A View from Blue Grotto

Wednesday, September 08, 2010

What are your nonprofit's values worth?

As nonprofits become more knowledgeable in the areas of planned giving, they are all trying to better understand the process donors go through in deciding how they want to allocate their estates.

According to David Bromelkamp, President and CEO of Allodium Investment Consultants, his team takes their clients through a detailed planning process as they prepare them for the future. Many of Allodium’s clients are philanthropic, and take their giving decisions seriously. Bromelkamp says that nonprofits need to be more strategic and planful as they approach donors, working to connect people to the organization’s core values and to engage them in its mission.

I have heard Bromelkamp speak on several occasions about a variety of topics regarding investment and best practices for nonprofits. Each time, what impresses me most is not just his strong financial advice, but his ability to speak the language of nonprofits. With his background as a CPA and financial advisor, I find his proficiency in the nonprofit world a rare combination.
His own volunteer involvement includes serving on the Board of Catholic Charities of St. Paul and Minneapolis.

I interviewed David recently in the hopes of bringing some of that knowledge and perspective to Blue Grotto clients and my blog readers.

Each time I hear you speak about Allodium’s nonprofit clients, I am impressed with your proficiency and knowledge of the nonprofit field. How have you built that expertise?

Our financial advisors have extensive experience working with both individual and institutional investors.

Individuals are philanthropic, and they think about giving. Nonprofit institutions think about donors and receiving. If you can look at it from both sides of that same coin, you understand the connections between donor intent and a nonprofit’s mission.

When those align, that’s when a nonprofit gets gifts. In my twenty years of financial experience, I know that the really big decisions individuals make, they make based on their core values. Organizations, similarly, are driven by a mission and set of core values.

An individual investor who has taken care of their priorities - put their kids through college, taken care of their retirement - may then turn their attention to charitable giving. They get very values-oriented, and become increasingly thoughtful about how an organization fits their values before they make major gifts, whether through planned gifts or campaign contributions, like a capital campaign.

How can a nonprofit be more strategic about their development efforts?

Personally, I am very planful and strategic. So, things like planned giving make a lot of sense to me. Estate planning makes a lot of sense to me, retirement planning makes a lot of sense to me.

We have seen a trend in development - nonprofits are becoming more knowledgeable about the importance of planned giving and that donors want to do more than simply write a check. So the idea of estate planning, and planned gifts and trusts, is becoming far more important

It is all about planning. Investors make plans. They make estate plans, retirement plans, etc. They think ahead five or ten years and make plans. Organizations need to emphasize the strategic planning element of their development efforts, and how that dovetails with donor values.

Why do you think values are so important to the development-philanthropy relationship?

Donors make decisions based on their values. The larger the financial amount, relative to their financial situation, the greater likelihood it will be a values-based decision.

If you asked me for $100 for your organization, I might give you $100 because I’m trying to be nice to you. But, if I have to decide how to carve up a $10 Million estate between three organizations when I die, I’m going to think about what three organizations are the most important to me and my life, and what I want to leave as a legacy. Those are going to be values-based decisions, not seat-of-the-pants decisions. They will be very values driven.

People tend to go to their core values when they are forced to make hard decisions. In periods of stress or duress, you’re going to revert back to your core values. And there are different sets of values that drive people’s decisions.

You’ve talked about converting that $100 donor into a significant or a lifetime donor. What do you think nonprofits can do to help make that conversion in their donor base?

I think the most important thing is for organizations to develop a relationship with donors – relationships that enlighten the donors about how the organization’s mission dovetails with the donor’s core values. The better that the organization can get at that enlightenment of the donor, the larger the gift they can achieve. Or the larger share of the wealth from that donor.

It’s all about enlightening the donor about what the true mission of the organization is, and connecting it to the donor’s core values.

Nonprofits also have an opportunity to demonstrate their own strategic map to donors– for growth, or a narrowing of focus, for improvement or delivery of service, even fundraising strategies. Donors of large gifts want to know that you, too, are being strategic in your stewardship of their gift.

Sometimes it’s a chance to more deeply engage a donor in the organization. One organization I think does a good job is St. John’s University in Collegeville, MN. They often invite alumni to give counsel on a specific issue. For example, if they want to build a new library, they include donors in the discussion on their approach to launch such a major capital campaign.

Getting donors involved in that strategic planning process engages them more deeply with the organization, and reminds them how much they value the organization and its mission. Increasing their commitment to the organization philosophically will inevitably increase their commitment to the organization financially.

David Bromelkamp is President and CEO of Minneapolis-based Allodium Investment Consultants, an award-winning independent investment advisor. Contact him at 612.230.3702; dbromelkamp@aicria.com.

And email me with examples of how your organization is passing the values test.

Yvonne Hundshamer
President, Blue Grotto Inc.