After working in the field of nonprofit fund development for a number of years, Mark Walker believes that those who are successful in the area of planned gift development are those who “value the donor more than the donation.” According to Mr. Walker, senior representative for MAP (Medical Assistance Programs) International, this tenet is also a fundamental element of his “elder donor strategy.”
What is the elder donor strategy?
The elder donor strategy consists of discovering the special needs of your older donors and putting plans into place which address those specific needs. In many cases, nonprofit management tends to look at reports analyzing donors who give smaller amounts and decides these donors are not worth keeping on the file. Too often, these reports ignore the age of donors and the fact that many of these “underperforming” donors are simply older and cannot afford to make larger gifts due to increased living expenses, reduced income as a result of lower interest rates, and other factors.
The response of some organizations is to compound the problem as they increase the number of appeals mailed to smaller donors as part of “upgrade” or “lapsed donor” strategies. At some point, it can appear that these donors are simply not worth spending time and effort on because they are not producing cash gifts at the same rate that they once were. This can be a critical error and one that can cost an organization the bulk of what would have been its bequests, gift annuities, and other planned gift income over time.
From previous experience at other not-for-profit organizations, Mr. Walker knew that older donors were special and should be handled in a special way. “When you have a majority of your donors over age 65, and you meet these folks and realize the incredible emotional ties they have to your organization, you also realize the gift potential they represent for those who have the ability to help them give more effectively,” said Mr. Walker.
Based on the advice of his consultant, Robert Sharpe, Jr., Mr. Walker started the process of finding out who his older donors were through an age overlay on his donor base. He then looked for those age 70 and over who were long-time givers but had reduced their giving in recent years. A process was put in place that included a phone call to each of these persons as soon as possible after they made a gift of any size.
It was quickly discovered that, as suspected, many of the older donors on Mr. Walker’s donor list were retired and living on a fixed income. Even though they still believed in the organization’s mission and were loyal donors, they simply did not have the actual or perceived capacity to make larger outright gifts.
These donors were also displeased with the amount of funding appeals they were receiving in the mail for two reasons: first, they did not have the cash on hand to make a gift every time they received a request and felt guilty that they could not respond, and second, they felt that the organization was wasting funds on superfluous mailings.
Once Mr. Walker discovered why his older donors were not responding to the current appeals, he decided to restructure his organization’s way of dealing with its older constituents. “We decided to focus on our elder donors’ potential for long-term giving,” Mr. Walker said, “not just on immediate funding possibilities.”
Putting the strategy to work
The first thing Mr. Walker decided to do was cut the number of appeals mailed to his older donor group. “Once we talked with some of our donors and found out that they were giving out of their Social Security checks, we realized that it was not cost effective to be sending these donors appeals on a monthly basis,” he said.
Mr. Walker knew that his older donors, while they may not have the ability to make large cash gifts, in most cases did possess significant assets in the form of home equity, securities, retirement plan benefits, life insurance, etc. He decided to send his older donors a special informational newsletter focusing on estate planning strategies and planned gift opportunities. The first page of this newsletter features a story about donors who have already made planned gifts to the organization.
“The best people to tell the story about the benefits of making planned gifts are the elder donors themselves,” Mr. Walker stated. “We lift up these special individuals and focus on how they have grown through their relationship with the organization and how they have benefited from good, solid estate planning, in hopes that we can motivate others to follow their philanthropic lead.”
The reduction in current appeals resulted in substantial savings in fund-raising expense. In fact, enough was saved to substantially offset the cost of the planned gift communications effort. Another benefit was less negative feedback from older donors about what they considered to be excess mail.
To further celebrate and acknowledge his older donors, Mr. Walker also established a special giving society consisting of those donors who have included MAP in their wills or have made other planned gift arrangements. “Once you have established that a donor has a life-long relationship with an organization, a lot of good things can come from recognizing it and celebrating it,” he said.
Personal contact rounds out strategy
In addition to reducing the number of current appeal mailings, sending the planned giving newsletter, and creating a recognition society, Mr. Walker hired a full-time staff member to assist him with donor relations. One of her primary roles is calling a number of older donors each month just to thank them for their commitment to the organization.
“You have to have one person who contacts these elder donors as often as possible,” Mr. Walker said. “Here at MAP, Dotsie Ross calls our donors, asks if they have any other interests or needs, and really thanks them for being long-term supporters. If a donor shares information that indicates they might benefit from a planned gift, we use this as an opportunity to offer whatever assistance may seem appropriate.”
Mr. Walker visits with donors in person whenever he can, especially trying to schedule visits to coincide with other business travels. He cautions that such face-to-face meetings must be carefully scheduled with older donors because they may feel that the visit will be another appeal for a gift. “A lot of these elder donors have been giving to an organization for 20 or 30 years and have never had any personal contact,” Mr. Walker said. “You need to be very careful to explain to them that you simply want to stop by and meet them and thank them for their support, and you have no intention of asking them for more money.”
Dotsie Ross has also trained a select group of volunteers to work specifically with older donors. Since his staff consists of himself and Ms. Ross, volunteers have been extremely helpful in making sure that donors’ requests are responded to in a timely manner. If a volunteer discovers a potential planned gift prospect, he or she can then refer the donor to Mr. Walker for more specific advice and information.
Emphasizing the donor’s needs first
By implementing this elder donor strategy, Mr. Walker feels he is serving the needs of his older donors and, by doing so, is also serving the best interests of his organization. “I have found over the years that if you help the donor and keep their needs in mind first, your organization will benefit in the long run,” said Mr. Walker.
His donors have responded favorably to this different approach. Mr. Walker related the story of one donor in particular who said she was increasing her giving because “she felt appreciated and saw the good work and efficiency of the organization.”
Over 70 million Americans will pass the age of 65 over the next twenty years, including the majority of the donor base of many organizations. As a result, Mr. Walker believes that creating stronger relationships with donors, especially older donors, is going to be increasingly more important. “As we get more caught up in technology, those personal relationships are going to be the key,” he said. “The whole development staff needs to be involved in the relationship-building process—that includes everyone who meets with donors from the CEO to the planned giving staff.”