In this episode of Stories of Change, Larry shares his experience of fundraising with nonprofits and creating a high-performing fundraising culture. He also shares practical tips that organisations can learn from and also sheds light on the typical mistakes that nonprofits make while raising funds.
Larry is an internationally recognised coach, trainer and thought leader in fund development and philanthropy. He is the author of the award-winning book, The Eight Principles of Sustainable Fundraising®. His thirty-year career spans both program development and capital fundraising. He has lead teams that collectively raised over a half-a-billion dollars. He’s coached the board, executives, and fundraisers of hundreds of nonprofit organisations in the United States, Canada and Great Britain.
Transcript of the Episode:
Simit: Thank you, Mr. Larry Johnson, for agreeing to be on this podcast. It’s really a pleasure to have you here.
Larry: Well, it’s my pleasure. Since as we spoke a while back, I made my first trip to India in February (2023), and I’ll be coming back in October. And I just really enjoyed getting to know the Indian people and they have a bright future ahead of them.
Simit: Absolutely. Thank you so much. Like after our lost conversation, I ordered your book and it’s absolutely amazing. And it took me back to the days when I was working with nonprofits, and I could relate a lot of things that you have mentioned in your book.
But I want to start with talking about how the the social sector has evolved in the last few years, like in India, for instance, since the CSR Act came into being, there has been an absolute, you know, this about how the sector has evolved in terms of the resources, in terms of the number of personnel, the number of people who have gotten into the sector. And I’m sure it has been similar in the U.S. as well. So maybe if you could talk a bit about the overall social sector landscape across the world and vis-a-vis India.
Larry: Well, you said something that really cued me in. You said my book took you back to when you were working in nonprofits and you can relate to that. You see, one thing that I’ve said for a long time is that human nature is universal, cultures different, people dress differently, they behave differently in different situations. But human nature is pretty much the same wherever you go. And I certainly felt that when I was in India. There are some principles that are operating when it comes to philanthropy. We see it in this country (USA). We also see it in India.
“In terms of what’s happening in India with the CSR legislation, we are seeing formalised philanthropy which is being driven through a corporate interest.”
And in terms of what’s happening in India with the CSR legislation, you’re seeing a lot more formalised philanthropy and it’s being driven through a corporate interest. But like this country, the bulk of the funds will still come from motivated individuals.
And so in this country we have a very well-developed nonprofit sector. We have a well-developed philanthropic sector. That being said, those in the wealth management space will still say to you that there is a great deal of untapped resource that’s not engaged in any way that could be engaged if the givers, the philanthropists and I use the word philanthropists, for someone who gives ₹1 as opposed to ten crore or whatever it is, if they were engaged properly, this money would be made available to them. And we see that in this country as well.
And of course the big difference is do you see philanthropy or giving as a transaction or do you see it as a relationship between those who give and those who receive? So we have a lot of so-called sophistication in this country. Some of it is useful, some of it’s not because it does go back to people. Sooner or later it goes back there. And one thing that I hope happens in India, as you grow your philanthropic sector, that you don’t fall victim to the the technology razzle dazzle. We’ve sort of fallen into that. The CRM companies, the donor screening companies, they sort of encourage that because they’re selling their stuff, obviously, and that’s not a bad thing.
But there’s this misnomer that somehow technology will solve your fundraising problems. Well, it won’t. All right. And so if I were going to say the thing that I see in this country (USA) that I would not like to see in India is a too much of a reliance on these fairly sophisticated tools to do your fundraising because they will aid it. They won’t do it for you.
Simit: It’s really interesting that you mention this because when I look at organisations in the US and Canada, in the U.K., you see that nonprofits have started raising funds through crypto currency. We are still far, far away from getting to that stage because the bulk of the organisations are still struggling to do fundraising even in the traditional way.
So, I would love to understand in terms of how fundraising has also evolved in the last few years in evolved economies like in the US, for instance, or in Canada.
Larry: We’re seeing a lot more reliance on giving through electronic channels. And that would be the traditional email. But now we’re even seeing texting as a way of giving. And I suspect from what I learned when I was in India, that you’ll probably skip the email phase and go right into texting in India, you have a better developed cellular network than we do in this country. And I think part of that is because you sort of skip between landlines to cell and that’s probably been one of the big differences is the modes are things, but it goes back to the basics though, even though you’re using a different channel, a different method of communicating, it’s still communication between people.
“People give to something they understand.”
Crypto is just another asset. It’s like real estate or other tangible assets or currency. It’s just another asset people give to something they understand the channel in which they give it or the form in which they give it is quite secondary. So that’s, I would say, electronic channeling differences in communication. That’s going to be the difference is the mode of communication. But what you’re saying eventually has to come down to another person.
Simit: Given your experience of more than two decades of having worked with tons of nonprofits in terms of fundraising, what are the things that according to you have typically worked really well for social impact organisations?
Larry: The key is understanding, and this is my principle one donors are the drivers. They are the ones who are driving the philanthropic energy. They are the vector. And when you understand that piece of it that they are really driving the train, you don’t have to say, Oh, they don’t believe in my cause, blah, blah, blah, don’t go down that road. It is the pity route, the self-serving pity route. And believe me, nonprofits are prone to do that because they think they’re so well motivated.
Well, it’s I like to say to a nonprofit, you’re going to have to get over yourself. Yes. You’re doing good work. There’s nothing that would dispute that. But it’s really not about you. All right. And that’s something you have to remember, that you’re simply a facilitator in this enterprise, you see. And it is an enterprise. We have nonprofits here that you say that they’re a business and they kind of go, oh, well, yes, you are. You’re just not distributing profits to stockholders, that’s all. I mean, you’re still doing a work and you have to have revenue coming in the door. So the key is if you get over yourself and then you look at those who would support you, but they would support you for their reasons, not the organisation’s reasons. And that’s kind of, oh, what does that mean?
“If nonprofits can give their donors an experience that money can’t buy, donors will support you in a big way.”
Yes. Believe me, if you will give a donor and potential donor an experience that they cannot go out and buy somewhere, they will literally throw money at you because they’re looking for something that’s going to give them self-worth, a feeling of being involved in something bigger than they are. And especially when you get into the higher income levels, people don’t need another boat, they don’t need another condo. Buying stuff isn’t going to give them what they’re looking for. And so if you can give them something that they cannot buy and that is self-fulfillment because they’re a part of something bigger than that drives it. And so whether you’re texting someone or meeting them on the street or whatever you’re doing, that’s what facilitates this. But that’s hard to do it because people are so well, they’re doing such great work and they’re so focused on their work and there’s nothing wrong with that. But invite somebody else into that. It’s just not all about you.
Simit: In fact, typically this is also something that you have mentioned in your book as well, that organisations remember or reach out to the donor only when they need funds or they need them to write a cheque. And once they have done that, a lot of times we fail to acknowledge the support that they have been giving or generally just know that what is happening with the donor, in terms of what is their motivation like, what is it that they actually are looking at when they’re supporting an organisation?
It’s not just giving some money, but there is obviously a backstory to it as to why they’re supporting a cause. So, it would be great if you could maybe talk a bit about what are the typical mistakes that organisations make when it comes to fundraising?
Larry: The biggest one is they make it about the money, number one, and we can talk about that the rest of the hour, but also the whole concept that you mentioned of only being in communication when they’re making an ask or they need money, that goes back to the problem of making it about money. All right. Because if it’s a relation ship, you’re going to be reaching out to that person to get to know them and then money becomes a part of it, but it’s not what’s really causing it to go forward. If I were if every time you saw me, you knew I was going to ask you for money very soon, you’d start to avoid me.
All right. So, yeah, absolutely. You know, if I’m on the street in Mumbai or down there. Oh, there he is. I’m going to dash into the cafe or I’m going to hop into one of those auto rickshaws and whiz around the block. I’ve had that experience. That was kind of fun, actually. If there was someone that was just always wanting to ask a favor of them, which is essentially the same thing, you know, they would avoid them. And nonprofits do that often unwittingly. They’re not deliberately doing that. But what they’re doing is they’re objectifying the person they see. That person is simply a source of revenue or or a resource you see rather than a person.
“Nonprofits usually see donors as a source of revenue rather than a person.”
And therein lies the big difference. So then there’s that. And even when someone makes a gift, they forget, Oh, well, they already made a gift and move on to somebody else. That one shot kind of deal, you see. And here’s another one. Tip Principle Four is learn and plan. You learn who would naturally support you and not everyone in the world is going to think your cause is really great. And they may be generous people, but for them it’s just not something they’re interested in. It doesn’t make it any less generous.
But often what nonprofits do, they don’t take the time to figure out what sort of individual would naturally want to support them and then focus on reaching out to those people. Too often there’s such a thought, Oh, we got to raise money today that they just sort of throw it out there. Or as we would say in America, you know, a shotgun against a barn, it just kind of goes all over it just it’s all over the map and whatever sticks, kind of thing. Well, there are all kinds of things that are wrong with that. But the two practical reasons are, number one, it’s very expensive because it brings in very little money. You’re spending all your resource on a huge swath of people in the hope that a small minority will make a gift. Take the time and the effort to be much more focused and targeted in the way you approach people. And you’ll raise a lot more money. You’ll actually spend less, which means you’re raising more.
“Nonprofits need to take the time & effort to be focused & targeted in the way they approach people.”
Simit: I mean, this seems like a very elaborate kind of process in terms of being really engaged with the donor and not just reaching out or just writing like generic emails, which go out to 5000 people and then one of them decides to donate. But what you’re suggesting is being more involved. How can organisations get to that stage? How can they go about this process?
Larry: It’s a combination of what I would call Principle three and Principle five. First of all, Principle Three is leadership leads. That’s your governing board or your executive staff, no matter how small it is. You see those presumably are the individuals that are the most committed to your success, or least they should be all right. And that isn’t always the case.
But they should be because there three roles that your board plays. Number one, it is a board. It’s supposed to set your policies. It’s a corporate. It’s you know, it’s a fiduciary board. It’s supposed to advocate for you. And then lastly, they’re charged with making sure there are enough resources there to execute the mission. And for most nonprofits, philanthropy is a part of that picture. Maybe not all of it, but it’s a part of it.
So that you take that responsibility and then look at Principle Five, which is work from the inside out. It’s your board should be comprised of all the different constituencies you intend to raise money from one member. You don’t want all bankers or accountants or PR people or doctors or any other group of people. You want a whole group.
“Your board should be comprised of all the different constituencies you intend to raise money from.”
And then, as I learned in India, as my Indian partner said to me, you know, Larry, in America, one person will talk to ten. Well in India, one person will talk to 100. And it’s true. That’s where Indians have a distinct advantage over Americans when it comes to building a network, because if someone’s had a good experience, they’ll tell everybody they know and you want to build on that because then your network grows. And then in terms of the scientific part of it, you sit yourself down and you just start looking at, what are the kinds of people that support us. Let’s see, where are our gifts coming from, what’s important to these people? And then you gradually build a profile of what that typical person might look like. All right. And then at that point, if you really want to get sophisticated and you can begin to employ some of these more sophisticated tools which use this kind of profiling to begin to build your list, you see now it’s not all about new donors, though, much more about retaining the ones that you had.
You see, this is a big, big, big mistake that nonprofits make. Oh, we need more donors. Well, no, you need to keep more of the ones you have, because when you do that, your costs go down and your revenue goes way up because no one’s going to come to you right off the bat and make a huge gift.
You know, I’ve been in this business, what, 30 years and I’ve raised almost $1,000,000,000 U.S. and I can count on one hand the number of times someone walked through the door wherever I was working and offered me a gift that was anywhere close to their financial ability. All right. That just doesn’t happen, You know, once in a while.
Let me give you a perfect example of this. I live in the Rocky Mountains, and two hours for me is a community called kitchen. And you probably know it is Sun Valley, which is one of the world’s top ski resorts in the world. And it’s a pretty wealthy community, as you might imagine. I had a couple of clients up there, and one of them was an arts organisation. And they unfortunately had been depending way too much on what I call transactional fundraising, specifically a wine auction. All right, then the economy took a real downturn and, well, how many people are going to buy $2,000 bottles of wine? Not many. All right. Even in that community. So as I was working with them, I said, what you need to do is be focusing on people that are already giving to you. And I said, here’s what I want you to do. I want you to come up with a list of everyone that’s given you $200 in the last year. And that’s not very much, especially in that community. And I want every board member to take, you know, take ten of those names and it wasn’t tough and make a phone call to that person. And all you want to do is, number one, thank them for their gift. And number two, ask them how the organization could support them, not the other way around. And if you get a voicemail, you leave your personal number to return the call. Don’t give them the office number.
And they did that well. There was this one lady who had just moved to Sun Valley from it, from someplace back east, and she wrote him a check for 200 bucks. And so they called and thanked her two weeks later to the day they received in the mail a check for $20,000. Well, when they called her, she said, well, I was just so impressed when I got this call from the board member that thanked me and wanted to know how I was integrating into the community that, wow, I want to be a part of this. See, she just wrote a check tinderbox this to see what happens. And then when she got back. Wow, that’s what I’m talking about. That’s the kind of investment. But you only get that if you’re really focused on the donor and not on yourself and on the money.
“You get good investments if you focus on the donor rather than the money.”
Simit: In fact, today I just like on my LinkedIn, I ran a poll in terms of what is the best way to engage, going to say, how do nonprofits to get a sense as to what is it that other nonprofits kind of do in India as to what what are the ways in which being engaged with their donors? It’s a one week alone kind of approach. So I’m hoping to get some interesting insights into this. But what is what has been your experience?
Larry: You don’t have enough time to go around to every single donor individually, but technology enables you to do more that than you used to be able to. But if you have a strong network, you can still do that. I mean, in India, you know, I was told that these networks exist and you can do that.
So it give you a perfect example. I usually like to ask someone, Well, so Simit, what is it you’d like to accomplish? And just leave that question open and then listen to what you say to me. Really Listen, you see, and then let just see where the conversation goes and I’ll give you a perfect example. I was in Bangalore when I was in Bangalore in February. They arranged a lot of appointments for me and one of them and I won’t mention his name because of his business. He’s a CEO of a very high level security company. Either he provides security for corporate and private people worldwide. We’re talking about top level here. Okay. When I went into his office, I really thought that James Bond was around the next corner. I mean, that’s the kind of environment this was, you know, and and this man was very, very sophisticated. But also very cool. You could tell this guy he had dealt with the best and the worst of the world. And but we had a nice conversation. And I said to him, I said, so, so what would you like to accomplish? He immediately got up and we were in this sequestered high, you know, high security, high tech room. And he goes over to this model where he wants to build this training school for vocations. Who would have known that?
Yeah. I mean, here because I’d I’d been escorted to this off a side street in Bangalore and some armored range Rover, you know, with all the other big muscle around me all the way up to the skies office. And I felt like I was in a set, you know, And this is what he wants to talk about, you see, is my point. You know, appearances can be very, very misleading. And if you just give people an opportunity and you’re honest about it, they will respond. They really will. And that’s another way of finding the people that are really going to support you, too.
Simit: I mean, these are wonderful kind of insight and really interesting stories. So when you’re dealing with multiple kinds of donors and multiple people that are individual donors, then on to they cooperates, what sort of donating to an organization? And there are all kinds of things to do in terms of your fundraising. So obviously, the strategy to engage each one of them would also be very, very different types. Do you want to kind of throw some light on on that aspect?
Larry: Yes, I do, because often people will say, Oh, well, but you can’t treat corporations and independent foundations that way. Well, yes, you can with the proviso, first of all, they’re people like anyone else, but they have organized their fundraising or their philanthropy around particular goals. So it’s incumbent upon you, the member of the nonprofit, to figure out what those goals are and how they might really match what you have. Then the next step, and this is something they almost never do. All right. Is sure there’s going to be a formal procedure. You know, you fill out a form, you do this, you do that. Okay, fine. But before you do that, you need to make an appointment with the person who’s going to receive that and say, you know, Simit. You know, I represent, you know, this orphan’s home and and I just want 30 minutes of your time because I want to find out what’s really interesting to you this year for your CSR work. And you say, Oh, sure, Larry, come on over 30 minutes and I would be asking you for money, but I’d be, I’d be saying, So what is it that would really entice you? What is it that would really interest you? And you’re going to tell me, right? And if I’m smart, I’m going to go back and I’m going to tailor my proposal that the written piece, similar to what you said to me, two things happen.
First of all, the fact that I’ve targeted it so well, it’s likely to get more attention. And the second thing is you’re going to remember me as a person, not as a piece of paper. And the other thing is, you know, don’t try to put us put a square name to a round pack. You see, if you’re really interested in animal welfare and I’m into orphans, well, we might have a drink together somewhere, but I’m not going to waste your time with a proposal, you see, And you’re going to respect me for that. Because sooner or later, one day, you will meet someone that likes what I do. And you’re going to say, Well, we don’t do that. But hey, Larry, does. You should go talk to him. It’s it’s a it’s it’s you know, what’s the proverbial what goes around comes around.
Simit: Absolutely. Yeah. I mean, a lot of times, like generally this is one thing that I have seen the kind of work we’re doing in organizations in India. So it’s typically the kind of interactions that especially when you go to conferences, for instance, in when you have like your name tag and that is the name of your foundation, for instance, then suddenly you’ll find a lot of people, you know, trying to talk to you because they are and it’s so transactional and it’s so obvious that, you know, people are asking you,
Larry: You’ve got a target on your back. So it is over there.
Simit: Yeah, you can you can literally see that people are talking to you because just because you have like a foundation written on your name and looked at and if you hadn’t had that, then you would not be having that conversation with that person. You know, the conversations are so direct. It would just, you know, just the money part of it. And then like a larger conversation, which may or may not necessarily lead to raising resources, but at least you are making that connect. You’re building your network. And I think that’s an important part. Which organizations typically tend to miss.
Larry: Well, in a and in a conference setting that is not the place to have a serious discussion about potential funding. It’s a place to get to know the person. Because, for instance, you have no idea what that person’s going through. Maybe his breakfast didn’t agree with him. Maybe he had a fight with his wife that you don’t know. You have no idea what’s going on in that man’s life or that woman’s life. And so too, to treat them as some sort of transactional thing. It’s really very devaluate.
“A conference setting is not a good place to have a serious conversation about potential funding.”
Simit: Like sure, In India, we see a lot of, you know, a debate or like a discussion going around in terms of talking about some of the failures of an organization. And that’s something that you have also highlighted in your book. But it’s a tricky situation. How do you talk about failure? Because the fear is that if you talk a lot about your failure, then it is likely that you might not get support from your donors.
And generally there could be a question mark about your capabilities as an organization, and it could just be two more complications and you would rather just not talk about it. I mean, what what are your thoughts?
Larry: Let’s go back to a basic motivation of why donors give. Number one, they’re giving see something happen. It’s going to give them a sense of well-being and fulfillment. Don’t ever forget that. All right. So, yes, progress is important. However, people who are making gifts, especially at higher levels, they’re used to taking risks they didn’t get there playing safe. They respect an intelligent risk taker. Now, that requires the organization to be very transparent, but it also requires them to demonstrate that they are taking some calculated risks.
You know, it’s more on the upside than the downside. Here’s our goal. And to get there, we’re going to take a few risks. And if we if this doesn’t work out, we’re going to do this instead. I’ll give you a perfect example that people can see. It’s an organization called Splash, and it’s a charity based out of Seattle in this country that is focused on potable water projects, you know, providing potable water, water in the third World, probably in some places in India, for all I know. All right. And one thing that they and they’ve been doing this for 20 years, this isn’t anything new for them. They put up a live webcam at every single installation, real time to show people what’s happening at this site. And when something when a project didn’t go well or went belly up or something really happened, well, they would report it. This is what happened. This is how we’re going to correct it. This is what we’re going to do in the future.
So it wasn’t just, oh, we failed. No, no. Well, guess what? Happen they’re giving just kept multiplying. People, I want to be a part of this. Wow. What’s going to happen? You see, And people expected it not to be 100% because that’s the way it was presented. Then, you know, we’re risky. We’re out there, we’re ahead of the pack. And yeah, we’re going to make some mistakes and we’re going to make some failures, but we’re going to we’re not going to let that stop us. We’re going to keep working. So don’t be fearful, but be transparent and be honest and then be prepared to take critique from people. That’s the key.
“Dont’ be fearful, be transparent and honest.”
Simit: Right, Thank you. I want to talk a little bit about like the other side of technology, which is the social media part of the culture now. But there are so many platforms that can do it. We don’t have to talk anymore. But that’s not the case in the US. For instance,
Larry: I can’t wait til it’s gone, by the way. We could talk about that. Yeah, let’s hope it disappears soon. All right.
Simit: But here there are like so many platforms right now. There’s Linkedin, there’s Twitter and Instagram and there’s Snapchat. And it just kind of keeps on going and WhatsApp and Telegram and so on. So how can an organization be up to date with what is happening in this case? Like, should the focus be just on maybe one or two platforms or should they be honest from a fundraising point of view and from a communications point of view? I mean, what has been your experience of having worked with organizations like Across the World?
Larry: You need to be present where you’re supporters and potential supporters are. You know, each one of those platforms that you mentioned to me has a certain profile of the user. You know, the Snapchat or the 20 somethings. All right. Okay. Facebook or the grandmothers. All right. I mean, that’s pretty generalized, but still.
“You need to be present where your supporters and potential supporters are.”
So once you know the kind of people that would potentially support, you can see that that requires going back to principle four, again, that self-reflection. You know, let’s be serious. Let’s be frank about the kind of people that would support us. And yes, I would agree you cannot be all things to all people. You cannot be on all platforms. And there again, this go back, it’s a it’s simply a way of communicating. And so you want to be able to communicate with those people who would naturally support you, not the whole world.
Simit: Yeah. And there’s also the the fear of missing out back to the formal sector as they say.
Larry: Let me tell you, the tech giants know that they’re in the business to make money. Don’t kid yourself. And they have created these algorithms that are truly addictive. And so you have to just resist that. You know, I mean, in the bad old days when it was just billboards, you put a billboards in the neighborhoods where you expected to get support from. You didn’t plaster them all over town. What a waste of money!
Simit: That’ true, that’s true. I mean, I have one kind of last sort of final question in terms of of course, there is there is your book, which we will be putting out, like in the video as well. But what are the other resources that if you could share, especially for for organizations in the social impact space, any resources or websites or, you know, where people can learn more about fundraising?
Larry: What we’re doing in India is we have taken our platform, which is a training platform to India, and we have a small group of Indians that we call our fellows who are training right now to be coaches, to teach others how to do this. And one of the distinctives of what we do is it everything is in plain language. There’s no technical terminology or jargon, and we’ve steered clear of that. And we’ve tried to distill it down to the basics. And we’re we’re going to be providing our services in India at a price point that just about anyone can afford. That’s very important to me.
But I realized early on that what was being counseled didn’t require a lot of money to be successful. But unfortunately, getting access to that information was difficult because of the price point. All right. So that there are a lot of what I call the tips, techniques and secrets. CROWD Buy a little this a little bit. I would steer clear of that. Steer clear of that. If anyone says three steps to whatever you can, just keep looking. So but we’re working hard there and we’re going to be building the platform. If you simply went to our website, the eight principles dot com, it does geo target. So you’ll see an Indian homepage and they’re going to be see in about two weeks, going to see a lot of changes there because we are rolling out a totally online program, a certification program. And I’ve talked to a couple of universities there in India that want to use this. And then our fellows group, who are the senior people who were training and they come from all level that they come from a foundation head. There’s a couple of entrepreneurs. There’s a philanthropists they’re all different kinds of people who want to really share this with with their countrymen. So yeah, so the eight principles.com and we’re going to make it affordable for people and it’ll be Indians teaching Indians. And I think that’s very important.
Simit: Thank you. I think that would be really helpful for organizations in this piece because that’s a major, I mean, fundraising for it for a cause, it’s like the bread and butter, right? And it’s something that organizations struggle to kind of do more effectively. So I think your work will definitely be very, very useful for organizations and for individuals in this space. So thank you for sharing that and thank you for such a wonderful conversation and for sharing your insights.
Larry: I’m just been delighted speaking with you and Simit when I come to India, we have to get together.
Simit: Absolutely, Absolutely. I need a signed copy. I have the book. I need you to sign it for me. Please.
Larry: I will. When I show up, I’ll gladly do it for you. Absolutely, sir.
Simit: Looking forward to it. Thank you so much for your time.
Larry: Welcome. My pleasure.
