Difficult Donors

Philanthropy.com, from the Chronicle of Philanthropy

Learning When to Walk Away From Difficult Donors

Martin was unequivocal: “Such donors are the past, not the future. We’ve got the track record, so donors should trust you and the organization. Your board is not going to allow you to undertake projects in which you get dumped on.”

And then it happened. As if Martin had mystical powers that theatrically placed an exclamation mark after his words, the fast rat-tat-tat on my right shoulder signaled that a New York pigeon was suddenly in cahoots with our difficult donor.

“That’s good luck, you know,” said Martin, not missing a beat, as we surveyed the damage to the blue blazer. He bought water and grabbed napkins and we tended to the jacket together.

Running a nonprofit group in today’s economic climate often means not being so fussy about who your donors are — you feel lucky just to have donors. But our board has decided to adopt an aggressive shift in thinking: Hand-pick a small cadre of donors who are nice to work with, understand the immediate and strategic needs of the organization, and want to be real partners in our mission of transforming the way Jews in America view Judaism and its impact on their day-to-day lives.

I have to admit that when this utopian strategy was first hatched, I thought my board didn’t understand the heavy burden its chief executive and director of development carry every day to raise money. It is not easy. But as I’ve racked up significant frequent flier miles visiting many donors and potential donors, I am beginning to see their point of trying to be more selective.

First, since the job of fulfilling our vision on a national level is so challenging, why spend priceless time and energy with difficult people or people whose values do not align with our own? Second, we have eight years of experience producing national, innovative programs on Jewish life. We know a lot about what works and what doesn’t, and we have a responsibility to build on that experience. Besides, the time and energy that our board members put into this endeavor means that they are likely to ask tougher questions and be more thorough in their oversight of the charity’s work than most donors.

As we prepared to undertake this shift in thinking, Martin put together a PowerPoint presentation for our board retreat. It opened with an empty elevator. The top-hatted, short, mustachioed money guy from Monopoly entered on the right. “That looks a lot like Michael Steinhardt,” someone laughingly observed. (Mr. Steinhardt, the legendary money manager, is not a donor to our organization, although I’ve met with him on several occasions to discuss philanthropy.) Next into the elevator came the bespectacled, young Harry Potter. “And that’s Yossi!” exclaimed another, referring to me. The Monopoly Man said, “I would like to build a program to help make all young Schwartzes more Jewish.” Potter replied, “We can do that,” and a bag of money exchanged hands.

“That’s our old business model,” said Martin, and then he tapped the computer again. “Here’s our new model.”

The Monopoly Man went into the elevator, followed by Harry Potter. “I would like to build a program to help make all young Schwartzes more Jewish,” he said. “Let me tell you about our tested, innovative program to reach all Jewish teens, including the Schwartzes,” responded Potter. A bag of money changed hands.

The board applauded its approval.

Within the next week, I faced two tests of this shift in thinking. First, would we turn down a major gift with too many strings; and second, when I met with a major foundation, would I stick to the basic script of our strategic plan or would I try to contort the proposal in order to please?

Our response to the first situation was to turn down the potentially difficult grant — for now. A six-figure grant is very tempting. But the potential donor wants to structure it more like a contract, and I and my board worry that under the terms we could lose control over how the money should be spent. There is also a question of cultures and expectations, including worries about communication, since the potential donor lives overseas. So rather than accept the money, we are going to wait and try to negotiate based on our concerns.

The next test involved a meeting with a very likable but cautious director of a major foundation for lunch. I shared the excitement of our new direction and outlined only one proposal for the foundation to consider, a program to reach a record number of teenagers who have no affiliation with Jewish institutions by offering them a pop-culture Jewish magazine, interactive Web site, e-philanthropy program for collecting donations in honor of bar and bat mitzvahs, and cool Jewish-music downloads.

“Send me a proposal,” he said.

Stew Bromberg, our development director, and I have repeated this strategy several times in the past several months. We need to find at least two major gifts for our teenagers program, and we’ve heard our proposal is a finalist with several foundations. We hope to have good news soon, or else we will have to delay the start of our program for unaffiliated teenagers, which we’re calling Jvibe.

The next step, we believe, will be to build an alliance with a group of donors who share our vision and our management style, a move that will require a new communications tool. We are currently adding a video conferencing system that we hope we’ll be able to share with a key group of major donors as a way to give them frequent updates on our progress and to get their insights and help.

Our charity’s largest partner in this effort is the Avi Chai Foundation, and it has provided us with a model for how it might work, as well as generous financial support. Avi Chai’s offices in Jerusalem and New York currently use video conferencing.

Three huge boxes with the video-conferencing equipment now sit outside our conference room, which is being renovated to maximize the effect of the system. They are tangible symbols of the shift we are working to achieve among our donors to have deeper and more meaningful relationships that can bring out the best in each party in natural and fluid ways.

I am keenly aware that the first year of making the shift and limiting my donation search to “nice” money and donors is going to be bumpy and filled with different kinds of anxieties and challenges. But I am also hopeful it will mean being better focused on living our values toward our vision. And that the next time I go on a fund-raising trip, all I’ll have to worry about will be the birds.

– From the issue dated March 18, 2004

Yosef I. Abramowitz is chief executive officer of Jewish Family & Life, a charity in Newton, Mass., that seeks to spark and nurture Jewish identity. He can be reached at CEO@jflmedia.com.

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