Werth-It Fundraising Blog

We’re all writing our holiday letters to our donors, if you haven’t done it already.  Here’s a quick trick: use a focus group to get feedback on your letter.  You can do this by email.  Just email about 25 donors and ask if you can have their opinion, that it will take about five minutes of their time and they can do it all by email.  For the five people or so who say yes, then send them the holiday appeal by email.  Ask them to give you their thoughts: is the story compelling?  What do they like?  Is there anything they dislike.

This is quick, and you can do the whole thing in a couple of days.  Not everything they say will be true, however.  People universally think that direct mail letters are too long, yet every study shows that longer letters get more gifts and higher average gifts than shorter letters.  However, you can take the specific comments and apply them, and, besides, donors like to be asked for their opinion, so they will feel bonded to you because you asked.

KLG called to talk to me about fundraising.  (Normally I use first names, but hers is so unusual I said it would be a dead-giveaway if I used it.)  Ultimately, she said she didn’t want to fundraise, she just wanted to hire someone to do it.  This is a common reaction.  Although KLG has been running the same cause for 11 years, she has been reliant on one major funder who is now cutting back on support.  So KLG has to raise money.

I find that a lot of founders of organizations feel this way.  What they really want to do is the work of the organization, not the work of an executive director.  They want to manage the programs because they care about the cause.

I will say that it’s tough to hire someone else to manage your cause while you just do the program work.  No one will ever care about this work as much as you will if you’re the founder.  However, doing the program work and managing the organization require two different skill sets.  Sometimes you’re better off hiring someone else.

For example, if you are the program manager, you get to do the actual work, and if you’re working with people then you get to help them.  If you’re the executive director, you have to supervise personnel, manage the budget and resources, oversee the audit, work with the board and fundraise.  You do everything EXCEPT the real mission of the organization, often.

What if you don’t want to fundraise?  Well, frankly, you’re going to have a hard time hiring someone else to do it.  There are about 160,000 fundraisers in America and there are about 1.5 million nonprofits in America.  So if you’re the boss, you have to fundraise.  Even if you hire someone else to do it, you still have to be the face of the organization and make the funding requests to the most significant donors.  They’re not going to want to meet with the hired help.

So, what do you do if you don’t like to fundraise?  More on this in the next blog.

Debi R. asked me a good question today, “If you work for a NON-profit organization, how do you get paid?”

That’s fair.  I just wrote about income models for other people: how do I make my income?

Debi has a problem that many people have: she doesn’t know how people get paid if there are no profits.

Well, in the non-profit world, we get paid the same way that people in for-profits do: we earn a salary.  You see, even though there is no ‘profit’ in a non-profit, there is still revenue.  Money comes in and goes towards salaries and expenses.  If there’s extra money, it’s not paid to the ‘owners’ as it would be in a for-profit, it goes back into programs or is held in reserve.  If your reserves are large enough, the income from investing the reserve can help pay for programs.

And what’s my income model?  I have clients for whom I fundraise, or for whom I teach fundraising.  I charge them in one of three ways: by retainer, by project, or by the hour.  If it’s by retainer, I do all the fundraising, and I get paid an agreed-upon amount once a month.  If it’s by the project, we agree on what I will do, I do it, and I get paid for doing it.  If it’s by the hour, we agree on a sum and what I will do, and I get paid.

So, a client might ask me to fly in and teach their board to fundraise.  We agree on an amount and they pay me.  Or perhaps they ask me to write their holiday mailing: that’s also a project with a set fee. 

And yes, after all my lecturing recently in this blog about income models, my income model does work for me.

Do you have questions like Debi R.?  Write me, Katherine Wertheim, at katherine@werth-it.com.

A board member once called me up and said, “I am so sorry to do this to you on short notice, but I have a black-tie event coming up in three days.  Would you be my date for it?”  I said, “I don’t need three day’s notice for black-tie.  I can do it on three hours’ notice with two hours left over.”

It’s true, I can get completely dressed in black-tie in under an hour.  He wasn’t the last donor to ask me; periodically, if you do enough fundraising, donors will call you for other charities and ask if you can be their date or fill in a table at a black-tie event.  Other fundraisers will ask if you can work the press table or help in other ways.  I even did it to a friend recently, calling and saying, “Hey, after I get out of this black-tie event, want to dress up and meet me?”  Could you come up with a black-tie outfit in under an hour?  Here’s how.

The trick is in preparation.  You should know exactly what you would wear, including all accessories.  How long does it take to shower and shave?  If you’re a woman, how will you do your hair?   Most importantly, will your outfit fit?

If you want to be prepared for a late-call black-tie, you have to have an outfit that stretches.  This will accomodate you if you’ve recently lost or gained weight.  You also have to know where all your accessories are, and you have to have appropriate shoes.

Don’t fret if this isn’t in your budget: you can get all this stuff at second-hands stores fairly inexpensively.  For men, no one cares if your tux is old — a lot of men pride themselves on how old their tux is, as if to say: “I don’t need a new tux every year — this one’s fine.”

For me, my number one trick is gloves.  Wearing gloves means I don’t have to worry whether my nails are done, which is tough to do at the last minute.  For men, my number one trick is to wear an undershirt underneath the shirt.  A white undershirt gives a crisper look and absorbs perspiration.

I know one executive director who really protested against getting a tux, even though it was to be donated by one of the charity’s donors.  A year later, he admitted to me that he’d worn it many times: to the original event that called for black-tie, to a charity ball put on by another organization that benefitted his agency, to his birthday, his wife’s birthday, their anniversary and new year’s eve! 

Don’t be afraid of black-tie, just practice walking in those new shoes before you wear them out.

Questions about fundraising?  Write me, Katherine Wertheim, at katherine@werth-it.com

Here’s something I’ve been thinking about for a couple of days: the difference between capacity and desire.

Capacity is whether someone has money.  You’ll hear people say, “We just need to find rich people.”

Desire, in fundraising, is the willingness to give.

So, someone could be wealthy, with the ability to give, but lack the desire.  Of course, hypothetically as fundraisers we can instill that.  However, people who don’t generally give are not going to give to you — generally speaking.  Not always; perhaps you can inspire them to give.  However, it’s not the way to bet.

So, rather than look for someone with capacity, I’d rather look for someone who is already inclined to be generous.  I think many people are capable of larger gifts: you don’t have to be rich, you just have to want to give more than you want to do other things with your money.  For example, you could buy a latte every day at Starbucks, or you could donate $1,000 a year to charity.  (Or you could take a trip, or go to a spa for a three-day weekend, etc.  There are lots of things to do instead of a daily latte.)

I read “The Millionaire Next Door” and a lot of the profiled millionaires have no interest in giving money to charity.  They say, “Charity begins at home” or “I’m my favorite charity.”  They have capacity, but no desire.  Frankly, I probably can’t instill charity into them, either.

A friend just returned from Las Vegas.  She told me, “I said to myself that I would only lose $60.  I was winning $200, but I had said I’d only lose $60.  So I lost the $200, and my original $60, and then I stopped playing.”  I replied, “Oh!  If only you had said, ‘I’m going to stop as soon as I win $200!’”

Do you see?  She was more concerned about preserving what she had than adding to it.  Are you like that?  Are you so worried about keeping expenses down that you don’t increase income?

I had another thought: fundraising is like a casino.  You come into the casino intending to part with your money.  You’ve already decided how much you’ll leave there, how much you’ll spend.  The job of the casino is to part you from your money as pleasantly as possible.

That’s the job of fundraising, too.  Donors already know that they intend to give.  They even have an idea of how much they want to give and what kind of cause they want to give to.  Our job as fundraisers is to create a pleasant experience for them as they give.  That means that we connect them emotionally to our mission as well as financially, that we honor their intentions, and that we do what we say we will do.  The donor wants to be engaged; it’s our job to see that it happens.

Over and over, I’m continually reminded of how generous and caring people are.  Let’s face it, my job puts me in the path of nice people.  The staff members for nonprofits could do better for themselves elsewhere, financially, but they choose to work for nonprofits to make the world a better place for others.  The donors are concerned about others more than themselves: they’re grateful that they’ve received so much and want to give back.  I’m very blessed: yes, I chose this work, but I’m very happy that people accept me and I fit in.  I’m glad to do this, and I would highly recommend this career to others.

Today, what will you do to create a pleasant experience for your donors?  It’s Veterans Day in America: for American fundraisers, how about thinking of five donors you know who are veterans and thanking them for their service?

You’ve seen this before… “A generous donor has agreed to match all the funds raised, up to $5,000.  If you give now, your gift will be matched dollar for dollar.”  That’s called a Matching Gift. 

The difference between a matching gift and a challenge grant is that the challenge is not actually contingent on the money being raised.  So, a challenge would be “A generous donor has given us $10,000 and challenged us to match it dollar for dollar.  Will you give now to help us meet this challenge?”

Obviously, challenge grants are easier for you — you get the money whether you raise more or not.  I will say that donors are very excited, however, by matching grants, and will give money specifically to meet the match.

OK, you have that great video, and you know you need to get it up on YouTube, but what else?

Lewis Marklin Mash told me about a great service.  He has a syndicated TV show that he also posts up on video.  You can see it online at:  http://video.yahoo.com/watch/3854015/10516242.  However, he’s also posted it up on a number of other services, including MySpace, Goodle, AOL and more.  How did he do it?  Here’s what he wrote:

“There is actually a wonderful site called Tube Mogul, that you can register with, for free.  They have a dashboard that contains links to all of these sites.  As you register with each site and set up a profile, you go back to tube mogul and save your user name and password to each site.  Then you upload your video to tube mogul and do a one-time send out, that posts it to EVERY one of the sites at the same time!!!  It is incredible.  It will not only get your videos out across the net, but will also boost your search engine queries by a ton!!”

Worth checking out!  Thanks Lew!

There I was, my first night of camping in the Borneo jungle.  A group of us were participating in Outward Bound, an organization that teaches mental and physical courage through testing your limits and going beyond them.  It was November, 2000, and in America, the 2000 election was going on, and I thought, “Drat.  I’m going to miss the whole thing.  It will be over by the time I get back.”  But, as we know now, that election wasn’t decided for almost two months. 

I’m thinking of this today because once again it’s election day in America and my greatest hope is just that we know the outcome by tomorrow.  That election taught Americans not to take their vote for granted, not to assume that other people will decide, not to say that ‘elections aren’t important’ or to be as dismissive of them.  The turnout today is supposed to reach record highs — we’ve already registered millions of new voters.

So there I was, a group of Malaysian men and me.  The instructor had us go around in a circle and talk about our fears about participating in this series of challenging exercises.  Frankly, I didn’t want to say it out loud, but my fear was that I wouldn’t be able to make it through the experience physically.  I had been dutifully training, and I had gotten to the point they recommended, where I could run for 45 minutes straight, but I was thinking to myself, “This is just like junior high school, and my greatest fear is that I’m going to be the fat kid in P.E. class.”  I thought it; I wasn’t sure I had the courage to say it.

At that moment, one of the men spoke up.  He said that his greatest fear was that he wouldn’t be able to make it, that he would be the fat kid in the phys. ed class!!!

It was my exact thought, coming from a Muslim man who spoke English only as his third language!

It showed me that fears are universal, that everyone fears the same thing.  Dr. Maslow told us that everyone wants the same things; this showed me that we have the same desire — to succeed — and the same fear of failure and looking bad in front of others.

That’s true in fundraising, too.  Even as you fear making the ask, the other person sympathizes because they have the same fear, too.  They imagine being in your shoes, and they’re often kind to you because they recognize the courage it takes to be the one doing the asking.  (Yes, admittedly some people aren’t kind, but many are.)

If you’re in America, please take the time to vote today, and let’s hope the election is decided by tomorrow.

In the last blog we covered Income Models.  That is, how do you make enough income to support what you do?  I want to expand on that a bit, because I see a lot of people who have home-based businesses, or who are lured in to multi-level marketing.  However, this does also apply to nonprofit organizations.

An income model says, “This is how I will make income from what I do.”  For example, a real estate agent knows that if she sells a house for a 6% commission, she has to split that with another broker, and then with her office, so really she is making 1.5%.  If she sells a $200,000 house, she will make $3,000.  To make $36,000 a year, she has to sell a $200,000 house every month.  To sell one house, she knows how many buyers she has to show it to, and how to price it to move.  She can’t take six weeks to sell a house, and only sell one at a time, because she won’t make her projected income.  That’s an income model.

Now, I see a lot of people who haven’t figured out that their income models don’t work.  For example, let’s take someone who sells a product at home-based parties.  If they make 50% on the product and the average unit of sale is $32 (see last blog for “average unit of sale”), and four people at a party each buy one product, that’s $32 x 4 = $128 x 50% = $64.  Therefore, to make the equivalent of a full-time job that only pays $8 an hour, they have to have a party every single night of the workweek to make just minimum wage.

But, you say, they can convince other people to sell, and make money off the ‘downline.’  However, if you talk to people who have actually done multi-level marketing, you’ll find that most couldn’t/didn’t make it work.  They paid the fees to get in, bought the minimum product, and then didn’t do anything with it.  Sure, you see the testimonials, but the truth is most people fail at it.  That means most of your downline will fail, and then you won’t produce revenue from it.

Before you get into anything, whether it is a for-profit, non-profit, sales job, commission job, or multi-level marketing, take time to do that math.  Figure out how many people you’ll have to approach, and how many you’ll have to convince, in order to pay yourself a decent wage.  If the number of hours of work doesn’t pay as well as a job, you might as well just get a job.  Then you get your paycheck and you don’t have to lie awake at night, figuring out how to pay the bills.

This is especially relevant to people who want to start their own nonprofit organizations.  What income model allows you to make enough money to have this be fulfilling work?  In America, about 30% of nonprofits don’t even make $25,000 a year.  40% make between $25,000 and $500,000.  Only 30% make over $500,000.  So, if you’re a struggling nonprofit with a income stream of about $200,000 a year, that means it’s you, a program director, an assistant, and perhaps some part-time help or interns.  Everything is going to feel burdensome  to you and you’ll be working all the time.  However, if you haven’t given any thought to how you’re going to develop an income stream that supports doing more, then you’re going to be stuck at this level and always reliant on foundation support and a handful of major donors.

That’s all I want to say right now about businesses and making money.  Tomorrow I’ll return to the business of fundraising and board development for nonprofit organizations.

Do you envy Chris, the host of the www.topfive.com website, for getting all these answers to his questions about business fundraising?  Is there a topic you’d like me to address?  You can write to me, Katherine Wertheim, in the comments field below, or directly at katherine@werth-it.com.