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The Art of Leadership in Philanthropy with Frankie Airey

Workshop for board members and senior staff of non-profit organisations
Wednesday 21 April 2010 at the McCullough Robertson Lawyers

Thirty two participants from 26 organisations participated in the event, hosted by Heather Watson of McCullough Robertson Lawyers.  (Ten people were from eight non-arts organisations.) 
Presenter: Frankie Airey of Philanthropy Squared
Co-facilitator: Cathy Hunt, Director, Positive Solutions.

Following a welcome by Heather Watson, Special Counsel with McCullough Robertson Lawyers, giving the context of her firm’s involvement with BoardConnect, Cathy Hunt, Director of Positive Solutions, gave a brief résumé of BoardConnect’s purpose and activities, before introducing the presenter, Frankie Airey.

Frankie Airey:
A philanthropy campaign will only work if it is approached with the idea of achieving sustainable growth, not as a one-off, flash-in-the-pan campaign for cash.  It is important for organisations to shift their approach and to adopt a proven framework.

The first question any major donor asks is “What is the Board doing?”  The board’s involvement in any fund-raising campaign is crucial: it cannot be left totally in the hands of the development staff.
There are three sources of private support:

  •  Foundations & Trusts 
  • Corporations 
  • Individuals (including private ancillary funds)

All of these groups have their own motivations, with some overlapping interests.  They want their donations to have impact, to fund innovation and to leverage further donations from others.  In addition, corporations and individuals seek to raise their profile and to be, and be seen to be, good citizens.  Individuals are generally also seeking personal connections with the organisation to which they are giving.

Foundations and Trusts: 

  • Are set up for the sole purpose of donating money to not-for-profit organisations
  • Want to see impact, social change and innovation flowing from their investment 
  • Want to leverage further funds – “will my donation unlock others?” (Challenge grants – “we will give $x if you can raise the same $x from another single donor”)

Corporations:
Corporate support to non-profits has a grey area between:

  • Marketing/sponsorship 
  • Corporate social responsibility 
  • Corporate philanthropy (this constitutes a tiny percentage of corporate giving)

Seeking corporate donations is a very different process for non-profits, since corporations exist only to do better business: they want to achieve social impact that is related to their business.

Individual philanthropy:
This is the largest source of support after government funding (an average of approx 76% of private support for non-profits in the US comes from individual donors with a further 12% or so from bequests and a tiny fraction from corporations).  In this country, individual philanthropy is a very large untapped source for non-profit organisations.

We are all philanthropists”

Motivations for individual philanthropy:

  • Social impact flowing from the contribution 
  • Often triggered by an event in the life of the donors or their family/friends 
  • The arts seen as a means of achieving change 
  • The arts seen as a value-based activity 
  • The donor has an emotional connection with the arts 
  • Profile raising 
  • Looking for an increased sense of involvement and belonging

Major donors: 

  • Mission – they care about the cause they are supporting 
  • Look for financial stability – they are investing in the future 
  • Look for who else is supporting the organisation (among their peers, or among people whose peer group they admire) 
  • Look for how well the organisation is delivering on its social agenda  – relates to the quality and capacity of staff leadership 
  • Like to be asked

From the non-profit organisation’s perspective:
The organisation must examine itself and put in place the structures that will set its pattern of behaviour.  It is not sustainable to hire a fundraiser peripheral to the organisation – the best fundraiser needs an organisational framework.

  • Everyone in the organisation needs to become a fund-raiser  
  • Donors will respond to the way they are treated by all members of the organisation, including staff and volunteers 
  • Staff need to treat everyone who interacts with the organisation as special 
  • Take time and build relationships with people


Critical Success Factors:

1. Compelling vision – articulated by the board, sets the tone.  Must be linked to the communication plan

  • NFPs often don’t express their vision clearly enough: their material usually addresses clients or governments, but not donors 
  • Making the case for support must be more than a shopping list 
  • Vision needs to be broken down so that it articulates why the organisation exists and how private support will help it achieve its goals 
  • Need to establish how the donor would like to be kept informed (do they want full acquittal reports, or just regular updates?) – ongoing communication

2.   Internal leadership is crucial - staff must be engaged.

Executive leadership:  

  • Must inspire, respond to and manage change in the organisation’s culture 
  • Oversee the implementation of strategy to create a different attitude within the organisation and then to maintain the new structure 
  • Must involve the Development team in decision-making – the fundraiser is the “choreographer” (not the principal dancer) and needs to train the leadership of the organisation 
  • Major donors give to the leadership of the organisation, not the fundraiser.  Leaders need to have open, honest dialogue with donors, even about weaknesses and what is being done to correct them

3. Leadership roles and responsibilities

  • Need an effective partnership between the internal and external leadership 
  • The CEO and executive staff create the environment for philanthropy to thrive

4. External leadership - The Board sets the tone and articulates the vision.  Board members:

  • must understand the implication of a fund-raising campaign 
  • must engage the CEO in the process
  • raise the sights of donors (“stretch” giving, i.e. “give til it hurts” so donors really think about what they are giving/supporting)
  • enlist senior volunteers (e.g.people who have been involved for a long time, ex-board members) and donors by example 
  • ensure responsible stewardship of donations

Board members must

  • be the first port of call for donations 
  • ensure that money is spent as promised 
  • find external volunteers and ambassadors who can provide credibility and endorsement, as well as advocating the organisation themselves
  • (in the US, there is price tag to joining the board of a NFP organisation)

The best volunteer is a satisfied donor

5. Prospects - It is useful to think about potential board members in three categories: people who have skills relating to Work, Wealth and Wisdom

  • People who care, e.g. current and past donors/staff/subscribers 
  • Inclination is the best indicator of a good prospect to donate, rather than just financial capacity 
  • Organisation should provide engagement, involvement and a sense of belonging, e.g. events that engage supporters without asking for money 
  • Individuals need to feel valued as people, not just for their money 
  • Cannot get major donations without clear investment over time, often years in the relationship – it is like a courtship

6. Professional skills and resources

  • The fundraiser’s expertise guides the process 
  • Needs to manage up as well as manage down
  • Needs to know when to take centre stage and when to stay in the background 
  • Provides good data 
  • Organisation needs to marry strong leadership with the professional skill so that there is an understanding of how to use the fundraising tool

 “Money is not the basis of a relationship; it is the expression of a relationship

Questions/discussion:

• Increasingly seeing corporate activities connecting with non-profit organisations:  This relates to corporations working to build loyalty from and good relations with their staff.  NFPs should not necessarily agree to a corporate partnership involving staff engagement, unless it really fits neatly into existing operations.  Sometimes, partnership with corporations involves “jumping through hoops” – diverting from core activities – for little result.  Working with individual philanthropists frequently offers better reward for effort.

• How to find lists of PAFs?:  Lists used to be available through the ATO website, but they have been removed  (argument between privacy rights and the public right to know where money is spent that provides a tax deduction).

• How to engage potential donors, especially if the activity is outside Australia and not easily visible?: It is important for donors to have a ‘window’ through which they can view the organisation and what it does.  It is engagement that unlocks commitment.

• How to get around the ‘gate-keeper’ of a foundation or trust and reach the prime donor?: the gate-keeper’s job is to filter approaches to the foundation.  Trying to circumvent that person can be counter-productive.  The best approach boils down to quality of communication at all levels – research the triggers that really interest the donor and then make the powerful, compelling case.

Click here to download a pdf of Frankie's power point presentation.