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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Serie: Essential Texts for Nonprofit and Public Leadership and Management
- Sprache: Englisch
This books offers a definitive text on the vital topic fundraising.It provides students of fundraising and nonprofit professionalsaccess to the most relevant theories and includes concrete examplesof modern fundraising practice. The book contains clear learningobjectives, recommended readings, case studies, summary self-testquestions, and exercises at the end of each chapter. ThePrinciples and Practice of Fundraising comprehensivelyaddresses all the major forms of fundraising and critical topicssuch as donor behavior and fundraising planning. Praise for fundraising principles and practice "Not only will fundraisers benefit from this comprehensive yetaccessible text, but this should be required reading for allnonprofit practitioners and scholars. Reading this book willprovide valuable insight on a vital subject and enhance the successof any fundraising effort." ?John B. Ford, president, Academy of Marketing Science andprofessor of marketing, Old Dominion University "This is not just a how-to-do-it book. Rather, it provides deepknowledge about the nonprofit sector, its role in society, and thevalues and psychology of giving that is essential to responsibleand effective fundraising." ?Paul Brest, president, William and Flora Hewlett Foundation andauthor, Money Well Spent "Adrian Sargeant is the world's foremost fundraising scholar. Thistext will be invaluable to the beginner, but new research findingsmean it should also be a must read for establishedpractitioners." ?Steve Thomas, co-chair, Resource Alliance, and chairman, StephenThomas Ltd, Toronto "Designed and written to fill the void in current fundraising anddevelopment textbooks for both undergraduate and graduate studentsstudying nonprofit management and leadership, FundraisingPrinciples and Practice surpasses my expectations for acomprehensive approach that will benefit American Humanicsprograms." ?SueAnn Strom, vice president, Academic Partnerships, AmericanHumanics®, Inc. "Sargeant is the accessible academic and this is typical of hiswork. It is rigorously researched, clear, concise, well written,well presented and entirely appropriate. Any fundraiser who knowswhat Adrian knows will outperform the others. It's as simple asthat." ?Ken Burnett, author, Relationship Fundraising and The Zen ofFundraising
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Cover
Contents
Title
Copyright Page
FIGURES, TABLES, AND EXHIBITS
PREFACE
ACKNOWLEDGMENTS
THE AUTHORS
PART ONE: Introduction to Fundraising and Donor Behavior
CHAPTER 1: INTRODUCTION TO THE NONPROFIT SECTOR
A “Third” Sector
A Tax-Based Definition
A Structural-Operational Definition
Size and Economic Significance of the Nonprofit Sector
Sources of Income
Philanthropic Income
Summary
Discussion Questions
CHAPTER 2: THE DEVELOPMENT OF A PROFESSION
Early American Fundraising
The Great Philanthropists
Key Historical Figures
Toward a Profession
Looking to the Future
Summary
Discussion Questions
CHAPTER 3: ETHICAL FUNDRAISING: EUGENE R. TEMPEL AND SARAH K. NATHAN
Obedience to the Unenforceable
The AFP Code of Ethical Principles and Standards
The Donor Bill of Rights
Common Ethical Dilemmas
Adopting Professional Codes
Summary
Discussion Questions
CHAPTER 4: INDIVIDUAL GIVING BEHAVIOR
Who Gives?
Motivation
Definitions of Donor Behavior
Modeling Donor Behavior
Donor Decision Making
Feedback
Alternative Models
Summary
Discussion Questions
CHAPTER 5: SOCIAL INFLUENCES ON GIVING
A Social Giving Model
Societal Environment
Social Environment
Summary
Discussion Questions
PART TWO: Fundraising Planning
CHAPTER 6: FUNDRAISING PLANNING: The Fundraising Audit
A Planning Framework
The Fundraising Audit
Analytical Tools
Fundraising Metrics
Conducting an Audit in a Small Nonprofit
The SWOT Analysis
Summary
Discussion Questions
CHAPTER 7: FUNDRAISING PLANNING
Setting Fundraising Objectives
Key Strategies
Tactical Plans
Budget
Scheduling
Monitoring and Control
Selection of an Appropriate Planning Framework
Summary
Discussion Questions
CHAPTER 8: THE CASE FOR SUPPORT: TIMOTHY L. SEILER AND EVA E. ALDRICH
Preparing the Case
Case Expressions
Effective Case Expressions for Fundraising
Summary
Discussion Questions
CHAPTER 9: ASSESSING FUNDRAISING PERFORMANCE
Aggregate Fundraising Ratios
Conducting a Fundraising ROI Analysis
Other Measures of Performance
Benchmarking Fundraising Costs
Sector Benchmarking Initiatives
Making Investment Decisions
Accounting for Risk
Making the Case for Investment
Summary
Discussion Questions
PART THREE: Fundraising Methods
CHAPTER 10: DIRECT RESPONSE FUNDRAISING
Cornerstones of Direct Response
Acquisition Planning
Summary
Discussion Questions
CHAPTER 11: FUNDRAISING ONLINE: Techniques and Tools:
ePhilanthropy
Web Site Strategy
Fundraising Online
Online Communication Metrics
Summary
Discussion Questions
CHAPTER 12: DONOR RETENTION AND DEVELOPMENT
What Is Loyalty?
Recruiting the Right People
Building Donor Loyalty
Planning for Retention
Relationship Fundraising
Calculating Donor Value
Segmenting for Growth
Loyalty Metrics
Summary
Discussion Questions
CHAPTER 13: MAJOR GIFT FUNDRAISING: ROBERT F. HARTSOOK AND ADRIAN SARGEANT
Characteristics of Major Givers
Motives of Major Givers
Major Donor Recruitment
Summary
Discussion Questions
CHAPTER 14: BEQUEST, IN MEMORIAM, AND TRIBUTE GIVING
Will Making
Charitable Bequest Giving
Motives for Charitable Bequest Giving
Soliciting Bequests
Talking the Language of Bequest
Memorial and Tribute Fundraising
Summary
Discussion Questions
CHAPTER 15: PLANNED GIVING: MATTHEW J. BEEM AND ADRIAN SARGEANT
Planned Giving Vehicles
Donor Motivation
Soliciting Planned Gifts
Planned Gift Donor Stewardship
Planned Gift Donor Appreciation
Managing the Planned Giving Function
Summary
Discussion Questions
CHAPTER 16: CORPORATE GIVING AND FUNDRAISING: DWIGHT F. BURLINGAME AND ADRIAN SARGEANT
History
Why Do Corporations Give?
Forms of Business Support
Cause-Related Marketing
Who to Ask? Selecting the Right Organization
Benefits and Pitfalls
Fundraising Planning
Summary
Discussion Questions
CHAPTER 17: GRANT FUNDRAISING
Definitions and Categories
Foundation Funding Trends
Preparation and Planning
Foundation Research
Assessment and Prioritization
Initial Contact
Application and Proposal
Relationship Building
The Grant Cycle
Why Applications Fail
International Funding
Summary
Discussion Questions
PART FOUR: Fundraising and Civil Society
18 MANAGING FUNDRAISING VOLUNTEERS: WALTER WYMER AND ADRIAN SARGEANT
Formal Versus Informal Volunteering
Volunteer Recruitment
Retention Strategies
Program Evaluation
Summary
Discussion Questions
CHAPTER 19: FUNDRAISING EVENTS: KARIN COX
A Typology of Events
Anatomy of an Event
Evaluating Fundraising Events
Summary
Discussion Questions
CHAPTER 20: WOMEN AND PHILANTHROPY: DEBRA J. MESCH AND ANDREA PACTOR
Capacity for Giving
Barriers to Women’s Giving
Gender Matters
Women’s Influence in Decision Making
Generational Differences
New Models of Engagement
Value of Donor Education
Women as Donors: The Fundraising Strategy
Measuring Impact
Summary
Discussion Questions
CHAPTER 21: PUBLIC TRUST AND CONFIDENCE
Trust and Confidence
Building Trust in the Sector
Lessons from Across the Pond
Growing Confidence in the Nonprofit Sector
Building Trust in Organizations
Building Confidence in Organizations
Summary
Discussion Questions
CHAPTER 22: THE SOCIAL ROLE OF FUNDRAISING: RICHARD B. GUNDERMAN
The Role of Giving
Human Flourishing
The Long View
Priorities
Fundraisers’ Dreams
Summary
Discussion Questions
References
Name Index
Subject Index
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List of Illustrations
1 Introduction to the Nonprofit Sector
FIGURE 1.1. SOURCES OF REVENUE FOR REPORTING PUBLIC CHARITIES, 2005 (PERCENT)
FIGURE 1.2. SOURCES OF REVENUE FOR REPORTING PUBLIC CHARITIES, EXCLUDING HOSPITALS AND HIGHER EDUCATION, 2005 (PERCENT)
FIGURE 1.3. CHARITABLE GIVING 2008
2 The Development of a Profession
FIGURE 2.1. AMERICAN RED CROSS FUNDRAISING POSTER
3 Ethical Fundraising
FIGURE 3.1. AFP CODE OF ETHICAL PRINCIPLES AND STANDARDS
FIGURE 3.2. THE DONOR BILL OF RIGHTS
FIGURE 3.3. THE E-DONOR BILL OF RIGHTS
FIGURE 3.4. RETURNS THAT ORGANIZATIONS MIGHT GENERATE FROM FUNDRAISING AT DIFFERENT LEVELS OF EXPENDITURE
4 Individual Giving Behavior
FIGURE 4.1. EMPATHY-GENERATING AD PRODUCED BY THE PARKINSON’S DISEASE SOCIETY OF SINGAPORE
FIGURE 4.2. INDIVIDUAL GIVING MODEL
FIGURE 4.3. EXAMPLE OF NOVELTY IN ADVERTISING
FIGURE 4.4. ROSEMAN’S COGNITIVE APPRAISAL THEORY OF EMOTION
FIGURE 4.5. EXAMPLE OF KNOWLEDGE STRUCTURE
FIGURE 4.6. ROYAL NATIONAL LIFEBOAT INSTITUTION AD
FIGURE 4.7. SARGEANT AND WOODLIFFE MODEL OF GIVING BEHAVIOR
5 Social Influences on Giving
FIGURE 5.1. SOCIAL GIVING MODEL
FIGURE 5.2. THE EFFECT OF SOCIAL INFORMATION ON GIVING
FIGURE 5.3. THE EFFECT OF SOCIAL INFORMATION ON GIVING IN THE SUBSEQUENT YEAR
FIGURE 5.4. THE EFFECT OF SOCIAL NETWORK ON GIVING
FIGURE 5.5. HOW MUCH DO YOU IDENTIFY WITH BEING A PUBLIC RADIO MEMBER?
6 Fundraising Planning: The Fundraising Audit
FIGURE 6.1. GENERIC PLANNING FRAMEWORK
FIGURE 6.2. PEST ANALYSIS FOR A NONPROFIT SERVING THE HOMELESS (CONDUCTED EARLY 2008)
FIGURE 6.3. SOURCES OF FUNDRAISING INFORMATION
FIGURE 6.4. LIFE CYCLE CONCEPT
FIGURE 6.5. USING THE LIFE CYCLE FOR PLANNING
FIGURE 6.6. PORTFOLIO ANALYSIS
FIGURE 6.7. SAMPLE PORTFOLIO ANALYSIS
7 Fundraising Planning
FIGURE 7.1. ANSOFF MATRIX
FIGURE 7.2. AMERICAN GENERATIONS
FIGURE 7.3. Sample Segments from the Tapestry Segmentation System
FIGURE 7.4. VALS FRAMEWORK
FIGURE 7.5. Criteria for Segmentation of Industrial Markets
FIGURE 7.6. MULTISEGMENT APPROACH
FIGURE 7.7. POSITIONING OF CHILDREN’S CHARITIES
FIGURE 7.8. BRAND TOUCHPOINTS
FIGURE 7.9. A BRAND FRAMEWORK
FIGURE 7.10. DIMENSIONS OF A NONPROFIT BRAND
FIGURE 7.11. SALVATION ARMY AD
FIGURE 7.12. FUNDRAISING PLAN STRUCTURES
8 The Case for Support
FIGURE 8.1. DEVELOPING THE CASE
9 Assessing Fundraising Performance
FIGURE 9.1. DEFINITIONS OF CATEGORIES OF FUNDRAISING ACTIVITY
FIGURE 9.2. BENCHMARKING PROCESS
FIGURE 9.3. ILLUSTRATIVE FUNDRAISING EFFECTIVENESS PROjECT (FEP) AVERAGES
FIGURE 9.4. INDEX OF NATIONAL FUNDRAISING PERFORMANCE
FIGURE 9.5. ONE-YEAR ROI FOR ACQUISITION MEDIA
FIGURE 9.6. COMPARISON OF ONE-YEAR AND FIVE-YEAR ROIS
10 Direct Response Fundraising
FIGURE 10.1. CORNERSTONES OF DIRECT RESPONSE
FIGURE 10.2. SOURCES OF NEW DONORS
FIGURE 10.3. CONTENTS OF TYPICAL DATABASE RECORD
FIGURE 10.4. HERITAGE FOUNDATION DONORS
FIGURE 10.5. BUDGET FOR A TYPICAL FIFTY-THOUSAND-PIECE INITIAL TEST MAILING
FIGURE 10.6. SAMPLE SUCCESSFUL RECRUITMENT MAILING, DENVER RESCUE MISSION
FIGURE 10.7. SAMPLE SUCCESSFUL RECRUITMENT MAILING, OCEAN CONSERVANCY
FIGURE 10.8. UNICEF AD
FIGURE 10.9. DIRECT DIALOGUE DONOR RECRUITMENT
FIGURE 10.10. ASPCA DRTV AD
FIGURE 10.11. SAMPLE LETTER
11 Fundraising Online: Techniques and Tools
FIGURE 11.1. BENCHMARKING ANALYSIS DATA ON INTERNET GIVING FROM TARGET ANALYTICS
FIGURE 11.2 AMERICAN CANCER SOCIETY WEB SITE
FIGURE 11.3. E-FUNDRAISING MIX
FIGURE 11.4. IFAW CAMPAIGN MICROSITE
FIGURE 11.5. SOCIAL NETWORKING AND WEB 2.0 LANDSCAPE
FIGURE 11.6. KIVA ONLINE AD
FIGURE 11.7. VIRAL EXAMPLE: THE SEAGULL STRIKES BACK
FIGURE 11.8. EXAMPLE OF A SPONSORSHIP PORTAL
12 Donor Retention and Development
FIGURE 12.1. DONOR RETENTION CHART
FIGURE 12.2. A TYPOLOGY OF LOYALTY
FIGURE 12.3. IMPORTANCE AND SATISFACTION MATRIX
FIGURE 12.4. BOTTON VILLAGE RESPONSE FORM
FIGURE 12.5. THE LOYALTY LADDER
FIGURE 12.6. DONOR PYRAMID
FIGURE 12.7. DONOR COMMUNICATIONS CYCLE
FIGURE 12.8. UNION OF CONCERNED SCIENTISTS WELCOME PACKAGE
FIGURE 12.9. DONOR VALUE PYRAMID
FIGURE 12.10. DONOR VALUE PYRAMID FACTORING IN COSTS OF FUNDRAISING
FIGURE 12.11. PERSPECTIVES ON VALUE
13 Major Gift Fundraising
FIGURE 13.1. AVERAGE TOTAL, SECULAR, AND RELIGIOUS GIVING BY THE SOURCE OF NET WORTH, HIGH NET WORTH HOUSEHOLDS, 2005
FIGURE 13.2. IMPORTANT MOTIVATIONS FOR CHARITABLE GIVING BY HIGH NET WORTH HOUSEHOLDS
FIGURE 13.3. REASONS FOR ENDING SUPPORT OF NONPROFITS
FIGURE 13.4. THE MAJOR GIFT DEVELOPMENT PROCESS
14 Bequest, In Memoriam, and Tribute Giving
FIGURE 14.1. GIVING BY BEQUEST, 1967-2007
FIGURE 14.2. PROJECTED NUMBER OF DEATHS, 2010-2050
FIGURE 14.3. WILL MAKING BY AGE
FIGURE 14.4. HOW IMPORTANT IS IT TO YOU TO LEAVE AN INHERITANCE?
FIGURE 14.5. HUMAN RIGHTS WATCH SOLICITATION
FIGURE 14.6. MORALITY: SURVEY RESULTS
FIGURE 14.7. MORALITY DISCREPANCIES
FIGURE 14.8. EXAMPLE OF A TRIBUTE PAGE
15 Planned Giving
FIGURE 15.1. REVOCABLE TRUST
FIGURE 15.2. CHARITABLE GIFT ANNUITY
FIGURE 15.3. POOLED INCOME FUND
FIGURE 15.4. CHARITABLE REMAINDER UNITRUST
FIGURE 15.5. CHARITABLE LEAD TRUST
FIGURE 15.6. REMAINDER DEED GIFTS
16 Corporate Giving and Fundraising
FIGURE 16.1. CORPORATE GIVING, 1968-2008
FIGURE 16.2. CORPORATE GIVING AS A PERCENTAGE OF CORPORATE PRETAX PROFITS, 1968-2008
FIGURE 16.3. HÄAGEN DAZS PROMOTIONAL MICROSITE
FIGURE 16.4. MINNESOTA FEDERATED FUNDS
FIGURE 16.5. EXAMPLES OF CAUSE-RELATED MARKETING
FIGURE 16.6. CORPORATE FUNDRAISING PLANNING
FIGURE 16.7. AN EXTRACT FROM BIOVERSITY INTERNATIONAL’S ETHICAL SCREENING POLICY
17 Grant Fundraising
FIGURE 17.1. SOURCE OF FOUNDATION FUNDING ($BILLIONS)
FIGURE 17.2. RECIPIENT ORGANIZATIONS BY DOLLAR AMOUNT
FIGURE 17.3. RECIPIENT ORGANIZATIONS BY NUMBER OF GIFTS
FIGURE 17.4. FOUNDATION FUNDRAISING PROCESS
FIGURE 17.5. PROPOSAL DEVELOPMENT PROCESS
FIGURE 17.6. SPECIMEN COVER LETTER FOR THE NORTH STREET HOSPICE
FIGURE 17.7. THE GRANT CYCLE
18 Managing Fundraising Volunteers
FIGURE 18.1. MERCY CORPS COMMUNITY FUNDRAISING ACTIVITIES
FIGURE 18.2. SCHOOL FUNDRAISING IDEAS
FIGURE 18.3. VOLUNTEER RECRUITMENT PROCESS
FIGURE 18.4. PERSON SPECIFICATION
FIGURE 18.5. FRY ELEMENTARY SCHOOL VOLUNTEER RECRUITMENT FORM
19 Fundraising Events
FIGURE 19.1. AN OPEN HOUSE RECEPTION
FIGURE 19.2. EVENT GANTT CHART
20 Women and Philanthropy
FIGURE 20.1. GIVING BY GENERATION
FIGURE 20.2. Specimen Donor Education Program
FIGURE 20.3. CARE CAMPAIGN POWER PACK
21 Public Trust and Confidence
FIGURE 21.1. PERCENTAGE OF RESPONDENTS WHO THINK CHARITIES ARE DOING A VERY GOOD JOB
FIGURE 21.2. WHY CONFIDENCE HAS DECREASED
FIGURE 21.3. CREATIVE ACCOUNTING
FIGURE 21.4. CHARITYFACTS WEB SITE
List of Tables
1 Introduction to the Nonprofit Sector
TABLE 1.1 TYPES OF TAX-EXEMPT ORGANIZATIONS AND NUMBER, EXPENSES, AND ASSETS BY TYPE, 2005
TABLE 1.2 ORGANIZATIONS, EXPENSES, AND ASSETS IN THE NONPROFIT SECTOR, 2005
TABLE 1.3 THE STRUCTURAL-OPERATIONAL DEFINITION
TABLE 1.4 INTERNATIONAL CLASSIFICATION OF NONPROFIT ORGANIZATIONS
TABLE 1.5 ELEMENTS OF THE DEFINITION OF GRASSROOTS ASSOCIATIONS
TABLE 1.6 CONTRIBUTIONS IN 2007: $306.69 BILLION BY TYPE OF RECIPIENT ORGANIZATION ($ IN BILLIONS)
4 Individual Giving Behavior
TABLE 4.1 DEMOGRAPHIC CHARACTERISTICS OF RESPONDENT HOUSEHOLDS
TABLE 4.2 REASONS FOR GIVING
TABLE 4.3 REASONS FOR NONSUPPORT
6 Fundraising Planning: The Fundraising Audit
TABLE 6.1 EXTERNAL ATTRACTIVENESS OF ACTIVITY A (CHILD SPONSORSHIP PRODUCT)
TABLE 6.2 INTERNAL APPROPRIATENESS OF
ACTIVITY A (CHILD SPONSORSHIP PRODUCT)
TABLE 6.3 REPORT OF SOLICITATION ACTIVITIES, WITH GIFT INCOME MEASURED AGAINST APPROVED BUDGET AND ACTUAL EXPENSES (BY PROGRAM)
7 Fundraising Planning
TABLE 7.1 FUNDRAISING ACTIVITIES AND PRODUCTS
TABLE 7.2 FAMILY LIFE CYCLE
TABLE 7.3 SAMPLE GANTT CHART
8 The Case for Support
TABLE 8.1 QUALITIES AND RESPONSES
TABLE 8.2 EXAMPLES OF APPEALS TO EMOTION, REASON, AND ORGANIZATIONAL CREDIBILITY
9 Assessing Fundraising Performance
TABLE 9.1 ILLUSTRATION OF ROI ANALYSIS
TABLE 9.2 MINIMUM FUNDRAISING ROI BY CATEGORY OF FUNDRAISING ACTIVITY AND AVERAGE GIFT SIZE
TABLE 9.3 GREENFIELD’S NINE-POINT PERFORMANCE INDEX
TABLE 9.4 FEP SURVEY DATA ELEMENTS
TABLE 9.5 PROFILE OF INVESTMENT
TABLE 9.6 ILLUSTRATION OF PAYBACK PERIOD
TABLE 9.7 FACTORS FOR THE PRESENT VALUE OF $1
TABLE 9.8 NPV ILLUSTRATION
TABLE 9.9 FURTHER NPV ILLUSTRATION
TABLE 9.10 PROJECT DECISION ILLUSTRATION
TABLE 9.11 PROFITABILITY INDEX ILLUSTRATION
TABLE 9.12 OPTIMIZING THE INVESTMENT DECISION
TABLE 9.13 EXAMPLE OF REAL RATE OF RETURN
TABLE 9.14 FURTHER ILLUSTRATION OF REAL RATE OF RETURN
10 Direct Response Fundraising
TABLE 10.1 PROBLEMS WITH NAMES
12 Donor Retention and Development
TABLE 12.1 REASONS FOR LAPSE
TABLE 12.2 COMPARISON OF TRANSACTION AND RELATIONAL APPROACHES
13 Major Gift Fundraising
TABLE 13.1 INDIVIDUALS WHOSE NET WORTH IS $15 MILLION OR LESS
TABLE 13.2 INDIVIDUALS WHOSE NET WORTH IS MORE THAN $15 MILLION
TABLE 13.3 GIFT RANGE CHART: $1 MILLION GOAL
14 Bequest, In Memoriam, and Tribute Giving
TABLE 14.1 WEALTH TRANSFER: LOWER-LEVEL ESTIMATES
TABLE 14.2 CHARITABLE BEQUESTS REPORTED ON ESTATE TAX RETURNS FILED IN 2003
TABLE 14.3 PERCENTAGE OF CHARITABLE BEQUEST DONORS
TABLE 14.4 INCOME PROFILE OF BEQUEST PLEDGERS
15 Planned Giving
TABLE 15.1 HOW DONORS FIRST LEARNED ABOUT GIFT OPTIONS
TABLE 15.2 BOARD INVOLVEMENT IN PLANNED GIVING
16 Corporate Giving and Fundraising
TABLE 16.1 TRENDS IN MOTIVATION OVER TIME
17 Grant Fundraising
TABLE 17.1 SAMPLE TIMELINE
TABLE 17.2 SUCCESS RATE OF APPLICATIONS BY GRANTMAKING EXPENDITURE
TABLE 17.3 REASONS FOR DECLINING GRANT APPLICATIONS
18 Managing Fundraising Volunteers
TABLE 18.1 HOURS SPENT VOLUNTEERING BY GENDER, AGE, AND ETHNICITY IN 2008
19 Fundraising Events
TABLE 19.1 EVENTS GRID
TABLE 19.2 SPEDMEN EVENT BLIDGET
21 Public Trust and Confidence
TABLE 21.1 CONFIDENCE IN CHARITABLE ORGANIZATIONS, 2002–2008
TABLE 21.2 RATING OF FUNDRAISING EXPENSES BY CHARITY NAVIGATOR: PERCENTAGE OF TOTAL FUNCTIONAL EXPENSES SPENT ON FUNDRAISING (LOWER IS BETTER)
The Instructor’s Guide for Fundraising Principles and Practice includes sample syllabi, study questions for each chapter, and case studies. The Instructor’s Guide is available free online. If you would like to download and print a copy of the Guide, please visit:
www.wiley.com/college/sargeant
The Student Resource Web site for Fundraising Principles and Practice is www.studyfundraising.info.
EDUCATIONAL RESOURCES FOR NONPROFIT AND PUBLIC MANAGEMENT
Handbook of Nonprofit Board Governance, by BoardSource
Strategic Planning for Public and Nonprofit Organizations, 3rd Edition, by John M. Bryson
The Effective Public Manager, 4th Edition, by Steven Cohen et al.
Handbook of Human Resources Management in Government, 3rd Edition, by Stephen E. Condrey
The Responsible Administrator, 5th Edition, by Terry L. Cooper
Conducting a Successful Capital Campaign, Revised and Expanded Edition, by Kent E. Dove
The Public Relations Handbook for Nonprofits, by Arthur Feinglass
The Jossey-Bass Handbook of Nonprofit Leadership and Management, 2nd Edition, by Robert D. Herman
Benchmarking in the Public and Nonprofit Sectors, 2nd Edition, by Patricia Keehley et al.
Museum Marketing and Strategy, 2nd Edition, by Neil Kotler et al.
The Ethics Challenge in Public Service, 2nd Edition, by Carol W. Lewis et al.
Working Across Boundaries, by Russell M. Linden
Designing and Planning Programs for Nonprofit and Government Organizations, by Edward J. Pawlak
Measuring Performance in Public and Nonprofit Organizations, by Theodore H. Poister
Human Resources Management for Public and Nonprofit Organizations: A Strategic Approach, 3rd Edition, by Joan E. Pynes
Understanding and Managing Public Organizations, 4th Edition, by Hal G. Rainey
Designing and Conducting Survey Research, 3rd Edition, by Louis M. Rea et al.
Making Critical Decisions, by Roberta M. Snow et al.
Hank Rosso’s Achieving Excellence in Fundraising, 2nd Edition, Eugene R. Tempel
Handbook of Practical Program Evaluation, 2nd Edition, by Joseph S. Wholey et al.
“The rapid growth in nonprofit management educational programs has highlighted the urgent need to develop conceptually grounded textbooks to replace the many how-to books informed mainly by practitioner experience. Nowhere is the need more urgent than in the area of fund development—a major source of revenue for U.S. charities and similar organizations elsewhere. Fundraising Principles and Practice by Sargeant and Shang brings a most welcome focus on key conceptual frameworks along with useful checklists and informative examples from the United States and elsewhere needed by students and practitioners alike.”
—KIRSTEN A. GRØNBJERG, EFROYMSON CHAIR IN PHILANTHROPY, CENTER ON PHILANTHROPY AT INDIANA UNIVERSITY
“Reading this book, it’s as if Sargeant has taken you on a personally guided tour through the labyrinth that is our third sector and has left you with a detailed road map and commentary that allows you to continue exploring it, productively, on your own. There is no one better than Sargeant to act in this capacity of guide and mentor—his years as a leading academic and as a practitioner mean that he understands, at all levels, the critical impact that our environment has on each and every fundraiser.”
—ANDREW WATT, CHIEF PROGRAMS OFFICER, ASSOCIATION OF FUNDRAISING PROFESSIONALS
“At last a comprehensive and scholarly textbook on fundraising, with full coverage of the latest insights from the disciplines of marketing, psychology, and economics.”
—AMERICUS REED II, THE WHITNEY M. YOUNG, JR. ASSOCIATE PROFESSOR; ASSOCIATE PROFESSOR OF MARKETING, THE WHARTON SCHOOL, UNIVERSITY OF PENNSYLVANIA
“Sargeant and Shang have put forth a comprehensive yet practical assessment and review of factors defining donors (and nondonors), their influencers, and behaviors. If understood and applied to strategies, this text can increase the effectiveness of fundraising professionals for decades to come.”
—BOB CARTER, VICE CHAIRMAN, CHANGING OUR WORLD, INC.
“Students and practitioners alike will benefit from Sargeant’s comprehensive yet concise and eminently readable book on fundraising. This is a serious book that employs the latest in fundraising research as well as current examples from numerous locations to make the book the most meaningful yet practical fundraising text yet written—not a surprise from the world leader in fundraising research.”
—SANDRA MOTTNER, PH.D., ASSOCIATE PROFESSOR OF MARKETING, FINANCE AND MARKETING DEPARTMENT CHAIR, WESTERN WASHINGTON UNIVERSITY
“Not only will fundraisers benefit from this comprehensive yet accessible text, but this should be required reading for all nonprofit practitioners and scholars. Reading this book will provide valuable insight on a vital subject and enhance the success of any fundraising efforts.”
—JOHN B. FORD, PRESIDENT, ACADEMY OF MARKETING SCIENCE, AND PROFESSOR OF MARKETING, OLD DOMINION UNIVERSITY
“This is not just a how-to-do-it book. Rather, it provides deep knowledge about the nonprofit sector, its role in society, and the values and the psychology of giving that is essential to responsible and effective fundraising.”
—PAUL BREST, PRESIDENT, WILLIAM AND FLORA HEWLETT FOUNDATION, AND AUTHOR, MONEY WELL SPENT
“Adrian Sargeant is the world’s foremost fundraising scholar. This text will be invaluable to the beginner, but new research findings mean it should also be a must-read for established practitioners.”
—STEVE THOMAS, CO-CHAIR, RESOURCE ALLIANCE, AND CHAIRMAN, STEPHEN THOMAS LTD., TORONTO
“Fundraising Principles and Practices is designed and written to fill the void in current fundraising and development textbooks for both undergraduate and graduate students studying nonprofit management and leadership. [However,] this book provides far more than a ‘how-to’ guide as it sets the stage historically for development as a profession, providing exceptional research and examples for novice to senior development practitioners as well.
The book surpasses my expectations for a comprehensive approach that will benefit American Humanics programs throughout the United States. We are indebted to Drs. Sargeant and Shang for this timely and thorough addition to our literature base.”
—SUEANN STROM, VICE PRESIDENT, ACADEMIC PARTNERSHIPS, AMERICAN HUMANICS®, INC.
“Sargeant is the accessible academic and this is typical of his work. It is rigorously researched, clear, concise, well-written, well-presented, and entirely appropriate. Any fundraiser who knows what Adrian knows will outperform the others. It’s as simple as that.”
—KEN BURNETT, AUTHOR, RELATIONSHIP FUNDRAISINGANDTHE ZEN OF FUNDRAISING
FUNDRAISING PRINCIPLES AND PRACTICE
Adrian Sargeant, Jen Shang, and Associates
Copyright © 2010 by John Wiley & Sons, Inc. All rights reserved.
Published by Jossey-Bass
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Library of Congress Cataloging-in-Publication Data
Sargeant, Adrian.
Fundraising principles and practice / Adrian Sargeant, Jen Shang, and Associates
p. cm.
Includes bibliographical references and indexes.
ISBN 978-0-470-45039-0 (cloth)
1. Fund raising. 2. Nonprofit organizations—Finance. 3. Nonprofit organizations—Marketing.
I. Shang, Jen, 1979- II. Title.
HG177.S27 2010
658.15’224—dc22
2009044624
FIGURES, TABLES, AND EXHIBITS
Figures
1.1 Sources of Revenue for Reporting Public Charities, 2005 (percent)
1.2 Sources of Revenue for Reporting Public Charities, Excluding Hospitals and Higher Education, 2005 (percent)
1.3 Charitable Giving 2008
2.1 American Red Cross Fundraising Poster
3.1 AFP Code of Ethical Principles and Standards
3.2 The Donor Bill of Rights
3.3 The E-Donor Bill of Rights
3.4 Returns That Organizations Might Generate from Fundraising at Different Levels of Expenditure
4.1 Empathy-Generating Ad Produced by the Parkinson’s Disease Society of Singapore
4.2 Individual Giving Model
4.3 Example of Novelty in Advertising
4.4 Roseman’s Cognitive Appraisal Theory of Emotion
4.5 Example of Knowledge Structure
4.6 Royal National Lifeboat Institution Ad
4.7 Sargeant and Woodliffe Model of Giving Behavior
5.1 Social Giving Model
5.2 The Effect of Social Information on Giving
5.3 The Effect of Social Information on Giving in the Subsequent Year
5.4 The Effect of Social Network on Giving
5.5 How Much Do You Identify with Being a Public Radio Member?
6.1 Generic Planning Framework
6.2 PEST Analysis for a Nonprofit Serving the Homeless (Conducted Early 2008)
6.3 Sources of Fundraising Information
6.4 Life Cycle Concept
6.5 Using the Life Cycle for Planning
6.6 Portfolio Analysis
6.7 Sample Portfolio Analysis
7.1 Ansoff Matrix
7.2 American Generations
7.3 Sample Segments from the Tapestry Segmentation System
7.4 VALS Framework
7.5 Criteria for Segmentation of Industrial Markets
7.6 Multisegment Approach
7.7 Positioning of Children’s Charities
7.8 Brand Touchpoints
7.9 A Brand Framework
7.10 Dimensions of a Nonprofit Brand
7.11 Salvation Army Ad
7.12 Fundraising Plan Structures
8.1 Developing the Case
9.1 Definitions of Categories of Fundraising Activity
9.2 Benchmarking Process
9.3 Illustrative Fundraising Effectiveness Project (FEP) Averages
9.4 Index of National Fundraising Performance
9.5 One-Year ROI for Acquisition Media
9.6 Comparison of One-Year and Five-Year ROIs
10.1 Cornerstones of Direct Response
10.2 Sources of New Donors
10.3 Contents of Typical Database Record
10.4 Heritage Foundation Donors
10.5 Budget for a Typical Fifty-Thousand-Piece Initial Test Mailing
10.6 Sample Successful Recruitment Mailing, Denver Rescue Mission
10.7 Sample Successful Recruitment Mailing, Ocean Conservancy
10.8 Unicef Ad
10.9 Direct Dialogue Donor Recruitment
10.10 ASPCA DRTV Ad
10.11 Sample Letter
11.1 Benchmarking Analysis Data on Internet Giving from Target Analytics
11.2 American Cancer Society Web Site
11.3 E-Fundraising Mix
11.4 IFAW Campaign Microsite
11.5 Social Networking and Web 2.0 Landscape
11.6 Kiva Online Ad
11.7 Viral Example: The Seagull Strikes Back
11.8. Example of a Sponsorship Portal
12.1 Donor Retention Chart
12.2 A Typology of Loyalty
12.3 Importance and Satisfaction Matrix
12.4 Botton Village Response Form
12.5 The Loyalty Ladder
12.6 Donor Pyramid
12.7 Donor Communications Cycle
12.8 Union of Concerned Scientists Welcome Package
12.9 Donor Value Pyramid
12.10 Donor Value Pyramid Factoring in Costs of Fundraising
12.11 Perspectives on Value
13.1 Average Total, Secular, and Religious Giving by the Source of Net Worth, High Net Worth Households, 2005
13.2 Important Motivations for Charitable Giving by High Net Worth Households
13.3 Reasons for Ending Support of Nonprofits
13.4 The Major Gift Development Process
14.1 Giving by Bequest, 1967-2007
14.2 Projected Number of Deaths, 2010-2050
14.3 Will Making by Age
14.4 How Important Is It to You to Leave an Inheritance?
14.5 Human Rights Watch Solicitation
14.6 Morality: Survey Results
14.7 Morality Discrepancies
14.8 Example of a Tribute Page
15.1 Revocable Trust
15.2 Charitable Gift Annuity
15.3 Pooled Income Fund
15.4 Charitable Remainder Unitrust
15.5 Charitable Lead Trust
15.6 Remainder Deed Gifts
16.1 Corporate Giving, 1968-2008
16.2 Corporate Giving as a Percentage of Corporate Pretax Profits, 1968-2008
16.3 Häagen Dazs Promotional Microsite
16.4 Minnesota Federated Funds
16.5 Examples of Cause-Related Marketing
16.6 Corporate Fundraising Planning
16.7 An Extract from Bioversity International’s Ethical Screening Policy
17.1 Source of Foundation Funding ($Billions)
17.2 Recipient Organizations by Dollar Amount
17.3 Recipient Organizations by Number of Gifts
17.4 Foundation Fundraising Process
17.5 Proposal Development Process
17.6 Specimen Cover Letter for the North Street Hospice
17.7 The Grant Cycle
18.1 Mercy Corps Community Fundraising Activities
18.2 School Fundraising Ideas
18.3 Volunteer Recruitment Process
18.4 Person Specification
18.5 Fry Elementary School Volunteer Recruitment Form
19.1 An Open House Reception
19.2 Event Gantt Chart
20.1 Giving by Generation
20.2 Specimen Donor Education Program
20.3 CARE Campaign Power Pack
21.1 Percentage of Respondents Who Think Charities are Doing a Very Good Job
21.2 Why Confidence Has Decreased
21.3 Creative Accounting
21.4 CharityFacts Web Site
Tables
1.1 Types of Tax-Exempt Organizations and Number, Expenses, and Assets by Type, 2005
1.2 Organizations, Expenses, and Assets in the Nonprofit Sector, 2005
1.3 The Structural-Operational Definition
1.4 International Classification of Nonprofit Organizations
1.5 Elements of the Definition of Grassroots Associations
1.6 Contributions in 2007: $306.69 Billion by Type of Recipient Organization ($ in Billions)
4.1 Demographic Characteristics of Respondent Households
4.2 Reasons for Giving
4.3 Reasons for Nonsupport
6.1 External Attractiveness of Activity A (Child Sponsorship Product)
6.2 Internal Appropriateness of Activity A (Child Sponsorship Product)
6.3 Report of Solicitation Activities, with Gift Income Measured Against Approved Budget and Actual Expenses (by Program)
7.1 Fundraising Activities and Products
7.2 Family Life Cycle
7.3 Sample Gantt Chart
8.1 Qualities and Responses
8.2 Examples of Appeals to Emotion, Reason, and Organizational Credibility
9.1 Illustration of ROI Analysis
9.2 Minimum Fundraising ROI by Category of Fundraising Activity and Average Gift Size
9.3 Greenfield’s Nine-Point Performance Index
9.4 FEP Survey Data Elements
9.5 Profile of Investment
9.6 Illustration of Payback Period
9.7 Factors for the Present Value of $1
9.8 NPV Illustration
9.9 Further NPV Illustration
9.10 Project Decision Illustration
9.11 Profitability Index Illustration
9.12 Optimizing the Investment Decision
9.13 Example of Real Rate of Return
9.14 Further Illustration of Real Rate of Return 232
10.1 Problems with Names
12.1 Reasons for Lapse
12.2 Comparison of Transaction and Relational Approaches
13.1 Individuals Whose Net Worth Is $15 Million or Less
13.2 Individuals Whose Net Worth Is More than $15 Million
13.3 Gift Range Chart: $1 Million Goal
14.1 Wealth Transfer: Lower-Level Estimates
14.2 Charitable Bequests Reported on Estate Tax Returns Filed in 2003
14.3 Percentage of Charitable Bequest Donors
14.4 Income Profile of Bequest Pledgers
15.1 How Donors First Learned About Gift Options
15.2 Board Involvement in Planned Giving 428
16.1 Trends in Motivation over Time
17.1 Sample Timeline
17.2 Success Rate of Applications by Grantmaking Expenditure
17.3 Reasons for Declining Grant Applications
18.1 Hours Spent Volunteering by Gender, Age, and Ethnicity in 2008
19.1 Events Grid
19.2 Specimen Event Budget
21.1 Confidence in Charitable Organizations, 2002-2008
21.2 Rating of Fundraising Expenses by Charity Navigator: Percentage of Total Functional Expenses Spent on Fundraising (Lower Is Better)
Exhibits
12.1 Measuring Donor Satisfaction
13.1 Silent Prospecting Exercise
14.1 Measuring Moral Identity
19.1 Event Evaluation Form
To Gwendoline Owen. Our Nan.
PREFACE
Welcome to our textbook! A quick search on Amazon.com revealed that ours will be the 929th book on fundraising available through the site. Hurrah! Although on the face of it this might sound like a perfectly respectable total for a profession barely a century old (Cutlip, 1990), it doesn’t compare favorably with the 308,975 texts available to practitioners of marketing, a related profession with similar longevity. Fundraising professionals are beginning to build a platform of knowledge, but we have a very long way to go to catch up to our for-profit colleagues. Volume aside, we also have concerns about the nature of the texts that are currently available. Books on marketing fall into either of two broad categories, namely “how-to” books written by practitioners on the basis of their own experiences and opinions, and textbooks, which open up access to scholarly material, summarize the current state of knowledge, and impart that to students. In fundraising there is a similar division but textbooks are rare.
We believe that both categories of books have a role to play in a modern profession and both are necessary for the health of the field. We readily acknowledge the contributions of the professional literature, in particular the excellent work of leading practitioners such as Tom Ahern, Ken Burnett, Jim Greenfield, Simone Joyaux, Kim Klein, Harvey McKinnon, Hank Rosso, George Smith, and Mal Warwick. We have admired and respected the work of these individuals for many years. What they all bring to the profession is a wealth of practical experience, a spirited enthusiasm for their craft, and a willingness to share their knowledge with others. They also share an ability to write, to make that knowledge accessible and to impart it with a genuine warmth and passion for the topic. Anyone serious about a career in fundraising would do well to read the classic texts offered by these authors. We reference many of them in this book. Also, in our online resource center at http://www.studyfundraising.info we offer a list of recommended readings to support each of the book’s topics.
The picture in terms of textbooks is not so rosy. Presently only three textbooks on the topic are in print (Kelly, 1998; Lindahl, 2008; and from the United Kingdom, Sargeant and Jay, 2004). Added to these, ours is the first to be written by academics from the marketing discipline, and the first to be developed specifically for a university audience, including students enrolled in American Humanics programs and those studying for a diploma in fundraising. Our text will provide the reader with a unique synthesis of the best of professional practice and the latest academic research, drawn from the disciplines of economics, psychology, sociology, philanthropic studies, and of course marketing.
The advent of a comprehensive student textbook is highly significant for the profession, because it draws together, for the first time, the knowledge base that we would expect every competent practitioner to know. As authors we have long felt that every competent fundraiser should have access to the most critical aspects of that knowledge, such as the three key things that drive donor loyalty, an understanding of the relationship between branding and fundraising, and the core psychological principles that underpin why people give. As the body of academic research grows, this knowledge must be fed into professional practice, where it can have an impact on performance. Textbooks and their associated Web resources are an essential part of this process. They offer insight that is complementary to the professional texts we referred to earlier.
Disseminating the latest thinking and research matters because it exposes individual fundraisers to new ideas that should drive forward the quality of their work, but it also matters for the profession of fundraising. The existence of a well-defined and commonly accepted body of knowledge is what underpins our claim to be exactly that: a profession. As long ago as 1991, Bloland and Bornstein, for example, noted that the most important strategy for gaining professional status is the development of a substantial, legitimate knowledge base. “Creating a theory base that is changed by research, and a research base that is informed by theory is considered by many students of the professions to be the most important tactic in the professionalization process” (p. 117).
Kathleen Kelly (1998), who took the first step in drawing much of this material together, estimated that there were eighty thousand fundraisers practicing in the United States. Today we believe the total to be closer to one hundred thousand. In today’s competitive fundraising environment, it is essential for these individuals to have access to a body of knowledge they can call their own. Half a century ago fundraisers might have been able to survive with good people skills, but if this was ever true, it certainly isn’t today. The current generation of fundraisers is having to cope with the realities of modern database fundraising, Web 2.0, and an increasingly sophisticated array of planned-giving vehicles that donors may now employ to structure their giving. Possessing good people skills is no longer enough. There is a wealth of facts, tools, frameworks, and theories that fundraisers now need to be aware of. This text is designed to promote their access to this material.
The book is structured in four parts. Part One provides an overview of the development of the profession and defines the sector it serves. It then considers donor behavior, examining who gives, why people give, and the social and environmental influences on that behavior. Part Two focuses on fundraising planning, providing an overview of the planning and budgeting process. It also examines how to assess fundraising activity and appraise the potential for future fundraising investment.
Part Three deals with what we term the methods of fundraising. It examines various direct response media and the use of the Internet for fundraising, then major gifts, bequest and planned giving, and corporate and grant fundraising. It also looks at the critical topic of donor retention, reviewing in turn each of the major drivers of donor loyalty.
Part Four looks at the relationship between fundraising and civil society. It explores key issues such as the development of women’s philanthropy, the engagement of volunteers, and the management of the public trust. It also explores the social role of fundraising, apprising fundraisers of the wider role they play in their communities.
The associated Web resource (www.studyfundraising.info) offers additional case study material, links to relevant fundraising Web sites (or sources of sector information), additional self-test questions, and reading lists to support each topic. We have selected these resources to offer further insight from around the world. Students of fundraising in every country should find these materials valuable.
We hope that the book and its associated resources will meet your needs.
February 2010
Adrian Sargeant
Jen Shang
ACKNOWLEDGMENTS
We gratefully acknowledge the assistance of all our coauthors in putting together this textbook. Without the input of your expertise, this text would not have been possible. We also gratefully acknowledge our three reviewers—Simone Joyaux, Tom Ahern, and an anonymous reviewer—who conducted a line-by-line appraisal of an earlier version of the text. Your ideas, corrections, and wit (!) were most welcome. Any remaining errors, however, are entirely our responsibility.
We also very much appreciate the generosity of the nonprofits that have contributed to this book, by sharing their resources and allowing us to reproduce them here. Textbooks are only as good as their examples and we are genuinely grateful for your help. We would also like to say a special thank-you to Mal Warwick for sharing his ideas and helping us access materials. We know there are many, more pressing demands on your time. Finally, we would like to say a big thank-you to our graduate assistants, Amy Wolff and Casey Chell, who helped pull together all the various strands of the text.
Thank you all.
THE AUTHORS
Eva E. Aldrich is associate director of Public Service and The Fund Raising School at the Center on Philanthropy at Indiana University. Her work centers on the development and revision of The Fund Raising School’s curriculum. Prior to joining the Center on Philanthropy, Aldrich was a member of Johnson, Grossnickle, and Associates, an institutional strategy and advancement consulting firm. She holds the designation of Certified Fund Raising Executive from CFRE International and serves on the organization’s Exam Committee and its Job Analysis Task Force. She received her master’s degree in English from Indiana University and is pursuing a doctorate in Philanthropic Studies from Indiana University.
Matthew J. Beem is a polished fundraiser and skilled teacher. He brings architecture and rhythm to campaigns. His insight and strategic direction for capital, major, and planned gifts initiatives and his ability to teach and mold novice fundraisers into those who change the fiscal direction of their organizations are unmatched. During his twenty-year career, Beem has helped nonprofits raise more than $200 million. His writings have been featured in the Chronicle of Philanthropy, the NonProfit Times, and the International Journal of Nonprofit and Voluntary Sector Marketing. He coauthored, with Eugene R. Tempel, a chapter in the university-level textbook New Strategies for Educational Fundraising (2002). Matt holds a bachelor of journalism from the University of Missouri-Columbia School of Journalism and a master of public administration in nonprofit management from UMKC’s Bloch School.
Dwight F. Burlingame is associate executive director, director of academic programs, and chair of the philanthropic studies faculty at the Center on Philanthropy at Indiana University. He holds degrees from Moorhead State University, the University of Illinois, and Florida State University. He received the Certified Fund Raising Executive credential in 1989. He is currently coeditor of Nonprofit and Voluntary Sector Quarterly, the official journal of the Association for Research on Nonprofit Organizations and Voluntary Action. He is also coeditor of the Philanthropic and Nonprofit Studies book series for the Indiana University Press. Burlingame has authored and edited numerous books and articles on philanthropy and fundraising. He is the editor of the three-volume work Philanthropy in America: A Comprehensive Historical Encyclopedia (2004) and his book Corporate Philanthropy at the Crossroads (1996), coauthored and edited with Dennis Young, won the Skystone Ryan Prize for Research on Fundraising and Philanthropy from the Association of Fundraising Professionals.
Karin Cox is executive vice president, chief education and creative officer, and one of the founding principals of Hartsook Companies, one of the largest fundraising consulting firms in the world. Her unique experience spans the field of fundraising: in higher education, she was a key participant in a more than $100 million campaign; in health care, she was one of America’s top spokespeople in the field of child abuse prevention; in K-12 education, she played a key communications and public relations role; and in human services, she was executive director of a nonprofit that increased its staff, budget, and revenue tenfold. She has written numerous articles.
Richard B. Gunderman is professor of radiology, pediatrics, medical education, philosophy, liberal arts, and philanthropy at Indiana University. He received his bachelor of arts degree summa cum laude from Wabash College, his medical degree and doctoral degree in social thought from the University of Chicago, and his master’s degree in public health from Indiana University. Gunderman is a seven-time recipient of the Indiana University Trustees Teaching Award, and has also received the Wayne Booth Award and the Herman Frederic Lieber Memorial All-University Award for Teaching Excellence. He has authored more than 230 scholarly articles and has published six books, including We Make a Life by What We Give (2008).
Ted Hart is considered one of the foremost experts in ePhilan-thropy around the world, having founded P2PFundraising.org and the ePhilanthropy Foundation. He is sought after internationally as an inspirational and practical speaker and as a consultant on topics related to nonprofit strategy, both online and offline. He serves as CEO of Hart Philanthropic Services (http://tedhart.com), an international consultancy to nonprofits and nongovernmental organizations (NGOs). Hart is founder and chief executive of the international nonprofit environmental movement GreenNonprofits (http://greennonprofits.org), dedicated to helping nonprofits and NGOs around the world to learn how to become part of the much-needed global environmental solution. He has served as CEO of the University of Maryland Medical System Foundation, and before that as chief development officer for Johns Hopkins Bayview Medical Center. He has been certified as an advanced certified fund raising executive by the Association of Fundraising Professionals.
Robert F. Hartsook is chairman and CEO of Hartsook Companies, one of the largest fundraising consulting firms in the world, and founder of the Hartsook Institutes for Fundraising. He is author of six books, including How to Get Million Dollar Gifts and Have Your Donors Thank You (1999), Closing That Gift (2000), On the Money (2004), and Reality Fundraising (2005). As a fundraiser whose career spans thirty-nine years, and as a philanthropist who has given away millions of dollars, Hartsook offers a unique perspective on the field. He has received many honors, including the naming of Indiana University’s Robert F. Hartsook Chair in Fundraising, the first academic chair in fundraising in the world.
Debra J. Mesch is director of the Women’s Philanthropy Institute at the Center on Philanthropy at Indiana University. She is also professor of public and nonprofit management in the School of Public and Environmental Affairs at Indiana University-Purdue University Indianapolis, as well as professor of philanthropic studies at Indiana University. Mesch received both her master’s in business administration and her doctorate in organizational behavior and human resource management from Indiana University’s Kelley School of Business. Before coming to Indiana University, she taught at Simmons College and at Northeastern University’s College of Business Administration. Mesch’s recent research agenda has focused on issues of civic engagement, volunteer motivation and management, diversity, and race and gender issues in giving and volunteering.
Sarah K. Nathan is a doctoral candidate in philanthropic studies at Indiana University’s Center on Philanthropy. Her research focuses on service clubs, particularly women’s participation after 1987. She is a passionate and active member of Lions Clubs International and a graduate of Concordia College in Moorhead, Minnesota.
Andrea Pactor is associate director of the Women’s Philanthropy Institute at the Center on Philanthropy at Indiana University. She has managed two national symposia on women’s philanthropy for the Center and coordinates the Women’s Philanthropy Institute’s operations. Pactor has a bachelor’s degree in history and literature from American University, a master’s degree in museum practice from the University of Michigan, and a master’s degree in philanthropic studies from Indiana University.
Adrian Sargeant is Robert F. Hartsook Professor of Fundraising at the Center on Philanthropy at Indiana University. He is also professor of nonprofit marketing and fundraising at Bristol Business School in the United Kingdom, and adjunct professor of philanthropy at the Australian Centre for Philanthropy and Nonprofit Studies in Brisbane. He is author of Marketing Management for Nonprofit Organizations (1999) and Fundraising Management (2009), and an honorary fellow of the Institute of Fundraising and a fellow of the Chartered Institute of Marketing and the Institute of Direct Marketing.
Timothy L. Seiler is director of Public Service and The Fund Raising School at the Center on Philanthropy at Indiana University, and assistant professor of philanthropic studies in the graduate program. An alumnus of The Fund Raising School, he has been teaching for the School since 1986 and director since 1994. Formerly a vice president of the Indiana University Foundation, Seiler was a major gifts officer for university development and led the comprehensive fundraising program for the Indiana University-Purdue University Indianapolis campus. In his current role he teaches core courses and customized contract programs and regularly makes conference and seminar presentations nationally and internationally.
Jen Shang is a philanthropic psychologist and professor at the School of Public and Environmental Affairs and the Center on Philanthropy at Indiana University. She studies the psychological determinants for giving. Her research has shown that a better understanding of donor psychology increases donation revenue by 10 percent with minimal (or no) additional cost. Shang’s work has been published in the Economic Journal, Journal of Marketing Research, Organizational Behavior and Human Decision Processes, and Nonprofit Management and Leadership; funded by the National Science Foundation, the Aspen Institute, the Corporation for Public Broadcasting, the Association of Fundraising Professionals, and the Hewlett Foundation; and featured in the New York Times, the Chronicle of Philanthropy, Advancing Philanthropy, the Nonprofit Times, and Professional Fundraising.
Eugene R. Tempel is currently president of the Indiana University Foundation. He is a nationally recognized expert in the study and practice of philanthropy and nonprofit management. His career includes more than two decades in higher education administration, fundraising, and teaching. For eleven of those years he directed the Indiana University Center on Philanthropy. He is a member of several boards, past chair of the Indiana Commission on Community Service and Volunteerism, the first elected president of the Nonprofit Academic Centers Council, and a member of Independent Sector’s Expert Advisory Panel, which created national guidelines for nonprofit governance and ethical behavior. Tempel earned his bachelor’s degree from St. Benedict College and his master’s degree and doctorate in education from Indiana University. He also holds the Certified Fund Raising Executive professional designation.
Walter Wymer is professor of marketing at the University of Lethbridge. His academic work has helped develop the field of nonprofit marketing. He has authored approximately fifty scholarly articles and nine books, as well as given presentations at numerous academic conferences. He is editor of the Journal of Nonprofit & Public Sector Marketing and former president of the Atlantic Marketing Association. He is author of Nonprofit Marketing: Marketing Management for Charitable and Nongovernmental Organizations (2006), coeditor of The Routledge Companion to Nonprofit Marketing (2007), and author of Internet Marketing for Nonprofit Organizations (2010).
PART ONEIntroduction to Fundraising and Donor Behavior
CHAPTER ONEINTRODUCTION TO THE NONPROFIT SECTOR
By the end of this chapter you should be able to:
Describe the difference between the public, private, and nonprofit sectors
Understand different perspectives on the scope of the nonprofit sector
Describe a variety of ways of categorizing nonprofit organizations in the United States.
Locate information on the size and performance of different categories of nonprofit or cause.
Describe the key sources of nonprofit income.
This chapter begins our exploration of fundraising by studying the sector that is typically the focus of our activity, reviewing definitions of the nonprofit sector, distinguishing it from the public and private sectors, and examining its primary sources of income. We conclude by exploring how such knowledge of the sector can assist fundraisers in developing their practice.
A “Third” Sector
Over the years many authors have developed widely differing terminology for what is ostensibly the same cohort of organizations. Labels such as third sector, independent sector, not-for-profit sector, nonprofit sector, charitable sector, and voluntary sector are used with varying frequency in different countries. Unfortunately these labels are all too often used interchangeably and with rather different emphases of meaning, making it impossible to be sure with any degree of certainty that any two writers are addressing the same facet of society. Salamon and Anheier (1997, p. 3) argue that this complexity has developed because of the great range of organizations that are included under these umbrella headings, “from tiny soup kitchens to symphony orchestras, from garden clubs to environmental groups.”
Our first task in this text must therefore be to begin to navigate a way through this complexity. The logical starting place is the term third sector, which is now in common usage and reflects the distinctive role the sector has in society. The third sector is distinguished by being somehow different from either government or the private sector. All three sectors are important facets of human society and all three have a role to play in the satisfaction of human need.
The private sector or “market” caters to the majority of human needs—certainly in the developed world—matching the supply of producers with consumer demand for goods and services. This market ensures that people can obtain much of what they want and need from others at a reasonable price—or at least those who have money are facilitated in doing so! Economists argue that the market works because suppliers are prevented from charging excessive prices by the knowledge that if they do so, others will enter the market to cater to the need. Similarly, the market ensures that a multitude of needs are met by ensuring that a reasonable profit will be available to suppliers in each case. There is no philanthropy at work here. The market works purely on the notion of self-interest. As Adam Smith (1776, p. 119) noted, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their own advantages.”
There are instances, however, in which this market mechanism fails and governments may be compelled to intervene to ensure that certain minimum standards of consumption are met for all individuals in a given society. During and immediately after the Second World War many governments had to introduce food rationing to ensure that those on low incomes were not priced out of the market and starved as a consequence. Equally, in the United States the Medicaid scheme ensures that the poorest members of American society have access to health care, which they couldn’t otherwise afford. The term public sector
