The Timothy Group

Renewable Energy™

A Practical Four-Part Plan to Help You Recession-Proof Your Organization

Energy. It's what drives our lives and gives power to our ambitions. When it's cheap and abundant, we take it for granted. Lately, however, our attention is increasingly focused on the real prospect that supplies of energy are becoming scarce. Imagine a day when lightsdon't come on with the flick of a switch.

Today, the non-profit sector is facing its own form of energy crisis. The energy that powers these organizations is not derived from coal, oil, or gas. Rather, it is people power—people serving people—that makes ministry happen, and money provides the wattage to keep those lights burning bright. Asmany non-profit leadersare acutely aware, however, it's a new day. The recent volatility in the stock market and the economy have together created an environment in which charitable giving—the energy of production—is becoming intensely competitive.

But what if there was a way you could "recession-proof" your agency?

As consultants to non-profit organizations, consultants with the Timothy Group are working with a Rescue Mission in North Carolina. Rescue Missions are “street-level”ministries providing food, shelter, and a helping hand to the homeless and disadvantaged. Relying almost100% on donations to fundtheir work, these agencies are particularly vulnerable to declines in charitable giving. As news of a growing economic meltdown began to break, this Mission prepared for the worst, developing plans to cut expenses buy as much as 30%. They debated suspending their capital campaign.But the crisis never came. In October, annual fund giving was actually a few percentage points ahead of the prior year. In November, it jumped almost 30%. December was up too. The Missionended the year tens of thousands of dollars ahead of last year's annual fund giving inaddition to raising nearly$4 million more for their new building project.

This Rescue Mission is not an isolated example. Many different types of agencies are defying the statistics. Andby following a few simple guidelines you can also“recession-proof” yourorganization with a fund development system you can count on, even in tough times.

Powering Through the Energy Crisis

Recent surveys indicate the economy and relatedtrends in charitable giving are at the top of nearly every non-profit leader’s list of concerns. Organizations reporting giving declines of 20%, 30%, even 40% or moreare headlining medialike Newsweek’s article, “The Coming Charity Crisis” and CNN’s segment, “Charities in Crisis.”

So why are some agencies able to power through this crisis while others are falling on hard times?

Consultants at The Timothy Group have worked for decades with more than 1,500 organizations, helping to raise hundreds of millions of dollars for ministries across the United States, Canada, and overseas. We have seen what types of fund development work best. While there is no magic formula, there is one thing that consistently stands the test of time, regardless of economic circumstances.Those agencies that do a good job developing on-going relationships with their key donors do better in the long run. It's the main reason some agencies are able to power through an energy crisis while others are browning out.

Makes sense, right? Yet if that basic principle is so widely acknowledged and easily understood, why do so few organizations achieve it? Why do so many organizations pour disproportionately more time, attention, and resources into strategies like direct mail, which have the lowest returns, yield the smallest gifts, and engender very little loyalty from donors? In our experience, organizations don't intentionally short-change relationship based approaches. They struggle because relationship-building is time intensive, complex and can be difficult to manage..

At The Timothy Group, we understand that there is a simple solution to getting more organizations to implement relationship-based fund-raising approaches: Make it simpler. The result? A practical four-part plan dubbed Renewable Energy™designed to help small and mid-sized non-profits implement an annual financial development program built upon the firm foundation of established relationships.

Renewable Energy™: A Four-Part How-To Guide

The Renewable Energy system has four primary components:

1. Generators create new energy to continually replenish and increase the supply.
2. Transmission Systems keep the energy flowing within the system.
3. Outlets are where energy is converted into motion (i.e. ministry).
4. Safeguards are internal systems designed to make sure that everything works as it should.

Generators

These are the events and activities that generate new donors and new contributions into the system. There are many different types of events and activities that can be utilized asGenerators, as long as they share three key elements: 1)a built-in way for existing supporters to invite others from their own circles of influence to participate; 2) at least one significant opportunity to share the mission, vision, and impact of your organization; and, 3)specific opportunities for staff and volunteers to follow-up with prospective new donors at a later date.

Generators are not primarily fund-raising activities, although they often do generate significant amounts of income. Their primary purpose is to provide opportunity for your current friends and supporters to introduce others to your organization, with a goal of recruiting new, potentially long-term supportive relationships.

In our experience, two of the most effectiveGeneratorsareNew Friends Dinners and Ministry Briefings. As the name suggests, New Friends Dinners are large-scale annual dinner events that provide existing supporters with an opportunity to invite friends or associates to join them at the event, with the express purpose of introducing them to you and your ministry. Ministry Briefings occur on a smaller scale and may occur several times during the year.

Transmission Systems

Transmission Systems are the relationships you build with your donors. These are the things you do that are commonly referred to ascultivation activities; activitiesthat strengthen your relationship with your donors.

A key part of an electrical transmission system is the Transformer. Within the context of our fund-raising system, Transformers are those events and activities that give your donors opportunities tovisit on-site and engage with your ministry. These experiencescan have a potentiallytransformative effect upon the donor, increasing his or her “voltage”, i.e. commitment to your ministry. When donors actually get into the field and work side-by-side with your staff and other volunteers, it often has a significant impact upon their lives far beyond simply giving money. One major donor told a college president, "It's easy to write a check. I want to get involved." You want more committed donors? Then set up more Transformers in your power grid.

Your organization’s internal and external communication systemsare a vital part of your relationship-building activities. Videos, brochures, newsletters, websites, and proposals are all important tools.Much of the communications that happenin a relationship should also be informal, however. These are the day-to-day, simple communications that occur during the course of any relationship. Though seemingly mundane, these are often the most important part of the system.

Outlets

This is how donors get “plugged in” to ministry. In specific fund-raising terms, these are the “ask events”. Here are some points to remember:

• Outlets can occur in a variety of settings, but the best and most effective way is always person-to-person, eyeball-to-eyeball. Make your request as personal as possible.
• The most effective systems are those that have an abundance of Outlets. Staff, board members, and other volunteers should be empowered, equipped, and given multiple opportunities to plug donors into the system.
• Outlets work best when someone is specific about how much money you are asking for, why you need it, and how it will be spent.
• Bad connections in your Outlets can short out your whole system. Make sure you have the right people in these roles and that they have the training to make sure they do the job right.

Safeguards

You need tomonitor the Renewable Energy program to keep everything humming. Here are some of the Safeguards to put in place:

• Research and Development: Make sure you are investing in research and development activities-both donor research and research into ways to improve the systemover time.Always be on the lookout for new opportunities to keep your program fresh and effective.

• Protocols: Establish protocols for “ask” events and activities. Write out your case. Create standard formats for your proposals and request letters. Have the board set objectives for themselves infund-raising and friend-raising. Monitor staff members toensure they are working efficiently and effectively. Track donor calls, requests, and other key measures. The things we measure are the things we get done.

• Maintenance: Anytime you hold an event, hold a “debriefing” to review how well it achieved the goals you set for it. Go through your toolkit at least once per year—are your materials still effective and up-to-date? How well are your staffersdoing in fulfilling their roles? How well are board members fulfilling their goals? Make sure everyone is trained in the system and the part they play.

The Renewable Energy program is designed to be simple to operate once in place. To help you get started, consultants from The Timothy Group are available to help you design a program specific to your ministry. Build this system, and you will build strong relationships with your donors that will help you power through whatever energy crisis is coming in the future.