Podcast: Donors Are Not ATMs: How a Mindset Shift Can Transform Your Fundraising

Season 4, Episode 41

In this episode, Amy Eisenstein and Andrea Kihlstedt unpack a common but costly mistake nonprofits make—treating donors as checkbooks instead of partners. Sparked by recent federal funding cuts to arts organizations, this conversation challenges fundraising teams to rethink how they communicate with their most committed supporters during a crisis.

This conversation is especially timely for nonprofit leaders facing funding cuts, uncertainty, or stalled campaigns. If you’re tired of short-term fixes and want to start building lasting support, this episode offers a clear path forward.

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Andrea Kihlstedt:
Mindset. Have you ever tried to change your mindset? Well, Amy and I are here today to talk to you about just how important that is if you want to raise more money.

Amy Eisenstein:
Hi, I am Amy Eisenstein. I’m here with my partner and co-founder and colleague, Andrea Kihlstedt. And today we are talking about the importance of a shift in mindset to think about your donors as real partners, not just pocketbooks, wallets and why that’s important and what a difference it’s going to make in your fundraising results.

Shifting Your Mindset: Donors as Your Partners

So Andrea, why don’t you get us started and help us think about why did this topic come up for us and why is it important?

Andrea Kihlstedt:
Yeah, thanks, Amy. This topic has come up because in recent days, many organizations, particularly arts organizations, have heard that their funding, their NEA funding has been cut. All of a sudden they thought they had programs that were funded into next year, maybe for 25, 50,000, 100,000 dollars, and they got a letter in the mail saying, “You will not be receiving that money.”

Now, there are many ways organizational leaders can respond to that. Unfortunately, a common way of responding is sheer panic, right?

The sky is falling.

Amy Eisenstein:
Chicken Little.

Andrea Kihlstedt:
Chicken Little. This is terrible, and we are in desperation. And when you move into desperation mode, when that is your mindset, it sets up a whole chain of thinking that is not conducive for fundraising. So what do we want to encourage them to do, Amy?

Amy Eisenstein:
Right. Well, let me just take that one step forward before we get into what to do. I mean, the reaction that we see most frequently, and you were telling me this has happened to you a lot in the last two weeks, is you get an email saying, “Hep, help the sky is falling. We’ve lost our funding, won’t you help?”

And they probably get dribs and drabs or maybe a small flood of small donations, but it doesn’t really solve the problem and it doesn’t grow confidence or connection with donors. And I think that’s what we want to talk about, sort of shifting that mindset so that the donors are real partners, not just help us in our time of need, send in a hundred bucks or 200 bucks.

So let’s talk about how an organization might respond and reach out to donors in good times and bad. I mean, this is a good example. This is why it came up for us because there’s a lot of uncertainty and funding freezes and cuts. So we’ve been thinking about this a lot. But the truth is that in capital campaigns, in ongoing annual fundraising, it is so important to keep your donors front and center as partners.

So let’s talk about how we can make our donors partners and really shift our mindset.

Andrea Kihlstedt:
Yeah, let me see if I can put an exclamation point on that. If you see your largest donors, let’s say the top 30 people who give to you, as people who are invested in the long-term health of your organization as people who are excited and eager to see your organization succeed and to help it move forward. If that’s your mindset, if that’s where your thinking begins, then when a problem comes up, one of the first things you’ll think about is reaching out to them.

And honestly, even when there’s not a problem but when an opportunity comes up, you might think to reach out to them. And those are the people who should be on your mind just as though they were friends because they are friends, they’re institutional friends, right?

If I have a personal problem of some sort, I am likely to reach out to my friends. I’m likely to call Amy, I’m likely to call my friend Maria, I’m likely to reach out to people who have been my personal support system to discuss it with them and get their thoughts and ideas. We do that often and regularly in our personal lives. But when it comes to our organizations and our donors, we tend to see them as being outside of our problems, as being people we should hide our problems from, not people we should share our problems with and get the benefit of their wisdom.

So to go back to the beginning of this, what we’re really talking about is shifting your mindset from thinking about donors as people who will give, if you ask them for money, maybe, to people who will help you think about and discuss issues and problems and they may help solve them with their money and in other ways as well. So it’s such a big difference in approach to fundraising.

Amy Eisenstein:
I love that. I mean, what just popped into my head when you were talking about this is sort of putting your 30 top donors on an imaginary committee. Don’t tell them they’re on this committee, but they’re on your problem-solving committee and your opportunities committee so that every time you have something significant come up and in between, you would check in with them.

Present Your Donors with Options

But to go back to this example of arts organizations that are getting notifications this week about their funding being cut, reaching out to donors and saying, “Okay, this is what happened.” So sharing what happened and say:

“This is what we’re thinking about. These are the options. This is option A. If we are able to privately fund this program, we’ll be able to continue it. If we are able to raise partial funding, we’ll be able to do this, that or the other thing and modify the program. And if we don’t, we will have to make really hard decisions and probably not run the programs this year.”

Asking your donors:

“What haven’t we thought of? What are the other options? Which are you thinking we should pursue? How might we go about doing that? Would you be willing to help and in what ways?”

So really presenting donors with thoughtful discussion and letting them buy in literally and figuratively.

Andrea Kihlstedt:
Let me give you a personal example of that, Amy. There’s an arts organization here in the city that I support, and they did just lose some funding and I saw an email come through from them. It came to me along with everybody else on their list saying, “We’ve lost our funding and please help.”

Now, I decided I was going to help, but it struck me that I would have been perfectly happy had they called me up, and these people know me, or to some extent, had they called me up and said:

“Hey Andrea, we know that you know something about fundraising and we’re in this situation where we’ve lost a chunk of money. Would you be willing to Zoom with us or sit down with us and talk about ways we might address it?”

Now, I would be delighted to do that. It is something I know about, right? It would show that they understand that I have expertise that might help them. The fact that they didn’t know that or that they knew it and didn’t ask makes me feel like, well, all right, they don’t care.

Amy Eisenstein:
Right. They’re not running things well-

Andrea Kihlstedt:
Yeah, exactly.

Amy Eisenstein:
… because they’re not doing things well. I mean to me that’s like an opportunity cost, right? What did they miss? I mean, just based on what I know about you and your philanthropy, if they had called to ask your advice, you would have given them 2 times, 10 times, 15 times what you normally give because you would want to step in and help.

Andrea Kihlstedt:
Right. That’s right.

Amy Eisenstein:
And not by obligation but because you are asked your opinion and asked to help and you want to help and you want to see the programs continue and that’s what good donor partners do. And so sort of hiding that from them or shrinking back, hesitating to reach out or thinking, we just can only go to our donors with good news or when we have exciting things to share, is really a missed opportunity.

Put Yourself in the Shoes of a Donor

Andrea Kihlstedt:
Yeah, it’s kind of a funny exercise to put yourself in the shoes of a donor getting an email like that and ask yourself the question, how would it feel if an organization you support called you and asked you for advice or just had you on a list and asked you for money? How would you feel and what would be the difference and how should they approach you?

I used to think that I was special, I was unique. Well, I found over the years that I’m not special and I’m not particularly unique and the way I respond to things is the way many people respond to things. So checking in on my own judgment about how I would feel if an organization reached out or didn’t reach out is a pretty good, what’s the word, sort of barometer, right? And I encourage you to think that way, right? I mean, for example, let me take that just a step farther.

Amy Eisenstein:
Yep, go ahead. Go ahead.

Andrea Kihlstedt:
Amy, I know that you support social justice organizations and I’m sure some of your organizations have lost funding. So you get an email saying:

“Dear Amy, we’ve lost $75,000 to support this organization. We can take this money from our cash reserves to support the program, but we hope you’ll be able to contribute.”

Now, what would you read in that and what would you do?

Amy Eisenstein:
Well, it’s so funny. I mean, I would say they have the money. They don’t need my money, right? I was just thinking that when I get a bulk email like that, I think, “Okay, somebody else will do it. They’re sending it to 10,000 people, 1,000 people. Sometimes I step up and sometimes I don’t, but they don’t really need me. They’re not talking to me.” So if someone from the organization called, then I’m like, “Oh, they really need my help.” It’s a different kind of thought process. It’s a different conversation.

Andrea Kihlstedt:
And even if they don’t know you, even if they don’t know you, they might call you and say:

“Amy, we haven’t talked. You’ve been a supporter of this organization for a long time and I follow what you do on the internet about fundraising, and I’m wondering if we could have just a 20-minute conversation so I can pick your brain about this and what approach do you think we should be taking?”

How would that set you up?

Amy Eisenstein:
Yeah. Then I really feel that they’re paying attention. Listen, on the one hand, I don’t want to send the message that you just need to coddle donors. I mean, that is not the message. And I also don’t want the message that everybody that follows me either that I’m going to consider giving money to.

We’re walking a fine line here, right? You support the arts. I support social justice and food organizations. We all have the organizations that we support more than others. But I think tapping into people who are your loyal supporters in terms of what their expertise is or even not it, I mean, most of your donors are not fundraising experts, but going to them simply as supporters of your organization and thoughtful people by saying:

“All right, these are the three options that we’ve thought of. What else might we consider? Which option do you think is most important or that you’d be willing to step up and help with?”

To me, I mean sometimes there’s going to be expertise at play and sometimes there’s not with your donors, but they have opinions and judgments. And so by going to them with choices or asking for their opinion is a smart thing to do to engage donors.

Andrea Kihlstedt:
Even if you were to contact a couple of your largest donors and say to them:

“In our group of donors, you give it to us very regularly and at a higher level than many donors. And I wonder if you would consider giving a lead gift, an initial gift to help us get going on this fundraising campaign to solve this problem.”

Even that would be better.

Amy Eisenstein:
Or a challenge. Yeah, a challenge matching gift, right? Say:

“Listen, this is plan A, and we’re going to go for it first. We do have plans B and plans C, which we’d rather not… We’re going to work our butts off for the next two weeks, three weeks to get back to plan A and continue our programs and services and have them thrive, and would you consider issuing a challenge match so that we can go with plan A?”

And having a thoughtful discussion about that. I think most donors would be interested in that.

Andrea Kihlstedt:
Exactly.

A Crisis Mindset vs. An Opportunity Mindset

So, again, let’s go back to the beginning of this conversation, which is about mindset, right? On one hand, we’re talking about a mindset in which you’re going to all of your donors to ask them for money because you have a big problem, you lost a big grant, and you’re worried that the sky is falling and you’re asking everybody to help as they can in a generic sort of way. And the mindset is that these people are good primarily as ATM machines or as pockets. You’re not talking more deeply with them about what’s really going on.

On the other hand, you can see an opportunity born of crisis to have some meaningful conversations with some of your largest donors to help shape the plan going forward and to find out from them how they would like to help. One is a mindset of crisis and donors as pockets, and the other is a mindset of opportunity and donors as partners.

And the latter, that frame of mind that your donors care about what you do care about, what your organization does, they care about whether your programs are going to go forward, they are happy to share their thoughts and opinions with you, and they may be willing to share their money with you is such a powerful approach to fundraising. But it’s more than just a one-shot deal, right? This is a mindset shift in how you think about fundraising.

Amy Eisenstein:
Right. And then don’t forget to circle back with them and let them know, “Because of your advice and contribution, we were able to do X, Y, Z.” Whether it’s the full plan A or plan B, circle back and say, “This is what happened as a result of our effort, as a result of what we discussed as a result of your contribution.” And don’t leave that hanging. Don’t leave them wondering.

So making sure that you’re… We’re talking about 10, 20, 30 people that you’re picking up the phone to call and you’re going to get a lot of voicemails, so you can do this in a day or two. It’s worth the effort. It’s worth reaching out to donors and then calling them a few weeks or months later to let them know how the program’s going. You’re not just calling them in times of crisis, but this is your imaginary committee.

A Secret Committee

I like that idea. Sort of putting them on a committee without telling them they’re on the committee and just the committee never meets, it’s all one-on-one and you’re reaching out to them, whether it’s monthly or quarterly or whatever the case to discuss the topic of the day.

Andrea Kihlstedt:
I mean, like the idea that we talked about before as having a parallel with how you function on a personal level with a group of friends. You don’t put your friends together in a committee of friends, right? You may get them together now and again, you may go out for coffee or a drink, they may or may not come together. They may or may not know one another, but many people have go-to friends that they rely on in times that are good and times that are bad.

And if you use that as sort of a model that you can adapt to fundraising and organizational life, there are a ton of parallels. People you’re going to call to say, Hey, this is the great thing that happened. You can call them to say, Hey, here’s a problem. What do you think I should do? You build friendships that way. And many people, I think particularly women, are pretty good at having friendships like that.

Amy Eisenstein:
That’s right. And so that is the ultimate definition of relational fundraising. I mean, what you just described in terms of thinking of these relationships and look, they’re not friendships in the sense that in the outside or when you leave your job, you’re not going to continue the friendship. That relationship is based on your commitment to the health and well-being of this organization, these services, the mission, but thinking really about it as you do, your friendships, I think it’s a perfect parallel. These are relationships that you have based on the importance of your mission. I love that analogy.

Andrea Kihlstedt:
And then when you get a letter in the mail saying, “Guess what? Your $75,000 grant, which you knew you had in place, has been canceled.” The first thing that’ll come to your mind is, “Let me call Bill. Let me call Sally. Let me tell them what happened. See if they’re willing to get together to talk about what we might do, what the options are.” That’ll be the first thing that comes to your mind, not, “Let me send an email to everybody and ask them for 10 bucks.”

Amy Eisenstein:
Excellent. Listen, I think this was a good important topic for the times we’re living in.

I just want to remind listeners that we have tons of free resources and, of course, opportunities to work with us on our website at capitalcampaignpro.com. So please visit our website, and if you’re thinking about a campaign or need support with your campaign fundraising, sign up to talk to us. We’d love to talk to you.