The blog of the John S. and James L. Knight Foundation
Session 1: March 1, 2010
In this session community foundations (CFs) will learn from the world of sales how to build their donor bases.
Dirk is a sales marketing consultant and author. He started two nonprofits and works with the community foundation in Barrington, Ill.
Dirk started with several definitions CFs use to describe themselves from their own web sites to kick off a discussion about their missions. He found references to “custom approaches …unique experiences.” They were variations on a main theme: creating a customized way for donors to meet their giving needs. And he looked at the fact that CFs subscribe to national standards. All of which told him that in more than one way, whether it’s clear to the audience or not: They all focus on sales.
Just like a business with a product to sell, CFs need to continually ID potential donors, ID the needs of the community, then match them and build solutions together.
Dirk asked: What role does a sales orientation play in building a donor base? Can we apply what we’ve learned from business to helping CFs develop their donor bases? He shared three sales principles from business for broadening donor pool:
Principle 1: Proactivity and focus
CFs must be proactive in prospecting for donors. Most businesses, Dirk says, are reactive. Community foundations, too. As a participant said: When the market’s good, it’s really good. When it’s bad, it’s really bad. And in the recent economic bust, donations for some were down 50 percent.
Dirk used a key statistic: According to a recent Aspen study, only 27 percent of respondents say they develop their own intentional approach to geographic component funds (GCS), as opposed to responding to an approach coming from local leaders.
The common sentiment in the room: It’s hard to be proactive. There was an acknowledgement that “when I’m out asking for gifts, I’m making more money.”
But it takes work. Josie Heath (The Community Foundation Serving Boulder County): “You gotta kiss a lot of toads to find a prince.”
Sales people ask: What is my world of opportunity? Who are my current customers? The same questions go for a CF: Who’s currently giving? Does that make up part of our world of opportunity?
In sales, we challenge people to develop their potential market, said Dirk. So, too, for CFs. So the first question is: Can you develop the entire world of opportunity?
That’s time consuming, the group agreed. So the second question is:
Which of our potential donors are the best fit for what we do in our foundation?
Put another way: If you could mold the perfect donor: Who would it be?
And so, against the takeaway encouraged by Alberto Ibarguen of Knight (information is a core community need), Dirk challenged the participants to develop a profile of the potential donor (individual and organization) who might be interested in joining a community information challenge project.
The group broke into three panels. Two developed profiles of an individual donor. The third developed a profile of an organization.
Individual profile might look like:
Or maybe just a well-read lottery winner!
More from group two:
The third group looked at organizations that might fit the profile:
In conclusion: Keep prospecting. Proactively go after the likeliest prospects.
Principle #2: Customer focus
After a discussion about customer focus traits, good listening jumped to the top.
Dirk said the key is turning the conversation around. Know the customer well enough to find a way to get them to do all the talking.
Dirk told an anecdote about a business that succeeded when it developed a customer service-focused mission: We won’t ask for your business unless we have a plan to help improve your business.
To get there, you’ve got to do your research on your customers before you have the conversation. The customer-service research will show you everyone has a different set of needs.
In another breakout, Dirk asked the groups to discuss what might motivate those earlier individuals and corporations.
For organizations, the small group said: tax deductions, recognition, legacy, passion, trust, reputational enhancement, competition.
For individuals, the small groups said: Information on a specific issue, more transparency, personal fulfillment, personal connections, the chance to leverage resources, a connection to like-minded people.
Using these characteristics, CFs should develop a questioning road map so that they can turn the conversation around. Let prospects do 80 percent of the talking.
Principle #3: Value Added:
It boils down to this: Research show only 40 percent of a customer’s buying decision is based on the tangible product. Everything else is based on the intangibles that add up to value-added.
Dirk’s message to CFs: Understand your product: Funds, options, administration. Get to know the rest of what you do as the 60 percent, value-added intangibles.
From a closing group discussion, those intangibles include: convening, research, new approaches to giving, strengthening nonprofits, leverage, connections to shared interests, social activities, recognition, a sense of belonging to something bigger than themselves, due diligence, security, the relationship with the CF and legacy.
The cosmetics industry gets this. Watch them, Dirk said. They create a solution that fits every situation for their customers, and they give them a unique experience tailored to their needs.
Just like the language Dirk found in the CF mission statements.