When a potential donor asks questions, they may be taking an interest in making a gift. When a prospect asks TOUGH questions, it can be a sign that they’re engaging with a fundraiser’s major gifts proposal. That’s why, in April, we hosted a complimentary professional development webinar for fundraisers and advancement professionals on how to address donors’ 5 toughest questions.
Based on our research and conversations with fundraisers, these were the sets of questions prospects or donors may ask that guided our discussion:
1 – How much info do you have on me? Can I see my file? What are you doing to safeguard my personal information?
2 – I looked at your annual report and I see you have only generated less than 5% return on endowment assets over the last ten years. I did much better on my own investments. Why should I give my dollars to you to invest?
3 – What documentation do I need to provide for proof of my planned gift? Why do I need to give you this?
4 – Does my gift really matter?
5 – How is the money of my gift actually being used?
Want more than just the main takeaways? For free access to the full webinar, join our Research Consortium and then, once logged in, navigate here.
The conversation, which drew dozens of development staff and fundraisers from across the country, was led facilitated by myself and Robert (Bob) Fealy. Bob is a Chicago-based business leader, major gift fundraiser, and ALUMinate’s President and Co-founder. Bob is the previous chairman and interim president of the University of Cincinnati Foundation and chair of four recent fundraising campaigns, including for the Chicago Children’s Choir and The Morton Arboretum.
Here are the main takeaways from the webinar:
1 – Want to know where things are headed in regards to privacy and data security laws? Look across the pond.
In the realm of privacy and data security, a starting point for fundraisers is to read and understand the European Union’s General Data Protection Regulation (GDPR). Though the GDPR has not been enacted in the U.S., many states are looking to the GDPR as a model for future data privacy laws, for example, the California Consumer Privacy Act (CCPA), which goes into effect in 2020. Yes, it might be a dry read, but failure to understand this major development in data security could cost you the trust of your most powerful donors. In particular, we recommend fundraisers become familiar with a subject access request (SAR), which, under the GDPR, is a written request an individual may make to a company or organization asking for access to all personal information that company or organization has on them. Here is an example SAR.
2 – The math of endowment rates of return can be confusing, so break it down for donors.
According to The Chronicle of Higher Education, “the average annual return on college and university endowments over the 10-year period ending with the 2017 fiscal year was 4.6 percent.” Since many major donors are business-savvy and have their own investment advisors, they may be confused as to why the rate of return is lower than what their personal investments are earning. It’s the job of fundraisers to explain the difference to donors. Once a gift-funded program is put in place, the institution needs to fund it year after year. This is done by first preserving the principle, often through less aggressive investments. In addition, the university’s return compounds tax-free, while the donor’s return is a pre-tax return.
3 – The biggest threat to planned gifts may surprise you…
Russell N. James III, an assistant professor at the University of Georgia found that “among the 1,306 people in the study who dropped a charitable bequest from their wills during the nine-year survey, the number-one reason was that they had become grandparents.” In our webinar, Bob discussed specific ways fundraisers can prepare for this by asking for documentation for proof of planned gifts.
As Bob pointed out, it’s so important to continue to cultivate those donors. A bequest can open the door to ongoing gifts and leadership from that donor.
Have questions about how secure and steward planned gifts and bequests? We have answers! Register now for our next complimentary webinar, “Planned Gifts & Bequests: Here Today, Gone Tomorrow?” on June 18, 2019 at 12:00PM CST. Due to demand, space is limited in this session.
4 – Every gift matters. Seriously.
Donors who give four or five-figure gifts may feel their donation is inadequate in the age of the megagift, but, as Bob explained in the webinar, for some low-income or nontraditional students, receiving even a few thousand dollars can mean the difference to being able to attend that semester or not. As a first-generation college student and alumni-funded scholarship recipient, I can attest to the fact that mid-level gifts are extremely important. In the webinar, we discussed specific tips for how to use story in unique ways to show donors the impact of their gift, whatever the size.
5 – The need for multiple points of contact.
Did you know that, according to a 2017 survey conducted every five years by the American Council on Education, “the average tenure for college presidents was 6.5 years in 2016, which is down from 8.5 years a decade before.” In addition, the average tenure of development officers and fundraisers (at an individual institution) is just eighteen months! Endowments are long-term, but college and university leaders and fundraisers may not be.
A prospect might not want to commit to making a major gift if key figures at the institution may leave. Institutions should have multiple points of contact with key donors. Want to know the specific steps you can take to build that safety net through multiple relationships and a bulletproof gift agreement? For this and LOTS more, join or log in to the Research Consortium and access the full webinar. Investment consultants charge thousands for this advice. We’re pleased to offer this webinar on a complimentary basis. In addition, we hope you can join us for the next webinar, “Planned Gifts & Bequests: Here Today, Gone Tomorrow?” on June 18 at 12:00PM CST! Register now.
As always, I welcome your thoughts and questions related to this post.
The ALUMinate Team.