Developing an Annual Fundraising Program

1
Developing an Annual Fundraising Program

• Anne C. White, Ph.D., CFRE

2
Where the Money Is........

• Giving USA Americans donated 248.52 billion to
  charitable organizations an increase of 5 per
  cent over the previous year, and a new record for
  the United States.
• Corporations 12.00 billion 4.8
• Foundations 28.80 billion 11.6
• Individuals 187.92
  billion 75.6
• Bequests 19.80 billion 8.0
• Individual giving was 83.6 or 207.72 billion

3
Developing An Annual Plan for Sustainability

• Definition Annual Giving is the primary
  fundraising method used to broaden support,
  upgrade levels and provide operating support for
  ongoing programs. Annual giving is the 365-day
  development program that is the central point for
  most first-time donor gifts.
• Within the integrated development process, annual
  giving is an essential first stage and precedes
  all other stages

4
The process of annual fund development includes

• Developing the case for support
• Prospect Research
• Cultivation/constituency development
• Solicitation strategies
• Acknowledgment and Recognition
• Gifts Management

5
What are the key components of the written,
operational development plan?

• Statement of fundraising purpose
• Strategic and financial goals
• Budgeting how are you going to pay for the
  process
• Cultivation Strategies
• Solicitation strategies for targeted
  constituencies
• Time frames and responsibilities
• Indicators of success
• Processes to monitor progress and evaluate
  performance

6
What is the purpose of annual giving?

• Provide income for unrestricted and restricted
  programs
• Renew donor support
• Cultivate donors to increase giving levels
• Solicit new donors to broaden the base of support
• Identify leadership
• Identify major gift prospects
• Build donor loyalty

7
What are the components of an annual fund
strategy

• Individuals first-time and renewal
• Corporations can be philanthropic support or
  marketing funds
• Government proposals for specific established
  program
• Foundations proposals for new or existing
  programs, capacity building
• Special Events raises funds and brings new
  friends
• Major Gifts program support, building, special
  projects,

8
. Important principles when soliciting
individuals

• An individual is unlikely to make a significant
  gift to an organization that is new to him or her
• The demographic profile of your current donors is
  a good indicator of the profile you will find
  successful in a prospect list for your campaign
• Time (generally three to five years at a
  minimum), energy, work and budgets are all
  required to build a broad base of support

9
How does an Individual decide whether or not to
contribute

• To diminish negative feelings (guilt, fear,
  anger)
• To gain immortality
• To express deep emotion (grief memorial or joy
  commemorative)
• To give something back
• To help or care for others
• To respond to the person asking
• To gain tax and/or financial planning benefits

10
Selecting the best strategies for soliciting
individuals

• According to author James Greenfield, personal
  solicitation is 16 times more effective than mail
  solicitation
• Using more than one method of solicitation is
  desirable for individuals
• Each method has a greater potential when it is
  well coordinated with other methods
• Individuals have different motivations for giving
  and different patterns of giving. The more you
  know about a donors motivations and giving
  patterns, the more effective your solicitation
  activities will be

11
With which audiences would personal solicitation
be best?

• The Board peer-to-peer solicitation is best
  accomplished by a small committee of board
  members and aids board members in soliciting
  others
• Major annual donors prospects at higher annual
  giving levels have the greatest interest and
  potential personal solicitation can maximize
  their giving potential

12
What role does the professional play in personal
solicitation

• Directs the program
• Sets expectations
• Organizes Activities
• Prepares Materials
• Provides Training
• Motivates solicitors
• Reports Progress

13
Participation in Solicitation

• Participates in Solicitations
• Makes the call when the relationship is the best
  with a staff member
• Assists a reticent or unskilled volunteer
• Makes the call when no one else is ready, willing
  or able

14
Mail solicitation/direct mail

• Mail solicitation is the most impersonal and
  least efficient form of solicitation
• Requests for a first-ever (from a nonaffiliated
  prospect list) gift will yield a return rate of
  between 0.5 and 1.0. If early returns are
  promising, it is advisable to send more than one
  appeal to the same prospects to maximize the
  opportunity and chance of someone making a gift

15
Direct Mail

• Direct mail is not simple to perform nor easy to
  operate at a profit it requires years of
  experience to master.
• Every aspect of the direct mail campaign - from
  segmentation of the list to design of the letter,
  envelope, response device and recognition or
  thank you gift, can affect the outcome of the
  campaign. It is strongly recommended that each
  of these elements be tested for their response
  rate before any large, direct mail campaign is
  undertaken

16
Electronic Solicitation

• ePhilanthropy is the commonly used term for
  online donations to nonprofit causes. It can
  take the form of direct contributions from donors
  via your website, or indirect contributions via
  cause-related marketing agreements with
  businesses.
• The growth of the use of the Internet for
  philanthropic purposes will be met with success
  when integrated with traditional methods of
  direct mail, telemarketing, and personal
  solicitation

17
Electronic Solicitation

• There are many more people using the Internet
  your requests can be informational and customized
• Solicitation on the Internet will not be
  successful as a sole approach to be valuable, it
  must be integrated or followed up by mail and
  telephone calls
• Your organizations online presence can be as
  simple as a website with information on its
  activities and contact information

18
Strategies for Soliciting Organizations

• Research what motivates the organization and what
  strategies work for them
• Keep in mind that a successful solicitation will
  require the same relationship-building techniques
  used with individuals
• While the format of the ask (grant proposal or
  other) may vary, it is a relationship which often
  makes the difference.

19
Types of Clubs and Associations

• Service Club (Lions, Rotary, Kiwanis, Junior
  League, etc)
• Self-help associations (PTA, Mothers Against
  Drunk Driving, etc)
• Professional and Trade Associations
• Social Clubs

20
Motivations

• Specific interest (Lions and blindness, etc)
• Community Service
• Business or social concerns of members

21
Obtaining support from Businesses

• Types of business support
• Neighborhood stores or businesses
• Banks, utilities, department stores
• Motivation for business support
• Civic pride /good citizenship
• Connection with a community resource
• Employee morale builder
• Good for business

22
Business Support

• Strategies for seeking business support
• Nominate local business leader for your board
• Form a businesspersons council
• Seek in-kind or product gift that serves your
  organizations needs
• Provide recognition for the gift
• Seek a sponsorship for a specific aspect of your
  organization
• Ask for display space in a local business

23
Obtaining Support from Corporations

• Types of Corporate Support
• Corporate Foundations (similar to private
  foundations)
• Direct corporate giving (cash directly out of
  corporate profits)
• Executive discretionary funds (personal
  connections with executive leadership)
• In-kinds gifts of company products or equipment

24
Corporate Support

• Subsidiary or individual plant budget (local
  giving)
• Marketing budgets (cause-related marketing
  support or support for special fundraising
  events)
• Research and development budgets (tied to the
  company business interests)

25
Motivations for corporate support

• Good corporate citizenship
• Enlightened self-interest
• Individual leadership initiative
• Location
• Quid pro-quo interests
• Interest to corporate employees

26
Strategies for corporate support

• Establish board and key volunteer relationships
  among employees
• Make a persuasive case for corporate support
• Conduct good comprehensive research
• Write good grant proposals

27
Obtaining Foundation Support

• Types of Foundations
• Private
• Company Sponsored
• Community
• Operating

28
Motivations for Foundation Support

• Community support
• Sociopolitical concerns
• Historical roles (philanthropic interests of
  founders)
• Seed money for new projects
• Tax advantages

29
Strategies for Foundation Support

• Research the foundations
• Analyze foundation guidelines
• Approach a foundation (personal contacts)
• Make requests for support (develop, write and
  package the proposal)

30
Obtaining Support from Government Entities

• Typically they fund education, health care needs,
  and training and workforce issues
• Largest amount of funds available from
  federal/national and state/province
• National Education Association, U. S. Department
  of Education, HUD Community
• Development Block Grant administered through
  county government, state/province department of
  public aid, local housing agency

31
Federated Campaigns

• Another area of support is Federated Campaigns
  there are many more since United Way was first
  organized as the Community Chest in the early
  1900s.
• Many national organizations have developed
  campaigns related to particular issues and there
  are others such as Americas Charities which
  represents organizations with different missions
  and services.

32
Proposal Writing

• Basic components of a proposal
• Summary clearly and concisely summaries the
  request
• Program Statement describes the organizations
  qualifications or credibility
• Problem Statement or Needs Assessment documents
  the needs to be met or problems to be solved by
  the proposed funding
• Objectives establishes the benefits of the
  funding in measurable terms

33
Proposal Writing

• Methods presents a plan for determining the
  degree to which objectives are met and methods
  are followed
• Evaluation presents a plan for determining the
  degree to which objectives are met and methods
  are followed
• Sustainability describes a plan for
  continuation beyond the grant period and/or the
  availability of other resources necessary to
  implement the grant
• Budget clearly delineates costs to be met by
  the funding source and those to be provided by
  the applicant or other parties

34
Who Should Write a Proposal?

• Most proposals are developed by staff as a team
  the development staff pulls all the information
  together and puts it in the correct format as
  requested by the funding source
• No matter who is working on the proposal, the
  developers should act as facilitators bringing
  together the needs of beneficiaries, applicant
  organization and funding source on some coherent
  and logical plan.

35
Basic Principles of Proposal Writing

• Make sure it is neat, clean and easy to read
• No typographical errors
• No extravagant packaging spiral bindings are
  made to cut apart, and expensive covers look like
  you wasted money.
• It should be Brief!
• What is the right length just long enough for
  you to clearly communicate your message but not
  long enough to produce a stupor

36
Proposal Writing

• Be positive!
• Remember that you are offering the funding source
  an opportunity to participate in an important,
  useful activity.
• Remember that the funding source gets its
  credibility from funding winners, not losers

37
Proposal Writing

• Avoid Unsupported Assumptions
• The astute reader finds any number of unsupported
  assumptions in most grant applications
• Dont assume the funding source knows accurately
  what your organization does
• Be sure if the national scope of a problem is
  described, that you document its existence in the
  community you are serving

38
Proposal Writing

• If you use words like we believe support that
  belief with cold, hard facts
• Present enough evidence to support your position
  and no more dont use large numbers of charts
  and graphs they will probably not be read and
  too often fail to support the thesis of the
  proposal.
• Cite sources of data in the body of the proposal
  and avoid footnotes dont develop a doctoral
  dissertation

39
Proposal Writing

• Write your proposal in English!
• Proposal writing is not an opportunity to
  demonstrate your mastery of bureaucratese
• If your funding source employs jargon in its
  guidelines, use it only if you feel you must and
  define your terms

40
Proposal Writing

• Panelists reviewing your grant may not know the
  terms tell them what you think it is
• Test the clarity of your proposal by having
  someone who is not familiar with what you do read
  it and give you feedback

41
The Cover Letter

• This is an essential part of the proposal package
  second in many ways to the Summary.
• Assures the funding source that the proposal is
  endorsed by the Board
• Briefly describes the content of the proposal
  it is not a proposal summary
• Place to commit to following up on the proposal
  We would welcome the opportunity to meet with
  you
• Address your letter to a specific person at the
  funding source spell the name right, have the
  correct title, and follow up with that person to
  be sure it has been received

42
The Proposal Summary

• The summary appears at the beginning of the
  proposal, but it is not prepared until you have
  completed the proposal. It should include the
  following
• Identification of the applicant and a phrase or
  two about their credibility
• Reason for the grant request, issue, problem or
  need to be met
• The objectives to be achieved through this funding

43
The Proposal Summary

• The kinds of activities to be conducted to
  accomplish these objectives
• The total cost of the project, funds already
  committed, and amount asked in the proposal

44
The Importance of the Summary

• It is usually always required by the funding
  source and must be included
• It may be all that is read
• It will be the first thing read
• It should frame your proposal
• It is good practice in expressing your ideas with
  clarity and brevity

45
Special Events- To Have or Have Not

• One of the first considerations is timing. Then
  comes implementation major efforts are required
  for organizing an administrative group lining
  up and training volunteers locating site,
  talent, equipment, supplies printing brochures
  publicity and so on. Weeks and months can be
  consumed even for a relatively small happening.

46
Special Events

• Essential Questions to ask answers must be
  objective and based on solid, current, factual
  information.
• What type of event should be considered - what
  is our competition, what will have the greatest
  appeal and the greatest likelihood of success
• Weather while we have a small chance of rain
  there are potential rainy periods even in the
  spring and alternative plans must be considered

47
Special Events

• Competition Other events can siphon off
  attendance and we should consider any events
  which hit our target audiences. Check with the
  Red Book to see what might already be scheduled
  on a proposed date (not all events are listed in
  the Red Book so additional research will have to
  be done)
• Population there must be enough interested
  people who will support the event
• Attitudes how do those targeted to attend or
  participate in the event feel about it?

48
How much money can, should, and will be raised
from this event?

• In a major, highly-populated market like the
  Phoenix metropolitan area, events should be
  carefully considered as to the return on the
  investment.
• Develop a realistic budget of all costs and set a
  attainable goal for a net return
• The enormous time and effort to produce a
  successful event constitutes a large investment
  of time and talent, both staff and volunteer.
  Why spend all that effort to produce an extremely
  low return on your investment when it could in
  reality be much more financially successful.

49
Volunteer Committees and Responsibilities

• One of the great problems of special events can
  be the shortage of volunteers. Secondly can be
  the lack of organization for the volunteers. To
  ensure a positive outcome, plan, plan, plan
• Create an organizational chart you can clarify
  roles and responsibilities between various people
  in the organization, and utilize it to recruit
  and orient others

50
Volunteer Roles

• Develop job descriptions for each task within the
  plan - before you recruit volunteers you must
  know what they will do include the purpose and
  responsibilities of the job including
• Time required
• Length of commitment
• Qualifications or skills required
• Orientation or training provided
• Benefits to gain

51
Volunteer Roles

• Do a basic calendar of organizing work
  backwards from the date of the event to ensure
  you have enough lead time for each activity.
  Allow time for mistakes, delays and a little
  procrastination from individuals
• Recognize the recruitment of volunteers send
  each volunteer that is selected a letter
  confirming his/her appointment include current
  plans for the event any minutes of organizing
  committee

52
Volunteer Roles

• To be effective, volunteers must have information
  and perspective keep in contact with
  volunteers, be sure they are fulfilling their
  responsibilities catch any problems early
  encourage their creativity and commitment keep
  them apprised of the overall picture.
• Confirm everyones involvement before the event
  have a pre-event meeting the day before with key
  volunteers to be sure all will go smoothly
• Recognize hardworking volunteers at the event
  and afterwards. Recognition consists of both
  saying thank you and being open to constructive
  criticism. Collecting their comments soon after
  an event improves the event next time.

53
Volunteer Roles

• What jobs do you need to fill there is nothing
  more frustrating than finding an essential duty
  in the event has no leadership think and plan
  for the duties
• Overall chair
• Sponsorship
• 3. Decorations
• 4, Facilities
• Food/Liquor/Licenses
• Entertainment/Talent Hospitality
• Graphics Design/Printing/Signage
• Marketing/Publicity

54
Volunteer Roles

• 9. Silent/Live Auction
• 10. Accounting/Financial Management
• 11. Transportation/Valet Parking
• 12. Program Committee
• 13. Technical Equipment
• 14. Clean-Up/Tear Down
• 15, Security
• 16. Others as needed depending upon event
• Staff should play a troubleshooting role be
  visible and working with volunteers and ready to
  step in when needed.

55
Special Event Cost Accounting

• Rule 1 cost per dollar raised
• Everyone has a different perspective on how much
  money it takes to raise a dollar. In special
  events the guide is to invest 50 cents for
  every one dollar raised. While this may sound
  reasonable, many times the cost of staff time and
  overhead expenses are not included the costs
  are real and should be included.

56
Special Event Cost Accounting

• Rule 2 volunteer work needed
• Expect to invest 2 volunteer hours for every
  hundred dollars raised, in addition to financial
  investments this means that volunteers earn
  50/hour for the organization.

57
Special Event Cost Accounting

• Rule 3 maximum ticket sales
• One person can sell 10 tickets on the average -
  many groups overestimate how easy it is to sell
  tickets this rule appears to be consistent
  whether the tickets are for an event or a raffle.
  It is often the case that 20 of the volunteers
  sell 80 of the tickets unfortunately it is
  hard to predict who will be the star salespeople.

58
Special Event Cost Accounting

• Rule 4 utilize in-kind donations to maximize
  the return on the investment
• Look at all the materials it will take to run the
  event and select the ones which have the best
  opportunity to be donated food, printing,
  decorations, flowers, talent, etc. Plan in-kind
  contributions into your budget so you can be sure
  they are being pursued

59
Major Gifts and Planned Giving

• There is only one way to solicit a major gift
  in person! Describe your project and the way it
  helps to solve a community problem, match the
  prospects needs to those of your cause and ask
  for the prospects support

60
Major Gifts and Planned Giving

• Be interested in the prospect
• Pick the right prospect it is the appropriate
  contact that makes the difference in fundraising
• Solicit in person face-to-face solicitation is
  the only method
• Convince yourself first be sure you have made
  your own commitment before you ask anyone else
  your gift gives credibility to the ask
• Know your cause be knowledgeable about the
  problems and opportunities and the role your
  organization plays in the community
• Know your job be familiar with the role of
  solicitor
• Know your prospect think about their possible
  motivations for participating in addressing these
  community issues engage them in conversation
  about this interest

61
Major Gifts and Planned Giving

• At the Meeting..
• Explain your role and mention your gift
• Talk about community issues and how your
  organization can help respond to these needs
• Remind the prospect how his or her gift will help
  respond to this community problem. Talk about
  how the gift can influence others

62
Major Gifts and Planned Giving

• Ask for a specific amount
• Aim as high as you can challenge and stretch
  the prospect
• Get a commitment before you close the meeting
• Never leave a gift envelope or commitment form
  with the prospect you can leave informational
  materials.

63
Major Gifts and Planned Giving

• Asking for a specific amount and securing a
  promise
• It is crucial to ask for a specific amount
  people are more comfortable when you give them a
  sense of what is expected they can better make
  a decision
• Get a commitment of a specific amount before you
  end the solicitation. If the prospect needs time
  to think about the amount, tell him or her you
  will call back on a specific day to get the
  pledge and follow through

64
What If . Contingency Plans

• Do not accept a gift that is too small if you
  think the prospect is going to offer a smaller
  gift try to negotiate up first
• Dont just accept a no. Keep selling however
  if you feel the prospect is going to turn you
  down, withdraw saying that perhaps this is not a
  good time to consider such a gift. Ask for a
  future meeting

65
What If

• If the prospect agrees to consider your appeal
  but wants to take some time, make the follow-up
  appointment then
• Remember our job is to get the answer not
  just ask

66
Recognition Strategies

• Before you even begin a campaign, you need to
  know what your recognition plan will include
• Specific giving societies with dollar amounts and
  benefits at each level
• Website acknowledgment
• Printed Materials

67
Recognition

• Donor walls, plaques, etc
• Private receptions
• Access to CEO, Artistic Director, backstage
  tours, etc
• Tables at Gala or other special events
• Think creatively make it unique!

68
Planned Giving a definition

• People hear of a major bequest or a distribution
  of a charitable remainder trust, and immediately
  think lets do planned giving!
• That is understandable because planned gifts
  from individuals will be the largest growth area
  in the future.
• Planned Giving is the integration of sound
  personal, financial and estate planning concepts
  with the individual donors plan for lifetime or
  testamentary giving.

69
Planned Gifts

• Bequest
• Charitable Gift Annuity
• Charitable Remainder Trust
• Charitable Lead Trust
• Life Insurance Policy
• Pooled Income Fund

70
What Do Planned Gifts Offer to the Donor

• Opportunity to Give
• Income Tax Deductions
• Fixed or Variable Income
• Retirement Income
• Reduction of Capital Gains Tax
• Potential for Increased Income
• Asset Management

71
Why Are They Important to an Organization

• Probably the largest gift a donor will make to
  your organization
• Come from people who have been supporting your
  organization for years
• Are easy to market your letterhead can have a
  tag line which reads something as simple as
  Remember xyz organization in your will or estate
  plans

72
Important to You

• Offers a donor the opportunity to support your
  organization long after his or her death
• Provides long-term program support if placed in
  an endowment
• Provides a simple and easy way to ensure the
  donors wishes will be followed after his or her
  death

73
Important to You

• Provides opportunities for large and small donors
  to participate
• Provides opportunities for small donors to
  receive recognition during their lifetime for a
  gift from their estate

74
Our Annual Fund Plan

• Goals
• Identification of preferred and available
  strategies
• Analysis of potential by constituency and
  strategy
• Goals by strategy

75
Annual Fund Plan

• Timeline for each strategy including income
  benchmarks
• Creation of a budget for each strategy
• Marketing needs to support each strategy
• Financial and human resource needs (including
  volunteers) for each strategy

76
Annual Fund Plan

• Board commitment both personally and as a group
• Staff buy in and financial commitment
• Team approach everyone is responsible for
  development!!

77
Thank You

• Anne C. White, Ph.D., CFRE
• Director of Development and Marketing
• Phoenix Boys Choir
• awhite_at_boyschoir.org
• 602-264-5328 x 31
• www.boyschoir.org