Episode 147: Overcoming Obstacles Soliciting and Closing Gifts

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 Hallett philanthropy, Randall Hallett.

It's wonderful to have you here with me on this edition of "Around with Randall." Today part two of our two-part series in handling objections. In part one we handled, during maybe more of the early stage of the relationship, that process where you're building that rapport, trying to get someone to at least have the initial conversations, and what kind of happens in those moments. Today we're going to shift the objections towards the end of the process, maybe during the solicitation stage or the closing stage, trying to figure out how do I deal with the overall objections.

I want to start with this kind of concept or or at least thought process regarding why we get to these points. I think that we take cultivation, so maybe the overreaching thing is to try to get some of these things handled before you get to that objection. When you've asked for a gift a lot of times this can be done during the cultivation stage. I talk a lot about the concept, certainly did not invent it, of the soft ask. How do we use soft asks more often in the process to get people to where they feel comfortable? And we kind of know what the playbook looks like as the relationship develops because we move at such a fast pace and because we move in ways that cause us to be more transactional, whether it's the metrics or the deadlines or the annual goals, we sometimes forget that in many ways we want the prospect or donor not only to feel but to be in control of where we're headed in terms of there. We're heading towards a gift that that's not negotiable, that they are in agreement. That's where we want to go. The nuances, the speed, the timing can be a lot more in our control and make it feel like it's their direction if we used soft asks more often.

Soft asks don't necessarily have to be a soft like solicitation. It could be soft ask for the next step. Could we have another meeting to talk more in detail about this, or would it be okay with you if I brought in Dr so-and-so, or Professor so-and-so, or our CEO? That would allow us the opportunity to better understand and be, what your thoughts are as well as kind of share some of the details that are going on this soft ask process. I think really demonstrated at the highest level actually during the pandemic and during Covid, and I've talked about this before, where all of a sudden the normal routines as gift officers were associating ourselves with that we could become comfortable with, that our routine all of a sudden weren't available to us. We couldn't go have a cup of coffee, couldn't go have lunch, we couldn't stop by their house. And the best gift officers that can kind of manage that process most effectively, they were the ones who actually soft asked, well would it be okay if I came and had a cup of coffee with you on the front porch. I won't have to go in the house. Would you feel okay meeting me in a park? Could we do zoom and maybe that's technology, a little, much more challenging. Could I help you do that? It was almost like they were seeking permission based on health concerns, which is what really was happening.

I would say the premise of getting people to tell you what they want and where they want to go allows you to be more effective in the closing and gift getting process in the end result. So I start with the the concept at least that if you were to push these objections and ask a lot more questions in the process to push them back in cultivation, I think what you'd find is you'll have less objections. When we get to the solicitation and closing stages, nevertheless, they always seem to occur and I want to break these in into three bigger areas. So we're gonna have these three big kind of beginning into the tactical areas that we need to deal with an objection, objections, and the third is going to have seven sub points because it's the one we see most often. So the, you're in the middle of a solicitation or you've just closed, you've just closed your maybe closes and passwords you just finished your conversation about we really are hoping you might join us at this level or would you consider a gift of a million dollars, would you help us in this way, and there's this moment where sometimes the prospect/ donor says something that isn't yes and frankly isn't no.

The three most common are I need to speak to somebody else, number two I'm not sure this is the right time for that kind of gift, number three that's more than I thought, that's a stretch, that's more than I had intended, I've never made a gift that big. I'm not sure about that from a size perspective. That last one I'm gonna break apart into seven different ways in which you can answer that and kind of figure out where they're at.

So let's start at the top. I need to speak to someone else, a spouse, a significant other, an attorney, a financial planner, a CFO in the business if it's a family-owned business or personally held business. They are looking for the acceptance of a third party to make this gift come to fruition. Again if we go back to the soft ask cultivation process it would seem natural to ask if I was bringing you an opportunity to support the particular effort we've been talking about at the million dollar level, is that something you would consider. At certain dollar levels it's almost, I think, almost required in a soft ask to say are there other people that would be a part of this conversation, where it would make you feel better. If it doesn't happen that's okay, but maybe that's a tactical piece in the soft asking process, a little bit before you get to the rejections. There's a couple things to keep in mind here. Number one, and I've only seen this done a couple times where the gift officers are so concerned about outside influences that they don't want the other person, people, influencers in the room. I think that's a dangerous precedent. If we're really donor centered and we really are ethical we want the gift to feel awesome for everybody involved, so if it's a spouse probably makes sense if they bring it up to have that spouse, significant other in the room when that conversation occurs which may mean another move, another part of the solicitation and closing process to ask again. If it's somebody that's an advisor and it's an attorney or financial planner or, you know, CFO in a business, they're actually telling you that they want to make the gift the question is becoming how do we do that. Can I make this work? How do I make this work? A couple thoughts here. Number one is that I recommend highly you leaning into that conversation because they are signaling that their financial decisions, at least at that level, are interacting with or dependent upon an outside person. I have a client that we're working, I'm working with, where we're working through the details of probably a major eight figure ask that will shatter any large gift that this organization has made, and the question is who's in the room. And there is an advisor that this person or couple works with and we know based on a lot of detail and information and conversations and certainly the client through the cultivation process that they've done brilliantly on that, we know this person needs to be there because though when the ask actually happens and there's no surprise they're going to be asked for money here and this meeting's coming, the first move is going to be turning either right or left depending on the moment to this individual to this influencer, so not having them in the room is crazy. And if we didn't set it up correctly I know what this individual or couple might say, but we guarantee all of us, do I need to check with so-and-so, can you get them in the room to begin with. If they do say I need to check with someone, great. How do I help you do that? Do you want me to come with you to explain it to them? Do you want to take the information? Do you feel like the information is detailed enough?

I've learned that by asking that question the answer is about 50-50. Sometimes I mean the half people will say nope everything I got I just need to sit down and chat with them. That's a really good sign. Sometimes they're looking for someone else to come and answer kind of some unknown questions that the influencer might have, particularly as someone gets older and there are other people involved, concerned, aware. The key in any one of those, and then I'll get to the problematic third influencer, not problematic challenging is not to let it go with an undefined or unknown time frame . That's great. If I give you two weeks can I check back with you? Or if they want you to come be a part of it great. Can I come? Can we set a meeting with this in the next week? What I've learned is, and I think other experts would agree, is if you elongate that time then where you have a gap between you've just made an ask or you're right there soft asking and we're now at this Challenge and the moment where you get the challenge may be fixed by having that outside influencer in the conversation, the longer that is the more challenging you're actually going to get because emotion sometimes fade and particularly at higher levels gifts if done correctly are more emotional than logical. Doesn't mean there's no logic, but people give at the highest transformational level whatever that is for them, based on their desires inside their heart to change the world on a mission that you're representing. So shorten that time frame. Don't leave it elongated. Don't leave it unknown.

The last challenge in this week, someone else, happens more often than planned giving than anywhere else and it's not that they even want somebody else in the room. They're trying to figure out how to deal with them and that's a planned giving with either parents or a parent and a child. Having spent a great deal of my professional life in estate and planned giving efforts, I'm always aware, hopefully not as amazed as I once was that when we're dealing with money and what the thoughts of children are and what they might get complicates conversations. So if you're looking at a gift and it's an estate gift and you're looking for them to sign up for the Legacy Society or whatever that is, there's a challenge here that you got to be aware of and it's one that involves what do the kids know and what should they know, and there's no right answer here. But all the largest estate gifts I ever dealt with I always said to the individual or the couple are you comfortable with where you're at with your kids on this decision, I didn't want to assume the kids knew. I didn't want to assume the kids had a right to know. I didn't want to assume the kids should know. I didn't want to assume the kids didn't know. I'm just asking are they okay, and I'm looking for trouble.

My favorite story, true in this circumstance, was with a donor in California earlier on in my career, and he did not want to tell his kids about a enormous estate gift. And I'd gotten to know the kids a little bit and my sense was is they weren't going to like this we had long conversations and I never could say John you have to do this because that's not my right, not my place. But I knew that it would potentially compromise the gift, us, him, his legacy, if we didn't get a handle on this. He eventually told them and the kids weren't that happy, but at least it clarified the intent. So I need to speak of, think of, bring somebody else in the conversation. You got a lot of tools in that.

The second is, which all comes up just as frequently but it's much easier answer is this isn't the right time, or gosh I'm I'm not sure we can do this right now, or you know these decisions sometimes are better made than other at a different time. It's not the amount that they're concerned about, it's the win. I'll use me as an example. When I began Hallett Philanthropy many years ago I changed the way our philanthropy occurred. We used to be monthly ongoing donors. They would add up to some I think decent size annual gifts, leadership-level gifts. Because I'm a budget guy I want to know exactly how much money I had versus how much money was going out and that's the way we could do it when I got into my business, my model changed because from a financial perspective we needed to figure that out at year-end. So giving became one time and it took a couple of nonprofit charities a little bit to figure that out, where I'd be like I'm not making, it's April I'm not making that decision right now and they would push me on it. I'm like in the business here, you guys aren't listening. Those kind of decisions are made at the end of the year because that's how I can know what the year looks like from a business perspective, what my next year looks like in terms of what we have available. Kind of gives me a flavor from a tax perspective of what it means. I kind of meet with my accountant two or three times near the end of the year like okay if we did this what would this mean, if I did this what would this mean. If someone says it's not the right time the answer is easy. Here. This is why. It's short. Great, thank you for letting me know. When is the best time to come back at this and have a conversation? It may be business on your end. It might be, you know, we've got a couple big things. Go and come back in three months. It might be, we've pushed out a lot of money, maybe it's a foundation, we've pushed out a lot of money we're kind of taking a break for this year. Can you come back next year? It's really not a complicated answer in conversation but I'm always amazed that people are pressing like they've told you they're not going to make the decision right now. Instead of pressing into it find out when it's best to make.

The third is the biggest one. It's the stretch. It's too big. I didn't think, I don't know if I can do that. And there are seven different ways I'm going to give you, tactically, to address that question and they're going to be pretty self-evident so I don't have to, like, I don't think spend a great deal of time going into the detail.

Number one is the idea of a multi-year pledge. If you ask for $100,000 can they make the $25,000 gift in four years, and or could they do $50,000 and two or $33,000 or $300,000 whatever it is sometimes a larger number coming out at one time is more concerning in that same vein keep in mind that there are people, and I'm actually one of them, who really don't like to make multi-year promises. So I may say for $100,000 that's a lot right now. I don't think I can do that. Could you do $25,000 over four years? I think I can, but I just want to do them each year which means you've got to come back and ask three consecutive years and steward that gift correctly, $25,000 at a time. So be aware. Extending a pledge period may require multiple additional steps which, by the way, should be good for relationship building, pledging.

Number two appreciated stock, in particular, as we've gone through the last six to nine months I'm actually a little surprised I didn't think the economy of the stock market would do this well over the last couple of months. Somebody may have appreciated stock. Don't forget that that then removes the capital gains taxes that one might come, and number two they can hold that tax deduction over a five-year period beyond this year to actually use that credit. It's really not a credit but the deduction credit against their taxes going forward, so you could say maybe talk a little bit about that. Is there a stock or two that maybe's appreciated that might fulfill this and help you actually reduce your taxes?

Number three is the idea of well, I'd love to do that but I'm a little concerned about income. What do I do because I'm older. I want to make sure this is where gift annuities, you know, the right kind of charitable remainder trust things of that nature are important. I know people are going to say well you know you can go out and get five or six percent in a CD or in a particular bank's savings account right. Internet Bank the mega Banks aren't doing that, so if you got your own personal money maybe look around you. Get a better interest rate at four, five, six percent. But those aren't guaranteed and I think the key here is looking at it. Say well you can make the gift now. We can put this into some type of annuity vehicle or a charitable manager trust vehicle and it will guarantee you income at the level that we could work out or based upon the charts so that's another option.

Four in that same regard is about the kind of the thought process around is there other things that they could contribute. I'm in Nebraska. Maybe if you're in California, New York, or in India listening to this you may not think about this but we deal in corn and grain and sheep and cattle. I have taken gifts of a percentage of someone's yield when it came to their corn or soybeans. I've taken cattle, which you'd be stunned at how much at Hereford a heifer will go for at auction, and by the way if they do it right they can write off all of the expenses against their business that they use to grow the crops or to, you know, feed and and take care of the cattle or there's all kinds of things. So another way of looking at it is there's something tangential or asset-driven. Maybe it's a painting. Maybe it's something else that they're like yeah, yeah, which also may have appreciated. So there's lots of different options there. Another one is insurance. I had a number of people early on in my career when I was working for St Thomas Academy at Catholic military all College prepared to all male college preparatory institution. I just loved working there but all of these, at the time I was there World War II veterans were coming into their late 60s, 70s, and early 80s they were all graduates. What I figured out was is because of their military at the time when they graduated then many of them either went into life and then were drafted or went directly into the war they were given $10,000 life insurance policies that they carried for life. And what I realized is that if they as military school going into the military they all had them where were they. We started this really cool program where a lot of people who didn't think they could make gifts made us the beneficiary in the life insurance they didn't even need it. They'd forgotten about it. Different way of looking at it, whether that's making the beneficiary in a current policy or even purchasing a new policy, transferring that ownership back to the nonprofit so they're paying monthly but instead of paying the insurance company they pay you and you own the policy. They get a deduction for those annual contributions and they get to make a gift when they pass.

Another way to look at this is what else can they do from an income perspective. Can they, are there income vehicles like I think about a business you know could you look at if you're a McDonald's operator owner five cents of every french fry sold can come to the charity. And I just didn't make that up. I've actually done that so a lot of business owners have income. What can you do to capture that?

The last number seven is a combination of any of these. They're not mutually exclusive. They're an and not an or the key here when you talk about that's a stretch gosh what can I do is to give them lots of options. If you've cultivated and built a relationship based on trust you've built Rapport and you know them you can start strategizing. What are your biggest concerns? Well then this, there are these options, multi-year pledges, stock and appreciated assets, things of that nature. You can carry those forward. You can do things like annuity programs, guarantee income, you can do of some type of if you have farm or some type of tangible piece of property insurance policies, income from a business, possibly like a percentage of it or a certain piece of it or any combination. All of these are answers to the challenge, becomes obstacles that we need to get through when we make that solicitation.

A couple minutes over from our normal 20 minutes but I think it's important because we need to be better at overcoming these obstacles and those challenges. We need to handle them. We need to lean into them and give people more options to consider as a part of this process. Don't forget to check out the blogs at Hallett Philanthropy.com - two a week. I'm writing more and more to be honest. In fact a couple of this last week I wrote crazy stories that I found in the nonprofit world that are kind of worth a laugh maybe maybe a little bit of a lesson for all of us. And if you want to reach out to me that's podcast@hallettphilanthropy.com.

Don't forget what you do is important. It's critical. It makes a big difference. It's the difference in many times for people and and the things in our communities that are most in jeopardy. My favorite saying, some people make things happen, some people watch things happen, then there are those who wondered what happened. Your work is doing something for someone that's making something happen for those on the other end of the spectrum that are wondering what happened. And the organizations and things we value the most that are wondering what happened that makes what you do worthwhile. And I appreciate it. I hope you know that you're making a difference and people tell you the same. I'll look forward to seeing you next time right back here on another edition of "Around with Randall." Don't forget make it a great day.