A Journey in Discovery Learning

“If it is to be, it’s up to me”

— Not sure who first said this but it’s spot-on.

I’ve been in the fundraising/development business for twenty years now. Yes, I attended classes, read books and spent numerous hours seeking the counsel of others. Some stuff I learned worked, and others just didn’t fit my style. The bottom line is that asking others for money is a very personal endeavor. You must be passionate about your mission, understand human nature and realized that in the back of every donor’s mind is a little voice saying, “Can you trust this person with your money?”

My most successful endeavor was establishing a nonprofit foundation supporting a government educational institution where we started from zero and raised over $13 million in just over seven years. Now, this is not big money compared to capital campaigns where universities and hospitals raise hundreds of millions of dollars for buildings and facilities. But for a small foundation whose mission is to “provide the margin of excellence” for a government supported school, this is a huge amount.

At the time I was asked to establish this foundation, I had raised money to support several small nonprofits in my community, but I certainly was not a professional fundraiser. Because of my business dealings I was reasonably well connected to several business leaders but by no means would anybody consider me a “mover and shaker” in my community. But I was known as a “doer,” a person who was organized and could be counted on to get things done.

The reason for this essay is not to brag about myself, but to share with you the journey that led to what some have considered a tremendous success. It’s a story about humility, persistence, a reasonable amount of fear mixed with a determination to protect my personal reputation—if I said I could do it; I was determined to do it and do it right. A little fear can be a great motivator. It is also a story about what I learned about the art and science of fundraising. Yes, art and science. The science is the step-by-step process that sets the conditions for a successful ask. The art is determining the time, place and circumstances for the ask—closing the sale and collecting the money.

For someone relatively new to the field of fundraising (development), it was also seven years of discovery learning. I attended conferences, participated in webinars, read books and continuously sought the counsel of others.
I came to appreciate that asking for money to support a just or worthy cause is as much about psychology as it is about what I call the three “Ps” of fundraising: planning, passion, and persistence.
In my civilian career I was a professional business developer so much of what I learned in that field had application to fundraising for nonprofits that entailed building a solid business case, doing research about the client, understanding and appealing to the client’s needs, making a convincing case, overcoming objections, and closing the sale.

I had the great fortune of having a board chairman who I had known for over twenty years. He and I and another friend were the three founders of this new educational foundation. We carefully selected board members who we knew were advocates for our mission and passionate about serving our specific constituents. Our founding board members were fourteen community leaders and successful businesspeople. Bottom line, they had access to resources. By the end of our first organizational meeting where we laid out the goals and objectives and the showed them a timeline of what it would take to establish and stand-up this foundation, they pledged $200,000 over a three-year period to launch this new foundation. But they made it clear they expected me to do the leg work.

Once established, we initially elected 30 individuals as trustees. I realized that my board, while passionate about our mission, were not nearly as passionate nor as committed as I was about building this new organization from the ground up. Most were business professionals who had day jobs. They were advice givers, not doers. They were not about to roll up their sleeves, grab a shovel and start digging in. Many were senior leaders who were used to giving orders and directing those who would wield the shovels. It became apparent that they were good at helping me meet people, opening doors and making introductions but were neither comfortable nor interested in asking for money. If we were to make this work, I had to become the “heavy” who drove the process and the closer who collected the money.

A mentor of mine once told me, “be smart enough to know what you don’t know and surround yourself with others smarter than you.” So, I spent some of our meager resources attending a Council on Foundations annual conference held in Pittsburg, PA. I met several professional nonprofit leaders and learned a great deal about the various types of nonprofit organizations. I attend a seminar for CEOs and was surprised to learn that the facilitator for this class lived about 15 miles from my house. He had been in the nonprofit business for over 30 years. He was well-schooled and tremendously experienced. I immediately latched on to him and a short time later I invited him to join our board. He became my mentor and soon gained the confidence of the entire board.

For the next few months, I negotiated a donated space and reached out to my friends who donated office furniture, computers, and supplies. The government educational institution that we were established to support was very skeptical. They had never had any outside organization helping them and were concerned about the legality of accepting our support. So, the challenges we faced were (1) figuring out how to establish business operations and raise funds to support our mission, and (2) dealing with a beneficiary that was both skeptical and leery about the legality of the role we were playing.

Initially I was the only employee. At our first formal board meeting, I presented a plan for the way ahead. My new trustees listened carefully, gave some advice, agreed on the direction for the way ahead but promised nothing. I remember thinking what I needed was a board of doers, not a board of directors. I quickly determined that if it was to be, it was up to me. In all future board meetings, my trustees cheered from the sidelines when I scored and booed when I fumbled. I grew comfortable with the fact that if I was producing results, they would leave me alone. I was fine with that.
As the founding CEO, I was instrumental in building the board of trustees. I was smart enough to know that I needed senior business leaders capable of making a substantial financial commitment, making decisions, influential in the community, passionate about our mission and dedicated about the success of our endeavor. I was also influential in selecting the foundation officers. The best decision I ever made was convincing our board chairman to “hire” a very successful entrepreneur, former military officer, to join our board and shortly thereafter elect him as president of the foundation.

Early in the development of the Foundation we realized we were not well schooled in the management of a nonprofit, so we hired a fundraising consultant to help us get organized and properly focused. We wrote a request for proposal and reached out to five firms to bid on this work. We chose a firm that originally wanted one-year contract at $12,000 per month but we eventually negotiated a six-month contract at $12,000 per month –a total of $72,000 with an option to continue with the work for another six months. That was a lot of money for a new start-up, but it turned out to be well worth the cost. Our president at the time was a very successful and dynamic entrepreneur who lead the trustees in a discussion about the need to hire this consultant. The issue was the cost. So, he said, “Okay, I’ll pledge $25,000 to pay for the consultant,” two others in the room matched his offer and within 5 minutes we had the $72,000 necessary for me to sign the contract and commence work. This is a perfect example of what a real leader can do to support and drive decisions.

Although expensive, it turned out to be a very worthwhile investment. The consultant not only counseled me, the CEO, but educated the board about their duties and responsibilities. He also provided drafts of all nonprofit policies to ensure good governance, proper administrative procedures, and compliance with state and federal regulations. One thing that always stuck with me was the five steps for fundraising that proved to be the most valuable part of their education—more on that later.

Planning is the hallmark of the military profession, so we instinctively knew that we needed a plan. We developed the following approach. First, we would determine our short-term, mid-term and long-term goals. For each set of goals, we would determine what the funds would be used for, the cost to achieve each goal and then developed a list of the kinds of donors most likely to support each. We were also mindful that we had to fill three buckets; (1) unrestricted operational funds that we needed to pay staff and all overhead expenses, (2) temporary restricted funds to pay for programs of a fixed duration, and (3) permanently restricted funds that we would invest and use the dividends and interest from those investments to fund programs in perpetuity.
The first bucket was the hardest to fill because not many donors are interested in paying the staff, buying ink, or paying for your accounting services—the cost of doing business. Most wanted their donations to pay for specific programs where they could see measurable results.

To fill the second bucket, we developed a gift book that listed programs that our beneficiary wanted to see funded and then “shopped” this to donors who were interested in investing in specific programs. We “taxed” each gift 20% to help pay for business overhead and put those funds in the first bucket.

The third bucket, the permanent endowment, was reserved for the mega-investor. Individuals with the capacity to make gifts over $1 million. We found such a person. What follows is the story of how we attracted his investment. Likewise, interests and dividends earned from our permanent endowment were taxed to help us pay for our required business overhead.

The Great Recession that lasted from December 2007 to June 2009, began with the bursting of an $8 trillion housing bubble. The resulting loss of wealth led to sharp cutbacks in consumer spending and a corresponding loss of value in the stock market. This was touted as the worst employment contraction of any recession since the Great Depression. I had no idea at the time this would be a problem as we launched our fundraising campaign. This was a case of what you don’t know won’t hurt you.

Unfazed by the grim economic reality of the Great Recession we grew our asset value from $574,050 at the end of 2007 to $6,750,996 at the end of 2009. It was a case of willful ignorance coupled with not wanting to accept excuses.

As we began raising money, I soon learned that you could get exhausted chasing $100 gifts. What I came to understand is that nearly the same level of effort is required to obtain $1000 gift. But I also realized that to achieve any fundraising goal you need a plan.

Attracting our Greatest Investor

During one of our board meetings, we asked all trustees to make a list of at least 10 people they knew who might be interested in investing in our foundation. Notice we said investors instead of donors. We want our donors to know they are investing in the future of others.

As we went around the room discussing the names on each list, one trustee said he knew a prominent billionaire. After the meeting I pulled the trustee aside and we went to my office to discuss how best to approach this wealthy individual. This led to a 2 ½ year campaign to build a relationship with this wealthy individual. I found six books written about this person. I read each of them to understand his passion, motivation, and the things he cared about. He had established three foundations. I pulled their Form 990s to determine what each foundation did and what they had invested in and how much they had given to each beneficiary. I asked my trustee to invite me to any function where I could meet this wealthy person to build a personal relationship. I visited with several of the organizations this wealthy donor had supported in the past to get an understanding of what he had supported and why.

This was not a quick nor inexpensive process. I travelled to New York City, Washington DC and Dallas to rub elbows with this individual, visited with him in his office and met his key staff. At about the 2 ½ year mark I thought it was time to make the ask, so I made an appointment and visited with him in his office in another state. But after a few minutes of our meeting, I could tell that something wasn’t right, so I deferred the ask. Even when he said, “how can I help.” I said, “I’m not here to ask for your support but since you offered, I’d like some time to think about it.” I subsequently went back to the organization we supported and together we developed some options for our potential donors’ consideration. About six-weeks later we invited him to come to our location where we took him on a tour of the facilities. We had lunch with the head of the school in his personal quarters and then spent time with him in a classroom with some students where he joined in a discussion on a subject of his personal interest. The last meeting of the day was with me in my office where I presented him with two options for his consideration. After only 20 minutes, he said thank you and with that he got up and said, “I will get back to you on Friday.” That evening we hosted a dinner in his honor with the head of the institution and other VIPs.

The result of this effort was the largest individual gift in the history of his philanthropy, our donor decided to pay for both programs we presented for a total of $6.1 million—a major windfall for our foundation. All of this occurred during the so-called Great Recession, a period when the markets were down and many on my board were wringing their hands over the bad economy. I guess I wasn’t smart enough to know this would be a problem.

The five steps for effective fundraising

As noted above, our fundraising consultant mentioned five steps for effective fundraising. They are:

1. Identify. The includes making a list of candidates you think might be interested in investing in your nonprofit
2. Qualify. As you do your research look for those who have given to other causes and have a history and the capacity to give
3. Cultivate. This is the most important and time consuming. Find out what’s important to them, learn about them: background, education, passion, causes they support.
4. Solicit. Whereas the first three above are more about process, solicitation is an art. Finding the time, setting and circumstances to make the ask.
5. Recognize. Take time to say thank you, and not just a note or letter that is required by the IRS. Ask your trustees to call or send notes of thanks. Celebrate your donors by announcing their gifts in newsletters, in annual reports, magazines or in person at social functions.

After Action Review

As a retired military officer, I was accustomed to the concept of conducting an After-Action Review (AAR) after each military operation. As a former VP of a technology firm, I instituted this practice after each proposal that we either won or lost to learn from our mistakes and reinforce those things we did well. Clearly, our AAR for this campaign was important. Here’s what we learned.

• Never try to second guess what an individual donor will or won’t do.
• The number one reason high net worth individuals give money is because they want to make a difference in the lives of others.
• Nobody likes to give money away but if they do it has to be for something they are passionate about.
• People give money to people they know and trust. Building trust takes time.
• Be kind, considerate and always ask of there is anything you can do for them. To quote Teddy Roosevelt, “Nobody cares how much you know, until they know how much you care.”
• Remember God gave you two ears and one mouth. Use them in that proportion. You will learn a lot about an individual by listening to them. It may reveal their passion.
• Assume they will research you and your organization. Likewise, you must do your research on them and their organization. Prepare thoroughly—you never get a second chance to make a first impression.
• Be patient, deliberate and thoughtful in your approach.
• Conduct your solicitation in person, free of distractions. Leave them with a proposal or case statement that answers the questions, WHO, WHAT, WHERE, WHEN, WHY, and HOW MUCH you’re asking for. I always include a budget.
• Be prepared to respond to their objections. Help them find ways to make the gift happen.
• Once they accept, ask for their offer in writing. In my case the donor said, “Oh, just write me a memo about what we agreed to and send it to me and I’ll countersign it.”
• Expect that when the donor turns the agreement over to his staff, they will probably ask for several documents: your IRS tax determination letter, a copy of your last audit, your most recent Form 990, list of your directors/trustees, and perhaps the process whereby they can transfer the funds directly into your account.
• Ask your trustees to send a personal letter of thanks to the big donors, studies have shown that your best donors are those who have already given.
• Don’t send a staff member to ask for money, donors want to speak with the boss.

Access

I mentioned the institution’s reluctance to embrace the Foundation. Over time they came to realize we were an asset that could help them realize their goals. Military schools are funded by money appropriated by Congress. Those funds come with many restrictions. Additionally, the military ethics regulations preclude government employees from asking for help from outside resources. As CEO of the Foundation, I was often invited to attend meetings where I initially sat in the back row, quietly taking notes but eventually was invited to sit at the table when they discovered I would come forward and offer to help with funding support in areas where they could not use government money. Funds for things like travel and registrations for meetings, conferences, and community relations activities.
I recall at one meeting the deputy commandant was discussing the need to examine how the private sector could help in establishing entrepreneurial development activities in Afghanistan to employ young people who may otherwise be attracted to joining the Taliban because they were desperate to find a means to support themselves and their families.

At the time, I was a friend of the CEO of a prominent research center that dealt with entrepreneurial development. Together we developed a conference and between the three organizations (the military school, the Foundation, and the research organization) we attracted nationally known speakers to come to our area for a two-day conference to discuss what came to be known as Expeditionary Economics.

We published the Proceedings from the Summit on Entrepreneurship and Expeditionary Economics: Towards a New Approach to Economic Growth Following Conflict or Disaster. These proceedings were then hand delivered to the U.S. commander in Afghanistan for his consideration. The commandant of the military school was impressed by our reach and influence in the community, this led to even greater access to meetings and social activities that made the Foundation a partner in support of the school.

Being Creative

Unrestricted money is always hard to come by, so you need to be creative and innovative in your approach to fundraising. I sat in on a meeting with the dean of the college where he discussed developing a new program in homeland security, so I devised a program where the school I supported would partner with a local state university to co-develop a master’s degree in homeland security. Homeland security was all the rage after 9/11. Several universities were developing programs. Many were not very good nor were they very useful.

The U.S. Northern Command is responsible for the security of the continental United States. They developed several criteria for advanced degrees in homeland security, so we developed a proposal and secured the support from our local Congressman to help us compete for a grant from the U.S. Department of Education. Two years later we were awarded a $250,000 grant from education department. Thirty-seven percent of that grant was for overhead expenses that immediately went into our unrestricted account. I detailed a member of my staff to be the program manager for this task and his salary was paid from this grant. The next congressional project was the brainchild of one of my trustees who lived in Washington DC.

5-Star Generals Commemorative Coin Program

Congress may authorize up to two commemorative coins each year that celebrates and honors American people, places, events, and institutions. Although these coins are legal tender, they are not minted for general circulation. Each commemorative coin is produced by the United States Mint in limited quantity and is only available for a limited time.
As well as commemorating important aspects of American history and culture, these coins help raise money for important causes. Part of the price of these coins is a surcharge that goes to organizations and projects that benefit the community.

Established in 1881, the United States Army Command and General Staff College (CGSC) has played a decisive role in the education and training of officers in times of war and peace. It has had a profound effect on many fields of battle by providing its students the required skills of battle management, leadership development, and the most modern and effective command and staff action procedures. All of these have been key to our Nation’s success in its many military conflicts, which have helped preserve our freedoms and way of life. The CGSC is the country’s oldest and largest military staff college.

The 5-star generals who attended or taught at CGSC are:

• Douglas MacArthur
• George C. Marshall
• Henry “Hap” Arnold
• Dwight D. Eisenhower
• Omar N. Bradley

According to the Public Law passed by the US Congress, the Secretary of the Treasury was authorized to mint and issue up to 100,000 $5 gold, 500,000 $1 silver and 750,000 half-dollar clad coins in recognition of these five United States Army 5-star generals to coincide with the celebration of the 132nd anniversary of the founding of the CGSC. As authorized, in 2013, the United States will honor the generals with the minting of three commemorative coins. Their five portraits will be distributed across the three obverse (heads side) coin designs, while the reverse (tails) designs are all emblematic of the CGSC at Fort Leavenworth, Kansas.

The final designs were approved by the Department of the Treasury on September 7, 2012, after consultation with the CGSC Foundation and the U.S. Commission of Fine Arts, and review by the Citizens Coinage Advisory Committee.

In 2013, the five-Star General Commemorative coins were sold by the U.S. Mint, the surcharges earned from the sale of these coins netted the CGSC Foundation, nearly $3 million.