My last post was about why sharing a shortfall with your donors is good for revenue and your relationships with donors.
That’s a challenging, counter-intuitive idea. So because we humans learn through stories, let me share the story of how one nonprofit navigated their shortfall situation.
Here’s how it went…
Opening Up to a New Idea
Years ago, a nonprofit we were serving let us know that they had a $500,000 shortfall as they approached the end of their fiscal year.
We recommended that they share the shortfall with their donors by running a shortfall campaign.
The conversation that followed went through the standard steps that most of these conversations go through…
First, they told us that sharing their shortfall was a ridiculous idea. They shared that their organization is a pillar in their community. They were worried that making the shortfall public would negatively affect their brand. They were worried that donors would think the organization was a bad steward of their gifts. They were worried that – even if some donors gave a gift to help – that overall it would cause more donors to stop giving to the organization.
We listened. And then we shared that we knew from experience, having run 60 to 70 successful shortfall campaigns, that their donors would give generously if the organization included the shortfall in their messaging. And we shared that, in our experience, the organization would not suffer any of the negative consequences that they feared.
Feeling slightly warmer to the idea but still unconvinced, they said what most organizations say at this point, which is, “Well, there’s no way that will work with our donors because [REASONS].” The reasons tend to be things like, “Our donors are different than other donors” or “this won’t work because all our donors know our founder” or “our donors are professionals and won’t fall for this” (as if there’s something to fall for?!?) and, my personal favorite, “all our donors are from [location] and people from [location] don’t like things like this.”
So we said, “We hear you and acknowledge that these are real concerns. Could we share an example of a shortfall campaign from an organization similar to yours? It worked well for them and we think it would work well for you.”
They replied, “Yes we’d love to see the example… but we have to tell you that our boss isn’t going to like it.”
So, I had a warm conversation with the Director of Donor Development. She was open to the idea, found our experience persuading, and decided it was worth talking about.
This leads to the final step, which is moving up the chain of command to have a conversation with the VP or ED/CEO who can make the final decision. In this case, I spent an hour on the phone with the VP of Philanthropy. She’s a brilliant woman and had all the concerns mentioned earlier – in part because she was very good at fundraising and had never experienced a shortfall before.
I talked her through several shortfall campaigns I’d been through. I shared all the positive reasons that donors respond to shortfalls. I shared results of previous shortfall campaigns compared to standard results.
It was basically an hour-long counselling session. People in Fundraising tend to have deeply held beliefs about what their donors will and will not respond to. And I was warmly sharing some data that challenged this person’s beliefs. There were hundreds of thousands of dollars on the line, and relationships with very large donors, so we talked it all the way through.
The VP of Philanthropy bought in, and then met with the Board to get approval. After much discussion, the Board nervously decided to try it.
The Campaign
It was time to get to work. Here’s what we did:
- We planned out a 6-week campaign that ended when their fiscal year ended.
- The campaign had two direct mail letters, 8 emails, and phone calls to major donors.
- I wrote up talking points about the shortfall. These included how the shortfall happened, what the consequences would be if it wasn’t erased, and what the organization was doing about it.
- The talking points were distributed to the Board, to Major Gifts Officers who were calling major donors, and to the people answering the phones.
- I wrote the direct mail appeal letter that kicked off the campaign. We used the thinking and messaging in the letter to craft the follow-up letter, the emails, website copy, and giving page copy.
- The messaging was clear and to the point: through no fault of their own, the organization was facing a $500,000 shortfall. We shared what would happen if they couldn’t erase the shortfall. We shared the good work the donor’s gift would help make possible. Then we asked the donor to send in a special gift to help erase the shortfall.
The people were prepped. The letters were mailed. The emails were sent. It was time to see what happened…
The Results
Their fiscal year-end campaign normally raised about $150,000, and our campaign raised about $650,000. That’s an “extra” $500,000 that effectively erased the shortfall.
It doesn’t always work out that perfectly, but it does more often than you’d expect. The major donors who get involved often want to know how much is needed to reach the goal. They will often stretch their giving to help you reach the target number.
In addition to the overall success, there are few numbers I’d like to highlight:
- The response rates to the direct mail and emails were notably higher than average.
- Their average gift sizes were higher than normal.
- The organization had about 100,000 donors at the time, and they had a total of five donors reach out to them to ask about the shortfall. Five!
- Two of the five people who reached out were Board members who had already been briefed on the shortfall. (Yes, that is as ridiculous as it sounds.)
- In the five conversations, after hearing more details about what was going on, two of the five people gave a gift on the spot.
In addition, none of the feared negative consequences came to pass. This shortfall was a few years ago, and the organization now has about 25% more donors than they used to. Their major gifts program is going great. They’ve also successfully funded a significant capital campaign.
Their brand was not tarnished. Their standing the community remains strong. Their donors did not leave in a thundering herd.
The Lesson
This whole thing is a lesson in the power of vulnerability.
The organization was vulnerable and courageous enough to share the shortfall with their donors. Their donors responded generously, and were pleased to help the organization in their time of need. There were no negative consequences to speak of.
The organization has a deeper appreciation of their donors than ever before; the organization needed help, and their donors answered the call.
All of this is to say, if you have a shortfall don’t be afraid to share it with your donors.
