Week 7 Flashcards
Who loses, when an organization accepts a gift for an endowed program that produces mission drift?
I. the donor
II. the charity
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both are true. A donor seldom wins, if a pet project is funded that drives the organization off mission into areas it cannot pursue long-term with appropriate programs. No donor really wants that, and programs that cause mission drift are often finessed or discontinued, leading to donor unhappiness and even legal proceedings. The best gifts amount to a partnership in which both the donor’s goals and the charity’s priorities are in harmony.
All of these fundraisers are “hunting elephants,” as wealth advisors use that phrase, EXCEPT
A) Bo, a principal gift fundraiser, who works with a handful of very wealthy donors
B) Harold, a gift planner at an Ivy league university, who works with current and past board chairs to raise the lead gift for a billion-dollar campaign
C) Belinda, a gift planner, who uses blended gifts, often including bequests, to raise gifts of $100,000 or more for a campaign to raise $500,000,000
D) Toshi, a gift planner, who works with a community foundation to partner with advisors on gifts of noncash assets from very successful business owners in transition
C) Belinda, a gift planner, who uses blended gifts, often including bequests, to raise gifts of $100,000 or more for a campaign to raise $500,000,000
The correct answer is C. A $100,000 blended gift, which is largely made up of a bequest, sounds more like a deer than an elephant. What advisors mean by an “elephant” is a prospect whose potential is very large and who may also be demanding. You don’t shoot an elephant with a rifle used for small game, which means that special people require special handling. When fundraisers are forced, as they often are, to work very quickly with each donor, including the biggest, they are unlikely to bring down an elephant. The phrase “elephant hunting” is also cautionary. To feed his or her family, the hunter must bring back at least a little small game on a given hunt. To hunt only elephants is risky. Those who can specialize in this are few. (The very best at working with the wealthy would cringe to hear the hunting metaphor. They know that this work is best done in a spirit of service, ideals, and partnership.)
Consider the following gift cultivation and solicitation process. It begins with open questions to get the donor talking about his or her ongoing engagement with the charity, reasons for giving, favorite gift, giving goals, and the like. It goes on to ask the donor what the donor considers the charity’s greatest opportunity or challenge. It closes by asking how the donor feels he or she could help with that opportunity or challenge. As to this process, all of the statements below are true, EXCEPT
A) The process is consultative.
B) The process encourages the donor to give to the charity from his or her own goals and perspective.
C) It may land on donor-restricted gifts.
D) It fits well in a capital campaign for, say, a new building.
D) It fits well in a capital campaign for, say, a new building.
The correct answer is D. The challenge with a process like the one outlined is that it will elicit gifts in line with the perspective of the donor. That is not a bad thing in itself, but it can lead to gifts that could be restricted by the donor so that they benefit programs which interest the donor but which are low priority to the charity. In a capital campaign for, say, a new building, the fundraiser working with core donors is more in the role of a communicator and persuader. The goal is get the donor to buy into the charity’s goal and to give at capacity for that goal.
With respect to the Copernican Revolution in donor behavior, as cited by Charles Bronfman and Jeffrey Solomon, which statement(s) below is (are) true?
I. Years ago, highest-capacity donors wanted to revolve around the charity’s mission.
II. Today, the highest-capacity donors want the charity to revolve around the donor’s mission.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both statements are true. But it is also important to add that no big donor wants a charity to get so far from its own mission that the money is wasted. Instead, what the donor wants is for the charity to successfully complete a mission of importance to both. Still, Bronfman and Solomon are clear that the conversation has to begin with questions regarding the donor’s mission. That is the approach taken so successfully by Ron Schiller, when he asks, “Do you have a giving plan? A giving philosophy? A passion?” Then, if possible, he shows how his organization can fulfill that donor’s priority.
With respect to high net worth donors, which statement(s) below is (are) true?
I. Only a minority have a specific strategy in place to guide their giving.
II. Only a minority target their giving to specific causes or geographical areas.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
D) Neither I nor II
The correct answer is D. Actually, the vast majority (73%, in one study) have a plan in place to guide their giving, and almost all (93%, in one study) say that they target specific causes or geographical areas. All of this matters when a fundraiser visits a high net worth donor and asks for, say, a gift to a specific campaign. In the donor’s mind, the important issue is whether or not the campaign fits with his or her giving plan or strategy and whether or not it fits with the donor’s chosen causes or geographical area. Schiller would make the point that it is best for the fundraiser to begin by asking about the donor’s philosophy of giving, plan, passion, or issue areas. Then, and only then, can the fundraiser best position the giving opportunity at his or her charity. The goal is to build a bridge from the donor’s passion or focus to the charity’s capabilities.
According to William Sturtevant, what percentage of dollars raised in a mature gift planning program comes from special (major) and ultimate (planned) gifts, as opposed to regular, recurring (annual) gifts?
A) 60–70%
B) 80–90%
C) 30–40%
D) 50–60%
A) 60–70%
The correct answer is A. Sturtevant asserts that the bulk of dollars raised actually comes from major and planned gifts (special and ultimate) in a mature gift-planning program. So, for a CAP®, this amounts to ammunition for asking the board to invest more heavily where that investment will, over the long-term, best pay off in major and planned gifts created through face-to-face asks via a suitable moves management process. When done best, this becomes personalized philanthropic planning in the style of Dr. Steven Meyers.
According to William Sturtevant, which statement(s) below is (are) true?
I. Annual gifts account for 30-40% of revenue.
II. 60-70% comes from major (special) gifts and planned gifts.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both are true. The moral is that it pays to have major and planned gift programs in place. Many organizations, though, are bottom-heavy, as Penelope Burk says. That is, they invest heavily in asking donors each year for the regular annual gift but underinvest in the staff needed to ask, often face-to-face, for larger gifts and planned gifts.
Dave Dunlop pioneered “moves management.” This begins with his checklist. Which of the following statements about that checklist is correct?
A) Dunlop’s checklist begins by creating a portfolio of 100-150 donors assigned to a fundraiser.
B) The checklist specifies what the fundraiser should say or do with each donor.
C) The checklist serves to ensure that all fundraisers in a given organization stay on message.
D) The checklist isolates 10-25 of the best potential donors for special handling.
D) The checklist isolates 10-25 of the best potential donors for special handling.
The correct answer is D. A generation ago, Dunlop pioneered the idea of always treating the top donors as special over a lifetime, as opposed to just during a campaign. Experience has proven that isolating the top 10%, 1%, or even .01% pays off, if we put a more advanced process into motion through moves that make both institutional sense and good sense to the donor. But the process does require expertise and patience. The institution has to be willing to invest the resources against a potentially large, but often deferred and sometimes contingent, return.
What is meant by the phrase “moves management,” as taught by Dunlop, Sturtevant, and others?
A) putting the right moves on the donor
B) managing employee relocation
C) managing the gift planning cycle by deciding who will take which move in the process, how, when, and with whom
D) managing the relationships back and forth between charity and advisors
C) managing the gift planning cycle by deciding who will take which move in the process, how, when, and with whom
The correct answer is C. “Moves management” is the act of managing the gift-planning cycle by deciding who will take which move in the process, how, when, and with whom. The focus is on deepening donor engagement over time before making an ask for a potentially transformational gift.
Which of the statements below is (are) true?
I. A moves manager at a charity decides who will approach which donor, how, and with whom.
II. The natural partner is the one who has overall responsibility for that donor relationship.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
A) I only
The correct answer is A. The terminology goes back to Dave Dunlop, a highly regarded fundraiser. William Sturtevant writes about it at length in The Artful Journey: Cultivating and Soliciting the Major Gift. The system sees fundraising as a multistep process for several players. The moves manager is a fundraiser who develops a list of high-potential donors and manages the process of cultivating and soliciting them. The natural partner is a person who is well positioned to get an appointment with and influence the donor. The partner could be the president, executive director, a board member, or a close friend of the prospect and a fellow donor. The primary player is the natural partner best positioned to make the ask or to support the fundraiser when the fundraiser makes the ask.
Calculate the dependency ratio for the a nonprofit based on the following facts. Top five donors give $200,000. Earned revenue is $300,000. Total expenditures are $1,000,000.
A) 20%
B) 30%
C) 45%
D) 50%
A) 20%
The correct answer is A. Top five donors’ giving divided by total expenditures = dependency ratio. In this case, $200,000 over $1,000,000 = 20%.
With respect to the “overhead debate,” which of the following statement(s) is (are) correct?
I. Many funders prefer to pay for programs rather than for overhead.
II. Overhead is critical to the success of any program.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The answer is C. Both statements are true, and some funders are now adopting “pay what it takes,” meaning that they will pay their fair share of the overhead associated with a program.
With respect to Community-Centered Philanthropy, which of the following statement(s) is (are) true?
I. It is a counter-movement to “Donor-Centered Philanthropy”
II. It considers the needs and voice of the community served as important as – if not more important than – the personal preferences of the funders.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The answer is C. Both are true. Some funders see this as threatening; others recognize its value and are becoming more community-centered themselves, by listening to the voices of communities served and sharing the power with them.
With respect to “bonds and bridges,” which of the following statement(s) is (are) correct?
I. “Bonds” represent social capital within a tightly knit group (religious denomination, school, military platoon, dance club, bowling team).
II. “Bridges” represent social capital built between bonded groups (for example, a school with diversity as an admissions principle, a debate club drawing on different traditions, an Ecumenical Council drawing on many faiths, a Congress built to contain the energy of disagreement).
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The answer is C. Both are true. Today, it is easy to list many examples of bonding, but more difficult to list good examples of bridging, perhaps because of polarization.
