Fundraising Trends and Challenges: Insights from I.G.’s Major Gifts Surgery

Last week, I.G. hosted another Major Gifts Surgery, our recurrent rendezvous with charities from across the sector, where the I.G. team answers the most burning questions from fundraisers of every kind. Our major gifts experts on the panel — Emily Collins-Ellis, Rachel Stephenson Sheff and Gabriela Cervera — started off the session by presenting the latest insights and trends in the sector, and then took questions from the room. For those who missed it, here is a summary of what was discussed in the Oak Room at the Hospital Club in London.

Key Trends & Challenges:

· Barriers to Giving: Barclays recently released a report highlighting the main challenges to giving for High Net Worth Individuals (HNWIs). These include lack of control on how a donation is used, lack of faith in charities and how they are run, not having enough knowledge or experience with charities, and the belief that any extra sums donated aren’t large enough to make a real impact in the world. The good news is that charities have the power to influence these, for example by educating and engaging donors to tackle misconceptions and help them learn more about their work. For example, with a ‘case for need’ (rather than just a case for support), audiences will better understand how much their contributions matter and how they fit in the bigger picture. In other cases, it all comes down to trust and integrity, and the ability to be transparent and upfront about challenges.

· #CharitiesSoWhite: We heard it all before, diversity is a huge issue in the charity sector, where Boards and leadership teams are said to be too ‘male, pale, and stale’. But when it comes to fundraising, ethnic minorities and women donors are also mostly disregarded (or not specifically targeted) as prospects. Charities are missing a huge opportunity to expand their support base, and meaningfully connect with givers outside of the historic archetypal major donor. Whilst wealth and power are often both disproportionately concentrated in the hands of men in our world, that doesn’t mean philanthropy is. Successful fundraising strategies rely on diverse donor portfolios, and require equally diverse fundraising teams to implement them.

· Skills Gap: Major Gifts fundraisers are high in demand, but unfortunately as a sector, the UK doesn’t invest enough in the future pipeline of talent to fulfil this need. Outstanding organisations invest the right amount of time and resources to develop their junior major gifts fundraisers, providing opportunities for them to engage with HNWIs, and managing their team capacity so that responsibilities and experiences are shared equally. So, as Emily wrote a few years ago, stop trying to find fundraisers elsewhere and grow your own!

Insights from What Donors Want:

Our podcast, What Donors Want, is a great source of fundraising advice coming straight from the donor’s mouth. Our podcast producer, Rachel Stephenson Sheff, shared key insights from the first two seasons of the show. These are our favourite ones:

· People give to people: organisations are nothing more than the sum of their people, their honesty and integrity.

· Relationships are everything: donors truly feel confident about the investment they’ve made when they have trust in the people who run the organisation.

· It’s not just about money: donors also offer their time, skills, networks, and contacts, especially when it comes to next gen donors.

· The first year of the relationship is crucial: small ‘get to know you’ grants usually precede larger gifts.

· Talk about the ‘hard stuff’: being transparent about challenges helps to strengthen the relationship with donors.

· Avoid artificial restriction: charities should pitch visions and models instead of just projects, otherwise they should not expect unrestricted funding.

· Manage expectations: it all comes down to stewardship and cultivation, and knowing what level of engagement donors want.

· Don’t lose momentum: following up after the receiving a grant is crucial to keep relationships going.

· Reframe the power dynamic: charities should always remember that they are indeed helping donors solve a problem, in that they have more money than they need, and want to do something useful with it.

Audience Q&A:

The Q&A session offered attendees the opportunity to talk about the specific challenges that their organisations face. Below are the top three questions that the I.G. team answered during the course of the morning.

It is often said that donors want to buy a vision and a model. However, if you don’t offer tangible projects and the work that you do feels more abstract, this can often bring more challenges to fundraisers who are trying to pitch the charity’s work. How can we overcome this?

Activism and movements are less palatable for donors, but that mostly revolves around the way you ‘package’ what you do. You need to think about your organisation differently, and ask yourself the question ‘if your charity was a department store, what would be on your mannequins in the window’? You need to find the right way of framing what you do, to attract donors to find out more, and get their heads around the complexity.

To answer this question, charities may find it helpful to set milestones. These include developing a donor-facing Theory of Change, a practical way to explain the charity’s steps towards impact, and how contributions now can help to achieve its broader aim, no matter how long-term or complex. Communication is key, as donors usually want to be updated and know what happens after their contribution is made and what the impact of their donation was, even if the final result of the work isn’t yet tangible. Don’t forget that stopping bad things can be a good way to frame work that doesn’t have tangible ‘progress’, because people understand standing still as impact in those cases. Ensuring there is a clear understanding of the organisation’s leadership is also extremely important, as donors partly commit to a gift because of their trust on who is ‘steering the wheel’.

A lot of charities are beginning their major gifts journey from scratch and have limited staff capacity when it comes to engaging HNWIs. How do you structure a small team to avoid the risk of burnout?

Burnout is a frequent issue amongst fundraisers, and one of the main reasons is that their targets are often set by people who have no knowledge about fundraising and the implications of setting the bar too high. To overcome this and develop a positive environment for them to thrive, organisations could (and should):

· Promote shared responsibility by investing in junior fundraisers and allowing them to cultivate and hold relationships, build their professional brand, speak at events, etc. This increases sustainability and engages donors as they become familiar with the team, as opposed to just individual lead fundraisers.

· Implement alternative Key Performance Indicators that go ‘beyond pounds through the door’. Performance evaluations should not just be based on the number of gifts secured, but also on face time spent with prospect and current donors, and effort made to build meaningful relationships.

· Have solid systems in place, including a strong CRM (even a spreadsheet!) to track and share the evolution of donor relationships with the rest of the team, so that contacts are not lost when staff moves on, and everyone in the team is accountable for donor cultivation to ease off pressure on fundraisers.

· Create mixed portfolios, where people at each level are staffed across different audiences and accounts. This in turn helps the team develop skills at different levels.

· Live your values and ensure that the organisation applies the same values it applies to its work and beneficiaries in the day-to-day approach to supporting staff and volunteers.

How do you take the first steps to find major donors when you don’t have the networks to begin with?

Major gifts fundraising is time consuming, and not always the right strategy for every organisation. If you are starting to build a network of HNWIs from scratch, you need to evaluate whether a long-term approach to fundraising is the most effective solution, as it takes about 12 to 18 months to see any return on investment. Ultimately, this all comes down to the Board’s appetite for a long-term approach to relationship building, and whether you have the team capacity and the right resources to undertake it.

Building networks and relationships is very resource intensive. It requires your teams to host and attend events, and spend a lot of time engaging with as many people as possible. Being constantly overwhelmed by requests, major donors tend to respond and make gifts only to organisations and people they personally know and trust.

Publicly available information about HNWIs’ giving preferences is not always up to date and reflected in reality. To start building a solid network of support, you should attend sector events where your target audiences are likely to be found. Another way you can reach out to new donors is by leveraging your current supporters who can endorse your organisation and make introductions. To make it easier for them to speak about your work, make sure you provide them with strong communication materials and a simplified message.

If you want to attend our next Major Gifts Surgery or discuss your organisation’s major gift strategy, please get in touch! And if you haven’t done it yet, subscribe to our podcast What Donors Want for great fundraising advice straight from the donor’s mouth.