One of my favorite parts of my job is connecting with fundraisers, and in turn, connecting fundraisers with experts in the industry to share best practices, research, trends and technical know-how.
Many of you know about the webinar series we hold each year. Last summer we had the pleasure of welcoming Eddie Thompson, Ed.D., FCEP, Founder and CEO of Thompson & Associates to our series. Eddie presented “13 Characteristics of High Propensity Donors” to an audience of 300 nonprofit professionals.
The presentation was very well received. Here’s what one participant had to say afterwards:
“Eddie was an excellent presenter—the presentation was inspiring and held my interest the entire time—brief and concise PowerPoint with very valuable and useful information.”
If you missed the webinar, you can still view the recording.
Eddie spent a great deal of time at the end of his presentation answering audience questions. He is such a wealth of knowledge, we wanted to share a portion of the Q&A session with you.
(The Q&A has been edited for clarity and brevity.)
Q. We have a question about working with donors that have children and grandchildren. This person often gets pushback because donors feel that they should fund their grandchildren’s college education and because of that they cannot make a major gift. Do you have any suggestions on how to respond to that concern?
A. You know I use the nomenclature educational charitable remainder trust, where I create an intervivos charitable remainder trust, making the children income beneficiary with a right to revoke. So, it’s not a completed gift. So, an intervivos charitable remainder trust where the children or grandchildren for educational purposes are the income beneficiaries.
Q. Beth is wondering about looking at consistency of giving and the month that people give. Do you have any experience with looking at the month that people give and what that can tell you (other than year-end giving or giving prior to tax filing)?
A. We ought to do a study on this because my experience has been that strategic donors tend to be procrastinators too. And they tend to kind of rush everything in the last week or so of the year. So, my strategy has been to go to those big donors in January and February and start planning with them then, so you’re not rushed. They make better decisions when they’re not rushed and they’re not procrastinating. But I do find the vast majority of really sophisticated donors tend to give the last two weeks of December.
You know, there are two things I learned, that I read in the Harvard Business Review in 1982 about this guy, who was the President of Jiffy Pop. Some of you are too young to know what jiffy pop is, but it was a phenomenon when I was a little bit younger. He had been hired as the new CEO of Allied Van Lines because they were about to close. And he said we’re in the relationship business not the moving business.
And he said, I want you to divide your client list into four parts: Group A, Group B, Group C and Group D. Group A, you’re going to go see them in January, February and March and ask them for the business this coming year. The B group you’re going to see in the next three months. And the next group you’re going to see in the next three months, and by the end of the year you’re going to have seen all of your clients.
Now I’ve taken that with fundraising. I call on all of my best donors in January, February and March asking for their commitment. So, by the end of my first quarter I’ve called on my top donors and I know what they’re going to give. There’s no one at a nonprofit that’s done that except the best ones.
So, I say, go see your best donors in January, February and March to start that relationship about their giving for that year. That way you have time to think about some more complex types of giving that are in their interest, as well as yours and the nonprofits. So, schedule and get out of the office as much as you can.
Q. Rhonda wants to know how you would go about introducing the concept of charity to individuals with earned wealth.
A. You know you’re competing for a lot when you’re trying to get earned income, trying to get discretionary income. You’re competing with an awful lot of charities. I think one of the lessons I’ve learned, and to be honest, I learned this from making mistakes. My partners say all the time that we built an amazing company on all of Eddie’s mistakes and there’s an awful lot of truth to that.
But one of the things I’ve learned in this process is that most donors are looking for the smartest way to help you.
I go back to those three things. I think, to be really successful you have to help them answer these three questions: Do I have enough to live on for the rest of my life? What’s the smartest way to give to my heirs? Would I rather see my estate go to charity or the IRS?
It is harder to argue that by writing us a check it’s going to benefit you dramatically tax-wise because not that many people can really use that deduction. But if, with proper planning, and I am a huge proponent of a systematic approach with high accountability. I’ve never met a great fundraising program that didn’t have those two combinations together and I’ve seen thousands and thousands of organizations. You find those organizations that have a strategic approach with high accountability. And the reason why that’s important is you can’t control when a donor gives or how much. The only thing you can really control are your activities.
So, my thinking is, with donors, get out and have conversations, build relationships and extend those relationships. Most organizations do not see enough of their donors.
Q. We have a couple of people curious about donor advised funds and the role that they play in your equation, with the 13 characteristics. Have you experienced some individuals that want to shield their money from charities using DAFs?
A. You know I don’t know that they are so much wanting to shelter from charity is that the commercial companies are better at selling than some of us are.
I think it really makes more sense to give directly to the charity than a DAF. We often hear that people want to create a DAF because it’s going to teach their children to be philanthropic. I don’t think that works; either they are philanthropic or they’re not.
And if I can add one other thing too, but I’ve been saying this for 40 years: market, market, market planned gifts. And if you go two or three years you don’t see good results and all that you’re hearing from are accountants, CPAs, attorneys and investment advisors, that’s OK, they need to be educated too.
But I will tell you a strategic donor will read everything you send them, and they do not make gifts they make investments.
And they make every investment after giving it a great deal of thought and reading a lot. They read. So, they may be emotional in their gift, but the decision process is slow, meticulous and informed.
I would encourage you—market, market. Keep your name in front of them, so when they’re going to meet their attorney or their investment advisor…do you realize that three-fourths of all planned gifts are initiated by an investment advisor? Let that one sink in. So, they’re your advocates. You ought to be spending 10% of your time in meetings with various investment advisors, trust officers, attorneys—get to know those professionals in your community.
Q. You did recommend paying attention to people who have trusts. Stephan is wondering how you identify those among your donors?
A. Well, one of the advantages we have as a company is that we see the net worth statement of everyone we meet with. Now, when I worked for a nonprofit, I would tell people every now and then I get to see net worths, but truth is I probably saw about five in my career before I started Thompson & Associates. So, we have an advantage. But if you listen carefully, you can do what I referred to as permission solicitation.
You go to their house and you’re walking down the foyer going into the den and you see pictures and you see the grandchildren. That’s where I would typically start because we tend to love our grandchildren an awful lot. And I would say, have you ever thought about having a trust for your grandchildren? And I just keep on walking. So, you just want to plant seeds, because people share more information, even sometimes accidentally, with some really good questions.
Q. Do you think that the characteristics of people who have a propensity to give are changing?
Not the characteristics, but things are changing with inflation. And most people I’m working with have been preparing for inflation for about a year, a year and a half, before it really became an issue, and they’ve been planning for succession for about six months.
Again, these people who make these big gifts are planners. I haven’t seen their characteristics change. What I have seen is that sometimes certain characteristics are more emphasized than others, and right now strategic donors are really strategic donors. I predict we’re going into the golden age of gift planning.
I tell you I raised more money in the early 80s during hyperinflation. If you use a discount rate, I raised more money than about any year, until I started Thompson & Associates. But we’ve got to be strategic, and we’ve got to know who to go after. Just remember those statistics: one out of three baby boomers do not plan to leave an inheritance to their children. One out of three. And 47% do not plan to leave the majority. Our potential is staggering. But we’ve to be strategic in our approach.
Q. You mentioned a favorite book about major giving discussing the three types of donors. Could you remind us again what that book was?
A. Yes. The book is Designs for Fund-Raising: Principles, Patterns, and Techniques by Harold J. Seymour. It’s the best book I’ve ever read on major gifts and annual gifts about types of donors. And it is just so down to earth, it’s so practical and what I’ve discovered over the years too, when we kind of do an analysis of organizations, is that simple works if you work it. And he breaks it down into really simple concepts. I would encourage you, if you can find a copy of it, to get it. It’s a good read.
Our 2023 webinar series is in the works. Look for your personal invites to your inbox in a few weeks. In the meantime, you can view all of our past webinars in our online library.
If you have presenters or topics you would like to see, please let us know in the comments below.