Stewardship and Accountability: The Surefire Path to Increased Major Gifts

By Karen Osborne and Robert Osborne Jr.

Over the last decade a sea change has occurred in fund development. In a study on donor motivations, donors ranked on a scale of 1-10 what mattered most to them when considering giving. Up until recently, most donors reported that belief in the mission of the organization and the desire to have an impact on the people served was their number one motivation. Certainly a first-hand experience of the work of the organization made belief in mission and impact that much more powerful as a motivation. Improving their community was consistently number two for donors. But something changed.

Donors report that stewardship and accountability matter to them more than it has ever mattered before. Consider these findings:

Reason For Giving Ranking* 1. How the organization spends the money 7.12. Belief in the mission and the impact of the work 7.13. How the organization helps my community 6.54. Details on how my gift was spent 6.45. The organization’s case for support 6.16. Statistics on how many people the organization has helped 5.47. Stories about the people served 5.48. Information on how to help in addition to giving money 5.39. Progress reports over the past year 4.910. Receiving thank you gifts 2.7

* Based on a scale from 1-10 with 10 being the most important

Six out of the ten reasons have to do with Stewardship and Accountability. Our donors are telling us something. In fact, they are shouting. But are we listening?

What has caused this sea change?

While there is little research available to answer that question, the anecdotal evidence is pretty compelling. Corporate instances of alleged and some proven malfeasance are making our donors suspicious of us. When we add that to some concerns in our own world of philanthropy, we find that our donors don’t trust us.

Today, you can’t pick up the newspaper without seeing an article on the lack of donor confidence. So even if some of our donors were not concerned, they are becoming concerned because the media tells them they need to be. This has a direct bearing on our work. We are seeing more restricted giving and more activist giving; donors want to control more of the process and are demanding more direct involvement, clear measurement and strict accountability.

©2005, updated 2016 The Osborne Group, Inc.One Grand Central Place, Suite 4600, New York, NY 10165

So, what should your organization do to not only gain the confidence of your donors, but in fact inspire them to give you more gifts, less restricted gifts and to do it all with joy?

Let’s define our terms

Many of us think of stewardship as saying thank you, providing recognition by putting up a plaque and communicating regularly with our donors via newsletters. Those organizations fortunate enough to have an endowment might also include sending reports on its performance to donors.

Yes, all of the above is part of good stewardship. But it is so much more. When practiced fully and well wonderful dividends accrue.

Defining Stewardship - It starts with a PROMISE.

When you seek gifts via any means, you are promising your donors that certain outcomes will result. If it is through your annual appeal seeking unrestricted gifts, you are promising that you will take measurable steps to achieve your vision as a result of their collective investments. For major and restricted gifts, you are promising specific outcomes as outlined in the case for support you offered either verbally, in writing or in a presentation.

Stewardship demonstrates how you are DELIVERING ON THE PROMISE.

1. Spending as agreed: This is the first and most important component of your promise: that you do with the money what you said you would do, and that you can demonstrate it.

2. Managing prudently: This is an implicit promise and one that donors care deeply about. You are promising to manage the resources wisely and that your financial house is in order. You communicate that you’re spending a reasonable amount on overhead and fundraising expenses; you have ethical and wise policies and procedures in place.

3. Documenting: For all major gifts and for some of your leadership annual gifts, you have captured donors’ intentions and documented the particulars of their gifts. You have documented stewardship, naming and gift acceptance policies and procedures.

4. Acknowledging every gift within 24 to 48 hours: You pick up the phone and thank your leadership donors immediately. Depending on your institution’s size and resources, you do this for gifts as low as $100. Donors receive a receipt promptly in the mail. Even if the donor is a very important person and/or large donor and you want to send a very special letter, the donor doesn’t wait for days or weeks to receive that special letter. You change your acknowledgment letters at least quarterly.

5. Providing appropriate, appreciative and appreciated recognition: You provide agreed upon recognition. Your recognition guidelines are appropriate and equitable. For example, donors providing unrestricted gifts of $25,000, a piece of equipment valued at $25,000, a bricks and mortar $25,000 gift and an endowed or restricted program gift of $25,000 are all recognized in a way that they would deem fair and equitable.

©2005, updated 2016 The Osborne Group, Inc.One Grand Central Place, Suite 4600, New York, NY 10165

6. Demonstrating significance and impact: This is where many of institutions fall down. Every donor (direct mail, annual, corporate, foundation, major individual giver, legacy) receives impact communications letting them know, concretely, the impact their gift is having. They receive these reports in a variety of interesting and creative ways – email, paper, video, photographs and at special events. For major donors, they receive on-going impact communications beyond the year of their gift. For unrestricted annual or major gifts, impact reports are still given. You share how you spend budget-relieving dollars to further your mission.

7. Providing joy: Stewardship is personal. For every major gift donor from all sources, you know why they made the gift and what would please them in terms of thank you initiatives, recognition and impact communications. You listen to your donors and help them relive the joy of their gifts on a regular basis.

Defining a World Class Stewardship Program

For any one gift we probably can do all of the above and perhaps you are doing all seven things for your top donors. But what about the donor who couldn’t attend the thank-you luncheon or the program officer who failed to send an update note to a major gift donor? What about your leadership annual fund donors? What do they receive after the thank-you letters and calls? What about the millionaire donor who only sends you $25 in the mail? What stewardship does she receive? How are you inspiring her to give again and give more?

The benefits of a world-class stewardship program abound: Donor retention Lifelong donors More productive relationships Greater pledge fulfillments More upgrades More renewals More planned gifts Word of mouth marketing Increased Board and volunteer involvement and satisfaction Annual gifts leading to major gifts

In fact, a recent study and report by AHP, “Elevating Philanthropy, Exceptional Practice in Major-Donor Fundraising,” looked at the highest performing hospitals in country and reported that all had strong stewardship programs in place.

A World-Class Program Requires Several Things:

1. Commitment. The institution must agree that this is a high priority and invest thought, time, and resources to creating a strong and successful program.

2. Someone in Charge. Yes stewardship is everyone’s responsibility. But without a lead person in charge, stewardship efforts are often ad hoc. Institutionalized stewardship ensures against donors falling through the cracks.

©2005, updated 2016 The Osborne Group, Inc.One Grand Central Place, Suite 4600, New York, NY 10165

3. Annual Internal Assessment. What are you already doing well? What aspects of stewardship are you missing? Use the Stewardship Assessment in the Fund Development Toolkit to inform your plans going forward as well as ways to measure your progress.

4. A Written Plan and Calendar. The plan has clear and measurable goals and objectives, covers all areas outlined in the definition above, indicates who will do what by when and includes a budget. The calendar lays out when and for whom each stewardship initiative will occur.

Stewardship Maxims:* Quality matters more than quantity.

* Sameness and lack of creativity breeds immunity.

5. CEO, Program & Policy Staff, Directors, Board Members, Colleagues and Clients. Donors enjoy hearing from those who used the gift and/or benefited from the gift. Use many voices and images. Create a stewardship culture and the benefits expand exponentially:

More staff and administration giving Increased Board understanding of philanthropy, and as a result, participation in seeking funding Increased Board giving Increased giving and involvement from those involved with stewardship

6. External Assessment. Conduct donor satisfaction surveys. Surveys help you find out what your donors think and feel about their gifts to you and others. They will also help you uncover ways to improve your stewardship and accountability efforts.

7. Software to Manage the Process. A good fund development database will have places for storing the requisite information.

8. Metrics and Measurement. Set up a system for measuring your results. The survey will help you however; you should look at other metrics as well including donor retention.

Take a step today towards meeting your donors’ stewardship and accountability needs.

The pay-off and JOY will be huge.

Can a Small Shop and Small Budget Create a Good Stewardship Program? “Yes!”By Robert Osborne, Jr.

Just follow these simple guidelines:

1. Make sure you do it! In a small shop, where you are always scrambling to make ends meet, it is easy to neglect stewardship. But don’t. A good stewardship program will actually make it easier to raise money. Well-stewarded donors, donors who know the incredible impact of their gift, will be much easier to secure gifts from and you will in fact save resources.

©2005, updated 2016 The Osborne Group, Inc.One Grand Central Place, Suite 4600, New York, NY 10165

2. Simple and Creative. Creativity can make up for expense. Instead of slick, expensive mailers, find creative ways to make the same point. A strong anecdote told by the right person or people can go a long way.

3. Try a Thank-you-thon. During a thank-you-thon you simply get staff and volunteers to call donors, thank them again and share the impact of their gift has had. It only takes a few hours and you’ll be surprised how happy donors are to be thanked instead of solicited.

4. Recognition Events. Events don’t have to be complicated or expensive. Thank your donors and show them the impact of their gifts through simple events. A room, a case of wine and a selection of cheeses coupled with great illustrations of the impact of donations is all you need.

5. A Group Effort. If you can, get your program and policy staff involved. A simple note or phone call from them to donors from time to time can make a big difference.

6. Maximize your Newsletter. Put a note on your newsletter. “Check out the story on page three. It is an example of the difference your gifts are making.” Make sure you put outcome and impact stories in your newsletter and then remind readers, “Here is an example of the impact our donors are making.”

7. Use Email and your Web Page. Make an effort to get email addresses from your donors. Send a picture and a very brief impact story with a simple message. “Your gift makes a difference. Thank you again for all you do.” Put stewardship messages and stories on your web page. Remind visitors that these stories are examples of the difference donors are making!

8. Expand Your Reach. Form a stewardship committee of the board. Include some philanthropic board members, some from the governing committee and consider a few non-board members – perhaps volunteers who are being considered for board membership. Send them out to make face-to-face stewardship and accountability visits. They’ll have a great time, be inspired and please the donors.

9. A calendar is key. Because you won’t be able to devote a full-time person to stewardship, creating a calendar becomes even more important. Post the calendar over your desk so you do what you planned!

10. Don’t forget foundations and corporate donors! Foundations and corporate donors need stewardship, too. Send more than the required yearly report; do more than the recognition at the big event. It will make a big difference.

©2005, updated 2016 The Osborne Group, Inc.One Grand Central Place, Suite 4600, New York, NY 10165