FundClass Archives:

Reach Out and Build More Powerful Stakeholder Relationships

by Marshall Howard, Marshall Howard & Associates
Author of the learning novel Let's Have Lunch Together

Edited Digest of FundClass Topic #37, February/March 2006

Author and consultant Marshall Howard has, for over 24 years, pioneered the training, strategies, and techniques that make learning how to build great relationships fun, practical, and cost effective. He is author of Let's Have Lunch Together, a teaching novel which shows how to build more powerful relationships with stakeholders.

TABLE OF CONTENTS

Opening Message
I. Removing the Roadblocks
   Questions and Responses
II. Connecting With Stakeholders Faster
   Question and Response
III. Execute One Powerful Relationship-Building Action Every Day

OPENING MESSAGE

Greetings and welcome to this presentation, "Reach Out And Build More Powerful Stakeholder Relationships." This is my first online seminar. I look forward to and encourage your participation, questions and comments.

I've spent more than 24 years, as a relationship building consultant, teaching nonprofit organizations how to execute a strategic, step-by-step system which aims to demystify this art (and science).

My recently published learning novel Let's Have Lunch Together, shows readers, in a practical, fun way, the how-to's of great relationship-building.

"Our causes are worthy and our passions are sincere; why aren't more leadership donors giving to us?"

Development is a human enterprise - driven and determined by the strength of people's connections. It's not just the cause. The stronger the connection, the more that can be achieved.

We all know this. But what exactly does it mean? How can we develop the skills and take the time, in our busy schedules, to build these relationships?

In this program, I look forward to engaging you to think about new ways to:

• Remove the roadblocks you face in building relationships with stakeholders and prospects (including lack of time)
• Connect with stakeholders faster
• Execute one powerful relationship-building action every day

My presentation is about building stronger relationships in order to accelerate giving. But relationship-building should never be thought of as solely a fundraising enterprise. As I say in my book, "Building strong relationships is the single most effective way to raise more money, reduce stress and make work and life more rewarding and fun."

I'm sure you've experienced presenting a great proposal. Then silently, you wait while they mull over what you've asked them to do. The anticipation and dread of that moment is one few ever forget.

What many people fail to realize, however, is that it's not just the strength of the proposal, the case you've put before them, or even the need. It's about whether we have truly come to know the individual on the other side of the table and how well we have opened ourselves to them.

Here are two of my favorite themes from Let's Have Lunch Together:

"Opportunity goes where the relationship flows."

"If you continue to focus on the major gift sale, you'll never move up the relationship scale."

Again, thank you for the opportunity to participate in FundClass, and I hope you will enjoy this discussion.

Marshall Howard

return to Contents

I. REMOVING THE ROADBLOCKS

"People say yes to those they know best."

I've spent more than 24 years as a fundraising consultant to nonprofit organizations around the country. My focus has been teaching my clients relationship-building techniques to successfully implement the two most important parts of their development jobs:

• The ability to build powerful boards and campaign teams and to increase funding from major gifts, planned giving, events, corporations and foundations through the power of relationships.
• The ability to turn those relationships into productive outcomes.

What stops most people from building powerful relationships are six major roadblocks:

1. Overlooking The Importance Of Relationships
2. Avoiding Relationship-building Responsibilities
3. Prioritizing Time
4. Being Closed
5. Focusing On Approval Rather Than Outcomes
6. Gaining More Control

1. Overlooking The Importance Of Relationships

Development is, above all, a human enterprise, driven by the strength of people's relationships. The stronger the relationship, the more that can be achieved. Have you ever left a meeting, where you said to yourself, "There's chemistry - we connected. That was a great meeting."

First, think about where a relationship has helped you personally get something that you wanted. Second, think about where a relationship has helped you achieve something at work.

Remembering the excitement about the connection(s) and the results they produced will give you an appreciation of how important relationship-building is in helping you get more of what you want.

Whatever your challenges, having strong relationships will help you make the task easier, more enjoyable and result in greater success.

2. Avoiding Relationship-building Responsibilities

No matter what your job title, if relationship-building can increase your results, you need to acknowledge that you have a personal responsibility to develop your skills.

Executive directors are often busy spending much of their time on administration and programs and some development staff are often too consumed with event logistics and fundraising administration to do enough to reach out and build strong relationships.

Assign yourself the responsibility to develop relationships with stakeholders on the board, on your event committee or on your fundraising committee.

Once you have that responsibility, normally a goal is assigned to the responsibility. Many times, the goal is to ask the person for a donation. Once the prospect has said yes, most staff feel they have accomplished 85% of what they came to do. However, in relationship-building, the goal is to get to know the stakeholder as a person first, a donor second. It's the relationship that will help you get more of what you want. (We'll discuss how in the next lesson.)

As my lead character, Oscar, in Let's Have Lunch Together says, "If it is to be, it's up to me."

3. Prioritizing Time

Carving time out of a busy schedule for relationship-building is a challenge for everyone. Developing a relationship takes more than one appointment, a few emails or group meetings.

To connect with those who are important to your cause means a commitment to make a meaningful connection. How often do you schedule breakfast or lunch meetings with prospective and existing stakeholders? How often do you visit them in their home or at the office? When was the last time you scheduled an appointment at your office to show someone your organization. Not to ask for money or anything else. Just to get to know each other?

To make this a priority, acknowledge that building powerful relationships will lead to less stress and make your work easier and far more rewarding than you imagined.

Then, distinguish between items that are urgent such as emails and telephone calls and items that are important such as recruiting new stakeholders. Constantly acting on what's important is what will move you towards your goal.

4. Being Closed

One of the most challenging personal roadblocks I have noticed is that people are closed. They don't ask enough questions because they often don't want to be asked questions about themselves. But you can't expect people to be open with you if you are not reciprocating.

Many people feel, "It’s not my role, as a staff person, to be nosy and ask a lot of questions. I’m not a peer." However, if you ask open-ended questions in a professional manner, you will not be viewed as too intrusive. Most people love to talk about themselves. The key is to ask a few open-ended questions and let them do the talking.

Some people feel they are more comfortable keeping business separate from their personal lives. Unfortunately, then their style becomes all about the work and less about relationship-building. They seldom ask questions and have difficult establishing a meaningful relationship.

You can also be open and vulnerable by asking for their ideas and help. Vulnerability shows honesty and honesty builds trust. This trust is the fundamental bonding agent in every good relationship.

Here’s an example from my book. A board director is speaking:

"A few years ago the Director of Development of the Mentoring Center came to visit me. I was on the board. She wanted introductions to a couple of my friends. She was very open in saying that neither she nor the organization was used to meeting such prominent people. She felt somewhat uncomfortable. Her vulnerability showed honesty. I trusted her. Our relationship grew stronger. I made the introductions, set the appointments and attended both meetings. One of my friends eventually became a $20,000 donor."

5. Focusing On Approval Rather Than Outcomes

Many of my clients spent more time polishing a proposal or an "ask" letter, rather than getting to know the prospective donor. They often ask the prospect, "Is the proposal giving you a good overview?"

If this is a behavior that you might have, ask yourself why are you concerned about getting approval on a job well done, rather than the outcome? Is it because you haven’t taken the time to get to know the prospect?

6. Gaining More Control

Without being too assertive or strong, you can gain control by managing the outcomes of your meetings to increase your success. Many organizations have lists of special event and annual campaign donors whom no one has met on a one-to-one basis. Using the donation as a door-opener is a good way to gain a face-to-face meeting. The goal of the meeting is to begin the relationship development, get to know the person and analyze the fit between his or her interests and your mission.

Here are some ways to gain control over the meeting:

1. Since you asked for the meeting, take charge and lead it. Ask open-ended questions and listen carefully. Create a five- to ten-minute bonding time to get to know each other professionally and personally.
2. Develop a 10-minute question time zone; ask about each other's business, nonprofit, work, etc. This is a chance to connect, uncover the fit and discover what you might have in common.
3. Move into the case statement zone. Ten to fifteen minutes is all you need to explain your mission.
4. Try a test close. Take five minutes to ask open-ended questions about feelings and perception about the mission. Then respond. Explore what you think might be wins for them if they joined you.
5. If there are enough wins, move into the ask time zone. To get a yes to become more involved, you might have to ask several times in different ways. No one ever says yes solely based on information. What gets people to say yes is the e-factor: emotion - connecting to you and our work.

In the next section, we'll expand on some of these ideas when I discuss, "How to connect with stakeholders faster."

return to Contents

QUESTIONS AND RESPONSES

Sean H. asks:
Marshall, I've observed that we (as fundraisers) often have a strong temptation to "go in for the kill" on the "first date." That is, because we have limited time, we try to wrap up the first encounter with a potential donor with either a firm commitment or nothing.

In the long term, how effective is this strategy? I fear we may be losing many good prospects who would pay off well in the long run if we put in enough cultivation time up front.

It’s hard to generalize since each donor has a different set of needs and expectations, but do you have any sort of general rule on this? No asks on a first date? No asks until the third meeting?

Liz B. asks:
Hello Marshall, and thanks for doing this class. The topic is very timely for me. In recess, I sent out a question on orienting board members, and Diane was kind enough to send me a slide show she’d inherited, which made the very good point that we need to cultivate our board members as we would any other prospective donor. Wondered if you'd care to comment further on that aspect.

Marshall’s reply:
Thank you to Liz and Sean for your comments. I often say that relationship development is like dating. It’s a process of getting to know someone and of making an emotional connection. This is true of prospects, donors and even board members!

This process is also a long-term one and in our "let’s meet quarterly goals world," it’s often difficult to persuade our organizations to give us the time. Then, as you say, we feel pressured with a rushed appointment.

Before you begin to build your connections you should know where you are on this scale:

The Relationship Scale

• Level I. Professional Zone: Knowledge of each other’s professional roles. The result of the first one-on-one contact. Little knowledge of each other as a person.
• Level II. Individual Zone: Heightened knowledge of each other as a person beyond professional roles. The result of second and third one-on-one, high-impact touches. Uncovering one or two common interests.
• Level III. Win Zone: Delivering lots of mutual wins. The result of on-going, high-impact touches. Sharing things outside business. Uncovering more common interests, values, and goals. Some professional and social interaction.
• Level IV. Partnership Zone: Building and acting upon common ideas and opportunities together. The result of continued high-impact touches. High degree of trust. Frequent professional and social interaction.

Obviously, you begin at Level I and throughout the process, try to move people who are important to you and your mission to Level IV. To do this, you need to remove roadblocks I wrote about, ask a lot of open-ended questions and build a "mosaic" of the person with details about his or her personality, family, academic background, professional experience and philanthropic interests.

You may have an awareness of someone; talked to him or her at an event, sent thank-you letters and talked on the telephone once. This, however, is not a relationship. Good relationship builders know where they stand on the scale above. A good relationship may take 6 – 12 months to develop (even with a board member).

Here are three relationship-building secrets to help you:

1. Be more curious
2. Put the other person first, your needs second
3. Uncover common interests, value and goals

As I say in my book, "If you continue to focus on the major gift sale, you’ll never move up the relationship scale."

When do you make an "ask?" You’re right – it’s very hard to generalize. You have to wait for a natural opportunity to bring to the surface opportunities that fit both you and the stakeholder. It’s the art of asking others to share some things that will make a difference. It’s also about uncovering some of their resources to produce tangible, positive outcomes that will affect your mission.

People who have a strong win-win relationship want to step up and help. To deliver wins for your stakeholders, you have to know them well.Your wins have to be appropriate and well-timed. For instance, to deliver a recognition win, you can write a thank-you letter to the supporter’s company about the valuable contribution the volunteer is making. In the newspaper ad for your event, you can list the supporter’s name along with the company.
Marshall Howard

Gary G. asks:
Marshall, would other wins for the donor/prospect include learning more about the subject of your mission--knowing that this mission is something that they share an interest in. So, for example, at the Alzheimer’s Association, we want to educate donors about the disease, where we are in research, etc. before they might be asked to support research. Lab visits and meetings with prominent researchers are a primary cultivation tool for us.

Also, I know that there are some occasions where the person wants something from the organization or its staff that seems somehow wrong. For example, in my previous experience in grateful patient fundraising, we had to be careful what things we might do for a major donor patient. Conveniences were fine to give, but we always had to draw the line and avoid anything that might be seen as better medical services.

How do you draw the line on things outside of the scope of your mission and what's appropriate?

Marshall’s reply:
Gary, I think that the more someone knows about your mission and be connected to the mission or to the staff on an emotional level, the more they will be willing to find a fit for their resources. Their resources might include a major gift, introductions to their prestigious circle or allowing you to tap their company’s vendors.

We’ve noticed that some people like a lot of control. Unless they are the chairs of group they do not want to be involved. This is difficult because you have to save these positions for people who can get the job done.

A win for this type of person might be to make them a mentor to you. You could schedule one-on-one updates and ask for advice. You could create strategies with them and then help them meet the goals they set for themselves.

The bottom line is to know someone well enough to know what it will take to keep them connected. Of course, in medical facilities the big donors always want special treatment and that’s a tricky medical situation, especially when their name might be on a wing of the building!
Marshall Howard

Response from Mary C.
Gary and all,
One of my favorite ways to recognize donors when I was involved in the performing arts was with benefits that were "two-fers." We didn't give away "stuff", we gave away opportunities to get a closer look at our work. A win for us (no tote bags!) a win for the donors, and another win for us when their greater knowledge created greater interest.

Surely there was a similar way of crossing the line: people demanding personal time from the artistic staff or visiting artists, access to tickets that required special favors (usually all of these favors were requested by people who would not ordinarily have been at a level to ask, too!). As Marshall says, finessing those simply required enough knowledge of the people to handle them gracefully.

I find it hard to imagine how to succeed with development work if one isn't already approaching donors in this way. It's ALL about relationships to me!

return to Contents

II. CONNECTING WITH STAKEHOLDERS FASTER

Development professionals work with two types of stakeholders:

1. Prospective Stakeholders - People who are referred or we know through other activities but are not currently tied in any way to the mission. We usually try to convert these prospective stakeholders in one or two meetings, but as Sean pointed out, this is a short-term, usually less productive and fulfilling endeavor.
2. Current Stakeholders - People, who may have given an annual donation, sponsored a table or team in an event. Often, these prospects may be much more valuable for uncovered future donations and resources. In many cases, the organization staff will usually only meet with them when it was time to ask for the annual gift.

To get to know either of these stakeholders better, you need to utilize the three secrets to relationship-building:

• Be more curious
• Put the other person first, your needs second
• Uncover common interests, values and goals
• Be More Curious

Here's a chance to use your personal strengths. If you are a person who is compassionate, cares about helping others, is concerned about other people, is interested in people and/or is curious, you will shine!

As I mentioned in the first section, many people feel timid about prying. In a very professional manner, you can ask open-ended questions to build a "stakeholder mosaic." Remember, this is information people naturally want to know about each other when forming a productive partnership. It starts with the first meeting and continues throughout the relationship.

"Ask open-ended questions, that is a must
Then listen, ask more and build their trust."

Be sure to keep written notes so you can remember everything about key stakeholders.

To explore the business fit:

1. What's your company’s philosophy in partnering with nonprofits?
2. Does your company have a partnering strategy?
3. Is your strategy local, regional, or national?
4. At what management level is this strategy discussed and developed within the company?
5. How does your firm link its community service and company image?

To explore the personal fit:

1. Are you originally from here?
2. Tell me a little more about your company.
3. My spouse ____ is a ______. And your husband/wife?
4. My son ____ is now 18, and he’s off to State University next year. How about you?
5. I've been with the organization as ________ for _ years. And yourself?

To build the mosaic you need information about:

Personal

• Family (Martial status; Names and ages of children; Spouse's name, occupation, company, and title; Years in the community/hometown)
• Experience (Former employers; Past nonprofit commitments; Schools and education; Current nonprofit commitments)
• Other (Relationship to the mission and/or the organization; Favorite hobbies, sports, and interests; Achievements)

Professional

• Business (Types of products/services; Key executives' names and titles; Competitors; Charitable giving sources/history; Number of employees; Marketing and sales methods; Ownership/locations; Vendor types)
• Job (Title/responsibilities; Length of employment)
• Put the other person’s needs first, yours second

The answers to the above categories gives you a basic picture of your stakeholder. Now that you have that picture, what is your next step?

You need to analyze each stakeholder and develop a win-win relationship. These wins are non-monetary and they are much harder to uncover. Not only do stakeholders want wins, they want lots of wins and they want them continuously. That’s not easy to do in many organizations (unlike Mary’s where she can arrange artists’ visits, etc.)

There are two types of wins - business and personal:

Personal Wins
- Sense of accomplishment
- Making an impact
- Recognition/anonymity
- Personal networking
- Sense of affiliation
- Participating in solutions
- Socializing
- Being the leader
- Control

Business Wins
- Good corporate citizen
- Positive public relations
- Enhanced media coverage
- Increased visibility in the community and marketplace
- Increased sales
- Improved esprit de corps between managers and employees

Here’s an example from the food industry about identifying what people want. For years, the industry obsessed about their ready-to-eat meals. Finally, they had a revelation; people want to do a bit - just a little bit - of actual cooking. They want to feel as if they are doing some cooking and preparing a wholesome meal for their families. Popular products like Hamburger Helper give people a sense of accomplishment.

What does that have to do with nonprofits? People may want to do more than just write a check or volunteer. Volunteering is not a win - it’s a way to get a win.

If you don't continuously uncover and deliver wins, I promise you someone else will. Most stakeholders won't tell you they are unhappy. They’ll just pull up stakes and take their big pot of resources elsewhere.

Uncover common interests, values and goals

The single most important thing in building a powerful relationship is to uncover things you and the stakeholder share. When two people see things in the world the same way, they feel they can trust each other.

For example, when you're in their office, be aware of their awards, diplomas, vacation photos, etc. Look for clues about things, interests or values you might share.

Remember the relationship scale in the first section? Look at the scale and analyze where you are with the stakeholder.

The overriding principle to your meeting is to put the other person’s needs first. You know you are connecting when you have a solid exchange of feelings, opinions and perspectives. Deep down, you know things are going well and there is chemistry!

To keep this chemistry going, you need to deliver at least four high-impact touches per year . . . and that will be the subject of Part III.

Little chemistry, not much in common ~ Lots of chemistry, a great deal in common.

Marshall Howard

return to Contents

QUESTION AND RESPONSE

Rosa María C. asks:
Marshall, I am learning and enjoying your classes. I see the importance you place in creating strong relationships.

In Spanish we say: Conocerlos es quererlos.
(The more we know somebody the more we get to love that person).

My question is how to plan those meetings? Are they informal meetings? When you set an appointment with an important stakeholder, what do you say is the purpose of the meeting?

Here in the school I work, we are working towards forming a Scholarship Foundation. We have designated two hours every Wednesday to present the project to community members in "petit committee." We have been doing this for 4 months now. The director of our school precedes these presentations. This represents an opportunity for parents to talk to our busy director and this is a chance for us to explain the mission, vision and goals of this upcoming foundation. Do you consider these meetings serve the purpose of strengthening relationships with stakeholders?

Marshall’s reply:
Your first meeting with a prospective or existing stakeholder should be all about the relationship and less about business. Make the goal of the meeting getting to know each other or getting to know each other better!

Your first meeting with a prospect or someone you really don’t know well could be at their office. The advantage is that you will get clues to his or her personal and business lives in this setting. You may also get to know the assistant who could be a strong ally for you.

The meeting should be approximately 40 minutes and 15 – 20 minutes should be asking questions and getting to know each other. Be sure to provide details about yourself.

When setting the appointment, you might say, "Bob, the purpose of my visit is, I’d like to get to know you a little more and see if there is a fit and an interest in our mission."

A strong relationship building contact should be one-on-one; not e-mail, telephone or group meetings. Perhaps you could schedule appointments with key people who attend these meetings.

Rosa, remember there are internal and external relationships that are important to us. The strength of your relationship with the director of your school, beyond your work roles, is a key one. If you have a strong relationship with the director, then he or she, even though very busy, will make time for you to visit stakeholders and more or a part of the campaign.

Marshall Howard

return to Contents

III. EXECUTE ONE POWERFUL RELATIONSHIP-BUILDING ACTION EVERY DAY

Now that you recognize that strong relationships are the most effective way to raise money and make your work and life more rewarding and fun, it’s time to put more techniques into action.

Create A Time Bank

I suggest that you create a time bank strictly for one-on-one relationship-building. Allocate 20 or 30 minutes each day so that you can forge a stronger connection with one or two people in that time. You might decide to save two or three of those blocks each week in order to have lunch with a key stakeholder!

Take a good look at the mosaic of the stakeholders (and prospective stakeholders) that you have built. You might want to write it up for yourself as a guide.

Most people feel that have a relationship-building plan by staying in contact with supporters through newsletters, e-mail updates, special invitations, volunteer meetings, etc.

Those are important, but they're not enough. There are two kinds of touches: general and personal. General touches such as newsletters and e-mails are low emotional impact, make a small impression and are soon forgotten. Personal one-on-one touches, such as a making coffee or lunch appointments or taking a tour of your mission in action make a high emotional impact, a big impression and are long remembered.

By the way, this doesn't mean asking stakeholders over to your house for a barbecue. High-impact touches must also be one-on-one. Make them interesting and provide a benefit to the stakeholder. Tailor some touches to their interests so that he or she wants to spend time with you.

Build A Stakeholder Touch Plan

1. Select twenty "A" category stakeholders (your board, a leadership group and others with great potential), plus ten "B" category stakeholders (those whose commitments you want to build). Over the year, touch the "A"s four times, the "B"s twice.
2. Make each touch one-on-one, not in a group setting. Half of the touches should occur someplace other than his or her office: breakfasts, lunches, after work, etc.
3. Deliver a stakeholder benefit in at least half of the touches: a relaxing coffee break at Starbucks, a couples dinner, a tour of a your program, a thank-you plaque to display, a small gift based on their interests or hobbies, etc.
4. Focus half the conversation on getting to know each other. Don't discuss organization business. Ask lots of questions. Share things about yourself.
5. Tailor the touches. One touch each year should focus on the stakeholder’s hobbies or interests: a sporting event, fishing, golf, tennis, bicycling, wine tasting, lecture, etc. Be sure to also tailor one touch each year so that the stakeholder personally experiences your mission in action and/or meets one of the organization's beneficiaries.

Donations To Help Reach Stakeholders

I'm sure your next question is, "Where’s the budget for all of that?"

There are many ways to make high impact touches that cost virtually nothing. Some organizations have what I call a ‘goody closet.’ Volunteers help fill it with all kinds of donated things: extra wine from the gala or their own cellar, golf and tennis balls from their tournaments, tickets to plays and sporting events (from their corporate seats), restaurant and day spa coupons, Starbucks and other gift cards, etc.

One of my clients received the donation of a yacht for an evening cruise around the bay. Rather than use it for an event, she used it to entertain a small group of stakeholders and prospective stakeholders.

These items are acquired free from supporters and their contacts. It’s all reserved for and shared exclusively with key stakeholders-not used to raise a little money from a drawing or auction.

Delivering Wins

Part of your plan should include delivering appropriate and well-timed wins to your stakeholder. That's why the single most important thing about delivering wins is getting to know your stakeholder as a person, plus the things that you and your stakeholder have in common-your shared ideas, values, ambitions, and goals. It avoids offending one another. It avoids killing the relationship.

To find out more about your stakeholder to develop these wins, ask some of these "insurance" questions:

1. What attracts you to our organization?
2. What are some of your expectations?
3. What outcomes would you like to see?
4. How do you see yourself helping us achieve our goals?
5. What were the most and least desirable things about some of your other nonprofit involvement?

Other Wins

Write a thank-you letter to the supporter's company about the valuable contribution the volunteer’s time has made in helping families. In your newspaper thank-you ad after an event, not only list the contributing company, list the supporter who helped make it happen.

Here’s a business networking win - ask your supporter who he or she does business with. A stakeholder who is an executive in a bank’s trust or wealth management department might want to join you at a meeting with a lawyer or accountant.

Once you have a solid relationship with someone, you will know when the time is right to bring to the surface opportunities that are a good fit for you and the stakeholder. Most of them have much more than money to offer. They have two powerful circles of influence: personal and business. When you uncover these, you turn relationships into highly productive outcomes.

Remember never lose sight of your goal - building a relationship. Keep these three commandments on your wall

• Be more curious
• Put the other person first, your needs second
• Uncover common interests, values and goals

Good luck to everyone. I’d like to hear more about your experiences as you go out to build these relationships and know which techniques work for you. Keep building those great relationships and thank you for joining me.

Marshall Howard

Let’s Have Lunch Together is the story of a stressed out Executive Director who tries everything to move his fundraising to the next level. He thinks he knows all about relationships. That was until things suddenly began to take a downturn. He needed some answers and he needed them quickly. He got them from an unexpected source.

Visit Marshall Howard online for more information about the book:
http://www.marshallhoward.com