The Five W’s of Investor Relations

The Five W's of Investor Relations: A highly effective way to engage key investors well beyond the capital campaign.

Your capital campaign is over. You’ve secured the funding needed to implement your strategic plan, grow your services, make capital improvements, etc. Now what?

Having a strong investor relations program is a critical element of every capital campaign… and the work really starts once your campaign is complete. After all, once your current 3-5 years of funding is over, you will want these funders to support your organization for a new funding cycle, hopefully at an increased level. Creating a Large Investors Advisory Council (or Advisory Board, Chairman’s Circle, Trustee Circle, etc.) is a highly effective way to engage these key investors well beyond the actual campaign.

Let’s take a look at the “Five W’s” of a successful investor relations program:

Who: Membership typically includes those investors who have the most “skin in the game,” those who have the most to lose or win based on the results.

Some of these investor members will also be on your organization’s Board of Directors. Typically, you’ll want your top ten investors at a minimum, those who provide 50-65% of your funding. Thereafter, it depends on the size of your organization and your ability to properly administer the group’s activities. A group larger than 25 is difficult for most. One representative per funder is standard and alternates may be selected by each investor.

What: A “Best Practices” strategy to retaining and empowering your campaign’s top supporters.

Personally, I prefer the term “Advisory Council” because it clearly states the purpose of the group: a council that meets to review progress toward campaign goals, is asked to provide advice regarding campaign initiatives, and provides oversight on how campaign funding is being spent. These investors are the real VIPs for your funding… with VIP standing for “Vital Investor Participation.”

Where: Host at least one in-person investor group briefing annually.

These briefings (separate from other meetings) will provide large investors/stakeholders with an opportunity to get to know one another better. It also offers your organization an opportunity to thank investors/stakeholders, communicate progress, and provide (when/if appropriate) gifts of appreciation. These can be held in the organization’s or an investor’s boardroom. Be sure to choose a venue that allows for review of recent successes, pending projects, challenges, and future plans.

When: Discuss expectations of meeting frequency with your Advisory Council members and be up-front about your organization’s bandwidth to host productive meetings.

The frequency of meetings can be quarterly, semi-annually, or annually, depending on what works best for you and your Advisory Council. Allow enough time for a Q&A period, group discussion, and member feedback to take place. A luncheon setting creates a relaxed atmosphere for these events and makes good use of attendees’ valuable time.

Why: “Vital Investor Participation” is the goal of this investor relations strategy.

When investors are not only kept informed but invited to participate, your organization’s plan becomes their plan, not just with money but emotionally and psychologically. Once the plan truly feels like “their plan,” your top supporters will get even more involved to ensure the plan’s success.

For example, if some are employers with a workforce development challenge and your plan of work calls for solving this challenge, their involvement and ideas and suggestions could be revolutionary. Or, if your plan of work calls for assisting with a housing shortage, your top construction, banking, and realtor investors may have ideas for making headway on that challenge. Also, if there are any concerns regarding how investor funds are being used, those will typically air in these meetings and will be addressed at the meeting or in follow up communications. This eliminates any rumors and potential negativity.

If you keep investors informed, listen to their ideas, and even implement some of them, you are perceived as really trying to solve their problem(s). Will this help increase funding for the next campaign cycle? Typically, yes, it will. Even if the challenge isn’t completely resolved, you tried and used their ideas. You are in this together.

Other Ideas on “How” to Increase Vital Investor Participation

  • Tap the expertise of your investors. Involve them in special assignments like hosting prospects or participating in “red carpet” or “behind the scenes” tours, joining staff serving as community ambassadors when traveling outside the area, participating in local industry relations, etc.
  • Ensure investors are aware of and/or invited to attend any/all appropriate events, meetings, and special functions. Provide them with recognition by seating them at the head table, ensuring they meet the “right” people, and/or get a moment to shine on the microphone. Always prepare them with talking points about your organization.
  • If appropriate, create an investor relations budget to implement strategies and designate a board member to oversee investor relations.

Some of the strategies offered are likely already at play within your organization but may benefit from incorporation into a larger strategy and/or use a refresh.

As you can see, by engaging the members of your Large Investor Advisory Council early and continuing to engage them throughout the course of your three to five-year funding cycle, you’ll be able to maximize their involvement and their commitment to your organization, not to mention you are more likely to generate larger future investments.