introduction to effective fundraising
TRANSCRIPT
Introduction to Effective Fundraising
The elements of building a successful fundraising strategy
Fiona McPheeFebruary 2016
What is effective fundraising?
• Low spend / high return?• Cost per dollar raised• Return on Investment
• A program delivering more net each year?
• A sustainable program delivering more net each year?• Diversification – are you eggs all in one basket?• So more people need you than you can reach today?
Today
•Fundraising in context – big picture sources of funding
•New Zealand’s individual giving market•Strategy options•Couple of critical factors to success
You as a donor
My favourite Charity:
How you support:
Why?
My favourite Charity: Blind
Foundation
How you support: Regular
gift from credit card &
volunteer
Why?
My daughter was born with
cataracts, they have made a
huge difference to her life
and I want to ensure other
children can get the help
they offer
What does Effective Fundraising Look Like?
It is hard workYou have to make
choices and set priorities
Fundraising is an indistinguishable part of your organisation, not a separate function just generating the money
There is no one-size-fits-all or magic template
My fundraising strategy
Because of the need to
diversify from our reliance
on events and corporates,
our plan is to keep the
income from those secure,
whilst investing our surplus
in a new regular giving
program. We will also be
investing more in....
Data / information we
collected to come up with
that strategy
Corporate and events have
been growing, but seem to
be harder every year and
our demand for services is
greater. World Vision seem
to do well from regular
giving, and I went to a
training...
My fundraising strategy driver
Growth? Stability?
Diversification? Other?
My fundraising strategy targets
Next year
Three years / five years
Net / Gross / Return on investment etc
Fundraising in context
The big picture
Facts not anecdotes
The Big PictureOverall Fundraising Strategy
The Big PictureOverall Fundraising Strategy
Investments
The Big PictureOverall Fundraising Strategy
Government
The Big PictureOverall Fundraising Strategy
Government
Trusts & foundations
The Big PictureOverall Fundraising Strategy
Government
Trusts & foundations
ConsiderCorporate &Events
“Chasing the corporate dollar”
Home of capitalism, most generous
nation on earth. 19660.9% of corporate
profit donated
Rise of the Triple Bottom Line,
Corporate Social Responsibility
20120.8% of corporate
profit donated
1986Peaks at 2.1% of corporate profit
donated
Source: www.slate.com
155%
23%
342%
NZ 2014
1 80%
25%
315%
USA 2014
Source: Giving USA & Giving New Zealand
Gross Income - by year – New Zealand
$0
$40 M
$80 M
$120 M
$160 M
2005
2005
2006
2006
2007
2007
2008
2008
2009
2009
2010
2010
2011
2011
2012
2012
2013
2013
2014
2014
Inco
me
Individual Organisation
The Big PictureOverall Fundraising Strategy
Government
Trusts & foundations
ConsiderCorporate &Events
The Big PictureOverall Fundraising Strategy
Government
Trusts & foundations
ConsiderCorporate &Events
ConsiderAssociations, groups
The Big PictureOverall Fundraising Strategy
Government
Trusts & foundations
ConsiderCorporate &Events
ConsiderAssociations, groups
Individuals – Long term growth
The Big PictureOverall Fundraising Strategy
Government
Trusts & foundations
ConsiderCorporate &Events
ConsiderAssociations, groups
Individuals – Long term growth
The Giving Constituency
Types of Individuals
Occasional
Strong Relationships
Total Commitment
• Singular emotional response
• Other motivation – raffle, auction, peer-support
• Regular Givers• Multi touch point• Longevity giving
• Bequests• Major Donors
The Big PictureOverall Fundraising Strategy
Government
Trusts & foundations
ConsiderCorporate &Events
ConsiderAssociations, groups
Individuals – Long term growth
The Giving Constituency
Bequests / Legacies Major Donors Regular Giving
The Big PictureOverall Fundraising Strategy
Government
Trusts & foundations
ConsiderCorporate &Events
ConsiderAssociations, groups
Individuals – Long term growth
The Giving Constituency
Bequests / Legacies Major Donors Regular Giving
Other areas:• Lottery
• Merchandise• Community / Peer-to-Peer
The Big Picture
Government, trust &
foundations offer
immediate funds
But in 10 years
time…?
Bequests / legacies,
major donors
and regular giving
Appeals and acquisition
are the means
to this end
Simplified
Overall Fundraising
Strategy
Government
Individual – Long term
Growth
Trusts and Foundations
Corporate
Acquisition, Renewal
and Retention
Bequests
Major Gifts
Regular Gifts
Individual giving is currently the ONLY long term solution for growth
New Zealand’s Individual Giving Market
Fundraising
Individual Report 2015Benchmarking
Amnesty International New Zealand | Blind Foundation | CBM New Zealand | Child Cancer Foundation | Child Fund New Zealand | Coastguard New Zealand | Fred Hollows Foundation New Zealand | Greenpeace New Zealand | IHC New Zealand | Life Flight New Zealand | Mary Potter Hospice | New Zealand Breast Cancer Foundation | New Zealand Red Cross Society | Oxfam New Zealand | Plunket | Royal Forest and Bird Society of New Zealand | SPCA Auckland | St John New Zealand | Starship Foundation | The Stroke Foundation of NZ | UNICEF New Zealand
2015 Members: New Zealand
33
Gross Individual Income - by year
$0
$50 M
$100 M
2005
2005
2005
2005
2005
2005
2006
2006
2006
2006
2006
2006
2007
2007
2007
2007
2007
2007
2008
2008
2008
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2008
2008
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2010
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2011
2011
2011
2011
2012
2012
2012
2012
2012
2012
2013
2013
2013
2013
2013
2013
2014
2014
2014
2014
2014
2014
Inco
me
Bequest Cash Child Sponsorship Regular Gift Event Other
New Recruits - by year
0
50 K
100 K
150 K
2007
2007
2007
2007
2007
2007
2008
2008
2008
2008
2008
2008
2009
2009
2009
2009
2009
2009
2010
2010
2010
2010
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2012
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2012
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2012
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2013
2013
2013
2014
2014
2014
2014
2014
2014
Recruitment Year
Recr
uits
Bequest Cash Child Sponsorship Regular Gift Event Other
Individual Gross Cash Income - by channel of solicitation
$0
$10 M
$20 M
2005
2005
2005
2005
2005
2005
2006
2006
2006
2006
2006
2006
2007
2007
2007
2007
2007
2007
2008
2008
2008
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2011
2012
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2012
2013
2013
2013
2013
2013
2013
2014
2014
2014
2014
2014
2014
Inco
me
Direct Mail Face to Face Media Online Other Phone
Regular Giving Income - by channel of solicitation
$0
$10 M
$20 M
$30 M
$40 M
2005
2005
2005
2005
2005
2005
2006
2006
2006
2006
2006
2006
2007
2007
2007
2007
2007
2007
2008
2008
2008
2008
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2009
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2011
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2011
2011
2011
2012
2012
2012
2012
2012
2012
2013
2013
2013
2013
2013
2013
2014
2014
2014
2014
2014
2014
Inco
me
Direct Mail Face to Face Media Online Other Phone
Average Bequest - by charity (excluding gifts below $1K)
Avg Gift last 5 yrs
$0
$100 K
$200 K
$300 KAv
erag
e Be
ques
t
Pledged Bequest Rate - by type of support
0%
1%
2%
3%
4%
Face
to F
ace
CS
Face
to F
ace
RG
Regu
lar G
iver
s
Cash
Don
ors
Loya
l F2F
Don
ors
Activ
e Ca
sh D
onor
s
Non
Fac
e to
Fac
e RG
RG &
Cas
h Do
nors
Loya
l Acti
ve C
ash
Dono
rs
Loya
l Non
F2F
Don
ors
1k+
Dono
rs
Confi
rmed
Beq
uest
Rat
e
Older is better
Major
RG
Cash
Bequest
New Zealand Donor Pyramid
0.2%
0.3%
44.0% (234,784 donors)
55.5% (296,271 donors)
$37,344
$4,800
$240
$8128%
20%7%
46%
2014 Income
Lots from few v little from many
•Bequests•Major Donors•Grants•BIG events
•Appeals•Regular giving
•Sponsors•Lotteries
Lots from few v little from many
•Bequests•Major Donors•Grants•BIG events
•Appeals•Regular giving
•Sponsors•Lotteries
Approaching Strategy
The need for growth
What is your fundraising vision?
A fundraising vision that answers the questions• How many donors do we want? • Do we want a large number of donors or do we want to focus on larger gifts from fewer
sources? • What kind of donors do we want?
• Do we want a donor base of individuals? • Do we want corporate donors? • Do we want to take funds from the government?
• Are we looking to diversity or to focus our fundraising? • What do we want our funding source pie chart to look like at the end of five years?
• What donor audiences can we best reach with the channels of communication have we built?
• Will these channels of communication most effectively carry our message to our target donor audiences?
• What do we want our donors to do for us? • Just give money? • Or is there some other way we want them involved in our mission? • How can we best leverage their support to make real change on our issue?
http://www.frontrangesource.com
The need for growth
What is my fundraising vision?
What sort of strategy do I need to achieve my vision?
Ten Steps to Fundraising Success
Assess your current fundraising efforts
Assess the fundraising strengths
and weaknesses of your board and staff
Assemble the team to select the best
fundraising strategy
Weigh the costs and benefits of the
available strategies
Chose the strategy that is right for your
mission
Set fundraising goals that support your
fundraising strategy
Turn fundraising goals into achievable
objectives
Choose the right tactics for this
fundraising strategy and goals
Create a master calendar and keep
on track
Measure your progress
Mal Warwick & Stephen Hitchcock.www.josseybass.com
Growth Audacious goals. Bold.
Big Impact Resource intensive
Involvement Voluntary.Lobbying.
Public participation Staff intensive
Visibility Brand identification.
Broad public awareness
Resource intensive(usually)
Efficiency Cost-conscious. Well established
Frugal management Staff and time intensive
Stability Unchanging values. Broad $ base
Cash reserves. Long term view
Resource intensive
How have others grown?
Cancer Council NSW Example
1997 - 2007• Visibility - events
2002 - 2007• Growth – Regular Giving
2005 - onwards
• Involvement – Relay for Life, Volunteers, Relationships Extension
2007 – onwards
• Stability – Major Gifts, Bequests
2012 – onwards
• Stability – Channel diversification (cash, regular giving, events)
2 year growth 2013 – 2015: 8%
9 year growth: 66%
Amnesty Australia Example
• 2008 – strong regular giving program, small occasional pool, tens of thousands of interactions, monologue not dialogue
• Involvement & Efficiency focused• 2009 – Seven year vision to inspire over 500,000 people every year
to take action (more people = more activism = more members and donors = more impact)
• Stability & Involvement focus• Building engagement through online actions, social media, volunteer groups, donor
care, tied giving• Cross-sell, Regular Giving, Acquisition, Major Donors, Bequests
• Refining programs
2 year growth 2013 – 2015: 18%
9 year growth: 115%
Critical Factor: Your Proposition
Your fundraising proposition
1. What the charity does – the services you provide, the research you do, the teams helping, the campaigns undertaken
2. Your history and track record3. Your board, your leader
Your fundraising proposition
1. What the charity does – the services you provide, the research you do, the teams helping, the campaigns undertaken
2. Your history and track record3. Your board, your leader
Your fundraising proposition
“Your donation makes a difference. We promise.
Donate today.”
Your fundraising proposition
“Your donation makes a difference. We promise.
Donate today.”
Your fundraising proposition
http://www.kaygrace.org/
People give to you because you meet needs, not
because you have needs
• Are you clear on the needs you meet?
A gift to your organisation is a gift through your organisation to the
community
• You are not the end user of the gift (its not about you)
Fundraising is not about money, its about
relationships based on shared values
• Are you really clear what your values are?
Your fundraising proposition
Answers the question:
Why should I give?
Your fundraising proposition
Creative Audit
Audience framing
Competitor review
Stakeholder consultation
Understand strengths,
weaknesses and points of
difference
Creative workshop(s)
Know what you need money for – how you are going to spend it but more importantly
for what outcome
Its not about huge numbers or big brand
statements. It's a simple fact that brings home, in
human terms, your impact
You are offering a solution to the
problem as the donor understands it, not as
you do
Focused & emotive
Assessing Impact
Assessing Impact
What you focus on affects your ability to grow• Classic measures
• Cost Per Dollar (CPD) / Cost of Fundraising (COF)• ROI
1 2 3 4 5 6 7 80
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Series1
Series2
Series3
Cost of fundraising year on year…
1 2 3 4 5 6 7 80
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Series1
Series2
Series3
Cost of fundraising year on year…
Massive investment in acquisition
1 2 3 4 5 6 7 80
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Series1
Series2
Series3
Cost of fundraising year on year v net
1 2 3 4 5 6 7 80
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Series1
Series2
Series3
Cost of fundraising year on year v net
Maintained slight growth in net – money to spend on cause
1 2 3 4 5 6 7 80
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Series1
Series2
Series3
Cost of fundraising year on year v net
Maintaining acquisition, but rewards of year 2 acquisition beginning to show through
1 2 3 4 5 6 7 80
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Series1
Series2
Series3
Cost of fundraising year on year v net
Decided to STOP acquisition for one year – nearly $1.5m bonanza for capital projects and service development – COF plummets
1 2 3 4 5 6 7 80
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Series1
Series2
Series3
Cost of fundraising year on year v gross
1 2 3 4 5 6 7 80
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Series1
Series2
Series3
Cost of fundraising year on year v gross
Reduced acquisition leads to slight decline in gross
1 2 3 4 5 6 7 80
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Series1
Series2
Series3
Cost of fundraising year on year v net v gross
1 2 3 4 5 6 7 80
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Series1
Series2
Series3
Cost of fundraising year on year v net v gross
Growth phase complete – charity stabilises, but still acquiring more donors than losing, hovering around 0.4 cost of fundraising
Assessing Impact
What you focus on affects your ability to grow• Classic measures
• Cost Per Dollar• ROI
• Comparing programs (includes staff costs)
• Overcoming their limitations• Net return – how much more do you have for your services / program?• Income per fundraiser
Net return is key – example
Monthlygiving
Expected Fundraising Return on InvestmentBequest Major
GiftsRegular Giving
Grants DM Renewal
Events Lottery Acquisition
10 10+ 10+
9 9 9
8 8 8 8
7 7 7 7
6 6 6 6 6+
5 5 5 5 5
4 4 4
3 3 3
2 2 2
1 1 1.0
-1 0.5
Making it all happen
Make a concrete, measurable plan
Get organisational buy in
Avoid being internally focused
Don’t overestimate your ability
Seek experience & expertise
Review
THANK YOUFiona [email protected] Twitter: fimcpheePhone: 021 336 905Web: www.paretofundraising.co.nz
Experts worth reading: Dan Pallotta, Mal Warwick, Ken Burnett, Kaye Sprinkle Grace, Bill Toliver, Simone Joyaux, Sean Triner
Excellent resources:• Showcase of Fundraising Ideas & Innovation http://sofii.org/ • Resource Alliance http://www.resource-alliance.org/
Support in New Zealand• Grants: Strategic Grants https://www.strategicgrants.co.nz/ • Major Donors & Capital Campaigns: Giving Architects http://www.givingarchitects.com/ • Fundraiser Recruitment: Execucare http://execucare.co.nz/
Pareto Fundraising