Transcript Fundraising, Part II: Individual Soliciations

Fundraising, Part II:
Individual Solicitations
Thomas P. Holland, Ph.D.
Institute for Nonprofit Organizations
University of Georgia
Presentation will cover
Steps in a campaign
Roles for board members
Annual gifts
Making the Ask
Capital campaigns
Major gifts and planned giving
Stewardship of gifts
Most Productive Method of Fundraising:
IN-PERSON SOLICITATION
• 70% of contributed funds for most nonprofits come from
individuals
• 90% of gifts come from 10% of donors
• Identify people with means through contacts and research
• Then find people who know them and who will introduce you
to them
• Invite them to get acquainted with your organization, attend
events, volunteer
• Listen to their interests and increase their involvement
accordingly
• Invite them to help sponsor activities
• Thank them
Over 80% of All Adults Give.
Reasons why they do:
1. I was asked to give by someone I trust for a cause I believe in.
2. I believe those with more resources should help those with less.
3. I get personal satisfaction from giving.
4. Because of my religious beliefs or commitments.
5. I feel that I benefit when I help others.
6. Sustaining a family tradition.
7. Giving sets a good example for others.
8. Giving helps my community.
9. Gift in remembrance of a loved one.
10. Gift is tax deductible.
11. Giving is encouraged by my employer.
Sources of Individually Contributed Income
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Annual giving (unrestricted)
Telephone and mail campaigns (unrestricted)
Special Events (unrestricted)
Capital funds (restricted)
Bequests, wills, trusts, endowments
In-kind contributions
Giving and Asking
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People give money because they want to.
People don’t give unless they are asked.
People give money to people, not programs.
People give money to opportunities, not deficits.
People give to successful organizations, not to
distressed ones.
• People give money to make a change for the good.
Motivations Differ
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Learn potential donor’s interests
Engage them with program
Demonstrate accountability
Build involvement and trust
Offer opportunities to provide input and
support
• Ask what form of recognition is best
Key Principles of Direct Fundraising
• The board takes leadership, with staff support.
• Begin with goals for the organization, not with whatever
source seems available.
• Search for sources and people who are interested in and
share your goals.
• Develop relationships with them.
• Find ways to engage them with your organization before
asking for anything.
• Results are directly correlated with the extent of
engagement. No shortcuts.
The Gift Pyramid
• Rule of thirds: 1/3 of goal will come from top few
gifts; the second 1/3 from larger number of midrange gifts; bottom third from larger number of
smaller gifts
• Must cultivate smaller donors to make giving a
practice and to enlarge gifts in subsequent years
• Must know donor capacity and approaches that will
produce larger gifts (donor research)
• Begin campaign with top prospects (quiet phase)
Relationships are Primary
for Any Approach
• Begin with friends, volunteers, former users of services,
alumni, and any others with history of engagement with
your organization.
• Do not waste time or money buying lists from vendors. You
won’t raise money by calling or writing to people who don’t
already know you or the organization.
• There is no substitute for relationships.
• Share your excitement and satisfaction with others.
• Invite them to participate in ways that interest them, and
listen to their responses.
The Board and Senior Staff Develop Friends
into Sponsors
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Board identifies priorities for new funding.
It demonstrates commitment by 100% giving.
Members and staff share enthusiasm with friends.
Invite them to get acquainted with organization.
Host special events to showcase projects.
Ask friend for support for aspect of interest or introduce to
Executive or Chairperson for the ask.
• Follow up with appropriate thanks.
• Staff supports board in these efforts, rather than doing it for
them.
PREREQUISITE
• If your board is not taking leadership in fundraising,
the FIRST task is to solve that problem.
• Willingness to learn and try are the beginning steps.
Skill comes with practice.
• Everything else depends on this foundation.
• Everybody must be involved in some way.
• No excuses allowed.
Common Excuses:
• I’ll do anything but raise money.
• Nobody ever said raising money was part of being on this
board. (problem with nominating committee)
• We deal with substantive issues, not with raising money.
(what is more vital to organization’s survival?)
• I’m too busy. (commitment?)
• I don’t want to ask my friends for money.
• I can’t stand being turned down.
• I’m just not good at that sort of thing.
• I’ll get around to that later (procrastination)
Such Denials of Responsibility Must be
Faced and Dealt With
• The board is ultimately responsible for the well being
of the organization in every area.
• Other competitors are moving ahead with raising
money, taking your potential donors.
• Board members have various talents, all of which are
needed.
• Fundraising can be learned, practiced, and refined.
• It can be fun and satisfying.
Board Applications
• The board is responsible for the future well-being of
the organization
• It sets strategic goals for the future
– identify needed enhancements of organization and
programs
– become knowledgeable and experienced about
fundraising
– budget for staff to help board and CEO with marketing,
communications, fundraising, advocacy, partnerships,
volunteer recruitment and retention
Set Clear Expectations for Board
• Write board member job description
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commitment to values and mission
attendance and active participation
100% giving
public representation and advocacy for organization
• Fill gaps in group’s skills by
– targeted recruitment
– board education on fundraising, communications, volunteering
• Engage volunteers in special projects
– bring in needed skills
– watch for potential nominees
• Conduct regular evaluations to learn and grow
• Demonstrate accountability to sponsors
– via financial reports and individual communications
The Board’s Fundraising Committee
• Oversees the preparation of a comprehensive, written plan for
review by full board
• Ensures a realistic appraisal is made of potential support and
reasonable goals are set
• Develops consistent message for all to use
• Participates actively in identifying prospects, cultivation,
asking
• Enlists every board member in specific tasks, events,
recognition of donors
• Reminds every member to give and to complete assigned
tasks
• Evaluates efforts for future improvement
Support Roles for Board Members
• Work with staff to develop volunteer opportunities
• Host reception or event where CEO or Board Chair gives brief
presentation
• Introduce friends to CEO or Board Chair
• Identify and do background research on potential donors and
doorways
• Offer to be a speaker at civic organizations
• Work with staff to draft case statements, press releases, other
approaches to public awareness
• Develop donor appreciation and recognition plans
• Search for ideas and people with expertise and bring to board
education sessions
Basic Steps in a Campaign
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Set goals based on organizational strategies
Select steering committee
Set up record system and recognition system
Identify roles and responsibilities for each
Develop case statements (why should anyone give?)
Carry out research on potential donors
Find ways to meet them
Engage them with organization
Invite them to help support specific activities that interest
them
• Recognize and thank them, keep them involved
• Repeat and refine this cycle every year
Developing the Case
• Begin with the why: what is our mission?
• Then state the what: what do we want to achieve?
• Then state the how: how will this new project meet a
need and fulfill mission?
• Then who: who we are and how well we have been
serving our constituencies.
• Finally, what specific action do you want the reader or
listener to take?
Personal Solicitation
The most effective and efficient form of
fundraising
• Requires training, planning and follow-up
• Best way to involve board, other committed
volunteers and donors
• Requires understanding of volunteer
recruitment, management and support needs,
including prospect research and preparation
for asking
Personal Solicitation
• Preparation:
– obtain accurate information about donor/prospect
interests, past giving history, capacity.
– Determine best person to contact the prospective donor
(let volunteers pick their donor prospects)
– Offer adequate support, training to solicitor
• Presentation:
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Match solicitor to prospect
Arrange to visit a prospect in person when possible
Ask for a specific amount
Follow through on any follow-up prospect requests
Personal Solicitation (cont.)
• The Close
– Be quiet. Do not fill the space with chatter. Let
other person speak first.
– Be positive, not apologetic if prospect declines
– Be prepared to negotiate terms of gift
– Make careful notes about next steps and follow
through with donor
– Thank them
The ASK is Essential
• You are offering them opportunities to do good.
• Not everyone has to do every aspect of the campaign,
but someone must be ready and willing to do the ask.
Guarantee: It won’t hurt if you try.
• Time it to come after you already are well acquainted
with the person and s/he with you and your
organization.
• Match ask to their interests and their resources.
• Ask and then shut up. (Don’t fill the space with nervous
chatter.)
• Respond to questions and offer alternatives.
• Thank them several ways, regardless of results, building
relationship for the future.
Key Steps in Asking for the Gift
• 1. Build rapport, show interest in prospect’s
issues and concerns
• 2. State the case for support of opportunity
• 3. Encourage further involvement
• 4. Identify benefits of action
• 5. Ask for the gift, identifying a specific amount and a
specific purpose
• 6. Be quiet
• 7. Respond appropriately
– don’t push or argue (you can’t win ‘em all)
– leave the request on the table
– be prepared with alternatives if asked
• 8. Follow up with thank you, regardless of
outcome
• 9. Update records
• 10. Report to donor about use of gift
Prerequisites to the ASK
• You have the right prospect.
• You have cultivated a good relationship with the
person, and s/he is familiar with your organization.
• You know the person’s interests well.
• You have an appointment to discuss the specific
opportunity and make the ask.
• You know the amount to ask for and the right task
needing their expertise.
• You are prepared with ways to recognize the gift and
to make use of their help.
Annual Giving
• Organized effort to secure gifts on an annual
basis, either by mail, telephone, personal
solicitation, events, or all four.
• The primary fundraising method used to broaden
support, upgrade giving levels, and provide
operating support for ongoing programs.
• The backbone of most fundraising programs.
• Complements other forms of giving: planned,
capital, endowment.
• A cyclical, multi-stage process that may involve
several solicitation strategies.
Annual Giving in the Pyramid of Giving
• New donors are unlikely to make significant gifts to
an organization that is unfamiliar to them.
• Annual giving programs build on initial gifts or
expressions of donor interest to develop a consistent
giving pattern. They represent an essential stage in
the giving cycle before a major donor commitment is
possible.
• Time (3-5 years), energy, work and budget are
required to build a broad base of predictable annual
donors and identify those making larger gifts.
Purpose of annual giving
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Acquire new donors
Renew donor support annually
Cultivate donors to increase giving levels
Build donor loyalty
Identify and involve leaders
Identify major, capital gift prospects
Rules of thumb in annual giving
1. Understand what will motivate your donors or
prospective donors before you plan your solicitation
strategies.
2. Carefully match prospects to projects that interest
them and to solicitation strategies that will reach
them.
3. Renew the same way you solicited the original gift.
4. Provide varied giving opportunities during the annual
fund cycle.
5. Provide varied and multiple forms of appreciation
during the annual fund cycle.
6. Track your results carefully to understand your
donors’ giving patterns.
Major Gifts
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Build on annual gifts but seek larger amounts
Small number of givers will provide most funds
The most cost-effective approach to fundraising
May be used for
– New or expanded programs
– Capital for buildings or equipment (often called Capital
Campaigns)
– Endowments
– Sponsorship of special need or activity
Usually come from person’s assets (savings)
rather than their current income
• Go to organization’s assets rather than its
current operations
• Require extensive personal cultivation
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Don’t Be Afraid to
Ask for a Large Gift
Giving Levels: Two Examples
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Benefactor
Patron
Sponsor
Donor
Contributor
Friend
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Senior Associate
Associate
Sponsoring Member
Sustaining Member
Contributing Member
Member
Steps
• 1. Specify major opportunities for sponsors,
drawing from strategic plan and linking with
donor’s interests.
• 2. Plan the gift pyramid
• 3. Identify likely givers
– Records of prior giving
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Prior engagement with organization
Interests and motivations
Capacity to give
Network of associates
More steps
• 4. Start with board members and others already
engaged with organization
• 5. Each person must make own gift first, before
asking anyone else
• 6. Timing: Consider special events in prospects’ lives
(birth, marriage, change in business)
• 7. Prepare personalized presentation, drawing on
case statement and linking opportunity with
prospect’s interests
Steps (continued)
• 8. Presentation plan
– Personalized case statement
– Financial records of organization
– Opportunity for which gift is sought
– Benefit to giver
– Specific request and options
• 9. Peer makes appointment to present in
person, in private
Planned Giving
• Come from the donor’s capital holdings
• Bequests, insurance, gifts or property or
income, trusts, endowments
• They may be deferred gifts (pledge in a will of
life insurance) or current (interest from a
trust)
• Donors may gain by tax benefits
• Usually require specialized staff skills
Stewardship of larger gifts
• Thank the donor in multiple ways.
• Find appropriate ways to recognize and publicize the gift.
Ask their preferences.
• Use the money as the donor intended.
• Keep accurate ongoing records on gifts and donors’
intentions or interests.
• Add notes to file on issues related to individual donors
that may be relevant to next ask.
• Report to donor periodically on how gifts were used
• Continue to engage him/her with organization.
• Ask for advice on fundraising plans, potential donors
• Build long-term relationship of trust and engagement
• Thank the donor again.
A Board Members’
Fundraising Checklist
• Do I have a clear picture of the mission, priorities and needs of the
organization?
• Do I really understand and support the case, why someone should
support this organization?
• Do I contribute to the extent of my means?
• Do I offer additions to the list of prospects?
• Do I share in cultivating prospects?
• Do I make introductions for others to make solicitations?
• Do I accompany others on solicitations?
• Do I write follow up and thank you letters?
• Am I prepared to make solicitations myself?
• Do I do what I say I will do?
Build Board Capacity and Skill
• Talk with people on other boards that have success with
fundraising.
• Visit the Foundation Center Library (Hurt Building, Main
floor, 5 Points, Atlanta) for more other materials and
resources (http://fdncenter.org)
• Use prepared learning resources
– Ga. Center for Nonprofits offers short workshops
(www.gcn.org)
– BoardSource has several good booklets and
educational resources such as “Fearless Fundraising:
The Video Workshop” (www.boardsource.org)
Recommended Reading
• S. Weinstein, The Complete Guide to Fundraising
Management. Wiley, 2009.
• K.S. Kelly, Effective Fund-Raising Management.
Erlbaum, 1998.
• J.M. Greenfield, Fundraising Fundamentals. Wiley,
1994.
• F. Howe, The Board Member’s Guide to Fundraising.
Boardsource, 2000.
• Other materials on many web sites, such as
www.managementhelp.org