A few months back I was facilitating a board retreat for a historical society in Denver and talking about the importance of fundraising, when a board member named John stopped me and asked me this:
How can you expect us to feel motivated to raise funds when we have such a big endowment? I’m not convinced we actually need the money.
Great question, John! And I truly appreciate your honesty. Here’s my answer:
Share it with others — Today’s Tweetable:
Video Transcript
It was really important for the staff at the organization to hear that their board members weren’t helping with fundraising, in part, because they didn’t feel any sense of urgency (or even a need).
You may be thinking, “What a lucky position to be in — I wish we had a reserve or endowment.” But, the fact is, they still need to raise a lot more money if they are going to accomplish what they want to do.
What do you think my one word response was to John’s question? Harvard!
As everyone knows, Harvard has one of the biggest endowments in the world, but that doesn’t keep any of their development staff up at night — or stop them from working hard every day to raise more money. Nor does it give pause to their thousands of Harvard Alumni from sending in bigger and bigger gifts every year.
So… what’s the key difference between Harvard and this historical society in Denver?
Their case for support.
It’s All About the Case for Support
Harvard has an extremely strong case for support, which includes a sense of urgency. I don’t know what their specific case is, but I’m guessing it’s something to do with being and staying the top university in the world.
We spent much of the day discussing the case for this historical society and creating a sense of urgency, which the board members believed in.
So regardless of whether or not your organization has an endowment or reserve fund, the question to ask yourself is:
- Do you have a strong case for support?
- Is there a clear and urgent need?
- Do your board members understand that case and fully support it?
Only when you can answer “yes” to all of those questions will your board members become the amazing fundraisers you want them to be.
I know I answered John’s question because by the end of our time together, he was excited again about fundraising for the amazing projects at the historical society.
I hope this helped you too, and any questions you might have had about fundraising with a reserve.
And now, let’s dive into this week’s Year of the Board assignment.
This Week’s Task
This week, I’d like you to take some time to review your case for support. Is it strong? Do you convey a sense of urgency?
Does your organization have a reserve? Have you created a sense of urgency in your case for support? Tell me about it in the comments.
This post is part of my Year of the Fundraising Board series. Check out the entire series to learn how to create a stronger, smarter, and super motivated nonprofit board.
Hi Amy, What a wonderful video…and a great message. In one word…Harvard…you make the point that it’s not about how much money you have, it’s about what impact you have. It’s so easy for people to all into the trap to think that fundraising is primarily about money and your great video reminds us otherwise. Besides…you are video star!
Thanks so much, Andrea! I appreciate the kind words and feedback!
Thank you, Amy! I, too, love your concise videos. Thank you for sharing and encouraging all of us! May I talk offline to you about how to overcome a founder’s concerns about fundraising?
Lisa
Hi Lisa,
Yes, I’d be happy to talk anytime. Founders often do have special concerns. I’ll send you an email so we can schedule a time.
Amy
Amy,
Great reminder message. It will help me focus a conversation with my all my teams including school administration, development and the Board. Thanks for your common sense insights.
When fund raising, how do I explain overhead costs and get them to donate so we cover that. So many people seem to think that a non-profit cannot fund raise for overhead like heat, light, water, utilities, staff, etc. They think we should only ask for direct cost of that program like food for the dinner, the caterer, but not the cost of the staff who work toward all the programs, the building which we own with a mortgage and its expenses like those mentioned. They think the costs associated with the building should magically come from somewhere else! It is a business building and we use 20% for our programs and office. So 80% is rented to businesses, but that portion is not 100% occupied at all times. Usually there are vacancies as businesses close, grow and move out, or go somewhere else for whatever reason. People think the rent will cover all the building overhead and ours as a non-profit as well. Are they just stingy? What is my answer?
Hi Edith,
Great question! I’d love to start a discussion on how to get donors to understand the importance of overhead or operations costs. I will commit to doing a full post on this in the near future.
Thanks,
Amy
I, too, am interested in the best way (if there is one) to make the case for raising money to strengthen reserves to shelter the organization for ongoing admin and overhead costs. Is that even possible?
Yes, Brenda. I believe many donors are savvy and understand the importance of overhead – or will if we (as nonprofit professionals) take the time to explain it. Some donors will never give to overhead, but I believe it’s our responsibility to frame the conversation. Look for a post on this topic soon!
We are fortunate to have developed the relationship with one donor couple in particular who understand this need and give to cover all our administrative costs. I work with this couple and have discovered a further interest in endowment after several conversations. Also we are blessed to have leveraged this gift to almost match it with those who hear the story and give to build mortgage-free Gomes because they appreciate this administrative covering! Win-win!
Yeah, Lisa! Thanks for sharing.
I am really looking forward to a post on how to fund raise for overhead costs and have people understand how important this is.
I like the idea of urgency- it truly makes a difference! Thank you for sharing!! Great job!
Amy, as someone who has specialized in endowment for 20 years, I can agree that “urgency” is one of the incentives that encourages a donor — and a board member to help fundraise. But my experience it is not even among the top three. You may not have fully answered John’s question.
It’s ironic that you use Harvard as an example, since a healthy percentage of its donors give not because of urgency but 1) for gratitude to the college for who they’ve become, 2) to make sure others see their names in the annual report, and 3) certain naming opportunities, e.g. tenured professorships and scholarships, that only endowment giving brings.,
You’ll also see that a great deal of endowment giving is “legacy” giving, when people are looking back at their lives and asking what they’ve accomplished. See Russell James’ studies about people’s emotions as they near the end of their lives.
People also give to or create endowments because they don’t trust the nonprofit to handle their large gifts,, and they can set rules for an “endowment within an endowment” for how it should be spent.
Another argument John should be selling is the excitement and positive use of a good-sized endowment, not the urgency. It allows a nonprofit to dream and innovate. Freed from the shackles of raising every single dollar of annual operations, it can actually spend some money on retreats, strategic planning, staff training, attending conferences, experimenting with new programs, etc.
Finally, the biggest concern among most nonprofits is that a donor who contributes to an endowment will steer away any gifts they might give to annual operating gifts, a very real concern. Perhaps the answer is not to raise the money for the endowment from living donors, but to focus on people’s final gifts. I worked with a 175-year-old children’s services agency that, thanks to an ample endowment, uses annual donations to outfit every social worker with smoke alarms, Walmart gift cards, and emergency rental assistance to help clients who needed them. That provides the concrete (and urgent) reason to give to annual donors, and creates the history of giving for the future givers to endowment.
These are the things John should have in his back pocket when he goes out to talk with prospects. I can almost guarantee that none of the board members (or staff) have donated to the endowment or, if they have, it was for one of the reasons above. Ask John what it would take for him to feel good about doing so.
So good for you in raising and answering this essential question, Amy. I hope I’ve added to the discussion.
Hi Rick,
Thanks for your thoughtful response – you make some great points. Although I may have slightly overemphasized the “urgency” part of the case for support, I stand by Harvard as a good example of an organization with a huge endowment – which is not a reason for donors to consider not giving, but actually seems to act as a motivator. In other words, success breeds success. I love your idea of an endowment enabling a nonprofit to dream and innovate! Thanks for adding to the conversation!
Best,
Amy
Did I miss a post on explaining overhead? as referred to in your March 5 blog. I also would like information on how to do fund raising to pay down a mortgage.
I have had similar response from some of our Board members (i.e. asking for money when we have a reserve) even though our reserves are relatively small. Do you have samples of Cases for Support that you could share? I am re-writing ours and examples would be really helpful. Thank you.