Peer to Peer Fundraising, Part 5

This blog is for thoughts regarding the National Association of Home Builders, which includes local and state HBAs. The opinions posted in this blog are NOT OFFICIAL NAHB opinions nor is this blog owned by NAHB but it is intended for NAHB members and staff use.

August 14, 2011

Peer to Peer Fundraising: Part 5 "Two Types of Fundraisers, Two Types of Members"

There are two types of fundraisers and both are identifying two types of members. It is really that black and white. I will explain why one fund raiser gets immediate results while the other builds for continued political investment. We will also discuss the two types of members and I'm not talking about builders and associates. 

Part 5 "Two Types of Fundraisers, Two Types of Members"

"The Hunter" ~ Think about it for a moment. A hunter goes into the woods in search of his prey. Eventually the object of his quest appears....    


Ready...     Aim... Fire... Done. 
One shot, one kill, over.


The hunter in fundraising has a similar approach. The potential PAC contributor (not investor) is targeted, money was asked for and a check was written. One target, one ask, one check, over. The hunter was able to "bag his 1 for the PAC" but did not set up the potential for the future. 


The Farmer ~ The farmer tills his ground, plants the seeds for his crop. He will supply water and nutrients to aid in the growth of his crops. The farmer knows that he will have continued growth of crops by taking the time and care to nurture. 


The farmer in fundraising will "plant the seeds" of political synergy into the member's mind. He will carefully supply the member with the nutrients which I'll describe as visions of business opportunities. This will almost guarantee that the member being tended to will continue, just like crops, to invest (not contribute) to the PAC.


The differences between the hunter and the farmer, when it comes to fundraising, are very simple and they apply to what we experience within the HBA. The hunter gets one contribution while the farmer has "sown the seeds" for a continuous investment in the building industry. 


Any PAC, local, state or NAHB's, has to have our members understand the importance of the PAC. To give and not understand is pointless. To give because you want to make a difference is the strength of our Federation, our industry.


A farmer knows what ground is fertile and what ground is not even though both look the same. Which brings us to the two types of members I mentioned in the beginning. 


When we think of members within the HBA we think "builder" and we think "associate." Those are the only two classifications of members we have. What I'm talking about is to identify the two types of members that are "fertile" and who are "not so fertile." Those members are classified as DIRECT and INDIRECT.

Direct ~ A direct member is a member who is directly affected by issues affecting the home building industry. 
1. Builders and remodelers.
2. Supplier of product that goes into a new home or renovation.
3. A trade that is needed to help construct a new home or renovation.
4. Any service that solely handles the construction of a new home or renovation.


This group has one purpose when it comes to our industry and that purpose is the start and completion of a new home or remodel.


Indirect ~ is any member who can sell his or her product outside the home building and remodeling industry.
Examples:
1. Insurance companies.
2. Financial services
3. Lending institutions.
4. Law firms
5. Advertising agencies


The list is long so I'll stop with 5 examples but hopefully you will understand that the indirect member is diversified and can work with many industries, not just housing. 




How are the direct member and indirect member different when it comes to political fundraising? The direct has a need for the housing industry to be protected while the indirect member, not so much. Understanding this will help you cultivate a list of potential PAC investors (direct) who will continue to invest or hunt for contributors (indirect) who will sponsor a PAC event when times are better. Indirect members will not invest in our industry's defense on a regular basis because housing is not their primary focus.


Knowing whether or not the member is affected by positive or negative initiatives in our nation's capitol, or in your state capitol, will go along way with becoming successful with Peer to Peer fundraising by streamlining your efforts based on the potential PAC investor's need.
                                  
Next week's blog we will tie all of the Peer to Peer blogs together and develop a strategic plan for your fundraising efforts. 


Submitted by: Michael Kurpiel, CGA, CGP

2011 NAHB Associate Members Committee Chair

Peer to Peer Fundraising, Part 4: Common Road Blocks

This blog is for thoughts regarding the National Association of Home Builders, which includes local and state HBAs. The opinions posted in this blog are NOT OFFICIAL NAHB opinions nor is this blog owned by NAHB but it is intended for NAHB members and staff use.

August 7, 2011

Peer to Peer Fundraising: Part 4 "Common Road Blocks"

Road blocks are really just excuses in disguise. When some one wants to evade a question there are may ways to avoid the financial ask. It's the old "I can't hear you because I'm going through a tunnel" tactic. It's tough, I won't deny it; overcoming peoples objections to taking money from their wallet and handing it over to you is the ultimate test in persuasion. To clear the roadblock and not get detoured I am going to give you the most common objections, as well as mistakes and misconceptions, with possible ways to persuade the potential political investor that maybe they just don't have any objections at all. Knowing what makes up the HBA's political synergy (described in Part 2 from this series) can really help you to engage the prospective PAC investor. Understanding possible responses to objections may not get you a "yes" but if you don't engage at all the answer will always be "no."

Part 4 "Common Road Blocks"

There really is only one mistake when asking for PAC investments; you need  to understand when asking for the investment do not preach. You may have all this new or refreshed information about political synergy but who you are speaking with (not to) most likely doesn't. It's very easy for those in the "absolute know" to become frustrated that others don't invest already. No one likes being lectured and people will have a tendency to shut down your words in their mind and regard your attempt as "wasting your time." 

Don't get on your soap box and preach just because you understand the message. By utilizing the information you know, you are able to teach the potential investor the reasons why and then you can handle the objections in an easier way. Sales 101 clearly states "ask open ended question." Ask them questions about political synergy such as "how do you think the HBA protects the building industry?" By engaging them in conversation they will feel that you are not just looking for money; you are helping them understand.

Don't Preach, Teach!

"Tell me and I forget. Teach me and I remember. Involve me and I learn" a quote from Benjamin Franklin that rings true in any time. 

Let’s go over two of the most common objections you will be given. We are all sales professionals, whether it's selling homes or selling products and services. The reason you receive a "no" is because you didn't supply a "need" or a reason to commit. 

“Low on Funds, No Business!”

Low on funds, particularly in today's economic climate, is a valid concern. When you take an investment dollar amount, let's call it $100, you can't just say $100 dollars. That is looked at as a whole. Break it down into manageable dollar amounts such as $1.93 per week. $100.00 divided by 52 weeks is $1.93. A large cup of coffee is $2.75. An iTunes download is .99 cents. A 16 ounce bottle of water is $1.50.

In other words, you need to demonstrate how low the asking investment cost truly is in the (pardon the over used phrase) grand scheme of things.
No business is an easier road block to navigate. No business is the primary reason to invest in the PAC. HBAs are fighting everyday, on everyone's behalf, to bring relief to the home building industry. If you plan on being in business in a year, and beyond, a continued yearly investment helps to insure that you will have the opportunity to stay in business. 

"Conservatives v Liberals, Republican v Democrats"

"I don't contribute to PACs. They tend to contribute to candidates I don't support because I oppose them on issues that are unrelated to the housing industry. My personal contributions are candidate specific." 


How's that for a "NO?"  The process within political synergy is to identify legislators or candidates that support housing as well as political leaders that are in prominent "seats of persuasion." I am not saying to ignore each potential investor's political views. I'm explaining that being employed is better than being an R or a  D. I have my own political views, and while it feels great to stand on my moral high ground, it feels better to be employed and providing for my family. The housing industry doesn't support one party or another. They support the candidates who are for our industry's recovery and stability. If the potential investor truly earns a living for home building teaching them about the HBA political synergy will demonstrate that HBA staff is doing a fantastic job identifying who support us and who are not interested in helping the home building industry. When you invest you invest for a return. What better return than pro housing legislation which in turn helps you to keep earning?

Now let's talk about BUILD-PAC and the objections, or misconceptions, for investing nationally. Understand that the two previous objections are given on all levels of PAC as well but now we have the objection to contributing federally. 

"Which PAC is more important; local & state or NAHB's?"

Builders are most directly affected by local and state governments. Federal politics affect builders all over the country. The United States Congress is the only government entity that has the power to help our industry right now. Contrary to Tip O'Neill's popular belief not all politics are local. We live in a new world, "global housing" economy. A balance has to be achieved when investing in PACs, within a particular state and NAHB. When people invest they generally invest dollars in multiple areas. The same holds true for our industry's PACs. The available dollar is a lot smaller today and members will want to feel that their investment is helping. Demonstrate examples of  national victories as well as state victories and what affect it has on homes being built, in turn, products and services being sold.

One last road block that has nothing to do with asking for a dollar investment is asking other members to invest time, volunteering within the political synergy.

"Time is short, I can't volunteer"

I only have one answer for that statement and it is a bit harsh but it is reality. If you aren't working you'll have all the time you'll need. Don't rely on others to "handle it."  Become a part of the association that takes positive action which benefits everyone's livelihoods.

Next week we will discuss the two types of fundraisers and which style is best. We will also take a look at the two types of members we ask to invest, and no, I'm not talking about builders and associates. 

Submitted by: Michael Kurpiel, CGA, CGP

2011 NAHB Associate Members Committee Chair

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Peer to Peer Fundraising, Part 3

This blog is for thoughts regarding the National Association of Home Builders, which includes local and state HBAs. The opinions posted in this blog are NOT OFFICIAL NAHB opinions nor is this blog owned by NAHB but it is intended for NAHB members and staff use.

 

Peer to Peer Fundraising: Part 3 "Why Should YOU Care?"

"The Great Housing Industry Depression" has taught us quite a lot but the most important lesson will help us deliver a better explanation on why members should care about political investing. That lesson is what happens when some initiative tries to slow down or stop housing.                                                

This post, which will be short but extremely to the point, should help the general member clearly understand the reasons why they should care as we hope to stop the apathy attached to investing in our PAC.

Part 3 "Why Should You Care?"

In our last post we brought political synergy to the forefront and explained the working parts of a cohesive effort. Now we will show you exactly why you, the builder member should care.

Let's list for the builder the "problem" areas:

1. Government legislation

2. EPA regulations
3. Environmental organizations
4. The N.I.M.B.Y. (not in my back yard) mentality
5. Or any other anti-housing group

Pick anyone, combine a few or just add them all together. They have one thing in common; the desire, obsession in some cases,  to slow down or completely shut down home building. 

What we are experiencing right now is not necessarily the affects of any of the 5 listed items, but number 1 can most certainly HELP our efforts to get back to work sooner rather than later. 

Quite a few builders have been in this business most of their adult lives. Some are second or third generation builders. That is a testament to their love of home building.


The affects of legislation or regulation certainly can hurt us at any time if we are not a sturdy Three-Legged Stool (see Political Synergy post). Builders pay for many types of insurance but the majority seem to have an "I could care less" attitude about investing in the PAC which is like a political insurance. 

Why should associate members care? 

Take a really hard look at the picture above with the "sorry, we're closed" sign. Exactly what our industry has been experiencing.

Now take a look at this picture below:

Dramatic? Yes. Is it realistic? Unfortunately for quite a few, yes.


We have stressed in multiple posts before this; "if 'it' affects a builder 'it' will affect associates." We stressed this for a reason and we are all living it right now with lack of sales. "Why SHOULDN'T you care" is the question I have for you. This is harsh, I know. I fully expect some members to be taken aback by the "out of work associate" picture. However, if I turned one associate around by this by lifting the political apathy, well then I have brought one more passionate member into our grass roots efforts. I'm quite positive that I have more than one associate thinking about all of this.

Finally the ULTIMATE reason why you, the member, should care:

There are 4 types of members in our Federation:

1. Those who make things happen

2. Those who watch things happen

3. Those who wonder what happened

4. And the worst of all; those who sit back and watch things happen and then complain the loudest when those things do happen.

Which type of member do you want to be? Do you care?

Next week’s blog post will be about common objections to investing and how to turn those objections into non issues.

Submitted by: Michael Kurpiel, CGA, CGP

2011 NAHB Associate Members Committee Chair

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

NOTE: This article is based on a section from The NAHB Associates presentation "Peer to Peer Fundraising." 
This type of fundraising will work on all of your HBA events or fundraising initiatives you may have; you just have the supply the core reason for the fundraiser and demonstrate

Peer to Peer Fundraising, Part 2

Peer to Peer Fundraising, Part 1

This blog is for thoughts regarding the National Association of Home Builders, which includes local and state HBAs. The opinions posted in this blog are NOT OFFICIAL NAHB opinions nor is this blog owned by NAHB but it is intended for NAHB members and staff use.

This is part 1 in an effort to give you some good reasons and ammunition for political fund raising

 

 

Peer to Peer Fundraising: Part 1 "What Doesn't Work?"

"What Doesn't Work" is the title of this post and, I know, this is supposed to HELP you with your fundraising efforts, not criticize. If this series of articles is going to help you understand how to effectively fund-raise we have to start off with things that really do not work to the degree we would all hope. Please take my comments regarding what each and every HBA does for member contact as it pertains to fundraising as "tongue in cheek" but with some truths in the observations.

Part 1 "What Doesn't Work?" 

The need for political fundraising occurs and the usual group of members gather and come up with an idea for a fundraiser. Now most ideas are worthwhile while some are just not going to produce interest from the members. I'm not going to tell you what are good ideas and what are bad ideas. Each area of the country decides that based on demographics and regional make up. However what I will tell you is that all the HBAs go about it the same way:

1. Need for dollars.

2. A meeting to discuss fundraising event.

3. Decision on the event is made.

4. The usual process for "the chasing of dollars" begins:

Mass mailing to general membership

Yes, the old tried and beaten method is up and running again. The idea for a PAC event is sent out to the entire membership with the hopes that the envelope was attractive enough to gain the recipient's attention long enough so that your PAC mailing is opened. 

What we don't know is how much mail the general member receives on a daily basis. Your mailing could very well end up here:

You just might have some success in getting the member to really give your mailing enough attention that they will sign up for the event. But then again, when they see the dollar amount that you're asking for the mailing maybe left on that cluttered desk or it may be filed below in the circular filing cabinet:

Next?

Advertised and announced in your HBA publication

It look good, doesn't it? Your event in color and for all to see. It explains the particulars and, of course, there is probably a registration piece and the dollar amount. Most newsletters that are sent to members offices usually end up go to their "library:"

Think about it and be very honest; am I right or am I right?? I don't mean to be graphic but when you are in "read mode" the chances of you calling your HBA to sign up for the event, and are also ready to write a check or give your credit card number over your cell phone at that precise moment, is slim to none. The chances you may bring the publication with you from the "library" may be slightly better. Mostly likely your publication will be placed with a three year old Readers Digest and The Bathroom Game Book.

Next?

Blast emails to your membership distribution list

.

The email is drafted and approved. The distribution list is selected, BCC of course, and you click send. That was extremely easy. Your email is now going to quite a few members and we know that the internet is fast and reliable. How could your members not sign up now?

Along the way your email hit a few snags..... 

I think you're getting the message. Mass mailings, publications and distribution list email blasts just are not that effective. But all hope is not lost, you have a general membership meeting between now and the PAC event. 

Here's probably what you'll do:

1. HBA president will speak to the audience or

2. the PAC chairman will speak to the audience or
3. the executive officer will speak to the audience or

4. SOMEBODY from the event planning committee will speak to the audience.

The audience, if they are like the average general membership meeting audiences, will be engaged in conversations at their tables and not really focused on the speaker explaining the event, talking about "how much fun you will have and please fill out the forms that are in front of you on the table." The forms generally stay on the table after the event.

Let's face it, if any of the above methods worked there would really not be a need to use the remaining methods. Now, what do all four of these commonly used methods have in common? There is no member to member contact, no peer to peer. It's all done in blocks of many members with each method given the singular member of the multiple members an opportunity to ignore the PAC event because the bottom line is the perceived view on how this affects their own bottom line. You've given each member a chance not to participate. 

Would an associate, as an example, stand up in front of a large group of builders, or use any of the other methods, and hope for a sale? Not if they truly want to be successful persuading the builder to buy their product or service.

In order for PAC fundraising to be successful you have to speak to members one on one or, at the most, in a manageable group, where intimate discussions can take place. In order for you to persuade members to invest in the PAC and\or a general event, you have to explain how the political process as well as how the synergy of the HBA staff and members work within that political process. 

Next week I will write about the legislative process and how HBA staff and active members blend their efforts to work within that process. This will help you with the structure of what the general member doesn't see but certainly feels. If you understand it will help you become more persuasive in your ask for an investment.

Submitted by: Michael Kurpiel, CGA, CGP

2011 NAHB Associate Members Committee Chair

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

NOTE: This article is based on a section from The NAHB Associates presentation "Peer to Peer Fundraising." 
This type of fundraising will work on all of your HBA events or fundraising initiatives you may have; you just have the supply the core reason for the fundraiser and demonstrate a value to the potential investor. 

The Housing Market and the Debt Ceiling Debate

The Housing Market and the Debt Ceiling Debate

As negotiations continue on whether and how to raise the debt ceiling, it is important to keep in mind housing market impacts that could occur due to the some of the possible outcomes being discussed in Washington.
Under the present law debt ceiling, the federal government may not borrow more than $14.3 trillion. The effect of this limit is that on August 2nd the federal government will not be able to pay all its obligations with cash-on-hand and incoming tax receipts. For example, to run even with current tax receipts would require a 40% cut in current government expenditures.
Most analysts expect the debt ceiling to be increased under a plan that cuts a significant amount of government spending. Negotiations are occurring today that revolve around rival plans championed by Speaker of the House John Boehner and Senate Majority Leader Harry Reid.
But what impacts could the housing market experience if these negotiations fail to produce legislation that lifts the debt ceiling?
Most experts believe the government would continue to pay interest/principal on outstanding debt first, followed by expenditures like social security payments. Last in line would be certain discretionary government payments, perhaps including wages of federal employees. The loss of these payments would certainly have a significant short-term contractionary impact on the economy. This kind of “anti-stimulus” would be particularly harmful at this moment given ongoing weakness with GDP growth and unemployment, both factors resulting in weak housing demand.
Moreover, under this scenario, even if the government continued servicing outstanding debt, thus avoiding even a temporary default, the bond rating agencies could downgrade the AAA rating of federal government debt. In fact, it is possible that absent an adoption of a long-term deficit reduction plan, a debt ceiling increase allowing ongoing payment of all federal obligations will not satisfy the ratings agencies. These institutions could keep the U.S. government on creditwatch or even downgrade given the forecasted size of future government spending.
The United States government is currently one of 18 countries that have this top-tier, AAA debt rating. Loss of the rating would have multiple negative economic consequences. It would reduce demand for U.S. Treasuries, which would lower bond prices and increase interest rates. Higher risk, non-government debt could also be sold off as investors seek to maintain a certain average credit rating of owned assets. Pension and money market funds in particular may need to reduce their holdings due to a loss of the AAA rating. In turn, higher interest rates for U.S. government debt could also increase long-run government expenditures by increasing interest expense making the long-run fiscal challenges worse.
Given that many interest rates are pegged to Treasury rates as matter of market practice, these impacts could certainly increase interest rates for home mortgages, auto loans and other consumer durables and business loans. Along with weaker macroeconomic variables, an increase in mortgage rates would further weaken housing demand and place downward pressure on prices.
How much would interest rates increase?  There are many estimates, but none certain. The bond markets have viewed the ongoing negotiations with a posture of confidence in a deal getting done. However, it is possible that government interest rates could rise 100 basis points or more in the case of a temporary default, which might spillover as higher rates for home mortgages. For the case of downgrade, the impact on interest rates would be smaller, but any increase in rates would weaken housing demand.
The timing of impacts for housing could also be delayed as increases in mortgage interest rates might take time to materialize in the market. A contrarian might also argue that demand for mortgage-backed securities might even increase somewhat, as investors move out of Treasuries and move into other assets perhaps offsetting a mortgage interest rate increase.
Nonetheless, the primary effect of a default or downgrade would be increased uncertainty. Home buyers are making purchase of a capital asset that they will own, on average, for ten years. Given other sources of uncertainty, particularly from the labor market, the largest impact from a failure to reach a deal that increases the debt ceiling would be to further increase concern and anxiety of families attempting to make long-term economic decisions.
And as we have seen, weakness in housing markets can easily produce a vicious cycle whereby housing price declines reduce household wealth, which reduces consumption, business growth, and job creation, further weakening housing demand and placing more downward pressure on housing prices. And of course the debt ceiling occurs in an environment full of housing policy debates, including the mortgage interest deduction (MID), the expiration of the conforming loan limits, and the qualified residential mortgage regulations (QRM).
What the housing market needs now is more, not less, certainty, with respect to housing policy and access to capital via the mortgage markets. This will help stabilize housing prices, thereby helping households repair balance sheets and set the stage for more robust economic growth.

This entry was posted on Monday, July 25th, 2011 at 6:10 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Luxury Sales on the rise?

Bain: Luxury Sales Expected To Gain 8% This Year

by Sarah Mahoney, Yesterday, 3:12 PM

The rich aren't just back, they're really back: Worldwide spending on luxury goods is expected to increase 8% this year, according to the latest forecast from Bain & Co.
Fueled by strong spending in the U.S., Europe, Brazil, Russia, China and the Middle East, the report forecasts luxury spending of €185 billion euros, or about $275.4 billion -- up from €172 billion last year. And 2010 actually came on stronger than many expected, with a 14% jump in luxury goods in the fourth quarter pushing sales past their pre-recession levels. For 2010, sales totaled €172 billion -- busting past the prior peak of €170 billion in 2007.
From 2008 to 2009, the affluent cut back sharply, with luxury sales plunging 17%.
So far this year, sales are up smartly: In both February and March, Bain says both department store and direct-owned luxury chains saw double-digit growth from the prior year. And orders for the fall season are up sharply, particularly for accessories, leather goods and hard luxury categories such as jewelry and watches. The report was released by Fondazione Altagamma, the Italian luxury goods industry trade association.
In the Americas, it predicts spending for the year will reach €52 billion, or $77.3 billion, with the U.S. continuing to hold its position as the largest consumer of luxury goods.
"Luxury has made a brilliant return to the retail stage, but the script has been re-written," Claudia D'Arpizio, a Bain partner in Milan and lead author of the study, writes in their release. "More demanding customers, generational shifts, new loyalty rules, an increasingly integrated offline and digital customer experience and the continued growth of China and other fast-growing markets are transforming the luxury industry."
It expects spending to climb 25% in China, perhaps even exceeding Japan for the first time. And Japan's sales are forecast to decline 5%, partly as a result of the earthquake, but stabilizing in the third quarter.
Worldwide, Bain predicts annual growth of between 5 and 6% through 2014.