The 3 Most Damaging Fund Raising Myths – Part I

Note:  Over the next few posts, I will identify 3 separate fund raising myths that make us less productive.  This is Part I of III.

 

Fund raising myths abound.  People who have not been called into our noble profession will regularly (and perhaps disdainfully) inquire of us, “how can you ask other people for money?”  As if the role of inviting people to align their financial support with their deeply-held values is somehow unethical (or worse!).  Similarly, there is the myth that only “rich people” give money and only because of tax benefits or other self-interested motives.  But these myths and misunderstandings are not typically held by development professionals themselves.  So, while it is unfortunate that these myths circulate in the broader world, they, typically, don’t directly hinder our ability to raise important resources for missions that transform lives.

However, there are myths that are held by many of us laboring in the development vineyard.  These myths are far more injurious to our efforts because they either consciously or subconsciously inform how we approach our work and engage other people.  Theses myths are just that – generally-believed concepts that are neither supported by the weight of researched evidence nor experience.  And yet, they continue to stymie our progress.

Here then, are what I would call out as the first of the 3 most damaging fund raising myths accepted by too many development professionals:

Myth #1:  Donors only give (or will only give more) for restricted purposes.

To say that this myth is pervasive would be an understatement.  I have heard newcomers and experienced professionals alike utter some semblance of this myth too many times to count.  The reason this myth is so widely-accepted, I believe, is because it feels right.  It seems intuitive.

The thinking goes:  “People will give (or give more) when they understand logically and agree with how their money will be used.”

And while this statement is not altogether inaccurate, the problems begin to arise when the concept is applied.  Specifically, many development professionals define the phrase, “how the money will be used,” by pointing to concrete funding priorities such as facilities, programs, endowments, etc., etc.  However, the research – and, more specifically your donors – aren’t primarily motivated to make gifts based on how the money will be spent.  Instead, they make their giving decisions based on the perceived impact their giving will make for a mission they care about.

In the 2014 U.S. Trust Study of High Net Worth Philanthropy, the following finding was reported,

“Almost four times as many high net worth households reported placing no restrictions on their largest gifts in 2013 (78.2 percent) compared to the percentage of wealthy households that did so (20.1 percent). (emphasis added).  Let that sink in for a bit.   Their largest gifts were unrestricted.

Similarly, over the past few months I have completed two campaign readiness studies for clients that supported this finding.  When I interviewed these institutions’ major donors and prospects for the purposes of the study, 63% and 68% of these donors indicated they would make an unrestricted campaign gift.  Why give unrestricted?  The most commonly cited reasons are because they believe in the mission and because they trust the institution’s leadership.

Don’t believe this overwhelming evidence is true for your donor base?  Here is a quick way to find out how it applies for your institution’s donors.  Sit down with a few of your major donors and ask them individually, “Why have you made the decision to make such generous gifts to our institution?”  When you really think about it, you already know how they will respond.  It will be because of mission.  It will be because of impact.  It will be because you are transforming or saving lives.  The specific uses of the gifts – the buildings that get built, the new programs, the new technology, etc., are simply tools to serve more and serve better.  Tools don’t inspire your donors.  The work the tools allow you to do inspires them.

The problem with believing the myth of “restricted giving is king,” is that it can inform work plans in insidious ways.  We begin to pay more attention to how we will spend the campaign money raised, instead of focusing on answering the question of why we need the funds in the first place?  Or, instead of leading with unrestricted giving as the assumed giving option, we proactively put restrictions in major gift proposals believing that the specificity will trigger a more generous response.  Or, even in annual giving appeals, we start segmenting and soliciting our donor base by gift restrictions (i.e., where we believe they might give) instead of continuing to make the strong (and, oh by the way, productive) case that giving unrestricted aligns with their values of supporting our compelling mission.

So, if you hear someone on your team say something like, “everyone knows that donors give more for restricted purposes,” remind them that believing in myths won’t make your program more successful.  In fact, you just might be missing out on your donors’ best gifts.

 

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