Episode 87: Campaign Philosophies —Traditional and New School

Welcome to another edition of a"Around with Randall", your weekly podcast making your nonprofit more effective for your community. And here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett.

I'm so grateful to have you right here with me, Randall, on this edition of "Around with Randall". Today's conversation, discussion, is a little bit interesting in that it's a compare and contrast situation, scenario. About a month-and-a-half ago, two months ago, there were a couple of articles in the Chronicle of Philanthropy written by Drew Lindsay that really caught my attention and actually printed them out, took some notes, and I put them off to the side because I wanted to take a little bit of time to reflect upon them. I thought they were really interesting in what they were talking about and what we're going to chat about is these two articles and all about capital campaigns. One dealt with how bigger gifts were driving campaign success, the other is up, the other article was kind of this idea of upending that traditional stance of bigger gifts driving campaigns and how smaller donors are really more of the successful model we should be thinking about. It's led me to kind of go back and forth on some thoughts and that's what I want to talk about today.

So if we think about campaigns at a 30, 40, 50,000-foot level, the traditional model has been that we go out and we're going to identify a smaller group of people depending on the size of the campaign. Could be 20 people. Could be 50 people. But it's going to be a small group. We're going to spend some time with them about the mission of the organization, the campaign priorities. We're going to solicit them. We're going to do this kind of in a quiet process and then when we get to a certain percentage, there's kind of some different perspectives on what that percentage is, I like it to be a little closer to 75-80 percent, there are those who would say closer to 60. I think there's arguments all kinds of ways of looking at it but in the end you, that's when you go public. This has been driven by a traditional model. This is, in some ways, all, if you've been doing this long enough you know and the numbers over the last decade as I have talked about a number of times and I think it's important to recognize particularly from Giving USA and the great work they've done tracking all of this over the last 30-40 years but in particular the data from the past decade is that less people are giving, overall, more. Less people making donations but the dollars are going up, and the average gifts are going up, and the mega gifts are making more and more of an impact on success for non-profits. So as a result what you end up with is this traditional model that's being fed by the data that tells us that fewer people are making more of a result so it would naturally particularly maybe those of us are a little bit older continue to matriculate towards this ideal of a traditional campaign major donors making up, you know, the huge percentage of the opportunity.

On the other side of the equation, and this has been interesting to read because it's something I'm a little bit more a distant from, it's, as most of you know I'm not a huge social media person and I certainly know about it certainly understand it but I've always asked the question why does anybody really care what I eat for breakfast? So I don't really engage at a high level, but that doesn't mean it doesn't have an effect. Just may mean I'm not as knowledgeable as I should be. The story that Drew Lindsay wrote about in April talks about how campaigns have been incredibly successful when they have concentrated very much on smaller donors, and that they find it more inclusive and that it generates new opportunities that weren't present before a traditional campaign probably is going to be banked on people. You know this new version of smaller donations and campaign success is actually based on people you may not know. So I did a little extra research to kind of figure out why is this happening. We actually can take our kind of lead on this subject not in non-profit work, but in political fundraising, which I guess technically could be nonprofit but political.

So in 2008 then candidate, now former President Barack Obama really pressed, pushed, moved the needle on online giving and on smaller donations. In fact 24 of his total contributions for his political campaign came from smaller donors, people under 500, which is a huge change. One of the first to do this in 2004, even though his campaign wasn't successful, for the office was the former Governor, Howard Dean, who had much of the same push around this idea of smaller donors making a bigger difference. While I think President Obama pushed that envelope a great deal to elevate it, the real big move came actually in 2016 with former President Trump, where 69 percent of his donations, individual donations, came from smaller donors. And so this idea of smaller donors making a bigger difference in, I'll call it in a very broad sense, political or not or not political, philanthropy, is growing.

It leads me to my next question. Well, why? And what you begin to find out is is that it's usually younger people who are making those contributions, which is probably not a huge connection. But the reasons why are important. What we know is about Millennials and Generation Z is that they associate their philanthropy with the experience, with the mission, that how their core personal beliefs matching the mission and core beliefs of the organization, and that these are larger groups of people. Generation X, my generation, is smaller and obviously if we look to the Baby Boomers who are ahead of me, are shrinking in numbers, that there's huge numbers behind the two generations that are to follow me in Millennials and Generation Z that numbers are on their side and they're in a younger position, probably more able to make smaller donations than larger ones, but they also connect their personal belief system to the things that they give to. It's experiential and so it's very natural for this to happen.

So what are the benefits and what are we to do with this with information, These contrary stories from Drew Lindsay? So I took a little bit of an effort to figure that out and trying to think okay so what are we, what are we talking about here in the traditional model where we work with major donors and we build up some in a campaign, a little bit of momentum, is that we know, those are staff-driven, and that the, this is our history and tradition, it's what we know. In that particular article there were, there was a quote that said this is the way I was trained, this is the way I've always experienced it. Why would I do it differently? And I thought, well that seems logical to me but is that actually true? And we'll talk about that on the flip side when we talk about smaller donation campaigns. The other thing is that as the Baby Boomer generation grows older, and I look at my parents as a wonderful example, that the the importance of planned giving in these campaigns is becoming more and more important. If you're focusing on a smaller group of people because they're moving into retirement age where they're less likely to drain their funding, their their retirement, their investments or whatever because they're not gonna have any more income, my father talked about this when he retired and he he says you won't understand until you get there but all of a sudden you don't have any more income and that's a scary thought. And I heard something very similar from my grandmother and grandfather. You know 30,40 years ago when they retired, and that mentality means that planned giving has to be a more and more important factor. But that also brings challenges because maybe the campaigns, let's say for physical structure or for immediate need, and if you don't have a some type of of planned giving vehicle that allows you immediate access to those resources, and that's tough to do, you have to wait till someone passes. Obviously we don't have control of that, so what does the organization do to fund that building or that that immediate need in the interim before that gift actually comes to fruition with the passing of that particular donor?

We also know that planned giving is, and I take this from the Stelter Group out of Des Moines, that planned giving is best at least the applicants or the the best possible prospects are best defined by those who give you the most consistent gifts, and they don't have to be big at all - $25, $50, $100 but they've given you to you for 25 years so there's a wealth of opportunity with these people. So this big campaign thing probably not, or you know, with small donors, major gift campaigning, probably not a big surprise to you but there are some risks with it. One risk is that you're putting a lot of eggs in very small basket, and that we know, as we've talked about previously on the podcast and also I talk about all the time, donor concentration if it's too small can be very hazardous to one organization's or one gift officer success. We also need, since it's staff-driven, need really good staff members' talent and that's more troubling. Today we're seeing so much movement in employment. Well, talent alone doesn't necessarily bring you gifts immediately. It's relationships that do, and if you're losing good people and bringing in other people that maybe is good, but they don't have those relationships. They don't have those connections. So what you're left with is maybe a lot of talent but not a lot of deep, meaningful trust. So, not only talking about talent, we're talking about probably talent that has longevity that can capitalize on those relationships, and we also, as we've discussed, have to be able to fund what we need particularly for using planned giving as an option for these major gift campaigns.

I've gone through this just recently with a client doing a feasibility study. Number of people said I'm very interested in this particular project but it's got to be through my estate gift. Well, the problem is it's a $100 million+ building and the CFO's comment is where do I get the money to pay for this and that becomes an interesting dialogue because the answer is, if you want their money they're telling you how they're going to give it to you. If you ask them but they're alive and you have to wait, which means the organization's gonna have to make some financial decisions. So there's some risks with this, but it's a very traditional model. We know it works when it's done well. It's what I base feasibility studies on.

The opposite side of it is these these smaller donor campaigns, which means you're doing a lot of different activity. And when I kind of dug into this in the tactical pieces, what is it that you need to do this. I came up with a totally different series of requirements. Number one, you need a network that you can communicate a great message. So let's take these two things apart. The communication piece, what is it that you want to say? Is it going to have importance in a traditional campaign? we sometimes build out, and I'm more of an advocate of a one page at least initial case statement, the days of 8, 10, 12 page case statements are dead unless you're doing, a you know ,a comprehensive campaign for university $175 million or two billion or something of that nature. People will read that much, but you can't do that in a social media tweet or posting. So how do you get value out of a limited number of words? Where social media has a much more limited attention span, at least when people read, what is the messaging? The second part of it is the network. If you've got a bunch of people on your board, if a bunch of your donors, volunteers, and others are not engaged in social media, Randall Hallett right here, then this is really hard.

So who am I going to get the message, even if it's the perfect message, to? So how many connections do you have, friends? How, what's the size of the group you're trying to use in a campaign? You might have a small campaign committee that can connect you with 20, 30, 40 people in the communication of a small campaign, small giving campaign. You might need a much bigger committee because that gets your message out further. It also will bring you the opportunity to have new people because the message goes out to people you may not know, and that's also a positive. It's a new group that you haven't depended on in the past. It's a different kind of planning. How many messages do you send, and by the way, remember the traditional model. We can argue about the percentage major gift campaigns. You're usually quiet until you're 67, 80 percent of the weight of the goal. There is no quiet phase with this.

Probably, if you're using small gifts as the basis for your campaign success, because you're communicating it right away so this pre-planning is critical to get that message out as fast as you can consistently as you can, you also have an advantage because most gifts like small gift campaigns are cash. Now there's a reason that political people went to this because it was instant cash. If someone leaves $25, $50 on your web page or however you get the money through the internet or online, you get that money today or tomorrow unlike a traditional campaign where you may have to wait. So there's different planning, there's different communication, there's different understanding of the value. Everything's got to be locked and loaded because you can't be trying to change the plan in the middle of it because you've already communicated it and there are risks. You need those connections so you're going to have to have a different looking group of volunteers and leaders who are connected in the communities you want to reach.

Number two. You have to have a very specific knowledge of what you need, and you have to be able to communicate in a very specific way, short-term, and you're going to need lots of people to be engaged and be okay with that to be able to communicate the message and also deal with the challenges that come with communication. Here's the crazy thing. I took the articles and maybe I misread them, but I don't think so. As an, or I guess my question is, why aren't they, and why can't we do both? Why can't we have a traditional campaign that generates a great deal of money on the front end from a small group of people, and then have the small opportunities so everyone can be involved on the second part of the campaign? Why does it have to be one or the other?

Now there's a lot more work that goes into doing both because you're kind of doing two different processes, but it allows more people to be involved and engaged and to talk about your organization and talk about the value it has collected. Even if they don't make a gift it has collateral value, positive outcomes, because you're telling more people the story. People are reading it, seeing it, and maybe some of these smaller donors down the line when maybe you're long gone become pipeline opportunities for the next series of people that come through at the larger gift areas. I'm not sure if the author meant it either, or I think that there's value in both and that we need to be open to both solutions as a way of meeting our nonprofits' needs, particularly when it comes to a campaign. Because we want as many people to help support the, what we're trying to get done that helps our community, helps people in the way in which it meets their expectations, different way of looking or thinking about campaigns in today's world.

Don't forget, always want you to think about the blogs on the website hallettphilanthropy.com, 90 second reads, but they're two,three a week about different things going on in the nonprofit world or just leadership or just things going on in general, 90 seconds, easy. Hallettphilanthropy.com. And just hit the blogs. I also would recommend if you can, and would help me if you're listening to this downloaded or if you're watching it on YouTube, leave a comment. Send it out to someone. Leave a positive remark, give it some stars. I want this to be a classroom. I want to cause people in 20 minutes to think about how they can help their own career, their philanthropy, their organization, and their community. And if it does that in a regular increment, series of increments, then I'm happy because it makes a difference for you.

So share it with a couple people, which would be awesome. And if you want to contact me that's podcast@hallettphilanthropy.com. Glad to chat with you. maybe you have a suggestion on a particular subject. would love to hear from you. Remember what we do in the nonprofit world is critically important. My favorite saying you've heard me say time and time again, some people make things happen, some people watch things happen, then there are those who wondered what happened. Nonprofit work is about doing things, being people who make things happen and partnering with those who have that same mentality for those people and those things that are wondering what happened. And that's giving back. That's the essence of philanthropy. Love of mankind. And I can't imagine a better way to spend a career. I hope you feel the same, hope you feel like you're making a difference, because you are. I'll look forward to seeing you right back here on "Around with Randall" with me, Randall, next time. And don't forget make it a great day.