Hospice Trends: Donors invest in you; treat them like investors
Show how your program pays dividends
By Eric Resultan
Editor, Hospice Management Advisor
It may not have been all that long since you launched your 2004 annual campaign. As always, your loyal contributors came through, and you were pleased with the contributions of some new donors. Going forward, the same folks will eventually get a letter asking for money to help fund a capital campaign for a new inpatient facility, or maybe you’ll send them an invitation to a special event where you’ll try to reach into their pockets again.
As you prepare your next fundraiser, you can’t help but think: "How often can we go to the same people year after year, sometimes more than once a year, before they say no more’?"
Let’s look at why people donate:
Your hospice helped a donor’s loved one. The impact on the life of the patient and his or her loved ones was so great that the donor is compelled to support your mission.
Many donors use their donations to gain prestige and honor in their communities. Contributions to worthy causes are feathers in their caps. Your positive image reflects favorably upon them.
• Sense of community.
The donor may not have ever had a loved one in the care of hospice, but he or she may understand hospice’s importance to the community. By implication, donors are adopting the hospice mission as their own in the belief that the community cannot do without your hospice.
No matter why donors give to your hospice, a donation is more than a gift. By definition, a gift is something given without any expectation of getting something back in return. Donors, however, do want something in return, whether it’s improved hospice care, prestige, or some other commodity. That makes a donation more than a gift; it’s an investment.
An investment is the act of acquiring something — property or some other possession — for future gain. This means hospice donors are in some sense assuming ownership of your program via their donation/investment. And they expect you to make good on their investment by working on behalf of their reason for donating. Those who give out of gratitude expect you to help more people in the same way you helped them and their loved ones through a difficult time; those who donate for prestige want to see the hospice rise in prominence; and those whose charity comes from a sense of community expect measurable benefit to the community.
Failure to make good on your donors’ investment will result in divestment from your hospice. Almost as bad as not honoring donors’ investment is a failure to communicate the returns your hospice has achieved by means of their donation.
It’s been said that saying "thank you" is a small price to pay to each and every donor. But even a heartfelt expression of gratitude may not be enough. Hospices need to do more than acknowledge donors; you need to treat them like shareholders who have invested in the company. This includes being accountable to them and showing them how you’ve spent their money.
Successful fundraising is all about building relationships with donors, whether they are individuals or major corporations. It has nothing to do with begging for money. Donors want to know what was achieved with their donated money. The most effective way to say "thank you" is a progress report. Donors are less interested in your activities than in the results of your activities.
Proving to donors that you have been good stewards of their money begins long before you accept that first dollar. Your success must be measurable and plainly obvious to your donors/ investors, and that takes some planning on your part. When marketing to potential donors, be sure to take the following steps:
- Establish goals to be achieved by using donor money.
- Communicate those goals to prospective donors.
- Communicate past successes to them also.
If you tell donors when you have reached or partially reached the objectives you stated when you asked for the donation, the chances of repeated giving are more likely, even in the same fiscal year.
If we are to view donors as investors, then they should be entitled to the same considerations extended to shareholders of publicly held companies. Each year, for example, donors should receive an annual report that shows the hospice’s financial situation: revenue from Medicare reimbursement, fundraising, and other forms of revenue, compared with the hospice’s various cost categories.
An annual report, however, isn’t just about numbers and figures. It’s an opportunity to describe your successes of the previous year, such as new community programs that are not reimbursed but paid for using donated funds. Your annual report should be treated with the same care for appearance and professionalism as any other marketing document. Remember, this report is your opportunity to tell your story and leave a positive impression with your loyal donors, as well as prospective ones.
Another way to communicate donation dividends is through quarterly newsletters. Much like the annual report, the newsletter should provide quarterly financial updates and comparisons to previous years. Use this publication to update donors on goals set for the year. While you want to put a positive spin on things, be honest. If a goal has been difficult to achieve or cannot be attained, say so and explain why.
And now, back to the "thank you." A letter of thanks, preferably from the CEO or president of the hospice, is crucial as a follow-up to a donation. A thank-you letter following the achievement of major goals or milestones also is important because it tells the donor he or she is part of the team, an invaluable partner.
Remember, you are competing for a limited amount of charitable dollars. If you cannot prove donor money is yielding dividends, you will not be able to persuade people to continue investing in your mission.