Episode 297: Creating a Quantifiable Risk Assessment for that Significant Solicitation
It's another amazing day right here on this edition of Around with Randall. Today we're going to do a deep dive into trying to quantify put numbers a process with some teeth to it, to the idea of figuring out how much to ask for in solicitations. If you're looking for some basic information or some other details of the solicitation area within the moves management donor relationship process, you can go back.
Episode 23 of Around with Randall handles the basics with a follow up episode in 181. Number 181 handles key questions that you need to be thinking about when you go through the solicitation process. If you're looking to figure out how to individualize solicitations so that they're more than just a generic ask. That's episode 171. When we talk about asking for general things, because maybe we don't have all of the strategic alignment that we're looking for.
Episode 199. And if you're looking to overcome obstacles when you make those solicitations, episode 147. All that is great background for what we want to look at today is trying to figure out how much we should be asking for. All too often, we spend a significant amount of time trying to figure out this particular issue, and yet I don't hear very often ways in which it can be done.
And today we're going to kind of peel that onion back a little bit, layer by layer, to get to the core and give you some suggestions. And as always, we'll kind of start in the big picture, the big kind of the grander perspective, get into some of the challenges and then finally move into tactical solutions. Today we'll be dealing with five tactical things you can do that are going to better align you with those ask levels.
When we talk about solicitations, we have questions that naturally come up as a part of this process. It's not unusual thinking about are we asking for the at the right time? Are we asking about are we what the donor wants to actually do? Do we how do we pair this with what we're physically or or strategically looking to accomplish?
What are their hurdles? Have we earned their trust? Are we talking to the right person? Do we need others to be involved? All of these things are normal, but all too often we assume too much about how much to ask for. And so the idea is, is to think about things around a gift at a significantly lower capacity.
Actually, is can be insulting to the donor or lacks the passion connection. We're looking for donors sometimes when they don't feel like we're in the right ballpark. Delay conversations beyond what would be normal confusion because they're trying to accomplish one thing and we're asking for another. There's a loss in confidence. They're not listening to me. They don't understand me as a donor.
The gift officers just trying to, you know, get a gift across the finish line. The idea is, is that we regularly talk about capacity. In fact, we will screen for that. That's something that's not abnormal, but we don't equally talk about it from to figuring out the actual solicitation moment of how much to ask for. And this isn't meaning we're going to figure it out by creating a mathematical formula.
This is about reducing risk. All the things I talked about a moment ago are the questions around do we don't understand? They're kind of not sure. We're not quite sure where they are. We they think we're not listening. All the misconceptions that might come. The objective is to recognize what risks are the largest, and come up with a rationale as to how to solve those.
And that leads us into figuring out how much we should be asking for. So let's talk about the challenges first. There's a number of them. The first is this is going to be a big surprise. But is is the donor is the things are the things we've done the activity. Are they ready to make that gift at the level, most importantly at the level that we think or that they think or that we've figured out might be the appropriate level?
Donors may have attended events. They may have had meetings, they may have reviewed proposals, they may have toured the facility. But does that mean that they're ready to make a gift at the level that probably we should be thinking about? And the question I would ask is what evidence? Evidence? Think about my background. Fortunately in the law, what evidence do we have that the donor is moving toward the decision?
Do we actually have evidence of it? And all too often we tend to say, well, I put a proposal in front of them or I'm about ready to. And we don't challenge the notion of, do we have evidence to show that it's the right time? So that's number one. Number two is that capacity drives our decision as to how much ask for, which is the worst thing we can do.
A capacity score if it's internal because you have a larger team or it's well screened. Does it mean squad douche? It means nothing. What it means is, is that they have a directional opportunity based on outside information. Well, we think that they can give $1 million because we well screened them. And what we should be thinking about is breaking this out into kind of thoughts of not only capacity, but the affinity.
Remember those capacity scores? Let's use donor search as an example. But they all do. It is usually giving for 3 to 5 years to all nonprofits. Well, how do we sit with all of them in comparison? Where do we rank? That's affinity engagement. Are we engage with them, or do they feel like they are a part of what we're trying to accomplish, or are they just kind of sitting out there and making regular gifts?
Are they confident? Are we confident in the relationship? Which brings us to this concept. When you put all of those together as general readiness. If we don't ask the question of capacity in these constraints, all we have is a number that someone else might have done, and it might be right. But I tend to believe that it doesn't actually get to what's actually trying to be accomplished by the donor.
The third is this idea of balancing internal readiness versus donor strategy readiness. Are we asking because we think the donor is ready, or are we asking because we need the gift? I'm working on a campaign council with a with a really interesting client and really interesting cause case. What they're trying to do. But this is exactly what we're talking about.
And they're like, well, we should outside people, campaign counsel, campaign committees. It's a better way to put it. Community members are saying, well, let's go talk to Bob about a $5 million gift. And I'm like, we're doing that because that donor believes that that community leader believes that that that's something we should ask for. But that's because we need the gift of 5 million.
I'm not sure that that's the right amount. And so what we've done in the circumstances actually take that particular campaign leader and said, hey, why don't you come to the meeting? And he's beginning to figure out that we don't have all the information necessary. So what we think we need versus what they think they'll do or or what we might think they do are two totally different things.
That's an enormous challenge. Number four is, is that gift officers all too often really rely upon sometimes heavily intuition. Now I've run into a couple of gift officers. I think about one. She's long retired. Her intuition was amazing. It doesn't mean it doesn't exist. But all too often we put all of our chips. If we use the poker analogy into the middle of the table on intuition, I'm like, no, we actually should do some things to make this more meaningful experience.
Gift officers will develop their instincts, but the weaknesses is the holes and the questions that we should be asking to get past those holes. Do we have a good relationship? Does it need to have something more measurable, which we'll talk about? What is the donor said evidence again or done that supports a solicitation? We'll get to the solutions in a second.
We're going to answer this particular one. I'm all for intuition, but at the end of the day, probably you can't. That's not the only thing you should be using. We should be asking. Number five is we treat the solicitation as a single decision. And in some ways, the question we really tend to ask is, or we ready? The question we should be asking is what or what, where or how specifically is there risk in the solicitation for us and the donor?
Is the donor ready by project but not about are they already by amount but not project? Are they ready for the amount but not timing? R they ready for the conversation? But we're not talking or having the right people in the room. The distinction gets us to this idea of risk in in the ask association, in a way that forces us into the tactical things that we want to talk about.
What are the things that we can do to alleviate this idea of it not being a single decision, a single moment, but the right moment with the right people for the right amount, with the right language, for the right thing. And that is when we are at the highest levels. You're asking for 50 bucks just to ask, but you want $5 million.
If you can't answer these things, then you're not going to get to where you want to go. So let's shift to the tactical. I think I said there are five tactical things that I would recommend you do to better understand how much to be asking for. So let's start with number one. I believe that you probably should score.
Sorry, the math process nerd that I am score every significant solicitation. Now significant is a key word. If you're asking for 50 bucks, even $1,000, just ask. Maybe you have a meeting or two for a thousand, but you need to ask. I'm talking about 100, two, 50, 500, absolutely over a million. And there are five things that I think you should consider scoring.
And you can score them from 1 to 5. Simple one being we got a problem challenge. I'm not sure. Five being I know the answer because we've had some conversation or there's been some part of the conversation that's answered this. So number one is or a if we want to do it that way A is donor readiness. Has the donor demonstrated an interest in discussing a gift, not discussing an interest, not discussing their passion for the project, and ask, has it been part of the conversation?
We'll talk about what that sounds like in a minute. And you're going to if you've listened to any of my trainings, education through the various associations or this podcast, it's going to sound very familiar. Number one, or a donor readiness. Number two is purpose alignment. Do they want to give to what we're going to ask for alignment to what we need align with what they think their interests are.
And do you have evidence of that? Three is there an amount confidence meaning if I put this number on the table, what evidence do you have to say that the donor will consider it? I didn't say make the gift, but it's not going to be too small or too low, or be offensive and too high. But the point being is, is that you have confidence because you have evidence.
There's been a conversation, and we'll talk specifically about that here in a minute. Number four is the relationship strength. Is there a significant trust and access for a candid conversation? When you get to this point, you are in the this unique position of being inside their mind and their heart as a donor. Is their trust enough to have a very interesting, sometimes challenging, sometimes incredibly rewarding conversation?
And lastly, fifth, do you have timing confidence? Do you have evidence again that this is the right time to ask? Several of the other podcasts I mentioned, number 23 1811 71, 199 and 147. We talk about these things like the soft ask which we'll get to, and this creates a risk score. So if your score is put 1 to 5 on each one of those on any significant ask, if you're below 15, you've got a high risk that something might go wrong.
Whereas if you're above 21 or more, you probably have a lower risk if you're honest with yourself. The idea is, is that if you're at that low, that high risk, lower number, then this isn't scientific probability. But if the if you've got a lower number, then you might want to go back and clarify where the lower numbers one through five are.
If you have a relationship strength issue or you think there's not an alignment, they like the project, but we're not quite sure if they give maximization to that specific element of the project capital endowment, whatever. Then you need to go back and and re clarify where they are on these things. I like this because it forces a discussion with a gift officer to say, walk me through your evidence of these five readiness, donor readiness, purpose, alignment giving to what we need confidence is to the amount with evidence, relationship strength with evidence, timing.
Are we doing it at the right time with evidence 1 to 5? Add them up what you'll get as a ranking that will help you. So that's the first tactical create a dimensional, quantifiable way to think about this. Number two, as I've mentioned, you have to have evidence for each one of these particular scoring mechanisms. Do not allow, do not accept.
You cannot be willing to move forward. Well, I think she's ready. Well, I get the impression that he's ready. No. Replace it with these questions. If you're prospect management and if you're the chief of major gifts or the head of major gifts, or you're the CDO, CPO, ask these questions before they go. Ask and put a proposal in front of someone as a formal solicitation.
Has she asked how this would be funded? Has the gift officer asked where the money is going to come from? Pledged cash? State gifts? What if they haven't done that? Kind of hard to know what to ask for. Number two, have they requested the donor information about naming or at least has it been discussed? Not everybody wants to name something, but has it been discussed?
Three has has there been any conversation about how the payment plan will go over years? What time of year? How many years? Number four, has there been some discussion with, I'll call it significant others particularly spouse, but could be children. The larger the gift, the more other people should probably be aware of it. I get really concerned when you talk about a $5 million gift and you don't have.
The answer is does the spouse, husband or wife, maybe even the kids, particularly if they're older donors, they're not involved because that can cause some issues. Lastly, did was there did they talk about what level would make them feel as if they were a meaningful difference, a significant difference for the cause that we're talking about? And believing in evidence is comes out of the answers to these questions.
And if there are too many knows, then you're not ready to ask. So number two, require evidence when you do the kind of the rating process. Number three, when you do that rating process, figure out which 1 or 2 are your biggest risks. If three are at five and two of them are at one, so your score 17, you're probably in a low to moderate level of risk.
Moderate probably is fair, but if we could just take the two that had ones timing and alignment and get them clarified, is it worth another meeting to get to 20 or 21 if all the other elements are high amounts of confidence i.e. I know that the donors ready, and I know that there's a great relationship strength, but I'm not quite sure on the timing, and I'm not quite sure on the they understand the money is going to be used for this, this and this.
Have one more meeting, clarify. Take that to a 21 or 22. You'll get more gifts. The idea is that you can do certain things to do that. So if the amount is a high risk you're not quite sure. Test a range. We'll talk about how to put that language in place here in a moment. Number two is if alignments we talk about impact.
Here's what we're looking to do. Here's the impact. How does that sound. If timing explore their decision timetable and ask them is when do you make your final decisions. When do you make your gifts? All the all year long at the end of the year? We've talked a lot about this in the podcast. We do our philanthropy at one time at year end for the most part.
So if you ask me in February, my answer is you want the money now, I'll give you 20 bucks, but I'm not giving any more than that till I figure out what my year looks like. Number three is. Or see, is that if the time or. Excuse me, D if the relationship is weak, then determine who else needs to be there or how you can build credibility.
It's not difficult if you take the five areas and figure out where the weakness is, and then jump that a little bit. So number two is ask for the evidence for the score. Number three is pick it apart and figure out which parts can be improved. Number four is my famous favorite. Overly discussed. Underused. Soft. Ask soft asked this and you can think about the five paradigms or ways to grade or rate this when you do it.
We've talked a lot about this particular project. Project A will call it.
Based upon the impact that we've discussed, based upon what you think is important. And if I asked you next week for a gift of X amount of confidence, 50,000 100,000, how would you feel about that? What's your comfort level? Or you could say, would a gift of a quarter of $1 million that range somewhere in that area? B be meaningful enough for the things you want to accomplish that we're doing that you might consider discussing that if we develop the proposal around this priority at a quarter of $1 million, that you can see all the details, would that be useful to you?
The soft ask will help you reduce the risk and really improve the likelihood of a yes, because it gives you a chance to pull back and say, hey, I'm missing something here. One of the five. Let's build that up so that we can figure out how to do this more meaningfully. Number five, in your risk management discussions and the last episode, I talked about the idea of collaboration needing someone even bigger organizations risk or it's a boost management meeting smaller organizations it's a board member or CEO, somebody who could be a kind of a sounding block of things that even if you're the only fundraiser, they allow you to have someone to kind of talk
to, maybe it's the advancement committee of the board, different options. This is that piece about talking about it. Either prior to even after in some type of review, what was the what was the proposed ask for? How did it go? What was the risk score? What happened based upon that risk score? What were we missing? What what did you if it didn't go well when it was too easy, meaning you were too low in terms of an ask about could we have done something different, brought someone else in, had a different conversation to increase the likelihood or reduce the risk?
That's a part of this, this process of having kind of a review in management or whatever you do in terms of portfolio review, even maybe with another gift officer, just informally, really allows you to begin to learn where those risks are before you get into the next, next ask. And also then it creates either individual or organizational discipline to do this in a more meaningful way.
So five tactical things you can do to increase the likelihood of gifts. Gifts lower the risk. When you ask. Number one five dimensions five things you should ask around readiness, alignment, confidence, the relationship strength and timing. But a score 1 to 5 number two require evidence to prove that score. Don't just assume. Well, you know I think she's ready.
Number three. Really look at the ones that are your weakest of the five 1 or 2 and see what you can do to improve that part of the risk, to lower the overall risk and increase the likelihood of the gift. Number four soft as soft as soft as soft as soft as what you'll find is when you soft ask.
You can then pivot or pull back if something's not quite right. And number five is review what you've done, if nothing else, by yourself. But it's much better in a team environment or a partnership environment where you can go through this and say, okay, this one didn't come to fruition. Let's look at the five kind of areas or dimensions that we've talked about.
Where was the whole and how do I not do that again? Fundraisers often ask whether they think the donor is ready or not, because the organization needs the money, or it just seems like what we should do, we need to get to the point of not only asking, are they ready? We need to get more sophisticated by asking what is the risk?
If we ask now and then have dimensions or categories to look at, to say, well, here's why this risk is the way it is. Readiness. Alignment. Confidence in terms of amount relationship strength overall and timing. Confidence. The point being in all of this is, is that the purpose of this risk assessment, this idea of quantifying this risk is not to bring delay.
It's not to hold people back, but to increase the ratio. We always talk about a 3 to 1. I'm not sure that's a great number, but there's we use it three asks for one gift. How about if we got a 2 to 1 and the amount went up in each one of the ones we close? That's what we're talking about is efficiency.
It's to give a level of confidence to the gift officer, the donor, the organization, the relationship, the process, the confidence, and to remove uncertainty to get to more yeses, more meaningful gifts. And yes, this is a little extra work, but it will make you more successful. It'll make the organization more successful. If we did it in this manner, it's not that much more work if you just make it a regular part of your process.
Quantify the risk. Reduce that risk by looking at those five dimensions or categories. Figure out which ones are the lowest. Make a couple of adjustments. You'll close more gifts. Your conversion rate could go to 2 to 1. Think about how effective you'd be if you just thought about it in this manner. That's why we want to quantify risk assessment.
You know, one of the things I enjoy doing often is writing, and in particular my blogs. I hope you'll take a look. There are two per week. I think they're released on Tuesday and Thursday. Somebody else does that for me. I write them, but I don't put them out on the website. Go to blogs and get RSS feed, RSS feed, write to you comes out things I see in the industry.
Maybe not podcast worthy. Maybe there are things I see in my life about leadership, about different circumstances. Maybe it's a news story I comment on, give you something to think about twice a week. 90s that's how long they take to read. There are 500 words or so, because I don't think you want to take more more time, but it might give you something to think about.
That's blogs on the philanthropy website. So backslash blogs, if you'd like to reach out to me, maybe you have a subject you'd like to recommend like, hey, you don't cover this, tell me, I'd love to do a deep dive and figure it out if I can. That's podcast health. Com. We need philanthropy now more than ever. There's just a lot of moving pieces in the world.
I don't think any of them are terrifying, but I do believe they cause consternation, challenges and issues. And whether it's economic or political or societal, this is where philanthropy and the nonprofits that represent the philanthropic opportunity are at our best, at your best. Remember, some people make things happen. Some people watch things happen. Then there are those who wonder what happened were people.
Hopefully you're someone who makes things happen. You find other people, other people in your office, board members, volunteers, donors who also want to make things happen for the people, the places, the things, the organizations, our community that are wondering what happened. I've spent almost 30 years doing this. I can't imagine doing anything else because the things that I get to do or help my clients do help the world make people's lives better.
That's a great way to think about value in what we do each day, and hope you have a sense of that in small ways or in big, with what you do today, what you did yesterday, and what you'll do tomorrow to make this world a better place. I look forward to seeing you the next time, right back here on the next edition of Around with Randall.
And don't forget. Make it a great day.