Keeping Your New Donors!

Hooray!  Your conversion strategies worked swimmingly and you’ve received a glorious gift from someone who has never given!

No matter the giving level, you can do many things to thank and ultimately, retain this donor:

• Yes, send the standard thank you letter.  Of course you would do this.  Personalize the text of the letter and hand-write a brief note.
• A couple days later, send a hand-written thank you note, that’s personalized and customized
•  Call to thank
• Email a thank you – especially Gen Y or donors without phone numbers, but with emails
• Text a donor, if you have the phone number and a ‘texting relationship’ with the person (or again, Gen Y)
• Send a welcome/thank you email or letter => share how can your donors learn more, or understand your full scope of work, or become more engaged/volunteer
• Invite to a free program/event
• Have a Board Member write a note/make a call of thanks
• Invite to a program milestone
• Invite for a tour
• Invite to volunteer
• Send a thank you card from your recipient/client
• Send photos of people you’ve impacted (or include photos in the welcome thank you email or letter)
• Email or mail a survey; maybe you’re a multi-issue organization and want to find out your donor’s priorities?
• If the gift is above a certain level, invite to an event for free or a lunch with your ED/Chair.

Spread these out a bit – don’t bombard your donor within 12 hours of their contribution. 

But don’t deliberately protract your thank yous over several months.  You can certainly follow up in a few months to invite the donor to a program milestone and include a thanks, but don’t send a welcome email four months later. 

Your touch points several months later are part of recognizing and cultivating, not explicitly thanking.

And, customize your response to the donor’s giving; we immediately reply to online gifts with impactful and personalized thank you emails. 

Yes, we follow up these emails with “standard” thank you letters and hand-written notes, but you were pinged with the donor's contribution, so take a hot second to share your appreciation. 

Do’s for working with an outside (or new but experienced) grants professional

Do listen to our advice about your organization (and fundraising)

Successful grants are awarded to strong organizations. We can tell within 5 minutes of meeting you whether your organization is grant-ready.

We can read an audit. We know what a strong fundraising plan looks like.

When we recommend your ED attend the site visit with a program officer, we’re not monopolizing his/her time. 

When we tell you 100% of your board should be giving, please don’t ask “really?”

Do remember that in the first two months of working with us, you’ll spend a lot of time with us

We need to get up to speed on the ins and outs of your programs. We need to ask about organizational structure. We need your program leadership to talk about future plans. We’d love to attend any events (and volunteer) or program milestones.

We’ll ask many detailed questions. We’ll ask why your mission statement reads 3 completely different ways on your website. We’ll ask you tough questions. 

We’re doing this so we can do our best job in the beginning. We know what Foundations want to know.

And, we want to reduce the number of edits in the first couple drafts. If you don’t answer our questions up front, you will have many revisions/questions later. And, better to answer to us than to a Foundation!

This time will pay off. Our subsequent drafts will require less filling in from you, because you’ve shared your program goals for the upcoming fiscal year.

Best Practices for Grantseeking

Ok, your checklist is all checked off. You’re ready to apply for grants!

A few best practices:

First, grants do not replace board/staff fundraising from individuals

When your board starts suggesting grants in lieu of their selling sponsorships, event tickets, it’s time to urge that board member to move on (a future post :)).

Grants aren’t the panacea to donor and board fatigue.

Grants are strategic opportunities to enhance already-strong fundraising programs. Grants can help you launch a program, but they are not annuity streams of revenue.

Second, do your research!

Definitely research Foundations (we like foundationcenter.org). Our process usually takes a couple months – we start with broad criteria, such as Foundations that fund in California in the field of say education. 

We generate an initial list of around 200 prospects. We cull this down to about 40.

We research the Foundation’s profile on Foundation Center, its website, its 990 and sometimes its Guidestar profile. We also review the websites/annual reports of like-minded organizations to see if ABC Foundation is really funding direct services for mental health.

We create a 12-18 month calendar. We keep the other 160 Foundations sorted in various buckets – never eligible, possibly eligible or almost eligible.

For instance, if you’re more than 18 months away from an audit and there’s a perfect Foundation for your mission that will make absolutely no exceptions whatsoever about submitting an audit, that Foundation goes on our almost eligible list.

Every 6 months or so, we revisit these lists and update our calendar.

And, of course, most Foundations change their priority areas over time. Just because you’re not eligible now doesn’t mean you should ignore the Foundation forever.

Third, read the guidelines for each foundation

You may not qualify. If I had a nickel for every time I was asked “how come we aren’t applying to ABC Foundation – they fund education and we have an education component in our debate team programs,” I wouldn’t write these blogs :). That’s why we go from 200 Foundations to 40.

Seriously, read the guidelines. The Gates Foundation won’t fund your grassroots, after-school tutoring program.

Of course, it’s an outstanding program and yes, Bill should fund it, but the fact is, submitting your proposal won’t change his mind. 

High-level alignment between your and the Foundation’s missions doesn’t mean you’re eligible to apply.

Unfortunately, one client actually wanted us to apply to every foundation that supported education, whether or not the foundation funded in our geographic area or specific area of education. It was time to have a different conversation with the client. 

It’s great to be aggressive with applications – we do believe if you’re not getting turned down from time to time, you’re not applying to enough Foundations – but taking a direct mail approach of applying to 200 Foundations in 6 months and hoping 3 or 4 will come through is foolish. It’s a great way to burn your reputation with funders. 

Program officers travel in small circles and move around among various Foundations. They will remember the homeless shelter that applied for an education grant because shelter volunteers talk to clients in the food line. 

Foundations are more similar to major donors in the level of customization required.

Fourth, develop relationships with Foundation staff

Unless contact with a Foundation is strictly prohibited in the guidelines, professional fundraising staff (or ED) should contact the Foundation’s staff, in advance of submitting a proposal. 

Do your research in advance – write down your questions. 

Most Foundations will appreciate that you took the time to call and ask a question or two and develop a relationship. You don’t want to launch into your entire proposal, but give them your 30-second pitch.  And LISTEN.

Most program officers don’t have the ability to say yes to a proposal. But, they have the ability to say no. That’s powerful.

Do listen and take their advice if they tell you to change something.

Fifth, pilot your grant proposals

With our clients, we leave some running room in the early months. We know we’re still working on the exact pitch/phrasing – especially if this is the first time they’ve applied for grants. We like scaling up.

Don’t apply to 30 grants in one month. One client wanted us to do this; fortunately, they didn’t have enough postage that day :). 

You’ll need to spread out your applications anyway; many Foundations have specific deadlines, which may include that they only accept grants between May 1 – June 15. Don’t bother applying October 12.

When you’re venturing into grants for the first time, you need to develop the relationships with Foundation staff and you’ll need to test out your pitch. Get feedback from Foundations.

If you are turned down, contact a Foundation and nicely, nicely, nicely ask for feedback. Thank for their consideration of your request. Let them know you’re new to Foundations and you want to learn.

Maybe it’s simply that the grant process was competitive this time and your proposal was strong. Great. Apply again.

Maybe your mission doesn’t dovetail as much as you thought; you give gift cards to select clients, but you’re not a food bank. Put this Foundation on the back burner.

The downside of not piloting, especially when you’re a new organization, is you could run out of Foundations to apply to. Say, we had applied to all 30 Foundations in the first month for our client. Our client would have had no one else to apply to for at least 6 months.

It’s also valuable to get feedback from Foundations that you can take to your board. One nonprofit I worked at - before going into consulting - didn’t believe me when we told them that 100% of the board needed to give and insisted I apply for grants. Only 75% of their board gave.

So, I applied to one foundation that immediately turned us down.

I called for feedback and was told they wanted to see 100% of the board giving. Surprise, Surprise.

But, I took that back to the board and said if we were serious about securing grants, we had to implement all the things on my original checklist.

This inspired the Board Chair to get the three board members reluctant to give, off the board.

Our subsequent proposals were funded.

Grant Readiness – Checklist

If you’re a $5MM organization and you have a strong portfolio of grants and Foundations, this isn’t for you :).
 

If you’re an ED or board member venturing into fundraising for a new and emerging nonprofit, keep reading!

We’ve found a baseline of grant knowledge is desperately lacking. Therefore, we’ve created this comprehensive checklist as you think about your organization’s grant readiness.

Have your 501c3 IRS Determination Letter

Although contributions made to an organization between submission of the IRS application and approval of the 501c3 are tax-deductible, most Foundations require that the organization have the 501c3 in hand before applying for a grant.

You’re better off spending those early months building your infrastructure – recruit board members, write board and officer job descriptions, create a first year operating budget, create your website, write your mission statement, roll out your programs – than writing grants.
 

100% of your board must give

If all your board members aren’t making personal financial contributions, go directly to your next board meeting, do not pass go, and alter your bylaws/pass a resolution that 100% of the board give.   

If your own board members won’t give, why do you expect others unconnected with your work to give?

The 100% of board giving is a critical threshold. Even if some board members make modest gifts, you’re fine. But, get to 100%. 

Foundations usually request copies of your board members and affiliations, so if you have community activists and others who are not wealthy philanthropists, the Foundation will have a context for the total amount given.

Have a Board-approved annual operating budget

We’re always surprised at nonprofits functioning for 3-5 years, but lacking a written operating budget. If that’s you, start with some numbers, talk about it at the board level, commit to something on paper and get a vote. Forecast how much you will spend. Then, forecast how much you can bring in. (You may need to revise it later on, but that's ok!  It's worth the time and effort to later revise.)

Special pet peeve:  when a program officer asks for your annual budget, please don’t tell them how much money your organization has in the bank. Even if it’s a respectable amount. 

True story. As a consultant, we joined on a conference call with a Foundation, when the ED incredulously responded to a request for the budget by quoting (to the penny) the amount in the bank.

We quickly reassured the program officer that the nonprofit had the last 3 fiscal year budgets (at the very least, reflected in the 990s on Guidestar) and that Joe Smith was like every other ED who kept working capital at the front of his mind. (Yes, we did wait until we hung up with the program officer before explaining working capital or 990 to this ED.) 

If your annual budget has recently exploded, you can tell the program officer what you’ve raised to date, your board-approved budget, and your plans to revise to reflect higher actuals.

But, don’t confuse an operating budget for your bank balance.

Have an organizational fundraising plan

Grants aren’t generally awarded when nonprofits can’t demonstrate strong support from the community.

You don’t need a fancy template, but you need strategies laid out. How do you raise funds? What are you doing to reach individual donors? What’s your major gift plan? How many donors do you have? What will happen if you’re turned down from this Foundation? Be able to articulate a plan.

File an IRS Tax Form 990

This is often-to-usually required by foundations. Even if your budget is modest and below IRS standards for submitting a 990, we recommend you submit one.

It signals your infrastructure, grant-readiness and ability to comply with external requirements.

It also prepares you to re-position your lovely operating budget into the square pegs of outside requests – something you’ll get a lot of practice doing when you apply for grants!

Do you have a recent audit?

This isn’t required for all Foundations, but when it is required, don’t ignore it. Foundation requirements aren’t optional. One client thumbed his nose at this requirement, ignored our warnings and applied without an audit, without telling us.

I’m not going to say we cheered when we received the decline letter. But, the program officer quoted the requirements and bolded the audit line, and advised that any future proposal without an audit would not even receive a response. To call the language terse is generous. 

Now, if your first organizational audit will be ready one week after a Foundation’s annual deadline, do contact the Foundation’s staff to see if an exception can be made so you can submit your audit after the deadline.

Otherwise, a nonprofit boldly ignoring requirements makes Foundation staff wonder whether the nonprofit can handle a grant or meet the proposed objectives.

Once you start hiring staff, think seriously about an audit. Without an audit, you’re simply out of the running for several Foundations. And, for some you are eligible for, you’re limited by how much you can request.