The 4 Myths that keep homeless service organizations from major gift success

Working with over 200 organizations that focus on serving people who are homeless, hungry, and living in poverty, I’ve come to conclude that there are 4 myths that keep organizations like this from achieving their full potential in major gift fundraising.

As you read this post, maybe you’ll recognize some of these myths. Maybe you’ve heard a colleague or board member say them. Or (and no, you don’t have to raise your hand), maybe you’ve even thought or said them in the past. Either way, my hope is that this post will help you bust those myths in your organization and raise a whole lot more money for your cause!

Myth #1

Our donors are small dollar, grassroots supporters. We can’t ask them for a lot. They simply don’t have that kind of money. 

Truth #1

A few years back I was part of a study that looked at the financial capacity of donors to domestic hunger and poverty organizations. We analyzed donor files of more than 40 organizations, of all sizes and from all parts of the country. We looked at small, medium, and large orgs. We looked at orgs on the West Coast. In the Midwest and South. On the East Coast. Urban, rural, and suburban.

Consistently, we found that anywhere from 18% – 23% of donors on these files were people with cash capacity of a million dollars or more. On several files, we even found Billionaires!

This was consistent across all of the files, showing us that even though many of the donors to social service-related organizations are small dollar donors, there are plenty of donors who can give significant gifts — if they’re engaged appropriately.

Myth #2

We aren’t the children’s hospital or the university. What we do isn’t sexy enough for big donors to get excited about. We don’t have those kinds of opportunities.

Truth #2

For a long time, many organizations (and even many consultants) believed this!  But over the last few years, I’ve seen many organizations that work in the domestic hunger, poverty and homelessness sector break this myth. Here are four specific examples…

A. A Midwest homeless service organization raised $1 Million in a six week period to help fund expansion of a successful long-term recovery and housing program focused on chronically homeless men. The funds were primarily used to hire additional caseworkers to support increased capacity. The success of this campaign rested on the organization’s ability to tell great stories about people who had come through this program and were now successfully re-entering society after 10+ years on the streets.

Gifts to this campaign ranged from $100 to $85,000.  Yes, you read that right. $85,000. This campaign also surfaced TWO estate gifts that were previously unknown to the organization!

B. A shelter in the South raised $2.2 Million in just two months to help make their facility more accessible to people with disabilities, and to hire additional caseworkers specifically to focus on serving homeless men with disabilities. This organization was able to tell stories and share examples of people who needed help, but who were unable to receive it because their facility lacked the infrastructure, and they lacked the specialized staff to serve people with disabilities.

Gifts to this campaign ranged from $50 to $125,000 from individuals. Many of the donors who gave to this campaign were previously LAPSED $1,000 donors!  Excitingly, this campaign also encouraged a lapsed corporate partner to renew their giving with a $500,000 gift!

C. One poverty relief organization in the Northeast raised over $600,000 in six weeks to fund a job training program by telling the stories of formerly homeless individuals who came through their training program and are now gainfully employed in the community.

This campaign generated gifts that ranged from $50 to $30,000.

D. One shelter on the East Coast raised $300,000 in 30 days to fund additional staff they needed in order to open a brand new women & children’s shelter that was sitting empty because they couldn’t afford to staff it. They told stories of single mothers in the community who, along with their young children, were sleeping overnight in their cars or in tents in the woods because they had no safe place to sleep.

The revenue generated from this campaign was in addition to what they regularly raised at this time of year — it was additive!

Myth #3

We don’t have an established program. We don’t have a process or systems, or maybe even the right people to be successful. We can’t start a major gift effort until these things are in place. 

Truth #3

If you wait for the perfect system, process, tools, and staff, you’ll NEVER start. Delaying until you have this stuff in place is a crutch for the timid, and those afraid of asking for money.

You need five easy things to begin a major gift program.

A. Your WHY (why do you exist, why are you undertaking this project)

B. A simple plan (1-2 pages, NOT an extensive document)

C. An offer (what you’re selling)

D. Needs list with costs

E. A list of donors

If you commit to making major gift success a priority in your organization, you can pull all five of these things together in 5-10 business days. Many organizations that never get a major gift program off the ground fail because they create a six or twelve month plan to create a major gift plan. There’s no reason for that!

10 business days. 5 simple items. Start now.

Myth #4

We don’t have anything to sell!

Truth #4

If that’s true, you should fire all your staff (including yourself), send your clients away to an organization that is actually doing something in the community, sell off your assets and shut your doors. You don’t have a reason to exist — and you sure don’t have a reason to be asking the community to support your work!

If I’m wrong, that means you DO have something to sell. If you work in the domestic hunger, poverty, and homelessness sectors, that might look something like this:

  1. Job training programs
  2. Day of meals
  3. Advocacy efforts at the state and federal levels
  4. The need to purchase property for permanent supportive housing
  5. Financial literacy training programs
  6. Purchase of a farm and farm equipment
  7. Childcare program
  8. School supplies
  9. Medical & dental clinics
  10. A new food truck
  11. Staffing
  12. Additional bathrooms and shower facilities
  13. New HVAC systems in your shelters
  14. Increased bed count
  15. Secure youth, LGBTQ, or Transgender housing facilities
  16. Public inebriate care programs
  17. Respite or hospice care
  18. Alcohol, drug, and gambling addiction recovery programs
  19. Baby formula and diapers
  20. A furniture bank
  21. Purchase fresh produce for meals
  22. Nutrition / cooking training
  23. Expanding your service area or demographics served

There. That’s 23 potential programs that you could start selling if you provide those kind of services. If you don’t do those, or if you’re in an entirely different sector, go through the same exercise. Then put costs to those things. Now you’ve got a needs list with costs!

Now that we’ve busted those four common myths that hold many organizations back from major gift success, where do you go from here?

Here are the 7 steps you need to take to get your program launched:

  1. Commit to making major gifts a priority in your organization
  2. Start where you are
  3. Define your WHY (why do you exist / what unique value do you provide)
  4. Write a plan that answers these six questions
    1. What’s the problem/need?
    2. How will your organization solve it?
    3. Why are YOU the best solution in the community?
    4. What’s the cost of your solution, and how will you spend the money?
    5. What benefit will this create, and for whom?
    6. Why is it critical that donors fund this project NOW?
  5. Decide how many calls and visits you can do in a month
  6. Build your list
    1. Rank donors by single largest gift. Then re-rank that list by recency of last gift. Start with the top 30-50 names.
  7. Start dialing!

Please note: I reserve the right to delete comments that are offensive or off-topic.

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