What We Do In Development and How We Go About Doing It Donald R.Gray Advancement Academy Conference April 27, 2003

What We Do In Developmentand

How We Go About Doing It

Donald R.GrayAdvancement Academy Conference

April 27, 2003

Would you mind turning off your ringer?(in other words, please turn off or mute cell phones and pagers)

Universal Vision Statement for Philanthropy:

“You want to compose a good world. It is an honorable and noble profession”

-Maya Angelou

Mrs. Evelyn Kaufman Stow High School English Teacher, 1958 (that’s Stow, Ohio, NOT Vermont)

•Words reflect who you are to others and to yourself.

•Words also reflect how you choose to be seen by the world.

•So choose them carefully!!!!!!!

Donald Gray--What is Development?

Gifts and Donations

A GIFT is a tangible symbol of feelings between people

A DONATION is a tangible symbol of support to a cause


Development and Fund Raising

A GIFT is to DEVELOPMENT (givers)

as

A DONATION is to FUND RAISING (donors)

Inappropriate Terms• hit up• put the arm on …• squeeze• loaded• milk• … should give• … ought to give• … owes us• pass the hat• get into his/her pockets


Annual vs Major Gifts

• Annual Donations– frequently given/asked– discretionary income– unrestricted fund– mailings, events, phone– 2-5% of income– 90% gifts; 10% dollars– 1st step to major gift– very, very important


Importance of Annual Fund in Major Gift Activity

• For all givers to universities who make a first “major gift” of $25,000 or more, – 75% made a first donation to the university of

$250 or less in response to the annual fund– 83% have made smaller level donations

(annual fund donations) for at least 5 years; almost 60% for at least 11 years


The Right Way to View Annual Fund

• Concept of Annual Fund as Living Endowment ($1million annually equates to an endowment of $20-25 million)

• Annual Fund is the spring that feeds the river of Major Gifts that flows into the estuary of Planned Giving


Annual vs Major Gifts

• Annual Donations– frequently given/asked– discretionary income– unrestricted fund– mailings, events, phone– 2-5% of income– 90% gifts; 10% dollars– 1st step to major gift– very, very important

• Major Gifts– infrequently given/asked– from assets: stop/think– relationship required– targeted/restricted projects– 10-20x annual fund gift– 10% gifts; 90% dollars– often repeated over time– critical to success


The Math of Major Gift Work

$ For each major gift (>$25K), you need three prospective major givers

$ On average, a major gift is closed after 9 meaningful contacts, or between 6 mos-2yrs

$ Thus to get 5 new major gifts requires 3 x 9 x 5 = 135 meaningful contacts.


ULTIMATE GIFTS

• Once in a Lifetime Gift• Combination of Giving Methods; Many People

Involved• Total Commitment to Institution’s Mission• Long, Emotional Relationship (and several

previous major gifts) • Often Involves Major Naming Opportunity• 1,000-2,000x Annual Gift/10-20% Net Incoming-

Producing Assets

Life Savings:$150,000

Size of Gift:$150,000

Reason for Giving:To help others

avoid a life as hardas hers

Purpose of Gift:Scholarship

Fund for poorstudents atUniversity ofSouthernMississippi

Ted Turner, after hearing of Ms.McCarty’s gift, gave $1 billion toUNICEF, saying,

If that little woman can give awayeverything she has, then I can giveaway a billion dollars.


$100,000 annual income (gross)$2 million net income-producing

assets

• Annual Donation: $2,000-5,000 to all charitable organizations (2-5% of annual income)

• Major Gift: $40,000-80,000 (2-4% of net assets)

• Ultimate Gift: $200,000-400,000 (10-20% of net assets)


Having fun with Bill Gates: net assets approximately $85

billion

• Annual Donation: Who knows? Anything he chooses

• Major Gift: $1.7 billion - $3.4 billion• Ultimate Gift: $8.5 billion - 17 billion

• Question: How much would a person with $1 million in net assets need to give to equal a relative $1 million gift from Bill?

$11.76

In raising funds from individuals, never overlook the concept of relative wealth.


Top Three Reasons People Give Major and Ultimate Gifts

• Belief in Mission and Stability of the Organization

• Sense of Civic Responsibility

• High Regard for Staff and Volunteer Leadership

“Charitable giving isn’t the ultimate test of one’s humanity but it does give us

some numbers to play with.”

St. Peter

Recently departed non-philanthropist


“It just feels good”


Bottom Three Reasons People Give Major and

Ultimate Gifts

• Guilt and Obligation

• Promotional Materials and Proposals

• Tax Considerations

Successful Development

THE MYSTICAL MINGLING

OF

A JOYFUL GIVER

AN ARTFUL ASKER

A GRATEFUL RECIPIENT

Show Creativity

Additional Gift Interest

The Cycle of Successful Development

Creating the Joyful Giver

Making the Artful Ask

Attention

Interest

Desire

Action

yes

no,no,no

maybe

acknowledge

Invoking the Grateful Recipient

Initial Contact

ID

Documents

What We Do In Development and How We Go About Doing It Donald R.Gray Advancement Academy Conference April 27, 2003