The Right Way To Cultivate

December 17, 2009      Admin

Here is a terrific comment on yesterday’s Agitator post from Andrew Kramer describing how his organization, Prison Entrepreneurship Program (PEP) in Houston, builds cultivation into the guts of their program … and the enormous benefits reaped.

He was taking me to task for treating cultivation merely as a monetary cost. Actually, The Agitator has been a huge champion of cultivation (try searching our blog for "loyalty" or "donor retention") and I can’t find a word of his comment to disagree with.

Says Andrew:

"If your cultivation of donors is entirely based on their participation in your programs, then the costs of cultivation are easy to bear, even at an initial loss. So, my objective as a fundraiser is to get people to come to our events, in prison, and interact with our participants and graduates. That’s part of our mission, so we have more incentive to get people involved–and cultivated–than to just look at everyone as a "donor" and only a donor. When our volunteers come to prison and work with our guys, they are costing us money–we have to have food, staff, materials, etc–but that money almost always translates into huge revenues–roughly every dollar spent on prison events yields $19 in revenue since almost all of our donors, major and minor, come to our events at some point. We maintain a healthy positive cash balance, but in effect, it makes sense for us to spend a lot of money on cultivation because it’s really just programming.

Too many organizations don’t look at the ways to make sure that they involve and cultivate their donors–and also usually fail to see that a reduced cost because a volunteer is doing work you would otherwise have to pay for is a donation–just not one that can be receipted and counted for the IRS.

I don’t donate much money to organizations, but I do "donate" a ton in the form of referrals, consulting, and other benefits. There is one organization that I work with that is able to provide free executive level consulting services to nonprofits–I consider making the connections and making sure that the follow-through is done on both ends a form of donating because my referral is free for the nonprofit consulting group (otherwise they would have to pay for it in advertising, networking or staff time) and it yields substantial benefits for the nonprofit. Both nonprofits win–and so do the executives who get to see how great most nonprofits are–but I never get a receipt for the economic benefit captured and created because of the pairing.

I think that’s really, really important, especially when we look at cultivation–if you are only looking at the monetary value captured and not the actual value captured and created by "donors" then don’t even bother to worry about whether or not you’re doing cultivation correctly. We thank our volunteers lavishly–pictures, emails, follow-up calls, increased opportunities to get involved more deeply–because they create the most value for us. In fact, we treat our volunteers many times better than our donors because the real value is in the time and effort and not in the money that is what is generally considered the fundraisers objective.

One last thing–since foundations account for a pretty big part of our revenues each year–it’s important to keep in mind the kinds of cultivation that you do. Even with our foundations, the objective is never just to look at them as pools of cash for our benefit–the real value is in the fact that they require us to think about our programs and offerings, and then again that throughout the year they require us–sometimes in very thoughtful ways–to measure and assess what we’re doing. I’ve learned that most foundations treat honesty and candid feedback about what happened as their primary form of involvement in our organization. They’ve never come to us and said that we should run our program a certain way, they just ask us to think about what happened and there is tremendous value in that since most individual donors never do that."

Great advice. Sounds like a  tremendous program PEP has. Andrew, you  deserve a raise!

Tom

 

 

 

One response to “The Right Way To Cultivate”

  1. Jim Toscano says:
    December 17, 2009 at 10:24 am

    Tom:
    Yesterday, Britain decided to ban checks after a set period of, I think, nine years.
    What effect would it have on our fund-raising process if donors didn’t have a check to use to convey funds?

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