What They Didn’t Teach You in Fundraising School The nuts and bolts of running your fundraising office

Dan Kimball Product Specialist at Aplos Software

DanKimballDan Kimball is a seasoned fundraiser with over 20 years of experience in strategic fund development and nonprofit management.

He’s currently developing Aplos’ Donor Management Platform to help nonprofits connect with (and cultivate) their donor base.

“Fundraising is not just about raising money. It’s about building relationships.”

Twitter: @fugativedmk @aplos_software

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IntroductionA practical look of what goes on behind the scenes for any successful nonprofit fundraising operation. This is designed for any sized nonprofit or faith-based organization.

Development/fundraising operations are the activities that hold everything together – data management, gift processing, office procedures and event management. Without strong operations, your development activities will flounder. Achieving strong development operations requires a balance of planning skills, time management, and even some HR skills.

This webinar will highlight:

• Getting the most out of your Donor Management/Database system. • Gift Processing and Records Management. • Making the right Investment in your fundraising operations and the overhead myth. • Too much to do and not enough time.

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Why Fundraisers Do What We Do

“Research Suggests Giving Boosts Happiness and may Improve Health” - Chronicle of Philanthropy, Sept. 8, 2015

• A psychology professor, Elizabeth Dunn of the University of British Columbia, who studies human happiness discussed her research at an international conference during the first week in September, that charitable giving not only makes people feel better but can lower their blood pressure, as reported by the Thomson Reuters Foundation.

• The studies found that the donors' blood pressure was lower after giving, while that of those who spent the money on themselves did not change. Giving is "not just heartwarming, it may be quite literally good for our hearts," she said.

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Development in a Nutshell

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• Good development is noble and honorable.

• It’s not about the money, it’s about the relationship.

• People give because they understand the impact in the community that will happen, for the individuals and organizations from their donation/investment.

• People give to strength, success, and quality.

• The giver has the right to enjoy the giving.

• Development is fun!

Why People Give

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• Belief in mission and stability of the organization.

• High regard for staff and volunteer leadership (relationships have/are being continually developed and strengthened.)

• To make an impact.

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Do You Have A Database?

Are you using any kind of Donor Management Software?

Common Reasons for Not: • We don’t know what a donor database can really do. • We don’t have the manpower to manage it. • We’re hesitant to invest a portion of our budget. • We don’t know how it enables effective fundraising. • We don’t get a lot of funds from individual donors (funded by government support or grants).

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Do You Have A Database?

Your fundraising database should also help you focus your work so that you are asking the right person for the right gift at the right time for the right purpose. And, it should help you report to the people who need to hear from you: your board, funders, constituents or donors, or the general public.

A good fundraising database should help you work smarter and more effectively: • Prioritize and segment mailing lists • Manage and track your prospects • Steward your current donors • Identify future donors • Manage your time • Measure and forecast • Ask the right person for the right gift at the right time for the right purpose

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Do You Have A Database?

• Data is one of your most critical assets. Protect it and use it well.

• A fundraising database serves as your “institutional memory.” If someone leaves your organization, the database should allow her successor to pick up where she left off.

• A fundraising database helps you work smarter, faster, and more effectively.

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What’s in your Database? Do you know your current Donors?

Items to Consider:

• Who are your top 50-100-200 donors?

• Do you know why your largest donors are giving to your organization?

• Do you know what areas of interest your donors are giving to? Are there any patterns emerging?

• What is your average gift size? Do you know how many donors are giving at each level annually?

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What’s in your Database? Do you know your current Donors?

• Who are your repeat donors? Over last 5 years? last 10 years? A significant characteristic for a donor/investor that is attached to your organization and more likely to give, is that they have been giving repeatedly over years – even at $25.

• What is the percentage of your donors that contribute annually over the last 5 years? Last 10 years? Are there any patterns emerging?

• What is your stewardship plan for first time and repeat donors?

• What is the cumulative/lifetime giving of your largest donors?

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What’s in your Database? Building a Donor ProfilePersonal Information Name: Date of Birth: Spouses Name: Spouses Date of Birth:

• Number of children, names and ages, spouses names and ages, where each live:

• Number of grandchildren, names and ages, spouses names and ages, where each live:

• Number of siblings, names and ages, spouses names and ages, where each live:

• Elderly family members or friends needing care or the prospect may wish to remember:

 

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What’s in your Database? Building a Donor Profile

General Information regarding goals, interests, motivations

• Past involvement and activities with your organization/Ideas for future involvement:   • Areas of assumed or verified interest at your organization:   • Involvement with other charitable organizations: boards, committees, etc.:   • School/College background: Spouse, Children

• Indications of wealth and lifestyle which may reflect on the prospects attitudes, priorities and motivations:

• Do we know of any connectors to prospect/donor?

Gift Processing-The Good,The Bad & The Ugly

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Do you have a process in place from beginning to end of each gift?

Donor etiquette is not wedding etiquette. You don’t have a year to send the thank you note. The 72 hour rule. This is perhaps the most important thing you can do to sustain donor relationships. But if anyone doesn’t take this seriously, it won’t happen. And if you can’t make this happen, you’re going to leave money on the table. You’re going to lose donors. Period.

Develop Written Acknowledgment Policies And Procedures - No matter your size Assure you have the cross-departmental systems (often facilities, finance and development) in place to get the job done in a timely manner

Here are two examples of policies: Association of Advancement Services Professionals AFP: Developing Fundraising Policies and Procedures).

Gift Processing-The Good,The Bad & The Ugly

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Think about the journey a donor’s gift takes from the minute it leaves their hands to getting deposited to your account. How quickly do you welcome the gift from its travels? Is everyone who should be involved in expediting the journey aware of their role to avoid delays, and do they own it?

• Do you wait for the mail to arrive? • Where does the mail go first? • Where do checks go first? • Where do credit card payments go first? • Once the gift arrives in the development department, what steps are taken next? • Who is assigned the job of gift acknowledgment? • Once a computer-generated letter is produced, what happens next? • Once the thank you is signed what happens next? • Once the thank you is sealed what happens next? • Not having clarity on the answers to these questions can easily tack on several days to a week to your

thank you letter’s journey.

Gift Processing-The Good,The Bad & The Ugly

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An Online Receipt is not a thank you.

Don’t let your online donors suffer just because they chose to give via your website. Make sure they get a prompt thank you that you’ve customized, and not just a canned emailed receipt. It should be personalized and align with the purpose for which they made their gift. These folks should also receive a mailed thank you letter, with all your inserts and personal notes, but you can take a little longer with this since they already know you’ve received and appreciated the gift.

Gift Processing-The Good,The Bad & The Ugly

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Focus on the details Is this a new donor or returning donor? If a new donor, ensure all contact information is entered or imported into database. If you know who solicited or referred the donor, record that information. If a returning donor, ensure contact information is up to date, name is spelled correctly, and you are not inadvertently creating duplicate donors. For Example- Andrea Johnson, Andrea Tammy Johnson and Tammy Johnson may all be the same person!)

Who should thank the donor? Is an email enough? When should you send a letter? Who should sign it? Should a telephone call be made? By whom? Figure these things out in advance, and be consistent.

Is the gift an “unrestricted” or “restricted?” This refers to the wishes of the donor. This issue typically arises with larger gifts, when a donor requests that funds be used for a specific program or purpose. Make sure you honor your donors’ requests.

Stewardship

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Have a Stewardship Plan

Goal:

Develop a stewardship program with a focus on creating happy donors whose commitment and giving increases throughout their lifetimes.

Acknowledge:

• Ensure appropriate acknowledgement of all gifts.

• Determine levels of personal acknowledgements from leadership and participants within your organization.

• Determine how you will communicate: Program information, video message from leadership, participants, volunteers.

Stewardship

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Recognize

• Recognize giving at various levels

• Communicate to donors through various mediums: donor newsletter, holiday/birthday congratulations cards, e-mail news updates and impact stories, donor honor rolls, social media, snail mail

• Invitations to various events, press conferences, stories of impact through feature stories on web-site, e-mail newsletters/blasts

• Provide annual impact report of the impact of their gift and overall funding

• Specific stewardship plans for your largest donors are necessary i.e. $10k $100K, $500K.

Fundraising operations and the overhead myth

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In the summer of 2013, in a remarkable development that was little noted outside of the world of philanthropy, Guidestar, Charity Navigator and BBB Wise Giving Alliance, the US’s three leading sources of information about nonprofits, together published a letter intended “to correct a misconception about what matters when deciding which charities to support.”

“The percent of charity expenses that go to administrative and fundraising costs – commonly referred to as ‘overhead’ – is a poor measure of a charity’s performance,” said the three groups, which are consulted by millions of donors a year. The letter was unveiled on a new website called The Overhead Myth.

In extreme cases–when charities spend most of the money they collect for overhead and fundraising–overhead costs can help put a spotlight on fraudulent nonprofits. But, broadly speaking, the overhead metric has done more harm than good. Overhead covers such essentials as office space, computers, marketing, fundraising and, er, staff.

Fundraising operations and the overhead myth

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The idea that charities should be ranked based on their overhead expenses is not merely dumb, but counterproductive, as Dan Pallotta explained in a lively and irreverent TED talk called The way we think about charity is dead wrong. His talk has been viewed 3.4 million times.

Ted Talk - Dan Pallotta: The Way We Think About Charity is Dead Wrong

Another great resource on the this topic is the nonprofit blogger Vu Lee-Nonprofit With Balls

Fundraising operations and the overhead myth

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Be transparent but be honest.

Imagine you went to Starbucks and ordered a latte -- priced at $2.00. "I only want to pay for the coffee, the cup, and the time it takes you to make it," you say. "I don't want to pay for the rent, insurance, accounting . . . basically, I don't want to pay for your overhead. I'll pay $1.30, but that's it." What would Starbucks say back to you?

The issue of nonprofit overhead keeps circling around the same questions: how much is too much? How much is too little? and should government and foundation funders pay for it? These questions bedevil nonprofits, foundations, and the public like pesky bees. Nobody even agrees on what "overhead" means, yet the bees keep buzzing, making people run inside.

Fundraising operations and the overhead myth

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What is your organization aiming to accomplish?

What are your strategies for making this happen?

What are your organization’s capabilities for doing this?

How will your organization know if you are making progress?

What have and haven’t you accomplished so far?

These questions require reflection, promote transparency and focus on what matters: results.

Fundraising operations and the overhead myth

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If your organization doesn’t pay for a good accountant/software or accounting staff, it won’t have adequate controls and fraud is more possible. If your IT system isn’t current, you can be limited by outdated technology, run into storage issues, have costly computer crashes and waste time doing things that you could easily automate.

The mentality of “do more with less” often doesn’t really allow you to do much. Many administrative costs are not expenses, per se—they’re investments. By allocating money toward the right things, you invest in your brand’s reach, influence, donor base and long-term planning.

The place to begin is in knowing your nonprofit’s goals and what it takes to achieve those goals. For example, if you’re building a new facility that will further your mission, the administrative costs will go up significantly—but that’s not necessarily a bad thing if, in the end, it multiplies your impact.

Fundraising operations and the overhead myth

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Donors may be concerned with expenses and overhead, so be transparent and educate them. Instead of only looking at the overhead ratio, encourage them to ask questions like these:

How effective is this organization? How efficiently do they carry out their mission?

How many lives are they impacting? Do they seem to have a vision for the future and long-term growth?

Look at your fundraising efficiency: How much does it cost you to raise one dollar and how successful are you in doing that?

Dispelling the overhead myth doesn’t mean you can spend willy-nilly or let administrative costs get out of control. But it may mean taking on a different mindset and understanding you can potentially lose much more than you gain by being too tight with the money you spend on your infrastructure.

Final Thoughts and Recap

A well run fundraising shop regardless if you are all volunteer or paid staff can be the difference between not growing, more donors and better use of time, energy and resources.

Take advantage of the resources and technology that can help you run better operation and spend more time on your mission.

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Conclusion/ Q&A

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AboutAplos

We’re the #1 solution in online donor management software for nonprofits.

Fundraising is important, but you probably wish you didn't have to spend so much of your valuable time raising money. Aplos' all-in-one solution helps you raise money, track giving, and ensure your donors have a positive experience with your organization.

Visit aplos.com for more information.

"Nonprofits all across the country are praising the software's ease of use, reasonable price, and great customer service." - NPTechNews

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