Episode 15: A Fundraising Makeover

Episode 15: A Fundraising Makeover

Please note: This is an AI generated transcription. There may be slight grammatical errors, spelling errors and/or misinterpretation of words.

Speaker: Welcome to Mission + Markets, a podcast by CAPTRUST, where we explore trends and best practices for endowments and foundations related to mission engagement, fiduciary governance, and investment management. Hosted by CAPTRUST’s Heather Shanahan, each episode shares research, resources, and recommendations from industry insiders so your nonprofit can focus on what’s most important, the mission.

Heather Shanahan: Hello, and welcome to today’s episode of Mission + Markets. My name is Heather Shanahan with CAPTRUST.

Today I’m joined by Missy Hatley of Legal Aid of North Carolina and Shannon Williams of Armstrong Maguire. Missy, would you be willing just to tell us a little bit about you and your background and Legal Aid?

Missy Hatley: Sure. Happy to be here. My name is Missy Hatley and I’m the development director for Legal Aid of North Carolina. We are a nonprofit law firm that serves all 100 counties across the state, providing civil legal assistance in a variety of areas. The top two need areas for North Carolina being family violence and housing issues.

And I joined Legal Aid about a year and a half ago after 20 years working for affordable housing, homelessness, and permanent supportive housing nonprofits.

Heather Shanahan: Excellent, welcome. Shannon Williams with Armstrong Maguire, tell us a little bit about you.

Shannon Williams: Hey, Heather, thank you so much for having us. What a treat to be with you today. So I’m Shannon Williams. I’m the managing director at Armstrong McGuire. And for 20 years we have been partnering with nonprofits, helping them to build their capacity in leadership development, organizational planning, and fundraising.

Heather Shanahan: Fantastic. Glad to spend some time here with you today. I ran across the story, I think, Shannon, that you had posted on LinkedIn talking about legal aid and how you guys worked together for a fundraising revamp and some really innovative approaches. So, Shannon, tell us a little bit about the background on the story of legal aid and this transition and their philanthropic giving.

Shannon Williams: Absolutely. So as Missy said, Legal Aid of North Carolina. is a really powerful organization for our state, you know, serving all 100 counties and really, you know, removing any barriers to justice for North Carolinians.

So they had a board member who was serving on their development committee, And she reached out to me and she said, you know, I really feel like legal aid has some untapped potential in our fundraising. But we’re not really sure how to unlock that potential. And so we decided was, our team at Armstrong McGuire would come in and do a fundraising effectiveness analysis of their current fundraising program.

So we worked with the development committee and the development staff to really go about that analysis. And what we learned was they had done a really good job of establishing a direct mail program and partnering with some organizations for some third-party events. But what they were really lacking was a major gifts program.

They really had not ever really gone out and, and asked individuals and companies and foundations to really invest in their work at a really deep level. And so that became a big part of the focus of our revised, and I would say, expanded development plan for them.

Heather Shanahan: That’s significant, just from our perspective, our annual survey of endowment and foundations that we do here at CAPTRUST. We see that anywhere from 46 to 53 percent of organizations that were surveyed list individual donations as their greatest source of fundraising to think that maybe that was missing on the boat there is certainly a great opportunity for you guys to dig in.

Missy, at the time you were new to the organization, how did you navigate any internal frictions or challenges with the staff as you address this new strategy?

Missy Hatley: I first started with building what I believe are relationships inside the organization because there are over 400 staff across legal aid, and there’s always been a need for more funding. There’s always been an effort around lots of grant writing and engagement and reporting.

And so one of the first things I wanted to do was connect with as many people as I could across the state to share how major gift fundraising is different. It’s not at all a criticism of not having done more of it in the past. It’s showing an appreciation for what has been built up over the past 20 years.

And then saying, this can take us to the next level. This can fill in some of those unanswered needs when you focus on primarily grant funding and offer flexible funding. so just building relationships inside.

And that gave me a lot of great practice and training and learning about the mission once I started talking to people externally.

Heather Shanahan: So for you at Legal Aid, who are your primary strategic partners?

Missy Hatley: So I would say our, our longest, most loyal donors are attorneys that have served on the board, or, you know, firms that do a lot of pro bono support for us. Because they’ve been close to the mission for a very long time and they understand the impact it makes. And so they’re more likely to understand what a $100 gift or a $10,000 gift is.

Prior to focusing more on philanthropy in the nongovernment sector, I think most of our partners were very generous, but complex government and nongovernment foundations that look for very particular programmatic goals and it can drive programs forward, but if you don’t quite have enough funding overall, some of your infrastructure needs can really hold back the ability to do that.

So, some of the philanthropists we’re going to now understand that we need some flexible funding to be able to act quickly, to pivot, to be nimble, to respond to the client needs

Shannon Williams: I love that Missy calls it flexible funding. For a long time in philanthropy and fundraising, we really use the term unrestricted funding. And I love that she talks about flexible funding because that’s really what it is and what we’re asking, especially major donors to really trust the organization.

To take their investment and use it in the places that will have the greatest impact. so, talking about that as flexible funding really helps a major donor understand that the organization is striving to be nimble, to be able to meet the most pressing needs of North Carolinians.

And so I really love that change in vernacular that Missy and Legal Aid has adopted.

Heather Shanahan: I haven’t heard that before. I like that too. I think that’s more meaningful as you talk to potential donors to then unrestricted so what, what’s important to donors? What are you when you’re having these conversations? I think you talk about what’s important to the organization.

What are you finding that’s important to donors as you’re communicating with them?

Missy Hatley: I would say that what is the most important is conversations that we have with donors. It’s almost, for any nonprofit fundraiser, I think the most difficult question to answer, which is, it really just starts with, what do you need? And the needs are so great and it’s hard to not feel overwhelmed by that question and say, well, we need everything, or we just need money.

When of course, it’s a lot more nuanced than that. So, understanding the financials of the organization at a very high level is important for your development department. really you need as much time as possible at the table with the, the CFO as, is strategies and.

What we would do if this funding doesn’t come through, what we would do if this funding does come through. All of that is important for a development director to understand because when you go and talk to a donor, the conversation could become very specific. Andas much as you can understand an investor level conversation and, Follow that donor down their line of questioning to how it really would make a difference

And as much as possible being able to understand at a very high level how their gift will make a difference and how it will help

Heather Shanahan: Yeah, I’m glad to hear you say that one of the things that we prepare with our clients is called a donor dashboard and it’s something simple. It’s just a two page front and back. The front is specific to their organization, their mission, their goals, their strategies, customized with their photographs.

And the back is a snapshot of their portfolio. and we think that that transparency is key. It’s important for donors to see, you know, what you’re doing and that you practice good fiduciary management, but I think it’s helpful for development teams to say, all right, I have a one page drill down. I don’t have to understand.

All the moving parts, but I can walk in with one page and I can speak to this eloquently and educate a potential donor about what we’re doing. so it sounds like that’s kind of, those are the conversations that you’re having too, of making sure that you’re fluent in, in that language as a development person.

Shannon Williams: I love that y’all are doing that, Heather. I think that’s fantastic for nonprofits to have that simple overview, because we all know, what a donor is looking for is they’re trying to make a difference. And so they want to have confidence that when they invest in you, that can happen.

And so I love anything we can do to increase that confidence and that the donor feels good about the investment that they’re making in the nonprofit.

Heather Shanahan: Absolutely. one thing that we find is also useful for that is for board members, you know, outside of your finance committee, you may find that not everybody that’s serving on your board is well versed in how to read financial reports. Our statements. And so just making them feel like they are armed to be able to go out in the community and, be a resource and an advocate and a champion for the organization.

And on that note, Shannon, how did you engage the board? for support?

Shannon Williams: In part, we were fortunate that the initial request to really analyze the fundraising program and strengthen it came from the development committee of the board. So, we had some internal champions from the beginning, and as we went through that process, process the rest of the board was brought into that by their peers. Our team was certainly present at those board meetings, sharing our findings and recommendations, but we also had a true partnership with those development committee members. And so as a board, they were able to look peer to peer and say, Hey, we think this is what we need to do to increase our impact as an organization.

And, board members who don’t serve on that development committee, they already trust and have relationship with their board members. And so they said, all right, let’s give it a shot. So from there, it was really our responsibility at Armstrong McGuire. to really train and equip those board members.

And so again, Heather, I appreciate that y’all, you know, recognize that the, the kind of materials that you’re putting together are helpful tools for those board members. So that when they are out in the community or in their network, having conversations with prospective investors, they’re equipped with at least the high level documentation that they need To not only share the story that’s in their heart, that story of why I serve on this board, why I think access to justice is important for our state, but partnering that with the facts and the financial numbers, as well as the impact numbers of how access to justice actually does change the trajectory for an individual or a family who is facing a legal issue.

Heather Shanahan: I’m curious, Shannon, you said board training. I’d love to hear from both of you. What type of board training you did, to, to get your folks up to speed.

Shannon Williams: Well, I’ll kick it off and then certainly Missy jump in, but, you know, we really focus on helping a board understand the fundraising cycle, which for us, we really talk about. what we call the five Is. So really starting with identifying who are your prospects. And then the next piece is investigating, understanding what might make that prospect want to invest in you.

And at what level are we talking about someone who could make a $5,000 investment or a $500,000 investment? And, and what might our strategy be? Then we work on the next two I’s, which we call INFORM, let them know what you’re doing, and INVOLVE them. How can we engage them in some way in our work? Whether that is simply attending an event, or participating in a program, or something that gets them closer to the mission.

And then the last piece is INVESTING. Inviting them to invest. And so one of the things, Heather, that we really focus on is, If you think about that, 80 percent of the fundraising cycle is really focused on building the relationship. And only 20 percent is on asking them to give. And I think so often as board members, when we’re asked to be fundraisers for our organization, we immediately jump to that asking piece.

And, we think, Oh, I’m not comfortable doing that, or I’m not sure, or whatever the barrier is there. But when you help a board see that they could really plug in in 80 percent of this cycle. That has nothing to do with asking for money. It is strategy and it is engagement and that’s where a lot of board members start to have an aha moment like, oh wow, I really can help with the fundraising and maybe I’m going to be great at the asking piece, maybe I’m not, but either way I can have an impact in expanding the donor base for my organization.

Heather Shanahan: Shannon, that’s excellent. I haven’t heard that before. I like that. The five Is. That’s a great takeaway. Missy, what would you add to that in terms of that board training and those conversations that took place?

Missy Hatley: Since the board development committee really initiated this, this movement toward relationship-based fundraising and had done a lot of work with Shannon and Armstrong McGuire before I came in, I think the phase that we’re at right now with legal aids, Development committee is a lot of one to one discussions between me and members who are active in our solicitations on what works for them.

So everybody’s a little bit different in how they approach their jobs and how they approach their philanthropy. And so one of the steps I would say is incredibly important to do is a practice session with someone and sometimes we’re in such a hurry to, to raise funds that you kind of skip that step, but really builds the relationship that you have with your partner in the solicitation.

So I’ve been doing a lot of those lately, and I really enjoy them. It’s just a low stress way to practice the language with each other and no matter how much we all care and know about Legal Aid practicing in your head is not the same thing as practicing it out loud and you want to have a good cadence with your partner.

So that’s just a practical step that I think we sometimes skip, but it can be really helpful.

Heather Shanahan: You know, you become in what you’re saying. And then obviously your comfort level, too. So that’s a, that’s a great idea.

Let’s talk about impact, Missy. What has this shift in fundraising strategy meant for your organization? And what have you been able to do programmatically that you couldn’t before?

Missy Hatley: So we have a lot of strategic areas that we are investing in that Nongovernment funding is allowing us to really move the needle on. one being innovation. So, our CEO, who’s been with us for about two and a half years, one of the first things that she did when she came on board is set aside, what we call the Innovation Lab, which is a dedicated, small but mighty department, with a lot of advisors in legal tech, to really try and harness what innovation technology can do to help us with making legal services more accessible.

We’re receiving over 400, 000 calls a year. and those are just the folks that are picking up the phone and calling. We know there’s a lot more people, with needs. So, we have to do more and we have to continue to innovate to reach more folks, whether it be for brief advice or representation or referrals.

It is really difficult to fundraise, especially in government funding, around innovation, because many times you’re investing in new technology, and a lot of funders want, understandably, to see a proof of concept and a really well funded, you know, long historical program, but if we only go after those dollars and only talk to donors about that, then we’re really missing out on innovation.

And reaching more people with really great needs. So, I’d say innovation is a big one. Another is meeting clients where they are. And, from my experience working in, in the housing sector for so long, That is a big part of reaching people who are in most desperate need.

So in order for us to meet people where they are, we need to expand our partnerships with domestic violence providers, and we’re even going out and speaking to more community colleges.

If there’s something we can do that will help them hit the ground running when they get their degree or their certificate. that, again, is a little bit innovative because it takes time to build those relationships and, get the referral process going to where we’re, we’re increasing the cases.

But those are some of the extra steps we’ve been taking.

Heather Shanahan: I can’t believe 400, 000 calls a year. That is pretty staggering. And, and like you said, you know, who are you not touching just because of a lack of awareness. So, thanks for the work you’re doing. That’s important. Shannon. in this process, did you strictly rely on staff and board to implement these initiatives and start impacting change?

Or did you take a more ad hoc approach? Were there community members or folks that you engaged that weren’t presently involved in the organization?

Shannon Williams: We were fortunate that as our work was wrapping up, we were really helping the organization prepare to celebrate its 20th anniversary. And so we used that as an opportunity to create an ad hoc committee, and gave us a chance to bring some folks in that were not currently serving on the board, or maybe had not ever, volunteered with Legal Aid of North Carolina.

And I really appreciate the stat you gave, you know, earlier in our conversation, about individual giving. And so we know that, individual giving is the key to sustainable fundraising for any organization. And by expanding this committee to folks outside of the board, it really gave us a chance to penetrate into more networks.

And so these volunteers, who were willing to, be fundraisers, solicitors on behalf of Legal Aid could go to their own peers and, their own friends within their networks, which is really a key to expanding your individual giving program. So, we could not have had the success we had without those additional, volunteers outside of the board joining in on this process.

Heather Shanahan: You often see that in capital campaigns that you’ll engage community members or, external folks that aren’t on the board, but, not necessarily in this type of a fundraising shift. So great idea. Missy, what advice would you give to other organizations, that realize that there are gaps in their development strategy, what would you tell them?

Missy Hatley: One of the most important steps that a development department can take if you haven’t had an assessment it can be a really great place to start I’ve benefited from working in organizations when we had development assessments three times in my career. And it is an excellent way of measuring the effectiveness of what you’re doing.

And sometimes you need that outside expert to look at what you’re doing objectively. When you work in development, you care deeply about the organization and the impact that you’re making. So all the information you can get about how to be more effective is good news. And that’s largely an internal process, if you’re going to launch a capital campaign and you do feasibility study, then you’re talking to external donors about their likelihood to, to support that.

But a development assessment is really internal to the board and the staff members and the key stakeholders. Who care about the long term sustainability of the organization. So I’m a big advocate for that. Starting that process when you kind of know that your, your time is not being spent in the most productive–

Shannon Williams: Yeah, and I would add to that one of things about a fundraising effectiveness analysis. or a development assessment. You know, I think sometimes as a development leader, and I’ve been a development leader as well, there’s a little bit of fear. Like, oh, you know, what if we figure out that’s something we pour a lot of time and energy and isn’t really worth the investment.

And, you know, one of the things that we say all the time is the cost of fundraising, the cost of an individual program is not the only indicator of its value. However, understanding what kind of return you are getting on the investment that you’re making helps you to prioritize. You may have, for example, an event that you do every year and it might not give you the greatest return, but there may be an underlying, maybe educational factor or a stewardship factor that makes it worthwhile.

And so just acknowledging that, hey, we either lose money here, or we don’t make as much as we want to, but there is another value is important. for any development team, whether it’s the staff or the board, when you are brave enough to say, let’s, let’s analyze what we’re doing, let’s have an assessment.

Don’t worry so much about, is everything giving you a maximum return? Because there’s a lot of variables into the different strategies and really understanding, that not everything is going to be efficient in terms of every penny, invested. But it doesn’t mean it’s not valuable. It gives you a chance to really discuss it and determine it and agree upon it together as a team.

Heather Shanahan: Like you said, the key is let’s lean in. Let’s actually examine what’s working. What’s not. Let’s measure these outcomes, you know, we see a lot of organizations that have just really expensive models all they do is events and that’s, expensive, labor intensive, and the outcomes aren’t always what you think they are.

Shannon Williams: Oftentimes boards will enjoy the idea of, of an, an event, having an event, whether it’s a gala, a golf tournament, whatever. It’s very tangible. So boards like the concept of that. And so boards are often surprised when they really realize how much it costs, because a well-done fundraising effectiveness analysis will not only look at the dollars that you’re investing, but the time of the staff people who are involved in those events.

And so time after time, boards are shocked by that. When they realize how, how much it truly costs to, to execute on those events. So I think that’s a great point, Heather, that you know, that data itself can be very eye-opening for boards who don’t have enough experience or reference to really understand the true cost of executing on a fundraising event, it is the most costly fundraising you can do.

Heather Shanahan: Shannon and Missy, are there any other things that you want to make sure we touch on before we wrap?

Missy Hatley: One aspect of Legal Aid’s messaging for fundraising that I wanted to highlight is that being a publicly funded organization. is advantageous in private fundraising. So sometimes when we receive a lot of government funding, your initial conversations with a new donor might be, well, you get 60 percent of your budget from, government, federal funding and other funding. Why do you need private philanthropy? And I think there’s a lot of good conversation around how much compliance comes with that government funding and how restrictive it can be, but at the same time it shows that you have this long-term relationship of fiscal responsibility and program impact to continue to receive those competitive dollars.

And then private philanthropy coming alongside of it can really, move the needle on the flexibility of the funds.

Heather Shanahan: Mm-hmm. Well, and government funding can change, on a dime, depending on, so many factors. So, being able to really round out your strategy seems really a good idea. All right. we like to close with the question, mission impact. What does this mean to you personally?

And so Shannon, I’ll start with you.

Shannon Williams: So, in this particular case, I came to learn that, access to justice is really fundamental to our state in our democracy. And so being able to expand the giving program with Legal Aid and to expand their flexible funding really gives them more fuel to break down those barriers and help our neighbors in need to be successful in their own goals to, really position themselves and their families for the kind of success that is important to them. And when that happens, our state is stronger.

This is a great example of a mission that really impacts every single one of us. We might not wake up thinking about that because of our own, fortunate circumstances. However, it is this work that really does chart the course for our state.

So, it’s been a real gift to me personally to get to understand that and to see the work of Legal Aid of North Carolina firsthand.

Heather Shanahan: Thanks, Shannon. That’s great. Excellent perspective. And I’ve learned about the organization through our discussion too. So always grateful to have conversations with, amazing organizations that are positively impacting their communities. So, Missy, thank you for the work that you do and, tell us in your words, then mission impact.

What does that mean to you?

Missy Hatley: What Legal Aid’s mission means to me, personally, is, being able to play a small part in helping our attorneys remove legal barriers for folks. And through, all of my time working in housing, I, I learned the legal barriers that contributed to, ultimately experiencing homelessness. And so I think of all of our programs are economic justice programs.

Whether it’s family violence, whether it’s a fraud, fraudulent, you know, document that a senior citizen signed that has them facing foreclosure, all of it really comes back to economic justice and doors that were open for me and help that I received from my community, my neighbors, my parents.

I want that for everyone, and there’s really a great opportunity in coming alongside legal aid to, when you see injustice, correct it. And you just do that one at a time. Instead of getting overwhelmed that we can’t reach everyone, we just really take a lot of joy in being able to do that one family and one person at a time.

And another thing I’ll say is that, you know, in the United States, if you are in criminal court and you don’t have money for an attorney, you are provided a public defender. But in civil court, that constitutional right is not there. And so, well over 90 percent of low-income people with a civil legal issue represent themselves or simply do not pursue justice in their case.

And so the justice gap is very wide. And so I want to do as much as I can as a nonattorney to connect people to access for justice.

Heather Shanahan: Fantastic. Missy Hatley, Shannon Williams, thank you both for your time here today. It’s been educational, not only from the understanding what legal aid does, but also from this fundraising strategy and shift, and then the positive outcomes that you were able to have as a result. So we are super grateful for your time.

Missy Hatley: Thank you.

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