Whether you are the Executive Director, Artistic Director, Development Manager or Board member, if you are actively involved in the administration of an arts organization, it is likely that you get involved in conversations with donors – individuals and families whose time and financial support help sustain your organization and its programs. Some people have a natural gift for establishing a personal rapport and building a trust relationship with people, greatly enabling conversations where the expected outcome is new or additional financial contributions. Most of us struggle, to some degree with parts of this process.
Bristol Stragegy Group Report
A short report I came across from the Bristol Strategy Group (2010) illustrates the art of holding conversations that build trust between two people in a clear and simple way.
Establishing a relationship involves listening to the other person – it is much more important than what we say in a conversation. There are three quite simple questions to incorporate into a conversation with your donor:
“What do you want to achieve?” - described as the ‘success’ question to learn what motivates your donor;
“What do you want to avoid?” - deepen your perspective on donor motivation by learning what the donor wants to ‘avoid’ – What don’t they want to happen if they support you, for example, your organization and programming no longer exist;
“What helps you decide what charities to support?” – allow you to learn what your donor’s expectations are for service, recognition.
The article suggests that using the three questions changes a conversation to one of respectful interest focusing on the donor and their reasons for giving/wanting to support your organization. Going into a conversation, you will be rightly proud to speak about your arts organizations’ mission, programs and challenges for success. It is important to begin by understanding what your prospective (or current) funder wants to support, what motivates them to give and what their expectations are by providing their financial support.
Prior to starting a conversation, you should be clear on what you want to accomplish at your meeting. In building a successful donor relationship, prepare by learning as much as you can about the donor before the meeting starts. When you meet, focus on listening – what are you hearing, which may differ from the words your prospect/supporter actually uses. Does that help you understand if this is a strong prospect, and can you meet their expectations? You hope to come away with knowledge that helps you build a strong and enduring relationship with a donor – they will become an advocate of your arts organization. Your time is precious, and the questions can create a positive atmosphere where both parties may find out - ‘we aren’t right for each other’. Not everyone will say ‘yes’…..
The Three Questions
Using the three questions creates an opportunity for an informative dialogue that lets the prospect know you are personally interested in them. The approach is equally applicable with current donors as you try to deepen current levels of support. Donors may respond differently to the ‘success’ and ‘avoid’ questions and using both can give you a deeper insight into their beliefs. The last question will help you learn what the donor expects from you in return for their financial support.
The questions described in the article are simple and can be used by anyone in your organization – they are easy to ask, and people like to respond. You are keeping the focus on them and not you, allowing you to learn important information about the profile of the donor, while quickly building a trust relationship with that person.
Special events – building prospective new supporters
December 10, 2012
Supporters of arts organizations commit support in a number of different ways:
Purchasing tickets/subscriptions and attending regular arts programs
Volunteer support to the organization’s activities and administration
Financial support through annual campaigns, special events, and special purpose campaigns
Prospective New Supporters
Maintaining current records and information about supporter’s can be complicated and requires both dedicated staff resources, and often access to donor management software. I’ve heard many a discussion about the benefits of special / gala events. The gross proceeds often are large, which is wonderful. The costs and time required to plan, organize and execute leave arts administrators questioning whether this is a cost effective way to raise funds for the organization. Michael Kaiser, head of the Kennedy Centre for the Arts in Washington, offers a non-financial perspective on the benefits of gala/special events that relates to attracting prospective new supporters to your organization.
Michael suggests that special events are excellent ways to create ‘prospecting opportunities’. Your current supporters purchase tickets or a table and bring their friends as guests. By attending the event as a guest, they become familiar with your organization and arts mission/programs. The host typically considers their guests to be people who are likely to support the organization. Following up with all guests is an easy way to attract new donations, subscribers or volunteers.
LYBNTY's and SYBNT's
Our experience tells us that donors who already give to an organization are the easiest group to raise gifts and donations from. The Kennedy Centre characterizes these donors as “LYBNTY” – someone who gave Last Year But Not This Year”. Their donation is recent and you can reasonably expect that they will support you again. Donors who fall into this category can become a primary list of prospects to attend your next special event. It is a much more fertile group than the “SYBNTYS” – Some Year But Not This Year.
Tracking your donors and their frequency of support is an effective tool to where you place your resources. We can’t reach out personally to every donor or prospective donor. A simple tactic of reaching out to your organization’s ‘LYBNTS’, can save time and result in positive results for your organization.
Considerations for Creating Capital and Endowed Funds
October 31, 2012
Arts managers ask us – why hold money in an endowment, where we only receive income and can never access the invested capital ? Investment returns have fallen and I’m not sure I can count on receiving income.
Capital funds, whether endowed (income only and capital is invested in perpetuity), or a restricted fund (income and limited access to capital under certain conditions) offer an arts organization a stream of income, that through its constancy, helps protect the organization from swings naturally occurring in earned income or fund raising activities. Capital invested in this way is a source of income that recurs and is usually unrestricted – you determine how best to use it each year. You may add it straight into your operating budget, but we observe that thoughtful arts organizations use it to invest in the future – through arts education, youth programs or scholarships to support emerging talent, as well as supporting strategic investments in program/mission.
A long term fund can meet both your planning needs and the desires of your donors who want to create a personal legacy through a gift delivering a stream of income – one that sustains over time the arts they are passionate about. People of all means give time, and money to support an art form , an artist or arts organization important to them. That desire to support is usually lifelong and often is a process evolving from volunteer, to annual gifts and ultimately legacy gifts/bequests. The decision making process is unique to every person or family. Connecting to the values and interests of donors is essential to your financial stability and long term funds, endowed or restricted are a tool you should have in place to respond to different styles of giving. People of modest means can and do make meaningful financial contributions, often through a final gift or bequest.
When developing your mission, or implementing a strategic plan for the next five years, managers and board members will identify if the organization needs to think of capital in the short term – a board restricted fund that serves a ‘rainy day’ fund, or a plan to build capital funds that accumulate funds to create streams of future income – providing flexibility to invest in new, adapt to changing circumstances, invest in facilities or sustain the legacy of an artistic founder. Just as donors are unique, so are arts organizations. You need to ask yourself where your organization sits in its development – ask yourself:
Do you have a firm grasp of your current liquidity needs – are all financial sources needed for today
Is your organization able to create reserve funds for investment or to meet a short term funding gap
Has your board thought about how long term gifts will help sustain your arts mission
Can you direct long term income from gifts towardspriorities of the organization such as outreach, education
Does your organization have the capacity, or access to expertise to manage long term gifts
Would a long term gift that is subject to restrictions offer any risk to your organization
Will a focus on long term gifts take away resources that are required to meet current funding needs
The Evolution of an Endowment
Historically, endowment meant capital was to be preserved and invested, generating a source of annual income. That often meant in ‘perpetuity – forever’ – one way to think of this or explain to a donor is a gift that will last 100 years or longer. Fewer donors think this way, and appreciate solutions that are long term, but also allow them to ‘see’ their gift at work. Endowment in this sense translates into a capital restricted fund – income is generated, but the capital may potentially be accessed in special circumstances/needs, or a fund is designed to last for a stated period – 10 – 20 years.
Understanding the demographic profile of your donors and the values important to them is important when discussing the best structure for a long term gift of capital. It both strengthens the connection between your organization and arts program to the donor and helps create a planning result that meets your financial funding needs today and over a longer time frame.
For every person wanting to support your organization financially, there are many options to link their values and aspirations to your business needs – be they current year’s programs, or a income that supports strategic goals long term in nature. Making informed decisions, both on your part and with your donors and their advisors is most important – to ensure support sustains you today and sustains your mission for years to come – continuing to spin ‘straw into gold….”