Fundraising Building Blocks for Board Members and Volunteers

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Fundraising Building Blocks for Board Members and
Volunteers

• Nonprofit and Public Management Center
• Shelley Strickland
• January 13, 2009

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Overview

• Fundraising as a Profession
• The Trustee Role in Fundraising
• Fundraising is CommunicationOverview of Key
  Conversations
• Changing Philanthropic Landscape
• Summary of Key Ideas
• QA

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• Fundraising
• as a
• Profession

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Development / Fundraising

• Development first used in 1924 by U. of Chicago
  President DeWitt Burton to explain fundraising
  as the planned promotion of understanding,
  participation and support (Cutlip, 1965)
• Fundraising is the management of the
  relationship between a charitable organization
  and its donor publics (Kelly, 1998)
• In the first place, I advise you to apply to all
  those whom you know will give something next, to
  those whom you are uncertain whether they will
  give anything or not, and show them the list of
  those who have given and lastly, do not neglect
  those whom you are sure will give nothing, for in
  some of them you may be mistaken Benjamin
  Franklin

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History of FR / Dev

• 1641-1700s appeals to England end as colonists
  raise funds to promote education, church
• See signs of generosity and community Tocqueville
  would recognize in democracy
• 1800s church plate, suppers bazaars, begging
  letters
• volunteer committees of charity balls, auctions,
  benefits
• Civil War brought first high-pressure, organized
  fund drive
• 1900s Carnegie Rockefeller shift from charity
  to philanthropy
• campaign originated in YMCA
• concept of strategy methodology to fundraising
• only after WWII were there staff fundraisers, not
  just consultants or firms hired for that role

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FR / Dev in the 21st Century

• Increased professionalization and professionalism
• Training and education
• Growth and demand in field
• Specialization
• Ethics
• Philanthropic partners
• When the fundraising process is undergirded by
  an examination of the organizations mission and
  case, it is a task that can be carried out with
  dignity. The person seeking the gift should never
  demean the request by clothing it in apology.
  (Payton, 1991)

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• With staff devoted to development, why does the
  board need to fundraise?
• Fundraising is still a legal, ethical and moral
  obligation of board members!

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• The Trustee
• Role in
• Fundraising

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Board Members Fundraising

• The board cannot divorce itself from its
  fiduciary responsibility thereby it always
  remains responsible for funding both policy and
  program decisions (Herman Block, 1990)
• One of the most inappropriate things a board can
  do is to call for increased income and leave it
  to the staff to produce.The board is
  accountableand the board leads (OConnell,
  1993)
• Trustees are the primary stewards of
  philanthropy. They hold the nonprofit
  organization in trust in the public interest to
  ensure that it functions according to its
  statement of mission. Governing boards must then
  accept responsibility for developing the
  organizations resources, both of talent and
  money, and directing them toward its goals and
  objectives. (Burlingame Hulse, 1991)

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Roles of Board Members in Fundraising

• Steward planning goal setting, mission
  relevance, accountability for donor intent, gift
  management investment, budgeting for an
  adequate and capable staff and support system
• Donor
• Solicitor
• Prospector
• Advocate
• Visible Attendee
• Team Builder (Henderson, 2003)
• Never think you need to apologize for asking that
  someone give to a worthy object.
• John Rockefeller

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Being an Educated Board Member

• Where does the money come from?
• Philanthropy in US is 2 GDP
• MONEY COMES FROM INDIVIDUALS! (83)
• Individuals (75) Corporations (2) Giving USA
• Bequests (8) Foundations (12)
• People give to people!
• Fundraisers do not make people give.
• The 1 reason why people dont give? They werent
  asked.
• You are not asking for something you are
  providing an opportunity when you invite people
  to invest.

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Classic Giving Considerations

• Giving Begets Giving
• Giving Is Primarily Responsive
• Giving Is Prompted Emotionally and Then
  Rationalized
• Giving Tends to Favor the Round Numbers
• Givers Tend to Follow Old Habit Patterns
• Tax Talk Facilitates Giving but Is Seldom a Prime
  Mover
• Giving Tends to Prosper Commensurately with
  Challenge (Seymour, 1966)

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Traditional Donor Life Cycle

• Identification
• Interest and Involvement
• Cultivation
• Solicitation (interest, ability,
  linkage) Stewardship
• It is proverbial wisdom that the success of
  fundraising is 90 in prospect identification,
  research, cultivation and preparation, and 10 in
  the asking. (Howe, 1991)

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Conventional Donor Pyramid
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Stewardship

• Reciprocity Acts of appreciation and
  recognition
• It is sometimes appropriate to include naming
  rights and plans in the proposal.
• In discussing recognition, emphasize how this
  will have
• an immediate impact (motivating other gifts)
• a lasting legacy (permanent naming)
• Responsible Gift Use Donation used for purpose
  intended
• Reporting Donors are informed of gift usage
• Relationship Nurturing In conjunction with the
  first three, donors are encouraged to renew
  their giving (Kelly, 1998)

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Fundraising Elements

• Major Gifts
• Planned Gifts
• Is your organization ready for the impending
  intergenerational transfer of wealth?
• Between 1998 and 2052 an estimated 41-136
  trillion will change hands (Schervish Havens,
  BC)
• Much more than a bequest! Todays laws and plans
  provide for living income and survivors
• Capital Campaigns feasibility study,
  silent/nucleus phase, five year average,
  endowment

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Fundraising Elements

• Special Events Resource intensive, often low
  ROI
• Corporate, Foundation and Government Grants
  Remember where the most money isindividuals!
• Annual Giving
• Types gifts cash, pledges, securities, real
  property, personal property
• Policies Procedures
• Vehicles direct mail, telephone, email/website,
  personal visit, event

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• Fundraising is Fun!
• Fundraising is the gentle art of teaching the joy
  of giving (theres equal joy in getting!)
• (Rosso, 2003)
• Its all about relationships and communication is
  the key!

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• Fundraising is CommunicationOverview of Key
  Conversations

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Questions to Ask Donors (current potential)

• Why have you supported our organization in the
  past?
• What prompted your gift?
• Where is our organization in your philanthropic
  priorities?
• Ask about mailings they receive / preferred
  methods of communication

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Key Considerations

• LISTEN!
• Responding to the angry donor
• Staying on message
• Do they mention taxes? Estates? Attorneys,
  Accountants or Financial Planners?
• Before you leave What is the next step?
• - May I visit again?
• - Are you coming to this event?
• FOLLOW UP! (Internal and external processes)

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Seven Faces of Philanthropy

• 1. The Communitarian Doing Good Makes Sense
  (26)
• 2. The Devout Doing Good is Gods Will (21)
• 3. The Investor Doing Good is Good Business
• (15)
• 4. The Socialite Doing Good is Fun (11)
• 5. The Altruist Doing Good Feels Right (9)
• 6. The Repayer Doing Good in Return (10)
• 7. The Dynast Doing Good is a Family Tradition
• (8) (Prince File, 1994)

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Making the Case

• The donor should understand what makes your
  organization unique.
• The case for the gift must be stronger and
  bigger than the institution itself (Panas, 2005)
• Whats in it for the donor? What does it mean to
  make an investment here?
• How will a program or building affect society?
• Make the needs about opportunities!
• People give to successful organizations.

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The Pre-Solicitation Conversation

• This should not come as a surprise to the
  prospect
• Helps you to know what to emphasize in the actual
  ask
• Clarify the prospects reasons for making a
  giftintentions and expectations
• Discuss naming and recognition interests
• Convey importance to organization and the donor

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The Pre-Solicitation Conversation

• Would you be interested if I talked with you
  about a gift of X to support X?
• Could you make a commitment of X?
• Would an investment of X to further PROGRAM or
  BUILDING be of greater interest to you?clarify
  interests
• How would you want such a gift to be
  recognized?

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The Ask StructurePrepping

• Think how the prospects leadership/ideas have
  led to this vision/plan
• Remember, people dont give unless theyre asked!
• You should feel pretty confident of success at
  this point if you have followed the process of
  research and cultivation.
• The RIGHT person(s), prospect, amount, purpose,
  time, way

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The ConversationActual

• Follow a script but be flexible!
• Make the link between the prospect and the
  proposed gift as you transition from small talk
  to the actual ask.
• Because of your vision or You have been such a
  faithful volunteer and we need your continued
  leadership
• We are asking you to consider an investment of
• Ask at the top of the range!

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The ConversationActual

• Make the case what this gift will do for the
  organization now and in the future (people!) and
  how this gift will inspire others
• Mirror look language of prospect Heres what
  I hear you saying
• Allow silence!

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The Negotiation

• Overcoming objections
• Share whats been done in other cases
• Avoiding the all or nothing
• - You might not be able to close that day but
  you want the door open
• - If you come down on the gift level, make
  sure it still covers needs/costs
• Always leave with a firm plan of the next step
  and when!

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Written CommunicationProposal Content

• Tailored to the person!
• While there will be a general case about the
  projects importance and the prospects history
  with the organization, link the two explicitly!
• People still have the same motives as
  organizations Whats in it for me? (paying a
  debt, setting an example, feeling good)
• Just as you would for a foundation or
  corporation, follow guidelinesdont give too
  much or too little. Follow the persons style.

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Continuing the Conversation

• Again, why its so important to clarify in
  solicitation what the prospect really said
• - no /time now - too much going on
• - no interest in program - come back again
• Keep in contact, especially if the program was a
  fit but or timing was off
• Include in mailings
• Invitations as appropriate
• Highlight new gifts or leadership, especially by
  peers

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• Changing
• Philanthropic Landscape

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Pivotal Time in American Philanthropy

• New Golden Age of Philanthropy (Tempel, 2003)
• Largest concentration of wealth in the hands of
  a few in a century (Katz, 2007 Nielsen, 1996
  Wagner, 2003)
• Todays donors are transformational (Grace
  Wendroff, 2001)
• research an organization (Allen, 2007)
• create rather than simply support philanthropic
  projects (Schervish, 2005)
• give in ways that are often creative,
  experimental and designed to improve society or
  to be an experiment in societal development
  (Tobin, Solomon, Karp, 2003)
• spend out resources during their lifetimes,
  applying vast sums of money and talent to
  troubling societal issues (Conlin, 2003)

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Nonprofit Best Practices for a Changing
Philanthropic Landscape

• Todays donors emphasize collaboration. They want
  to know why your organization is unique, but they
  also might suggest working together with a
  related nonprofit or even merging. (Frumkin,
  2006)
• To provide for adequate infrastructure, boards
  might consider growing or merging to a scale
  where its affordable, outsource, or even
  restructure to be more volunteer rather than
  staff driven. (Nonprofit Overhead Cost Project,
  2004)

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Nonprofit Best Practices for a Changing
Philanthropic Landscape

• Board recruitment is key to engagement. Assess
  the criteria. Look for an array of backgrounds.
• Promote a culture and structure that encourages
  board focus and influence beyond Exec Dir and/or
  Board Chair.
• The board must regularly assess its performance!
  Train and implement changes. (Urban Institute,
  2008)

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Nonprofit Best Practices for a Changing
Philanthropic Landscape

• Old reality focus on foundations and
  corporations with known guidelines rather than
  slow, time-intensive process of individuals
• New reality Orgs w/out a strong base of
  individual support will fade away. Thrive with a
  system for building and cultivating lifelong
  donorsdonors who understand and feel connected
  to the work of the organization
• Volunteer Donor
• Have ready Wish Lists (Axelrod, 2000)
• Raising More Money

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Nonprofit Best Practices for a Changing
Philanthropic Landscape

• Point of Entry eventbasic facts, emotional
  hooks, system for getting contact info board
  invites
• Treasure Map (resources, self-interest and
  contacts) Interviews board conducts. Really
  finding stories!
• Board calls to thank donors and reports on calls
  at board meetings.
• Multiple-year Giving Society
• (Axelrod, 2000)

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Nonprofit Best Practices for a Changing
Philanthropic Landscape

• Shift from institutional focus to an issues,
  constituency, and donor-investor focus.
• Donor life cycle (circle) changes to an infinity
  loop of transformational giving
• Effectively position through marketing/PR and
  consistent messages the way the organization is
  addressing issues
• Major gifts should be outcome rather than
  goal-focused too often donors not asked again
  and not involved
• (Grace Wendroff, 2001)
• High Impact Philanthropy How Donors, Boards, and
  Nonprofit Organizations Can Transform Communities

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Nonprofit Best Practices for a Changing
Philanthropic Landscape

• Transformational donors seek
• Orgs and leaders w/clear vision
• Solid or promising track record of performance
• High ROI potential values enhanced and well
  spent w/impact
• Dir and staff commitment to both values and mgmt
• Opportunities to leverage investment by
  attracting others
• Responsiveness and openness to questions re
  programs, finances and management
• Regular info on management and impact of gift
• Invitation to participate in decision-making,
  particularly concerning their investment (Grace
  Wendroff, 2001)

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• Summary
• of
• Key Ideas

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If you remember nothing else

• Of all giving in this country, the vast majority
  (83!) comes from individuals, not organizations
• As such, encourage your nonprofit to move beyond
  dependence on grants and events for funding
• By asking, you are giving an opportunity to the
  donor

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You can fundraise beyond solicitation

• Contribute to stewardship efforts thank donors!
• Facilitate introductions and visits
• Help find new philanthropic partners that will
  stay beyond you
• Accompany others on calls, even if you wont make
  the ask
• Write and/or sign materials

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Promote the fundraising effort

• Hire effective fundraisers in the executive
  director and development director roles
• Have realistic expectations
• Provide for ongoing support and training
• Invest in necessary fundraising elements
  materials, technology
• Approve policies procedures gift acceptance,
  gift agreements, endowment spending, etc.

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Promote the fundraising effort

• Staff and board members are partners in the
  process (and its a process!)
• Make fundraising an ongoing priority, not just in
  campaigns, not just for emergency needs
• Proactively plan for future needshave a
  compelling vision

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Promote the fundraising effort

• Make and support tough decisions (e.g., end
  beloved events with no ROI)
• Persevere in difficult timesnow more than ever
  communicate with your donors!
• Emphasize ongoing stewardship of all donors at
  all levels

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• Questions or Comments?
• srstric_at_umich.edu