Using Scholarships to Secure Major Gifts For Your Nonprofit. Nonprofit MBA Podcast 3.8
Summary: In today’s podcast episode, Stephen Halasnik and his guest Dr. Allen Abbott discuss how to use scholarships to secure major gifts for your nonprofit. It is no secret that in order to make things happen and achieve a nonprofit’s mission, you need the resources to do so. Sometimes fundraisers and other means of securing small donations just don’t seem to cut it. This article will go through the three tips for securing your gifts; establishing trust, understanding your donor, and collaborative efforts.
Three Steps for Success
1. Establish Trust with the donor.
2. Understand what’s important to your donor (speak to their needs).
3. Figure out what social need you can meet (something you can address collectively and visibly).
Establish Trust With the Individual Donor
In the nonprofit sector, mission and values are so important to many organizations. When you are trying to be awarding money in whatever form it is, it is crucial to be able to establish trust with your donor. Whether it is a current donor or a prospective donor, keeping that stream of consistent communication is crucial.
Donors want to have a personal connection to the cause or person they are awarding to. Due to confidentiality reasons with scholarships and the nonprofit sector, it is important for staff members and nonprofit board members to advocate for themselves. Major gift donors don’t want to feel neglected, and they especially don’t want to feel like they are unsure of where their gift is being allocated to. Whether it is via direct mail or phone calls, all it takes is a quick conversation to remain a credible organization that your donor wants to continue to give to.
Understand What’s Important to Your Donor
When it comes to soliciting potential donors and trying to build a connection, go deeper than a surface-level connection. Oftentimes, major gift prospects are older in age, and don’t want to be “bought out,” but rather they want you to speak to their needs.
Depending on your mission and values, know how to figure out what is going to differentiate you from other nonprofits and gift seekers. Solicitation can work, but ultimately you want to be striving for high retention rates. How do you have high retention annual giving? You have to form a personal bond with your donor. Maybe seek out family members or connect through social media to potential donors.
This relates to the idea of letting people give to you instead of making people give to you. Try to connect with as many people as possible. Tell your potential donors what your organization is currently doing to achieve your goals, and how their gift would help you. Furthermore, tell the story of the benefits, instead of what will happen with the money. In other words, explain to them where their money would be going instead of seeming like you are begging for the money. Figure out what’s the most important thing to them, and see if your nonprofit aligns with their philanthropy.
Figure Out What a Social Need You Can Meet With Your Funders
This brings us to the third point of knowing what social issue your donor can help in terms of advocacy. Together as a team, you want to find ways you can get them involved. Perhaps it’s a nonprofit fundraising event or crowdfunding, whatever it is, see what you can do together. In terms of supporting your nonprofit, see what type of stewardship can be supported.
For example, maybe a donor and a nonprofit want to raise an annual fund of money for a gift-giving program for children in need. Your collaboration will be able to visibly and collectively help with fundraising efforts to support your shared community of interest. Lots of folks in older generations have a lot of money, but they don’t know where to put it or who to give it to. Your nonprofit can help them be a proper funding source. Perhaps your donor is passionate about sustainability, together you can establish a major gifts program or fundraise to support a shared vision. Or, maybe you want to create a scholarship fund to help individuals go to college for free.
Always Be Looking for New Donors
As stated, oftentimes the donors who help create a donor base are older. With knowing this, it is not uncommon to lose donors. Maybe your donors want to continue to help your mission via a bequest, but that is not always the case. Usually, around 15% of donors are lost annually. With that being said, any gift officer or fundraising professional would tell you that you need to be constantly looking for new qualifying donors. Just like with grant writing, it is crucial to stay consistent and analyze your success rates via different metrics. Sometimes it can be hard to meet new people during Covid-19, so maybe you want to consider attending different webinars or virtual events to meet people.
The way to look at this topic is not by viewing it as a “sponsorship” but rather an integrated collaboration between your organization and a donor. The overall takeaway is that building relationships with as many long-term donors as possible is going to benefit your nonprofit organization tremendously. You can read about what the IRS qualifies as a gift here.
About the Guest Dr. Allen Abbott, from Cypress Grove
Bio: A semi-retired minister, Dr. Abbott now leads philanthropy for a large system of aging services in Fort Myers. He is president of the local AFP chapter. In addition to a Ph.D. He earned certificates in fundraising management and religious fundraising from Indiana University; a certificate in financial planning from Emory University; and a postdoctoral study at Harvard Divinity School and Dartmouth College.
Since its inception in 2018, the Staff Scholarship program at Cypress Living has awarded 107 scholarships, sent 55 students to college at 14 institutions, and several are now pursuing master’s degrees. Practically all of the students are the first in their family tree to attend college. Recipients include a brother and sister as well as a mother and her daughter. The program is a major gift magnet; last year the program surpassed $1m and the average gift was nearly $1,000. The model can be adapted to a wide variety of nonprofits.
About The Host Stephen Halasnik, Financing Solutions
Stephen Halasnik is the host of the popular, The Nonprofit MBA Podcast. The Nonprofit MBA podcast’s purpose is to help nonprofit leaders. Mr. Halasnik is the Co-founder and Managing Partner of Financing Solutions. Financing Solutions is a leading provider of Lines of Credit to nonprofits and small businesses.
Mr. Halasnik is a graduate of Rutgers University and has an Executive Masters from the MIT Birthing of Giants Entrepreneurship program. Mr. Halasnik is a best-selling Amazon author and is considered a leading authority on building great, purpose-driven businesses. Mr. Halasnik lives in New Jersey with his best friend, his wife Gina. Mr. Halasnik’s number one purpose is raising his two boys, Michael and Maxwell, to be good men.
About Financing Solutions Nonprofit Line of Credit
Financing Solutions nonprofit financing product is a great alternative to a traditional bank line of credit because it costs nothing to set up, nothing until used, and when used, is inexpensive. The credit line requires no collateral and no personal guarantees.
Nonprofit Organizations use their line of credit to help with emergencies or opportunities when cash flow is temporarily down (i.e. Payroll funding)
Please feel free to fill out the no-obligation, 2-minute nonprofit line of credit application here. The time to set up a credit line is when you don’t need it so that it is ready to be used, just in case.
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