Download - 5.4.11 Class
Michele R. Berard, MBA, CFREDirector of Funds Development, Butler Hospital
President/CEO, Ascent Advisors, LLC
May 4, 2011 Lecture
Non-Profits & PhilanthropyRIC Certificate Program
for Nonprofit Studies
Learning Objectives – May 4, 2011
1. What Fundraising Funds 2. The Case & Case Statements3. The Development Process4. Fundraising Vehicles5. Establishing Your Professional Brand6. Ethics in Fundraising
Note: Time dependent
A couple of points before we dive in…
Fundraising or Fund Raising Association of Fundraising Professionals (AFP)
changed Fund Raising to Fundraising in 2000 when they changed the organizational name, formerly National Society of Fund Raising Executives (NSFRE))
Philanthropy Healthcare, large institutions
Development, Fund Development Smaller non-profits, social service agencies
Advancement Education
For the purpose of this class, they all mean the same thing…
…from 819,008 to 1,238,201 in 10 years
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
819008865096
909574964418
10103651045979 1064191
11283671186915
1238201
Source: Giving USA 2010 The Annual Report on Philanthropy for 2009, Executive Summary
Discretionary Spending (total $1.368 trillion) some line items:
•Defense ($664b) •HHS ($79b)•Education ($46.7 b)•Homeland Security ($42.7 b)
and the list goes on…
Government Spending 2010 - $3.55 Trillion
Operations = Your Organization’s Purpose
Nonprofits exist to fill the gaps in services that public and private sectors do not provide The trend of increasing non-profits provides evidence
that unmet needs are increasing
Recent attention to reducing the Federal deficit will result in: Less government funding for non-profits
More gaps in services; smaller government
Opportunities for Private and Nonprofit Sectors
Organization’s Purpose = Mission = Operations
#1 - What Fundraising Funds
The Planning Process will undercover funding needs of the organization
In order to design a development plan and implement a program, it is important to work with the finance office (and other departments) in order to prioritize the organization’s funding needs.
E.g. if your organization requires $150,000 of operating support each year, a gift of $250,000 for the endowment is not going to add value
Organization’s generally raising money to fund: General Operating Expense Capital Needs Endowment
General Operating Expenses Pay for the expenses that carry out the mission of the
organization Can be programs, can be salaries, can be services Also referred to “General Fund” or “Unrestricted
Donations” Stigmatized
Interesting Parody: Organizations mostly need General Operating contributions, but they are the hardest to solicit/acquire due to: Increasing trend of donors wanting ownership Overall negative stigma of “paying for administrator’s
salaries” Difficult to marketing/report outcomes Sustainability (will need again next year)
#1 - What Fundraising Funds
General Operating Expenses (continued) Are recruited through:
Fundraising Events Direct Mail Appeals Corporate Sponsorships Internet Giving Grants (…however, requires some creativity) Planned Gifts (e.g. bequests)
The task in recruiting philanthropy revenue to support General Operating Expenses is finding a component (or components) in your organizational budget where the impact of the gift can be measured.
E.g.: Aftercare Program, Charity Care, …
#1 - What Fundraising Funds
Capital Expenses “Brick and Mortar” New Buildings, wings, major renovations (that result in
expanded or enhanced capacity) Large pieces of equipment
E.g.: MRI, DaVinci Robot, TMS Chair, Van/Delivery Vehicle
Donations to fund capital expenses are recruited through: Grants (foundations/government) Corporate Gifts Individual Major Gifts
#1 - What Fundraising Funds
Capital Expenses (continued)Contra to General Operating Expenses, it is easier to recruit
philanthropy revenue to support Capital Expenses because: The project timeline is finite It can be measured (you build it, order it, install it) Appeals to wider masses (due to: naming opportunities, committee
work,...emotion) Its easier to recruit large gifts for capital since the overall project is also
large Multi-year pledges The impact to the organization’s financial position – a bona fide revenue
stream that can be leveraged!
A Capital Campaign is a specific fundraising initiative that occur over a period of years to raise a predetermined goal Both timeframes and monetary goals of Capital Campaigns are both
trending upward
#1 - What Fundraising Funds
Endowment:According to the AFP Dictionary – is a permanently
restricted net asset, the principal of which is protected and the income from which may be spent and is controlled by either the donor’s restrictions or the organization’s governing board.
Many organizations have an endowment that provides revenue to support operations or a specific program
Prominent in Academic Setting with growing popularity in Healthcare settings e.g. Endowed Chair – The revenue earned from the fund is used to pay
the salary (or specifics mentioned in the endowment policy associated with that endowment)
#1 - What Fundraising Funds
#1 - What Fundraising Funds
Endowment (continued) Endowment Policies provide the details of the
administration (and often the investment) of the endowment 4% of interest earned from the ABC endowment goes to support the
salary of the Chief of ABC. Any additional earnings above 4% will be reinvested into the ABC endowment
The endowment will be invested in portfolio comprised of 40% stocks 60% bonds
ADVANCED: policies should consider the mission of the organization
Are recruited through Planned Gifts (mainly bequests) Major Gifts (primarily from Individuals) Special Campaigns (major, regular individual giving, events)
Endowment funding is generally never recruited from Foundations or Corporations
#1 - What Fundraising Funds
The Case for Support Case for the Institution - The case is the statement of
the cause Mission and strategic plan drive the case Explains why donors might want to contribute to the
advancement of the mission Describes the organization’s goals and objectives Explains the role of philanthropy in achieving organizational
goals One large case for the organization, from which smaller
individual case statements are developed for various constituencies and programs
Align organizational funding needs to donor’s wishes Also known as “The Case” or “The Boilerplate”
(internally) Purpose – Show the organization’s impact on the
community economically, socially, artistically, spiritually and/or historically for today and tomorrow
#2 – The Case & Case Statements
Who Creates The Case? Development Staff – they act as interpreters between
external constituencies and external constituencies Review, comments, approval, support by internal and
external constituencies
The Development Committee to
review, endorse
The Board to endorse
Goes to the constituency for testing
CDO begins the process
back to the CDO for edits
Hands off the CEO for review
#2 – The Case & Case Statements
The Case Contents: (Hank Rosso refers to this as case resources)
Mission Statement Goals Objectives Programs and services Finances Staffing Facilities and services delivery Planning and evaluation History
These are the parts that create your organizational whole. When put together, the case may also be referred to as the “boiler plate” or “template” for foundation grant requests.
#2 – The Case & Case Statements
Case Statements - what are they:? Written version of The Case for a specific
constituency or campaign and should state: The institution’s services, programs, and objectives How the goals of the fundraising program support the
institution Ways in which the institution will remain significantly
productive in the next decade The difference it would make if a donor supported the cause What the institution must do to improve or change its activities
and aims, and why the institution is valuable to society
The Case Statement must align donor wishes and funding needs of the organization
#2 – The Case & Case Statements
Internal vs. external cases (Hank Rosso) The completed case or template = the internal case The external case tells the story to the constituency
E.g. “…brochures, foundation (and corporation) grant proposals, direct mail letters, web site development, campaign prospectuses, news releases, newsletters, speeches, and face to face solicitations…” (Rosso, 2003)
To maintain alignment with organizational needs and donors’ desires, the following questions should be answered:
What is the problem or social need that is central to our concern?
What special services or programs do we offer to respond this need?
Why are the problems and services important? What constitutes the market for our services?
Continued on next slide…
#2 – The Case & Case Statements
Alignment questions (continued): Are others doing what we are doing to serve our market – and
perhaps doing it better? Do we have a written plan with a statement of philosophy,
objectives, and a program? What are the are the specific financial needs against which
private gift support will be sought? Is the organization competent enough to carry out the defined
program? Who are the people associated with the organization: staff, key
volunteers, trustees, directors? Who should support the organization?
Preparation of a case statement is first step in any aspect of the organization’s total development program (including: annual giving, capital giving, planned giving)
Case Statements are just for Capital Campaigns any more!
#2 – The Case & Case Statements
SWOT Analysis is helpful here…
The Case Statement is an internal document and the basis for and external “sales” publication with many uses:
To secure feedback and create ownership
To recruit volunteer leadership
To test the market
To form a basis for case (marketing) materials
To tell a story
#2 – The Case & Case Statements
Applying/Adapting to Your Market Segments The final step before writing the case statement(s) is
to determine your most critical constituencies
Which Constituencies: Are the strongest supporters? Give on a regular basis? Have the greatest ability and interest to give? Are the most interested in specific components of a
campaign?
The most effective tactic is to develop an individualized case for each constituent group as you are getting the greatest alignment (however, this is not practical)
Individualized attachments Individualized cover letters
#2 – The Case & Case Statements
Grouping Constituencies
Source: CFRE Review Course (faculty manual) 2004 Edition
Constituency Groups Case Statement Suggestions
Major Donors •Point out that you are looking for a few major givers•Ask for their advice and participation •State needs more briefly•Emphasize leadership of your organization and campaign•Be candid about request•Develop a low-key “insider” appearance (that is not too slick)
Community Audience •Emphasize economic contributions of your organization and/or its employees
Corporations •Emphasize any services you provide to the corporation and/or its employees
Foundations •Avoid formal printing•Be prepared to fit the foundation’s proposal format•Address annual goals, hidden agendas, stated areas of interest
#2 – The Case & Case Statements
#3 - The Development Process
Annual Fund
Endowment, Capital
Buildings, Equipment, Endowment
Special Programs
& Projects
Ongoing Programs
& Services
Estate Planning
AssetsIncome, Assets
Current Income
Benefit:
Source:
Donor
Major Gifts
Program
Capital Campaign
Planned Giving
#3 - The Development Process
No organization is similar; therefore needs different strategies and tactics to build and sustain a successful development program.
The Development Officer’s Job… to “Right Size” it for your organization’s needs
Answer the following questions for direction: What are the needs of your organization? What are the resources available to you? What champions to you have?
#3 - The Development Process
Stages of Development - Getting in moving up the Donor Pyramid
1. Identify potential prospects Compile and develop lists of predisposed individuals Similar organization’s annual reports, book of lists, professional
organizations, natural constituencies,etc.
2. Convert potential prospects into qualified prospects Test the list effectiveness by identifying linkages Engage volunteers, staff (e.g. rating session) May be combined with step 1
3. Convert qualified prospects into initial donors Build on linkages, test interest by asking for gift Solicit by personal contact (telephone, direct mail, special
event) Acknowledge gift (opportunity to validate the linkage; negate
buyers remorse)
#3 - The Development Process
Stages of Development - Getting in moving up the Donor Pyramid
4. Convert initial giver into donor of record Build on interests and linkages Report to the donor how the organization used their gift Invite to renew, Acknowledge
5. Increase the gift Research, building on linkages and interests Inform (report on use), involve in organization Invite to renew at a higher level (use gift club concept) Acknowledge
6. Secure Special Gift (e.g. $1,000) Continue research through linkages, involve, build on interests Align interests with a special need of organization Personally solicit (face-to-face) , invite to gift club membership
#3 - The Development Process
Stages of Development - Getting in moving up the Donor Pyramid
7. Secure Special Gift (e.g. $1,000) (continued) Acknowledge
8. Secure Major Gift (e.g. $10,000+) Validate donor as a major gift prospect via linkages and
donor research (i.e. capacity) Involve the donor in the institution via planning, case
evaluation (“testing the case statement”) As a loyal donor, ask him/her to participate in cultivation
events or help in identifying new prospects; join board committee
Share needs of the organization; align solicitation to donor’s desires, face-to-face solicitation by CEO/Board Chair, acknowledge
Reward/Recognize
#3 - The Development Process
Stages of Development - Getting in moving up the Donor Pyramid
9. Secure Big Gift Continue to involve and engage through linkages and interests Employ donor as an important advocate; invite to serve as
volunteer leader (board member); Foster a desire to give and ask by involving in cultivation events
and engaging his/her personal contacts Ask, Acknowledge, Reward/Recognize
10. Secure Planned Gift Continue involvement with the purpose to strengthen bond
between the donor and the organization Create feelings of belonging to and identifying with the
organization Foster mutuality of interests Giving in perpetuity (endowment) or legacy
#3 - The Development Process
Stages of Development - Getting in moving up the Donor Pyramid
HOWEVER: Evolves over a very long time horizon (e.g. 10 - 20
years) Through many Development Professionals
Very time consuming As donor progresses up the pyramid, the tactics become
more personal (hence dedicated MGO) Greater access; involving the time/energy of organizational
leadership outside of the Development Office 80/20 rule: 20% of your donors will provide 80% of the
funding Most of your donors will only progress so far in up the donor
pyramid
#3 - The Development Process
Individuals75%
Corporations5%
Foundations13%
Bequests8%
Source: Giving USA 2010 The Annual Report on Philanthropy for 2009, Executive Summary
2009 Contributions: $303.75 billion by giving source of contributions
Different funding streams contribute (or invest) for different reasons
Hint: start with funding needs of the organization, then work to align those needs to your constituencies
The Donor Pyramid illustrates the process of a development program and is a common element in fundraising education (note: google “donor pyramid” for other examples).
Donors enter at the base (the widest part of the pyramid) and are “stewarded” up the pyramid to more significant giving.
#4 – Fundraising Vehicles
1. Direct Mail Direct Mail is used to acquire new donors
and to renew current donors (note: Individual Donors)
Via a Direct Mail Appeal CLARIFICATION: “Appeal” is the call to action that
motivated the donor to respond with a gift. Often in fundraising, we use “Appeal” to describe a direct mail solicitation – e.g. Fall Appeal
Direct Mail Appeals come in all shapes and sizes and should be right-sized/right-toned to your organization (i.e. mission and culture)
#4 – Fundraising Vehicles
Direct Mail (continued)
Main components of the Direct Mail Solicitation (a.k.a. Appeal):
a) The letter… evoke emotion (Anger, Exclusivity, Fear, Flattery,
Greed, Guilt, Salvation) write to get the attention of “scanners” and “readers”
(use readability statistics on Microsoft Word) clearly state the purpose of the letter clearly state the goal; how success will be measured;
what results a gift will produce… use a “P.S.” signature
Via a Direct Mail Appeal CLARIFICATION: “Appeal” is the call to action that
motivated the donor to respond with a gift. Often in fundraising, we use “Appeal” to describe a direct mail solicitation – e.g. Fall Appeal
Direct Mail Appeals come in all shapes and sizes and should be right-sized/right-toned to your organization (i.e. mission and culture)
#4 – Fundraising Vehicles
Direct Mail (continued)
Main components of the Direct Mail Solicitation (a.k.a. Appeal):
b) The reply device… Draft first – before the letter Test Include credit card options, “in memory of”,
specific programs, check boxes for additional information (E.g. planned giving)
Revise and test, etc. Use as another communication device (for the
scanners) Include on-line giving instructions if applicable
#4 – Fundraising Vehicles
Direct Mail (continued)
Main components of the Direct Mail Solicitation (a.k.a. Appeal):
c) The remittance envelope… Self Addressed and Postage Paid
The internet is giving the USPS major competition. Don’t make it harder for your donors (or prospective donors) to have to buy a stamp, look up your address, write it down, and deliver it to the post-office!
Note: You’ll need a BRE Permit from your local post-office to use self-addressed, post-paid envelopes.
#4 – Fundraising Vehicles
Direct Mail (continued)
Main components of the Direct Mail Solicitation (a.k.a. Appeal):
d) The outside envelope… #10 window or plain (research has shown
that this is the most effective/efficient) Teaser Copy – If you appeal doesn’t get
opened, it doesn’t matter how long you spent on your reply device, or how well written your letter is, or even how compelling your call to action is!
“From the Office of the President” “Learn how your can help others access
healthcare” “See inside for details on a great investment offer “
#4 – Fundraising Vehicles
Direct Mail (continued)
Main components of the Direct Mail Solicitation (a.k.a. Appeal):
e) Premiums and gifts… Premiums are Give-A-Ways included in the
direct mail package to entice (guilt) a prospective donor
Premiums are most effective for donor acquisitions; less effective for renewals
Gifts are given only to donors; more control on the organization side, but also more time consuming
#4 – Fundraising Vehicles
Direct Mail (continued)
Other forms of Direct Mail (used more for stewardship):
Newsletter Invitations Announcements Surveys Annual Report Mailings Event Calendars…
Basically, any time you mass mail to your constituency or a segment of your constituency
#4 – Fundraising Vehicles
Direct Mail (continued)
Is the tactic most used to recruit donors because it can be mass produced at somewhat of a low cost. However…it is impersonal, which explains why first time donors don’t necessarily renew their support.
Long-Time Donor = Strong RelationshipPersonal Attention = Strong RelationshipPersonal Attention = Expensive, Time
Consuming and not replicable
#4 – Fundraising Vehicles
Special Events/Fundraising Events An opportunity to capture new donors
(“Donor Acquisition Vehicle” Good for organizations that:
need to build a donor base have a dedicated volunteer group to recruit
corporate sponsorships A mission that resonates with the community at
large (to recruit new supporters) -or- Have a large beneficiary base (Alumni, Patients,
Staff, Members, etc) to support the event (note: not a donor acquisition vehicle)
#4 – Fundraising Vehicles
Special Events/Fundraising Events (continued)
Usually funds General Operating, however could be appropriated to a specific fund or project (this should be discuss with you organization’s CFO ahead of time)
A huge variety, for example: Golf Tournaments Gala (Dinner & Dancing) Silent/Live Auction (stand along or an add-on) Fashion Show Food & Wine Tasting Celebrity Luncheon
The only limit is imagination!
#4 – Fundraising Vehicles
Special Events/Fundraising Events (continued)
A downward trend Expensive (% of net vs. gross) Ethical considerations (misleading donors) Time consuming Sponsorships correlated to economic times
A purpose beyond raising money Communicating your mission Recruiting new volunteers Recognizing community leaders Bonding experience for organizational staff Opportunity for your Board Members to participate
#4 – Fundraising Vehicles
Corporate Gifts/SponsorshipsFirst, some background Charitable contributions to non-profit
organizations reduces a corporation’s tax-liability
A contribution to your organization helps the corporation pay less in taxes
Good Economy = Sponsorships Two “pots” to pull from:
A charitable division of the corporation (usually larger with giving guidelines)
The marketing department (usually smaller with less restrictions)
#4 – Fundraising Vehicles
Corporate Gifts/Sponsorships The marketing department:
Contacts are usually public; reach out to them Personal/Professional relationships are helpful
(engage Board Members and Volunteers) note: we will discuss in greater detail in future modules
Do your research – What organizations has the corporation sponsored in the past and for what project? (usually located on the organization’s website under “Community Relations” or a similar heading)
Tailor your ask to what the corporation has done in the past
Make sure it contains a marketing benefit Examples
#4 – Fundraising Vehicles
Corporate Gifts/Sponsorships The Charitable Division:
Contacts are also public; reach out to them But first, do your research as there is usually a distinct
mission of this function (see Foundation Center – www.foundationcenter.org) or call them directly for their “Giving Guidelines”)
Review the funding needs of your organization – do they fit within the giving guidelines? If yes, begin proposal process
A word on square peg round hole approached Proceed with caution on exploiting
Personal/Professional relationships Examples
#4 – Fundraising Vehicles
Foundation Grants Similar to Charitable Division gifts from
Corporations Usually fund specific components of your
mission: A program A building project
Vary in size, scope, geographic area, mission requiring a substantial amount of research before the solicitation process
www.foundationcenter.org (free resource) Foundation Directory Online - h
ttp://fconline.foundationcenter.org/ - annual membership based on level of service/access
Guidestar – 990s
#4 – Fundraising Vehicles
Foundation Grants Researching Foundation Grants (note: will be
discussed in future module) The 990 – All non-profit/501(c)3 IRS Status file thee
990 as their annual tax return (foundations are non-profit/501(c)3 IRS Status)
The 990 contains valuable information, such as: The value of the endowment Application instructions (note: “…gives to only
preselected organizations…” is the default on the 990) Board of Directors Listing Grants Awarded Listing – with amounts to each
organization and often an explanation of the purpose Website
#4 – Fundraising Vehicles
Major Individual Giving Individuals who give major gifts (the amount
that qualifies one as “major” is determined by the organization) have a strong connection to the organization or the cause (e.g. your board members)
They are usually not first time donors, nor do the gifts come out of the blue (i.e. unsolicited)
These gifts are in the upper-tiers of the donor pyramid
Donors are engaged and want to see their gifts make a difference (measurable, innovative)
#4 – Fundraising Vehicles
Major Individual Giving (continued) The focus on MG programs is increasing:
Less expensive; High ROI (return-on-investment) Less dependent on the economy like Corporate
Sponsorships (however, not isolated from it either) Major Givers are usually great stewards of your
organization (if they are going to give multi-figure gifts to your organization you can bet they will say great things about you!)
Due to the proven success of MG Programs, good MGOs (Major Gift Officers) are often the highest paid in the Development Office
#4 – Fundraising Vehicles
Major Individual Giving (continued) However (the downside):
High pressure to meet metrics Lack of organizational strategic Generally does not support General Operating
Expenses The donors are very knowledgeable about non-profit
operations (they are using the same research tools you are using!)
The cultivation period is long (two-years) The investment in a MG Program is hard “to sell” to
Executive Leadership when return is in future fiscal years
Ethical considerations
#4 – Fundraising Vehicles
Planned Giving (or Gift Planning)
According to the AFP Dictionary - “a systematic effort to identify and cultivate a person for the purpose of generating a major gift that is structured and that integrates sound personal, financial, and estate-planning concepts with the prospect’s plans for lifetime or testamentary giving. A planned gift has tax implications and is often transmitted through a legal instrument, such as a will or a trust.”
For the purpose of this course, Planning Giving will be presented as an overview to the average Development
Officer
#4 – Fundraising Vehicles
Planned Giving (or Gift Planning) - Two kinds: (1) outright or current gifts (2) deferred (realized in the future)*
A donor who is considering, or has already made, a planned gift is at the top of your donor pyramid:
They know, believe and trust in your organization They’ve donated (money and/or time) for several
years, if not decades) They tend to be savy; appreciate the tax benefit
and creativity involved in establishing a planned gift to a non-profit organization
They want to be involved up until their passing (if deferred)
#4 – Fundraising Vehicles
Planned Giving (or Gift Planning)
Types of Deferred Planned Gifts1. Bequest
The most popular type of deferred planned gift and the least daunting
Once made, less than 10% change, those that do increase the amount to charity
Easiest to publicize; verbiage should be on your organizational website (See
http://www.butler.org/body.cfm?id=245); on reply devices, in newsletters, etc.
Discuss with the donor the intent of the gift Gift Acceptance Policies should reflect every
situation imaginable
#4 – Fundraising Vehicles
Planned Giving (or Gift Planning)
Types of Deferred Planned Gifts (continued)2. Charitable Gift Annuity – A legal contract between the
donor and the charitable organization, through which the donor exchanges cash, stocks, or other assets for an agreed-upon income for life
3. Charitable Remainder Trust – The Donor transfers assets to a Trust, which then goes to the charitable organization after the death of the beneficiary. The donor retains a fixed or variable income for life
4. Life Estate Contract – The Donor transfers the deed of real property to a charitable organization while reserving the right to live on the property for life.
#4 – Fundraising Vehicles
Planned Giving (or Gift Planning)
Types of Deferred Planned Gifts (continued)5. Charitable Lead Trust – Donor transfers assets to a
trust; the trust provides income to the charitable organization for a period of X years. After the said period, the assets revert back to donor (grantor) or someone else (non-grantor)
6. Life Insurance Policy – Two types (a) transfer ownership of an existing policy to the organization or (b) purchase a new policy/contract that names the charitable organization as the beneficiary (note: can also add charity to existing policy as another beneficiary)
7. Pooled Income Fund – A common trust with many donors; pro rata shares; as each beneficiary dies, the value of their portion transfers to the organization
#4 – Fundraising Vehicles
Planned Giving (or Gift Planning)
Advantages to the Organization: Long-term relationships with donors Provides future funds Promotes alternative thinking: “assets as gifts”
Benefits to the Donor Opportunity to give (via assets as gifts) Income tax deductions Fixed or variable income Retirement income Reduction of capital gains Asset management
#4 – Fundraising Vehicles
Planned Giving (or Gift Planning)
What the experts won’t tell you - “You don’t need to know it all; the details are done by estate attorneys and financial planning experts!”
Resources: RI Foundation – Videos on Options for Giving
http://www.rifoundation.org/ProfessionalAdvisors/VideosOptionsforGiving/tabid/530/Default.aspx
Partnership for Philanthropic Planning (PPP) – formerly the National Committee on Planned Giving (NCPG) National website: www.PPPNET.org RI website: www.PPPRI.org (for RI meeting
schedule/info)
Invitation to attend a PPP-RI Meeting: contact me if you would like to attend a meeting as my guest at no charge.
#4 – Fundraising Vehicles
Other Tactics – Telephone & Internet Both are in a state of transition but each has a
role in recruiting first time donors and renewing donors
Phone-a-thons are a good way to follow-up on a direct mail appeal
Provides a higher level of personalization and acts as a reminder
A great way to engage volunteers in the process (especially in phone-thank-a-thons)
The prominence of cell phones/cancellation of land-lines makes it difficult to reach a “live person”
“Do not call” list myths
#4 – Fundraising Vehicles
Other Tactics – Telephone & Internet (continued)
Internet Giving depends on the scope, target audience, and mission of the organization
Walks, Bike Rides, etc. have sophisticated web programs that are very successful as they empower the grassroots based fundraising team
Most organizations don’t have such a force and should regard internet fundraising as a add-on
Have an on-line giving option and include that link on all direct mail pieces
Incorporation a scope of programs to support on your on-line portal
Increase the number of credit cards accepted on your on-line portal
Great way to get more information about your donor, e.g. email address, mailing information, preferred phone number; can also include one or two survey questions on your online portal
#4 – Fundraising Vehicles
#5 – Creating your Professional Brand
“Organizational Expert”Butler Hospital…and other employers
“Teacher/ Mentor”RIC/Bryant…alumni relationships, teaching positions
“Industry Expert”Ascent Advisors …and clients
“Community Volunteer”American Red Cross…and other volunteer opportunities
“Industry Champion”
AFP/PPP…and other professional associations
Linked In
My Profile
Your skills of aligning funding needs to your prospective constituencies depends on your knowledge of external and industry factors (note: SWOT analysis will help with this)
Get feedback from people outside of your organization; objective feedback
Affiliation with other networks helps to provide credibility to you as a professional and to your organization (where you are not the paid “mouth-piece”)
Provides you with Best Practice information; use in your own organization; use to provide leverage for new idea implementation
Opportunity for Peer Learning
#5 – Creating your Professional Brand
Get out of the office and interact with others
AFP, CASE, AHP, PPP gatherings – Professional Associations
Alumni Groups – Not only for Colleges (e.g. LRI)
Chamber of Commerce Events – membership is not required
Civic Clubs (Rotary, Lions, etc.)
Sports – golf leagues, tennis, etc. The Internet provides other opportunities
Social Networking - LinkedIn – Groups, Facebook, Twitter
E.g. Lenny Silva
AFP Open Forum (and other listserv groups)
#5 – Creating your Professional Brand
“We in the nonprofit sector are held to a higher level of trust than our colleagues
in the for-profit sector”(Rosso, 2003)
Association of Fundraising Professionals (AFP) challenges its members to
Accept responsibility for their own behavior Accept responsibility for the behavior of their institutions In the areas of stewardship, accountability, confidentiality
A Trust Crisis 57% trusted private higher education 395 healthcare 31.6% private and community foundations 15.8% Congress (however this increased post 9/11)
“Those who presume to serve the public good must assume the public trust”(Rosso, 2003)
#6 – Ethics in Fundraising
Factors that Challenge Ethics in Fundraising1. Fund raising is not “business as usual”
Due to the amount of personal attention, engagement and creativity it impossible to outline every single scenario that can occur can document an ethical response
2. The challenge comes from changes in non-profit organizations, changes in the public’s assumption about nonprofits, and from technological shifts in how fund raising is done
Increased education and professionalism helps, but still dependent on the professional
3. Being responsive to changing circumstances and conditions leads non-profit leaders and managers to consider moral issues that pertain to their organizations
What is fine for one organization, may be a contradiction to the mission of another organization; no one size fits all approaches (some examples)
#6 – Ethics in Fundraising
Answers to Ethical Dilemmas are not always clear
AFP suggests using the following guidelines: If you use this solution, will you be able to look in the
mirror and feel proud? Is your solution one for which your organization can
stand tall in front of its donors and clients? Given today’s climate, would this solution stand up
under the scrutiny of the press?
As a Development Officer progresses through their career they achieve higher levels of professionalism…and an ethical sense (they progress from technician to professional).
There is no substitute for experience in this field
#6 – Ethics in Fundraising
Ethics and ProfessionalismThe text outlines six criteria that are essential to the fund
raising profession; they are: Autonomy Systematic knowledge Self-regulation Commitment and identification Altruism and dedication to service (fund raisers are
more generous with their resources and time than other citizens) Ethics and sanctions (AFP has a process in place to sanction
unethical behavior by members)
“Do we live for philanthropy or do we live off philanthropy”(Robert Payton, Former Executive Director Center on Philanthropy at Indiana University)
#6 – Ethics in Fundraising
Section 501(c)(3) of the Internal Revenue Code Professional Fundraisers must always be cognizant of the
non-distribution clause “…no part of the net earnings of which inures to the benefit of any
private shareholder or individual,…”
Commits nonprofits and those associated to the public good
Establishment of trust between donors and organizations Professional Fundraisers must be the protectors; ensure that we,
and all others, do not benefit personally from the funds being donated to an organization
This do NOT mean that fundraisers should not be paid fairly and equitably; it does mean:
Fundraisers do not accept personal gifts from donors Salaries must be commensurate with public expectation Board members should not have competitive advantage in
bidding for business with the organization
#6 – Ethics in Fundraising
Issues of Professionalism (Rosso, 2004)
What is the role of trust in our development as fund raising professionals?
What are the burdens placed on us as fund raising practitioners by the “non-distribution clause” in Section 501(c)(3) of the code?
As fund raising practitioners, who is are client: the donor or the organization?
In every transaction, what are the intents of the donor and what are the intents of the organization?
How can we, as fund raising professionals, protect and maintain our integrity as “boundary spanners” between donors and organizations?
How do we manage the tensions that arise as fund raisers working for organizations assist donors expand their philanthropy?
#6 – Ethics in Fundraising
The Josephson Institute surveyed more than 10,000 to define the values that are important to an ethical or virtuous
person.
Josephson’s 10 ethical values that form the basis for ethical decision making:
1. Honesty2. Integrity3. Promise-keeping4. Loyalty (fidelity)5. Fairness
Source: Achieving Excellence in Fund Raising, Rosso, 2003
6. Concern for others7. Respect for others8. Law-abidingness and civic
duty9. Pursuit of excellence10. Personal Accountability
#6 – Ethics in Fundraising
A Sample Ethical Dilemma:What does the professional fund raiser do (the matter of personal accountability) when the organization (loyalty-fidelity) decides to use funds given for one purpose by a donor (promise-keeping, integrity, honesty) for another purpose?
Three step process:1. All decision must take into account and reflect a concern for the
interests and well-being of all shareholders2. Ethical values and principles always take precedence over non-
ethical ones3. It is ethically proper to violate an ethical principle only when it
is clearly necessary to advance another true ethical principle, which according to the decision maker’s conscience, will produce the greatest balance of good in the long run
#6 – Ethics in Fundraising
Payton’s Ethics Cube: Individual (fundraiser) against the Organization surrounded by Competence, Language, Relations and Mission
First Ethical Tension – Individual vs. Organization Is the fund raising executive acting in the best interest of the
organization? Is the organization treating the professional fairly (compensation,
etc.) Who is the client?
Competence Competent in ethical and technical standard of the fund raising
profession Law abiding Pursuit of excellence Personal accountability
#6 – Ethics in Fundraising
Payton’s Ethics Cube (continued):
Language The way we talk about our profession The way we discus the process of fund raising E.g. don’t refer to donors as “targets”; or “hit people us” Integrity, honesty, commitment to openness
Relationships Who owns the relationship? Promise keeping, loyalty and
fidelity, fairness, concern for others
Mission Fund raising begins with Mission The Donor Bill of Rights
Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To ensure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the nonprofit organizations and causes they are asked to support, we declare that all donors have these rights:
(see next slide)
#6 – Ethics in Fundraising
The Donor Bill of RightsI. To be informed of the organization's mission, of the way the organization intends to use
donated resources, and of its capacity to use donations effectively for their intended purposes.
II. To be informed of the identity of those serving on the organization's governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities.
III. To have access to the organization's most recent financial statements.
IV. To be assured their gifts will be used for the purposes for which they were given.
V. To receive appropriate acknowledgement and recognition.
VI. To be assured that information about their donation is handled with respect and with confidentiality to the extent provided by law.
VII. To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.
VIII. To be informed whether those seeking donations are volunteers, employees of the organization or hired solicitors.
IX. To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.
X. To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.
#6 – Ethics in Fundraising
“Moveable Assets” - You have built an excellent reputation as development officer for a fine arts organization in a small city. You’ve been able to enlist the support of many new donors and have cultivated numerous major gifts. You’ve been offered a higher paying job at the city hospital. A. Suppose you have been cultivating a wealthy philanthropist, Mrs. X, who has no real
interest in the arts. Mrs. X has numerous health concerns. She is likely to respond favorably to a request for support of the hospital primarily because she has high personal regard for you. Would it be a violation of the AFP Code of Ethical Principles to ask Mrs. X to make the gift to the hospital instead?
A. YesB. NoC. It dependsD. Don’t know B. Suppose you have worked hard to write original text for planned-giving brochures that have been successful for the arts group. Would it be a violation of the Code to copy from them when you create the brochures for the hospital? E. YesF. No G. It dependsH. Don’t know
#6 – Ethics in Fundraising
#6 – Ethics in Fundraising“Not-So-Good Form”You are a development officer in a three-person development office. One day while reviewing your organization's government-required federal revenue agency reporting form (such as the Form 990 in the U.S., or the T-3010 in Canada) you discover a sizable difference between the total amount of donations reported on the Form and the amount published in the institution's campaign publicity. When you ask the Chief Financial Officer about the discrepancy, the CFO replies, "Don't worry, the Form is only an informational return. The revenue agency does not audit it.“
A. To be consistent with the AFP Code of Ethical Principles, what should you do?1. Inform the Chief Development Officer about the discrepancy.2. Tell the CFO that the Form must be filled out correctly.3. Inform the CEO that the Form must be filled out correctly.4. Ignore the matter because the Form is not your responsibility.5. Other
B. Suppose the Form is prepared each year by the organization’s accounting firm. Under the AFP Code of Ethical Principles, would this arrangement absolve you from any duty in connection with the Form? 1. Yes2. No3. It depends4. Don't know
Michele R. Berard, MBA, CFREButler Hospital (401) 455-6565
Ascent Advisors (401) 263-4902
CONTACT INFORMATION:
EXERCISE
SWOT Analysis : Identify general operating expenses that are taboo Conduct a SWOT Analysis for each one
Strengths Opportunities
Weaknesses Threats