Episode 178: The Questions in Relationship Development | Pipeline Development (Part 1 of 5)
Welcome to another edition of Around with Randall, your weekly podcast for making your nonprofit more effective for your community, and here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett.
I can't thank you enough for joining me on this edition of Around with Randall. I want to start a five-part series today on what I think of, or I'll entitled, the questions of relationship development. And we'll break each of the next five podcasts, including this one, into five different areas and really try to address what's holding us back as relationship builders when it comes to our responsibilities and being out there in the community and really looking for as we've discussed on many different occasions, the idea of transformational relationship, gift opportunities. And again, that's not defined by a dollar figure, but maximizing what someone's interest is in themselves and in the organization which you represent.
Today we'll talk about what I think of as pipeline development, finding prospects. Then we'll jump into the four major parts of the donor cycle. We'll start with obviously qualification, then into cultivation, solicitation and we'll conclude with stewardship and funnel these around questions. What is it that we need to realize to be successful in each one of these areas? So today, part one, pipeline questions.
The question that I think that we tend not to ask the most often, but is the most important when we think about pipeline development is actually quite simple, but yet profound. How likely are they to engage? The reason I think this question is first and probably most important is a couple of full. Number one, we as the evolution of the internet and research has continued to develop. We have become fixed by and just obsessed with well screening. I'm here to say that well screening has a place. I think everyone within the legal and ethical requirements, not only of what maybe it's in the industry like healthcare, hip-hop or whether we're talking about FERPA and education or we're talking about just ethical practices. I think well screening has a place and we should do it to the limits that were allowed to. But at the end of the day, well screening tells us a lot about how much someone might give. And the question comes back to, if we remind ourselves of the question, how likely are they want to engage about likelihood? And we spend so little time on that. We too often see a well screen and say, well, they can only give, according to outside data sources, $500. And so we dismiss them. And yet we know there are holes in the well screening. Part of the challenge and the pipeline questions in this one being the most important is the realization, hey, not all information is perfect. Not all information is correct either. And really the only way that we can know what someone might give is if we build the relationship. But yet we tend to look at well screening and fail to even posit the question in the processes we develop in building pipeline, whether or not they have a likelihood to give or the higher likelihood to give. The second part of it as kind of a sub point is, are they at the right level? Meaning what you work toward as your range, maybe it's everything if you're in a smaller nonprofit, if you're in a larger nonprofit, maybe you're an annual giving officer or leadership annual giving officer, a major gift or plan, gift or principle gift. You work in certain zones of opportunity. We tend to think because well screening tells us, hey, you know, they can only give $500. But yet we know the data is not perfect. Some do it much better than others and I'm on the record. I'm a donor search built desk O fan because of the amount of data that is actually accurate. But at the end, it's still not perfect. They're indicators. Something's at $500. Well, I can't work with them. But yet they own a company and all their assets are in the company and the company's flush with cash and they're going to sell it. And yet, well, now they've the screen at $500. I should work with them instead of what we'll get to in a moment about more likelihood actually having the conversation finding some of those things out yourself. The other thing that we fail to to too often not engage in is the realization that the most likely donors, the ones that will choose to engage with you are the ones that have already given to you. They're live on silence last year, but not this year or unfortunately not this year, or maybe not this year. The cost involved with getting a new donor is hugely different than retaining a donor. So even if you got a gift of $25,000 from Randall and you're there the next year and they said, we can't do that. We can only do 5,000. I don't understand why we would just then posit the thought process. Well, they're not up to my level. So all of these things, whether it's the overall thought process, how we're addicted to data that gives us a little bit of inclination as to what might be possible, doesn't talk about likelihood at all, whether or not we figure out if they're at the right level based upon things that we sometimes can't know through screening or retention versus new. We'll get to the retention on the back end as the last question as well. We're spending more time with our people that we already know, believe in what we're trying to accomplish, they've given gifts. How likely they are to engage is a question we should ask more often and it should be the pre-reuminent question that we ask when we think about pipeline development. If we spent more time figuring out who was likely to give and less time figuring out how much we think air quotes if you can't see me on the video, that if we think they can give, we actually might develop more relationships for people who can give higher dollars because it's important to them at the end of the day, that's what likelihood is all about. Fashion. What is important to them? So the first hurdle question that we deal with in this by-part series and just subset in the pipeline or prospect research part is likelihood and the fact that we don't spend enough time thinking about it.
The second question in this pipeline area is do I trust the data management team? In some cases data management is the CRM because or an outside resource, I think of omatic as an add-on to what Black bottom resource edge does or an XT. It depends on the size of the organization, the sophistication, the amount of people, the dollars, resources, things like that. But the question is do you trust prospect management and research? I work with a number of places that have a prospect management research team or individual. That they are totally and wholly responsible for identifying opportunity for the gift officers and shuttling data from A out of the CRM into portfolios, which is tech in the CRM, into people the gift officer's responsibility. And I got a lot of gift officers that don't trust them. Now there are a lot of different reasons for this. I think most of it is around two factors, control and accuracy. One is the gift officers issue, one is the database infrastructure, prospect management teams issue. The first is control. I think in life generally we like to have control of what we're trying to accomplish. But some of us demand it more than others.
I'm probably at the more of the demand at a lot in terms of control I have in my life. Thank God I married someone who is about five million times better person I am who allows me that until she's had enough and then says, yeah, get back on the train. We're not doing that. She's always right. If that's true in life, that means it's also true for gift officers. We want control of the things that are possible, meaning our portfolio size and the people we hold on to and get into that in a few minutes. We'll also also we want to make sure that we we think we know what we know because we think we can control that. This is about faith. I played quarterback in high school, not sure I was all that good. But even though we didn't throw the ball that often for running a wishbone offense for which none of you probably know what that actually is. As a quarterback when I would drop back as a right hander, I learned that I had to have incredible faith in my left tackle. This is what the movie The Blind Side is all about, but Michael or that faith comes from when I can't see what's going on behind me, but my responsibilities to do something past the ball, limitedly, over here, but I can't see behind me. And I had a faith that somebody was taking care of that one side. The better your faith, the better your throws. You didn't worry about it. The same is true and move this football metaphor into philanthropy and gift officers. Intrusting your database management team, your prospect management team, your infrastructure team, whatever you tend to call them.
Too often there is an immediate distrust. Some of that is lack of control. Are we willing to have faith in the partners that are part of our organization and trust that they're doing the best they can, not to get it perfect, never to be 100 percent, but to give you the best opportunity to be successful as a gift officer. It's not to say you shouldn't know or understand what they're trying to do or have a unique understanding of how that information gets to you and why it's important. Go back to the football. I knew how important faith was to that left tackle. For me, I needed faith in him. And what I learned was I knew exactly who we should block as quarterback. Sometimes you have responsibility to kind of know what's going on all over the field. I knew what responsibilities were. I understood that. I understood if they were in this kind of defense, there was going to change how we altered section. It could mean depending if the player was really good lined up over that left tackle. We might have to chip on him from a tight end or in our case, a wishbone left half back. All those things were known. But at the end of the day, my job wasn't to block. My job was to be the quarterback and I'm passing place throw everyone. So all we completed a pass.
The same is true here. That tackle would get beat. I'd get hit. They give you data. They don't turn into a donor. It turns out that the data is not perfect. And so some of this is a realization that perfection is not possible. But yet you have to have faith that the people who are doing it or doing their best, they're good at it. They're attempting to move the team forward. And then without them, you aren't going to be as successful. The second part of all of this is are you using good data? And this is where faith also comes into place. Do you trust them? Because if they're using artificial intelligence, you have to understand and believe that they actually know what better than you do. I have three or four clients beginning to get into this and there's this hesitancy with the gift officers like, this is just bad data. And I'm like, that's not actually true. It's not that it's perfect data, but it's better data. It's actually with artificial intelligence when we do it correctly, education, healthcare and other places, focusing on the people who want the first question, most likely to be engaging in the conversation. So the responsibility of prospect management is to show process, to show good data. But in the end, the gift officers are going to have to learn to trust much more so. And yes, trust comes over time. Yes, trust is earned. But a little faith along the front, when the ball is snapped and it's a new left tackle, I don't have a lot of time or didn't years ago, decades ago to figure out if they actually knew what they were talking about. They had to have faith that the system, the program, coaches, practices, all the other things that were going on, we're going to take care of that person's learning curve. Do you trust the prospect management team?
Question number three, are you and I willing to try new things to develop relationships? When we add things like clinician engagement for the first time where it's not just a mailing program, it's active engagement with the physician. And we'll come to this in a moment in terms of these relationships or referrals from a board or it's a new way of looking like AI of getting you prospect names are you and by the way, now new communication tools. We have less and less people picking up the phone. Are you willing to use texts? Are you willing to use LinkedIn? Are you willing to use Facebook? Are you willing to use different techniques? New things to start and have conversations. What I find is those that are hesitant to adjust to evolve end up being left behind. That's not about fundraising folks. There's can't tell you how many examples in case studies out of the Harvest Business Review and other outstanding educational institutions, including my own master's work as a within MBA where you study people who chose not to adjust. My favorite story is Eastman Kodak. Where do you think Xerox came from in terms of copy? Eastman Kodak they didn't want to adjust. Where did the idea of digital cameras come from? Did you know the first digital camera, what we think of in our iPhone was developed at Eastman Kodak in Rochester, New York? Didn't want to do it, didn't adjust. There's all of these moments in our life where we have to choose am I willing to take a chance? Am I willing to do something a little different? Not against ethics, not against morals, but a little bit different. Question three for us is am I willing to try something new? Do we need to communicate? New way to build relationships? New way to engage? If you're not eventually time will catch up to you. And so will the metrics that you don't want because you're not willing to think about it a little bit differently. Push through that envelope and we'll get a lot more into this in terms of qualification questions next week.
Number four do I have the right kind of relationships and right kind is capitalized. And what I'm talking about are referral agents. Every data point I've ever seen in 27 8 years of doing this says that the best way to enter into a new relationship is through referral because it encapsulates trust and you get inside that cone of trust that a person has with a potential prospect and they're sharing that trust with you, but you have to have a relationship with that referral agent. Physicians are notoriously challenging to do this because they don't understand philanthropy. They don't know who you are. It's their patient. You're going to screw this up faculty members at universities a little bit more likely because what they understand is is that they had an impact on these lives either recently or could be decades before. Then we get into boards and volunteers and campaigns got a client that maybe didn't quite do it the way I would have recommended and now they're stuck. And it's because their volunteer board doesn't really want to make introductions. Even though the relationship is good with the right kind of relationship with the what I call the fundraising team, which means they have the right kind of relationship with the fundraising team, but they don't have the right relationship with themselves to feel comfortable in making those introductions. If you don't have the right referral agents, the right trust with them, what you end up with is a lot of names and not a lot of action. And this is why you got to spend time treating your referral agents like a major donor. Do you have the right kind of relationships with those that act as your for all agents is really paralleling? Do you have really good relationship with donors? Because if you do and with the right ones, metrics is never a problem. Pipelines never a problem. So the fourth question in the great pipeline question conversation is do you have the right kind of relationships with your referral agents? And number five, are you willing to bless and release define room for new prospects? I cannot tell you how many times not every year, not every quarter, not every month, but every week I am dealing with gift officers. When I started asking questions about pipeline, I hear numbers like 150, 200, 250 and they don't have room for new prospects. Pipeline. And I'm like, what are you doing? You cannot have that many people that are at the right level of giving for what you do and have a likelihood that they want to engage with you. What I find most often is they don't have the likelihood with a well screen really well. I come back to what I said and you can go back into other podcasts where I talk about this specifically. The ideal pipeline or excuse me, the ideal portfolio size is not 125. It's somewhere between 45 and about 70. There's factors in that. But it's a smaller number and you have to be willing to let go of people. You might let go of the ones that are highly well indicated, but aren't willing to engage. What goods have someone with a great deal of money that doesn't want to talk to you or they've made the largest gift they're ever going to make so you're requalifying them. And podcast, blessing, releasing them. It's hard to do the last one, blessing and releasing if you don't have the first four, if you don't have a pipeline. So I'm not saying in and of itself, it's easy, but we need to get better at letting people go. I'm not going to break out in a Denim and Zell and Disney's let it go, but I am telling you you should think about it. You should be blessing and releasing multiple people per week per week. They're coming in. They're not qualified. I've made a gift. I'm holding on to them, but I don't know what to do with them. At a certain point, we got to bless them release and let them go. If you don't let and go, your portfolio gets too big, then it becomes paralysis by analysis. And then you're defeating the whole purpose of having some type of prospect management, process, system, team, support. If you can't let people go so the new group of people that they are working through to figure out who to give, give you as a gift offer to the best opportunity, a chance to be successful. Just a quick recap. How likely are they are to engage is more important than whether or not they're wealthy. Number two, can you and do you have the trust with the database team, the prospect management team? Number three, are you willing to try new things to begin relationships, to think about how that will get more into that detail? But are you willing to push the envelope and be a little uncomfortable? Number four, do you have the right kind of relationships with the people who are the referral agents?
And finally, are you willing to bless and release so you have room in your portfolio to do the previous four things that get you to better opportunities? There is no question that this year, whatever this year is for you in terms of your goals is most important. I'm not taking away from that. But our turnover rate at 17 18 19 months for gift officers, intermediate major gift, plan gift, principal gift. I don't care. Is so short, we don't ever develop the relationships we need with our donors. Part of the reason is we don't have pipelines and we start looking down the road and going, no, it's a look very good. I got to get out of here, which gets us back to answering these five questions. You want to know how to create longevity in your job. There's not a family, your family is not moving to another part of the country or whatever. You're scared about your performance, start with pipeline. And what you'll realize is if you control pipeline and you have the answers to one of these or all of these five questions, you'll be there longer and you'll be more successful. I promise you. Challenge yourself with the pipeline questions and probably more important, the right answers. Next time we'll delve into qualification and the big questions there. Don't forget to visit the website, heletflan3.com to check out the blogs tour three posts per week. You can get an RSS feed right to you, write about 500, 400 words per blog. Take about 90 seconds to read. Give me something to think about. Maybe challenge status quo. So don't forget, if you want to reach out to me, it's podcast heletflan3.com. I don't really ever like to ask, but I probably should do it more often. If you have a comment, whether it's on Apple or Spotify, YouTube, wherever, leave a comment, rate this opportunity, this show to help me be better at what I'm trying to give to you. Don't forget that what you do is critically important. You are a conduit. You are a connector. If you're a major gift officer, if you're a leader, you're executing on the mission, leading that mission. If you're in the database team or special event, whatever it is you do, you play a really big role for nonprofits and we need these nonprofits. There's more and more people that need this kind of opportunity, service, outreach, however you want to put it because what philanthropy, love of mankind, love humankind is all about is filling the hole somewhere between government and private enterprise. Non-profits come in and they fill that gap where it's not economically plausible to do this and the government can't quite get to it and maybe through partnership as well.
Philanthropy is about making a difference for people and things in a community that are important. I hope you know that you are as well because you're making a difference for your nonprofit and for the people in your community. I hope you believe that it's a difference maker.
Don't forget, some people make things happen, some people watch things happen, then there are those who wondered what happened.
You are someone, be someone and can be someone who makes things happen for a lot of other people who are wondering what happened.
I look forward to seeing you on part two of five on the great questions that are holding a conversation next time on Around with Randall.
Don't forget, make it a great day.