself getting involved with us?” Note that the first item on your Wish List should always be Ambassadors: short-term volunteers who agree to host and fill a private Point of Entry with ten or more people.

  3. Leaving a voicemail message when you are trying to get one-on-one telephone feedback.

    ‌Of course you would prefer to reach the person and speak in person, but if you have tried that with no success, it is perfectly acceptable today to leave a voicemail message. After all, you told the guest at the end of the Point of Entry Event that you would like to call to get their feedback in a few days. They filled out a contact card at your Point of Entry and gave you their preferred phone number. Therefore, you may leave a message just as you would call a friend or business associate and leave a detailed message on their voicemail.

  4. Having a free fundraising “Ask Event” where the guests are told in advance that they do not need to give money.

    ‌This is the ultimate in fundraising “permission.” Guests are asked to come to the event after attending a Point of Entry Event and being cultivated personally leading up to the Ask Event. Be careful never to use your Ask Event as a substitute for a Point of Entry.

  5. In order to attain our metric of having 10% of the guests join the Multiple-Year Giving Society, a minimum of 40% of the Ask Event guests must have attended a private, Ambassador-hosted and filled Point of Entry in the prior year.

    ‌These formulas should be met without any need to pressure guests to give.

For more counterintuitive aspects of the Benevon Model, read The Benevon Model for Sustainable Funding: A Step-by-Step Guide to Getting it Right, Second Edition.

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How to Think Like a Donor

How to Think Like a Donor

To get insights into how to cultivate a donor, look at what motivates you personally as a donor.

Here is a simple but powerful exercise:

  1. Make a list of the organizations you give money to. Not just the obvious one or two—go a little deeper. Come up with at least five.
  2. Next, take the time to answer the following questions for each contribution you make.

What patterns or trends do you notice in your giving? For example:

      • For how many years have you been giving to the same organizations? Have you increased your giving over the years? What, if anything, have these organizations done over the years that have led to an increase or decrease in your giving?

      • Are you a loyal or a fickle donor? Or a little of both? Do you give faithfully to your old standby favorites? Do you intersperse them with new ones? If so, what does it take to become a new recipient of your gift?

      • Is there any correlation between the amount of your time and money you give to an organization? Do you feel differently about giving money to the places where you also volunteer in some way?

      • What kind of thanks do you receive? Are you thanked more or less than you would like? Do the thanks feel personal enough? Does it seem like the organization knows you or wants to know you better?

      • Is your name prominently displayed in places that matter to you? On plaques, or in annual reports? Though this may not seem important to you, how would you feel if your name were inadvertently omitted.

      • In terms of ongoing connection, is there more each organization could be doing? Do they invite you to other events throughout the year? Do you feel sufficiently connected to their mission? If it’s a national organization, are you part of a larger national ‘society’ or group recognition program?

      • What more would it take for them to receive a larger gift from you? More information, more direct contact, more recognition? Maybe just a phone call?

Notice what makes you tick when it comes to giving away your money.

Notice what more an organization could have done to get to know you and your passion for their work. Often just a phone call or a personal invitation to a meeting or program of interest will make a big difference. Perhaps you’ve already done that with some of your favorite organizations and now you need something more. Perhaps they’ve missed your cues and their attempts to “cultivate” you feel too heavy-handed.

As you begin the cultivation process with each donor, remember, first and foremost, that you are a donor. Your name is on a list at each of these nonprofit organizations. Someone within those organizations may be trying to “cultivate” you right now!

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Determining How Much is Enough

Determining How Much is Enough - Success Benevon

We say that attaining sustainable funding requires each nonprofit organization to clarify its specific metrics, timeline, and plan for reaching the goal. Otherwise it will never happen.

To inspire each team to think big, we challenge them to imagine what life would be like at their organization if worrying about funding were no longer an issue. What if the basic day-to-day financial needs were handled and your organization could move onto fulfilling the next level of your mission—developing the programs you know would make a difference, staffing the departments that leverage the greatest results in the community, undergirding your infrastructure to sustain your operations going forward? How would that change the self-image of your organization, the quality of the work, and the outcomes?

What would have to have happened to make that possible? How much money would be in the bank and by when? How many months of operating reserves would it take for your organization to feel secure: three months, one year, two years? How many individual donors would you have? Would you want to have a big endowment?

At the school where I began to develop the Benevon Model, our definition of sustainable funding ultimately included an endowment fund that was large enough to generate in interest enough money to cover the annual operational gap that we struggled to raise each year. This does not mean, however, that after we had funded our endowment, the school no longer needed to raise funds. On the contrary, they worked as hard as ever to raise more funds and to engage the community in their work.

Like your organization’s mission, the mission of the school was broader than just educating its current students. They wanted to dispel myths, build bridges in the community, educate more students, and support their families. Having an endowment that covered much of the annual financial operating gap meant the administrators were not waking up in the middle of the night worrying about closing the school’s doors. Even with a generous endowment, there was still plenty of fundraising and other work to be done to fulfill the school’s larger mission.

Quantifying Your Legacy
Each group uses different metrics to track their progress in fulfilling their objectives. Some define sustainability as an endowment large enough to throw off in earnings enough money to cover their annual operating shortfall or gap. Their ultimate metric might be to have a $20 million endowment that will generate $1 million a year in income.

Other groups define sustainability as a reserve fund or pot of money set aside that they can get their hands on when they need it. They may decide, for example, that if they had a reserve fund large enough to cover one year’s operations, they could manage the uncertainties of their multiple funding sources year by year. That one year’s reserve fund becomes their metric.

Some groups define sustainability as having a higher percentage of their revenue coming from individual donors. Instead of having 95% of their revenue coming from government grants, 4% from corporations and foundations, and 1% from individuals, their metric may be to increase the 1% from individual giving to 5%.

Still other groups define sustainability as a percentage increase in the number of individual donors they now have, for example, increasing their current number of 200 major donors by 100% to 400 major donors. Of course, each group would define “major” donor for itself.

Another metric might be increasing the raw number of individual donors by a certain amount, for example, adding 100 new major donors per year, or reaching a total of 500 donors. Groups might put specific conditions on these goals, such as requiring that each donor has an ongoing open pledge to contribute at least $1,000 a year for each of the next five years. Their metric is the number of new donors at these levels.

In addition to establishing hard financial and donor metrics, we encourage each group to quantify their goals for softer intangibles like broader community awareness, more people requesting to become board members or volunteers, favorable media coverage, and more support from foundations and businesses. For many groups, these softer benefits are more valuable than the money raised.

Far and away, the number-one benefit our groups report from implementing the Benevon Model is that they are no longer the “best-kept secret” in town. People know them now. One behavioral health organization we work with is located in a rural community with a population of only 2,500 people. Yet people in the town did not know what was really going on inside their building. By the end of their first year using the model, all that had changed. They now had business support, favorable media coverage, and many passionate advocates championing their work at public meetings and the state legislature at budget time. Those results are hard to quantify.

We also understand that each organization’s metrics for attaining sustainable funding may change over time. As they achieve one goal, such as having a reserve fund of a specific amount, they may decide next to embark on a capital campaign or build an endowment, goals which may have been unthinkable until now.

Here are the specific questions to guide this important discussion with your group:

  1. How will we quantify our legacy of sustainable funding for this organization?
    • Short-term goals for the next five years?
    • Long-term goals for the next 10 to 15 years?
    • Be sure to include in these goals specific metrics, for example:
      • $25 million endowment
      • Reserve fund of one year’s operating expenses
      • 20% increase in individual donors
      • Diversifying funding sources by increasing funding from individual donors by 20%
  2. What would be the impact of attaining this legacy?
    • On the people we serve?
    • On our community?

The legacy you want to leave needs to be crystal clear before you begin to implement the systematic approach provided by the Benevon Model. Take the time you need to quantify—and get excited about—what sustainable funding would look like for your organization. You will need it to inspire your group as you embark on the work ahead!

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Five Critical Characteristics of a Financially Self-Sustaining Nonprofit

Five Critical Characteristics of a Financially Self-Sustaining Nonprofit

Before the New Year’s Resolution season has passed, consider that 2018 could be the year to get your organization on the path to financial sustainability. This future is possible for your favorite nonprofit organization if you are willing to do the work to attain it.  Here’s what it would look like:

  1. Your organization has a self-generating group of enthusiastic individual donors who understand and value your work and mission and who consider it consistent with their own values and mission in life. They regard their contributions to your organization as a bold step toward the fulfillment of their own purpose.
  1. These loyal donors understand your work and freely choose to pledge their ongoing financial support by making unrestricted gifts for your operational needs. A subset of these donors also gives for capital projects and endowment. Rather than developing separate categories of donors to give to operations, capital, and endowment, this ever-increasing, single pool of loyal donors support all of these needs. These individual donors and supporters also advocate on your behalf at the legislature, invest in the continuing education of your staff, or offer summer jobs for your students. They are there to help fund a one-time special need for a family or community. They care that much!
  1. Your donors engage others naturally by consistently talking about their favorite nonprofit organization with their friends and colleagues. They do this not because they have to sell tickets or raise dollars before the end of the year, but because they are genuinely excited about the organization’s work, and they want to tell others about it.
  1. As time goes on, a ripple effect takes hold. Instead of board members needing to ask their friends for money, people who have gotten to know your organization over time begin to come to you and ask how they can join your board or help you in other ways. What began as a mere fundraising program has become an ongoing operating system for engaging and developing relationships with individuals who will sustain your work and, in turn, engage others to do the same.
  1. Far beyond being your bread and butter, these loyal and passionate supporters are your oxygen, breathing life and vitality into your nonprofit organization, regularly refreshing your board, your volunteers, your staff, and keeping your organization connected to the current needs of the community. No longer the “best-kept secret in town,” your organization is well on the way to fulfilling its mission with a strong cadre of supporters who are delighted to be involved. For them, your work is their work.