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Abundant Vision Academy, Part 2 & 3: Meeting Prep, the Cultivation Cycle & Building Your Portfolio
35 Plays11 days ago
You can't close a major gift you weren't ready for. In this installment of Abundant Vision Academy, Tom gets into the mechanics of preparation: what has to be in place before you ever schedule a meeting with a donor.
This episode covers the full donor cultivation cycle from suspect to steward, why your vision has to be fundable before it's compelling, and how to build a major gift portfolio that actually works. Tom breaks down the difference between affinity and capacity, why 100 names in a portfolio is a setup for failure, and exactly how to mine your donor database to identify your best prospects before you ever pick up the phone.
This is Parts 2 and 3 of a 10-part series releasing every two weeks. If you missed Part 1, go back and start there.
Looking for fundraising coaching? Check out www.abundantvision.net
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Transcript
Introduction to Abundant Vision Fundraising Podcast
00:00:05
Speaker
Welcome to the Abundant Vision Fundraising Podcast. Whether you are a seasoned professional or a first-time fundraiser, we have the advice you need to take your next step toward major gift mastery.
00:00:19
Speaker
I'm your host, Tom Dauber, President of Abundant Vision Philanthropic Consulting. Last week's conversation was a blast. I'm so excited to have you with me for this next segment.
00:00:30
Speaker
Let's get back to the show.
Planning for Successful Donor Visits
00:00:33
Speaker
Welcome to the second lesson in the Abundant Vision Academy, meeting preparation. Great planning can make or break a donor visit. In this lesson, we are going to review all the things you should have done before you schedule a meeting with a current or potential donor.
00:00:51
Speaker
We're going to start with the basics, the donor cultivation cycle, your vision, your goals, and how to maintain and grow a portfolio of major gift donors.
Understanding the Donor Cultivation Cycle
00:01:01
Speaker
The donor cultivation cycle.
00:01:04
Speaker
Fundraising is a virtuous cycle. In the profession, we often talk about the donor cultivation cycle. It's a simple concept. If done right, a solicitation that leads to a donation should also lead to joy and positive feelings, which then lead to additional giving.
00:01:23
Speaker
It's your job as a fundraiser to ensure that your donor has the most positive experience possible so that they continue in their generosity to your organization. This cycle is sometimes called the cultivation cycle.
00:01:38
Speaker
It starts with the identification of potential donors. We call those suspects. We meet with those suspects to evaluate their interest or affinity for the organizational mission and to evaluate their capacity to make a significant gift.
00:01:54
Speaker
Once qualified, those suspects are now major gift prospects whom we work to cultivate by engaging them with the organization so that we might solicit a gift.
00:02:05
Speaker
Once we solicit a gift and the gift is made, then we steward the donor's gift by showing our appreciation for their gift and informing them about the donation's impact.
00:02:16
Speaker
If done well, there is a strong likelihood that the cycle will continue with additional gifts.
Crafting Mission and Vision Statements
00:02:22
Speaker
But before we can start with the cycle, we need to make sure we have an inspiring vision worthy of our donor's investment.
00:02:31
Speaker
Building your vision. Most organizations have a mission statement and a vision statement that they've really spent some time developing. These statements distill down into a few sentences why you exist and the change your organization wants to achieve.
00:02:48
Speaker
If you haven't done so, that's the place to start. Everything you do as a fundraiser ought to flow out of these two statements. For this training, I'm going to assume you have done your due diligence in this area.
00:03:03
Speaker
Before you schedule a meeting with a donor, notice i don't call these visits. I call them meetings or appointments. is these are not social calls. They should always have a clear business purpose.
Aligning Donations with Mission Goals
00:03:16
Speaker
Before you schedule that meeting, you need to be prepared to talk specifically about how donations to your organization directly support your mission and lead to the change described by your vision.
00:03:30
Speaker
So let's say that your organization wants to make the world safer for unicorns and dragons. If your vision statement is something like, we envision a world where unicorns and dragons are celebrated and embraced in every community, it will be important to really spend some time thinking about how money helps you reach that goal.
00:03:53
Speaker
And even what are the downstream positive implications of this vision becoming a reality? Consider starting with a problem.
Addressing Organizational Challenges with Initiatives
00:04:03
Speaker
Currently, dragons and unicorns are not celebrated and embraced.
00:04:08
Speaker
Here's where we'd want to cite some facts about our mythical friends. Something like, each year, 70% of all dragons and unicorns face harassment, even violence, from well-meaning monster hunters who see them as a threat or a source for magical powers.
00:04:26
Speaker
An organization like this who wants to end acts of violence they should be thinking about actionable steps to end such violence.
00:04:37
Speaker
Maybe it would be something like this. Maybe their first thing would be a program to proactively educate children, to help them see at a young age that acts of violence against dragons and unicorns is cruel.
00:04:52
Speaker
Maybe the second thing they'd look at would be community engagement. Those efforts could be with political and civic leaders to persuade them to use their influence for the good of dragons and unicorns.
00:05:04
Speaker
And lastly, maybe the third initiative would be drop-in centers for wayward dragons and unicorns where they can receive emotional support and medical attention if needed.
00:05:15
Speaker
So these are our three efforts. We then need to put together a document for each detailing the project's expenses and goals. For example, If I'm going to have a drop-in center, I need to identify all the startup costs for the facility, any ongoing monthly expenses, including staffing and benefits.
00:05:37
Speaker
Then the organization should also give an overview of the services that will take place in that facility. We'll even want to think about why your organization believes this is an effective way to address the problem.
00:05:50
Speaker
It should also describe how these efforts support your mission and vision, and should even speculate about how the results of this initiative may impact the dragons and unicorns in your care, both in what it provides and at what it prevents.
00:06:07
Speaker
For example, providing free care for dragons may prevent young abused dragons from seeking medical attention from back alley, unlicensed crypto veterinarians, and should even describe why that can be a problem for concerned dragon families.
00:06:25
Speaker
So once we have a document that reviews each initiative's financials and describes clearly how they help, now we have a vision that is worthy of a donor meeting.
00:06:43
Speaker
Building your portfolio.
Managing Donor Relationships Effectively
00:06:46
Speaker
When we talk about portfolios in major gift fundraising, we are talking about the collection of relationships you are personally responsible for managing on behalf of an organization.
00:06:57
Speaker
In this lesson, we are going to review how to go about determining who should be in your portfolio. A major gift portfolio is a group of strategic relationships that are assigned to a specific relationship manager with the goal of soliciting a major gift from that individual.
00:07:15
Speaker
In many small fundraising shops, you may not have relationship management assignments. I'd encourage you to reconsider that. It is crucial that everyone in your organization is on the same page in terms of how to treat your best current and future donors.
00:07:33
Speaker
There is no room for missteps here. You can't have multiple people in your organization engaging with the same donor in an uncoordinated fashion. You need a point person directing traffic here, and they must know about every interaction that a potential major gift donor has with your organization.
00:07:52
Speaker
The best way to do this is to assign that donor to a specific person, making sure everyone in your organization knows who is taking that responsibility.
00:08:03
Speaker
and that they are all accountable to clear future communications with that relationship manager and to report on those interactions as they occur. Fundraising is like dancing.
00:08:15
Speaker
If you aren't coordinated, you are going to step on one another's feet. Now, a major gift prospect is someone one in a managed portfolio who has both affinity and capacity and could potentially make a major gift in the near future.
Optimizing Donor Portfolio Sizes
00:08:31
Speaker
Three to five years is typical. A major gift suspect is someone whom you believe might have both affinity and capacity, but you don't know for sure yet.
00:08:43
Speaker
no matter what their gift history with your organization is, no matter what you believe you know about them, until you have personally met with them and have confirmed your suspicions, they should not be in your portfolio.
00:08:59
Speaker
So how many people should you be shooting for to keep in your portfolio? Well, your portfolio should be made up with three types of prospects.
00:09:11
Speaker
Prospects who are not ready for a solicitation today, but are being cultivated towards a solicitation. Prospects who are ready for a solicitation today and will be solicited soon.
00:09:24
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And prospects who have recently made gifts and who are in stewardship mode. As I said before, a major gift to officer won't typically be able to solicit more than 20 gifts per year.
00:09:39
Speaker
14 to 16 tends to be more typical. One third of your portfolio should be people that you are cultivating for a future ask. One third should be folks who are ready for an ask this year.
00:09:52
Speaker
And the final third should be individuals who have made gifts and you are stewarding. Each third should have around 20 people in it, giving you a portfolio of about 60.
00:10:04
Speaker
Now, I know some organizations will give their development officers 100 or more names in their portfolio. But think about this. If my job is to cultivate good relationships with each person in my portfolio, that means I should be trying to get in front of them face to face at least a couple times a year.
00:10:25
Speaker
If I have a portfolio of 100 people, that's 200 meetings I need to have just there. That's 16.6 meetings per month. Now, most fundraising shops are only looking for 14 to 16 donor meetings per month for their fundraisers.
00:10:43
Speaker
This leaves no time for discovery work or for prospects who might need more than two meetings in a given year. 100 people in a portfolio is just a bad idea that isn't going to result in good fundraising.
00:10:57
Speaker
Please don't do it.
Identifying Major Gift Prospects
00:11:00
Speaker
When building your portfolio, you want to start by reviewing your historical data. You want to look for your best current and potential donors from a number of different angles.
00:11:11
Speaker
Specifically, I'm about to share with you the type of data you can analyze for yourself in order to identify people who are likely to be major gift donors. You'll want to start with a download from your fundraising database or customer relationship management software into a spreadsheet.
00:11:29
Speaker
Once you have the spreadsheet, you can filter or sort your data quickly to see your top potential prospects or suspects. The first thing we're going to look at is cumulative and lifetime giving.
00:11:42
Speaker
A query like this one answers the question, who has given my organization the most money total? So use your donor database or CRM to generate a list of your donors by lifetime giving.
00:11:56
Speaker
You should be looking at that top 10% as potential candidates for your portfolio. Next, you'll want to look at recent gifts. Now let's say you have someone who's not in your top 10%, but has recently given you a relatively large amount of money.
00:12:12
Speaker
That's someone else you should be considering. You should query your database for a list of recent gifts, could be in the past two years or so, over a certain size.
00:12:23
Speaker
This number will vary based on your organization. Knowing your average gift side will help you decide on this number. The next thing you want to look at is your largest gifts.
00:12:35
Speaker
Oftentimes, the folks that have made your largest gifts will also be at the top of your cumulative giving list. But if you have a very old organization with a lot of long-term donors, that may not always be the case.
00:12:48
Speaker
So you should generate a list of the top 25 or
Distinguishing Donor Affinity and Capacity
00:12:51
Speaker
50 individual gifts to your organization. These individuals or organizations should also be strongly considered for your major gift portfolio.
00:13:02
Speaker
The next query you should pull is one that shows giving frequency. We don't want to just know which donors have made the top individual gifts to our organization. We also want to know who has a long track record of annual giving and consecutive years.
00:13:17
Speaker
Individuals at the top of this list might also make strong candidates for your portfolio. Each of the searches we have done, they are all different ways of identifying affinity and capacity.
00:13:32
Speaker
Affinity shows us who loves our organization and its causes the most. Such individuals tend to be faithful donors and regular attendees at events. These are often volunteers, advocates, and board members.
00:13:45
Speaker
It's important that we not mistake affinity for capacity. A healthy portfolio must have both of these attributes. A great volunteer who is important to the organization for their service is going to have great affinity, but that doesn't mean they have great capacity as well.
00:14:03
Speaker
So they should not be managed like a major gift donor in a portfolio. Only likely major gift donors should be a part of your portfolio.
Assessing Donor Capacity and Affinity
00:14:13
Speaker
Capacity tells us if they can give us a large gift to your organization.
00:14:18
Speaker
If they have a history of making large gifts to your organization, that tells us a lot. There are also many other ways to evaluate this.
00:14:28
Speaker
None of them are foolproof. One common way is to look at their address. The value of their home tells you something about their income, but it may also indicate crushing debt.
00:14:39
Speaker
Vacation habits and expensive hobbies can also be indicators. You can pay for wealth screening services that can review many of these publicly identifiable indicators.
00:14:50
Speaker
It can be helpful, but it isn't necessary. Large organizations like universities and hospitals make use of such screening tools. Having these tools helped me identify when a modest gift came from someone with a higher wealth rating.
00:15:06
Speaker
This was a good flag for me to be sure to give extra attention to that donor when I said thank you. However, I can't even count how many times I was able to qualify a new major gift donor through a visit who clearly had all the signs of wealth, but who did not show up on a wealth screen.
00:15:25
Speaker
Getting to personally know the individual is always the best way to screen for affinity and capacity. That's all the time we have today, but be sure to tune in next week to hear the next part of this exciting conversation.
Podcast Wrap-Up and Call to Action
00:15:39
Speaker
Now, if you've enjoyed this podcast, please be sure to subscribe and give us a five-star rating on your podcast provider. I'm your host, Tom Daubert. Thank you for joining me as we journey together towards major gift mastery on the Abundant Vision Fundraising Podcast.