The simple concept: Rationalize the Number.
- Don’t just pull numbers out of the air.
- Tie the number to a project, priority or overall funding plan for the vision.
The difference between rationalizing the number and not rationalizing the number is the difference between asking for money and presenting the opportunity (a BIG DIFFERENCE.)
Reminder: Don’t make decisions for the prospect. Let the project/priority drive the ask. Focus on the impact and not on trying to make decisions about ‘what funding level to ask for’ – present the opportunity around the rationale and let the prospect decide!
I’ve attached a simple framework (PDF DOWNLOAD) with some self-coaching questions you can use to help you rationalize the number and ask.
]]>This is not scientific but it’s far from arbitrary. This is my own little way of thinking about potential based on what I’ve seen at many organizations (start-ups to colleges). It’s a way of thinking about
- The potential of your current relationships.
- The potential of new relationships (if we visit!)
- Why we need to be visiting
Everybody says they need more prospects. Instead of trying to get more people to give 1x think about how you can get more people to give 50x!
- 1x is clearly emotional. I’ve seen a lot of people cry at events – but the giving is still impersonal and ‘charitable’ in nature.
- Sitting with someone one-one-one (or 2-1 / 2-2) allows you to listen and respond. It makes the ask personal and seems to trigger another level of discernment in giving – increasing a commitment to an organization ten-fold (10x).
- But to really get the big big gifts (50x) we need to do a better job of walking our prospects through a funding plan and going back and forth, having a dialogue about the ask… giving context and providing the FULL case-for-support. These conversations are much more strategic.
At my seminars I share a story of a school that met with parents and supporters. They asked everyone to “prayerfully consider giving at a level that was significant”. Those that had previously contributed $2000 through the auction responded with $20,000 gifts. The school was still frustrated. They had $1M prospects giving $100K and $100K prospects giving $20K.
As much as the prospects liked the school they had no context for how much money to consider. They had no way of guessing that $1M might be the linchpin for the campaign… there was no discussion that gave the committed families and supporters a framework to think bigger.
This school went back to each supporter with a complete funding plan. For a $1Million dollar ask, for example, they would ask for the $1Million (a specific number). More than that they would have a discussion around WHY the $1Million and what it would enable the school to do (leverage, leadership, timing, etc). The prospects had a broad context in which to consider the ask and many of them increased their gifts by five times and some by 20 or 30 times!
I’ve met with billionaires and many many millionaires. Trust me, nobody has disposable income. Nobody is going to guess that a $1Million will help. $10K or $50K is a lot to anyone! It’s not until we show up that we can get 10X. It’s not until we dialogue about 50X that we can get 50X.
A rhetorical question: Is it easier for you to visit with every current funder and ASK (10X) or to get ten more prospects to give? From there, is it easier to get your best prospects to 50X or to get 5-10 more visits?
]]>Some quick bullet points – or discussions that have been unique to this class (a very partial list)
- Designated giving: I’ve rarely, rarely ever had a gift designated. I know this is something many others deal with all the time. I really think this is because we’re not communicating where the money goes and so the investor has to put some sort of framing around this on their own.
- On that same note, only one person has EVER asked me how much money goes to overhead – I immediately asked him if he had ever worked with The United Way and he said, ‘Yes, why do you ask?’
Again, if you communicate your purpose + where the money goes + funding plan then it’s not about overhead.
- IMPACT DRIVES INCOME
INCOME = Communicating your Purpose and / or vision
DRIVES = Communicating Where the money goes (your buckets, circles or priorities – for those that have been to camp)
INCOME = Communicating your Funding Plan and having a discussion about how the prospect could fit in to that plan. - 1X 10X 50X
1X = What is given without a case for support + dialogue (one-on-one). Perhaps through mail or event.
10X = What is invested as a result of your showing up and having a dialogue around 1-2 pieces of your case for support (purpose/priorities/plan).
50X = What is invested when you walk through ALL THREE PIECES of your case for support – only when you enter into a discussion about what is really needed and talk about serious funding can a prospect begin to discern, think-about or work towards a leadership gift or transformational gift. - What economy?
One of our attendees from last year’s San Diego camp called in to report presenting the opportunity for $2.0Million AND closing. The prospect HAD been impacted (negatively) by the stock market but was committed to the PURPOSE/PRIORITIES/PLAN of this organization – they asked – and worked through the mechanics (it was not a given – had to have a DIALOGUE about how to make this happen). - And this one’s just for Alums.
Calculator Time? 15 Seconds.
In this seminar we discuss:
- A new look at “conventional” nonprofit funding silos (annual fund, special events, direct mail, grants, major gifts, endowment, planned giving, campaigns)
- A 100 Day funding plan to generate $100,000
- The triple ask (operations, projects & endowment)
- How to build a funding plan
- Top-down focus (not bottom-up)
- The master prospect list
- Simplicity, focus and return-on-energy
- Edit: “Year-end Funding Strategy”
Some of the questions that came in following the seminar are posted below. Add your questions to the comments.
Q. We are just getting starting and we don’t have a real funding plan.
[Our Org] has a yearly budget of $400,00.00 per year. $380,000.00 for running our school and training programs for the orphaned children in Rwanda and20,000.00 to pay our director and rent here in NY. We have never been able to raise the full amount of the money we need.
We have the opportunity to purchase land and build a boarding school for at risk girls, but no plan to how to do the fundraising.
We spend all our efforts on events where our Director (who is so compelling) speaks and we maybe raise $10,000.00 at a time. Now I understand how this is the wrong focus.
I do need to work on a real plan to get us solid. What you have said to this point has been helpful. Thank you
- BK
A. BK-
Thanks for your note!
Need to be focusing on following up with people at those events (to maximize the relationship). Talk to them about your programs — you need money for
Teachers (or curriculum)
Campus (or places where you do the teacher)
Students (a cost associated with each student).
The funding priorities might break out like this:
Teachers: $175 K (training, finding, supporting, paying)
Campus: $50K (we use other campuses but still need a central HQ – I’m making this up)
Students: $175K (we help 350 kids at an average cost of $500/kid)
Your plan should be around this — either get people to fund blocks of kids. Eg. “Nick, can you underwrite 20 kids?” OR Ask me to take make a $50K lead gift toward the vision for each of the next three years.
NJF
Q. I missed what you mean by flip to fill the funnel … can you repeat?
- JW
A – JW, if and only if someone is actually maximizing relationships then you can think of the model as a funnel. Without the focus on the top then it’s just a pool (not a funnel). You can use your events as predisposition events — with the idea that you will follow-up with attendees one-on-one following the event.
NJF
Q. How do I “think big” and shoot for a $1M budget, but also prove that we’re a lean organization?
Have a call with a legendary VC in a few hours!
- MDP, Social Ventures
A. MDP. As a VC he will understand Think Big, Build Simple. There is a reality… you don’t NEED $1M TODAY but you do need $1Million. So you can talk to [name] about growing with the vision – it could be a $200,000 ask in which he does $25K this year, $75K the next and then $100K. This is all a function of how/where you can let your plan go.
The other part of the answer is accounting for WHERE The money will go – your three circles. If your plan really requires $1M then it really requires $1M. You could be a $100M org and still be lean. So… what are you doing with the $1M?
Does that help?
NJF
Q. Hi Nick,
In planning your top tier, how do you determine when to use 5 angels at $100k each or top donor of $200k plus next 2or 3 at $100k, etc.
Then the same thing for the second (or middle) tier.
Thanks.
Best Regards,
- CP
A. CP
Thanks for the question.
I think it starts with what you can get your best prospect to do. The plan is DYNAMIC (I’m making a note to share this next time). Dynamic means that you can adjust your plan. If your top prospect agrees to $50K then you know you need to widen the base.
The important thing is that you do the math. The math will reveal when the plan becomes ‘not viable’. That is, if you find that you let everyone down a few levels and now need 700 prospects at $1000… well, that’s not viable.
I usually start out with a very aggressive funding plan and adjust if and as needed. I am reluctant to let off the aggressive plan though because in many cases, if you start adjusting your levels the funding just can’t be made up.
NJF
Q. Nick,
You distinguish the difference between sales & marketing. I understand this and wonder as a 1 person department who needs to raise awareness and funds, how do you measure the no-monetary yield such as greater awareness, buzz, etc…and include these needs in our plans
Do you have suggestions of best ways to identify qualified prospects?
Thanks,
D.
A. D – I think the key lies in understanding the distinction.
As a one-person development department my plan would focus on 20-30 prospects. We cannot fund our vision without those prospects. I don’t know the nature of your org (re: awareness) but re: funding, it’s only important that those 20 or 30 have a greater awareness. Heck, if we can get the funding on board we’ll hire someone to do marketing
NJF
Nick,
Thank you so much, I felt this was an excellent, excellent seminar……….. As a one-woman development department, I’ve got to tell you, that I was originally shaking in my shoes thinking of our upcoming, $3.5 M endowment/capital campaign………. And now, after your seminar, realize we probably need to make that a $12.5 M campaign – I strangely feel less anxiety than I did about $3.5 M
- JT
Q. JT – We’ll definitely get that for you when it becomes available.
Funny. It’s easier to think big than think small, isn’t it?
I just helped a retirement community in San Diego do this. The catalyst for the relationships was that they needed $5Million for a new center. We elevated the vision (did not change or arbitrarily add funding priorities). We took into account the entire picture and through that the org was able to secure a $5M gift to underwrite the project – as a piece of the vision. They never could’ve done this had they been about a $5M campaign.
NJF
]]>To me, the funding plan is the HOW behind the big picture dollar goal and the big picture dollar goal is what you need to deliver on your vision. So, in essence, this is HOW you will deliver on your vision. Is that important? You bet!
I’ve found that most organizations don’t have a funding plan.
Three simple action steps here:
- Determine the dollar amount you need for both operations and projects. What is the lump sum? Do the math! 80% of organizations can’t answer this question.
- How many investments would you need – and at what amounts to achieve this goal?
- When? (One year? Three years? Five years?)
The funding plan does a few things as it relates to your case:
- It makes it believable
- It shows a potential investor how she/he would fit into the funding vision.
- It also illustrates that you’re not just picking a number out of the air – there is logic.
Extra bonus: There are times when you can actually ask the potential investor, “Where do you see yourself in this plan?” Then, you let them select a dollar level.
]]>- Engage top stakeholders.
- Gather input and feedback around your message and priorities.
- Commit to a funding plan
This seminar is led by Tom Suddes and is 30 minutes in length.
You should use this LCB process IF:
- Your VISION/MISSION/MESSAGE is NOT clear, concise and compelling … and CANNOT be delivered in a consistent way by all of your STAKEHOLDERS.
- You are planning a Campaign … since this process is considerably more productive and
valuable than the typical “Feasibility Study” or “Internal Case Statement”. - Your “needs” require FUNDING that is greater than you’ve ever attempted!!! (And,
you are not celebrating your “150th anniversary” nor have “10,000 great relationships”
in your database.)