Fundraising During Times of Uncertainty - with Fred Fransen
Show Notes:
In this episode of 7-Figure Fundraising, host Trevor Bragdon interviews Fred Fransen. Fred is the co-founder of Certell, Inc., an educational non-profit which provides Social Studies curriculum to more than 5,000 teachers, and for years worked as a donor advisor for major donors. However, with all the uncertainty of the Coronavirus, limited air travel, and the volatility of the stock market, it is an interesting time to be a fundraiser. Together, Trevor and Fred discuss how to fundraise during uncertainty.
Fred discusses what a donor advisor does and what that work is like. He has worked with family foundations and individual donors but mostly worked with the foundation creators and small staff that support them. Fred says he gives a hand wherever he can be of assistance. He offers high-level administrative services, advises trustworthy financial managers, and guides major donors looking to invest in an organization.
Fred started his advisory business in 2008, which was a turbulent time financially. He discusses how non-profit organizations approached donors differently during this economic downturn. He had two clients that he started his business with, and things immediately were very trying. People with assets that were once generous thought the U.S. was entering a depression and became very afraid. However, Fred states that people didn’t realize at the time that it was actually a time to buy, not to sell. Million-dollar donations disappeared overnight. Luckily, Fred’s two clients just reclaimed an old donation and were sitting on a large sum of money and his business was able to keep operating. Looking at the crisis today, Fred advises nonprofit organizations to approach donors first before they may be tempted to pull their donations completely. The way most wealthier donor's personal assets are distributed, it is best to guide donors to push back the timing of their donation. He discusses why this counter-intuitive approach could actually help everyone involved once the market regains stability. There is a level of risk with this approach, but it could help gain more trust with your existing donors.
Fred shares some of the warning signs and changes that happened in 2008 compared to today. He said the turn of the market happened so quickly, which was caused by a fundamental flaw in the economy. Fred believes this is different from what is happening now with the Coronavirus. The precautions taking place to limit the spread of the virus may affect the market negatively now, but in the long term, the precautions will help the economy. Nevertheless, there is some short-term damage that is happening, since the market was doing so well before the pandemic.
Fred discusses the effects of canceled meetings and events due to the pandemic and how donors may respond. He shares his personal experiences with canceled meetings and how he is holding off on face-to-face meetings with his older donors. It may be worth postponing meetings with older donors since they will have a harder time with virtual meetings. He also encourages nonprofits to hold off on large asks during this time due to the level of uncertainty if possible. Trevor talks about how delayed donation probably won’t affect the long-term giving if the donor waits to donate for a few months. Together, Trevor and Fred agree that because of the initial strong reaction from businesses around the country; meetings, donations, and life will return to normal quickly.
Next, Fred talks about how major donors are thinking differently compared to the normal smaller donors. Highly successful wealthy people have an easier time going on with life and business. However, a major donor has more anxiety because they have more to lose and are probably a part of the older generation.
To wrap up, Fred talks about what is most important for nonprofit organizations to understand during a pandemic. He says nonprofits should be looking for ways to increase their liquidity and make sure they can handle a decrease in donations in a state of emergency. They should have a plan if there is a long term financial hit from the economy and find the weaker areas of the business in case the crisis worsens.
Key Takeaways:
01:25 - Fred discusses what a donor advisor does and what that work is like
04:03 - Fred shares what it was like starting his advisory business in 2008, during a financially turbulent time in history.
11:49 - Fred shares the best way to speak with a donor that may be tempted to pull their donation and how to tell the donor they can push back the timing of their donation instead.
13:23 - Fred talks about the shifts and changes that happened before the economic downturn compared to today, with the effects of the Coronavirus.
17:38 - Fred discusses the effects of canceled meetings and events due to the pandemic and how a donor may respond.
29:08 - Fred explains what he finds most important for nonprofit organizations to know during this time.