Jonathan Poisner Strategic Consulting

No, this isn’t a blog about Citizens United and the inanity of the Supreme Court giving corporations the right to make unlimited contributions in elections.

As I work with clients on fundraising, many of them manage corporate giving and major donor giving as very independent efforts, while others treat them as entirely the same.

I’d advocate for a middle ground recognizing the differences in the ways corporations give, and the differences between different types of corporations.

If you’re thinking about how corporations differ from individuals when you’re soliciting a $250+ gift, here’s some of my rules of thumb.

Very Small Companies

Very small corporations are not different than individuals. You should be speaking with the owner and their motivations for giving and the methods of solicitation should be no different than an individual donor.

Most Small/Medium Sized Businesses

Most small and medium businesses have no formal process for making contributions.

They tend to be on an ad hoc basis with the owner and/or manager having some authority.

Most donations are done either because the owner/manager has a strong connection to the charity or because the giving is done in a way that generates marketing. You should be clear going into an ask which motivation you’re focused on so the pitch can be appropriate.

While managers may have some authority, you are almost always better off talking with the owner if you can solicit them directly.

Large Corporations

Large corporations tend to have formal processes for making contributions.

These processes often have significant lead times prior to making a decision

Managers/staff are the decision-makers, not owners.

Different managers may have separate budgets for giving. A public affairs manager may have one budget and a marketing manager may have a separate pot of funds.

People other than those directly with the authority to make donations are generally not all that helpful as a route to generating a donation, unless they are higher in the corporate hierarchy than the person making the decision.

While these corporations tend to have policies around donations, personal relationships still are king – if you have a personal relationship with the person making the decision, you are far more likely to secure a donation.

I recently had a conversation with an organizational Executive Director who was having their group round up its grassroots supporters to generate online votes to have the group selected to win a small grant.  (Small means that in the organization’s context, it would at most be 1% of the organization’s budget if they received it).

What was odd to me is that the grant they were seeking was to do work that wasn’t part of their strategic plan.  Indeed, it wasn’t even something that fit within the group’s core niche/role, so it’s not that it wasn’t part of the plan because it was low priority — it was off the map entirely.

When I asked the ED why they were nonetheless pursuing it, their response was that the dollars flowing in would be twice what it would actually cost to implement and it would get the group on the radar screen of a foundation.

I pondered this for a few minutes and my reaction was — that’s not right.

Chasing money off-plan fails to account for:

• Staff time necessary to first chase the money, then implement the small project, then possibly to report back on it.

• The opportunity cost — eg. what the staffers involved in drumming up “votes” for the proposal could have raised from spending that time meeting with individual donors.
• The dilution of the organizational brand, as grassroots supporters become confused about what the organization is all about.  The same is perhaps doubly true with foundations — being on a foundation’s radar screen, but then perhaps being misidentified as something you’re not strikes me as a negative, not a positive.

Bottom line:  chasing money can be hazardous to organizational health.

Look for more on this in a future edition of my article: Why Organizations Go Off Course.

A mercenary donor is one who gives to you for some reason that isn’t primarily about agreement with  your mission.  They may give out of loyalty to a friend, out of a desire for good PR/marketing, or because you happen to be doing something at the tactical level that will have incidental impacts they want.

Organizations often seek mercenary donations and I’d be the last to tell you to avoid them at all costs.  But if I have a choice between a mercenary donor – whatever the type — giving me $1,000 and a mission-driven donor giving me $750, I’d take the $750 every time.

Why?  Because I’m evaluating the long-term expected value of the donor relationship and not the short-term monetary impact of the donation.

The long-term value of a mission-driven donor is higher for at least two key reasons.

For starters, getting a subsequent gift from them is more likely.  And getting a larger gift from them in the future is more likely.  You are looking for donors, not donations.   The $750 donor may very well turn into $5,000 over the next 4 years if the relationship is handled well. Whether the $1,000 mercenary donation ever turns into a repeat donation depends on factors out of your control.

Aside from this, mission-driven donors are also critical in growing the organization in another way.  They are far more likely to turn around and help your organization by reaching out to their friends and colleagues to help you grow your organization. Indeed, part of any well-designed major donor program and/or annual event is precisely the process of turning donors over time into fundraisers and friend-raisers.

So if mercenary donors are less valuable, should you ever seek them?  Heck yes.  But with a huge yellow caution sign – your programs, events, and strategies should focus on mission-driven donors.  And once you’ve created them, it’s okay to sweep in some mercenary donors as cream on the top.

Sometimes it’s easy to fall into the trap of thinking about fundraising as an ask.

Indeed, that’s the language I often use when I’m creating a fundraising plan or counseling somebody — “you have to get out and make more asks.”

Yet, at a fundamental level, fundraisers for nonprofit organizations aren’t asking.  They’re inviting.

They’re inviting people to participate in an opportunity.

What the opportunity is varies wildly by organization.  It could be as broad as “help us save the planet” to as narrow as “help us build a house for a family.”

The donor isn’t making a gift — the word gift implies a transfer of something of value with zero obligation on the part of the receiver.  But in the nonprofit organization context, the receiver has an obligation — to fulfill the mission of the nonprofit organization.

There’s an exchange going on.

And what a great exchange it is for the donor.   In exchange for your money, you get to help make a real difference in the world and feel great doing it.