Business as usual has never really been business as usual for nonprofits. Each new presidential administration and the efforts to cultivate that next generation of donors leave very little room for complacency, especially in the financial arena. Keith Hopkins has made a successful career out of assisting nonprofits of all sizes with fundraising campaigns. MiBiz spoke with Hopkins about how nonprofits are dealing with the current environment and what that could mean for their fundraising activities.
What are the biggest challenges nonprofits face in terms of fundraising?
I don’t know if there’s anything unique. The challenges are always finding leadership and donors. People are busier than they’ve ever been, especially those with younger families and with two people working outside of the home. It’s finding that energy to get community campaigns done and making the case that what you have in mind is worthwhile.
How does the current environment compare to recent years?
It’s not as hard as it was in 2008 or 2009 when we were in the depths of a recession and it was tough for arts organizations to raise money because people were focused on giving to organizations focused on addressing basic needs. But the economy really recovered and all of the campaigns I’ve done have either hit or gone over their goal. The bigger change for cultural arts organizations is what’s going to happen with governmental funding.
How are proposed cuts to the Federal budget going to impact them?
There’s a lot of negotiating that will happen between now and the final budget. This Republican administration wants to fund things they consider a higher priority. Arts and culture organizations may have to lean more heavily on donors if they want to offer the same number of plays or same hours of operation.
They’re going to have to be more aggressive with their donor community. Donors will have to make choices. Some will say that we have to rally to the cause and do what they can to keep the organizations afloat. In larger communities, arts organizations are banding together to create arts endowments for all of their community.
Governmental funding depends on who’s in power. The political winds have shifted and many feel that the arts are nice to have, but not critical. I don’t know what we’re going to see out of the national or state budget.
What fundraising methods are proving the most effective?
Ninety percent of the campaigns I work on are done face-to-face. Donors will want to ask questions, eyeball the leadership, and find out what the organization will do when the funding is up in three to five years. You owe them that courtesy. At the core of fundraising is relationships. I don’t think that is ever going to change.
How is the millennial generation affecting the seamless procurement of donors?
Most millennials don’t have a lot of disposable income. Many of them may be buying their first home or getting married. They might be doing some giving, but engaging them as volunteers or getting them to engage through a golf outing or auction is more likely. As they grow into middle age, they will become leaders in their community and their income will grow. A lot of it has to do with the life cycle. We’ve got baby boomers who are retiring and they’re coming into their greatest years of wealth inheriting through their parents. We’ve got Gen Xers, which is a considerably smaller group and they are a bigger challenge because fewer of them are more frequently engaged.
This is a pretty universal challenge, right?
Every nonprofit is trying to crack the code of how you get that next generation of donors. If you can show them that we have people who need housing and kids who need food and get them to volunteer and engage with your mission, they will be more likely to give. They don’t want to come out to meetings.
Are you seeing the next generation of major philanthropic families stepping up?
In most cases, they are. I see it with the Meijer, DeVos and Van Andel families. We’re starting to see that second and third generation become very engaged in fundraising. That philanthropic gene is being passed down.
What causes campaigns to stall out or fail?
The most likely cause is a lack of planning on the front end, although you can’t control factors such as the economy suddenly going into a recession. There are also a few external factors, including having a campaign chair who passes away halfway through a campaign.
Campaigns fail 80 to 90 percent of the time because they didn’t do a feasibility study, didn’t meet with foundation leadership, or didn’t lock up the right leadership. I am constantly preaching that there’s no fire and rush to get it done. The average campaign takes between 10-14 months, but that doesn’t include the feasibility study.
What is the best approach to getting people to donate?
The number one motivator for most donors is that they see a big need in their community and they’ve got excess money they can give. Many also give because they are asked by the right person. If the phone rang tomorrow and my brother called me and said he was helping to raise funds for an organization, I’d say yes because he’s my brother, I love him, and I trust his judgment. Most people are motivated by what’s in their heart and the needs they see.
How do you avoid donor fatigue?
One of the downsides of being a generous person is that the word spreads and you end up on a lot of lists as a potential donor. You have to be more sophisticated in how you give. You can give small gifts to lots of people or make impact gifts, but you have to be clear that you have two or three priorities, and that’s who you give to.
How many campaigns can a community sustain at any given time?
Some of that is dictated by the economy. In any community that has colleges or hospitals, you can count on one of those having a campaign at any time. I have seen five to seven campaigns going on in any given year. In a community the size of Kalamazoo or Grand Rapids, it’s hard to tell. I’ve seen some years when the economy is humming and there have been a lot of campaigns.
What’s your best advice to nonprofits for surviving in the current environment?
One of the things I want people to remember is that there’s a lot of angst and concern about what’s going to happen with the Trump administration’s budget over the next three years. There’s also talk of some significant tax cuts and when that happened during the Reagan years, giving jumped considerably. For nonprofit leaders, it makes sense to have a contingency plan, but you also have to take into account what impact proposed income tax cuts may have on giving.