fundraising fundamentals

Fundraising Fundamentals

Jeanne MinnicksJanuary 31, 2014

To broaden awareness of the

fundraising/development profession by familiarizing you with the culture

of philanthropy, common terminology, key staff members and their functions, and best

practices.

Session Goal

I. Overview A. The Importance of Philanthropy B. Why People Give, What They Expect & Don’t

Want, Other FindingsC. The Fundraising Environment

II. Fundraising’s Basic Elements

A. The Development TeamB. Primary Sources of ContributionsC. The Integrated Development PlanD. Ethics

III. Friend a Fundraiser

Agenda

I. Overview

Philanthropy means "love of humanity" in the sense of caring, nourishing, developing and enhancing what it is to be human.

It is experienced by both the benefactor and the beneficiary but in different ways. The former exercises his or her valuesby giving (time, resources) and the latter by receiving.

Philanthropy and charity are related but are not the same thing.

Charity relieves the pains of social problems. Philanthropy attempts to solve those problems at their

root causes.

A. The Importance of Philanthropy

Wikipedia

Altruistic behavior: Acts that intentionally benefit another organism, incur no direct personal benefit, and sometimesbear personal cost.

Meet critical needs of an organization Give back to society Help those who are less fortunate Advance a cause they believe in

Altruistic ? . . . not so much Feel good Recognition Because they were asked

Advice: Don’t guess . . . ask questions!

*Howard , Anne W.; New Brain Study Hints at Why People Are Altruistic; Chronicle of Philanthropy; February 22, 2007

B. Why People Give . . .

Prompt thank-you letters and calls

Opportunities to be engaged other than just monetary donations

Information on results achieved with their gift

Communications with staff whose programs they supported

Compliance with terms of the gift

B. What They Expect in Return . . .

Gifts

High fundraising costs

Over-solicitation

B. What They Don’t Want

The rich aren’t the most generous.

Insulated rich give less than those in economically diverse neighborhoods

Red states are more generous than blue states.

Conservatives give more than liberals, yet liberals sit on more non-profit boards

Tax incentives matter.

Regions of the country that are deeply religious are more generous than those that are not.

B. Other Findings

Gipple, Emily and Gose, Ben; How America Gives - America’s Generosity Divide; Chronicle of Philanthropy; August 19, 2012

Marketing – employed by commercial enterprises to influenceprospective customers to purchase products.

Development – process by which nonprofits influence prospective donors to support their needs through gifts andgrants

C. The Fundraising Environment

Berendt , Robert J. and Taft, Richard; How to Rate Your Development Office; The Taft Group; Washington, DC; 1983


Marketing Development

Research identifies and defines customers and their needs

Positions products to correspond to customercharacteristics

Dedicates a significant portion of budget to builds awareness through advertising & PR

support

Trains employees to sell

Research identifies prospects, giving potential & interests

Creates institutional case for support and giving opportunities that match donors’ interests

Communicates in a variety of ways to build awareness

Trains volunteers (board members & others) to solicit


Highly diverse and ubiquitous


Goal and numbers oriented


Relationship intensive


Communications intensive


Highly competitive


Creative


Slow to change


II. Fundraising’s Basic Elements

Executive Director Director of Development Director of Annual Fund/Annual Giving Major Gifts Officer Planned Giving Officer Grant writer Database Administrator Board of Directors

Development Associate/AssistantMembership CoordinatorSpecial Events CoordinatorVolunteers

A. The Development Team

Key spokesperson & lead fundraiser for the organization Possess real working knowledge of the development

profession o Different constituencies, giving cycles, forms of giving, donor cultivation

and engagement, gift management and record-keeping, functions performed by various development department staff

Makes vital decisions about the place development holds within the organization’s operations

Measures effectiveness of existing and new programs in terms of short and long term goals for raising money

Evaluates effectiveness of development staff Understands the role of board members in fundraising and

engages them appropriately

Executive Director


The mythological “Fundraiser” . . .

What’s in a name?

Peer relationship with trustees and often deals with corporate and foundation officers. The title accords respect and should reflect the importance and

impact of the role.

Director of Development

Primary role: to create a process of outreach to donors by organizing & using others to seek funds

Involved in the institutional planning process.

Multi-talented: Strategist TacticianFinancial planner MarketerParty planner Market researcher

Networker CompetitorTrainer CheerleaderDiplomat Psychologist News Junkie Communicator

Director of Development

Prospects for & stewards individuals

Manages the Annual Fund and other individual-giving oriented initiatives, i.e. Giving Tuesdays, Day of Giving

Director of Annual Fund/ Individual Giving

Annual Fund – a program that annually solicits a body of constituentsfor unrestricted contributions

Time consuming and expensive with relatively low return

Goal is to establish a giving habit and provide a basis for planned giving

Funds are in the form of cash and used primarily for ongoing programs

Typically directed towards individuals who receive multiple contacts during the fund period using a variety of methods

Most begin in the fall, conclude end of the tax year

Director of Annual Fund/ Individual Giving

The Center on Philanthropy at Indiana University – The Fund Raising School in partnership with the Bayer Center for Nonprofit Leadership and support of The Forbes Funds; Developing Donors; Indianapolis, IN; 2004

Solicits funds for special needs o Programs and projectso Limited capital improvementso Equipmento To build or add to an endowment fund

Higher $ value “asks”

Major Gifts Officer

Planned Gift

A legal vehicle to carry on the charitable values of an individual/family converting property into a program of good works which continue after his death.

Created during the donor’s lifetime but benefits do not accrue to the institution until some future time, usually at the donor’s death

Voluntary vs. involuntary philanthropy discussion

Planned Giving Officer

Englund, Gregory J.; Beyond Death and Taxes, Old Questions, New Answers; Estate Planning Press; Boston, MA; 1993

Requires specialized knowledge - financial concepts, financial products, & charitable giving strategies to take best advantage of

existing tax laws

Defer to an expert

Great interpersonal skills and sensitivity in discussing delicate matters

Considerable expenditure of time & possibly expense

Process can’t be rushed

Timing of gift can’t be predicted

Planned Giving Officer

Misleading title

Development - writing-intensive

Paper & on-line submissions - applications, proposals, letters, reports, and agreements

Variation among funders’ preferred formats

Standardization vs. customization

Versatile writing skills – creative, personalized, formal, structured, technical

Very different skill set from marketing & PR

Grant writer

Donor information management and analysis

Database Administrator

Fiscal stewardship & strategic advice about investments & financial direction

Input on specific management problems

Member recruitment

Expertise – law, finance, marketing, etc.

Personal gift

Fundraising support – gift solicitations, attendance at events

Advocacy

Board of Directors

Individuals

Foundations

Corporations

Government Entities

Capital Campaign

B. Primary Sources of Contributions

In 2012, largest single source of charitable contributions – 72% of $316.23 Billion

Sources of major and planned gifts

A strong individual base hedges risk

Many ways to engage – mass marketing, group, or one-one-one

Larger base provides the basis for specialized appeals & avoidance of donor fatigue

The Giving Institute & Indiana University Lilly Family School of Philanthropy

Individuals

Instrumental in pressuring nonprofits to define with greater clarity their missions, goals, outcomes

Divorced from the emotion of giving

Arms-length relationship with grantees and applicants

Focus - goals & outcomes, sustainability, board participation

Primary contacts - executive and/or program officer

Structured application process

Foundations

Corporate Relations or Community Affairs

Relationship-oriented; board contacts are key Focus - brand visibility (event sponsorships, naming rights) Selective Contractual Quid pro quo

Corporate Foundations – similar to private foundations

Focus - programs tied to corporate initiatives Primary contact – mid-level manager Structured application process

Corporations

Funding availability fluctuates widely depending upon budgets and political climate

Contact with elected representatives is important; lobbyists helpful but expensive

Application process – similar to foundation process, but more cumbersome and less transparent

Government Entities

Intensive program designed to raise a specified and large sum of money over a specified time period to meet capital needs (building construction, remodeling, expansion, equipment)

Elements: External consultant often hired to steer Usually multi-year Feasibility study Creation of the case for support Giving charts Prospect review to identify sources of funds Prominent leadership Volunteer committees Quiet & public phases “Pledge” system of giving

Capital Campaign

A comprehensive plan to raise funds needed to support the organization’s mission

Identical to a business plan used in the for-profit world:o Mission & vision statemento Organizational descriptiono Plan goalso Market opportunity analysiso SWOT analysiso Strategies and tactics to be used in pursuing opportunitieso Resource needso Budget & detailed forecast o Measurement and evaluation

C. The Integrated Development Plan (A Best Practice)

Development professionals serves the public trust by promoting ethical and effective fundraising practices by demonstrating values in all aspects of our personal, professional, organizational and public lives.

These values require that we: Observe and adhere to all relevant laws and regulations Build personal confidence and public support by being

trustworthy in all circumstances Demonstrate honesty in relationships Remain accountable for professional, organizational and

public behavior Are transparent and forthcoming in all dealings

D. Ethics (A Best Practice)

Association of Fundraising Professionals

III. Friend a Fundraiser

Understand that our focus is not on technology but on our mission

Recognize constraints of our limited resources

Add value to your nonprofit clients by understanding the functions of the individuals with whom you may deal

Remind us of the resources at your disposal – partnerships, training, etc.

Be an agent of change

Broaden your knowledge of the nonprofit sector

Create a culture of philanthropy in your workplace

Friend A Fundraiser

Association of Fundraising Professionals Pittsburgh Planned Giving Council The Bayer Center for Non Profit Management The Forbes Funds Greater Pittsburgh Nonprofit Partnership PANO Chronicle of Philanthropy

Local Resources

Thank You!

Bibliography

Bell, Jeanne and Cornelius, Marla; Underdeveloped, A National Study of Challenges Facing Nonprofit Fundraising; A Joint Project of CompassPoint and the Evelyn and Walter Haas, Jr. Fund; Compass Point; 2013


Englund, Gregory J.; Beyond Death and Taxes, Old Questions, New Answers; Estate Planning Press; Boston, MA; 1993

Gipple, Emily and Gose, Ben; How America Gives - America’s Generosity Divide; Chronicle of Philanthropy; August 19, 2012

Hall, Holly; Fiscal Crisis Reshaped How Donors Give; Chronicle of Philanthropy; September 22, 2013

Howard , Anne W.; New Brain Study Hints at Why People Are Altruistic; Chronicle of Philanthropy; February 22, 2007

Lewis, Nicole; Half of Affluent Americans Say Tax Policy Doesn't Affect Their Giving; Chronicle of Philanthropy; November 9, 2006

The Center on Philanthropy at Indiana University – The Fund Raising School in partnership with the Bayer Center for Nonprofit Leadership and support of The Forbes Funds; Developing Donors; Indianapolis, IN; 2004