15 August 2008

Opinion:
Prospecting is Critical in Tough Economic Times

Judy S. Keller, CFRE, Vice President
Midwest Region

Prospecting is fast, free, flexible, and - if you check your sources - reliable. It is also essential at a time when the economy is troubling economists, historians and development officers.

The Fundraising Index, developed by Indiana University’s Center on Philanthropy, has done little to assuage this concern. A recently released annual survey of 140 development professionals’ confidence levels indicates that, in the past six months, the Fundraising Index has plummeted six percent. As confidence dips, it is critical to revisit prospecting – a sometimes overlooked but always rewarding tool available to nonprofit organizations.

Active prospecting can reap big rewards for membership-based organizations, which typically lose between two percent to five percent of their annual income through natural attrition. Even organizations that are not member-based should remember the importance of finding new funding sources.

The nature of prospecting - identifying new donor support - has become more efficient and effective than ever. Free online resources available to development professionals now include websites and an online publication devoted to prospect research. The internet also provides incredible opportunities to connect with large numbers of people, a phenomenon underlined by the huge number of small donors attracted by this year’s presidential campaigns.

Blogging has invaded and invigorated patterns of communication, social networking and donor relations. The internet has dramatically expanded opportunities for organizations to explain their missions, share their stories and solicit support.

The nonprofit world must find the time, expertise and resources to take advantage of today’s technology and trends. The key to maintaining and expanding any individual funding base lies in revisiting and revitalizing prospect research.

Challenging economic times require development departments to remain focused on the fundamentals of fundraising, and prospecting is one of those key tools.

Well-Planned, Dynamic Recognition
Can Foster Deeper Donor Relations

Larry Greenwald Partner, RecognitionArtŠ
Sarasota, Florida

Editor’s Note: In seeking to offer additional resources for our nonprofit partners, we invite guest articles from our colleagues who serve the nonprofit development field. In this month’s New$ You Can U$e, we feature a submission from Larry Greenwald, general manager of Florida-based RecogntionArt©, a national donor recognition firm. Larry was a founding member of Recognition Resources® and, since 1992, has designed and manufactured donor recognition displays for the largest and smallest nonprofits in the country. Larry and his wife, Shelley, have served on numerous nonprofit boards and have helped in capital campaigns ranging from $2.5 million to $165 million. They are frequent speakers at regional and national fundraising conferences.

In the world of recognition there are many different possibilities, choices and opportunities to help you maximize your communication, donor acknowledgement and fundraising efforts. The problem is that there is no way that one person can think of them all.

Discover the Emotion Behind the Gift!

Donors have compelling reasons for giving to an organization, and there is always a definite and identifiable “emotion” behind the gift. This simple statement of fact is the basis on which all donor acknowledgement and recognition fundraising projects must be built.

There are three objectives related to this concept that, once implemented, will lead your nonprofit organization to differentiate itself above others and, ultimately, succeed in its fundraising and communications effort:

Donor Recognition Can Accomplish Much More than the Obvious

Often we get so bogged down with our day-to-day tasks that we end up putting aside our real and important work, which is thanking donors in a way that maximizes every dollar raised.

 “Show Yourself the Reasons”

A successful donor recognition display will communicate to your audience a variety of messages to help educate and increase fundraising income.

Design Location

Recognition fundraising works so well because people enjoy seeing their name and their gift displayed in a prominent location.

The design should be motivating and inspirational, but it is critical that the display is in a location where it is the center of attention. If it is not visible to the public, then efforts have been wasted and many donor opportunities are lost.

The success of a design does not simply rest on how much is spent to create it, nor does it lie in the application of the latest fad design. Rather, the location is so critical that in most cases, it is better to sacrifice a secondary component such as display size in order to capture a prime high-traffic location for your project.

So what factors contribute to a prime location?

The location also conveys to the donors the importance placed on their contributions and their names. As they say in real estate: LOCATION, LOCATION, LOCATION!

What Constitutes a Good Design

Just as corporations spend millions of dollars to have their products put on billboards or showcased in a dazzling design, donor recognition walls are the “billboards” for donors – your investors.

It is of paramount importance that you showcase your donors’ names in a billboard design. The “billboard” part is the style appropriate to your organization and region. But, make no mistake, if your donor recognition project does not engage or grab your investors, they will hesitate to donate again. Let’s discuss some of the important components in recognition design.

Show Me the Reason Why I Gave!
By incorporating elements from the organization’s history or current mission into the design, you can create a sense of community with your donors.

There are reasons your donors selected to invest in your nonprofit. Remind them — and any prospective donors — of those reasons by customizing the design’s details.

Create a Challenge for Your Donors
Including a hierarchy of giving levels is an equally important feature in donor displays. It has been our experience that even in completed campaigns, once the display is unveiled there will be new donors who will want to come onboard and current donors who will express interest in moving to a higher level or a different status. Therefore, the ability to interchange donors among the predetermined giving levels will create a lively environment that viewers will continually notice.

Donors invest in your organization for a reason; your goal is to find those reasons and integrate them into your design. This is a partnership between achieving the goals of your organization and achieving the recognition for your donors.

What Are Your Objectives?

First, create a list of your organization’s goals, wants and needs. Next, review each point below and consider if it will play a part in your recognition project. If so, how it will be integrated into the final design?

By establishing primary and secondary goals and then developing and implementing an action plan, you will increase your revenue, bond your donors for life, and create a lasting legacy for generations to come.

Static vs. Dynamic Recognition
Too often organizations find themselves in the dilemma between static (never changing) and dynamic (cumulative) recognition. Here are some thoughts about these two structures:

A dynamic recognition display allows everyone to participate. It not only recognizes large, single gifts that are received from time to time (especially in a specific campaign), but also smaller gifts given with consistent caring over a longer duration. Each is important to the organization’s success and both deserve recognition to show appreciation. Additionally, cumulative recognition allows the donor to see and be thanked for his/her entire history of giving, and not simply for a brief “snapshot” of the donor’s generosity.

Nonprofits spend significant amounts of money to recognize donors who give during annual appeals or capital drives. With static recognition, those donors will feel appropriately thanked at the time of dedication. However, the recognition vehicle soon begins to fade into the surrounding décor after the end of the event. As a plaque on the wall, it soon loses its appeal and disappears — if not from view, then certainly from our consciousness.

If, however, organizations would invest a little more into the display, a flexible, expandable, non-defined perimeter piece can be created that will become a dynamic part of their ongoing fundraising efforts. For example, it could include a rotating art exhibit of historic and/or current events that tell a story; this will keep it a consistent area of interest. It will allow organizations to recognize into the future for all donations: large and small, planned gifts and legacies, life insurance proceeds and wills.

As you can see, cumulative recognition, or a dynamic display, works for organizations dependent on their donors both large and small. After all, both should have the opportunity to be recognized for their total effort on behalf of the nonprofit.