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Fatal Fundraising Flaw: Don't Succumb

Excerpted from How to Raise $1 Million (or More!) in 10 Bite-Sized Steps

I recently worked on a project to raise $1 million to renovate a community market building that's home to many local businesses.

In an early planning meeting, George, one of the more powerful committee members, said he was convinced the best way to raise half of the money was to get 500 people to each give a thousand dollars.

"After all," George reasoned, "the market is the heart of the community and hundreds of thousands of people shop here every year. Why should a few people bear the brunt of this fundraising?" George suggested we sell 500 paving bricks at a thousand dollars each. "We'll raise half the money that way and be done by the end of the summer," he concluded.

Sounds deceptively easy and logical, except for one fatal flaw ...

People—and count yourself among them—aren't inclined to write checks of a thousand dollars without being carefully cultivated and solicited. George's idea was simply impractical. We had neither the staff nor the time nor the resources to identify, cultivate, and sell bricks to 500 people.

George's belief that raising money through lots of smaller gifts isn't uncommon. And certainly you'll want to invite as many people as possible to contribute what they can. But before you approach smaller donors you need enough large gifts to anchor the campaign. You ignore this part of the fundraising process at your own peril.

Take the temptation of direct mail, for instance. Blanketing your community with a general appeal is certainly easier than summoning the courage to ask selected people for sizable gifts. Just ask the library in a small town, where a wonderful group of people decided they were going to raise $2.2 million from private sources to help expand the library. They did in fact raise $900,000, leaving them $1.3 million short.

Approximately 34,000 people live in the town where the library is located, and their small trailer-like library was very popular. So the board figured they could send a letter to everyone asking for help to build a new facility. They wrote a great letter, developed a pledge form, and secured all of the town's names and addresses. They even put personal notes on many of the letters. With great anticipation, the letter was sent.

How much of the hoped-for $1.2 million came in from that mailing? To the board's surprise, just over $14,000. Not nearly enough to complete the campaign.

With some rare exceptions, the direct mail approach results in small gifts. To succeed in raising the remaining $1.2 million, the library needed additional big gifts. Who do you know would send $10,000, $25,000, and $50,000 via the post? (Ultimately, the library exceeded its fundraising goals.)

Raising large gifts requires effort, but it's a more strategic kind of effort, not the many hours of volunteer work required to get out a mailing. It takes time and thought and energy to build solid relationships with the right people, but once that's done, the asking part is easy.

Everyone's Fundraising Fantasy

Dave, the executive director of a youth services organization in New York City, established a charter school to expand and extend the services his agency provided for young people and their families in a notably poor neighborhood.

In the first year, the kindergarten and first grades were up and running in classrooms rented to them by a local public school. But wanting to expand, Dave set about planning to build a facility that would accommodate grades K-6.

What Dave wanted wasn't just a school, but a combination community center and school. He wanted a place where parents could get involved. A place that had theatre and music and sports along with child care and even a health clinic.

For the most part, the board was supportive, but some members had serious concerns. They wondered how Dave could maintain basic operations while devoting significant amounts of time and money to his new goal. And Dave knew that many board members weren't eager to commit their funds while the economy was so gloomy.

But Dave felt they couldn't sit back and wait. He already had waiting lists for the kindergarten class in the fall. The first graders would soon be ready for second grade, and next year he'd need classrooms for the third graders.

In meeting after meeting, Alex, one of the newer board members, sat quietly and attentively, listening and asking questions. He'd been involved as a volunteer for some years and knew firsthand the challenges young people in the community faced. His quiet and thoughtful ways had already earned him respect among the others at the table, but no one anticipated the way he would act on his commitment.

One day, after a particularly challenging meeting, Alex showed up unexpectedly at Dave's office. Fearing the worst, Dave asked his assistant to hold his calls.

Alex began the conversation in his characteristically understated way, telling Dave how important the organization was to him. He predicted dire financial times ahead but still felt they should move ahead with his plans for a new building.

"This isn't the time to stop growing," Alex said. "This downturn offers opportunities that'll disappear when conditions improve."

Then he added, "I know you'll have to invest to get the plans shovel-ready, so I've decided to cover these costs." With that, he handed Dave a check for $1 million!

Alex's extraordinary gift did much more than provide the planning funds. It created a sense of credibility and inevitability for the project. Board members who had been skeptical stopped their carping. They knew that when the project took clear form—with a site, a plan, and a budget—they'd be asked to give. And because Alex set the standard, they'd be more likely to stretch.

To be sure, Alex's gift was a surprise, but it didn't come out of nowhere. He had been intimately involved with the organization for many years. He had served as a volunteer in the programs, working with a group of young people from the time they were eight until they went to college. Alex had also attended early planning meetings for the project.

My point is, if you've involved people who are capable of making large gifts in the early steps of your fundraising, you'll be ready to ask them for their commitments without much fuss. One of the counter-intuitive aspects of well-executed fundraising is that the largest gifts are often the easiest to secure. You won't need fancy proposals or glossy brochures. But, unlike Dave, in most cases you will need to ask.

Andrea Kihlstedt
© 2010, Emerson & Church Publishers. Excerpted from How to Raise $1 Million (or More!) in 10 Bite-Sized Steps; excerpted with permission.

fatal-fundraising-flaw_Andrea-Kihlstedt.pngAndrea Kihlstedt is fascinated by what makes people tick. She has spent the last 28 years as a capital campaign consultant, working with organizations large and small, giving her ample opportunities to observe remarkable people who through their courage, commitment, and energies make our world a better place through fundraising. For more information, visit www.AskingMatters.com, a Web site designed to provide tools that inform, support, and motivate people to go out and ask for gifts.

Topics: Fundraising