Giving Pyramid
How to move donors up the giving pyramid to the ultimate gift
Contributed by Tom Knox
My last blog focused on the great benefits the Army and their donors receive from a planned giving program. You may recall that I mentioned that the planned giving program was added after a great direct mail program had been established, but a step was missed in the process.
In effect the Army had been asking donors for support through direct mail where the average gift was around $35.00. That process did lead to supporters who gave much more than the average and many who gave small gifts but gave for many consecutive years. Those folks became the focus of the very successful planned giving program. So the Army was happy to have direct mail meeting current needs and a portfolio building that offered some revenue for current needs, future needs and for capital expenses.
In the fund raising world, a planned gift was considered to be the ultimate gift. The proven development model generally followed is based on how donors enter an organization and how you move them up a giving pyramid to this ultimate gift. While there is some discussion in professional development circles concerning trends that may be affecting that pyramid, there is still a simple truth to be realized.
Simply put, we need to move the donors in a systematic manner.
The bottom of the pyramid (see below) is where, by far, the most donors first connect with an organization. They come with little personalization of the ask through direct mail, events, kettles, online – all broad appeal approaches with limited relationship building. This is an important part of any development program and by design is very broad and not personally focused to the prospect. It is about numbers – the more we mail the more we get type of approach.
The second level involves a relationship building approach that moves a donor from the entry level of giving to current major giving. This type of work is critical because it is here that we make perfectly clear the reasons why our work is worthy of their major investment TODAY. If we miss this step then many potential high end donors are asked for the ultimate gift of a bequest before we have made the case for current funding. We miss the opportunity to create annual major donors because we did not properly move the prospect through the proven model.
While the Army’s planned giving program has been very successful, the major gift effort for current operations did not have the same level of focus. Major gift officers now have to go to the planned giving donors and make the case of why their support is needed today. Not an impossible task. But, if eliminating reasons why people might say no is important, this approach actually gives a good reason for donors to say no – they can say I have already made the ultimate gift, I have the Army in my will and that will help with operating costs one day.
I am really pleased that the Army now has a major gifts effort. To be successful it will take concentrated effort and a structured plan with board supervision and involvement. This also needs to be coordinated with the planned giving efforts. Some organizations, and my preferred approach, do not have two teams – a major gifts officer team and a planned giving officer team – reaching out to donors. One team of gift officers is an approach that puts the donor first, not the gift type, so that only one gift officer is helping the donor move up the pyramid. In this structure, the gift officer listens and offers gift options that will help donors meet their needs and the organization’s. Even if what the donor needs at this point is a deferred gift, the case for significant annual support was made and is much easier to return to in future visits. When it comes to a potential planned gift, a planned giving professional who has been trained and kept up to date on changing laws is brought in to help the donor – but in all cases the donor is advised to seek their own financial planner or attorney for guidance.
The Army has the potential for huge support. I think they have not aimed high enough in their major gifts efforts. When I was with the Army, we tended to think a $5,000 or $10,000 gift was about the highest gift we would ever receive, maybe if we got lucky we would get a $100,000 gift. My belief is that the Army’s work is worthy of regular investments of $100,000 or more in many places. And I believe there are donors who would support the Army at that level – if you look you will see these same donors support other causes at these levels. Other places, based on program needs, not on donor potential, will not reach this level. That is why it’s important to have a solid program in place that meets the needs of the community and therefore worthy of support. If you are meeting community needs then a major gifts committee can set a goal and define what major gift level for their community would be appropriate – don’t be afraid to aim high.
A final note, if a major gifts program is simply staff driven then untold thousands of dollars will be left on the table. An active major gifts committee (for current and deferred gifts) is key. Perhaps we can talk about that next. Feel free to contact me if you’d like to discuss this, I know the model works from experience.
Tom began working with The Salvation Army as a camp staff member in 1973. His Army career included 10 years working in programs at community centers, building bridges between Corps and Clients, directing a home for runaway youth and then15 years in development. He was an instructor for the Officer’s continuing education program for four years, offering a day long class on special events, direct mail, board development, United Way relationships, major gifts, and planned giving. He also was a session speaker at the NAOC in St. Louis on the topic of CPR for Advisory Boards.
After 25 years with the Army, he was recruited and accepted a position to develop and implement a national major gift and planned giving program for the Humane Society of the United States. He later developed and implemented the national major gifts and planned giving program for the United Services Organization. Currently he is the director of development for the Bishop John T Walker School for Boys in Washington D.C. He can be reached at tksal@aol.com http://www.linkedin.com/pub/tom-knox/4/939/392