Why Stewardship Is Critical Now, and Always

May 08, 2009

As we continue to be inundated by poor economic news, falling philanthropic numbers, and negative financial outlooks, it is vital to remember that we have an important group of people who have made key investments in our institutions: our donors. It's critical that we pay close attention to our stewardship of those donors and provide terrific customer service to every one of them.

Now I understand that many of us in the fund-raising profession don't like to view donors as "customers." I hear colleagues talk of how it makes philanthropy feel like a transactional event, rather than a true gift. I certainly don't like the feeling of a gift being thought of as a transaction; after all, it should be a celebration of the donor's philanthropic goals having been met. However, what I want to stress is that, like customers, our donors have a choice as to where they invest their hard-earned riches. So we need to be sure that we offer excellent "customer service" to keep them interested and engaged. In this age of dwindling service, when it feels like no one is paying attention to the old saying "keep the customer happy," we can't afford to join that trend.

Let me share two different examples of good customer service — or stewardship — that I have witnessed recently.

A colleague traveled to New York City to visit a donor who had recently lost his job in the financial industry. As a follow-up to their visit, my colleague contacted several other alumni in the industry and asked if they would be willing to talk with this alumnus about career opportunities and offer advice. My colleague also sent the donor information about alumni gatherings in the city so he could attend and build his network. That assistance has led the donor to tell my colleague that when he finds his next position, he won't forget about how his alma mater helped. Who knows, maybe we just helped to put him on the fast track with a company.

During a recent visit, another fund-raising colleague had to bring the bad news that a donor's endowed scholarship fund was "underwater." I asked her how she handled that delicate situation. She said she went in prepared, with a full update for the donor (including a list of all gifts to the endowment, past scholarship recipients, and an outline of what the annual award has been in the past). The donor was so impressed to receive the information (without having to ask) that she plans to give an "expendable gift" that can be used this year to allow the scholarship award to continue uninterrupted. I don't know any institution that isn't looking for current-use scholarship money at this time.

Through stewardship, it's possible to turn a challenging situation like a job loss, or a difficult conversation about a struggling endowment, into a positive outcome.

Take the initiative. Ask your donors questions. Every donor is different, so listen to how they describe their wants and needs, and tailor your approach to them. For example, when I meet new donors, I like to ask how they prefer I communicate with them. That simple question allows me to understand if they enjoy a telephone conversation or want the flexibility of reading an e-mail message at their convenience. I also document any preferences I uncover, so that anyone from my university who works with that person in the future knows what he or she likes.

Another reason why listening is so important today: Donors are revealing details, more than ever before, about their financial situations. I have had several conversations in which people gave specific numbers in describing how much they lost in the market downturn. Recently, I had someone say to me, "Well, you know, I lost 50 percent of what I was worth a year ago, so now I'm only worth $5-million." I sat silently thinking to myself, "Wow, we had never thought of this donor as being worth $10-million." Ask questions, listen, and then take the information you hear and put it to good work.

Keep the following questions in mind and consider how you and your institution think of stewarding donors. How do you build donor confidence in your institution? How do you educate your donors about the institution's priorities? What opportunities are available to them to get involved, other than just writing a check? How do you demonstrate that you are using their investment wisely? Those are all important questions to ask as you build your donor strategies for the next fiscal year.

Also, does your institution have a stewardship director — someone whose job it is to lead the charge and create opportunities to engage donors? That position has traditionally been considered a luxury and found only at the most sophisticated fund-raising shops. Today I would argue that it is an essential part of any development operation. As gift officers go about their daily routines of identifying, visiting, cultivating, and soliciting, we all need someone whose job it is to remind us that once the gift is made, then the real work begins.

We need to remember that it is our responsibility to continue to strengthen donor relationships, not just raise a gift and then move on to the next person. That is especially true during challenging economic times, when philanthropic dollars are tight. Imagine if we merely worked toward raising an initial gift from a donor, and never followed up to say thank you and steward the relationship. Would we ever realize a second gift?

And what about the donor's estate plan? I'm fairly certain that our donors can find other worthy options for their bequest intentions. After all, I was once gently reminded by a donor that his estate plans are revocable and that he wants to be confident that his gift will be used correctly when he is no longer around.

Stewardship doesn't necessarily have to end when the donors and their partners are no longer with us. Many institutions make it a point to seek out close relatives who may make estate decisions for the donors or have philanthropic goals themselves.

I have a very good example of the importance of continuing stewardship with a family after the parents (who were the donors) are gone. When I started work at my current university, I was taking on some, as we say, fairly "long shot" prospects. I discovered a family whose parents, years earlier, had given money in their estate plans to finance a laboratory. No one had visited them to personally say thank you since the gift was received.

I made the initial telephone call to one of the sons and found that he was very receptive to a visit because, as he put it, "The institution meant a lot to mom and dad." So I went merely to say thank you for the estate gift. In my first visit with the son, what I found was a highly philanthropic family. And subsequent visits revealed they were interested in continuing the relationship with our institution.

Suddenly, the son and his immediate family became my prospects. They had their own alma maters and philanthropic interests, but because we went to say thank you for the parents' giving, they were interested in continuing an established relationship.

Since our first meeting, we have involved his spouse and children in several opportunities, and they have begun to donate in their own right to our institution. I say with certainty that they now consider their relationship with us to be personal and no longer just one passed down by their parents. Even more successfully, we have been able to work with a second son and his family, and they, too, have become supporters.

One of my favorite things to keep in mind as I go about my interactions with donors is something I heard very early on in my development career. To this day it's something I try to share with my colleagues in fund raising. You may have heard it before, but it's worth repeating: "Your best prospects are your current donors." I take that literally to mean that every donor's gift is the lead-up to the next one, and if we act as good stewards toward our donors, the next gift should be even larger.

Jeffrey A. Schoenherr is director of the regional and international major-gifts program at the Johns Hopkins Institutions. He writes regularly about career issues in university fund raising and development.