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Iceberg Philanthropy

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It's the path of. least resistance. to making a LOT. more money. for your cause. 17 ... she's got at least 20,000 suspects $40,000,000 potential revenue (minimum) ... – PowerPoint PPT presentation

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Title: Iceberg Philanthropy


1
Iceberg Philanthropy
  • Fraser Green, CFRE
  • Principal, FLA Group
  • AFP Canadian Congress
  • November 15, 2006

2
Before we start, please be warned..
  • I have an
  • inherited
  • evangelical
  • gene seriously!

3
My dad took me to Newtown, St. Marys Bay
4
(No Transcript)
5
Lets talk about the bus…
  • get the right people on
  • get the wrong people off
  • then get the right people into the right seats

6
Lets change seats
  • Planned giving
  • and major gift
  • types to my left
  • Direct marketing
  • and annual giving
  • types to my right

7
The ICEBERG is a metaphor for the donor pyramid
8
So, whats the problem?
  • Planned giving
  • types are in rowboats
  • Direct marketing
  • types are in
  • submarines
  • (without periscopes)

9
Youre both looking at the same iceberg..
  • But, youre
  • seeing
  • something
  • totally
  • different.

10
The silo effect
  • most fundraising programs are organized on a
    military/industrial model
  • departments compartments
  • in other words, silos

11
Silos or Seamless?
  • silothink is oldthink
  • silothink is slow and cumbersome
  • silothink looks inward
  • silothink covers ass
  • silothink is a loser
  • seamless is new
  • seamless is responsive
  • seamless looks at the donor first!
  • seamless is brave and selfless
  • seamless wins

12
Weve done our research, and
  • Your donors
  • want seamless!
  • Were all talking the
  • donor-centred talk.
  • Do we walk the walk?

13
The old paradigm shift
  • the planned giving type
  • needs to
  • cast a wide net
  • instead of using
  • a hook.
  • the direct marketing
  • type needs to
  • see the potential
  • to actually catch
  • HUGE fish for a change

14
To be more specific..
  • The planned giving
  • person needs to think about thousands of
  • prospects, and not
  • a couple of hundred
  • The direct marketer
  • needs to think about
  • 20,000 gifts
  • from 35 donors

15
Yet another way..
  • Planned giving
  • types need to
  • learn to use
  • the direct
  • marketers
  • tactics
  • Direct marketers
  • need to learn
  • to use major gift
  • planned giving
  • strategies

16
Why?
  • Its the path of
  • least resistance
  • to making a LOT
  • more money
  • for your cause

17
Because todays market is fiercely competitive..
  • direct mail market is shrinking slowly
  • donors feel overwhelmed
  • were not asking properly
  • we dont steward well
  • this is all research based

18
And thats why were all here..
  • Right?

19
9 ICEBERG Principles and 9 Practical Steps
  • designed to help you
  • - understand the iceberg
  • - see its potential
  • - tap its wealth
  • - transform your program
  • - get there before your
  • competition!

20
first ICEBERG principle
  • think BIG
  • really, really BIG..

21
  • To the planned
  • giving type,
  • big means
  • LOTS of prospects
  • To the direct
  • marketer, big means HUGE gifts

22
Two years ago..
  • We partnered with Mal Warwick
  • and did the first-ever poll of
  • direct mail donors.
  • N500 (Canada), /- 4.4 19/20
  • Lang Research/Comquest
  • www.donorresearch.net

23
Profile of a very ordinary donor
  • 80 are 55
  • only 10 work F/T
  • grew up before TV
  • 2/3 female
  • empty nest
  • average education
  • modest income
  • whitebread
  • attends church
  • supports 10 charities

24
Hidden Gold
  • Income
  • household income 55K
  • average DM gift 30
  • Assets
  • net worth 350,000
  • average bequest 20,000

25
  • These are
  • the donors
  • who fly way
  • under your
  • radar.

26
Those ordinary donors
  • 97 know they can leave
  • a gift in their will
  • 92 already
  • have a will

27
The AHA Moment
  • 17 have made
  • at least one
  • charitable bequest
  • 18 are very or somewhat likely
  • to do so within
  • five years

28
Oh yeah..
  • There are 7 million direct mail
  • donors in Canada today
  • (we know, we measure)

29
and…..
  • The majority of these donors have never been
    asked..

30
  • Thats a big
  • honkin iceberg!

31
Second ICEBERG principle.. we are emotional
beings..
32
Question
  • What were the
  • two most important
  • moments in your life?

33
what did you experience during your moments?
  • were you thinking?
  • .....or feeling?

34
Mine?
  • 1135 pm October 19, 1988
  • 640 pm June 21, 1999

35
The Old Brain (amygdala)
36
Our brains..old and new
  • New Brain
  • rational
  • thinks
  • processes data
  • justifies decisions
  • Old Brain
  • primitive
  • emotional
  • survival
  • DECIDES

37
Fundraisers just dont understand..
  • The old
  • (emotional)
  • brain
  • decides.
  • The new
  • (rational) brain
  • justifies
  • the old brains
  • decision.

38
Think differently…
  • Conventional
  • AFP wisdom
  • Speaks to the
  • new brain
  • The ICEBERG
  • strategy
  • Speaks to
  • both brains
  • (with the emphasis
  • on the old!)

39
How direct marketers and PGOs would propose…
40
I read an Animal Welfare Orgs Case for Support
  • It Had
  • Great numbers
  • Expressed needs
  • Described clear benefits to animals
  • Showed comparisons to similar cities
  • Described programs
  • Very businesslike
  • My Reaction
  • The day we got Champ
  • The morning ginger died
  • Winnie hit by the car
  • Rory and Restless
  • Buster after the can opener

41
Third ICEBERG principle..
  • Relating is
  • successful above
  • the waterline.
  • Marketing gets to
  • the bulk of the
  • underwater money

42
I visited Stephanie recently
  • she has almost 100,000 active donors
  • shes got at least 20,000 suspects
  • 40,000,000 potential revenue (minimum)
  • shes relating to 300 people
  • her legacy deficit is 19,700 donors!
  • Stephanie MUST market to reach her potential

43
So, planned giving types
  • Tea and banana
  • bread aint gonna
  • get you there!

44
Direct Marketers
  • Need to go beyond
  • he normal
  • acquisition,
  • conversion
  • renewal
  • (minor) upgrade

45
Fourth ICEBERG principle
  • Its the will, stupid!

46
Pop Quiz
  • Do you know
  • what percentage
  • of your planned
  • giving revenue
  • comes from bequests?
  • Straw poll

47
Check your materials..
  • How many planned giving
  • vehicles are mentioned?
  • Lets add em up..

48
Elementary, my dear Watson
  • 90 - 95 of the
  • money is in the will

49
Remember Cuba Gooding Jr. In Jerry McGuire?
  • Whats he saying
  • right here?

50
  • show me
  • the money!
  • Wheres your
  • money?
  • In the will!

51
Okay, okay
  • you can relate the other stuff (like charitable
    remainder trusts, gift annuities, blah blah blah…
  • but you cant market it
  • weve watched focus groups
  • and you know what happens?

52
THIS!
53
If you really want your iceberg..
  • Youve got to
  • sacrifice
  • Its the will, stupid

54
Fifth ICEBERG principle
  • Why gets the gift,
  • not how!

55
Lets get this straight once and for all!
  • Fundraisers
  • tell them
  • WHY
  • they should give
  • Donors
  • will figure out
  • HOW
  • they can give
  • on their own

56
Vision
57
Passion
58
Conviction
59
Inspiration
60
Sixth ICEBERG principle
  • Tell stories..

61
We all love stories
  • Glengarry School Days
  • Lord of the Rings
  • why do they turn novels into movies?
  • what makes history interesting?
  • Cape Bretoners watch the stories
  • its simply in our nature

62
Great fundraising is great storytelling
  • testimonials
  • legacy donor profiles
  • vision pieces
  • history
  • making the case

63
Seventh ICEBERG principle
  • Urgency

64
Urgency for two simple reasons..
  • Mortality
  • Competition

65
Leave it till next year?
  • civics are savers
  • civics have assets
  • will boomers?
  • floating nursing homes
  • 38 of women and 55 of men aged 75

66
Put most bluntly..
  • Civics are dying today..
  • You need to reach them
  • before they depart this world.
  • (Dont assume the
  • boomers will give.)

67
Diffusion of Innovations Charles Everett, 1962
68
So, time to do your arithmetic
  • 20 of your active donors will leave charitable
    bequests
  • lets assume theyll name 2 charities each
  • 20,000 x .2 x 2 8,000 bequests
  • but these are shared among 10 charities
  • your share is 800 bequests
  • 800 x 20,000 16 million
  • ideal solution would be if everyone did nothing
  • but what if others market aggressively and you do
    nothing?
  • your share shrinks
  • their shares grow
  • the USSR is gone
  • we live in a MARKET world

69
Overlay with Diffusion of Innovations Curve
  • early adopters will win big-time
  • some early majority will benefit
  • later early majority will hold their own
  • late majority will lose
  • laggards? forget it
  • timing counts in the market
  • and it is a market!! (get off denial island)

70
Where are we on the curve today?
  • innovators started about ten years ago..
  • early adopters are about halfway there
  • early majority will be there in about three years
  • as we move through the curve, margins will shrink
  • its simply the way markets work
  • think of the Klondike gold rush

71
Eighth ICEBERG principle
  • Its not about
  • the money

72
Its about…
  • heart
  • soul
  • footprints on the earth
  • passion
  • joy of living
  • meaning
  • human spirit
  • why we live
  • relationships
  • love
  • human duty

73
  • Yes, well get to
  • the money eventually.
  • But thats not what
  • all this is about.

74
Ninth ICEBERG principle
  • The Holy Trinity
  • Commitment
  • Openness Life
    circumstance

75
Commitment
  • Jac queline REALLY LOVES what you do
  • she believes in you
  • she trusts you
  • - to do great work
  • - with her money
  • - to stick around for
  • twenty years or more

76
Openness
  • Jacqueline is one of
  • the 97 - and the 92
  • she thinks legacy gifts are a good idea
  • (might have made one or be thinking about it)

77
Life stage
  • Jacquelines family
  • situation allows her to do this without
    compromising her obligations to the people she
    loves most
  • oh yeah, 65

78
Back to the iceberg (once more with feeling)
  • 20-35 are great suspects
  • the key is to find those who match the trinity
  • its quite a simple idea!

79
Rubber on the Road
  • some very practical
  • things you can do
  • to bring ICEBERG philanthropy
  • to life for you and your donors

80
Commit to do something in the next year..because
the journey of a thousand miles..
  • How much can you handle?
  • How much can your boss handle?
  • What can you get away with?
  • Take a magnifying glass to the budget..
  • Find allies
  • Point to others successes (theyre out there)

81
2. Pick some suspects
  • Hints..look for
  • Loyalty
  • Miss
  • Loyal monthly
  • Large gifts

82
3. Find a way to ask and listen
  • Engage your suspects
  • Ask for their help
  • Listen for
  • - brand attachment
  • - where are you on the hit parade?
  • - opinions on bequests
  • - reaction to materials!

83
4. You probably need a different materials
approach
  • Focus content on
  • Values
  • Vision
  • Mission
  • Program
  • Results
  • Future needs
  • Credibility

84
Your current materials probably..
  • talk about the importance of having a will
  • four to six vehicles
  • tax benefits
  • financial considerations
  • blah, blah, blah
  • Planned giving
  • brochures
  • should be
  • written by poets,
  • not tax accountants.
  • (author unknown)

85
5. Ask for their input again..
  • Does new material copy turn their cranks?
  • How can you appropriately cultivate?
  • How should you solicit/identify?
  • How much/ what type of stewardship would they
    want/expect?
  • The amazing thing?
  • If you ask, theyll tell you!!

86
6. Ask suspects to self-identify as prospects
  • go back to ICEBERG principle 9 the Holy Trinity
  • perhaps create a scoring system
  • are you their favourite?
  • is legacy giving a good idea? (maybe youre
    already in!)
  • whats their life/family situation
  • ask however you can I like the phone

87
I know about a dozen charities who have taken
this approach..
  • 3 of donors spoken to self-identify as
    expectancies
  • (almost 500)
  • 24 self-identify as prospects (trinity) (almost
    5,000)
  • total expectancy projected revenue
  • gt 11 million
  • revenuecost ratio
  • is about 751
  • and the prospects havent even been
    cultivated/solicited yet

88
Lets go back to the two sides in the room
  • Conventional
  • tea banana bread
  • doesnt generate
  • this volume.
  • Typical direct
  • response fundraising
  • doesnt come close
  • to this kind of ROI.

89
Internal Marketing Tip
  • market results to
  • everyone in your organization
  • donors will convince your leadership
  • better than you every time!

90
7. Start Cultivating Stewarding
  • mail works best
  • you dont need to visit (most dont want you to!)
  • no silos here
  • 4-5 cultivation pieces over about a year
  • 3-4 stewardship pieces will suffice
  • remember, PG strategy, DM tactics!

91
Cultivation mail package types
  • high quality, personalized card
  • living testimonial
  • CEO vision
  • story-driven newsletter
  • departed testimonial
  • not overly-branded
  • dont skimp!

92
8. After about a year of cultivation, you can
solicit/identify
  • mail or phone? theyve already told you!
  • break prospects into four groups
  • - expectancies stewardship stream
  • - actively considering more cultivation
  • - not active but open occasional cultivation
  • - just not interested back to regular DM

93
9. Assess, and plan for rollout (DM types
know what I mean)
  • stewardship plan for expectancies
  • cultivation plan for prospects
  • feed new suspects into the system
  • sell your success internally
  • get the resources you need
  • break down the silos
  • build on success!

94
Apply these 9 ICEBERG principles - 9 steps
with evangelistic zeal…now!
  • Great-great-great-
  • great-great-great
  • granddad and I
  • guarantee
  • youre gonna
  • make a LOT
  • more money

95
thus endeth the sermon..
  • thanks!
  • fgreen_at_theflagroupinc.com
  • 613-232-9113
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