Iceberg Philanthropy

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Iceberg Philanthropy

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

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Before we start, please be warned..

• I have an
• inherited
• evangelical
• gene seriously!

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My dad took me toNewtown, St. Marys Bay
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(No Transcript)
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Lets talk about the bus

• get the right people on
• get the wrong people off
• then get the right people into the right seats

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Lets change seats

• Planned giving
• and major gift
• types to my left

• Direct marketing
• and annual giving
• types to my right

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The ICEBERG is a metaphorfor the donor pyramid
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So, whats the problem?

• Planned giving
• types are in rowboats

• Direct marketing
• types are in
• submarines
• (without periscopes)

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Youre both lookingat the same iceberg..

• But, youre
• seeing
• something
• totally
• different.

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The silo effect

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

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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

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Weve done our research, and

• Your donors
• want seamless!
• Were all talking the
• donor-centred talk.
• Do we walk the walk?

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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

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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

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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

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Why?

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

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Because todays marketis fiercely competitive..

• direct mail market is shrinking slowly
• donors feel overwhelmed
• were not asking properly
• we dont steward well
• this is all research based

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And thats why were all here..

• Right?

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9 ICEBERG Principlesand 9 Practical Steps

• designed to help you
• - understand the iceberg
• - see its potential
• - tap its wealth
• - transform your program
• - get there before your
• competition!

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first ICEBERG principle

• think BIG
• really, really BIG..

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• To the planned
• giving type,
• big means
• LOTS of prospects

• To the direct
• marketer, big means HUGE gifts

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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

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Profile of a veryordinary 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

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Hidden Gold

• Income
• household income 55K
• average DM gift 30

• Assets
• net worth 350,000
• average bequest 20,000

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

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Those ordinary donors

• 97 know they can leave
• a gift in their will
• 92 already
• have a will

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The AHA Moment

• 17 have made
• at least one
• charitable bequest

• 18 are very or somewhat likely
• to do so within
• five years

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Oh yeah..

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

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and..

• The majority of these donors have never been
  asked..

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• Thats a big
• honkin iceberg!

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Second ICEBERG principle..we are emotional
beings..
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Question

• What were the
• two most important
• moments in your life?

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what did you experienceduring your moments?

• were you thinking?
• .....or feeling?

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Mine?

• 1135 pm October 19, 1988
• 640 pm June 21, 1999

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The Old Brain(amygdala)
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Our brains..old and new

• New Brain
• rational
• thinks
• processes data
• justifies decisions

• Old Brain
• primitive
• emotional
• survival
• DECIDES

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Fundraisers justdont understand..

• The old
• (emotional)
• brain
• decides.

• The new
• (rational) brain
• justifies
• the old brains
• decision.

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Think differently

• Conventional
• AFP wisdom
• Speaks to the
• new brain

• The ICEBERG
• strategy
• Speaks to
• both brains
• (with the emphasis
• on the old!)

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How direct marketers andPGOs would propose
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I read an Animal Welfare OrgsCase 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

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Third ICEBERG principle..

• Relating is
• successful above
• the waterline.
• Marketing gets to
• the bulk of the
• underwater money

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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

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So, planned giving types

• Tea and banana
• bread aint gonna
• get you there!

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Direct Marketers

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

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Fourth ICEBERG principle

• Its the will, stupid!

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Pop Quiz

• Do you know
• what percentage
• of your planned
• giving revenue
• comes from bequests?

• Straw poll

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Check your materials..

• How many planned giving
• vehicles are mentioned?
• Lets add em up..

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Elementary, my dear Watson

• 90 - 95 of the
• money is in the will

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Remember Cuba Gooding Jr. In Jerry McGuire?

• Whats he saying
• right here?

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• show me
• the money!

• Wheres your
• money?
• In the will!

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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?

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THIS!
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If you really wantyour iceberg..

• Youve got to
• sacrifice
• Its the will, stupid

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Fifth ICEBERG principle

• Why gets the gift,
• not how!

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Lets get this straightonce and for all!

• Fundraisers
• tell them
• WHY
• they should give

• Donors
• will figure out
• HOW
• they can give
• on their own

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Vision
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Passion
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Conviction
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Inspiration
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Sixth ICEBERG principle

• Tell stories..

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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

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Great fundraising isgreat storytelling

• testimonials
• legacy donor profiles
• vision pieces
• history
• making the case

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Seventh ICEBERG principle

• Urgency

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Urgency for twosimple reasons..

• Mortality

• Competition

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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

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Put most bluntly..

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

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Diffusion of InnovationsCharles Everett, 1962
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So, time to doyour 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

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Overlay with Diffusionof 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)

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Where are we onthe 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

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Eighth ICEBERG principle

• Its not about
• the money

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Its about

• heart
• soul
• footprints on the earth
• passion
• joy of living

• meaning
• human spirit
• why we live
• relationships
• love
• human duty

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

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Ninth ICEBERG principle

• The Holy Trinity
• Commitment
• Openness Life
  circumstance

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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

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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)

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Life stage

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

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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!

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Rubber on the Road

• some very practical
• things you can do
• to bring ICEBERG philanthropy
• to life for you and your donors

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Commit to do somethingin 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)

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2. Pick some suspects

• Hints..look for
• Loyalty
• Miss
• Loyal monthly
• Large gifts

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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!

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4. You probably need a different materials
approach

• Focus content on
• Values
• Vision
• Mission
• Program
• Results
• Future needs
• Credibility

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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)

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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!!

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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

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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

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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.

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Internal Marketing Tip

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

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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!

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Cultivation mail package types

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

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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

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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!

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Apply these 9 ICEBERG principles - 9 steps
with evangelistic zealnow!

• Great-great-great-
• great-great-great
• granddad and I
• guarantee
• youre gonna
• make a LOT
• more money

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thus endeth the sermon..

• thanks!
• fgreen_at_theflagroupinc.com
• 613-232-9113