EFFECTIVE FUNDRAISING MANAGEMENT

Bonnie Osinski

1

Agenda2

BASIC ASSUMPTIONS

THE PLAN

TYPES OF SUPPORT

SOURCES

FUNDRAISING VEHICLES

WRAP-UP DISCUSSION

Basic Assumptions 3

The ultimate goal of fundraising is to strengthen the organization so that it can be as effective as possible in fulfilling it’s mission.

Can you raise money and not strengthen your ability to fulfill your mission?

Effective fundraising requires building and maintaining trustworthy relationships with all constituents.

Basic Assumptions4

CIRCLES OF INFLUENCE

The stronger the core; the more effective the organizations All fundraising activities should be managed so they

strengthen the core The stronger the core; the stronger the message you can send The further away from the core; the more expensive it is to

fundraise Public relations is directed at the outer core and should not be

factored into direct fundraising expenses Without good public relations and overall agency

communications; the fundraiser has to spend more time working in the outer, more expensive rings

Basic Assumptions5

FIRST CLARIFY THE ORGANIZATION’S MISSIONThe stronger the connection to the mission; the stronger the

supporters

The value of fundraising is derived from the organization’s use of the money

The mission should never be subordinated to fundraising

CONNECTING THE MISSION TO FUNDRAISINGFund development is creating a constituency that supports the

organization because it deserves it

When an organization merits philanthropic support, fundraising becomes the process of facilitating transactions

The Board of Directors 6

You will never reach your organization's full fundraising potential without a board that supports and participates in fundraising

All members give to the best of their ability and all support fundraising in some way

Leadership is sincerely and actively working to add board members who can support the organization’s fundraising.

The board and the chief development officer work together as a team

A CEO who discourages a strong board will hold the organization back (usually a founder)

The Plan7

All the tools have to come together into an integrated, coherent plan

Fundraising cost/benefit analysis Budget, staffing, and organizational culture Do we have the necessary skills and knowledge in-house? Staff or consultants

Develop a calendar of activities for the year, keeping in mind:

cash flow

staffing

the organization’s programmatic and administrative planning

Plans and budgets serve as important political documents: use them to get leadership and staff buy-in.

Reliability/Autonomy8

RELIABILITY

HIGH MEDIUM LOW

Autonom

y

HIGH

Earned income; Endowments; Memberships; Small/medium individual donors

Fees for services; Event ticket purchasers

Foundation operating grants;

MEDIUM

Major individual contributions; corporate charitable contributions;

Corporate sponsorships

LOW

Ongoing government contracts; Third party reimbursements;

Government project grants; Foundation project grants;

Types Of Support9

RESTRICTEDDonor specifies the use

If you accept the money, you are legally obligated to comply

Make sure the specified use is in line with your mission and strategic plan

Best to turn it down if it is not a fit

Only a donor can legally restrict contributed funds

Types Of Support10

UNRESTRICTED The most desirable type of support Enables you to be flexible and responsive to changing conditions

and client needs Your best bulwark against a turbulent, unpredictable environment Virtually impossible to run a strong and effective organization

without a high level of unrestricted support

OPERATING Generally a sub-set of unrestricted Can also be restricted funds for specific or one-time operating costs

e.g. Computerization, financial systems, fundraising start-up costs

Types Of Support11

CAPITAL Construction, purchase of facility or renovation Generally a campaign with specified goals and time limits

ENDOWMENT Best way to insure long-term financial health Should be big enough to generate significant annual income Can it be too big? Less appealing campaign than bricks and mortar Can be built with planned giving income, much of which cannot be

projected in annual operating budgetsComposed of donor restricted and quasi-restricted funds

Sources12

GOVERNMENT Contracts and grants Really big money; often renewable over the long run Political realities make it less stable that it appears Lots of restrictions, paperwork, reporting Can suppresses the impetus to build an effective constituency You can’t use government operating funds for fundraising

THE PROCESS: Following detailed instructions in lengthy and complex RFP’s Funding agency tells you what they want Proposals often voluminous Complex budgeting process Reporting and evaluation is different for each grant

Sources13

PRIVATE FOUNDATIONS Mostly restricted grants in their area of interest Not meant to be an ongoing source of support Grants much smaller than government; paperwork less onerous Lack of contacts should not discourage application; valuable relationships

can build once a grant is awarded Potential for flexibility in project design within guidelines

THE PROCESS Creativity to develop & implement projects that meet your needs and

funder’s priorities Building relationships with program officers over time Plan to leverage time limited grants for future benefit – capacity building;

success story for other donors; learning that will inform programs Research to find a match

Sources14

CORPORATIONS Multiple entry points and interests possible within the same corporation Corporate self-interest is key Source of financial, in-kind, sponsorship, matching and volunteer

support Partnership and joint marketing possibilities

Renting your good name; Compatibility; Seeking connections with your constituency

Excellent source of board members

THE PROCESS Can be very similar to foundation grantsmanship The more contacts, the better –board networks important Research is different from foundation research Developing joint marketing and sponsorships can involve complex

negotiations Good source of corporate support

Sources15

INDIVIDUALS Source of more than 80% of all philanthropic funds Your best bet for long-term strength and survival; reliable insurance

against fluctuations other funding sources Investors; advocates for your cause – your power base Best source of ongoing, unrestricted funds Only source of planned gifts; best way to build endowment Most cost effective at major gift levels

THE PROCESS Research essential Requires ongoing maintenance of relationships and stewardship Best returns come after years of cultivation. Direct mail for general donors – entry way for major donors –

expensive start-up On-line email and social networking present cost-effective options Events can bring in some new donors; reinforce & cultivate others

Tools16

SPECIAL EVENTS Costly form of fundraising Staff time required is often underestimated Can be good for building visibility Means for volunteer support and involvement; opportunity for donor

cultivation Can bring in some new donors Can build a constituency that is loyal to the event, rather than the

organization or it’s mission

THE PROCESS Determine level of substantial support from board members and

current supporters- more than 50% of gross revenue required Scale event to organization’s capacity – realistic projections Consultants well worth it for large events; free staff to focus on

donor cultivation and solicitation

Fundraising Vehicles17

DIRECT MAIL Can be a very reliable support of annual cash income A successful mass mail program usually loses money for the first

three years; Pays off when a critical mass of repeat donors is reached Becoming more costly as postage and other costs increase Entry point for major and planned gift donors Not all organizations or causes can be successful in the mail Consider starting an in-house mailing program with contacts

generated by board staff, and other supporters

THE PROCESS Get professional help to develop competitive text and graphics –

even for in-house or donor renewal mailings Don’t even think about donor acquisition – renting lists – without

hiring a professional direct mail consultant You must mail several times a year to be successful

Fundraising Vehicles18

MAJOR GIFTS PROGRAMMost effective way to raise the largest gifts and the lowest costRequires time and effort to cultivate and upgrade donorsResearch and moves-management essentialVery strong advocates and solicitorsBoard must be intensely involvedBest indicator of long-term organizational strength

THE PROCESS Regularly mine general donor lists from direct mail, events, on-line, etc.

for major gift prospects Research is important Contacts from board members and other major donors Continuous cultivation and stewardship required Determine and respond to donor’s interest in becoming more involved

Fundraising Vehicles19

PLANNED GIVING The desired, ultimate result of individual giving programs Not limited to major donors Gifts made from assets, not income Require long-term planning on the part of the donor, preferably with

the help of a financial planner or attorney Bequests are the most common source; not the most beneficial for

donors of substantial means The ultimate payoff does not correspond to the costs incurred in a

given year

THE PROCESS Any organization can remind all donors about making bequests in

newsletters, web sites, targeted mailings, etc. Maintain awareness of the possibility of planned gifts as part of the

major donor process Stay on top of general tax law as it applies to philanthropy Investing in outside expertise yields the best results

Fundraising Vehicles20

CAPITAL/ENDOWMENT CAMPAIGNS Time-limited campaigns to reach specified goals Requires existing supporters to make significantly larger gifts Organization must be able to maintain annual giving income Reaching the goal requires that at least 10% of income comes from one

or two donors Depends on an existing major donor base Bricks and mortar tends to be more popular than endowment

THE PROCESS Outside counsel is highly recommended; feasibility study can make a

difference Campaign chair and committees essential Start bringing in lead gifts as soon as possible Silent phase until lead gifts and half the income is committed

Fundraising Vehicles21

INTERNET Growing, source of general gifts Good web site can be a source of on-line contributions New prospects contacted by means of direct mail and other

outreach check websites before making gift commitments Effective ongoing donor cultivation – newsletters, event

announcements, press releases, photos, etc. Social media is viewed as an effective means of donor acquisition;

especially popular vehicle for tech savvy board members, volunteers and other supporters to reach out

Does not require the level of up-front investment involved in direct mail

Studies show combination of direct mail & internet is especially effective

THE PROCESS Get on the learning curve and move up fast – periodicals,

newsletters, training, consulting Create and effective web site - expensive

Let’s Get Real22

What will work best for my organization?

Can I identify immediate next steps?

What barriers do I face?

What changes can I make?

Where to Get More Information

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Other training sessions Books, articles, electronic sources Consulting services, other sources Keep up with the field