Transcript Resource Development Raising funds for the non-profit organization Methods of Fundraising Non-profit resource development can be approached by anorganization using any number of methods,

Resource Development
Raising funds for the non-profit
organization
Methods of Fundraising
Non-profit resource development can be approached by
anorganization using any number of methods, or a
combination of many. This resource will give a brief
overview of the following fundraising strategies:
 The Annual Fund
 Major Gifts
 Small Gifts
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Direct Mail
Telephone Solicitation
Planned Giving
Capital Campaign
Special Events
A separate resource is available from the OFBCI which
covers Grant-Writing.
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The Annual Fund
 An organization’s “annual fund” should be an ongoing
campaign that encourages strong financial support from
a variety of sources throughout the year.
 The goals of an annual fund should be to generate and
build a donor base, but several helpful “by-products” may
result as a consequence of the annual fund as well, such
as creating awareness of the organization’s programs,
an enlarged volunteer base, and identification of possible
major or planned gift donors.
Continued…
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The Annual Fund
Continued
The basic formula of an annual fund throughout a series of
years should be to:
 Get a gift from a donor
 Repeat the donor’s gift annually
 Upgrade the gift each year
This is typically achieved through a direct mail and/or
telephone campaign.
The annual fund campaign should involve all members of
an organization, including the board, staff, and
volunteers. It also may be advantageous to include
previous donors in identifying prospective donors.
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The Annual Fund –
Goal-Setting
The first step in the annual fund process should be
to identify a monetary goal. Once a goal has
been identified, an organization may begin to
target previous and prospective donors to solicit
for the fund. Large grants provided by
foundations and corporations can provide a
significant amount of money, but donations
from individuals make up greater than 80% of
all charitable giving.1
1Results
according to Giving USA 2005 study. (The Resources Now National
Institute: Finding $$$ in Your Community. St. Paul, MN: Campaign
Consultation, 2006.)
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Major Gifts
Major gifts are those gifts which are significantly
larger than other donations an organization
receives and which have the potential to make a
significant impact on the organization and its
programs. They account for approximately 60%
of the money raised in the typical annual fund,
but only come from about one-tenth of donors
and are difficult to solicit. For this reason, major
gifts solicitation should be the first step in an
annual fund and the prospective donors should
be carefully researched and targeted.
Continued…
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Major Gifts
Continued
Five to fifteen percent of prospective donors should be identified
for major gift solicitation. These will most likely be previous
donors with an established link to the organization who have
upgraded their gifts in the past. A prospective donor of a major
gift should be personally solicited by someone within the
organization (board member, previous major gift donor, etc.).
Each solicitation will be a “mini-campaign” in which a
relationship is established and cultivated between the
potential donor and the organization. The keys to major gift
solicitation are preparation and patience. A major gift prospect
can take anywhere between a few months to over a year to
come to fruition. It is important to remain persistent, but not to
cross the line into pushiness.
Major gifts can be given to the general fund or to a specific
purpose, such as a program or building project.
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Small Gifts
Approximately 20% of the money raised in an
annual fund comes from an estimated 70% of
donors. Although these gifts may seem less
significant and small compared to major gifts,
remember that they are still important, making
up the base of the donations received in the
annual fund. These gifts are often received as a
result of a direct mail campaign or through
telephone solicitation and are much more likely
than major gifts to come from first-time donors.
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Fundraising Methods
The annual fund goal may be achieved by any
number or combination of the following
strategies:
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Direct Mail
Phone solicitation
Personal solicitation
Grant proposals
Special Events
Following are brief explanations of each of these
methods.
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Direct Mail
The purpose of a direct mail campaign should be to seek
new prospects and first-time donors, renew prior donors,
and to make special appeals for specific purposes, such
as a building campaign or a new program.
Direct mail is a mass appeal, not an individualized request.
In order to keep costs at a minimum, each appeal will be
identical. Mail should be sent out not only to the
organization’s constituents and past supporters, but also
to the wider community in an attempt to initiate
relationships with new donors. In order to reach new
donors, the organization will need a mailing list, which
may be rented from or exchanged with another
organization. List brokers are also available for purchase
of targeted mailing lists for direct mail campaigns.
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Components of a Direct Mail Package
 Outer Envelope: Standard size for a mailing
envelope is a #10 business envelope. The outer
envelope should be kept simple, but may include
a teaser. Keep in mind that if the target audience
does not get past the outer envelope, he or she
will miss the letter, so be very careful of the
appearance of the other envelope. Check with
the local post office on discounts on bulk
postage rates for non-profit organizations. Use
first class postage only when appealing to
generous donors for large gifts.
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Components of a Direct Mail Package
 Letter: The letter will carry the message of the
appeal. The main elements of a letter should be
a problem (the cause), a proposed solution (the
program), a recommended gift to support the
solution, benefits of making the donation (both
for clients and for the donor), and a thank you.
The letter can be long or short, as long as it is
easy to read, and should give a persuasive case
for support. A personalized letter will require
more time, but will have a greater impact.
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Components of a Direct Mail Package
 Response Device: This is a very
important element of the direct mail
package. This card should include:
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Name and address of the donor
A list source code used to track returns
Name and address of the organization
A listing of suggested giving ranges and/or
membership categories (gold and silver
levels, etc.)
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Components of a Direct Mail Package
 Reply Envelope: The inclusion of a reply envelope is
nearly as important as the reply device. Potential donors
are more inclined to give when all of the required
elements are included. If it is possible within the
constraints of the fundraising budget, paid postage
envelopes also increase the response rate.
 Extra Elements: Be very cautious when adding extra
elements to the package. In some instances, a
photograph or brochure may add to the appeal, but
extraneous items or flashy colors and patterns may
detract from the sincerity of the message.
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Direct Mail – Timing
The best time to carry out a direct mail campaign is either
from January to April or from August to November. Due
to the amount of mail circulated at the time, it is best to
avoid the Christmas holidays unless a strong seasonal
tie can be drawn to the campaign.
A way to project the results of the campaign is to keep in
mind that an estimated 50% of the total returns received
will arrive within the first three weeks after the mailing
has gone out. From that point, the approximate total
amount of money which will be received through the
course of the campaign can be gauged by doubling that
initial three week total.
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Telephone Solicitation
Telephone solicitation can help with any number of
fundraising goals: the annual fund, acquiring new
donors, a capital campaign, etc. This type of campaign
can target names in the organization’s database, new
donors, or local residents. A goal should be established
in terms of number of prospects reached and amount of
money raised.
IMPORTANT: Any organization conducting telephone
solicitation must comply with Do-Not-Call laws. For
information on these regulations, consult
http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt129.shtm
Continued…
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Telephone Solicitation
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The one-on-one interaction involved in a telephone solicitation
can be more personal than a direct mail approach.
 Information sheets should be
filled out and kept on hand by
the caller for each prospective
donor before they are
contacted. These should
include the following
information:
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Name
Address
Phone number
Occupation and title
Giving history
Suggested gift for the caller to
request
 A script should be prepared for
callers that will include:
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Pitch of the program
Solicitation of a donation
Thank you
Any upcoming special events
 All phone calls should be
documented by the caller and
followed up with a mailing,
including pledge reminders
and a thank you.
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Telephone Solicitation
Continued
Trained callers can either be volunteers,
paid temporary workers, or staff members.
Telemarketing firms are also an option. They
will handle all of the details of the
campaign for a fee, but keep in mind that
the organization will then have less control
over the operation.
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Planned Giving
Planned giving is the donation of a gift that
is legally provided for during the donor’s
lifetime, the full benefit of which is
temporarily deferred– usually until the
death of the donor. The donor usually
receives an immediate tax benefit from the
gift. A common example is a bequest
made in a will.
Continued…
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Planned Giving
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Planned gifts usually come from long-time donors who
have previously “upped” their donations and show a
continued interest in supporting the organization. The
decision to make a planned gift is usually very significant
for the donor, and the gifts tend to be large. For this
reason, recruiting planned gift donors should be handled
much the same as that for major gifts, as mentioned
earlier.
Face-to-face solicitation and long-term cultivation of a
relationship with the potential donor are the best
methods of encouraging planned giving.
Continued…
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Planned Giving
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Since a planned giving donor has decided to make
a significant investment in an organization, the
gift should be used to contribute to an
organization’s endowment or special fund rather
than to pay for daily expenses. Of course, the
specific requests and stipulations of the donor
should be honored as well. All details should be
clearly specified in a legal contract signed by
both the donor and the organization.
Continued…
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Planned Giving
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There are major advantages of planned giving for
both the donor and the recipient organization.
 The donor benefits by paying less income and estate
taxes and with financial planning assistance.
Additionally, some forms of planned gifts allow the
donor to receive an annual income taken from interest
earned on the gift.
 Due to the projected nature of the gift, a planned gift
allows an organization the opportunity for institutional
planning. Additionally, a planned gift donor often
becomes a better annual giver due to their investment
in the organization and its programs.
Continued…
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Planned Giving
Continued
Due to the complexity of the process, an
organization should confer with a lawyer or
financial consultant knowledgeable in planned
giving or estate planning before launching this
type of program.
For more information on the different types of
planned gifts, refer to the PG Calc Planned
Giving website at http://www.pgcalc.com/pginfo/pginfo.htm.
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Capital Campaign
The basic feature of any capital campaign is a
large fundraising goal that is more ambitious
than the organization’s annual fund, the
objective being to provide funds for a special
purpose. The complexity of this fundraising
method requires an extensive pre-planning
phase including needs assessment and a goalsetting phase. Also very important for the capital
campaign is a post-campaign analysis which will
assist in the pre-planning phase of any
subsequent campaigns.
Continued…
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Capital Campaign
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An organization’s capital campaign can be conducted in a
variety of forms. Some of the most common include:
 “Bricks and mortar” campaign: One of the most
common types of campaign; money raised goes toward
the construction or renovation of a building for the
organization.
 Endowment: Money raised goes toward the
organization’s endowment, providing the organization a
permanent source of funds or income.
 “Combined” or “comprehensive” campaign: Seeks to
cover all of the organization’s expenses for a specified
period of time.
 “Project” campaign: Money raised serves to endow a
new project or program taken on by the organization.
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Capital Campaign –
Soliciting Donations
 When soliciting donations for a capital campaign, an organization
should first seek a “lead gift.” This will be a major gift that will kick off
the campaign. As with other major gifts, the most reliable method of
securing a lead gift is to cultivate a long-term relationship with a
previous donor.
 Once a lead gift has been secured, the solicitation process should
continue with contacting past major gift donors and other prior
donors capable of pledging major gifts. Smaller gifts may also be
solicited from small donors, but it is important to begin with a base of
large gifts to reach the overall fundraising goal. This is more costefficient in terms of labor and time used in the campaign.
 An organization may wish to have trained volunteers solicit pledges
for the capital campaign to reduce costs in terms of employee time
and wages.
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Capital Campaign –
Planning Factors
Before launching a capital campaign, the following factors
should be planned:
 Letters of intent or pledge cards designed for distribution
 Recording system for gifts and pledges, as well as a
banking or accounting system to handle funds
 System for handling restricted gifts. Will the organization
allow for donor-ordered restrictions on gifts, and if so,
what is the minimum amount a gift must be for donors to
request restrictions?
 Plan for recognizing capital campaign donors
Finally, the organization may wish to consider bringing on
board a consultant or a volunteer with capital campaign
experience.
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Special Events
One of the most common methods of fundraising is the
special event. Some examples are:
 Sales
 Auctions
 Walkathons (or any “marathon” event)
 Raffles
 Meals
The focus should be on the event itself, not on making
money. In fact, the main benefit is usually not the money
raised, but rather the publicity and exposure gained by
the organization. It is an excellent opportunity to
recognize previous donors and to drum up new
supporters for the organization.
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Choosing the Special Event
When planning the type of event an organization
will conduct, keep in mind that the event should
merge the interests of potential donors with the
mission of the organization.
Additionally, the event should be suitable for the
target audience– both donors and clients. For
example, a family game night might be more
appropriate than a cocktail hour to raise money
for a group focused on responsible parenting, or
a raffle rather than a marathon to raise funds to
build a senior center.
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Basic Steps of Special Event Planning
The basic steps in the planning process of any
special event fundraiser are to:
 Secure funds ahead of time to pay for the event
itself.
 Form a committee whose sole focus is on the
special event.
 Develop a list of tasks that must be completed
and a timeline that includes each task.
 After the actual event, conduct an evaluation to
assess successes and areas for improvement.
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Additional Points
All of the aforementioned fundraising methods have a few consistent
variables which should be considered.
 A fundraising goal should be set.
 The donor prospect list should be continuously built upon.
 Volunteers should be utilized whenever possible.
 Anyone requesting funds of a prospect should be a donor him- or
herself.
 Timing is key: the largest amount of donations is given between
September and December. (See section on “Direct Mail” for
exceptions.)
 Keep in mind the target audience when planning events and
campaigns.
 Ask for a specific amount for a specific purpose.
 Thank donors early and often.
 Follow through: Keep donors updated, sending non-“ask” mailings,
such as newsletters.
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Final Note
This is merely a sampling of the many
opportunities there are for non-profit
resource development. For more
information about these types of
fundraising methods and others, please
consult the resources listed on the
following slide.
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Additional Resources
 Blackbaud Resources: http://www.blackbaud.com/resources/whitepapers.aspx#Fundraising
 Free Management Help:
http://www.managementhelp.org/fndrsng/np_raise/np_raise.htm
 The Fundraising School at the IU Center on Philanthropy:
http://www.philanthropy.iupui.edu/TheFundRaisingSchool/

“Fundraising Tips and Tools:”
http://nonprofit.about.com/od/fundraising/Fundraising_Tips_and_Too
ls.htm

The Nonprofit Times http://www.nptimes.com/
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