Season 2, Episode 66

Many large donors make many gifts to your organization. In today’s episode, campaign experts Amy Eisenstein and Andrea Kihlstedt talk about why you shouldn’t assume donors remember what gifts they’ve made and why you should help them keep it straight.

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Amy Eisenstein:
Do you think your donors are confused about what they’ve committed to give you and other organizations? Well, you’re probably right.

Hi, I’m Amy Eisenstein and I am super-excited to be here with my colleague and mentor, Andrea Kihlstedt. And today we are going to talk about Donor Investment Reports, what they are, why they’re important and why you should care. Andrea, get us started.

Andrea Kihlstedt:
Great. Hi everybody. So you know what I know about you is that you keep track of money. And I know that about you. If I were to ask you about the organization that you give the most to, do you actually know how much you’ve given that organization this year?

Amy Eisenstein:
No, actually, and that’s funny that you mention it and that we’re talking about this topic because I was just looking through my credit card records, which is where I make a lot of donations. I’ve stopped writing checks, I just give monthly now. But I couldn’t remember what I had given or what I was doing and if I needed to give and it’s a mess. I’m a very organized person financially and yet I have no idea what I’ve given to all of my top favorite charities.

Andrea Kihlstedt:
Amy, if you are like that, you can only imagine how people who are like me who aren’t so well organized about this and donors who actually give quite a bit of money but aren’t very well organized about it, what they know about or how confused they are about their giving.

And when it comes to capital campaigns, this becomes even more confusing and challenging and important for you to pay attention to because in a capital campaign, you’re usually asking donors to give over and above their regular annual giving, over and above whatever they give to your gala or auction or whatever events you happen to have during the year. And you’re asking for a big gift. And us inviting the donor to pledge that gift over time, maybe over a three year period or sometimes even over a longer period.

Amy Eisenstein:
I would never remember what I had done.

Andrea Kihlstedt:
So you might have given $1,000 to the organization, and then you might have given $250 to the gala, and maybe the year before you pledged $25,000 to the campaign, and you made $5,000 pledge towards that $25,000.

But really it’s all vague in your mind and it’s not clear to you what’s annual and what’s capital. So the question is, what should you as a development director in the capital campaign do about that? Is it your problem? Is it something that you can use to your advantage?

Amy Eisenstein:
Right. I’m glad you said that because I was going to say, is it your problem or is it your opportunity?

Andrea Kihlstedt:
Right, exactly. And honestly it is your opportunity. So over the last couple of years, so I’ve been working with an organization that has been just in this situation. Lots of wonderfully devoted donors who have given year after year in multiple ways. And this organization started a capital campaign to raise a lot of money. And of course they went back to the very same donors, which is what they should be doing. And the campaign has gone on now for about four years. And they went of course to their largest donors in the first year of the campaign. And after three years, most of them had paid off their pledges and they were going to go back to those donors to ask for one more year of pledging.

As they got ready to do that, we thought those donors are probably confused. Let us see if we can help them, let us see if we can help provide clarity and show them the full range of their investment in this organization.

So we created something called the Donor Investment Report. Now we were just tossing this around as an idea, and their very capable development director sat down and actually came up with a simple table like report, didn’t look fancy or complicated, it was clear and easy to read. And it started with the name of the donor at the top and the name of the organization. And it gave the first year and amount of their gift.

Now, some of these donors had given for a long time, so it might have said 2010. First gift, 2010, $1,000. And then there was a chart showing the last five years of giving and it was broken out into columns:

  1. The first column was annual giving.
  2. Second column was gala and events.
  3. And the third column was capital campaigns. And it showed how much they had given each of the last five years. And when there was an outstanding pledge or when a pledge had been paid, it showed that as well.
  4. And at the bottom it gave a totality of that person’s giving for the duration of their relationship with the organization. And then under that, it talked about what the return on that investment was.

Now think about that? You like returns on investment Amy, what would you like to see in that section?

Amy Eisenstein:
Every donor does. They want to know what have they given, what impact have they made? So I’m glad you said that below the numbers, the facts and the figures are actually what, or the finances I should say, were what the organization was able to accomplish because of that donor, maybe in conjunction with other donors as well. Sometimes you can break it out and sometimes you can’t.

And it’s interesting you pointed out a lot of things that were included on the report and some organizations have better record keeping, donor record keeping than others. And I think you can make it simpler or more complex. Honestly, the simpler the better for donors because they want to see something simple.

But don’t panic if you don’t have 5 or 10 years’ worth of data, put down what you have and start to use it as a motivation to keep better track. Certainly if you’re in a capital campaign, I hope you’re keeping good track of your donor’s contributions and pledges. It’s critical, but laying it out in black and white is super helpful for a donor.

Andrea Kihlstedt:
It might be a simple laying out of what that donor has done during the life of the campaign. So let’s say the campaign’s been going on for three years and they made an annual fund gift each of those three years and they made a capital gift early and have paid off a certain amount of it. So it might just track that. It doesn’t have to be more complicated than that.

Amy Eisenstein:
And one thing you’re talking about showing them this donor investment report at the end of the campaign, but you should actually show it to them manually with outstanding pledges so that they have an idea of what they’ve committed to, and you can use it as a cultivation opportunity. Just because somebody pledged for three years doesn’t mean you shouldn’t talk to them again for three years.

You should be checking in with your best campaign donors annually. And this is very specific and targeted and personalized for your top donors. You won’t be able to do this with everybody. This is not the same as the annual report that you mail out to every single donor. This is something you would do for your top 20, 30, 40 donors and sit down with them once a year and talk through what they’ve done, what they’ve committed to, and what you’re asking them for for the coming year.

Andrea Kihlstedt:
And what difference it’s made and what difference it’s going to make.

Amy Eisenstein:
That’s right.

Andrea Kihlstedt:
That’s the investment report of it. That’s the ROI, the return on investment. So it tracks investment, how much the donor is given and then it tracks the return, it shows very simply the key things that are return on investment.

My organization that did this also for some donors tracked other things. So if a donor had been on the board for a particular period of time, for example, or if they had served on committee role, they actually would include that in the report so that the donor could see all the ways in which they were involved.

Now, I think some of the reason people are hesitant to do that is that we have a fear that if a donor sees how much they’ve given, they won’t want to give more. It’s like, oh my goodness, if they see that they’ve given $34,000 over the last 3 years, maybe they’ll think that’s enough. But I think the real idea is that when someone invests in your organization, they know what that investment has made possible. And the organization has a relationship based on trust with the donor, saying to the donor:

“Listen, here is your investment in us and we would like you to make yet another investment.” A donor is going to feel better about the organization, not worse.”

Amy Eisenstein:
I think that’s so true. That’s such a good point. I think, and I hate to say it this way, but weaker fundraisers, more nervous fundraisers, shy away from their donors. They don’t want to talk to their donors, they don’t want to share and be open and communicate challenges or share total giving. It’s sort of all in the same theme of staying away from your donors, being scarce. But I think the strongest and the most powerful fundraisers know that open communication, honesty, transparency, builds the relationship, doesn’t damage it.

So celebrating all that they’ve given and how strong the organization is, thanks in part to their role. But I’m also super glad that you mentioned, I think it’s critically important also to include their volunteer activities on this donor investment report. What other important roles have they played in the organization in addition to just their finances? So like you said, whatever campaign committees they’ve served on, their time on the board, their volunteer activities, that’s all part of what they’ve invested in the organization.

Andrea Kihlstedt:
Now imagine, I mean, let’s bring it back to Amy again. We started with Amy and her confusion over her giving. Imagine if I had prepared one of these forms for Amy, a donor investment form for Amy, and if I sat down to meet with her and said:

“Listen, Amy, you have been a remarkable supporter of this organization for a great many years. And I thought you might like to see the totality of what you’ve done for us. Your first gift, the first gift you ever made to us was $100 in 2012. Since then, you have made 34 gifts totalling $24,000. Would you believe it? That’s fantastic.”

Amy Eisenstein:
I wouldn’t believe it. But there are organizations that I’ve given to, I can think of at least two for more than 20 years, but I don’t have a clue as to what I’ve given them. And maybe their records aren’t perfect and that’s okay, but it would be remarkable if they showed me what I’ve done in the last five years.

Andrea Kihlstedt:
It would. And if they said:

“We are going through the list of our top 25 investors and marveling at what they’ve done, and you are among that group. That’s why we’re sitting down with you and would you consider pledging another gift over the next three years or whatever it is.”

I’m just, of course making that up for Amy.

But just to give you a sense of what a conversation would be like if you had a donor investment report to talk to your top donors with. And you can imagine how it would make you feel if you were a major donor to an organization and the organization came to you and said:

“This is how important to you have been to us and this is what your investment has made possible.”

You pick two or three of your largest donors, and sit down and just see what you can map out. There is no one format for this. Just use your imagination and go back to your records and see what records you have. Pull the donor’s file and think to yourself, well, how can I put on one sheet, one simple, easy to comprehend sheet, how can I summarize or capture the totality of their giving to us or some component of that, the return on investment for them? How can I put that in a clear and simple way so that when I sit down and meet with that donor, I can actually have that prepared for them. Even change it over time. Keep playing with a format until you have one that works for you.

Amy Eisenstein:
It doesn’t need to be highly produced. It doesn’t need to be graphically beautiful. You can stamp confidential on the top if you want, but present it as a celebration. Celebrate what your donor has done and what they continue to do and what you together as an organization and as a donor have been able to accomplish.

So I love this idea of a donor investment report and I hope to see more and more organizations reporting back to us or starting to use this. I would be so excited if somebody presented this to me. Then I’ll know this idea is really widespread in the world, but I think with all our clients, we are going to need to institute this annually with the key donors to the campaign.

Those in the top third of your gift range chart should be sat down with and presented this so that they know what they’ve committed to, even if you’re not asking them for more, just as a reminder and as a thank you and as a celebration. It’s a great idea.

Andrea Kihlstedt:
Amy, this is the holiday season that we’re in now, and that makes me think where so many of us are thinking about year end, what can we do for our donors at year end? And many of us are thinking about bringing them something, or baking them something, or sending them something or a card. And imagine your top donors, you make a date to talk to them and to bring them something for the holidays, whatever it is. And along with that, you say:

“Listen, I’ve taken some time and I’ve really looked at the overall giving you’ve done, the difference you’ve made in this organization, and as the year comes to an end, I just wanted to share that with you and tell you how much we appreciate what you’ve done and what you are doing for us.”

What a gift that would be.

Amy Eisenstein:
Okay. Yes and development directors are super busy at year end, and I think this would be a gift in February or March or April or July.

Andrea Kihlstedt:
Well, that’s true too.

Amy Eisenstein:
I don’t think it needs to be tied to the end of the year. Make it annual, whatever that means for you, your donor. Not everybody needs to be on the same cycle. You can spread it out. Yes. Everybody’s getting baked goods at the holidays. Show up with some cookies in February.

So anyways. Alright. Great conversation as always, I hope we’ve sparked some ideas for you and we can’t wait to see you next time.


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