Obama and the Importance of Timing in Fundraising
A recent New York Times story about President Obama’s post-White House plans illustrated a cardinal rule of fundraising: Don’t announce a goal too soon.
Our 44th president has surely had his share of political victories and defeats. But when it comes to philanthropy, Obama, or, at least, someone closely associated with him, just broke a cardinal rule and demonstrated exactly what not to do.
On August 16, The New York Times ran an in-depth piece about early efforts to raise money for the Obama presidential library. The article describes Obama holding court at the White House with a high powered crowd including Nobel laureate Toni Morrison, actress and philanthropist Eva Longoria, and Vinod Khosa, founder of Sun Microsystems. By all accounts, the library will surpass previous presidential libraries in scope and in the use of technology to tell stories and shape perceptions of the Obama legacy. Aides have suggested they are seeking to raise as much as $1 billion to build the infrastructure and establish an endowment to support the library and other philanthropic activities, which are expected to be run out of a future foundation. (The Obama library and foundation will reportedly be located in the same building. According to Politico, the foundation will focus on improving life in the historically underprivileged South Side of Chicago.)
So, what’s the problem? The campaign goal was announced way too soon.
Dollar goals should not be announced publicly until at least half of the amount has been raised in what we like to call the “quiet phase” of the campaign. According to The Times, supporters have thus far raised $5.2 million of the $1 billion goal. Now, any nonprofit organization would be thrilled to have raised $5.2 million from 12 donors. But it amounts to just one-half of one percent of the stated goal: $1 billion is a long ways off.
Announcing a goal too early in the life of a campaign can have a deleterious effect on the outcome. High dollar figures can seem out of reach and thus lower the morale of staff, volunteers, and potential donors. Unnecessary questions can be raised about whether reaching the goal is feasible or if the scope of a particular project is too big. For donors of all types, learning that a fundraising effort is more than half complete can be a tremendous boost. Potential large donors who sat out the quiet phase might be tempted by a sizzling public campaign launch to make a major gift. Successful public campaigns are almost always preceded by strategically executed quiet phases. Of course, to be fair, it can be much more difficult to do anything quietly when you are the commander-in-chief.
I can only guess at why the Obama camp would have released the campaign goal and amount raised to The Times. One hypothesis is that there has been no small amount of critical press surrounding the Bill, Hillary and Chelsea Clinton Foundation, and I’d bet that Obama and his supporters are seeking to differentiate their approach by stating that, unlike the Clintons, Obama’s foundation will have raised all the money it needs before it starts building. Without a proper endowment in place at the outset, the Clintons have been forced to continually seek donations.
Regardless, I would have advised the Obama camp to publicly state that they intended to raise all the money for capital and endowment before building, without releasing a specific number. In two White House runs, Obama may have set the standard for grassroots political fundraising, but so far, in 2015, he’s flunking Philanthropic Fundraising 101.
Nonprofits can learn from this mistake and release campaign goals in a carefully thought out and timely manner. Holding back until the right time is not at all about maintaining secrecy, but rather, it is about ensuring success.
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