Before his retirement in 1988, Frank P. Wendt served as chairman of John Nuveen & Company, one of the world’s largest creators of tax-free investment opportunities. As a current trustee of a number of charitable organizations, Mr. Wendt, who currently resides with his wife in Southport, Connecticut, brings his for-profit experience to the nonprofit world. Here he shares with Give & Take a board member’s perspective on ways to improve relationships between the board and development officers, the current state of the economy, and effective fund-raising techniques.
Give & Take: During and after your successful career in the for-profit world, you made the time to be actively involved in a number of nonprofit organizations. What originally drew you to volunteer service with nonprofits?
Frank Wendt: As a trustee I have been associated with some excellent development professionals and am impressed with their dedication to the missions of their institutions. I feel compelled to do as much as possible on behalf of the institutions in which I am personally interested and involved.
Nonprofits offer personal satisfactions of a type not available in the business community. Not better—just different. It is rewarding to use my business experience to help resolve problems in the nonprofit world.
Give & Take: What do you think inspires people to make contributions of time and other resources to nonprofit groups? Do you believe most are motivated by altruism, religion, political beliefs, emotions, self-interest, or some combination of these motivators?
Wendt: Each donor is motivated in a different way, depending upon the organization and how it has attracted his or her interest. Some or all of the motivators you mention undoubtedly underlie a decision to respond favorably to a request for funds. However, I feel that the old slogan “people give to people” is the primary reason people part with their “treasure.” Whether it be an organization’s president, executive director, faculty member, staff member, board member, or a dedicated volunteer, one person can and does make a difference.
Give & Take: Much has changed since we last spoke some five years ago, most notably on the political and economic fronts. What are some of the primary challenges facing development officers today? How would you suggest they be addressed?
Wendt: The stock market boom and bust of the late 1990s, followed by three years of economic malaise, have affected our entire society, from first-time job seekers to retirees. Development officers must first and foremost empathize with their donors and understand that the current climate can dictate reduced expectations in many cases.
Of course, their institutions’ financial needs remain insatiable, and those working in other aspects of the institution may continue to expect the same level of funds that have been raised in the past. That is why it is crucial for development officers to periodically share with governing boards the reasons that ever increasing goals may not be realistic at present. Fundraisers should, however, also be prepared to discuss their plans to capture the unprecedented opportunities in today’s environment to build endowments for the future.
Longtime donors want to know how they can continue to provide meaningful support to their charitable interests despite reductions in their disposable incomes. Donors often make their largest contributions in their wills and other long-range plans, so this is an ideal time to focus on a deferred gift program. Also, gift annuity rates are extremely attractive for the charitably minded who are experiencing reductions in dividends and interest. The opportunity to make a gift and receive generous payments for life (and tax benefits as well) will be of great interest to many donors.
Development officers should also cultivate relationships with financial advisors; many are unfamiliar with deferred gift vehicles and will value a greater understanding of them when working with their clients.
Fundraisers should of course stay with the traditional development tools that have served them well in the past. However, they should brainstorm with development associates and volunteers about new and creative ways donors can satisfy their desire to support an organization.
Give & Take: In times of economic challenge, do you believe those who reduce giving do it on a “pro rata” basis, or do they decide to eliminate some charities entirely while perhaps even increasing their commitments to others?
Wendt: In difficult economic times, I believe most donors will continue to strive to support organizations in which they are genuinely interested on a pro rata basis. But I also believe today’s donors will be ever more selective in the future even when economic and political conditions are more favorable.
Donors are now being deluged with direct mail and telemarketing solicitations. This can have a “numbing” effect that results in unsolicited gift requests being ignored—unless they are from organizations where the cause holds genuine appeal as a result of personal involvement or other knowledge of the worth of the cause to society.
For the largest gifts, however, personal involvement will continue to be the most important element in the decision process.
Give & Take: How should fundraisers communicate with retired donors versus younger persons who are still actively employed?
Wendt: Abandon the “one solicitation fits all” approach! Different life circumstances require approaches that are tailored to specific age groups.
Obviously, efforts designed to encourage estate gifts will be of limited interest to a young person with a growing family who is still in the process of slowly building an estate. Conversely, mature individuals must make decisions based upon life expectancy, the possibility of outliving images, healthcare concerns, and other things specific to their age group.
Prepare yourself with solutions to perceived (or real) problems. For example, a gift annuity might be a welcome alternative to supplement long-term healthcare insurance to help pay for assisted living. An estate plan that includes gifts to nonprofits can save substantial amounts that would otherwise be paid in taxes while still enabling the donor to leave a legacy to relatives and/or friends.
Give & Take: What suggestions do you have for development executives who would like to build successful relationships with members of their board?
Wendt: First, let your organization’s principal executive know that it is important for you to meet with, inform, and educate board members on a continuing basis. Use these opportunities to subtly remind them of their financial responsibilities to the institution. Your fund raising will only be as successful as your leadership’s financial participation (ideally 100%) and involvement in the development process. Help board members succeed in their personal solicitations by giving them a working knowledge of available gift planning opportunities that offer viable alternatives to current cash contributions where appropriate. Board members need assistance from the development office to help raise funds effectively, so don’t hesitate to share research on potential donors and their interests, as well as opportunities for trustees to be “centers of influence” on behalf of the nonprofits they serve.
Give & Take: As a former and current board member, donor, and fund-raising volunteer, you receive a number of solicitations for gifts. What makes a gift solicitation work?
Wendt: I look for a well-considered appeal for funds within my areas of interest. A general appeal is not nearly as effective as a request to support a specific program. I also like “Wish Lists” that include a potpourri of “needs” that are beyond the reach of normal budgets. Most important of all (and what I look for before reading the solicitation) is the signature of the sender. If I know and respect the person and value his or her opinions, I am compelled to read the message. People give to people.
Give & Take: What advice would you give to someone just starting out who is charged with raising large amounts of funds, whether current or deferred?
Wendt: Learn everything you possibly can about your organization and its mission, its history, and the contributions it has made to the local, national, and/or international community. If you cannot be personally enthusiastic, look for a position elsewhere!
If the organization passes your “personal enthusiasm” test, as soon as possible seek out long-term donors and ask them to tell you why they have lent their continued support over time. Their stories will buttress your own understanding of the value of your nonprofit to society and will build confidence and add to the reasons you should be willing to devote your personal talents to the development effort.
Lastly, when you have done your research and are meeting with a well-qualified donor prospect, don’t forget to ask for the gift! Too many gifts are lost because of reticence on the part of the presenter to ask for the order!
And when you receive the gift, your work isn’t finished. It has just begun. Don’t make the mistake of ignoring your donor until “the same time next year.” Remember, donors are being cultivated, solicited, entertained, and educated by any number of nonprofits. You can’t thank donors too many times for their gift or, importantly, tell them how their gift has made a difference.