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Private Donors - Part 1
Private Funders are Difficult. Are They Worth the Effort? Hosted by Patrick O'Heffernan (February 2006 - Closed)
Why should you work with private donors when institutional donors can give larger grants and do it faster? Patrick O'Heffernan has the answer. Raising money from private individuals is often very frustrating, even for Americans who have honed the “major donor ask” to a fine art. Simply finding the right donor and then building a relationship is often daunting for a small NPO. The process can last two years, followed by months of agonizing over when to ask –and how much to ask for.
No wonder most organizations prefer to work with foundations, development banks and government agencies. While their politics may be mysterious to some, at least they have routines for asking, and schedules for making the decisions.
Here are three reasons why you should still find the time to work with private donors:
1. Some private donors can actually give more than institutions. While many foundations and agencies have large budgets, the funds are split among many organizations and there are limits on the size of each grant. Getting a very large grant from a foundation involves just as much relationship building and negotiating as a private donor gift would. Besides, private donors who have entered into a relationship with you can focus the majority of their giving on your organization.
2. Private donors can move much faster than institutional donors –in the right conditions. If you have built a good relationship, or if you have been introduced and are supported by someone who has a strong relationship with the private donor, and if your timing is right, the decision can be made in days, not months. And they often will do it without an elaborate proposal.
3. Finally, private donors, once they are on your side (or on your board) are far more loyal than foundations or development agencies. The upside of spending 18 -24 months building a relationship with an individual often means she or he is with you for many years... a rarity among institutional donors.
So what has your experience been? What advice do you have on private donors? I would like to start a conversation on how you build those relationships. Tell us your story below.
Dominique Callimanopulos - Feb 7, 2006 8:56 pm (# Total: 26) Elevate, Inc.
There are many variables when it comes to working successfully with individual donors, and these are accentuated when seeking private giving for new or start up organizations.
In the past several years, I have done fundraising for a few start ups, and have learned important lessons:
1. The network and skills of the founder or leader of the organization are key! It is the Founder's network that is going to get the whole ball rolling. His or her acumen, good judgment and appeal are essential for a good campaign and the success of the organization. Whatever issues a founder brings to the table will invariably be reflected by the organization. An important question to consider is whether your Founder (or you, if you are the Founder) is COACHABLE! The outcome of most meetings with individual donors in the early years of start up rest on the competence of a Founder. Likewise, their ability to attract a strong Board, that can perform an essential fundraising duties, is also a key consideration.
2. Fundraising, as the old adage goes, is "friend-raising" and TAKES TIME. It takes years to create a strong consituency of individual donors for any organization. Donors do not like to be treated as "targets". They are people first, with complex lives and many interests and your relationship with them has to be handled with the sensitivity you would bring to any relationship you care about.
3. Donor education, overload and burn out. Donors are increasingly educated and savvy people, schooled in the philanthropic conversation and scrutinizing of their investments. For fundraising to be successful, and organization must really have its act together. Likewise, being a philanthropist can be draining--as donors know groups are out for their money. Inauthentic interactions can be wearing for all concerned.
4. Fundraising is not an isolated function. Fundraising cannot be separated from the overall strength of an organization. To present well, an organization needs strong program development, an active, committed Board, and a strategic development plan. I have had many groups want to hire me as a fundraiser, and in some cases, have had to stregthen and advise on all the aspects of the organization.
5. Donor sources should be diverse. You really need a multi pronged approach to find donors: Good PR, regular special events, and tapping into your donors' networks are essentials. Best thing is if you can motivate and mobilize your donor base to find new donors. That again, comes down to the conviction, energy and vision of a NGO leader and staff.
These are just a few points, but I think they're important ones to include in the conversation!
Jochen Holtrup - Feb 8, 2006 2:53 am (# Total: 26) The Care Club (c)
At first exuse my miserable english - it`s a little bit rusty since school days:-)
Our experience is, that the biggest problems are to get trought right to the funder. It is sometimes more harder or difficult to get over the net of people that are around a welth man. You find people on the other side of the telephone that are "caring" so much about their boss that you are sometimes in situations, that are rediculous. They have no idea, but are asking questions, that you are sometimes wish you are at a institution. Because they think often, that you are only a bagger and have only a "crazy" idea, because they are not realy into social things. 2 times´, after month, we stood in front of a funder and he asked, why we didnt come earlier - what do you say then...?
warm regards
jochen
nortex - Feb 8, 2006 8:17 am (# Total: 26) Windy International Youth Foundation
I think private donors are very difficult to create a good relationship with, i started looking for some about three years ago and still am on them. They have made my projects stand still. They are very difficult to get. What do say about this? Help us. More vulunerable people are suffering, they need our help.
Pamela Hawley - Feb 8, 2006 12:39 pm (# Total: 26) Founder and CEO, UniversalGiving
Dear Patrick,
I absolutely agree with you about cultivating relationships with high networth donors! Our experience at UniversalGiving has been extremely positive.
If you have the right tools, such as business planning, budgets, vision and values; the right management team; an excellent presentation and presentation skills; and sincere motive, you will succeed.
Many funders do move very quickly when they are inspired by a right idea, right leadership and values. In addition, you can often present the reports, charts and graphs that are meaningful to your organization and board, rather than what is required by an institution. At the end of the day, the funder wants to see results, which can be manifested in different types of reporting.
Additionally, working with these donors provides diversification in your funding. It also often leads to referrals. And for our team personally, we enjoy this relationship with our donors. The relationship is very direct, clear, productive. It is also a joy to work with individuals who are often used to making quick business decisions and want to invest in a nonprofit with clear goals and results.
Patrick, I'd love to hear more of your thoughts on this issue. Thank you for raising it. All my best! Pamela
tutormentor - Feb 8, 2006 6:21 pm (# Total: 26) Cabrini Connections Tutor/Mentor Connection
I think all of the suggestions for finding private donors are great and I've applied them to raise more than $4 million since 1993 when I launched Cabrini Connections and the Tutor/Mentor Connection with 7 volunteers, 5 students and no money. However, I'm never received more than $10k from a private donor, or more than $40k in a single year from a corporate/foundation donor. Thus, I'm constantly applying all of the suggestions to build and sustain a diverse, and loyal donor base.
However, I'm also trying to do something else. In 1993 I began building a database of organizations in Chicago that offer various forms of volunteer based tutoring/mentoring in the non school hours. I began to plot this information into a Geographic Information System so that I could create maps showing where these programs are located in the city. I add overlays on the map to show where poverty is most concentrated and where poorly performing schools are located. You can see this in the Program Locator section of http://msg.uc.iupui.edu/TMC/html/index.php
With this information I feel it's possible for all of these programs to work together to create a greater, and more frequent public visibility (like advertising) that seeks out people who want to end poverty through education and programs like tutoring/mentoring, and who learn to make choices based on tools like the Program Locator that show where the need is. Using the search features a donor can look at the map of the city, pick a section of the city where he wants to be involved, and then search the zip codes in this section to determine what programs are there, what age group they serve and what they do.
Based on this strategy, the more ways we educate people about the issues, and about ways tutor/mentor programs make a difference, and the various ways they can give time, talent and/or treasure to help one or more programs grow, we can increase the pool of donors in a category, and the distribution of donors into all neighborhoods, not just those with high profile organizations and professional fund raising staffs.
If we can have just a small influence on donor choices, that leads donors to look for programs, based on a shared commitment to solve and important problem, we can lower the emotional and fiscal costs of searching for money, and maybe keep a few leaders involved longer, thus improving their experience, and the quality of leadership they provide.
Is this working? Our program locator attracted close to 20,000 page view in 2005. A program at the Chicago Bar Association distributed $45,000 in grants to 17 different programs in December 05 (http://www.lend-a-hand.net).
Can it work better? As Bill Clinton said at the funeral yesterday for Coretta Scott King, "the difficulty of success does not relieve one of the obligation to try" . If anyone reading this leads a volunteer-based tutor/mentor program, why not join us and try to make this work for you?
Dan Bassill
Tutor/Mentor Connection
http://tutormentor.blogspot.com
mathewemery - Feb 9, 2006 8:53 am (# Total: 26) Mathew Emery
From the perspective of a small private donor. There are a small number of organizations where I know the ED, program officers, and/or other staff and have a reasonably clear read on their (leveraged) social impact on the ground. These relationships have been built over the course of 5-10 years. Though I am a small private donor at present; I certainly intend to make large contributions over time as my means and time expand. For example, going cycling with a program officer for one of my favorite organizations once per year or so to hear what's happening.
Look at your full staff and volunteer base as assets in the private donor game. In the 'Good To Great' book, it maps to the concept of slowly but slowly building the momentum of your fundraising Flywheel.
My Best,
M.
Patrick O'Heffernan - Feb 9, 2006 10:20 am (# Total: 26) Dominique makes excellent points that are echoed in Mathew's post. Relationships are key, and, as Dominique points out, the networks and history of hthe founder or ED are often the most important. However, there is a danger here that if the founder or ED leaves, the networks with go with her or him. There is often a temptation by both the ED and the Director of Development to let the ED handle high donor relationships while the DoD writes the proposals, throws the house parties and works with foundations. While this is the most efficient arrangment for a small NPO, it can be a mistake unless both people make a point to introduce the DoD to all major donors..
Patrick O'Heffernan - Feb 9, 2006 10:30 am (# Total: 26) Dominique writes about donor education, overload and burn out...noting that donors are increasingly savvy. She is exactly right in saying that NPO's must really have thier act together before approaching a donor...there is nothing worse than going through the effort to meet a donor -- which Jochen rightly says is not easy - and then making a pitch not relevant to the donor. As she says, inauthentic interactions can be wearing for all concerned, and figuring out a social connection and then using it for a dumb ask is a kiss of death.
You should study a private prospect as carefully as you study a foundation, even though it is not as easy (if you have access to Wealth Engine or one of the private donor search engines, it can be a bit easier). The best way is to work with an "influencer" -- a person who knows them well and who trusts and supports you. The influencer can help you understand who the donors support, why, how much, and the best way to develop a relationship that is both authentic and profitable---not easy.
The best way is to introduce them to your work with the knowledge that they have some interest, and then let them seek more from you. Not always easy, takes much time and patience, is a gamble, but can pay off big.
.
Patrick O'Heffernan - Feb 9, 2006 10:44 am (# Total: 26) While working with European donors is a little different than US donors (who are much more savvy and systematic about their giving, as Dominique notes) the principles are the same.
First, how to get through the "screeners" as we often call them in the US...people whose job it is to keep people like you away from their boss. I try to avoid them altogether by working thorugh a peer, that is, a person who is the donor's peer and knows her or him socially or professionally. This is usually done through a board member or an advisory board member. (more about this is a later blog)
If you don have a board member or advisory board member who can do this, do you work with an attorney, acountant, consultant, etc. who also works with the donor (I recently was introduced to a donor by a caterer! who produced a party for me and who also produces parties for the donor..who I havd been tryint reach for months).
Also, don't forget family and relativies...do you have a cousin who owns a company that does business with a company owned by a donor..or a sister married to a friend of a donor's,or ...you get the picture. The point is, who do you know who might know the donor?
Another way is to speak at conventions and conferences that the donor attends. Since you can't know what he or she will attend, get out and speak as much as possible and you may get lucky (or other donors!).
Finally, to answer your question, what is your answer to the question why didn't you tell me sooner?....I would say, "it took us a while to reach you, but our work and our message got better while we were trying, so it was worth it for both of us. Now, here is what you need to know....."
Patrick O'Heffernan - Feb 9, 2006 10:55 am (# Total: 26) Windy, Do you have a Board of Directors or an Advisory Board? This should be the place to start. Also, as Dominique and others rightly point out, it takes a lot of time..as long as 18 months --- to build relationships. However, once those relationships are built, you will have a pool of people you can go to for emergency funds or new project funds...without the red tape of a foundation.
To your specifics, I understand about not starting projects until the donors agree to pay (and writes the check!). I always try to seek mutiple sources of funding -- private donors, foundations, government funding - for a project. The advantage to this is that you avoid to some degree the O.P.S. problem -- "Other People's Schedules" . While you will still be subject to the schedules of the donors, it won't be a powerless dependence -if you have multiple proposals working thorugh mulitple processes, some will be faster than others.
Another advantage of this is that as you get grants and start projets, you will have more to show private donors, who can pick off a piece of a project and offer to fund it while a foundation picks up a larger pieces.
Your comment about people are suffering and need help can be a powerful message to private donors, but it should not motivate you to skip cultivation that can build relatonships for long term funding. If you do not have the time to work for 6 - 18 months with a private donor, you should focus your energy on instituional funding for immediate needs, but make sure you have a board that gets your message out to donors...they might surprise you with the funds to improve or extend a project funded by a foundatin or government.
Patrick O'Heffernan - Feb 9, 2006 11:02 am (# Total: 26) You put it exactly right and so succinctly! In the best of all worlds, your donors work with you on specific projects, not to manage them, but to bring in other donors. This kind of relatinship sometimes happpens through donor organizations like Threshold, where donors can bring in directors of organizatons they support to brief other donors.
The quick businesse decisions you mentioned are,I have found, the result of strong realionships, good preparation, and an honest, direct ask. When you have a long standing relationship with a private donor, you know what she or he will fund and how much, so you can call them only with appropriate requests at appropriate times. If you do your homework -- make a pitch geard to that donor with the facts they like, often they can say yes or know on the spot.. and send the check on the spot.
Patrick O'Heffernan - Feb 9, 2006 11:17 am (# Total: 26) Dan, I always love your posts...you bring such good thinking and ideas to the site. The GPS process you describe is brilliant...are you an engineer?? (sounds like something one of my graduate students at Georgia Tech would have done).
In any case, a suggestion for it to work better is to apply for a speaking spot at an AFP annual meeting, both national and regional I think it is something that should and would be welcomed and will generate quite a bit of donor interest. I would also write an article for Philanthropy Magazine and send it to Tides, Threshold, etc. for reprinting in their newsletters to donors. And if any of the foundations that fund you have newsletters or magazines, send it to them also.
As to your comment about $10,000 being your highest private grant, that will depend to a certain extent on what you are asking for. I got a $10 million private grant at one point, but it was part of a $60 million capital project and it came from a funder with a private foundation who had a 10 year relationship with the institution (and I was part of a team that put it together). It takes time and scale.
tutormentor - Feb 9, 2006 6:32 pm (# Total: 26) Cabrini Connections Tutor/Mentor Connection
A few years ago students from Northwestern's Graduate School of Management did an audit of the Tutor/Mentor Connection and they recognized that we we doing good work but without adequate resources. One of their suggestion was to build a team of students from various universities who would work together to support the project.
I've tried to get this going in many ways. Most recently I've been able to get a discussion launched in the forums of http://msg.uc.iupui.edu/TMC/html/modules.php?op=modload&name=PNphpBB2&file=index
Patrick, I encourage you to read this and include this idea in any information you share about the T/MC. What I propose is building teams of business school students from different universities who share ideas and compete with each other to see who can do the most to draw resources to tutor/mentor programs in their community on an annual basis. One of the groups I'm taking with is the Oxford group I met in the Social Edge forum a year ago. I encourage you to point some of your own graduate students to this forum. Maybe they can form a team that gets recognized in FORBES as a Best Practice some time in the future!!
Imagine bright B-school students building marketing plans that draw visibility, volunteers and donors to charities in their community. Imagine an international competition and a Noble Prize type recognition of who does this best. Once this starts the ideas from each group become the starting point for the next year's competition, meaning they all innovate from the best work of everyone else to constantly improve the impact of what they do.
Combine this with my previous post and we have a low-cost, on-going, and highly visible way to draw a more consistent flow of needed resources to volunteer-based tutor/mentor programs in different communities.
Obviously, this is a concept that could be duplicated to support any charity category, not just tutoring/mentoring.
I'd love to have your help to make it a reality.
pa tom - Feb 10, 2006 6:01 am (# Total: 26)
tutormentor - Feb 10, 2006 9:07 am (# Total: 26) Cabrini Connections Tutor/Mentor Connection
I encourage you to visit Greenstar.org and introduce yourself to them. They have been setting up satalite powered community centers in remote locations and helping them to generate income through producing and selling local art, similar to what you are doing. Perhaps you can partner with them, or find a web based organization who understands this model and will help you. Another group to look at is http://www.aurashouse.com/. This is an example of how someone with web skills is helping people in communities like yours. Perhaps you could become one of their sponsored groups.
In our May eConference we're inviting people who have launched web based strategies like Aura's House to talk about what they do, so others might duplicate their work. Look in the Discussion forums of http://msg.uc.iupui.edu/TMC/html/index.php to see how Aura's House led this discussion in Nov. 05.
Good luck.
Dan Bassill Tutor/Mentor Connection
Patrick O'Heffernan - Feb 13, 2006 12:41 pm (# Total: 26) I did check out your site and it is (1) EXCELLENT and(2) an inspiration for futher discussion. Send me an email and we will continue talking
Patrick O'Heffernan - Feb 13, 2006 12:46 pm (# Total: 26) I have forwarded aurashouse to a freind of mine doing the same thing in Latin America, and to another friend of mine who runs a foundation that provides micro grants to women in develping countirs (mostly Gutamala). Thanks for hsharing this.
pa tom - Feb 14, 2006 6:08 am (# Total: 26) Dear Patrick O Hefferman,
Its a great pleasure for the concern you have ,to enable people find lasting solutions to the problems plaguing them.
We are grateful and we hope to contact the above references .We rest assured that with your assistance , together we will make a small differnce big change to improve the welbeing and safeguard the livelihood of marginalised artisans and farmers in rural communities in Cameroon.Hope you could please forward our Association mission aurashouse.Through this we are confident as a mentor and tutor are dreams will one day come true.
I wish you please send me your email address to enable us, send you photos of the fair trade global journey which was hosted in Cameroon from the 27-31/01/06.
NDOPCRAFT was priviledged to be approved by IFAT as one of of the main fair trade organisation to host the global journey in cameroon.
We look forward to hearing from you.
Laurinda - Feb 14, 2006 4:33 pm (# Total: 26) Hi to you all
I have read this discussion with interest. The one factor that I find missing in most NPO's focus is that in an endeavour to create sustainability you have to create sustainable economic demand and that is a missing factor.
whether the demand is only economic or emotional is irrelevant. you need to identify your target market and identify what would motivate the creation of demand (so as to satisfy "needs").
for example:
economic demand. the one major reason that we have identified a lack of economic sustainability is the fact that individuals and organisations embark on projects for which there is no market. Often there is no market for a variety of reasons ... but the most common is the fact that there isn't enough currency in an area to sustain demand i.e. money moves out of community faster than it can satisfy demand. what is needed are different methodolgies to retain currency for longer time frames and to get currency to circulate more, this in turn results in an increase of disposoble income
emotional demand. it is no different than economic demand. you need to identify the emotional needs of yr donors before you approach them. then you have to create the mechanisms and vehicles that motivates them to choose you versus the 1000 others that you competing with, not to mention all the other parallel demads that r made on the disposal income of individuals and/or organisations.
laurinda
tutormentor - Feb 14, 2006 4:46 pm (# Total: 26) Cabrini Connections Tutor/Mentor Connection
Your suggestions on creating demand are important. However, the best reason to respond has little impact is too few people are exposed to the idea. This is the challenge most small organizations or individual entrepreneurs face.
The Internet enables us to not only spread our message (economic or emotional) but also to connect with others and collaborate on message development strategies. For instance a few weeks ago I gave someone in Australia some ideas that she might use in engaging businesses in her tutor/mentor program. Last week she sent me a copy of her invitation and her agenda. It included our ideas. However, her invitation was done on a pdf with an animation element included. I thought it was really good. Thus, by networking, we both learned something.
Thus, while we think of what we say to potential donors, we also need to be thinking of ways we might work together to increase the number of potential donors who are listening.
Dan Bassill http://www.tutormentorconference.bigstep.com
Dominique Callimanopulos - Feb 18, 2006 5:03 am (# Total: 26) Elevate, Inc.
Reaching new individual donors online has become a breakthrough source of revenue for many groups. Ephilanthropy.org is a great organization to support online fundraising efforts.
FYI--My travel philanthropy company, Elevate Destinations, will be launching an online feature this Spring which will allow travelers going anywhere in the world to donate to a screened non-profit or NGO in their country of destination.
For more info or to be considered as a non-profit beneficiary, please contact us at info@elevatedestinations.com. The feature is not yet up on our site, but you can get a sense of our orientation at www.elevatedestinations.com. We hope to start a travel dollars revolution!
The great thing about our new program, which is called TRAVEL MATTERS, is that organizations do not have to be online or have a website to profit (as many don't, particulary small worthy groups overseas). Elevate will collect the donations through PAYPAL on our secure site and forward them through ordinary means.
Cheers,
Dominique
pa tom - Feb 20, 2006 4:41 am (# Total: 26)
Dear Dominique Callimanopulos,
Its a great pleasure to learn of this , wonderful live changing online donations ,that TRAVEL MATTERS has introduced .
We are grateful and wish to be included as one of the non profit organisations ,which looks forward to improving welbeing and safegaurd livelihood of marginalise artisans and farmers as while as a community free from HIV/AIDS.
We therefore call for your consent to include or organisation as one of those to benefit from these online donation.Together every one benfits more.
Dominique Callimanopulos - Feb 20, 2006 4:53 pm (# Total: 26) Elevate, Inc.
pa tom-
Please email me directly at dominique@elevatedestinations.com.
We will forward you an application to become a non-profit partner.
Thanks,
Dominique
pa tom - Feb 21, 2006 6:22 am (# Total: 26)
Dear Dominique,
Its a pleasure to read from you.The development of individuals ,small scale farmers ,artisans and the empowerment of the rural woman is essential for the economic and social development of rural communities .
We look forward for your assistance through your expertise ,to provide us with the necessary tools to ignite our projects and mission to fruition.
OTHER BETTER WORLDS ARE POSSIBLE
thanks
Patrick O'Heffernan - Feb 21, 2006 10:06 am (# Total: 26) Thisis the kind of exchange that we hope for every day at socialedge. Thank you Dominique.
CHRISDANIEL - Aug 7, 2006 3:24 am (# Total: 26) PROF.DR.J.CHRISTOPHER DANIEL
Dear Dominique:
Greetings from GOODWILL. Please take a few moments to visit our website at http://mfcs.malianfoundation.org/goodwill/. You will get to know of our work in India on our website.
As a member of “SOCIAL EDGE’ I am pleased to contact you and introduce me to you as Executive Director of Goodwill Social Work Centre, Madurai, India .I am a former professor of Social work at Madurai Institute of Social Sciences, Madurai, India. I am VICE CONSUL of the First children's Embassy in the World Medjashi- Macedonia.. I am a Networker registered with the Global Links Initiative,UK(http://www.glinet.org). The Goodwill social work centre is an Indian Non Governmental organization registered under the Tamilnadu Societies Registration Act 1975 and Foreign Contributions Regulations Act 1976,Government of India in order to be eligible to receive grant funds from international funding organisations.Our Centre is a member of the World Association for Non-Governmental Organization(WANGO),USA. I am glad to let you know that our organization is included in the NGO database of the websites: http://www.idealist.org/ (Action without Borders), http://www.enscw.org/, http://www.euforic.org/ and http://www.charitynet.org/
It is so delightful to visit your website and to know of your organisation and its various activities. I learn from your website that you are working with NGOs in developing countries. Would you be interested in partnering with our organisation and providing any funding for taking up development programmes for poor and disadvantaged children,youth and women in rural and urban areas in Madurai,South India. I would be very grateful for any help and support you might offer to our centre. I send you further information on hearing from you. Best regards.
Prof. Dr.J.Christopher Daniel, M.A.Ph.D (social work)
Executive Director
Goodwill social work centre
No; 5, south street extension
Singarayar colony
Madurai-625 002, India
email: chriskan@satyam.net.in
