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Endowment Strategies: Essential Infrastructure and Conversations with Donors


Why Are We Here? Building a culture of Legacy and endowment can be challenging. ... you have to wait until the time is 'right' but that day will never come. ... – PowerPoint PPT presentation

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Title: Endowment Strategies: Essential Infrastructure and Conversations with Donors

Endowment StrategiesEssential Infrastructure
and Conversations with Donors
Create a Jewish Legacy of Western Massachusetts
Why Are We Here?
  • Building a culture of Legacy and endowment can be
  • Now, time to engage in endowment building at your
    agency or synagogue.
  • This is an ongoing process it takes
    preparation, and activity.
  • Today will focus on key elements of the process
    you are undertaking.

Essential Elements for Endowment Success
An Overview
  • Building endowment is a proactive not reactive
  • To be successful, you must create a strong
    infrastructure, understand the donors
    perspective, and engage in conversations.

The Paradigm Shift
  • Ten years ago endowments were an embarrassment
    of riches
  • Now, fiduciary duty
  • However, the urgency of current programs must be
    balanced with preparing for the future

Why So Much Talk AboutCreating a Jewish Legacy?
  • The economy is tough and taking a toll on donors
  • Since 2000
  • Now, uncertainty in markets, interest rates,
    jobs, inflation, oil
  • Affects all wealth/age groups

Why So Much Talk About Creating a Jewish Legacy?
  • Government grants are disappearing greater
    needs with less available funds
  • National Association of State budget Officer
    Fiscal Survey of States
  • June 2008 - 48 billion shortfall in 2009
  • Cuts will occur in public health, elderly and
    disabled, education, work force
  • Federal government deficit at high

Why So Much Talk AboutCreating a Jewish Legacy?
  • Private foundation grants are shrinking
  • The number of charities reaching out to your
    donors is increasing
  • 819,000 in 2000
  • 1,128,367 in 2007
  • Board have a fiduciary duty to address mission

Understanding the Role of Endowed Gifts in
  • Planned gifts, legacy gifts, and endowment are
    closely tied
  • Annual gifts from income
  • Lasting gifts from assets
  • Continuation of the relationship with the donor

The Fundraising Pyramid
Donor Commitment
Nonprofit Contact
Building Relationship with Donors
  • The most exciting and strengthening element
    of this process is building closer relationships
    with donors sharing their visions and goals
  • Conversations let you get to know a donor
  • It takes more than one conversation
  • And it requires a strong infrastructure

Balancing Solicitations
  • One of the greatest concerns expressed by staff
    and boards is How do you balance needs and
  • You have limited staff and budget.
  • And you cannot afford to lose current revenue.
  • You may feel you have to wait until the time is
    right but that day will never come.

An Exercise
  • As a group, tell me your greatest concerns about
    the impact of endowment on your ongoing

The Infrastructure Required to Build Endowment
A Strategic Assessment
  • Your Strengths
  • You have local and national resources.
  • You have a strong, committed Jewish community.
  • You have a group of charities going to the
    community at the same time this will help in
    education and marketing

A Strategic Assessment
  • Your weaknesses
  • Most of your organizations are new to the
  • Most of your organizations have limited staff.
  • Staff is not trained in complex gift options.
  • It may not be easy to build infrastructure,
    assemble, and manage the volunteer team and
    expand the marketing.

A Strategic Assessment
  • Your Opportunities
  • Youre creating a long-term resource.
  • An endowment provides funds to capitalize on
    opportunities or expand strategically.
  • Youll have resources to respond quickly to
    critical and urgent needs.
  • Youll have resources to take on new ventures not
    covered by annual revenue.

A Strategic Assessment
  • Your Opportunities
  • Youll have the opportunity to build stronger
    relationships with your donors sets the stage
    for ongoing communications.
  • You can do it right youre starting at the
  • You can build strength in the Jewish community
    for Jewish causes.
  • There is an enormous transfer of wealth underway
    - 41 to 136 trillion

A Strategic Assessment
  • Your challenges
  • Articulating the case for Legacy/endowment, and
    building it into conversations with donors.
  • Finding the time to prioritize the work.
  • Changing the culture of your organization to
    build donor relationships
  • Positioning endowment to encourage donors to make
    annual, capital, and endowed gifts.

An Exercise
  • Divide into teams and identify your
    organizations greatest strengths and weaknesses
    in building endowment. You may select up to 3 of

The Case Statement
  • The internal case for support
  • Start by building the case among staff and board
  • Why do you need endowment?
  • Take the board through the exercise of answering
    these questions
  • Do you have a long-term purpose?
  • Do cyclical economic variances impact annual
  • Do you have new programs you want to pursue but
    no dollars?

The Case Statement
  • The questions, continued
  • Do you anticipate future needs not currently
  • Is there more competition for annual gifts?
  • Are you dependent on grants?
  • Are you losing donors through mortality, or a
    move from the community?

The Six Greatest Concerns
  • How can we hold money for the future, when there
    are so many needs today?
  • We will appear rich.
  • We dont want restrictions on gifts.
  • Wont endowment giving hurt annual giving?
  • These gifts seem complicated.
  • This process costs money.

The Case Statement
  • The external case why donors should give
  • Should inspire vision
  • Should inspire passion
  • Should be urgent
  • Should involve the donor
  • See page 15 Ray Lynn Wilbur statement

An Exercise
  • Make a list of the top five elements of your case
    for support.

Gift Acceptance Policies
  • Primary benefit is to maintain discipline, while
    opening doors to additional assets
  • Often come late in a development program as
    charities move beyond cash and marketable
  • There is organizational and board liability for

Gift Acceptance Policies Why?
  • Decisions on a case by case scenario are
  • The glittering appeal of the gift obfuscates good
  • Without policies, you may send mixed signals to
  • Good policies will keep donors from making

Endowment Policies
  • Location and form of endowment
  • Spending policy
  • Minimum fund sizes
  • Broad areas of endowment
  • How decisions are made
  • Publication and stewardship
  • Investment management
  • Other issues

Effective Data Management
  • Data is gold the key to prospecting
  • Data is key in building relationships
  • Its about more than membership or annual giving
    its about who they are and how they relate to
    your organization
  • Others can not sort, remember, or analyze whats
    in your brain unless you reduce it to data.

Key Data
  • Name, address, contact
  • Electronic as well
  • If family, key decision makers
  • Method of solicitation, contact
  • Personal interests
  • Family structure and interests
  • Volunteer history
  • Giving history
  • Use of services

Sound Fiscal Management
  • The scandals of a few have created concerns about
  • No longer get the benefit of the doubt and
    you shouldnt - you should have sound policies.
  • Dual controls and active board review
  • Standards for donor response
  • Transparency to public

Building the Legacy Team
  • You need staff and volunteers but will need to
    work with the resources you have
  • Rely on outside help for technical advice and
  • Rely on staff and board to ensure key
    infrastructure is in place
  • Rely on volunteers to have conversations with

Building the Legacy Team
  • Be patient endowments and legacies take time
  • Remember youre working with your best donors
  • Build a well-informed, motivated, inspired team
  • Each individual should understand the role they
    play in success

The Role of the Board
  • Engage in planning
  • Participate in endowment design
  • Ask questions!
  • Ensure accountability
  • Review regular report on progress
  • Support process in budget
  • Provide support in outreach
  • Adopt policies, including ethics
  • Consider a gift!

The CEOs Duties
  • Drive strategic planning
  • Oversee case statement
  • Ensure board is on board
  • Make regular reports to board and staff
  • Recruit planned giving committee
  • Define endowment form
  • Draft resolution to commit gifts to endowment
  • Assign oversight of endowment
  • Set goals
  • Establish way to distribute
  • Support calls

The CFOs/Treasurers Duties
  • Work with development staff to create endowment
  • Review administrative requirements
  • Make checklist for endowment support
  • Work with investment committee
  • Prepare quarterly and annual investment reports
  • Follow through on receipt of gifts

The Development Officer
  • Work with CEO/ED on case statement
  • Identify budget needs
  • Prepare marketing materials
  • Make calls on donors
  • Prepare gift proposals
  • Close and report gifts
  • Follow through with CFO/Treasurer
  • Contact donor after fund operational send update

The Volunteers
  • Embrace learning curve!
  • Learn to articulate the case.
  • Consider a personal Legacy
  • Give thought to the impact of your gift.
  • Make the calls!
  • Get help when you need it.

Setting Goals and Objectives
  • Shaping expectations on goals two common
  • The expectation the endowment will address
    short-term funding issues
  • Expecting planned giving to generate instant

Begin with Conceptual Goals
  • Building the financial base of your charity
  • Identifying new donors and cultivating
    connected donors
  • Creating a marketing program to create greater
  • Creating visibility for endowment and gift
  • Improving infrastructure
  • Engaging board and volunteers

Next, Set Specific Goals
  • Year One
  • Strengthen data management
  • Building donor information
  • Create prospecting process
  • Adopt key policies
  • Create marketing plan
  • Update current marketing platforms to include key
  • Develop method of tracking calls

Next, Set Specific Goals
  • Year One (continued)
  • Create recognition society
  • Make calls on top 50 prospects
  • Obtain endowment gifts from 50 of the board
  • Obtain endowment gifts from 20 of former board
  • Train staff/board on endowment/planned giving

Next, Set Specific goals
  • Year Two
  • Raise board participation to 75
  • Obtain 10 additional endowment commitments from
    former board
  • Make calls on top 75 prospects
  • Celebrate success at 1-year mark
  • Send letters to 500 endowment prospects
  • Create professional advisory council
  • Expand staff to support activities

Next, Set Specific Goals
  • Year Five
  • 150 members of the recognition society
  • 2 million in endowment assets
  • 10 million in endowment commitments
  • 150 ongoing solicitations per year
  • Active committee/task force
  • Active advisory council

Track Indirect and Direct Revenue Producing
  • Indirect
  • Number of prospects qualified
  • Number of records reviewed
  • Number of training sessions/volunteers trained
  • Number of telephone contacts, written contacts,
    personal contacts
  • Number of seminars, events

Track Indirect and Direct Revenue Producing
  • Direct
  • Gift commitments irrevocable and revocable
  • Cash revenue

Drafting the Implementation Plan
  • Start with your goals
  • Incorporate infrastructure needs (from
  • See page 28
  • Task
  • People responsible
  • Staff/volunteer resources
  • resources
  • Timeline

Tracking and Reporting
  • Update progress on quarterly basis
  • Report internally - one page report for
  • Report externally thank donors and report impact

Basic Marketing Strategies
Opportunities for Donors
  • Creating a Legacy is a joy not a burden.
  • Donor can select the charity and purpose for
  • The gift can involve or honor family
  • The gift should fit within context of other
  • Opportunity to give back
  • Opportunity to change the world

Challenges to Donors
  • It is uncomfortable to talk about bequests or
    death Ill take care of it later.
  • How do I balance family with charity?
  • Where do I start?
  • Why do you need the money?
  • Im not wealthy.
  • This is complicated.
  • My family doesnt live here.

The Many Facets of Donor Motivation
  • Commitment to role of organization in Jewish
  • Deep religious faith
  • Commitment to give back
  • Services provided
  • Contribution to quality of life
  • Personal gratitude for success

The Many Facets of Donor Motivation
  • Memorial
  • Facilitating change
  • Desire to influence or control activities
  • Guilt
  • Tax incentives

Donor Motivation High Net Worth Philanthropy
  • 2006 Study
  • Focused on philanthropic profile, motivations and
    goals of high net worth individuals (income
    gt200,000, assets gt1 million)
  • 3.1 of all U. S. households
  • 98 of group made gift to charity in 2005

Type of Gift Vehicles Used
Important Motivations for Giving
Factors That Would Prompt Additional Gifts
Center on Philanthropy at IU Bequest Study
  • Report in March 2007
  • Combined high net worth with surveys in Indiana,
    St. Louis, Memphis
  • Goal to identify potential bequest donors, and
    donor motivation
  • 48.4 had a will
  • FindLaw 44.4 (2002)
  • NCPG 42 (2000)

Age Demographics for Those With Bequest in Place
Age Demographics for Those Willing to Consider a
Bequest Intention Potential
Giving Interests Generational Differences
Younger donors are less likely to contribute to
religious causes.
Generational Differences
  • After controls were factored, age had little
    impact on amount.
  • Motivations varied by generation but not as
    varied as you would imagine.

Motivations for Giving Generational Interests
Generational Difference
  • Educational level affected donor motivation
  • College degree more likely to cite
    responsibility to help those with less and less
    like to meet the basic needs of the poor.

Identifying the Best Prospects
  • Internal
  • Multi-year donors
  • Members
  • Major gift donors
  • Long-term leadership
  • Long-term volunteers
  • Current board
  • Corporate leadership
  • Staff

Finding the Best Prospects
  • External
  • Community investors
  • Always start internally

Educating Prospects (Marketing)
  • Integrating the Legacy Message in Current
  • Annual report
  • Website
  • Annual fund solicitations
  • Substantiation and thank you letters
  • Stationery
  • Newsletter
  • Board meetings
  • Annual appreciation luncheon

An Exercise
  • As a group, lets brainstorm to identify current
    marketing platforms that may be available to you.

Create an Endowment/Legacy Brochure
  • A word from the Board Chair, Legacy Chair,
  • The case for Legacy/endowment
  • The endowment structure, options in giving
  • Basic giving options
  • Two donor stories
  • Reply form

An Exercise The Most Effective Marketing
  • What is the single most effective piece of
    endowment marketing material youve seen? Why?

Conversations with Donors
Making Calls on Potential Donors
  • The personal call is the most powerful, effective
    marketing tool you have.
  • Cannot be reduced to a formula.
  • The good news is, its driven by the donors
    interests so easy to do.
  • Planning is critical
  • Information
  • Calling strategy

The Secret for Success Its All About the Donor
  • Heres where you start
  • Information about the donors relationship with
    your charity
  • Info from public sources
  • Anecdotal information from staff

What You Must Know Before the Conversation
  • The strategy why youre there
  • Why you picked this donor
  • Basic gift options
  • Outright gifts
  • Gifts that pay income
  • Deferred gifts
  • Endowment options
  • What happens to the money

Assembling and Training the Calling Team
  • The importance of volunteers
  • Willing to be training and make calls
  • Know the charity well
  • Have made personal commitment
  • Have participated in training
  • Training the team
  • Role of endowment
  • Purpose of Create a Jewish Legacy
  • Strategy behind prospect selection
  • Role of volunteer
  • Basic gift options

The Top Fifty Prospects
  • Use identifiers discussed earlier
  • Share list with volunteers
  • Allow the volunteer to select 2 to 3 names they
    are most comfortable calling on

Setting Up the Call
  • Step One review the info.
  • Step Two send the letter.
  • Step Three follow up.
  • Step Four set a time to meet.
  • Step Five follow the phone call with a letter
    confirming the meeting time and place.

An Exercise What Are Your Greatest Fears?
  • As a group, share the donor question or response
    you most fear as a part of this endowment

The Course of the Call
  • Establish a relationship with the donor
  • How long have you been a donor to our charity?
  • When did you make your first gift and why?
  • What are your concerns as you look out 10 to 20
  • What do you believe are our greatest
    opportunities and challenges?

More Questions
  • What are the charitable interests you are most
    passionate about in the Jewish community?
  • How have you supported those interests?
  • Do you realize you could create a fund with our
    charity either today or through your estate
    that would address those priorities?
  • Would you like to talk more?

And Still More
  • What is the most significant charitable gift you
    have ever made?
  • Why?
  • What are your goals for you children,
    grandchildren in philanthropy?
  • Do you have an estate planner you work with you
    can recommend to others?

Listen Carefully Financial Needs
  • My CD income has been cut in half!
  • The dividends and interest from my investments
    has dropped dramatically.
  • I wish I could sell my stocks but I dont want
    to pay capital gains.
  • Im worried about taking care of my parents and
    my children!
  • I have a child with disabilities they are my
    first priority.

Listen Carefully Financial Transactions
  • My brother and I are going to sell land we
    inherited from our parents tired of taxes,
    management, and conflict.
  • Ive decided not to pass the family business to
    my children I think Ill sell it now to
    maximize its value.
  • Im worried about having enough income in
    retirement I think Ill sell my stocks and buy

The Course of the Call
  • Share information about your charity.
  • Qualify the donor.
  • Move the prospect to the next step.
  • Ask for the gift.
  • Know the gift goals.
  • Donor must be qualified.
  • Determine amount and type to suggest.
  • Set time to make the ask.
  • Who should be there?
  • Thank the donor.

The Follow Up
  • The follow up is key to your success endowments
    are built overnight, and deferred gift decisions
    are not made on the first visit.
  • Make notes about the call, the information
    developed, and steps required for follow up.
  • Assess the value of the call.
  • Make a list of follow up items.
  • Send a thank you note for the call.

Seven Secrets for Success
1 Find the Right Donors
  • Its all about the donors
  • Commitment better indicator than wealth
  • Ownership is key
  • Find a way for each to participate

2 Communicate Clearly and Consistently with
Those Donors
  • Communication must express expectations.
  • Communication must be ongoing.
  • Potential donors should be able to identify
    themselves as the target and get key information
    on how to move forward.

3 Stewardship is King
  • Stewardship is king
  • Cant begin with campaign must begin earlier
  • Hard to find time when in planning make time
  • Set stewardship as campaign value

4 Spread the Endowment Building Responsibilities
  • CEO/ED duties
  • CFO/Treasurer duties
  • Development staff duties
  • Board and volunteer duties

5 Report, Report, Report
  • Boards love facts, figures and success.
  • They prioritize those activities heavily
  • They must engage and take ownership of the
  • Treat every report like a donor call provide
    stories, incentives, results, impact

6 Never, Never Quit Building
  • The best campaigns reach goal and keep going.
  • Think about Harvard, Yale, etc..they fundraise
    for endowment daily.
  • Also remember, many of these gifts will be
    revocable dont send the message you dont need
    the gift any more.

Final Thoughts
  • Success requires a plan
  • Focus on best prospects
  • Make those calls
  • Keep endowment visible
  • Know the answers
  • Stay with it! building endowment is an ongoing
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