Fund-a-need ….Part II…. Implementation

In the previous blog on fund-a-need I described how I first encountered the process in Seattle and then how we brought it south to California.

In this blog we will discuss how to optimize your fund-a-need.

Begin with the basic definition: A fund-a-need is where the auctioneer asks for a cash donation from the audience. We do it from set increments working from high to low. $5,000, $2,500, $1,000, $500, $250, $100, for example.

Some argue that it is better to do it from low to high, hoping that some member of their audience will keep their paddle raised to some mystical level. From my perspective the confusion caused and the time wasted by doing this reverse negates any possible benefit.

For many organizations, the fund-a-need has become the single largest source of revenue of their auction evening, yet, surprisingly, remains almost a last moment consideration. To maximize the return, that philosophy must change.

The first change is to raise the “status” of the fund-a-need. Nearly every event is run with an organizing committee. There will be chairs for food, decorations, the silent auction and live auction. Rarely will there be a separate chair for the fund-a-need. My first recommendation is to institute one.

The fund-a-need needs it’s own advocate and decision maker.

The required decisions / tasks include:
1) The purpose and the goal of the fund-a-need.
2) How that should be marketed.
3) Finding the lead donor.
4) Looking for matching funds.
5) Deciding on the increments.
6) Determining the relationship between the fund-a-need and the rest of the auction.
7) Last minute changes/decisions.

The purpose and the goal of the fund-a-need.
Deciding on the focus of the fund-a-need is a priority. There are several factors that need to be considered.
· Do you want your fund-a-need to duplicate the mission of the evening? It is certainly acceptable to do this, but it forgoes the possibility of telling a different story about your organization. In other words, if you have introduced your auction with a video describing your organization and your goals for the evening, (always a good practice), what new information do you have to introduce the fund-a-need?
· The more specific the “ask” for the fund-a-need, the greater the possible commitment from the audience. They will cut you some slack for the auction lots, because they receive a “prize” for their donation, but when it comes to just cash they need to “buy into” how it is to be used. The charity, on the other hand, wants the ask to be as broad as possible to give them the greatest freedom in using the funds.

· Is this a realistic ask from the audience? If you set the financial goals too low you will quickly meet them, and that raises the question of whether you should continue asking for additional money. We have actually had events stop us during the fund-a-need and saying “That’s enough”. On the other hand, too high a goal is off-putting. If you are doing a “fund-a-need” to “Cure Cancer”, then any single donation becomes irrelevant. It will require billions, if not trillions, of dollars. In that situation a donation of $100 is practically as significant as one of $100,000
·
· Does your audience believe in the goal?
o For example we just returned from the Elegant Vintages Auction for the Indianapolis Zoo. This is a wonderful wine – auction whose main goal is to raise money from a crowd that are not normally zoo supporters. As a wine auction this succeeds admirably.
o The challenge has been the fund-a-need. The mission of zoos has changed from primarily entertaining and educating the public to becoming bastions of Conservation. Because Elegant Vintages has successfully developed a non-zoo crowd for their event, that group, almost by definition, are not passionate about conservation. Obviously they are pro-conservation; it’s just not their great passion. When that was the focus of fund-a-need the response was so-so.
o The last two years we changed the focus to a program that the zoo had wanted to start, namely subsidizing the membership of Head-Start families, so that for a fee of $25 dollars a year they would have full year-round access to the zoo, including free parking. In every way this has been a resounding success. Hundreds of families have signed-up, and the tracking data shows that they are attending the zoo regularly, the zoo has been getting great press and, most relevantly for this discussion, the Fund-A- Need has doubled.

Marketing the fund-a-need.
Having decided on the goal of the fund-a-need, the next task involves marketing. As is true of so much in this world, marketing defines the message and thus the product. While we have seen thousands of fund-a-needs marketed in hundreds of ways, the most successful come down to attaching a sympathetic face to the ask.

Some messages are difficult. The audience fights connecting with the cause. Introducing the fund-a-need for a Drug and Alcohol Rehabilitation center was young, good looking, fit and charming. I suspect that, on first seeing him, many of the audience assumed that he was the Executive Director or a councilor. He told his story of how a college sports injury introduced him to painkillers. These, in turn, lead to a downward and deep spiral. The attitude from the whole audience was “there but for the Grace of God go I”. The fund-a-need was very effective.

Another part of marketing is to assure the audience that their donation will make a difference, that there is an obvious call to action. Many years ago we were doing a fundraiser for a Hospice organization. It’s surprising, but fundraisers for Hospice tend to be very upbeat affairs. When it came time for the fund-a-need, they ran a video that told the story of a young couple that had lost their child. Though the video illustrated the great work done by hospice, it left the audience powerless. The pain was too raw. No amount of money would make a difference. Their money became irrelevant and so they did not offer it. If, on the other hand, the video had ended with the father saying that some piece of expensive equipment enabled them to keep their daughter at home until the end, the audience would have responded wildly. They could provide that fix.

Finding the lead donor.
The next duty is to find a lead donor. The size of that ask is dependent on several variables: the goal, the number and wealth of the attendees and their commitment to the event. If a lot of people are attending (500+), and they all have money and are committed to the event (i.e. limited corporate tables) then the lead donor need only be in the 5% range. For a small crowd with limited commitment you may need a kick-off donor at 20%.

Developing Matching Grants.
Matching grants are the most effective way to increase the return on a fund-a-need. As NPR discovered all those years ago, people love to have their money doubled. The ideal, of course, is to find someone that is prepared to match the entire fund-a-need. These angels are few and far between. More likely you will find someone who is prepared to make a certain donation, and gives you the freedom to use it as you wish. In that case you can either gather these donations into one large matching fund or, the more likely scenario, use the money to encourage individuals to increase their donation. For example if last year you had 10 donors at the $500 level and 20 at $250, then you could use a $10,000 matching grant to try to move 10 people from the $250 level to the $500.

Selecting The Increments.
Deciding on increments means balancing time, money and not appearing rapacious. From $100,000 down, the normal increments are:

$100,000 – $50,000 – $25,000 – $10,000 – $5,000 – $2,500 – $1,000 – $500 -$250 – $100

Though these are “Norms”, but as you can see, particularly in the higher numbers, there are enormous gaps. It is fair to assume that if a donor is prepared to give more than $250, then they will probably stretch to at least $500. The jump between $25,000 and $50,000 is a different story. You have to be creative.

For example I have an event coming up where we have always run the following increments:
$20,000 – $10,000 – $5,000 – $2,500 – $1,000 – $500

This year we have discussed my going out on a limb at $30,000. We don’t have anyone committed at that level, but last year there were several donors at $20,000. I think that it is worth the risk. We will either get a response or not. If we do then I will go this route:

$30,000 – $25,000 – $20,000 – ($15,000) – $10,000 – $5,000 – $2,500 – $1,000 – $500

If not then:

$30,000 – $20,000 – ($15,000) – $10,000 – $5,000 – $2,500 – $1,000 – $500

In both cases the $15,000 level is dependent on the response to the $20,000.

At Reynolds & Buckley we really think about this sort of thing, but I know that most auctioneers don’t. You need to decide and then tell them what to do.

Fund-a-need .v. the rest of the auction.
The relationship between the fund-a-need and the rest of the auction can be delicate. The first decision is where to place it within the proceedings.
The effect that the auction has on the fund-a-need is that it “loosens-up” the audience. If the room is seen to be having fun throwing around money, it becomes catching and produces a more effusive fund-a-need.

The goal, in deciding where to place the fund-a-need, is to find a spot where there has been time for the “loosening-up” to kick in, but not so late that people are starting to leave.

You also have to take into account that the fund-a-need can absorb cash from the auction. If you do the auction too early and it is very successful it can deaden the rest of the evening.

If you are planning a very short auction, less than 10 items, you may well decide to place the fund-a-need at the end. The only problem you will likely face will be from the check-out committee as the fund-a-need takes time to process.

Do you place the fund-a-need in the catalog? We would recommend doing so with the proviso that this forces a more precise description of where the money has to be allocated. From the stage I can fudge that a little, and therefore continue raising money.

Last minute decisions.

The fund-a-need chair may need to make last minute decisions. Just before a recent auction a potential donor approached the committee and offered a very large matching grant under the condition that the goal of the fund-a-need was modified slightly. This request would have floored many organizations. Too many people would have had to sign-off on the change. Fortunately this group was able to make a decision and thus raised an additional $100,000, a very significant sum.

SUMMARY

For years our assumption was that if someone has been outbid on a live auction item, they might well donate that money to the fund-a-need. Recently Greg has been putting a lot of effort into checking if that is true. He has been trying to track the runner-up bidders at his events and then monitor their donations in the fund-a-need. The initial results indicate that we were mistaken. It looks like there is no correlation between how much they are prepared to bid in the live and what they are prepared to donate in the fund-a-need. To me this reinforces the independence of the fund-a-need process and shows the increased importance of someone taking ownership of this part of the evening