Episode 23: Donor Cycle Series - Solicitation (Asking) and Closing (Part 3 of 4)

Welcome to another edition of “Around with Randall,” your weekly 10 to 12-minute podcast and making your nonprofit more effective for your community. And here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett. 

It's great to have you back here on, “Around with Randall.” Today, we are talking about the third part of our four-part series on the Moves Management Process or the Donor Cycle Process, however you want to put it. We want to talk specifically around the aspects of “asking” in what I would also classify as “closing” gifts. We'll talk about the distinction here in a minute.

I think it's really important to acknowledge that people come into this process with a little bit of apprehension. There are many studies that indicate that asking someone for money is one of the great fears in general society, so process becomes critically important. You'll remember that when we concluded the cultivation podcast, I talked about the aspects of what a soft ask is and what it looks like, and now we can find out why it's so important. You might remember that the soft ask is asking for permission to bring someone a proposal for a specific amount to support the cause that you possibly have been talking about. Here's why this is really important. If you've done that correctly, kind of bridging the cultivation, that next step the cultivation piece into the solicitation piece, then this gets to be actually quite easy. It eliminates a lot of the guesswork, a lot of the headaches and hiccups, and a lot of the indecision that goes along with it because you've gotten the person or the people to be at a place where they know what's coming next. If they really didn't want it much of the time, they would have told you back then. So, using that idea of the soft ask can be incredibly effective at reducing many of the gift officer, organizational nonprofit problems that come in a solicitation.

I mentioned the idea of closing as a part of this piece. We'll talk about that in the tactical as to how to get over some of those things. The reason why is, is that there's a great book that I read when I was still an active fundraiser as a Chief Development Officer in a large academic medical center called Three Steps to Yes: The Gentle Art of Getting Your Way, by Gene Bedell. It is really not a sales book, as much as it is about building trust in a relationship, which seems to be exactly what we should be aiming for in our relationship building activities with donors and prospects. In the book, it talks in kind of two things that I think are our two areas that I think are really important. The first is what he refers to as the three things that hold up someone from making a decision. The first is a loss of options. The second is a fear of making a mistake. The third is this idea of social or peer pressure. So, let me pull these apart real quickly because it's going to help us figure out how to get someone to finalize their gift in terms of supporting your organization. 

The loss of opportunity or options is that once they make the gift to you, they can't use that money in another way. This is where I always like to think about value. If someone's concerned, I'm giving you a million dollars so I can't use it somewhere else. Instead of trying to defeat that particular perspective, I actually want to jump on board and say, boy, are you right? But let me tell you how it's going to affect people. Your $1 million gift may come from one person, but it's going to affect hundreds of thousands of people. It's a way to reenter into that cultivation and why this is important, trying to merge the organizational need with their interests in the right timeframe -- think about a Venn diagram and trying to piece all these times, interests and need all in one place. Loss of options can be just a concern that they may be missing out on something. The second is a fear of a mistake. This is actually the easiest to probably overcome. Are they making a mistake? Well, if you have talked about what this is going to do to impact people, then it's likely that this is not going to come up as frequently because you would have covered that correctly in the cultivation stages. 

The third is social or peer pressure. You can look at this in two ways. One, is there someone that can help put a little bit of social or peer pressure? This is why in campaigns it's really important to have the right one, two or three people who make the first lead gifts, because that can be, even though they never have a conversation with a prospect, might apply some peer or social pressure that they as the prospect or the couple who are the prospects should be a part of this gift opportunity or this campaign You can also go the other direction. It can also go to, well, is my name going to be public in all of this, or if I want to remain anonymous because I don't want peer or public pressure. So, in the book it talks about overcoming those three instances, the loss of options, the fear of making a mistake, and lastly, this idea of social or peer pressure, either coming from those who are already involved and they feel like someone should be a part of it or how they're going to be viewed once they make the gift.

The second thing that Bedell does is talk about a three-step plan that I think is highly effective at a very base level in building trust and really it's not about selling tricks. It's about the relationship. Number one is to fulfill the needs of someone else. It's not about what your organization needs. It's about what the gift is going to do for them. Yes, it's going to change your organization. Yes, it's going to be part of something that helps other people, but for them to make the gift, this is about their need to fulfill something, their personal need, and how it's going to affect others in that process.

Number two, you need to be credible and trustworthy. We haven't talked about that a lot in the first two podcasts in this series, because it's almost understood, but I'm tired of it being understood. Your ability to be honest and trustworthy is quintessential in developing relationships. You should be seen as a trusted advisor in many of the relationships where I've spent the most amount of time over my years and gotten some of the largest gifts, in particular with estate gifts. There are times I actually know more than their children do because they trust me. Can you be an honest broker? Can you help march them through this process where they feel that you are on their side and be legitimately so. 

The third is this idea of communicating persuasively. The world of nonprofit philanthropy is getting more competitive. So, your ability to talk about what your organization does and how it differentiates from somewhere on someone else is critically important. It's not meant that you put somebody else down. It means you talk about your organization in the most positive way –outcome, affect -- how it's meeting the community's needs and helping individuals or families or groups in a way that nobody else is.

You might be thinking, wait a minute, we're talking about closing and asking, why did you bring this in here? Because this is the decision point. This is the moment when a prospect is going to make the decision, whether they're going to give. In doing so, you've got to be helpful in guiding them through this complicated process. If it's for five or 10 bucks, it's easy. You get to a $1million, $2 million, $5 million, there are a lot of emotions and financial issues and concerns. As the book indicates, these three hiccups that go along with kind of the psychology of why people don't make decisions. You need to understand that you are the instrument. You're walking them on this journey and the idea of fulfilling their need and the idea of being credible and trustworthy and being persuasive, and then helping them overcome these ideas that involve loss of options or making a mistake, or just the idea of how social and peer pressure are critical to get their name signed on a gift agreement.

So, the tactical let's talk about some of the detailed aspects, some high-level tactical thought, first and foremost, this should be the shortest, simplest, least complicated meeting you ever have. If you've set this up correctly, it should take about 10 or 15 minutes because you're going to walk in with a written proposal. Every organization and even to some extent, the different portions of our industry in philanthropy have different standards. The question will should be is what level is it that you should walk in with a written proposal? What does your organization say? For many it's a major gift level and maybe it's a pledge form if it's lower at a $1,000 or $2,500, but the idea is, accounting really struggles, finance really struggles to recognize that gift unless we have something in writing if they're not going to just be writing you a check. Well, to do that, we should reflect the professionalism that our industry should have by having a written proposal. We'll talk about that here in a second. Lastly, you want to make sure if there's anybody else that needs to be involved in this process, we talked last time during cultivation about planning. If you're going to bring someone else into the conversation, a relationship, please make sure to do that again. It doesn't elongate the meeting. It just may apply a little bit of that social or peer pressure. 

What is the order of the meeting look like? Well, first it's some small talk. Secondly, it's a recap of everything you've gone through. We've looked at this, you've mentioned how important this is to you, and here's what our organization is doing to meet that need and to get to the place where we've discussed. It's going to take resources in this amount, and you've indicated an interest in supporting us at this level. That's when I bring out the proposal, the bigger the dollar amount, the bigger the proposal, if you can get away with one or two pages and make it simple, I think it's great. But here's a tactical piece that I see as a disconnect that sometimes hinders the process or after the gift has already been applied or given causes some problems. Your proposal should have all the information in it that is necessary for the gift agreement to be completed. So, before I talk about the proposal, let me talk about the gift agreement.

The gift agreement is the agreement that allows the person to know what is expected of them and what they can expect from you as the nonprofit. So, things like how much is the gift for, how it’s going to be paid? is it over time? what is the recognition? Is there some kind of naming in this process? How are you going to steward them? Meaning are you going to provide them a report on an annual basis or semi-annual basis or some kind of output that allows them to know how their gift was used and how it was valuable? Does your gift agreement have a morality clause, we've seen more and more of this recently, where the morality clause basically indicates that the organization, if the donor does something that reaches a public knowledge, that's very negative, that the organization always retains the right to remove their name from anything.

The reason I bring these up is you want to match the proposal to the gift agreement, meaning everything that you need in the gift agreement is in the proposal -- how much, how often, what's it going for, is it restricted? What is stewardship going to look like? You're going to have a naming opportunity. I'm not sure I need to put the morality clause, but also how are you going to steward them? And then of course there are things like the value of what the effort is, what the organization's goals are. But you need to mirror them because if they don't, somebody reads the proposal wants to do the gift agreement and there's pieces missing that stalls the energy, the emotion, and the progress that you've built on, the momentum that you need.

I had a standard agreement for everybody in my shop between $10,000 and $1million, that we used, unless it was a complicated gift, so if it was a pledge, cash/credit card, or stock transaction. All things we could just do in a standard agreement. The gift officers would fill in the places where they were allowed and then they didn't have to get a gift agreement approved every time. As soon as we got into gifts that included estates, plan gifts or charitable remainder trusts, or land, or some kind of a gift in kind that would then require some kind of review. Realize your organization needs to put probably some standards on that, but also put some restrictions so that not just everything can get through, in order to protect the best interests of the relationship and the organization as a whole. 

The last piece is this idea of closing. I can't tell you how many times I had gift officers come back sky-high because they had a great meeting. They've agreed to the gift and I'd say, so where's the gift agreement and they'd say, well, I don't have it yet. Finance, accounting, and legal are going to look at these agreements as the declaration of the gift, not the verbal, particularly as you get above $10,000 or more. So, before you walk out of the room, after you've presented the proposal, I always carried the proposal and the gift agreement that matched it in case somebody said, Oh, this is great -- exactly what I wanted. I could pull that gift agreement out and say, look, let's get this done right now. In any case, once you hand over that gift agreement or that proposal and they say, gosh, I need a little time to think about this. It's really important to put a timeline on that. So, what if I got back to you in a week -- would that be okay? Or two weeks? If the prospect says I need to meet with my financial advisor or attorney. That is so wise, I think that's great. In gifts like this that makes a lot of sense. Would a couple of weeks be long enough before I can get back to you? You need to close end, so to speak, this timeframe, because there's nothing more frustrating than a gift officer thinks they have a gift, but they don't know what the next step is because they didn't close the timeframe of when the follow-up would occur. So, make sure that you have that timeframe. If you have a prospect that is still trying to figure it out, there are a lot of closing techniques in sales that you can use like a balance sheet or a trial offer. You can read about any of them and kind of apply them in very simple ways to philanthropy. The key is that you have to give them an opportunity to make a yes or no decision.

The last tactical comment I have is there is a worse option than not getting a gift. I mean, getting the gift is the best option, but there's something worse than not getting the gift. And that's not knowing if you got the gift. Closing is about getting to a “yes” or a “no” formally. I am going to give or I'm not going to give. That's particularly important as you look at metrics and year-end evaluations where you're like, well they said yes, but we don't have a gift agreement. Closing is a piece of this asking process that sometimes is overlooked and undervalued. I highly encourage you to think about them as a 1A and a 1B. Solicitations are about asking and closing.

If I don't close -- no gift agreement and no signature -- that becomes problematic. Actually, I miss asking for resources, support, and philanthropic dollars. I hope listening to this has helped get you closer to what you need to do to help your organization achieve its goals.

Don't forget about the website, hallettphilanthropy.com two “L's” and two “T's”. If you want to send me an email podcast@hallettphilanthropy.com. If you have a suggestion on the show or a comment, or if you think something I said was just terrible, reeks@hallettphilanthropy.com. I'll take complaints or something I missed. I want your opinions. Don't forget also the blogs. We do two or three a week, about 90 second reads each (max), just what's going on in the industry. So, a lot of different ways that you can continue your evolution, your thought process on what you want to be in some of the aspects of our non-profit industry. As I do each week, let me conclude with my favorite saying, “Some people make things happen. Some people watch things happen. Then there are those who wondered what happened.” I've come to appreciate in life that we fall into one of those categories, every second, that we're breathing and that philanthropy, and particularly those who work in non-profit, we're the conduits for people who want to make things happen, which makes us people who want to make things happen for those in our communities that are wondering what happened.

People that need help, assistance, a step up, a helping hand, whatever that looks like. So, by allowing the philanthropy to occur, we matched people's genuine interest in wanting to be difference makers. We're the conduits to connect the dots for people who are trying to make their lives better. I can't imagine a more fulfilling way to spend a professional life. I hope you feel the same, cause you're doing great things to make your community a better place. And that is worth your time, effort, and energy professionally and personally, as a person, we'll see you next time for part four on stewardship of this four-part series on “Around with Randall and don't forget, make it a great day!