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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
The real-world guide to successfully funding your nonprofit program The Complete Guide to Fundraising Management is the comprehensive handbook for successful fundraising, with a practical focus that applies across the nonprofit sector. With a focus on planning, self-assessment, continual improvement, and high-payoff strategies, this book provides more than just ideas--it shows you the concrete, real-world actions that make it all happen, and gives you the tools you need to bring these concepts to life. This new fourth edition features the latest information about social media campaigning, internet fundraising, crowdfunding, and more. Timelines, checklists, and forms help you streamline management tasks to focus on effective development, and updated sample reports and budget information help you begin implementing these approaches quickly. The nonprofit world is becoming increasingly competitive in terms of funding, and fundraisers are being asked to perform miracles more than ever before. This book offers a time-tested framework for fundraising success, with step-by-step guidance through the entire process from prospect to program. * Understand and apply the major principles and best practices of fundraising * Manage information, resources, development, and volunteers * Adopt new approaches to relationship-building and prospect identification * Write grants and fundraising materials that make a rock-solid case for support There is never enough funding to go around. To survive and thrive, nonprofits must revitalize interest and generate more support. Gone are the days of door-knocking and bake sales; strategy is critical, and execution must be top-notch. The Complete Guide to Fundraising Management shows you the real-world strategies that get your programs funded.
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Contents
Cover
The AFP Fund Development Series
Title Page
Copyright
Dedication
Foreword to the Fourth Edition
Foreword to the Third Edition
Preface
A Note about the Website
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
Setting Fundraising Goals
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
File Systems and Procedures
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
Friend-Raising Activities
Moves Management—Cultivating Real Relationships
Donor Acknowledgment
Four Parts of an Acknowledgment Program
Chapter 8: Major Gift Fundraising
When Major Gift Strategies Are Appropriate
Preparing for a Major Gift Initiative
The Solicitation Interview (How to Ask for a Major Gift)
After the Solicitation
Solicitation Training and Role-Playing
Chapter 9: Direct Response: Mail and Online
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
Social Media and Text-to-Give
Newsletters—Print and Electronic—as Part of the Direct Response Program
Websites
Chapter 10: Telemarketing as a Relationship Building Tool
The Law and Telephone Solicitation
Volunteer Phone-a-Thon
Volunteer Phone-a-Thon Overview
Volunteer Recruitment
Orientation
Managing the Process
Phone and Mail Campaign Coordination
Ad-Hoc Volunteer Calls
Professional Telephone Solicitation Campaigns
Chapter 11: Special Event Fundraising, Cause-Related Marketing, and Crowdfunding
Special Events: Choosing the Event
Implementing the Event
Cause-Related Marketing
Crowdfunding
Chapter 12: Grants
What Is a Grant?
Government Grants and Contracts
Foundations
Foundation Research
Project Development
The Application
Acknowledgment and Reporting Requirements
Donor-Advised Funds
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: Successful Fundraising in Large and Small Nonprofits
What Every Fundraiser Should Monitor
Decision Making
Small Shop Fundraising
The Job—and the Joy—of Fundraising
About the Authors
Acknowledgments
Index
End User License Agreement
List of Illustrations
Exhibit 2.1
Exhibit 3.1
Exhibit 3.2
Exhibit 3.3
Exhibit 3.4
Exhibit 3.5
Exhibit 3.6
Exhibit 3.7
Exhibit 3.8
Exhibit 3.9
Exhibit 3.10
Exhibit 3.11
Exhibit 3.12
Exhibit 5.1
Exhibit 5.2
Exhibit 5.3
Exhibit 5.4
Exhibit 5.5
Exhibit 6.1
Exhibit 6.2
Exhibit 6.3
Exhibit 6.4
Exhibit 7.1
Exhibit 7.2
Exhibit 7.3
Exhibit 8.1
Exhibit 8.2
Exhibit 8.3
Exhibit 8.4
Exhibit 8.5A
Exhibit 8.5B
Exhibit 8.6
Exhibit 8.7
Exhibit 9.1
Exhibit 9.2
Exhibit 9.3
Exhibit 9.4
Exhibit 9.5
Exhibit 9.6
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 11.1
Exhibit 13.1
Exhibit 13.2
Exhibit 13.3
Exhibit 13.4
Exhibit 13.5
Exhibit 13.6
Exhibit 14.1
Exhibit 14.6
Exhibit 14.7
Exhibit 14.8
Exhibit 14.9
Exhibit 14.10
Exhibit 14.11
Exhibit 15.1
Exhibit 15.2
Exhibit 15.3
Exhibit 15.4
Exhibit 15.5
Exhibit 15.6
Exhibit 16.1
Exhibit 16.2
Exhibit 16.3
Guide
Cover
Table of Contents
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The AFP Fund Development Series
The AFP Fund Development Series provides fundraising 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, philanthropy, and related subjects. The Association of Fundraising Professionals (AFP) and John Wiley & Sons, Inc., 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.
The Association of Fundraising Professionals and the Center for Fundraising Innovation
The Association of Fundraising Professionals (AFP) represents over 33,000 members in more than 230 chapters worldwide, 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.
AFP's Center for Fundraising Innovation (CFI) develops high quality, innovative education and information programs and resources that support fundraising professionals at every stage of their careers and help prepare them for the challenges of raising money on behalf of important causes.
CFI Staff
Jeffrey A. Rupp, Vice President
Susan Drake Swift, Director of Content Strategy
Vanessa Mayo, Conference and Meetings Manager
Chris Griffin, Product Development Coordinator
John Hendrickson, CFI Contractor
Cathy Williams, CFI Contractor
2016 AFP Publishing Advisory Committee
Daryl Upsall, FInstF, Vice Chair of AFP's Center for Fundraising Innovation Division
Stephanie Cory, CAP, CFRE, Co-Chair of the Publishing Advisory Committee
Ben Mohler, ACFRE, Co-Chair of the Publishing Advisory Committee
Nina Berkheiser, CFRE
Thomas Campbell, ACFRE
D.C. Dreger, ACFRE
Patricia Egan, CFRE
Patricia Eldred, CFRE
Steven Miller, CFRE
Sophie Penney, Ph.D.
Katrina VanHuss
The Complete Guide to Fundraising Management
A Decision Model for Optimizing and Implementing Analytics
Fourth Edition
Stanley Weinstein, ACFRE, EMBA
Pamela Barden, DBA, CFRE
Cover image: © iStock.com/VolokhatiukCover design: Wiley
Copyright © 2017 by John Wiley and Sons, Inc. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New JerseyPublished simultaneously in Canada.
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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with the respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor the author shall be liable for damages arising herefrom.
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Library of Congress Cataloging-in-Publication Data:
Names: Weinstein, Stanley, 1943- author. | Barden, Pamela, author.
Title: The complete guide to fundraising management / Stanley Weinstein, Pamela Barden.
Description: Fourth edition. | Hoboken : Wiley, 2017. | Revised edition of The complete guide to fundraising management, c2009. | Includes bibliographical references and index.
Identifiers: LCCN 2016051239| ISBN 9781119289326 (hardback) | ISBN 9781119289364 (epub) | ISBN 9781119289357 (ePDF)
Subjects: LCSH: Fund raising--United States—Management. | Nonprofit organizations—United States—Finance—Management.
Classification: LCC HV41.9.U5 W46 2017 | DDC 658.15/224—dc23 LC record available at https://lccn.loc.gov/2016051239
This book is dedicated to the board members, volunteers, and staff members who facilitate the fundraising for an organization. It is said that they have earned a special place in Heaven—next to the martyrs.
Foreword to the Fourth Edition
I will always remember the first time I met Pamela Barden, because she made it clear to me that I had failed to live up to her expectations.
In those days, I lived and worked from my leafy retreat in north-central Wisconsin, serving clients nationally as a freelance direct mail copywriter and consultant. Pamela had just taken a fundraising leadership position at a suburban Chicago-based nonprofit, which happened to be my client. She thought it would be wise to meet this stranger from the north woods who created direct mail campaigns for her organization, so we arranged to meet at a conference room at Chicago's O'Hare International Airport. It was there that I let Pamela down.
She expected a rough-hewn lumberjack in sturdy boots, worn jeans, and a plaid flannel shirt. What she got was an ordinary late-1980s business guy in a dark suit, starched shirt, properly knotted tie, and polished shoes. Pamela has never let me forget the disorientation I caused her by not being the rustic writer she expected.
Well, I have expectations, too. When Pamela told me she had written a book on fundraising and that she wanted me to write the foreword, I was humbled and honored by the opportunity. I immediately said yes—and then I quickly imagined how good of a book it must be if Pamela wrote it.
I am pleased to say Pamela did not let me down, not that I ever imagined she would. The fourth edition of The Complete Guide to Fundraising Management meets and exceeds every expectation for what such a book should be and achieve. I'm not the least bit surprised. Nor am I disoriented!
If I know one thing about Pamela after more than 25 years of professional collaboration and personal friendship, it is that she knows her stuff—not as an ivory tower theoretician but as an actual, seasoned, hands-on fundraising authority.
Yes, Pamela has earned a doctorate. But her advanced degree and academic experience came after years as a fundraising practitioner at several nonprofit organizations and as an ad agency executive and consultant. This makes The Complete Guide exceptionally useful to anyone who needs a practical understanding of the organizational structures and processes necessary for nurturing relationships and securing current, planned, and major gifts through the mail, online, one-on-one, by phone, and through special events.
Not only has Pamela done all of the above, she knows precisely where a fundraiser must first focus his or her energies: squarely on the donor. This perspective permeates The Complete Guide from the very first chapter. Effective fundraising, after all, is about people—about treating them with utmost respect and enabling them to fulfill their need for meaning and significance by connecting them with something larger than themselves.
I saw Pamela's donors-first ethic in a most compelling way not long after my expectation-shattering meeting with her at Chicago O'Hare. I was in her office discussing a recent appeal that had irritated a few donors who wrote to complain. To my surprise (because I didn't know Pamela very well back then), she told me she called every one of those disgruntled donors to acknowledge their letters and listen to their concerns. She then wrote detailed letters to each one to thank them for writing and to assure them that their opinions mattered.
Many wrote back in astonishment that a nonprofit actually cared about them and listened to them. Quite a few included a gift far larger than was requested in the original appeal.
This is one of many reasons I admire Pamela Barden. It was a great example of “friend-raising,” which Pamela has done with professionalism and excellence throughout her career and that she will teach you how to do in this invaluable guide.
Have I set high expectations? Yes, and I am confident Pamela Barden and the fourth edition of The Complete Guide to Fundraising Management will exceed them.
Tim KerstenChief Executive OfficerRobbinsKersten DirectDallas, Texas
Foreword to the Third Edition
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 whether 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 20 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 reread 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 principles 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. FlessnerFounding PrincipalBentz 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, Fourth Edition, functions like a GPS, helping you move toward fundraising success in a highly competitive philanthropic environment. Completely updated to include both online and offline strategies for increasing fundraising success, this new edition includes practical guidance based on our decades of experience that can 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 make choices so you can raise funds using the most cost-effective fundraising strategies.
The Complete Guide
will teach you how to put together a comprehensive fundraising plan 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, with 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.
Possibly more than ever before, fundraisers are faced with numerous challenges confronting today's nonprofit organization—reductions in government funding, declining giving from United Way campaigns, greater restrictions on corporate and foundation grants, older funders with changing priorities or a resistance to thinking about legacy giving, and less loyalty among donors of all ages. To make matters even worse, all of this is occurring at a time when the demand for services is increasing.
Yet, there are also more fundraising methodologies to choose from and growing donor expectations. Combined, this requires a strategic yet nimble approach when presented with opportunities that often arise with little advance notice. Organizations 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 offer; 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, Fourth Edition, helps you answer these questions. This book will 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, Fourth Edition, was updated and 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/fundraisingmanagement4. On this website, you will find all the exhibits from the book, many in a format you can download and customize for your own organizational needs.
Stanley Weinstein, ACFRE, Albuquerque, NMPamela Barden, CFRE, Los Angeles, CA
Chapter 1Five 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 resonates with 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 or causes they believe in.
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, RSV)
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: Suppose 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 donations, 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 is no one else 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, often employ modeling to help determine a person's potential to give, 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 no 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. Research completed in 2015 found that 88 percent of an organization's total giving comes from just 12 percent of donors. In many capital campaigns and mature fundraising programs, the top 10 percent 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.”
Fundraising does not exist 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. By having a balanced fundraising program, an organization is better able to weather periods of economic instability or internal situations that can impact fundraising. In conclusion, a comprehensive approach is respectful of both major donors and modest givers.
Chapter 2Your 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 work 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, mosques, and other houses of worship 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 approximately 1,550,000 nonprofit institutions. Of these, more than 1,076,000 are classified as tax-exempt charities by the Internal Revenue Service (IRS) under Internal Revenue Code section 501(c)(3).
The global nonprofit sector has the 16th-largest economy in the world.
Nonprofit organizations in the United States employ more than 10 percent of the national workforce.
The contribution of the nonprofit sector to the U.S. economy is estimated at $905.9 billion. This represents 5.4 percent of the country's gross domestic product (GDP).
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 more than $358 billion.
Approximately 80 percent of all charitable donations came from
individuals
, including 72 percent from current contributions and nearly 9 percent from bequests. An additional 15 percent of donations came from foundations (a portion of which are individual or family foundations); 5 percent was donated by corporations.
Nonprofit organizations nationwide engage more than 62 million volunteers, representing 65 percent of all American households. Eighty-three percent of Americans donate money to charity each year.
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. At present, one in three Americans are 50 or older; by 2030, one out of every five people in the United States will be 65 years or older. This compares to just 5.4 percent of the population a century earlier. As baby boomers retire, they will have more time to volunteer. Volunteers are twice as likely to make gifts to charity as 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 $6 trillion to the next generation in the next 30 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
and more critical of overhead spending. They want charities to prove that the programs they help support are effective in changing lives and that they are doing so as cost-effectively as possible.
Donors are less loyal to a particular charity. Currently, only 46 percent of donors in one year give in the next year; among first-time donors, this rate is only 25 percent.
Information technology continues to alter everyone's life. To flourish, nonprofit organizations must be more nimble, having an active communications presence online and offline, as well as optimizing their electronic communication for a variety of platforms.
The nonprofit sector continues to receive 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, external forces such as managed care and stricter educational guidelines, 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 ensure 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. They continually look for ways to increase their base of supporters, understanding donor attrition and its detrimental impact on future fundraising.
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 21st century, much of the focus has been on paradigm shifts. For a true paradigm shift—a fundamental change in approach—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):
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.
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
s
trengths and
w
eaknesses and external
o
pportunities and
t
hreats is called
SWOT analysis
.
Define your organization's mission and vision.
A mission statement answers the question, “Why do we exist?” A vision statement answers the question, “What will be different long-term when we fulfill our mission?” Neither statement is static; both should be reaffirmed or revised in response to megatrends and environmental change. The mission statement should succinctly answer four key questions: (1) What is the organization—what is its business? (2) What does it do? (3) Whom does it serve? (4) What is the geographic range of its work? The vision statement should, in a single sentence, define what success will look like for the organization.
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.
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; 10 percent growth in the number of children served in each of the following three years.”)
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.
Evaluate performance.
Track expected results. Review the situation. Look for negative variance, both short term and over a period of three to five years. 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.
Exhibit 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 that are achieving results and operating well-run fundraising programs.
As you think about strengthening your fundraising program, you can take the following steps to ensure that your organization is worthy of support.
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 these questions: 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, Stanley Weinstein 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.
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 the following: 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.
Strengthen the board.
Enhance the nominating process. Recruit people of affluence and influence. Have a clear board member job description and term limits. 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. Provide an agenda and any background material to the members in advance of the meeting so they can arrive prepared. 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 for additional training and to strengthen the group dynamics. Provide ample time for social activities.
Remain tuned into community perceptions.
Meet with constituents and stakeholders in the organization. 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.
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.
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 to recruit and train 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.
An analysis of your organization's strength and capability is a critical step for becoming or remaining effective in the 21st century.
Chapter 3Managing 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: (1) the case for support and the need for contributed income; (2) donor history; (3) fundraising strategies; and (4) 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 or mission accomplishments—rather than from the point of view of institutional needs?
How much contributed income is needed to sustain the annual operations of the organization?
How much contributed income is needed for the organization's high-priority special projects?
Has the organization established an endowment goal? What is it? How does the endowment goal relate to the organization's programs and aspirations?
Has the organization established a capital fund drive goal? What is it? If the organization is not planning a capital fund drive, has it identified high-priority capital projects that might attract major gifts without a formal capital campaign?
When gathering facts related to donor history, development professionals are often at the mercy of the information system. Some organizations maintain accurate and useful donor records. Some organizations are remiss in this area. And many emerging or grassroots organizations have yet to put in place any fundraising information system. This subject is covered in greater depth in Chapter 5; however, those responsible for fundraising—no matter what the state of the information system—must gather the most accurate information available concerning donor history and market forces. Here is a brief list of questions that form the basis of the early analysis:
How many donors in total contributed in each of the previous three years? (Include individuals, corporations, foundations, and any other donor categories you track.)
What was the total amount contributed in each of the previous three years?
How many individual donors contributed?
What was the total contributed by individuals in each of the previous three years?
How many individual donors have contributed the last two or the last three years, compared to those that only gave one of the last three years?
How many corporations and businesses contributed in each of the previous three years? What was the total contributed by corporations and businesses?
How many foundations made grants to the organization in each of the previous three years? What was the total of all foundation grants?
From which, if any, government agencies did the organization receive grants or contracts in each of the previous three years? What was the total amount of the government grants and contracts each year?
