Fundraising Essentials e-book Set E-Book

Stanley Weinstein

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Veröffentlichungsjahr: 2012

Beschreibung

An invaluable—and affordable—collection of essential fundraising titles from three widely respected fundraising experts

Written by renowned nonprofit leaders Stanley Weinstein, Brydon DeWitt, and Erik Daubert, Fundraising Essentials provides you with proven fundraising strategies that are easy to achieve and don't require significant resources or extensive knowledge of fundraising.

This e-book bundle explores all aspects of nonprofit fundraising, from creating and recreating your mission statement and knowing when your organization is ready to launch its campaign to getting your volunteer force purposefully engaged.

• The Complete Guide to Fundraising Management, Third Edition/Stanley Weinstein—an A to Z direction for planning, cost effective fundraising strategies, Internet fundraising, and much more
• The Nonprofit Development Companion: A Workbook for Fundraising Success/Brydon M. DeWitt—a thorough, to-the-point fundraising blueprint covering all aspects of successful nonprofit development
• The Annual Campaign/Erik J. Daubert—solid advice for building and managing a well-run annual support campaign for your organization

Packed with countless tools and techniques for fundraising success, this unique e-book collection presents straightforward guidelines and step-by-step instructions to help your nonprofit make the most of its monetary and staffing resources.

Leseprobe

Contents

Introduction

The Complete Guide to Fundraising Management, 3rd Edition

The Nonprofit Development Companion: A Workbook for Fundraising Success

The Annual Campaign

Introduction

Fundraising is the driving power behind every nonprofit organization. But while the fundraising climate for nonprofits has become tougher over the past several years, organizational funding needs have continued to increase. Nonprofit professionals need to be at the top of their games in order to effectively and efficiently raise funds.

In one collection, the Fundraising Essentials e-book Set provides you with proven fundraising strategies that are easy to achieve and don't require significant resources or extensive knowledge of fundraising.

This e-book bundle explores all aspects of nonprofit fundraising, from creating and recreating your mission statement and knowing when your organization is ready to launch its campaign to getting your volunteer force purposefully engaged.

With essential guidance for those starting new nonprofits-as well as for fundraising professionals in established organizations-this bundle offers hands-on information from renowned nonprofit leaders and includes the following titles:

The Complete Guide to Fundraising Management, Third Edition

/ Stanley Weinstein - A to Z direction for planning, cost effective fundraising strategies, Internet fundraising, and much more.

The Nonprofit Development Companion: A Workbook for Fundraising Success

/ Brydon M. DeWitt - A thorough, to-the-point fundraising blueprint covering all aspects of successful nonprofit development.

The Annual Campaign

/ Erik J. Daubert -Solid advice for building and managing an annual support campaign for your organization

Packed with countless tools and techniques for fundraising success, this unique e-book collection presents straightforward guidelines and step-by-step instructions to help your nonprofit make the most of its monetary and staffing resources. Read on to start raising more money and helping your organization meet its fundraising goals.

Table of Contents

Title Page

Copyright Page

The AFP Fund Development Series

Dedication

Foreword

Preface

Acknowledgements

About the Author

CHAPTER 1 - Five Major Fundraising Principles

PEOPLE GIVE TO PEOPLE TO HELP PEOPLE

PEOPLE GIVE RELATIVE TO THEIR MEANS

THOSE CLOSEST MUST SET THE PACE

SUCCESSFUL FUNDRAISING

THE 80/20 RULE IS BECOMING THE 90/10 RULE

THE NEED FOR BALANCE

CHAPTER 2 - Your Organization and the Nonprofit World

AN OVERVIEW OF THE SECTOR—BROAD RANGE OF SERVICES

OPPORTUNITIES AND CHALLENGES

WORKING TOGETHER

IMPORTANCE OF STRATEGIC MANAGEMENT

BE SURE YOUR INSTITUTION IS WORTHY OF SUPPORT

CHAPTER 3 - Managing the Resource Development Function

ANALYSIS AND PLANNING

EFFECTIVENESS: DOING THE RIGHT THINGS

EFFICIENCY: DOING THINGS RIGHT

BUDGETS AND FINANCIAL RESOURCES

FUNDRAISING MODES

SPECIAL ISSUES RELATED TO SMALL AND LARGE OPERATIONS

ETHICS

EVALUATION

CHAPTER 4 - The Case for Support and Fundraising Materials

THE CASE STATEMENT

THE COMPREHENSIVE FORMAL CASE STATEMENT

THE CASE STATEMENT PROCESS

MARKET- AND SITUATION-SPECIFIC CASE STATEMENTS

PRESENTATIONS AND PRESENTATION MATERIALS

CHAPTER 5 - Managing Information

RECORD KEEPING

SUPPORTING FUNDRAISING STRATEGIES

ACKNOWLEDGMENTS

REPORTS

TARGETED COMMUNICATIONS

THE SYSTEM

ESTABLISHING THE INFORMATION SYSTEM

CHAPTER 6 - Prospect Identification, Research, and Segmentation

THE BEST PROSPECTS

PROSPECT RESEARCH

PROSPECT RATINGS AND EVALUATIONS

KNOW THE PROSPECTIVE DONOR AS A PERSON

CHAPTER 7 - Nurturing Relationships

FRIENDRAISING ACTIVITIES

RELATIONSHIP-BUILDING ACTIVITIES MUST BE SCHEDULED AND MONITORED

MOVES MANAGEMENT—CULTIVATING REAL RELATIONSHIPS

DONOR ACKNOWLEDGMENT

FOUR PARTS OF AN ACKNOWLEDGMENT PROGRAM

CHAPTER 8 - Major Gift Programs

WHEN MAJOR GIFT STRATEGIES ARE APPROPRIATE

PREPARING FOR A MAJOR GIFTS INITIATIVE

THE SOLICITATION INTERVIEW (HOW TO ASK FOR A MAJOR GIFT)

AFTER THE SOLICITATION

SOLICITATION TRAINING AND ROLE PLAYING

CHAPTER 9 - Mail and Email Fundraising

ACQUISITION MAILINGS

RENEW AND UPGRADE

LAPSED DONORS

PUBLIC RELATIONS AND INFORMATION

FREQUENCY

ENSURING SUCCESS

ELEMENTS OF THE APPEAL PACKAGE

MAIL LISTS

MAIL PREPARATION: WHAT TO DO IN-HOUSE; WHAT TO DO WITH A MAIL HOUSE

POST OFFICE

NEWSLETTERS AS PART OF THE DIRECT MAIL PROGRAM

EMAIL AND WEBSITES

CHAPTER 10 - Telephone Solicitations

VOLUNTEER TELEPHONE SOLICITATIONS

PROFESSIONAL TELEPHONE SOLICITATION CAMPAIGNS

CHAPTER 11 - Special Event Fundraisers

CHOOSING A SPECIAL EVENT

IMPLEMENTING THE EVENT

CAUSE-RELATED MARKETING

CHAPTER 12 - Grantsmanship

WHAT IS A GRANT?

GOVERNMENT GRANTS AND CONTRACTS

FOUNDATIONS

FOUNDATION RESEARCH

PROJECT DEVELOPMENT

THE APPLICATION

ACKNOWLEDGMENT AND REPORTING REQUIREMENTS

CHAPTER 13 - Planned Giving

DEFINING PLANNED GIVING

IMPORTANCE OF PLANNED GIVING

CHARITABLE GIFT INSTRUMENTS—WAYS OF GIVING

DONOR EDUCATION AND THE PLANNED-GIVING PROGRAM

ENDOWMENT FUND

SAMPLE MARKETING PLAN FOR CHARITABLE GIFT ANNUITIES

PLANNED-GIVING SOCIETIES

CHAPTER 14 - Capital and Endowment Campaigns

REQUIREMENTS FOR A SUCCESSFUL CAMPAIGN

CHRONOLOGICAL STEPS FOR SUCCESS

BUILDING ENDOWMENTS

INSTITUTIONAL DIFFERENCES

CAMPAIGN ORGANIZATION AND STRUCTURE

CHAPTER 15 - Human Resources

THE BOARD OF DIRECTORS

THE RESOURCE DEVELOPMENT STAFF

VOLUNTEERS

WORKING WITH CONSULTANTS

CHAPTER 16 - Evaluation

Index

Copyright © 2009 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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eISBN : 978-0-470-45532-6

1. Fund raising-United States-Management. 2. Nonprofit organizations-United States-Finance-Management. I. Title. HV41.9.U5W46 2009 658.15’224-dc22 2008042569

The AFP Fund Development Series

The AFP Fund Development Series is intended to provide fund development professionals and volunteers, including board members (and others interested in the nonprofit sector), with top-quality publications that help advance philanthropy as voluntary action for the public good. Our goal is to provide practical, timely guidance and information on fundraising, charitable giving, and related subjects. The Association of Fundraising Professionals (AFP) and Wiley each bring to this innovative collaboration unique and important resources that result in a whole greater than the sum of its parts. For information on other books in the series, please visit:

www.afpnet.org

Association of Fundraising Professionals

The Association of Fundraising Professionals (AFP) represents over 30,000 members in more than 197 chapters throughout the United States, Canada,

Mexico, and China, working to advance philanthropy through advocacy, research, education, and certification programs.

The association fosters development and growth of fundraising professionals and promotes high ethical standards in the fundraising profession. For more information or to join the world’s largest association of fundraising professionals, visit www.afpnet.org.

2008-2009 AFP Publishing Advisory Committee

Chair: Nina P. Berkheiser, CFREPrincipal Consultant, Your Nonprofit AdvisorLinda L. Chew, CFREDevelopment ConsultantD. C. Dreger, ACFRESenior Campaign Director, Custom Development Solutions, Inc. (CDS)Patricia L. Eldred, CFREDirector of Development, Independent Living Inc.Samuel N. Gough, CFREPrincipal, The AFRAM GroupAudrey P. Kintzi, ACFREDirector of Development, Courage CenterSteven Miller, CFREDirector of Development and Membership, Bread for the WorldRobert J. Mueller, CFREVice President, Hospice Foundation of LouisvilleMaria Elena NoriegaDirector, Noriega Malo & AssociatesMichele Pearce Director of Development, Consumer Credit Counseling Service of Greater AtlantaLeslie E. Weir, MA, ACFREDirector of Family Philanthropy, The Winnipeg FoundationSharon R. Will, CFREDirector of Development, South Wind Hospice John Wiley & Sons, Inc.:Susan McDermottSenior Editor (Professional/Trade Division)AFP Staff:Jan AlfieriManager, New Product DevelopmentRhonda StarrVice President, Education and Training

This book is dedicated to the board members, volunteers, and staff members who help with fundraising. It is said that they have earned a special place in Heaven—next to the martyrs.

Foreword

I first met Stanley Weinstein more than 20 years ago. He was educated as a musician at the prestigious Eastman School at the University of Rochester and the Curtis Institute in Philadelphia. He played clarinet in major American Orchestras for the first half of his career. Symphony orchestras can be precarious places financially and Stanley ventured into the world of development out of concern for the well being of his family, his fellow musicians, and his passion to preserve and share our rich musical heritage. He intended to save the symphony by encouraging community leaders to become serious patrons of the arts.

I was puzzled. Having failed to make my high school symphony orchestra as a clarinet player, I wondered why someone of such musical talent would make this move. And after a few days of working with the board on their budget, I wondered if Stanley or anyone else was up to the monumental task ahead. He was smart and energetic, but he had the misfortune of starting his development career with a very difficult set of circumstances. All fundraisers have days in which the goals seem bigger than the prospect base and the tools available, but this was a particularly difficult set of challenges, especially for a rookie.

I should not have doubted him. Stanley did a great job that year just like he has done a great job on so many assignments over the past twenty years.

A decade ago, as he was building his now thriving consulting practice, Stanley mentioned to me that he was going to write a book about fundraising and fundraising management. I vividly remember sitting on the phone in my office telling him not to do it. As a new consultant juggling the demands of both finding clients and servicing client engagements, he had more important things to do. Besides, I told him, hardly anyone ever reads these fundraising books so his biggest contribution to the field would be his work on client projects.

I was wrong. Yes, Stanley has made contributions to the field through his client engagements and through his leadership in our major associations. However, his book The Complete Guide to Fundraising Management is enormously important to the field. It is an important book that is treasured by those of us who know him and those of you who may never meet him.

This is its third edition; proof that my observation that nobody would probably even read the book was incorrect. What I had not fully realized during that phone conversation was that Stanley Weinstein intended to write a serious book about a serious topic. It would not just be a rehash of ideas from the middle part of the 20th century when so many good practices in development were first codified. Nor would it be just a series of war stories. Both the practicality of the ideas and his examples on fundraising management are excellent. His next two books showed that this was not a fluke. He is a serious student of fundraising as well as a skilled practitioner.

So as the reader opens this book, whether you are venturing into Weinstein’s thinking for the first time or have re-read an earlier edition many times, it is worth every minute and every page. It is very difficult to write a book that is both useful and insightful. It is a joy to read a book that reminds us of good principals of fundraising, adds some new ideas, and illustrates them all with practical advice. The Complete Guide to Fundraising Management should probably be mandatory reading for anyone new to the development office. And it should be on the shelf of all us old pros because we too need somewhere to turn for some insights.

Vague platitudes are not worth much; concrete hands on tools and advice are enormously useful.

So the next time you find yourself in Santa Fe, enjoy those extraordinary woodwinds that include an Eastman and Curtis educated musician named Weinstein. I have sat in the middle of a great hall and listened as that exciting clarinet solo opened Gershwin’s Rhapsody in Blue, all the time admiring the musical gifts of my friend Stanley Weinstein. But I have also read his Complete Guide to Fundraising Management and understand that his decision so many years ago to devote his career to fundraising has made a major difference to the world of philanthropy. The important fruits of development and philanthropy in turn have made a difference to the arts, education, cultural, and environmental causes that shape our world. The world of development is a noble calling, and we are all blessed that Stanley Weinstein is a leader in the field and a serious author.

Bruce W. Flessner Founding Principal Bentz Whaley Flessner

Preface

“Cheshire Puss,” Alice began . . .“would you please tell me which way I ought to go from here?” “That depends on where you want to go,” said the cat.

—LEWIS CARROLL

Nonprofit organizations need strong boards of directors, loyal supporters, and a keen sense of mission. They also need cash.

This is a how-to book. The Complete Guide to Fundraising Management, Third Edition, provides a practical road map for fundraising success in a highly competitive philanthropic environment. Here are some of the ways this book will help you strengthen your organization and raise more money:

• The Complete Guide will help you gain an understanding of fundraising principles and practices. You will learn time-tested truths that govern the resource development process—the fundamentals that lead to fundraising success.

• The Complete Guide will help you raise funds using the most cost-effective fundraising strategies.

• The Complete Guide will teach you how to put together a comprehensive approach that can dramatically increase your contributed income.

• The Complete Guide provides valuable timelines and explores the chronological steps needed to establish and strengthen your organization’s fundraising program.

• The Complete Guide also provides advice concerning ways to bolster your organization and assure that your nonprofit institution is worthy of support—practical suggestions concerning board development, institutional advancement, strategic planning, and volunteer involvement.

• The Complete Guide teaches chief executive officers, development staff, board leaders, community activists, and volunteers how to organize their efforts, nurture meaningful relationships, and maximize their fundraising effectiveness.

This book is also about strategic management—the art of managing approaches designed to produce successful performance. Strategic management is especially important in times of rapid change.

Nonprofit organizations confront numerous challenges. Many are facing reductions in government funding. Others see their United Way contributions heading south. At times, traditional or older funders change priorities or die without providing for the organization’s future. To make matters even worse, all of this is occurring at a time when the demand for services is increasing.

A strategic yet nimble approach is also needed when presented with opportunities. Such opportunities often arise with little advance notice: a chance to purchase property needed to enhance the agency’s mission; a matching grant with a pressing deadline; a potential major donor’s expression of interest in your cause.

Agencies that monitor the environment are better prepared to respond effectively to the challenges and opportunities that are sure to arise. How they respond to the changing environment is called their strategy.

Many factors determine which fundraising strategies are appropriate to the nonprofit organization’s circumstances. Some of these factors include the amount of money that must be raised; how soon the funds are needed; whether the funds are for annual expenses, endowment funds, special projects, or capital investments; the reputation of the organization; the popularity of the appeal; the number of affluent and influential board members and volunteers committed to the cause; the experience levels of the development professionals; the number of active donors to the organization; the amount of donations the organization receives each year; the number of prospective donors who have been identified and with whom the organization has nurtured positive relationships; and a host of other factors unique to each organization.

Of equal importance is the nonprofit agency’s ability to respond to changing conditions. Are the services needed today the same as those that were needed five years ago? What services will be needed one year from today? In five years? In ten years? In short, what strategies are needed to prepare for the future? As important, what resource development strategies are needed to help the organization achieve its aspirations?

The Complete Guide to Fundraising Management, Third Edition, helps you answer these questions. This book will also help nonprofit executive directors and fundraising professionals manage a comprehensive resource development program. Board leaders and volunteers will learn how they can help increase contributions for annual operating support, endowment funds, capital campaigns, and special projects.

The Complete Guide to Fundraising Management, Third Edition, is designed for you. Whether you read the whole book or only the chapters that most interest you, this book provides time-tested, practical advice. So, enjoy—and prepare your organization to serve and to prosper.

A Note About the Website

A website has been created to accompany this book. It is located at: www.wiley.com/go/fundraisingmanagement3

On this website you will find all the exhibits from the book, plus some additional forms.

Stanley Weinstein, ACFRE Albuquerque, NM

Acknowledgments

I want to thank all the people who helped create this book. Certainly, my wife, Jan, deserves the greatest measure of my love and gratitude. Not only was she a source of personal support during the writing process, she also helped by suggesting clear language, preparing the manuscript, and organizing the exhibits. Suffice it to say, a great deal of this activity took place at odd hours. However, any errors due to sleep deprivation are mine alone.

My two sons, Rob and Steve, also helped. Rob has a good ear for language, and teases me unmercifully whenever I sound stuffy. Steve spoke up when he found something in the text to be unclear. Moreover, he spent quite a few early mornings typing manuscript corrections.

A number of friends and colleagues deserve special thanks. Susan D. Thomas, Lona M. Farr, and Kevin Hagen provided encouragement and ideas. T. Joseph McKay helped shape the planned-giving chapter. Beverly Peavler, a friend who happens to be a professional editor, helped keep me calm during the editing process. Mike Kroth, a friend and expert on organization development and adult learning theory, has influenced my life and many of the pages in this book. I am also deeply grateful to the clients I have served. I have learned something of value from each of them.

Let me also express thanks to the people and institutions that graciously granted permission to use their materials and ideas. I am especially thankful to the team at SofterWare, Inc. for their gracious permission to use so many examples of reports generated by DonorPerfect fundraising software. Bob and Kay O’Connell, from Saint Bonaventure Indian Mission & School, also deserve special mention. Together with their dedicated staff, they do marvelous work with the children and community elders they serve. Moreover, Bob and Kay have developed a sophisticated direct mail program that helped shape many of the thoughts expressed in Chapter 9.

Many volunteers I have had the pleasure to work with also taught me a great deal about resource development. Many keenly understand how to motivate others. Quite a few have extraordinary business acumen. All share a strong passion for the causes they represent. Among the volunteers who have influenced me the most are Mary Langlois, Ray Zimmer, Adelaide Benjamin, Scott Sibbett, Cleta Downey, Sheila Wald, and Ron Gilmer—all hold a special place in my heart.

Finally, I would be remiss if I did not thank two people who have had an enormous impact on my life—Kyozan Joshu Sasaki Roshi, a 101-year-old Zen Master, and Seiju Bob Mammoser. Their lives embody a devotion to selfless service that can serve as a model for all who work in the nonprofit sector.

About the Author

Stanley Weinstein, ACFRE, EMBA, has spent 42 years in the nonprofit sector. He served for nine years on the AFP’s National Board of Directors. As a distinguished consultant and president of Stanley Weinstein & Co., he has provided services and hands-on fundraising help for more than 300 nonprofit organizations nationwide. Mr. Weinstein’s campaigns have resulted in numerous major gifts ranging from $50,000 to $50 million. He is the author of Capital Campaigns from the Ground Up, published by John Wiley & Sons. His experience includes strategic planning, board development, major gifts, and capital campaigns for a broad spectrum of social welfare, healthcare, arts, religious, and educational institutions. In 2006, Mr. Weinstein was named “Outstanding Fundraising Professional.” The award was presented at AFP’s International Conference in Atlanta.

CHAPTER 1

Five Major Fundraising Principles

Truth, like gold, is not less so for being newly brought out of the mine.

—JOHN LOCKE

Nonprofit organizations need to remain flexible. Still, our action plans must be developed in accordance with the key principles that lead to fundraising success.

PEOPLE GIVE TO PEOPLE TO HELP PEOPLE

“People give to people to help people” is the most often quoted fundraising phrase, as well it should be. This wise and simple principle has three aspects, and it is prudent to remember all three.

“People give” reminds us that real living and breathing human beings—not institutions—make the decisions to donate or not to donate. They make their decisions based on relationships and to what degree the appeal responds to the funder’s interests. They also base their decisions on the quality of the organization’s leadership.

This brings us to the second part of the aphorism, “People give to people.” Donors are not in the habit of contributing in response to institutional needs. No rational person will buy a computer to help IBM recover from a poor earnings quarter. Similarly, few donors will give merely in response to a nonprofit organization’s deficit. Donors make their investments based on their relationship to the asker. Donors give to people they trust. Donors invest in projects that have a positive impact on their community, the nation, and the world.

The third aspect is “People give to people to help people.” From a donor’s viewpoint, institutions do not have needs. People do. Donors know that their contributions constitute an investment—an investment in enhanced services for people in need.

At its heart, fundraising is the art of nurturing relationships. So, our first job is to build strong, mission-based organizations. Successful fundraisers also form relationships with people who can help garner the resources needed to carry out the organization’s mission. We then ask for the support required to better serve those in need. Finally, we thank our donors so graciously that they continue their support.

PEOPLE GIVE RELATIVE TO THEIR MEANS

The second major principle is one of the keys to understanding the resource development process: “People give in relation to their means and in relation to what others give.” For some people, $10.00 or $30.00 is a generous gift. We also know that there are people who can donate a million dollars or more without changing their lifestyles. Most folks tend to give in ranges between these two extremes.

Do you remember this biblical incident?

. . . a poor widow came, and put in two copper coins, which made a penny. And He said . . . , “Truly, I say to you, this poor widow has put in more than all those who are contributing to the treasury. For they all contributed from their abundance; but she out of her poverty has put in everything she had, her whole living.” (Mark 12:42-44)

Many people have missed the point of this passage. They focus only on the small size of the offering—not the sacrificial nature of the gift. When professional fundraisers stress the importance of pacesetting leadership gifts, some volunteers ask, “Why focus on large gifts? Aren’t we sending the wrong message? We must not forget what we learned from the widow’s mite.”

Again, the point of the widow’s mite passage is not the size of the offering but rather the size relative to the widow’s means. For the poor widow, the gift was huge—a sacrificial gift representing “her whole living.” Too often, nonprofit organizations do not offer their more affluent supporters the opportunity to give at such significant levels. Rather than asking for pacesetting leadership investments, they ask for token support. Or worse still, they fail to ask at all.

Would you agree that rich people can afford to donate more than poor people? An understanding of this truism leads fundraisers to the firm conviction that any fundraising plan based on seeking an “average gift” is bound to produce substandard results.

Whenever you hear someone suggest that it is possible to raise $100,000 by seeking a hundred $1,000 gifts or a thousand $100 gifts, know that you are listening to a flawed plan—one that is likely to fail. Here is why: Say we plan to raise $100,000 by requesting $1,000 from each of our constituents in the hope of garnering 100 donations to make the goal.

Will some of those approached say no? Of course, they will.

Will some of those approached give less than the amount requested? Sure, they will.

Can some of those approached give a great deal more than the amount requested? Definitely!

To make this point even stronger, it is important to remember that donors tend to give relative to what others give. If organization leaders were to announce that the region’s largest financial institution donated $10,000, many donors would conclude that their contribution could be proportionately lower. Few would think that they should donate more than the leading financial institution or the wealthiest person in town.

Professionals avoid schemes based on the “average gift.” The plan they prefer resembles a pyramid. To raise $300,000, they might seek one donation of $45,000, two contributions of $30,000, three gifts of $15,000 each, four contributions of $10,000, eight $5,000 gifts, 15 gifts of $2,500, 30 donations of $1,000, and so on. By creating various levels of gift opportunities, the development professional helps assure that everyone—rich, poor, and in between—has a chance to make a significant gift.

THOSE CLOSEST MUST SET THE PACE

“Those closest to the organization must set the pace.” The value of this third principle becomes evident to anyone who spends a few moments reflecting on it. If those closest to the organization do not believe in the project enough to give generously, how can we expect others not as close to make significant contributions? When looking for financial leadership, some people in the nonprofit sector seem to say, “It’s not you, it’s not me . . . it’s the other fellow behind the tree.” Unfortunately, there are no other fellows behind the tree. Leadership begins with the board, staff, and key volunteers. When they lead in giving, others follow.

SUCCESSFUL FUNDRAISING

“Successful fundraising is the right person asking the right prospect for the right amount for the right project at the right time in the right way.” The word right is used six times in this sentence. These six rights are the six critical success factors in any fundraising campaign.

Begin by asking, “Who is the right person to ask for the contribution?” In most cases, the best person to approach a prospective donor is a volunteer with a peer relationship with the prospective donor. In many cases, the most suitable person to approach the prospective donor is the executive director or chief executive officer of the nonprofit agency—again, someone with a peer relationship with the prospective donor. The ideal face-to-face solicitation occurs when a volunteer leader teams with a key staff member to visit the prospective supporter. The ideal signer of a mail appeal is the board president, agency executive director, or a well-known celebrity supporter of your cause.

We now turn to the question of the “right prospect.” A nonprofit cannot succeed in fundraising without asking, “Who are our best prospects? Which supporters are most likely to make pacesetting leadership gifts?” The most likely gifts come from people who have been generous to the nonprofit in the past. Next, we look for people with the capacity to give generously who have a relationship with the organization—but have not yet given. We also look for people who have been generous to similar organizations. Successful fundraisers do not overlook board members, key volunteers, and their network of associates.

“What is the right amount to request?” Remember, you must decide how much to request before mailing a solicitation, phoning a supporter, or going on any solicitation visit. Too often, people in the nonprofit sector express thoughts such as, “Anything you give would be important and appreciated.” The problem with this thought is that it demeans the organization’s cause. The prospective donor may think you want a $50.00 contribution. This can be disastrous, especially if the donor has the ability to give $50,000. Serious fundraisers conduct meetings to decide how much to request from each of their prime prospects. Professionals segment their mail lists and personalize their request amounts.

The “right project” is always the one in which the prospective donor has the most interest. A university that requests funds for the history department from an alumnus who is a history buff will do better than a university that misses the mark and requests general operating support.

Determining the “right time” is not always easy. However, you cannot go wrong with the following rule: The best time to approach a prospective donor for a major gift is when you have nurtured a positive relationship.

The “right way” to ask for a contribution is with poise and grace. Put away your tin cup. You have nurtured a genuine relationship with the prospective donor. Now, you are offering an opportunity for the supporter to make a significant contribution—one that will have a positive impact on many lives for years to come.

THE 80/20 RULE IS BECOMING THE 90/10 RULE

“Often, 80 percent or more of the funds raised will come from not more than 20 percent of the donors.” This is a variation on the second major principle, “People give in relation to their means and in relation to what others give.” This propensity is based on Pareto’s 80/20 rule: 80 percent of your results will come from 20 percent of your efforts. We see the truth of this observation in many facets of our lives. Twenty percent of all salespeople produce 80 percent of all sales. Twenty percent of all volunteers raise 80 percent of all funds. Twenty percent of a corporation’s product line accounts for 80 percent of the corporation’s profits.

However, in fundraising, this tendency is often even more skewed. In many capital campaigns and mature fundraising programs, the top 10 percent now donate 90 percent of the amount raised. When the top 10 to 20 percent—those closest to the campaign and with the most resources—are encouraged to make leadership gifts, campaigns succeed.

THE NEED FOR BALANCE

Fundraisers often stress one aspect of resource development rather than another. Even seasoned professionals sometimes say, “A major gift program is the most cost-effective fundraising strategy. We have got to work at the peak of the giving pyramid. I really can’t be bothered with broad-based fundraising.” Others say, “We have to broaden our base of support. If we rely on too few donors, our constituents will think we are elitists. It is dangerous to have too few donors. What if we lose several of them in one year? Besides, our organization produces nearly a million dollars a year net contributed income from our mail program.”

I don’t believe that we live in an “either/or” universe. Both points of view have validity. Mature fundraising programs rely on a three-part strategy: Treat all donors and prospective donors with the utmost respect, broaden the base of support, and nurture personal relationships with major current and prospective donors. In conclusion, a comprehensive approach is respectful of both major donors and modest givers.

CHAPTER 2

Your Organization and the Nonprofit World

These Americans are peculiar people. If, in a local community, a citizen becomes aware of a human need which is not being met, he thereupon discusses the situation with his neighbors. Suddenly, a committee comes into existence. The committee thereupon begins to operate on behalf of the need and a new community function is established. It is like watching a miracle, because these citizens perform this act without a single reference to any bureaucracy, or any official agency.

—ALEXIS DE TOCQUEVILLE

AN OVERVIEW OF THE SECTOR—BROAD RANGE OF SERVICES

The nonprofit sector is vital both to American society and to the world. Generous volunteers and donors band together to make a better world for themselves, their neighbors, and the larger community.

Educational institutions foster self-reliance and a passion for lifelong learning. Social service agencies give the poorest of the poor a hand up, not a handout. Healthcare and research institutions find new cures for disease and heal the sick. Cultural and arts institutions enrich our lives and illuminate the human condition. Conservation organizations preserve and protect our environment and wildlife. Churches, synagogues, temples, and mosques renew our spirit and sustain our faith.

Simply put, the nonprofit sector addresses a broad spectrum of needs and is crucial to individual, family, and community well-being. Moreover, private nonprofit organizations are essential to the national economy. Consider the following.

Economic Impact

Nonprofits play a significant role in the modern economy:

• The United States has more than 1,480,000 nonprofit institutions. Of these, more than 800,000 are classified as 501(c)(3), commonly called charities.

• Nonprofit institutions have a payroll that exceeds $254 billion each year.

• Public charity revenue represents approximately 8.5 percent of the nation’s gross domestic product. Charitable giving equals approximately 2.2 percent of the gross domestic product.

Voluntary Support

In response to the pressing problems addressed by the nation’s nonprofits, Americans continue to be generous with their time, talent, and money:

• In one recent year, charitable contributions totaled over $306 billion.

• Approximately 84 percent of all charitable donations came from individuals, 76 percent from current contributions, and 8 percent from bequests. An additional 12 percent of donations came from foundations; 4 percent was donated by corporations.

• Nonprofit organizations nationwide engage more than 100 million volunteers and donors, representing 75 percent of all American households.

OPPORTUNITIES AND CHALLENGES

In the years to come, nonprofit organizations will be offered significant opportunities to increase their resources and enhance their services. At the same time, several issues pose serious challenges to the nonprofit sector.

Among the opportunities are the intergenerational transfer of wealth (and the concomitant opportunity to increase planned gifts), advances in technology, and an emphasis on collaboration.

Among the challenges are threats to the nonprofit sector’s tax-exempt status, the need for regulation to deal with the small percentage of tax-exempt organizations engaged in abuses, and federal budget cuts in domestic spending.

Here are some of the trends that will affect philanthropy in the United States:

• Americans are aging. In the next ten years, the number of people 50 years of age or over will increase 33 percent as the Baby Boomers grow older. The over-65 age group will jump 76 percent between 2010 and 2030.

As the Baby Boomers grow older, their children will leave the nest. As the Boomers begin to retire, they will have more time to volunteer. Volunteers are 66 percent more likely to make gifts to charity than nonvolunteers.

• The number of retired Americans is larger than ever before, and they are wealthier. Retired Americans are looking for places to spend their hours helping others and engaging in lifelong learning experiences. This group will transfer $9 to $11 trillion to the next generation in the next 15 years. In anticipation of this huge intergenerational transfer of wealth, nonprofit organizations are investing more of their resources in planned giving programs.

• Donors, especially foundations and corporations, are more interested in outcomes. They want charities to prove that the programs they help support are effective in changing lives.

• Information technology will alter everyone’s life. To flourish, nonprofit organizations will need to learn to communicate effectively using the Internet and emerging electronic technologies.

• The nonprofit sector will come under more scrutiny. Self-regulation and cooperation with federal and state legislative and regulatory agencies will be needed to preserve confidence in the integrity of our philanthropic institutions.

• There is a growing reliance on faith-based organizations to provide vital social services.

Successful nonprofit organizations will continue to monitor their internal and external environments. In response, they will adopt strategic plans that recognize and respond to their rapidly changing circumstances.

WORKING TOGETHER

Effective nonprofit organizations form strategic partnerships. Some examples are arts institutions that join together to develop joint marketing strategies, churches that make space available to social service providers, conservation and preservation organizations that share education facilities, nonprofits that form alliances to promote planned giving, and healthcare providers that share resources.

Many nonprofit organizations speak positively about the value of strategic partnerships and collaboration; however, they tend to act alone. Some executive directors, development directors, program heads, and marketing directors seem to think that opportunities for collaboration will appear magically. That is simply not the case.

People who believe in collaboration are willing to pay a price. They meet periodically—even when outcomes or expectations are not clear. These periodic meetings are essential to the process of developing trust and uncovering collaborative opportunities. Over time the process evolves. In the beginning, key personnel uncover small projects that they can do together. As the relationship matures, what began as a few joint projects evolves into a true strategic partnership.

In addition to strategic partnerships, charitable organizations—especially healthcare institutions—will explore mergers during the years to come. Competition for philanthropic resources, reductions in government spending, managed care, and a host of factors will drive many small and inefficient nonprofits out of business. Mergers have the potential for producing economies of scale. By eliminating duplication and overhead, more of the organization’s resources can be devoted to programs and services.

Ideas for collaboration among nonprofits are limitless. Donors do not like to support organizations that duplicate the work of other nonprofits. In fact, there is a growing trend among corporate and foundation funders to make grants to collaborative projects. Successful collaborative projects avoid duplication. They also exploit the synergy brought about by the collaboration.

Collaborations, strategic partnerships, mergers, and joint advocacy are examples of important organizational strategies. Before discussing other organization development and fundraising strategies, it might be helpful to step back and examine the key concepts related to strategic management.

IMPORTANCE OF STRATEGIC MANAGEMENT

Strategic management has several advantages over the drift, freewheeling improvisation, and crisis management characteristic of some nonprofit organizations.

The benefits of strategic management accrue to the entire organization. Similarly, a strategic approach to fundraising helps assure that your organization will obtain the generous financial resources needed to carry out its mission.

Fundraising professionals and volunteers who think strategically monitor their environments. They anticipate change. They observe trends. They stay tuned into the thinking of corporate and foundation decision makers. They are aware of the changing demographics of their supporters. They respond to opportunities. They diversify their funding sources and stay focused on those cost-effective strategies that produce high net contributed income for their institutions.

Strategic Management Process

People tend to avoid change whenever possible. Yet, change is unavoidable. A strategic approach to management recognizes the reluctance to change—and the unavoidable need to respond to changing circumstances.

Because “business as usual” will not work in the twenty-first century, we hear a lot about paradigm shifts. For a true paradigm shift to take place, strategic managers stop their organizations from focusing on the past and help them respond to a rapidly changing future. This process is called strategic visioning and planning.

There are many ways of thinking about the strategic planning process. For convenience, you might wish to think about it as a seven-step process (see Exhibit 2.1):

1. Recognize and celebrate the organization’s history. Even if many of the shared experiences are negative, one still must recognize that caring people gave birth to the organization and helped the institution through difficult times.

2. Monitor the environment. Examine the strengths and weaknesses of your internal resources. Look for the opportunities and threats presented by the external environment. This analysis of internal strengths and weaknesses and external opportunities and threats is called SWOT analysis.

3. Define your organization’s purpose and mission. Reaffirm or revise your mission statement in response to megatrends and environmental change. The mission statement should succinctly answer three key questions: (a) What is the organization—what is its business? (b) What does it do? (c) Whom does it serve?

4. Develop long- and short-term goals. Many of the key goals flow from the organization’s mission statement. Other goals flow from the SWOT analysis. Your organization will also want to develop broad goals dealing with each of the major planning dimensions: programs and services; governance and administration; facilities; human resources; technology; communications, marketing, and public relations; fundraising and resource development; and financial security.

5. Define strategies, objectives, and action steps—how the organization will achieve its goals. During the planning process, state how success will be measured. (Example: “Number of children served.”) The plan should then include specific measurable targets. (Example: “Not less than 7,500 children served in the year 2011; ten percent growth in the number of children served in each of the following three years.”)

6. Implement plans. Refine organization design and systems. Decide who does what by when. Stay focused on critical success factors. The organization must decide on the ideal structure to achieve its goals. These solutions can be integrated into the plan by creating broad goals dealing with governance and administration. Each action step and objective must be assigned to a responsible party. Inspect what you expect.

7. Evaluate performance. Track expected results. Review the situation. Look for negative variance. Also look for opportunity variance—unexpected good fortune. These latter variances often indicate a strength that could be built on or a new source of income that might be continued. Initiate adjustments.

EXIBIT 2.1 The Strategic Planning Process

BE SURE YOUR INSTITUTION IS WORTHY OF SUPPORT

It is possible to have a modicum of fundraising success based on technique alone. Conversely, it is possible to have a strong nonprofit organization that performs relatively poorly in the fundraising arena. However, the most effective nonprofit organizations are strong, mission-based institutions with well-run fundraising programs.

As you think about strengthening your fundraising program, you can take the following steps to assure that your organization is worthy of support.

1. Have a clear sense of mission. Try this experiment. Have a friend or any independent observer interview a few of your organization’s key people one at a time. Perhaps the interviewer could meet with your executive director, board chair, program head, development director, president of the auxiliary, marketing director, and several supporters. The interviewer can ask them about their understanding of the organization’s mission. The key people can be asked to state the mission in their own words.

Now, ask yourself, “How well understood is the mission statement?” “Is there agreement or disagreement about our mission?” “Are all key stakeholders familiar with the mission?” “Can all the key people articulate how the organization’s services are related to our mission?”

If the key people cannot easily articulate your mission, your organization has one of two types of problems. First, the organization may have failed to define a clear mission. In this situation, the mission is not well understood because it is not well formed. Second, the organization has developed a clear mission, but has failed to communicate that mission to prime constituents. If the interviews were limited to a few people close to the organization, and they had difficulty in stating the organization’s mission, chances are that the problem is of the first type.

Some years back, I interviewed a marketing director of a large institution. He said, “When we think in terms of increased income, we should remember that we are a museum. When we begin to behave more like a museum and open a gift shop, our income should show a healthy increase.” My next interview was with the director of the institution’s programs. She said, “The important thing to remember about our institution is that we are not a museum. Our mission is to preserve the materials entrusted to us and to make them available to scholars.”

Surprisingly, such differing views of an organization’s mission—while not always so dramatic—are commonplace. You get the point. Conduct the interviews and find out whether your organization is laboring with similar unresolved issues.

2. Strengthen your services. Nonprofit organizations exist to serve. Whether your agency is a social service provider, an arts institution, a church, a school, or a healthcare organization, its purpose is to provide some service for the betterment of your community. Whatever your service is, leaders of your organization should periodically ask themselves: “Who are we serving? Are our services effective? Are we providing the services in the most cost-effective manner? Are there others who need our services whom we are not serving? Are there other services we should provide that we are not yet providing? Are there others working on the same problem with whom we can collaborate? Are we taking the steps necessary to recruit and train the best service providers possible? What steps can we take to strengthen our services?”

Success in fundraising has a direct relationship to the quality of services the organization provides. In any strategic planning process, a focus on the needs of the people served will keep your organization on track.

3. Strengthen the board. Enhance the nominating process. Recruit people of affluence and influence. Provide early and effective orientation. Get people involved. Have an active board committee structure. Devote sufficient attention to your executive committee, nominating committee, finance committee, strategic long-range planning committee, and resource development committee. The last of these committees can be responsible for overseeing the personal solicitation, major gifts, and planned giving programs. You may wish to set up separate committees to deal with special events and membership. As uncommon circumstances arise, the board chair might appoint ad-hoc committees to resolve the issues or make recommendations to the board.

Keep meetings lively and timely. Start and end on time. Refer business to subcommittees, but allow sufficient time for the board as a whole to discuss major issues. Conduct annual or biannual board retreats. Provide ample time for social activities.

4. Remain tuned into community perceptions. Meet with constituents.

Conduct focus groups. Conduct informal interviews. Survey your supporters. Build on positive feedback. Eliminate negative perceptions. Be able to articulate the strengths of your organization.

5. Develop an atmosphere of mutual respect between your board and staff. Provide opportunities for interaction. Encourage open communication. Clarify roles: The board remains responsible for policy; the staff implements the policy. The board hires and evaluates the executive director; the executive director is responsible for managing the staff. The board works with the staff to formulate a budget; the board and staff have shared responsibilities for monitoring the budget.

6. Develop an active volunteer pool. Many organizations find it difficult to recruit and retain active volunteers. At times, staff members say that it is more timely and more cost effective to do a task themselves rather than recruiting and training a volunteer to do the work. No doubt this is true in many cases. However, the payoff for working with volunteers is twofold: (a) By increasing the number of volunteers close to your organization, the number of potential financial supporters is also increased; and (b) individual, foundation, and corporate supporters often view volunteer involvement as cost effective and highly desirable. Organizations that invest in volunteer involvement often experience increased financial contributions. Volunteers are 66 percent more likely to make charitable contributions than are nonvolunteers.

A checklist of Key Indicators of Organizational Strength and Capability is included on the website that accompanies this book.

CHAPTER 3

Managing the Resource Development Function

Organizing is what you do before you do something, so that when you do it, it is not all mixed up.

—A.A. MILNE

ANALYSIS AND PLANNING

When beginning any resource development assignment, staff and key volunteers can increase their effectiveness by devoting sufficient time and effort to analysis and planning. Planning will be discussed later; first, let’s turn our attention to analysis. Early analysis focuses on four main areas: the case for support and the need for contributed income; donor history; fundraising strategies; and resources.

The case for support is discussed in greater detail in Chapter 4. Some of the preliminary questions that must be posed during the early analysis include:

• How well understood is the organization’s case for support?

• Do the existing fundraising materials clearly describe the need for contributed income in terms of the people served—rather than from the point of view of institutional needs?