Standing Beside Alaska's Non-Profits

The Secret to Raising Money

We want to let a secret out of the bag. Raising money is simple. All you need is to find the best person to ask a prospect face-to-face for a specific amount of money – and you will raise money more times than not. Now let’s outline the complexity in that overly simple solution.

First, we want to address a few common myths about raising money:

  • As soon as you get your 501(c)(3) status from the IRS, money falls from heaven.
  • If Willy Horton robbed banks because that’s where the money was – then it’s logical that if you want to raise money you should ask rich people, right?
  • Institutional donors like corporations and foundations have the most money to give.
  • The more choices people have, the more they give.
  • Advertising is all you need to get people to give money.
  • “If people only knew how good our mission is, they would give.”
  • “If people knew how much we need their help, they would give.”
  • There is only so much money to go around – if I get mine, you won’t get yours.
  • Professional fundraisers ask for money.

These fundraising myths run rampant. In Alaska and around the country, fundraising or development professionals confront these myths every day. Capacity building organizations like The Foraker Group fill fundraising classes with eager volunteers and staff wanting to find the silver bullet that will help them raise more money. Many leave disappointed because regardless of whether they ask us, or the Association of Fundraising Professionals (AFP), or consultants from around the country, the answer is the same, there is no silver bullet.

Raising money is simple, you must ask. In order to increase your odds, find someone to ask a prospect that the prospect knows, trusts, or wants to know. And even though it can be uncomfortable to ask for an amount, providing a suggested amount actually helps to raise more money.

Raising money in a sustainable way is a much more detailed and lengthy process. It takes longer because you must first identify individuals connected to or passionate about your mission, cultivate them over time, and then ask them to give. After they give, you must reinforce their connection to you through appropriate recognition, engagement and communication.

In Alaska, nonprofits have become addicted to the fast way to raise money. We ask big corporations, foundations and the government to do more than their share because they have processes to solicit funds that seem easier than asking our friends and neighbors to give. We also rely too much on special events because we can disguise our solicitations by asking prospects to come eat a chicken dinner and bid on auction items. All these methods are faster – they seem easier – but none are sustainable.

The 2007 ISER/Foraker study that documented the economic impact of our sector on Alaska’s economy found that 40% of charitable income comes from earned sources, 35% from government and 25% from philanthropy. It also noted that in 2006, gifts to nonprofits by BP and ConocoPhillips represented 10% of the state’s total philanthropic dollars. Nationally, giving by all corporations amounted to only 5% of total philanthropy. Also in 2006, the Rasmuson Foundation contributed almost 12% of total philanthropy in Alaska. Nationally, all foundations combined contributed only 12% of total philanthropy. And in the same year in Alaska, government funded 57% of total nonprofit income. The national norm was only 35%. We have been very successful at asking our philanthropic institutions – especially the government, our largest foundation and our two major industry champions – to fund our sector.

A national study in 2006 documented another troubling statistic. The study ranked states according to the charitable giving of individuals making over $200,000 a year – and it placed Alaska dead last. Had Alaskans making over $200,000 in 2006 given at the national norm, our total philanthropy would have grown by 40%, or $100,000,000!

I have presented this information to almost every Rotary Club and Chamber of Commerce in Alaska. I have heard every possible excuse for why we don’t give as much as other states. Some of the arguments may have merit. For example, in rural Alaska there is significant sharing of financial resources between families. Such generosity is often charitable, but does not qualify for IRS recognition. (To be honest, that was really the only good excuse I heard, the rest seemed shallow justifications.)

We could easily blame Alaskans for not being generous, but in fact, we as a sector are to blame for the lack of giving. We have not done the basic internal shift to sustainable revenue streams. Those are earned revenue from mission-based services or products and contributions from dedicated individuals who are connected to our missions. We may want an easier way to raise money – but there is no easy way, just the right way.

So where do we go from here? Well, it may be good to change the tone – from a lack of generosity to the many ways we truly are more generous than the data shows. In 2002, Alaska was ranked as having the highest level of volunteerism in the country. Alaskans give more per capita to public radio than most states. Alaskans who make the least money give at the same level as individuals Outside. And then there is this story of generosity that is close to my heart because it involves United Way’s Tocqueville Society.

In 1981, Tommy Frist, the brother of former Senator Bill Frist of Tennessee and the physician CEO of Hospital Corporation of America, was chair of the United Way campaign in Nashville. He noticed that while he saw generous support from workers in retail stores, industry and hospitals, high net worth individuals did not give to the campaign. So he decided to raise money from wealthy citizens. His strategy was simple. He asked his peer group to give $10,000 or more a year to support United Way.

Within two years he had created what is now known as the Alexis de Tocqueville Society, a major giving program named for the French aristocrat who visited America in the 1830’s to study our penal system. However, his completed journal focused more on how democracy worked in this new country. In that work, entitled Democracy in America, he identified how we differed from our European cousins. He stated that in Europe, when there was a need, people asked the monarchy or the church to help. By comparison, in America people formed volunteer committees and worked together to solve problems. He wrote those words after witnessing volunteers in Tennessee – now referred to as the volunteer state – engage in community self reliance. I believe Tocqueville found us different because those settlers of European ancestry were greatly influenced by Native Americans who had survived for millennia through working cooperatively and engaging in a subsistence economy that had at its core sharing one’s bounty within the community.

Since the birth of the Tocqueville Society in Tennessee, it has spread throughout the country. I helped develop the first classes at United Way of America in 1984 on how to run these campaigns. I helped to start Tocqueville Societies in every community I worked. When I moved to Anchorage in 1992, it was the first giving strategy we implemented.

We were able to recruit our 1993 Campaign Chair, Greg Carr, to be the first Alaskan to give to United Way at this level. He asked his father Larry and his business partner Barney Gottstein to join in. Prior to 1993, only one donor in the community gave $5,000, so securing three new donors at $10,000 was a great accomplishment. From that start, we did simple fund development. Individuals were identified and asked by their close friends to join. We did all we could to engage and cultivate donors. To be honest, Tocqueville giving was slow to grow. The second year we had five donors, the third year eight, and that trend continued for the next decade – adding two to eight donors each year. The key words here, by the way, are next decade.

By 2002, the society membership had grown to over 40. Then a very dedicated and philanthropic volunteer, Vic Mollozzi, decided to use the best fundraising practices to take it to the next level. Through his effort and the hard work of all the volunteers who preceded him, the society grew to almost 90 members over the next few years! Most still gave at the $10,000 level, but there were numerous members giving annual gifts of $25,000, even $50,000 a year to United Way. Despite the recession last year, membership stayed at 78 families who collectively gave over 10% of the total campaign. For the last few years, Anchorage has experienced a higher per-capita giving at this level than any other city in the country! We are generous, we just need to be asked to give – and asked in the right way.

The lessons for want-to-be fundraisers in these stories are:

  • It can take a decade or more to see sustainable results – stop relying on fast and easy money.
  • Volunteers ask – staff provides support.
  • Alaskans are generous when asked, by the right person for the right cause, and then are engaged in meaningful ways.

So back to the myths:

  • As soon as you get your 501(c)(3) status from the IRS money does not fall from heaven, all you can do now is ask for a charitable gift that provides a tax advantage for the donor.
  • If Willy Horton robbed banks because that’s where the money was, then it’s logical that if you want to raise money you should ask rich people, right? The only rich people you can ask are the ones connected through relationships with your board, staff, and/or mission. By the way, you can also ask people who are not so rich, they actually give a higher percentage of their income to charity.
  • Institutional donors like corporations and foundations have the most money to give. Institutional donors provide only 17% of total philanthropy. Their support is significant and appreciated, but the real money is raised through individuals who choose to share.
  • The more choices people have to give to, the more they give. People who give typically donate to five or more organizations. People give not because the organization is on a list, but because someone asked them, or they have a relationship with the organization or affinity for its mission.
  • Advertising is all you need to get people to give money. Advertising raises awareness, reinforces the decision to give and helps donors feel good about their support. A small percentage of people who see an ad asking for contributions will respond without further encouragement. But most people still need to be asked by someone they know and trust.
  • “If people only knew how good our mission is, they would give.” People do give because of your mission. However, it can take years, even decades of cultivation before an individual contributes. Believing in a mission is important – allowing time for that belief to grow is as important. They still need to be asked.
  • “If people knew how much we need their help, they would give.” Most people are not influenced to give when they hear your needs. They are more likely to give when they see your impact and are asked.
  • There is only so much money to go around – if I get mine, you won’t get yours. The only competition you have in raising money is the perception of a donor’s capacity to share. It has been my experience that we have not neared that real capacity.
  • Professional fundraisers ask for money. Boards and volunteers raise money – staff provides the support for boards and volunteers.

So you may want to know – if raising money is so easy, then why does it seem so hard? Remember the secret? YOU MUST ASK!!! AND IT MUST BE PERSONAL.

When we ask in a letter, we ask, but not really. When we ask through a good ad, we ask, but not really. When we send an email, we ask, but not really. When we ask on the phone, we ask, but not really. When we hear someone ask on television, we’ve been asked, but not really.

One example of a TV “ask” that really does not ask is the Jerry Lewis telethon for muscular dystrophy. For the past 30 years, I’ve conducted an experiment around this Labor Day event. If I ask any group whether they have been asked to give to MD, only about 10% of hands go up. But if I ask how many have ever seen even a minute of the Jerry Lewis telethon, almost 80% of hands go up. The fact is that if you watched that telethon for any amount of time, you have been asked to give. But if you aren’t a Jerry fan or connected to MD, chances are you did not feel asked. Now think about all the mail solicitations or phone calls you have received during dinner – you were asked, but truthfully, did you really think they meant to ask you?

So there’s the problem. Asking the right way – so donors really know they’ve been asked and in a manner that will provide the best odds to secure a gift – we have to ask our friends, the people we trust, who trust us, and that’s a risky proposition. Because when we ask a friend and the friend refuses us, it feels like a personal rejection. In most cases it’s not, but it sure feels that way. And it’s not even the rejection we fear the most, it’s the fear of potential rejection that stops us in our tracks. So if there is any way not to ask, we take it. Having an event seems so much easier, but it will not raise sustainable revenue. No money, no mission. If we don’t start asking, none of us will be able to maintain our mission.

So how can we help you overcome your fear of asking? Here are a few suggestions:

  • Before you ask anyone to give, make your own gift at a level that is meaningful to you.
  • Solicit the easiest prospect first, then proceed to the person you think will be the hardest to ask.
  • Ask people who give if you can share their name with others to encourage additional support.

For organizations participating in Pick.Click.Give. this year, please consider this advice and don’t rely on someone else to ask. Just because you qualified for the program, that doesn’t assure donors will “click” on your name. You still have to ask. We suggest asking through email, letters and phone trees – but also identify volunteers with relationships with potential donors and have them personally ask their friends. You’ll get best advantage of your Pick.Click.Give. listing this way. In fact, this is the only way you will benefit from the investment of time and money by the Rasmuson Foundation and others to bring Pick.Click.Give. to life.

The investment has been made in your ability to ask – NOW ASK! If you are not participating in Pick.Click.Give., please use the ideas in this letter – or join one of our Foraker classes on fundraising. In order to make Alaskans more generous, we need to make it easy for them – by asking.