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Resource Development Past questions and answers from Jimmie Alford from live broadcasts aired by the Learning Institute for Nonprofit Organizations collaboration:* For more questions and answers on the topic of Resource Development, please also visit the Alford Group Inc. web site. Other Q & A Topics:
1) How can I find more donors? Form a committee of the most active and enthusiastic donors to spearhead a recruitment and relationship building campaign. Encourage donors to cultivate their friends, family and co-workers and involve them in the mission of the organization. For major gifts, personal cultivation is a must. For annual funds, mail and/or telephone cultivation and solicitation can be used. 2) How can I find more corporate/foundation support? A well written, persuasive, and engaging case for support is key. Research foundations and corporate giving programs; cull those whose mission and giving history fits the purpose and needs of your organization. Expertly written grants are a must. 3) How can I increase the involvement of my Board in the fund raising process? Impress upon them their role as leaders as well as advisors. Encourage them to give at a level that is significant for them, thereby setting an example for others to follow. Work to cultivate enthusiasm among the Board by starting with the most enthusiastic and committed member and working outward to increase involvement and build consensus. 4) The Board expects me as staff to raise all the money for the organization. How do I convince them they need to get involved too? The Board must provide the organization with an enthusiastic base of support. If the Board itself is not financially supporting the organization, it will be difficult to convince others to become involved. Impress upon them the need for them to be leaders as well as advisors. Encourage them to set an example by committing themselves to the success of the organization, lending their time and giving at a level that is significant for them. The Board must also leverage their resources and contacts to cultivate new supporters and major donors for the organization. 5) How doe I approach a donor who has turned us down before? Approach them again in an information gathering capacity. Learn their concerns/criticisms/questions and seek to address them internally. Having sought their input you have begun to involve them in the organization once again. Once their concerns are addressed perhaps they can be cultivated as a future donor. 6) How soon should you make the 2nd ask? (After Shakespeare Video) A good rule of thumb is to wait three to six months after the initial gift is received. However, make sure to send the donor a prompt thank you note after the first gift and include them on appropriate mailing lists to receive general information from your organization. 7) The nonprofit organization I work in is supported by 88% property tax funds. If the taxpayer perceives that private $’s are funding more and more services – will they vote for an increase in the tax that supports the organization? The general public can often be against increases in taxes. As taxes and potential increases are discussed, often the comments can be volatile surrounding the issues. In the long run the organization will be better off by building, maintaining and cultivating its own donor base versus having support funneled through tax funds. By taking responsibility for the donors and the relationships, the organization will have more control over the support - and not be at the whim of politicians and the voting public. 8) Which is more effective - a staff member doing the fundraising efforts or a hired consultant, heavy hitter (name) to work part-time to raise x number of dollars? This is not necessarily an either/or situation. First and foremost - donor relationships are built around relationships. The most effective solicitations occur in peer to peer settings. Therefore - ideally your volunteers will be fund raising on your behalf. Fund raising efforts can involve both staff and outside consultants. The important consideration here is the capacity of the nonprofit organization to sustain itself in the long-term (after the consulting relationship). The respective roles/responsibilities assumed by client and consultant should take this into account. Counsel should be utilized for guidance on strategic issues such as the timing or volunteer structure of a campaign, while the implementation of these strategies, including actual solicitation, should normally fall to the organization’s staff or volunteer leadership. While it may sometimes be necessary for counsel to become involved in implementation tasks, these instances should be seen either as teaching vehicles or stop-gap measures, as they do little to enhance the ability of the organization to raise funds in the future. 9)What information can you ask from a donor in a survey to find out more about them and why they give, without being too intrusive? Please see the examples of surveys listed in the response to question #31 below 10) Community and personal involvement seems a great idea, but what direction do you take when your communities are in low-income areas and internal resources are already stretched to the max. Wouldn’t grants be the better route? A well functioning development department will have a diversified revenue mix - receiving income from annual giving, major gifts, endowment funds, planned giving, earned or generated fees, etc. There are many strategies for raising funds (direct mail, special events, personal solicitations, telephone solicitations grants, etc.) and an organization should consider several strategies for bringing in philanthropic dollars. It is never a good idea to rely too heavily on any one strategy. In low-income communities you should consider secondary and tertiary constituent bases - for example families of those you serve, employers that employ your clients, etc. 11) What should be the first steps in jump-starting a capital campaign? If you are contemplating a capital campaign, it is ALWAYS wise to undertake a feasibility study. Every organization has needs. A donor will not give to your organization just because you have needs. A feasibility study will determine the actual amount your organization CAN raise from your current donor pool. It will often identify areas of your organization that could be strengthened to make a capital campaign run more smoothly. 12) What should be the first steps in jump-starting a capital campaign? If you are contemplating a capital campaign, it is ALWAYS wise to undertake a feasibility study. Every organization has needs. A donor will not give to your organization just because you have needs. A feasibility study will determine the actual amount your organization CAN raise from your current donor pool. It will often identify areas of your organization that could be strengthened to make a capital campaign run more smoothly. 13) How do these direct solicitation techniques apply to small community libraries that receive both private donations and public support? Direct solicitation techniques apply the same way to all organizations. You must articulate your key messages to the prospect and define for them why their support is important. Define what programs are funded by public support and the impact their private donation will have on your library. 14) The 10% mentioned related to acquisition: Does that include money designated for media and publicity or is that separate as a budget item for solicitation and acquisition? We are not sure what you are asking here. We would recommend placing media and publicity expenses that are geared towards generating donors to be placed in the solicitation/acquisition budget. If on the other hand, the media and publicity is primarily geared towards reaching your constituents or service recipients, it would best be placed in another category such as marketing/communication. 15) How can the actual donor database program be utilized to maintain and enhance donor base? i.e., What kind of additional information do you suggest be part of the database? It is difficult to actually say because each donor software program has so many variables. Which ever software you are using should be able to manage all the informational and demographic data as well as gift tracking and notes on prospect meetings and activity. If you find that you have a need that your software does not fill - contact the software company and see if there is an upgrade or add-on to the program that will meet your needs. 16) When Greg Simoncini’s study of his donor base is complete can others receive a copy of the results? A study such as that at the Hadley School for the Blind is very involved and individualized to each organization. The information that is discussed with the volunteers and staff is confidential. While Hadley may be willing to share its results (you would need to contact Greg) - it would not be as useful to another organization. The purpose of the study is for Hadley to reconnect with its donor base. Your organization has a different base of supporters with different giving reasons and interests. 17) I work for a small nonprofit which is primarily dependent on one funding source, plus some additional grant support and donations. We are considering establishing a Friends group to broaden our database of support. Can you provide some guidance (and perhaps resources) to help us determine if this is a good direction – and if yes, how to move ahead with planning and implementation. It is an excellent idea that you are considering a new group of supporters. Expanding your base of support (donor acquisition) is one of the essential elements of the program you attended. Speak to your current donors and "test" the idea with them. Elicit feedback so you can shape the program with the current donors’ interest and comments in mind. 18) Could you talk a bit about some of the best vehicles for planned giving? The most common form of planned giving is through bequests / wills. Often the organization is not even aware they are in a donor’s estate plans. There is no "best" vehicle per se. The "best" vehicle is the type of instrument that meets the donor’s needs and is manageable in the organization’s operations. It is often best to talk with the donor, listen and understand their needs, and then present the vehicle that will best help them achieve their needs. 19) The population has increased considerably more than the percentage increase in charitable giving. It looks like there is really less money available than 10 years ago. Is that true? No. In fact, giving by individuals increased by $18.6 billion (adjusted for inflation) between 1986 and 1996. That’s an increase of over 18%. Similarly, total giving, which includes gifts from individuals, foundations, corporations, and bequests, grew 20% in that same ten year period. (Source: Giving USA 1997) 20) What suggestions do you have for developing a donor file? For example; History of Giving, Contract, Money given. What else? Many software programs have "pre-designed" data fields to capture donor information. It is essential to have current and correct data (name, address, phone, etc.). For tax reporting purposes it is also essential you maintain gift information such as date, amount, was a tax receipt needed, etc. It is also helpful to maintain information on volunteer history, interest in programs, designations that were given with gifts, etc. 21) What would you recommend to develop a donor base for a Private School? Do you expand from an elementary/middle school to opening a high school? -Lydia of San Antonio, TX Your initial prospect list should contain those that directly benefit from your services. In this case - the children would not be viable sources. Therefore, a secondary constituent base would be the parents, grandparents, alumni, etc. If the students have progressed from another school - they might be willing to share a database, etc. It is important to make your case for support "real" and tangible to those who are potential supporters - why should they support your school! 22) Can marketing efforts look too costly for a not-for-profit agency so that you may look like you don’t need moneys? There is a real tension here. On the one hand, nonprofits wish to reach as many potential donors as possible, and convey to them an image of serious professionalism that connotes a strong organization which will put their money to effective use. But marketing efforts which are too glitzy or too high profile may instead send the message that the organization either doesn’t need their donation, or worse, that their money will only be used for more glitzy marketing efforts. Fund raisers are accountable to both ethical standards and to public perceptions. The Philanthropic Advisory Service of the Council of Better Business Bureaus specifies 35% as a reasonable standard for fund raising costs. Nationwide, these costs average 17.5%. Nonprofits should keep these figures in mind. Productively managing public perception of an organization’s marketing efforts is largely a matter of judgment. Fund raisers should ask themselves if the cost/appearance of a marketing effort is consistent with:
23) Are donors today more concerned and interested in specific outcomes of programs they support, especially from a business perspective of investment and return, rather than traditional emotional satisfaction? People tend to be emotional givers who look for rational reasons to support their emotional responses. With that in mind, institutional needs should be stated in terms that demonstrate a capacity to provide solutions to particular problems that are important to the donors. From a business perspective - donors are looking for a return on investment. Remember though, that the actual decision maker is still a person who probably have some emotional pull towards the organization he/she funds. It is best to consider who the actual decision maker is in a solicitation and pre-determine what will be the factors that will impact a decision. 24) Should nonprofits think of community foundations as competitors OR collaborators? There is no right or wrong answer to this question. Several factors will impact the relationship an organization has with a community foundation, if one exists in the immediate area. 25) How can today’s captains of industry be motivated to take on a similar role? (A hundred years ago people like Andrew Mellon, JP Morgan, Andrew Carnegie and Henry Clay Frick gave substantial sums to the arts and other public works. They believed it was their responsibility to do so.) Donors give for many reasons - tax implications, feelings of responsibility, attachment to the organization, etc. Your organization will be best served by identifying your key messages and defining the benefit of supporting your programs and services to the potential donors. We live in a different society than years ago when the above mentioned persons were captains of industry. Finding out what motivates the captains of industry in your area / constituent reach will lead you to uncover what will motivate them to give. 26) In finding funding for newly started organization s concerning Health Education, what is the best funding source of donor? Government or Individual? Please give name of source that would benefit my situation. A well functioning development department will have a diversified revenue mix - receiving income from annual giving, major gifts, endowment funds, planned giving, earned or generated fees, etc. There are many strategies for raising funds (direct mail, special events, personal solicitations, telephone solicitations grants, etc.) and an organization should consider several strategies for bringing in philanthropic dollars. It is never a good idea to rely too heavily on any one strategy. If your organization was founded concerning Health Education - look to those who founded you. What was the compelling reason to why you were started? Share this reason with others who would be interested in supporting your organization. 27) What kinds of questions should be asked during the donor interview? Please review the discussions that took place during activity #2 during the program. 28) How does an organization deal with turning around apathy of upper management, dependence on single source of funds, and empower the board to take leadership of the organization and its advisory committee? It is unhealthy for an organization to be dependent on a single source of funds. This a statement that needs to be made to both your board and staff. Apathy of upper management could be due to many factors. Depending on the degree of impact (and what upper management means - is the organization 500 people or 5 people) this apathy has - you may wish to conduct a staff meeting to determine what may help alleviate the apathy. If apathy centers on fund raising - do all the upper management members understand the process of fund raising and why it is critical for your organization? Often times apathy can come from lack of understanding. Empowering the board will come with strong volunteer leadership and a clear understanding of the roles and responsibilities the organization has of the board members. 29) What should be the role of my Board in the process of Acquiring Donors? How do we motivate our Board to be more active as donors? What is the typical revenue mix for nonprofit organizations – What percent should come from philanthropy? The Board must provide the organization with an enthusiastic base of support. If the Board itself is not financially supporting the organization it will be difficult to convince others to become involved. Impress upon them the need for them to be leaders as well as advisors. Encourage them to set an example by committing themselves to the success of the organization, lending their time and giving at a level that is significant for them. The Board must also leverage their resources and contacts to cultivate new supporters and major donors for the organization. There is no "typical revenue mix" for all organizations. It is highly dependent on the programs, services, and mission you fulfill. In general - if your organization is more that 60% dependent on any one funding source (philanthropy, contracts, grants, events, etc.) you should determine where you can diversify sources. 30) Our church recently did a capital campaign. How would that be different for an arts organization? (This question was addressed on-air) In a church you are working with a defined constituency of who should support the effort - the members. Most likely the donors to the campaign were all members who were at (somewhat) the same level of information and commitment to the church. In an arts organization - the definition of the constituency base is much less defined. You will need to have a clear sense of who potential donors are and what will motivate them to give to your campaign. 31) Could you please put examples of donor surveys on the Internet? There is a danger in reviewing existing donor surveys (or any type of survey for that matter). Often organizations try to copy surveys that were prepared specifically for one organization and try to adopt them for use in their organization. What you end up with is answers to questions that may be of little use to your organization. When developing a survey of any type it's important to concentrate on identifying answers that you are uncertain about and then developing well-structured questions that will get you those answers. Don't bother asking questions that will get you answers that you already know or have little use for. Having said that, there are a few donor surveys on line that you might want to take a look at…. Lacrosse Community Foundation: http//www.laxcommfoundation.com/donor_survey.html Ohio Hooved Animal Humane Society: http//www.ohahs.org/surveyohahs.html Community Blood Bank of Erie County: http//www.eriebloodbank.org/survey1.html Glaucoma Research Foundation Volunteer Survey: http//www.glaucoma.org/volunteer_form.html UCLA ALUMNI/DONOR SURVEY: http//kurty.fim.ucla.edu/adsurvey/index.html 32) How do personal phone calls vary from telemarketing phone calls as technique? – I’m not sure I’d welcome either! Telemarketing calls are typically made by professional solicitors who are not known by the individuals they are calling. Ideally, a personal phone call would be made by an individual that the caller will know. In addition the personal telephone call is typically made to individuals that are familiar with your organization. The ideal personal telephone call would be made by a trusted individual to a person already familiar with the organization and the caller. The call would be made to solicit financial support and as a means of communicating the activities of the organization. 33) Please post a copy of your donor survey on the Internet. What is the purpose of events in an organization? What can free vs. admission events do for organizations? Is there a way to balance them? Please see response to question #31 above in response to the donor survey. Certainly events can serve a number of purposes and it is important for the organization to determine this before hosting one. Events can serve as a vehicle to increase an organizations visibility in the community. It can serve as an opportunity to identify those in the community that have an interest in your organization. It can be used as a means of raising funds (or a combination of these purposes). Or perhaps simply for the purpose of building relationships with existing members and supporters. Having a free event might increase your attendance, but as a means of balancing increased exposure with fund raising, perhaps a donor or sponsor could be identified to fund the community based event that is free. 34) What is happening with donation to nonprofits in the area of tax deductibility? Do you foresee change in any tax reform movement? How about property tax exemption? As government faces increasing demands on limited resources you can count on increased attention being paid to the tax treatment of nonprofit organizations. When government turns its attention to nonprofit organizations it seldom focuses on the vast benefits provided by nonprofits. Rather, it tends to focus on the real and perceived abuses as well as the loss of potential revenue. Discussions on tax reform in the sector are not new, nor will they disappear. It's all the more reason for nonprofit organizations to work together towards combating major proposals that would substantially change the tax treatment of nonprofit organizations. Nonprofit World, the Journal of the Society for Nonprofit Organization (1-800-424-7367) regularly reports on proposed state and federal legislation impacting nonprofit organizations in its "First Alert" column. All is not bad on the legislative front. There is renewed interest in volunteerism and philanthropy. The Charitable Giving Relief Act (H.R. 2499) which was recently introduced would permit non itemizing taxpayers, whose cumulative annual charitable contributions exceed $500, to deduct 50% of donations above that amount. Independent Sector estimates that the bill would increase giving to charities by $16.5 billion over the next five years. 35) Can you provide us with a couple of suggestions for engaging Board members in Resource Development and Fundraising? The Board must provide the organization with an enthusiastic base of support. If the Board itself is not financially supporting the organization it will be difficult to convince others to become involved. Impress upon them the need for them to be leaders as well as advisors. Encourage them to set an example by committing themselves to the success of the organization, lending their time and giving at a level that is significant for them. The Board must also leverage their resources and contacts to cultivate new supporters and major donors for the organization. 36) Our board members are asked to give an annual gift of $100. Many could give larger gifts. How could we change our approach to encourage larger gifts? The first step is to assess your board’s giving capacity. If some members could give more, then you need to determine their level of gift potential. The next step is simply to personally ask for the amount you desire. Often Board members are not individually asked, and not asked for a specific amount. Again, impress upon your board members the importance of showing leadership in their giving. This sends an important public message. After all, if an organization’s trustees don’t give at capacity, why should anyone else feel compelled to do so? Another strategy would be to single out a few board members whom you know will be enthusiastic in their giving. Ask them to make significant gifts and then to solicit their colleagues on the board for similar amounts. This sort of peer pressure can be very effective. 37) My question goes to the issue of liability (insurance) for visitors to remote animal sanctuaries/habitats as is the I.C.F. Thank you. We recommend you contact your insurance carrier or the I.C.F. directly on this question 38) If face-to face solicitation of support from a potential donor is not feasible due to interception by intermediary staff, how can I ensure that my organization’s letter of solicitation gets to the philanthropist instead of stopping with one of the staff members? Work with the Board or other organizational volunteers to determine any networks that may exist to access the donor. Often times a phone call "to the person at the top" will accomplish just as much as a letter or proposal. If you can not uncover a link to the prospect (even a remote, but workable one) a secondary effort would center on building relationships with those close to the prospect. Get to know the intermediary staff that assist in making recommendations and decisions with the prospect. If they know you and about your organizations, they are more likely to pass on the request, perhaps even endorsing it to the primary prospect. 39) If, as suggested in "Scarce Funds, Tight Times: Nonprofits Need New Skills", one undertakes an entrepreneurial endeavor, such as the sale of something, how will that affect an organization’s nonprofit status? The issue of unrelated/related business income tax is quite complex. First and foremost we recommend you consult your tax advisor or a specialists in the area of exemption. A general rule of thumb related to earned income is the direct link to your mission. If an organization for developmentally disabled adults sells items made by the clients in a work training setting, they can make a direct link to the mission. The issues of addressing unrelated income-generating activity is often more difficult to define. Careful consideration should be given to the direct link and impact of the activity to your mission. *Responses were transcribed by Prof. Andrew Lewis from the live broadcasts produced by the Learning Institute for Nonprofit Organizations collaboration. |
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