Episode 215: The Cornerstone of Fundraising - TRUST How to get and keep it with Prospects and Donors
Welcome to another edition of Around with Randall, your weekly podcast for making your nonprofit more effective for your community. And here is your host, the CEO and founder of Halette Philanthropy, Randall Hallett. I'm so honored you take a few minutes of your day to join me, Randall, on this edition of Around with Randall.
I was recently reading one of the publications I tend to follow in the philanthropy world. And in there was an interesting article about a lawsuit with the Red Cross, where a number of donors are suing the Red Cross over their usage of donor money for Haiti. Now I'm not going to pause it whether it's a good lawsuit, a bad lawsuit, who's going to win, who's going to lose. That is yet to be determined. I don't even know all the facts. But what I found interesting was that donors were indicating that the usage of their restricted donations was not at the level that the donors wanted, anticipated, or demanded. And that now this may become a class action lawsuit.
Why did this strike my fancy? Why am I talking about it here? I went back and I looked at the 220 or so, maybe more podcasts that I've done. Speaking for a one-word subject of a podcast that maybe I've talked about and I really hadn't. I talked around it, but I not talked about it, and to be candid, I'm disappointed in myself, because frankly, it's maybe the most important element of what we do in the nonprofit world. It's what we live on. It's what makes us successful. It's what drives philanthropy to our organizations in positive ways to make a difference in our community. That five-letter word, simple word is trust.
I've not talked about how do you develop trust with donors? Now I've talked about trust and referrals, i.e. That’s where we get our prospects and how that works and how we build those relationships. You can go back and listen to those episodes. I think that's 140 and 205. I've talked about trust involving prospect management and how we have to be more as gift officers, more understanding, appreciative, and trusting of the prospect management team who's helping us to find our best opportunities. I've even talked about trust in artificial intelligence. So that episode for prospect management was 183. I believe AI was back in the 20s.
I even throw it out there that there is this concept called trust-based philanthropy where granting organizations just give the money and they don't need a whole lot of feedback stewardship because it's based upon what the organization is intending to do. Episode 83. But what I haven't talked about is trust with donors, our responsibility, how we build it. So let's start from the broad spectrum, work our way down to the tactical and the tactical today is actually a two-part. One is some basics, but the second part, meaning more important, and that's examples from my own time, my own career, the times where I was a practitioner, one of probably great many who was out there trying to do the best they could with the relationships of the people that were part of their organizational universe.
So let's start way at the top. When we talk about trust, there's research on this, just a couple that will highlight. The International Journal of Nonprofit and Voluntary Sector Marketing did a study and talked about it from donor loyalty perspective. What they found out was that trust is critical to the long-term commitment for loyal donors. Without it, they don't come back. It was a study done in the United Kingdom that talked about from the donor trust and relationships commitment, talked about it from the perspective of that it's a significant part of the donor's behavior or decision-making process that building trust is how you lead to loyalty and engagement.
Another managing the public's trust in nonprofits. So that's a book, a very seminal book kind of studying nonprofit work again, managing the public's trust in nonprofit organizations. Sector 1, the book starts off with an entire chapter about trust and about how it's kind of the seminal piece of understanding between the donor in their perspective and the nonprofit. Giving.org did a trust report back in 2019 that explained the influences of trust on the donor decisions and how important it was not only from an entry point, but also transparency and accountability for stewardship.
Well, none of those things if you've done this for five seconds are any surprising. What I found interesting was, as I do just a little bit of research when I get ready for these podcasts, there are studies out there. We have academic proof, but yet we don't talk about it enough. How important is this trust? I would equate it to one of the most important things that I have in my life. You might say, "Well, what is that?" My marriage. A strong relationship, marriage, maybe in my case, the most important. So, you have some tremendous friends that I value unbelievably. Clients who continually ask for my guidance and support and maybe some maybe a little of expertise, big word on that, sure. I totally agree with that at all times, but that's what they ask for.
Same premise, but marriage, my wife, the two of us, that's what we're really talking about in trust, because what we do every day functions a little bit like a toner and the organization on the one point of the gift officer. When we execute our lives together, it's based on trust, because everything we have, everything that's important to us is between us in that relationship, whether it's fidelity, whether it's facing challenges, whether it's being a parent, whether it's, you can name nine things that are critical to a marriage in terms of what you do every day, all the way down into intimacy, are all based on trust.
There's no sale, there's no exchanging of goods. You just look across the bed and know or hope, my case, know that I trust her. She's got my back that we're in it together. While I'm not putting a donor at that level and the donor relationship with the gift officer, I am saying there are some parallels because a donor own the only way they know that they're an equal part of their relationship that they are maybe more important part of their relationship, that they are getting what they're supposed to. There is no sale of goods. You don't exchange stuff. All you can do is build trust that they will believe that you are helping them with their legacy, with what they intend, with what their goals are and the organization can facilitate that.
Just like a marriage, it reminds me of what my mother said many, many years ago into this day, I think she would articulate is that trust takes a long time to build. It's like a building. My mom always talked about the building that trust every time you continue on in a trusting relationship, the building grows. But when moments happen where there are reasons not to trust, it's like cutting off the building five floors up, even though it was a 20-story building, you lose 15 floors. You lose most of that trust. And thus you're left with a lot less, the building through four floors. You can rebuild it, but you have to rebuild it over time and it may be rebuilt more slowly.
All of this is to say that the disappointment I started with at the top of the podcast about me, this should have been one of the first things I talked about. It is the reason we are successful. Yes, I talk about internal fortitude, kind of the fire in the belly. You got to be willing to have a ducks mentality with water off the back. All these technical things, but you could do all of those things brilliantly. And if you don't engender trust, you still will not be successful.
So let's jump into the tactical. The first part I want to spend just a couple of minutes, some bigger concepts, but then I want to turn to some things I thought about when I thought about the relationships that I had with donors that were turning them really, really large gifts, really large gifts that were based totally on trust in our relationship. So there are six things I want to highlight at the very top, or at least that big picture tactical. The first is is that you have to establish the relationship from the beginning, establish a foundation, no pun intended. Relationships don't, with trust, just don't happen overnight. They happen over time. And so you have to do some research.
You have to know a little bit about the donor. You have to be transparent, meaning what is the clear, accurate intention of the relationship. I learned this early on because I think there's a natural connotation that we'll all get to the point where I'm going to talk about why we have this relationship. And that's because I want to ask them to be a part of what we're trying to accomplish — ask for a philanthropic gift. Well, if you hold off on that to finish the trust, you're much better off in the beginning saying part of my role is to raise philanthropic funds with the organization for which I represent. And at some future point, I'd like to talk to you a little bit about that. Is that okay?
We think of that from a prospect management perspective, a pipeline perspective, hey, listen out waste time perspective, but we probably should be focusing it on the other side of the equation, which is I'm going to be honest with you as to what I really want to talk about eventually, not today, but eventually. You also have to listen, so a part of this foundation is, and I talk about this in trainings, proportionally two years, one mouth, use them that way. Listening becomes critically important, which we'll talk about in a moment in kind of my practical pieces of my experiences. The last thing is, and I've talked about this in the cultivation, maybe a little bit in the qualification stage end of it, is the more you're comfortable, and you have to be appropriate, talk about yourself, share from your perspective. A little bit about you, the more it will engender trust.
Too often we ask our donors or prospects to share with us, but are we sharing a little bit about ourselves appropriately? Some people share more. I'm more of an open book. Some people share less. It's kind of like my wife. I'm not saying either one's good or bad, but if you don't put yourself a little bit into the relationship, then it doesn't go as quickly in terms of that trust. I'll use clients as a good example. For the most part, I know the husbands and wives and partners of most of my clients, at least the ones that I deal with most often. I know their kids. I know when they get hurt. I know when they graduate. I know when they're going to college, I know where they are. I'm always asking about them. Part because I genuinely am interested, part because I think it's the right thing to do. On the same vein, I talk about my family. I talk about the ups and downs, appropriately, that engenders trust. Go build a foundation, establish that foundation.
Number two is cultivate authenticity. You have to tailor your interactions and communications towards the donor's interests and preferences. I'm going to come back to that here in about three or four minutes. Also, that authenticity is about consistency. Too often when I'm consulting and I'm working with a gift officer or a team, one of the things I ask for is the last action report. I see the last action was so long ago. What kind of donor relationship do you have with this donor? What kind of donor could they be if you've been talking to them in nine months or a year? Consistency is important. And so is empathy. That's genuine care, genuine respect for what they are and what they believe.
I've mentioned this before in the trainings that I do for gift officers. We are agnostic when it comes to politics and all kinds of things. If we really want to build better relationships. Now if you work for an organization that has a very specific mission towards a very specific political or social cause, aided with possibly something that's more controversial, then you have to, I hope, align with whatever that mission is. But generally, the more neutral you are, you let them and you — I've got a lot of former donors that don't know if I'm a Republican or Democrat or liberal or conservative because it's not important. It's not about me. It's about them and the ability to demonstrate empathy for what they believe. So two is cultivating that authenticity.
Three is demonstrating integrity. You've got to fulfill your promises. I always jest with people when they ask about Nebraska. What's one of the things that's really important? Nice. A handshake is more important than a contract and you hit one shot. I learned that from my dad and I learned it because we've lived here a long time. A handshake means something. That's integrity. When you say you're going to do something, you do it. And if you don't, you better have one heck of a reason as to why. You have to follow through with what you demand of yourself and what you offer to others as a part of the relationship.
The other side of it is being honest with challenges. I don't do this quite as well. I've gotten better at it as I've gotten older. But the challenge with anything we're dealing with or with our organization's dealing with isn't necessarily a hard no or a negative from the donor's perspective. In fact, what I've learned is when you're honest about the challenges, you actually are demonstrating vulnerability and honesty and integrity. So be open to the challenges. Now I also believe if there's a challenge, you're either seeking a solution or you have a solution or options. So it's just not, oh, we're dead in the water, but nothing we can do. Here's the issue. We have several options we're looking at. Here's what we're trying to figure out. That's a positive in terms of developing integrity and demonstrating it in terms of that relationship.
The other thing about integrity is protecting confidentiality. I'll talk about that here in a second with a practical example. So number three is integrity. Number four is showing impact, and I talk about this in a myriad of ways. What is the value of what their gift is going to do or what the organization is doing? Talking about evidence-based outcomes with milestones. Not just, hey, we'll get there eventually. This is becoming more important as we move more and more into that 95, 97. I think we're on the numbers, but 95, I'm pretty comfortable. 95% of our dollars come from 5% of our people. The question is, are we moving closer to a 97%? Well, if you want those 5% or 3% or whatever the top level donors, possibilities are, you have to demonstrate impact because they are sophisticated. They want details. They want to know how their money is going to be used.
That trust-based philanthropy that I talked about at the top is one of the things I talked about back in episode 83 is the antithesis, but that's not the norm. The norm is that our donors want to know more about what we're doing and we have to show and prove what that impact is. So developing that trust is all about impact and discussing it.
Number five is that long-term commitment. This is what I was talking about a few minutes ago about what my mom taught me, still believes it, what I believe in today. Is it to get to that 20th story, that 30th story, that 40th story of a building, each floor being an equate to a metaphor for more and deeper trust? It takes time. You can get floor one and two pretty quickly, but if you're going to get to those higher levels that deeper, more meaningful trust, it takes time, which is about continuous engagement. It's about invitation to offer their opinion.
This is one thing that I talk about with CEOs quite often and also with gift officers. CEOs, it's kind of this new thing based on my book, "Fiber Vulnerability" that I talk about when I do conversations with groups of CEOs. So you have to be willing to let donors put their own opinions in. Now that doesn't mean you have to take them all. But if you're not willing to engage them and get their perspective, how do you build the building of trust? Because the highest levels of trust are when you trust someone else to give you constructive criticism in a positive, meaningful, hopeful way. Well, if that doesn't ever happen, the building is tough to build going up. And that means being open to that feedback that comes.
So number five is layering that long-term commitment. It takes time. The last is that you need to maintain it over time. Just because you get the gift and this is the generosity crisis, Nathan Shapel, commentary around these deeper, more meaningful, robust relationships. Because it isn't one gift for 10,000. And we say, "Oh, I got my gift." How do you build that deeper, more meaningful discussion that leaves the things like planned giving, which only happens if we trust the organization, that ultimate legacy-type gift.
The more trust there is, the more opportunity there is for this deep meaningful gift that comes from massive amounts of assets in somebody's estate, which means you have to adapt to where they are and what they're going through. You have to invest in the relationship. That's about time. That's about doing things and not always showing up to ask for money, which drives me crazy. You know, my wife and I try to be philanthropic. I'm not huge amounts, but enough. And the only time we ever hear from some organizations at the end of the year, I'm like, you didn't even bother to send me an email, why in the world would I keep giving you money? Or at least the levels you want?
Those are the six: establishing that beginning part, that is foundation. Cultivating authenticity, demonstrating integrity, showing impact, demonstrating long-term commitment and maintaining that over time. The last two or three minutes, I just want to spend a moment or two talking about examples. Because the examples are where we find the elements we just discussed. These are true stories without names or first names that I've experienced.
There was a time in my career where the challenge for John was he didn't know how to tell his kids that he wanted to leave half of his estate to the nonprofit that I was affiliated with. So for someone to tell you that they're concerned about how their kids will take something and the emotion that goes with that, I was humbled that he shared that in that restaurant. And I told him that. We'll talk about the kind of the thread that goes through all of these. John was all about his family challenge.
Gil was always trying to figure out how could he reconnect to an experience earlier in his life. And once I was able to help him do that, not only the financial resources that came as a major gift in John as well in that moment, a story a moment ago, but his time and his willingness to help elevated deeply. He wanted to connect back. He was willing to tell me why and how maybe I could help him do that. Mike was someone who was concerned about his health and the fact that he had lost his wife and that maybe his kids weren't quite as close as he wanted. Who could he trust if he had a health episode?
And once we figured out, I figured that out, I could help him cross that Rubicon in his own mind that he would feel comfortable. Back to a point where he said in a sheet of paper, he says, if I ever have to call a 911, here's the sheet of paper I'm giving them. And I said, well, that's great, Mike. Let me look at it. And he said, the first thing they should do is call me. And I said, no, the first thing is to take you to the hospital. The hospital will get a hold of me.
That was kind of a disturbing moment because I couldn't help him. But if that ever would have happened, but it was also a gratifying moment that he trusted me almost as much as anybody. There was a woman who I once worked with who was going through a health challenge and she kept talking around philanthropy until we kind of got into the emotions of what she was going through. And she trusted me with the commentary that she felt out of control and that the philanthropy she wanted to do in the midst of her health care challenge was a way that she could have some control over something.
Now we're into someone's personal belief system. Do they, can they, can I help them figure out how to do that, how to have control? The last one that I'll talk about, Joe and his wife were all around what they were trying to figure out in terms of estate planning. How did they want to manage their expectations in terms of legacy? When then we finally got into what those challenges were, I was able to find, to help them find some solutions.
So these are examples, but here's the threat. John, Gil, Mike, an unnamed lady and Joe are all about not making what I was doing most important. The reason it took me years to figure this out. The reason I think sometimes I was able to raise money had very little to do with my skill set and had everything to do with the fact that I made it about them. I wanted to solve their problem. If I could solve their problem, first of all, I loved it because it was strategy and working through all kinds of technical things and hey, where are you at some of emotional, some or financial, some or a state.
It didn't make any difference. How do I help people? Because that's at the end of the day what I really want to do, including you. I made it about them. I found out what their challenge was, what they were trying to figure out. And in doing so, I was able to create solutions or options for them to consider. But because I developed a trust, they knew that I was doing it were their benefit for the manner in which they could feel good about who they were and what they wanted to accomplish.
Now at the time, I'm not sure I would have put it in that context. First of all, I was younger and dumber and number two, I was immersed in the moment. But as I look back at the threads of some of the best gifts I was ever a part of, people who trusted me. It was always because I was willing to put them and their concerns, their needs, their problem first. And in doing so, they probably could utilize philanthropy as an option. And by the way, there were a lot of other times in each one of these relationships where I've helped them that have nothing to do with philanthropy, which is my way of being supportive.
That's the cornerstone of trust. How do you make their problems diminish? How do you help them make what they want to have happen possible? Most of the time that will involve a conversation around your nonprofit every once in a while it won't. If we truly are good at what we do, we put the other person first, much like that marriage I was talking about. And not worry about the cost to us so that we can get them where they want to go.
And much of the time you'd be surprised that's when the gift jumps in terms of legacy and assets and a plan giving and or cash size or campaign. It's not a transaction. It's transformational. And it's not the money or the gift that's transformational is the relationship. That's why I still get Christmas cards from many of the donors I've worked with. Why I still send them. Every once in a while I'm talking to them. Even though I'm 15 years, 12, 15 years removed from some of these relationships that are still a part of who I am.
That's what we need to talk more about is trust. How to build it, how to use it, not for our benefit, but for the people that we're dealing with to make their world a better environment for solving their problems because in turn they're going to make their world, which could include us our nonprofits stronger for the community than which we live. And forget to check out the podcast. I'm sorry, blogs at howletflanthropy.com to a week on various things. 90 seconds, howletflanthropy.com/blogs.
And if you'd like to reach out to me, it's podcasted howletflanthropy.com. We serve an important role. We don't know what's going to happen the next day, the next month, the next year, but what I do know is that philanthropy makes the world a better place. What you do every day makes it better because at the end of the day philanthropy fills that hole somewhere between where government's inefficient and you know, for-profit world doesn't want to deal with it because it doesn't have, you know, profitability in it, nonprofit sit philanthropy sits to solve issues.
Don't forget my all-time favorite saying some people make things happen, some people watch things happen, then there are those who wondered what happened. You are someone, you work with people, you build trust with them with people who want to make things happen for the people and things in the community that are wondering what happened. And that is an incredibly, unbelievably wonderful way to spend a professional life.
I'll look forward to seeing you the next time right back here on the next edition of Around With Randall.
Don't forget, make it a great day.