Tuesday, October 23, 2012

Why Grants?

Grants represent 12-15% of all philanthropic revenues in the US.

So, why pursue them, when about 80% of philanthropy comes from individuals?

While, yes, we completely support maximizing individual donors before launching full-scale into grants – Arrowhead Management makes a tidy profit on such work – we also believe grants are of strategic value to nonprofits. (For complete transparency, Arrowhead Management also does contract grant writing.)

Grants are critical to nonprofit success. Receiving seed funding for a program from a signature foundation can enhance a nonprofit’s reputation. Grants are opportunities to pilot innovative ideas. Critical programs can be launched or expanded, thanks to grants.

Much like a venture capital firm, foundations that invest in nonprofits can provide other soft advantages, such as access to technical assistance providers for evaluation, tracking efficacy and best practices.
Grant conferences for all grantees from a specific initiative can facilitate introductions to potential collaborators or partners and critical information exchange.

We love the impact grants have on improving an organization's capacity/infrastructure. We love seeing the children/families/recipients of the program changed, as a result of grants!

We love when grants provide seed funding and 10 years later, the program is still funded by a variety of sources, because the community has taken ownership of the outcomes.

Grants are just like any other part of fundraising - a combination of science and art.

Friday, July 20, 2012

How To Thank Your Sustainers

Sustainers cause much anxiety in Development staff when it comes to thanking them.

We’re so programmed to thank a donor within 48 hours of a gift hitting our desk that we’re flummoxed to hear this might not be the best strategy.

First, stay true to your mission:  if you’re a disease-oriented cause or you have many elderly Sustainers, you may want to snail-mail thank you letters each month, as a thank you note is a welcome respite in their mailboxes. 

Conversely, mailing a monthly hard copy thank you letter might defeat your environmental mission and alienate true believers. 

Make the decision that makes the most sense for your donors and your cause.

Consider the case of a hip, young nonprofit that only sends a hard copy thank you letter in January for the previous tax-year:

  • Send a hard copy thank you letter for the donor’s first gift.  This confirms everything is working (even if you’ve already called or otherwise confirmed).  You can note you’ll send a thank you letter at calendar year-end.
    • An annual thank you in January for the donor who started giving last February is way overdue.
  • Send a hand-written thank you note 4-6 months into the year (or after the first gift)
  • Have a Trustee call to thank 6-9 months into the year
  • Email/Text/Thank on social media (not publicly, unless you know it’s appropriate for this donor)
  • Space out these additional thank you’s to correspond with the donor’s first gift and any other communications/invitations from you.  Don’t overwhelm your Sustainers in March only to go radio silent for 10 months.
  • Whatever you decide – monthly thank you letters/emails or only annual ones – let your donors know up-front and periodically.
    • Your March hand-written note might include something like “although
      we save trees by not mailing you each month, on the 15th of each month when we see our list of monthly donors, we’re so grateful your name is among them.”

Monday, April 16, 2012

What Should Be Your Sustainer Program’s Structure?

At Arrowhead Management, we are definitely cheap. 

So, when we talk about incentives for Monthly Sustainers, we’re not talking pricey corporate swag.  Not that winter scarf that even this nonprofit MBA student sported, complete with a Merrill Lynch logo (yes, yes, it was 2006).

Your Sustainers are a valuable group of donors.  They are providing you predictable revenue.  You don’t have to spend variable costs to solicit them.    

Your Sustainers should receive some special attention and perks from you.

Perks can include:

  • Opting out from solicitations (except for event invitations)
  • Invitation to a special (free) briefing by your CEO/Board Chair
  • Receiving a special report – maybe it’s the mid-year update report you send only to major donors 
  • Exclusive invitations to your program events/milestones (e.g. graduations)
  • Free upgrade to attend VIP Reception at your Gala, if they buy event tickets
  • Annual report, if they wouldn’t ordinarily receive it
  • Recognize your Sustainers in your annual report/website/email communication
  • If you do donor profiles, make sure to highlight one Sustainer
  • Thank you calls from board members once a year – particularly if their giving is maybe below the level board members usually call to thank donors

You can highlight some or all these benefits when you’re soliciting new Sustainers.  You might consider reminding current Sustainers if you haven’t told them this or you’re instituting new ideas. 

Don’t spend a lot of money, but incent them to give and to strengthen their connection/knowledge about your work.

Monday, January 9, 2012

Monthly Sustainers

There’s a lot of buzz about donors who give you $15/month on their credit card or EFT.  

Who should be in your sustainer club?

The vast majority of sustainers are annual fund donors.  Remember these 
terrific donors?  They are the 80% of your donors who contribute 20% of your 

These donors are wonderful!  They are the group you source for major gifts.  They’re also a great resource for monthly sustainers.

Yes, of course every organization has a story about a donor who wants to give $1,000/monthly.  But, by and large, your monthly sustainers are annual fund donors.

Even if you’re small, 80% of your donors is still a big number.  Probably not a group you can just “look at” on excel and decide who should be asked.

Let’s say your major gift cut off is $1,000/annually, so your annual fund donors give $0-$999.

We’ve identified a few key segments of annual fund donors likely to become sustainers:
  • Lapsed donors who’ve given at least $1,000 in a single year (go back 5 years);
  • Any event donors who don’t make other gifts;
  • Current donors who have given multiple gifts (excluding events) in at least one year in the last 5 years - no matter the individual or total/annual gift size;
  • Prospects active on email opens/clicks/social media;
  • Seniors on a fixed income - customize the ask to be low amounts;
  • Any annual fund donors who've downgraded giving levels over the last couple years;
  • Donors who were major donors in the past, but whose levels have dropped (especially if they gave throughout the lean years of 2009-2011)

Depending on your database size and length of existence, you can adjust the time or giving levels on these criteria to get larger or smaller batches of donors. 

Consider soliciting 5-10% of your annual fund donors.  Test, test your messages with sub-groups and then scale up to the full 5%-10% of annual fund donors.