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A training series designed specifically for Boards of Directors of Nonprofit Organizations
StateBoardTrainingConsortium’s
Achieving Excellence in Governance
``
DEVELOPED & PRESENTED BY:
Council of Community Services of New York State, Inc.
www.ccsnys.orginfo@ccsnys.org David P. Paterson
Governor
FREE TO NONPROFITS AFFILIATED WITH:· NYS Office of Alcoholism & Substance Abuse Services Karen M. Carpenter-Palumbo, Commissioner· NYS Office of Mental Health Michael F. Hogan, PhD, Commissioner· NYS Department of Health's AIDS Institute & Center for Community Health Richard F. Daines M.D., Commissioner· NYS Office of Children and Family Services Gladys Carrion, Esq., Commissioner
/
Fund Development for Nonprofit Boards
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance Key Learning Objectives
• Identify fund development responsibilities of the board, development committee, and staff
• Learn the components of a development plan
• Understand resource development strategies
• Learn ways of getting board “buy-in” to fundraising/fund development
• Develop strategies for successful solicitation
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Board of Directors:Major Policy and Monitoring Functions
• Board management and development
• Personnel management• Fiscal oversight• Program - quality assurance• Strategic Planning• Fund Development
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Fund Development Responsibilities of an Effective Board
• Accountability
• Ethical Principles
• Oversight
• Participation
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Accountability
• For all authorized activities generating financial support on the organization’s behalf
• Meeting all regulatory requirements:• Attorney General’s Office
(requirements in manual)• IRS• Other
• Compliance with ethical standards
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Ethical Principles
• Awareness of, and compliance with, the intent of federal, state and local laws regulating charitable solicitation
• Establish and exercise adequate controls over fundraising activities
• Accuracy, integrity and accountability in all solicitation activities, materials, representations, etc.
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Ethical Principles
• Motivated by mission, merits & resource needs
• Respect for the privacy of donors
• Administrative and fundraising expenses should be fair, reasonable, documented, and disclosed to ensure maximum support is devoted to the mission
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Oversight
• Establishing a governance structure
• Ensure development efforts meet the budgetary needs
• Ensure resources are available to maximize returns
• Approval of the annual development plan
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance • What are the agency’s real needs?• Is current funding sufficient?• Would funds raised effect existing
funding streams?• Where have the resources come from in the
past? • What are the funding trends?• Are the funding streams diversified?• What would be the impact of a funding cut from
any source? • What is our goal?
• Increased name recognition• Unrestricted dollars• Fund a specific program• Building donor base• Connecting with affluent people• Capital improvements
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Participation
• Personal contribution
• Involvement
• Identifying and cultivating resources
• Government relations
• Solicitation
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Who’s on First?The Development Committee
• Prepares Development Plan for Board approval
• Models and encourages full Board involvement in implementation
• Monitors and reports progress• Evaluates efforts • Revises plan
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Why have a plan?
• Gets rid of magical thinking• Coordinates Board, fund raising
and marketing efforts with the organizational strategic plan
• Gets “buy-in” from participants regarding:– Goals– Priorities– Accountability
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Why have a plan? (cont’d)
• Helps to pace your annual efforts• Great orientation tool for new Board
Members and Committee Volunteers• Creates understanding of everyone’s
fund raising roles and responsibilities• Outcome orientation helps you
measure your success!
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
What is a Development Plan?(or…taking the gamble out of fund development)
A detailed plan of how needed resources will be obtained, including:
– The case for support…who needs us?– Fund Development environmental analysis– Goals – Strategies– Budget and human resource needs– Timelines – Accountability– Evaluation
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
What is a Case for Support?• What do you need money
for?• How much do you need?• Why would someone want
to contribute?• Benefits to clients• Benefits to the donor• Benefits to the community
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Analysis of Fund Development Environment
External Environment:
• Competitors• Community awareness• Perceptions of activities
(quality and need)• Economy• Availability of human
resources
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Analysis of Fund Development Environment (cont’d)Internal Environment
• Staffing allocated to fund raising• Adequate space and technology• Budget availability for development
efforts• Volunteers’ commitment to
fundraising• Strategies• Budget and human resource needs• Timelines • Accountability• Evaluation
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Set SMART Goals!
Specific
Measurable
Attainable
Realistic
Tangible
Take It One Step At A Time!
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Set Your Goals…
• How much funding do you want to bring into the organization within the next year?
• What is the breakdown between operating and programmatic monies?
• Is your current budget a realistic one or one that reflects your ideal (you can have both!)
• How much funding do you want to bring into the organization over the next two or three years?
• How much of an increase will your operating expense be?
• Do you anticipate expanding current programs or starting up new ones?
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Keep in mind…
Those internal and external factors that influence your goals but may change, such as…
• Programmatic changes• Staff structure (number, qualifications,
etc…)• Board and community support• Local, state or national factors that can
influence fund raising (think 9-11 or Hurricane Katrina)
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Income-generating Strategies• Grants• Earned revenue• Entrepreneurial activities• Fund raising activities
• On-line activity• Special events• Direct mail• Radio, television or print ads• Phone-a-thons • Planned Giving • Face-to-face solicitation
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Each Strategy Serves a PurposeWhile it may not offer the greatest financial return, it may:• Establish credibility• Generate positive public exposure
for organization• Reach out to potential new donors• Involve new volunteers —
your best ambassadors in the community
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance Success Rate of Fund Raising Activities Based on Ratio of Time Invested to Financial Return
Personal face to face ask by a known peer 50%Personal phone call by a known peer 30%Personal letter by a known peer 15%
(on their stationery)Phone-a-thon (by a volunteer or paid caller) 10%Direct Mail 1-5%Special Events Least Effective Strategy
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Master Budget• It takes money to raise money,
but how much can you afford?(can cost up to 30% of anticipated revenue)
• Remember that time is money —if it takes time, there is a cost
• Even volunteer-driven fund raising efforts require adequate staffing, space and technology to support volunteers
• Remember to include all costs (direct or hidden):– Staff time– Space and technology needs– Marketing and advertising
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Strategy Jan Feb March April May June
Special
Event
Direct Mail Campaign
Volunteers Recruited
Follow-up Solicitation
Media
Thrust
Newsletters
Master TimelineSpace out major events and asks
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Exercise 2: Accountability Prepare a Written Action Plan
Tasks Key person Resources Target Date Outcome
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
So How Did We Do?Evaluating the Plan
• Review and fine-tune the plan annually
• Were costs within 30% of income?• Were targets and outcomes
realistic?• Consider the non-financial benefits
of each effort?• Are you moving toward your long-
term goals?
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Why Focus on the Individual?
• Source of 75% of charitable contributions
• Reduced funding from government and foundations
• Accumulation of private wealth–Due to stock market growth–Transfer of wealth to baby boomer
from the generation that saved• Need for unrestricted dollars• Requires Board involvement
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
$ 222.89
$ 22.91
$ 36.50
$ 12.72 Individuals 75.6%
Bequests 7.8%
Foundations 12.4%Corporations 4.3 %
Sources of Contributions
2006 Charitable Giving: $240.72 Billion
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Key Concepts In Fundraising… People earning under $40,000 per year
donate a higher percentage of their income than those earning more.
80% of the money you raise will come from 20% of the donors
Development is the process of building relationships
Fund-raising is setting up opportunities to actually ask for money
You better have a plan to cultivate those donors!
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Board Roles and Responsibilities for Cultivating Individual Giving
Board of Directors Identification Cultivation SolicitationDevelopment Committee Planning Training/Modeling Oversight Monitoring Evaluation
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance What about the CEO’s role?
• Articulate vision of the organization• Ensure organization operates in a way
that merits support• Major role in identification, cultivation
and solicitation of major gift prospects• Works closely with Board to encourage
and support their involvement• Ensure Development staff has internal
relationships, staffing and budget to achieve goals
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
What’s Left for the Development Staff?
Staff supports volunteers in the following efforts:
• Planning and evaluation• Resource development • Resource management• Implementation• Public Relations• Evaluation
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
O.K. I Get It!Now How Do I Get My Board on Board?
• Identify skill gaps among current members
• Recruit new members with needed skills
• Invest in Board training• Set an example• Establish coaching
relationships• Set reasonable goals
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Direct Solicitation...Not Me!
• What you believe in must be bigger than what you are afraid of.
• You are giving people an opportunity to have an impact on a community problem they care about--It’s simply up to you to share your passion. The dollars WILL follow.
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Who Should Do the Asking?
• Develop a strategy for approaching each individual
• Remember that the most effective strategy is a personal face-to-face ask by a known peer
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Development is 90% Cultivationand 10% Solicitation
Identification Screening Introduction
Familiarization
Appreciation
InvolvementSolicitation Rating
Org. Reaction
Prospect Reaction
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance Warning:
Don’t only target the “haves”
• 75% of all money donated to charity comes from individuals, and 85% of that comes from people earning less than $40,000 a year.
• Attitude toward giving and helping is more important than having or wealth.
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Identification Where Do I Find My Prospects?
• Those actively involved• Those with some relationship• Those with a natural inclination• Those who are active in
philanthropy• Those who could contribute but
have no history of giving
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance When Should I Ask?Cultivation of Prospects
• The higher the ask, the longer the cultivation period
• An annual fund gift is requested annually, generally through direct mail, phone-a-thons, or mass marketing
• Major gifts (10-25 times their annual gift) are infrequently asked for or given and require a personalized cultivation plan and solicitation
© 2000 All Rights Reserved
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Remember why people give
• Share goals the organization pursues
• Personal gratitude toward the organization
• Enlightened self-interest• Involvement in the life of the
organization• Being asked• Joy
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
What If They Say “NO”?Overcoming Objections
• Anticipate objections and be prepared
• Encourage prospect to tell you their reasons
• Listen carefully • Clarify misinformation and
offer opportunities to become more familiar with the cause
• Continue cultivation
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Post Campaign Necessities
• Acknowledge all gifts and pledges
• Thank each donor promptly and personally
• Continue building on donor’s interest — start working toward the ULTIMATE gift
• Publicize the donor’s generosity• Hold a wrap-up meeting with
solicitation team
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance Remember:
• People give to other people — establishing relationships are key
• People give because of self-interest — know what motivates your donors
• Respect donor privacy and wishes• Raising money is a long-term process• Money follows people—get prospects
involved• Diversify your funding streams• Few people give without being asked
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
And don’t forget:
• Plan ahead—raising $$$ takes time• Passion and compassion are critical• “Key person” fund raising is most
effective• Make sure you have a quality
“product”• Marketing is how people know you• Writing proposals is not
grantsmanship• Fund development is an every day art
© 2000 All Rights Reserved
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Now What?
• Take a hard look at your board to identify skill gaps and develop a recruitment plan to fill them
• Consider board training to help members understand their fund development roles
• Assess if current resources are sufficient to achieve the organization’s mission
• Prepare a fund development plan to address current & anticipated needs
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
© 2000 All Rights Reserved
Celebrate your success!
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2007 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Added Ideas, Comments, Added Ideas, Comments, Questions???Questions???
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Online Giving Research
• Overall, online giving climbed 37 % in 2006 over 2005
• 47 % of organizations indicated they use the internet to solicit gifts, compared to 34 % in 2002 and 37% in 2001. Of those who provide online giving opportunities, 61 % raised more money in 2003 than they did in 2002
•
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
• More than 65% of donors used information from the internet before giving, whether online or offline – and 40% always go online before giving, regardless of whether its online or offline
• The majority of online donors have little to no prior giving history with an organization. This means it could be easier to acquire an online donor than it is to convert a current donor into an online donor
• Roughly 19% of people donate online (compared to shopping at 67% and banking at 41%
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Getting Grants: The Process
• Need is recognized• Idea for solution• Identify funding source• Relationship building• Proposal writing• Submission• Celebrate!
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Earned Revenue Examples
• Fees for services rendered• Sale of a product/publication• Medicaid/insurance payments
received• Performance-based
government contracts
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Entrepreneurial Ventures
Earned revenue generating (profit-making) ventures that are either:
Related to mission (consistent with mission)
Unrelated (not consistent with mission) Remember, Unrelated Business Income Tax comes into play if the activity is outside the mission
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Exercise 1
John and Jane Dough have offered to give a $10,000 gift of appreciated stock to an agency in this room.
Why should it be your agency?
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance Exercise 1: Strategies
• Identify three strategies that you have used in fund development
• Identify a strategy that would be appropriate for one of your identified goals
• Consider what must happen to be successful• How much will it cost?• Where will the “up front” money • come from?• Who will be responsible?• When does it need to be done by?• How will we measure success?
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
If 80% of the money you raise comes from 20% of the donors, you better have a plan to cultivate those donors!
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
How Much Should I Ask For?Rating Prospects
• Involve 3-4 knowledgeable community volunteers
• Provide a list of 50-100 prospects grouped by affiliation with your organization, giving history and pattern and community philanthropy
• Volunteers match prospects with a gift range & add anecdotal information
• Information is shared with selected solicitor
State Board Training Consortium’s * Achieving Excellence in Governance
Council of Community Services of New York State, Inc 2008 SBTC Series
State Board Training Consortium’s * Achieving Excellence in Governance
Sample Rating Form Rated by:________
Prospect Relationship >$1000 >$5000 Other Information
Possible Solicitor
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