I’m working with a small non-profit that had a unique need for donor management. The organization is only about 3 years old and has just a hand full of donors. Not enough to warrant expenditure on a donor management package. Yet, they still need to track income, contacts, etc. At the moment it is all done in the president’s head. To their credit, they want to be positioned for the future and so we needed to do something.
I tend to be an advocate for not reinventing the wheel and getting software that works. However, it is hard to argue with very limited budgets and so . . .
Solution – created a rather unique Excel workbook that I think will serve the needs for the time being. At least until the donor pool is on a significant growth curve. It isn’t terribly difficult to add new donors or new giving opportunities. However, it is challenging to provide the treasurer with the needed detail so it gets a little complex at that point.
Nothing fancy (no fancy macros or special data entry windows) but I think a good short term solution for a non-profit startup. I don’t think I would recommend it beyond about 40 donors or so.
Anyway, if you are interested in seeing it, I am happy to share. Just comment and we can connect.
First, let me define the term “planned giving” so that we are all on the same page. Think of planned giving as the process of making a gift that requires an additional level of activity or planning due to a more complex set of issues. They require more negotiation or counsel than current gifts. Planned gifts are often “deferred gifts” because the income to the charity does not materialize until sometime in the future.
Planned gifts can be simple and provide immediate income to the charity such as a gift of securities (bonds, stocks, mutual funds, etc). They can also be quite complex, involving insurance, various types of charitable trusts, and more detailed estate planning. Planned gifts can be simple outright gifts to charity such as a securities gift or they can involve multiple family issues, planning for special needs, retirement income, etc.
If your charity accepts gifts of securities, and actively promotes those kinds of gifts, then you are well on your way to a planned giving program. But why should you consider other types/methods of planned gifts, especially if you don’t have the capacity for the traditional planned giving staff? Here are five things to consider:
- It’s about donor relationships. Planned giving initiates conversations with your donors in a deeper, more intimate setting. While you may not have the staff to engage with donors on the technical aspects of some of the gifting mechanisms, being able to provide resources to solve their challenges will help to cement the relationship you have built. Of course this also means that you have to be careful to properly steward those relationships.
- Reminding your donors that giving from their estate is a simple and easy way to make a legacy impact will cost you almost nothing. Add it in to any giving promotion, your website, your newsletter, etc. For the nominal “cost” of a few lines of text, your donors are reminded that they can express their appreciation for your organization even at death.
- In the past, it was thought that only large organizations could have planned giving programs because there needed to be someone to manage the process, invest funds, act as trustee, etc. With the growth of community foundations, there are now multiple ways for individuals to accomplish their goals without your organization needing to add staff. Establishing a relationship with a regional or national community foundation can be a very cost effective way of providing resources to your donors.
- Planned gifts that “mature” (or distribute their charitable remainder) can provide an unbudgeted source of income for special programs, additional initiatives or to offset expenses in the general budget. You can also set a corporate policy that deferred gifts will be designated for a specific fund or use.
- Planned gifts often provide the avenue to the largest gift the donor will make to your organizations. As you steward that relationship over time, older donors will gain an appreciation for your mission and may leave their ultimate gift to you to demonstrate that legacy lesson to their family and friends.
With these five considerations in play, is it time to implement a planned giving program for your organization? Contact me if I can help you develop a plan.
I have been thinking a lot about the scriptural principles for Christian stewardship and life applications. As I wrestled with my own understanding, and searched the Biblical texts, I have boiled it down to the following 5 principles that I believe are at the core of Christian stewardship.
- God, as creator, owns it all. In the beginning of Genesis, God creates the world and everything in it. He then creates Adam to steward, or care, for creation. (Genesis 1:1)
- Money management is only part of Stewardship. Our call to be wise stewards includes our time, our talents, our relationships, and our finances. (1 Corinthians 4:2) “Now it is required that those who have been given a trust must prove faithful” (NIV).
- Our possessions are temporary. During life they may be destroyed or lost. At death they cannot be taken with us. Therefore, what we do with them today becomes even more important. (1 Timothy 6:7)
- Every spending decision will be, at some level, a spiritual decision. Our checkbooks provide a story of where our priorities lie. Biblical stewardship does not require that a Christian despise money or discontinue earning it. Money is a necessity for basic living. The Bible does warn, however, that the love of money creates evil (1 Timothy 6:10).
- Giving is not about the Old Testament tithe (or 10%). It is about the heart. The story of the widow who gives her two small coins in Luke 21:1-4 is the demonstration of this principle. The amount seemed trivial but it demonstrated her devotion to God. 2 Corinthians 9:7 continues this theme: “Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.” (NIV)
I hope that in some small way this list encourages you and is a basis for your own journey of understanding.,
Knowing your donors is a major step in targeting your communications effectively. There are a number of ways to slice your donor list and evaluate how you might craft communication across segments or groups of donors. Maybe your list isn’t large so segmentation may not be very efficient but to the extent that you can understand who your donors are, the better you will be able to communicate with them.
One easy way to understand your donor is to gather age demographics. Including a birth date field (even just month and year can be effective) on every response device is a simple addition that can pay off in a number of ways:
- Knowing your donor’s birth dates can provide you an opportunity to add a high touch to your donor communication. Sending birthday cards lets your donors know you are paying attention to them.
- Knowing the age demographics provides necessary information when considering the launch of a planned giving program. If you have a large portion of your donor file that is over the age of 55, planned giving marketing can be provide donors with an additional way to support the organization that they love.
- Understanding the proportions of your donors in various age ranges will allow you to tailor your communication language and style to those groups. Language and idioms that young people use will not resonate with older populations. Preferred color palettes are also different.
- Want to generate volunteer opportunities? Different age groups will respond to different opportunities. For example, older adults may appreciate the opportunity to volunteer in your office while younger adults will want to do “field work”.
These two charts can be used to evaluate some basic statistics on your age demographics. Determine the range groupings that make the most sense for your organization. Organizations with larger donor files can probably slice their segments into smaller ranges than organizations with smaller files.
Understanding the age demographics of your donor file will provide you with strong information about the profitability and lifetime value of various segments and ranges. It will also provide you with some indicators of the health of your donor file based on the spread of donors across the age ranges.
Business people are used to talking about Return on Investment. And many times we try to apply some measurement of ROI in the non-profit world as well. I would contend that within the development arena, ROI is particularly challenging to measure. Some efforts produce an easy to measure statistic. Others – not so much.
Take direct mail for instance. 95% of ROI can be measured easily. Costs spent on the mailing vs donations returned. The other 5 % might be goodwill, name recognition, or just plain informing. Of course, if done badly, this 5% might be negative and actually hurt the organization.
What about donor events? Vastly expensive in both direct expenditures and staff impact. Especially if the organization makes every attempt to run lean. But how do you measure ROI? Do you absorb the costs knowing that your donors have been impacted (hopefully positively) by the event? Is the information that you have shared with them enough? Does the fact that this group of donors has received a special invitation to a special event serve as enough motivation to keep their engagement with the organization?
Now I realize that donor events come in all flavors of size and purpose. But I just want to throw out some thinking surrounding this development activity.
I would contend that maybe ROI for donor events is not truly measurable. But the events themselves can be powerful connectors for donors. So in that sense, they shouldn’t be ignored entirely.
Just a thought.