Raising Money, Part 1: Melissa Burns
The startup where I work, ONL Therapeutics, is in the midst of raising our Series B funding. It’s been an interesting process, full of ups and downs, promising roads and dead ends. There have been exciting moments, as well as points that were downright frustrating. While ONL’s story is still being written, one prominent lesson that I’ve taken away from this experience is that raising money isn’t easy.
But we’re not the only ones trying to raise money. There are countless organizations and institutions in a host of fields that need to raise money. There are people who devote their careers to raising money. How do these fundraising professionals raise money? How does fundraising in their fields compare to my experiences with a startup? Are there elements that are shared? Can their experiences inform how we raise money in a startup?
Eager to learn, I reached out to people who fundraise for a living. While some of the particulars are different, there are numerous common threads between our experiences.
Melissa Burns
Melissa Burns worked in development for the University of Michigan for six years before moving to the Michigan chapter of the American Civil Liberties Union (ACLU).
But her involvement in philanthropy stared much earlier. As Melissa reminded me, we’re all exposed to philanthropy at some point as we grow up, even if we don’t fully understand the mechanics of it. We’ve bought or sold Girl Scout cookies, gone door to door selling raffle tickets for our high schools, or dropped off some spare change in penny drives. Melissa built on these experiences and decided that she wanted to become an advocate to help make people’s lives better, though this first manifested itself in a desire to become a lawyer or a teacher.
But her career path changed with an internship. In college, she interned for the University of Michigan in development. Her previous experiences with fundraising gave her the mentality that everything is transactional – giving something with an expectation to receive something in return, a focus on the gift itself rather than on the impact. But at her internship, Melissa was struck with the epiphany that true philanthropy is transformational, where the focus is on the impact a gift will have, rather than on any benefits the donor may receive. Donations can meaningfully improve students’ lives and be much more than a mere vehicle for reciprocity. Melissa realized that being a fundraiser can be a form of advocacy. She could impact people’s lives by raising money for causes she believed in.
After college, she eventually ended up back at the University of Michigan. Fundraising at the University of Michigan is highly decentralized, unlike other universities. In general, this means that each entity within the university (school, department, club, etc.) has their own fundraising elements. There is also a central support group which assists the various entities with their fundraising activities. Melissa started in this central support group, working in the student philanthropy center. In this role, she educated students on how to raise money, as well as helped manage the same summer internship program that inspired her while she was in college. She then moved on to the development office of the university’s College of Literature, Science, and the Arts (LSA), the largest school within the university. Melissa was involved in the Leadership Annual Giving program, which works with donors who give over $1,000 a year to LSA.
Because of the size of LSA, Melissa’s challenge wasn’t finding donors, who were often alumni, but rather helping donors figure out where to give within LSA’s multitude of programs, funds, and departments. To successfully do this, she had to understand the donors’ interests.
Understanding a donor’s interests requires active listening and empathy, two skills that Melissa feels are absolutely vital for fundraising. Oftentimes, donors want their gifts to be transformational and impactful, rather than just transactional. So, they want to give to groups that align with their interests. If a fundraiser doesn’t understand the donor and identify the right destination for the funds, the donor’s desire to feel impactful may be squandered.
To understand the donor, Melissa would do her homework. Before meeting with the donor, she would learn as much about the donor as she could: the donor’s connection to the university, where the person previously donated to, and more. She uses whatever tools are available, including databases, Google, and LinkedIn. With this information, she could start to put herself in the donor’s shoes and begin to craft a tailor-made plan – a pitch – to the donor. She would emphasize how a certain department or program would fit well with the donor’s goals, and how a donation would make a meaningful impact.
In crafting her pitch, she develops a story. Fundraisers, at their core, are storytellers. Melissa often follows Simon Sinek’s “Why How What” model for storytelling. She focuses the story around the donor, who becomes the hero of the tale. She begins by emphasizing why a certain cause, program, or department is important, and why the donor should believe in the cause, establishing a direct connection to the donor’s values. She then explains how her organization has a positive impact in the area that fits the donor’s interests and values. She then describes what the organization does to achieve the “how” and the “why” and what meaningful impact the donor’s gift will have.
However, research isn’t everything. During the meeting with the donor, Melissa would adjust and finetune the plan by actively listening to the donor’s feedback to the pitch. As a fundraiser, if you’re not listening, you’re not learning about the donor. Through these conversations, Melissa could better understand donors’ values and help them identify ways to live their values through donations. Based on the university’s diverse needs, there was always a funding opportunity that aligned with a donor’s values.
But Melissa’s job didn’t stop once the check was signed. Melissa and her colleagues would continue to communicate with the donor, providing updates on how the gifted money was used and the impact the gift had. To Melissa, this stewardship is perhaps the most important aspect of the donation process. It reinforces the idea that the donation was transformational, not just transactional. It strengthens the connection with the donor, building a sense of collective effort, as if the donor was part of the same team, all moving forward toward a common goal, all creating impact together.
Many of these lessons held true when Melissa joined the fundraising arm of the Michigan chapter of the ACLU, though she did notice some differences. One of the biggest differences between fundraising for the university and the ACLU is that the ACLU is a single-issue organization. Instead of the numerous groups, programs, and departments looking for funds, the ACLU has a single general fund. She has also noticed a difference in the use of language, phrasing things more formally and less colloquially at the ACLU, due, in part, to the different target audiences. The ACLU’s donor demographic tends to skew older than the University of Michigan’s donor base. So, Melissa has had to adjust how she frames her stories to ensure that they resonate with the potential donors.
While Melissa’s experiences at the ACLU aren’t the same as her time at the university, there are still things that stay the same. The roles of empathy and active listening remain, and the need for donor stewardship continues to be vital. Melissa also emphasizes that the donor cycle is followed in both cases. In general terms, the donor cycle consists of four steps: qualification, cultivation, solicitation, and stewardship, and often these steps overlap and blend together. The goal of this cycle is to always be making progress towards the donor’s next gift.
In the qualification step, you do donor discovery and learn about what potential donors are interested in, their capacity to give, and their affinity to your cause. These factors help Melissa prioritize donors and influence the message she presents to them. There are data that demonstrate that people who have given to the organization before are more likely to give again. This can help you prioritize your potential donor list, though finding new donors is also part of the qualification step. During this phase of the donor cycle, you do research on the potential donors using the tools available to you, though Melissa is quick to point out that research is still not as informative as listening to the person.
When you’re done with the qualification step, you’ll have a list of potential donors who may be willing to give based on what you know about their interests and values. You then start the cultivation step, where you start to get people ready for the ask. This involves initial outreach and messaging. You begin to engage the donors to recruit them to your cause, encouraging them to start thinking of themselves as part of the team.
The solicitation step is the ask. By this point, the donor should be fully aware of the organization, the need, and the donation’s impact. To Melissa, if the donor is surprised by the ask, you did something wrong.
Stewardship, highlighted above, is the last phase of the cycle. In this step, you continue to build on the relationship you established with the donor. You remind the donor of the impact of the gift and show that the organization is using the donation wisely. You also start to lay the groundwork for starting the cycle over again and getting the donor to give again.
For Melissa, fundraising fundamentally comes down to relationships. Empathy and active listening allow you to establish a connection with a donor, while stewardship and cultivation enable you to continuously build on the relationship. In my fundraising experiences, I’ve also seen the importance of these behaviors. We’ll see that these behaviors represent a common theme when I talk to fundraisers, including in a future blog post profiling an individual who’s involved in raising funds for a private equity firm. But the importance of these attributes isn’t limited to fundraising. We’ve seen them come up in other fields, demonstrating their importance in any endeavor that relies on relationships.
Special thanks to:
Melissa Burns, Donor Relations Officer, ACLU of Michigan (melisbur@gmail.com)
Qiagen and Todd Festerling, PhD for sponsoring the blog