Fund-Raising for Choral Organizations Margaret Genovese Genovese Vanderhoof & Associates 2016

Fund-Raising • No one is born with the innate gift of raising funds and

most of us suffer from FOF disease (Fear of Fund-raising) [highly feared, right up there with public speaking]

• Fund-raising is a craft-sort of skill: a series of techniques that can be learned. Not rocket science

• However, the arts sector tends to have an additional issue of Myths about F-R, especially in Canada: – The government pays the tab for most arts activities (WRONG). – Corporations are the largest source of non-government funds

(WRONG) -- in the US this thought is often expressed as: We can’t raise any money because we don’t have any corporate headquarters (WRONG).

– Special events are a great way to raise money [POSSIBLY]

Practical Advice

• This is going to be a very practical session since most of you probably know a lot more about fund-raising than you think.

• Sources of funds [all approximate but you will get the picture] – USA (2013): Individuals 80% including bequests,

5% corporations, 15% foundations (all charitable giving)

– Canada: 92% individuals, 2% corporations, 2% special events, 1% foundations (arts giving)

Five Steps of Fund-Raising • Identification of Prospects: Who might donate money to us?

– Past donors (corporate/individuals/foundations) – Audience members – do you know who they are? Why not? – Attendees at your outreach activities: an open house, a special event,

parents of children at your camp – People known to your board members who are supportive of

community activities in general -- peer review process/ineffective – Small market versus large market: small markets sometimes offer

opportunities at the local level that a large market does not, especially in the corporate sponsorship area.

– ABOVE LIST VERY POSSIBLE, BELOW NOT SO – Donors to other organizations somewhat similar to us [potentially a

HUGE trap] -- lists in programs -- the tale of the new music organization

– Rich people in your community: the “usual suspects” school of fund-raising – the concept of the “go-away” gift

Five Steps of Fund-Raising

• Introduction – Seeing you do what you do: a concert, a community

outreach performance, an event involving children – Board’s role as ambassadors (what is your spouse

doing while you are performing? Or your children?) – Personal invitations: people need to know that they

will be welcomed if they come -- after concert collations -- name tags for all – market research tells us that people like to be invited

– Newsletters, websites, personal calls, social media – Attending a special event fund-raiser [making up a

table or arranging to meet people there]

Introduction/2 – Teenagers are sometimes a better audience than you might

think—encourage yours to come with a date/friend – Each board member should try to bring two new people to each

event—capture these names – Once a year only: if there is an upcoming performance with

especially weak sales, exploit your personal network to offer tickets at a vast discount (or free) to a wide variety of folks: through the HR department of your company, golf club, church, service club, whatever. Make it seem special: you are, after all, a board member and therefore you have this special access to tickets once in a blue moon. Plan this way ahead if you can: one often knows which events are going to be “soft” -- capture names

– Gift certificates: donated to silent auctions or to people you want to thank for doing you a favor or providing you a service

Five Steps of Fund-Raising

• Cultivation – Following up an introduction to the organization: an

email, a letter, a phone call, a hand-written thank you note, a newsletter, etc.

– Invitation to something else you are doing: next concert, the summer camp concert, the holiday show.

– Making sure the guest is treated as a guest and does not become a wallflower – name tag

– “Dating” concept – A general “pitch” at concerts to audience about your

need for funds beyond the price of tickets

Five Steps of Fund-Raising

• Solicitation – Few people ask you to marry them on the first date – How: a letter with follow-up call, a personal visit, a

lunch date, not email. – Many groups find it easier to ask for a specific type of

activity they are trying to fund: a tour, new choir robes, a scholarship, etc., although this tactic can backfire if you are in serious need of operational funding on an annual basis

– Don’t be afraid of asking: remember if you are a board member, people expect you to be bullish about causes that you support and volunteer for

Five Steps of Fund-Raising

• Stewardship/Recognition – This is the “thank you part” and should be done

promptly (not a once a year mailing of tax receipts). – Delivery of promised “benefits” (if any) should also be

prompt. Do not ever give away tickets: it clouds the purchase/donation message and causes tax receipting issues in Canada.

– Keeping in touch with the donor: emails, newsletters, etc. [Can be a relatively humble communication.]

Renewal

• A surprisingly large number of NFPs keep such poor records that one cannot identify donors from the past five years. Many organizations make little or no attempt to renew past gifts.

• Don’t need a fancy data base: could use file cards almost for the handful of donors most smaller groups have.

• If you get an unexpected large gift, follow this up if you can with a face to face meeting

Specific Sources of Funds

• Tricks of Trade part: – Foundations – Corporations – Special Events – Individuals

Sources of Funds: Foundations • Canada: very few foundations [tax laws] • USA: many regional foundations – can be researched – many have

guidelines available on line stating: the activities they support, how to apply, timelines, etc. – Can be a lot of work to submit a proposal, only to be turned down. – However, if one is turned down, one can ask why and also ask for tips

on how to make your proposal better. – Trick of the trade: if the local foundation is somewhat responsive to

your initial solicitation, you should keep applying. In time you might get a small grant. Patience is a virtue in the arena. But the outcomes can be small ($500).

– If the foundation is at least communicating with you, do remember to invite a representative to come to a concert or see kids at your summer camp or whatever.

Sources of Funds: Corporations • Not a growth area in Canada or the United States – new funding priorities,

often linked to marketing and promotion (sports, hospitals, big profile, relatively generic activities that impact a lot of people)

• Definition of what a “corporation” is: could be a law partnership, an owner of multiple fast food franchises, a local store -- small businesses, branch offices

• Large markets: lots and lots of charitable organizations, the larger organizations have existing relationships with certain corporations that they steward and renew. – NOT A GROWTH AREA -- Toronto example

• Small markets: you might benefit from your relationship with a branch office of a bank , a realty, etc. who might have discretionary corporate funds that can be dispersed locally. These type of gifts usually are to sponsor a specific project: a guest soloist, a concert, etc.

• There is no new money in the bigger sense unless you have a connection through a specific board or choir member.

Sources of Funds: Special Events • Professional fund-raisers by and large HATE special events: risky,

labor-intensive, fraught with details. Key to success: underwriting at a high dollar level and excellent ticket sales.

• Volunteers, however, tend to love special events because of the FOF issue: it seems easier to ask someone to buy a ticket to an event/party than to solicit money directly (“not nice”).

• Issues of donor fatigue: “same old, same old” – a signature event that starts to turn sour with attendance dropping, costs rising, etc.

• Sometimes the event really has nothing to do with the organization (bingo in Manitoba) so the attendees at the event don’t really have anything much to do with the actual arts activity. This may be fine for “Polo for Heart” or a 5k run for a disease, but not good as a way of attracting audiences to the concerts.

Special Events/2

• If you are doing some special events, you can reduce risk and possibly raise more money if: – Maintain a data base of past event attendees – Organize a silent auction at the event – Sell low-dollar raffle tickets at the event for some generic

prize (a weekend in the city with tix to a choral event) – Have a “patron” category for the event: if the ticket price is

$50, also have a patron price of $500—some people will always give more if asked. No need to invent special benefits for this price unless someone buys at that level—and then you can invent some benefits.

– Seek a sponsor for the whole event from a local business.

Special Events/3

• Make sure that it is clear that the event is a fund-raiser and not just a party or some sort.

• “Formal moment” – someone thanks the guest/donors for coming, the sponsor for the donation, the suppliers for the in-kind contributions.

• Board members should “work the room” [name tags] and introduce themselves to people they do not know. Make sure everyone is having a good time.

Sources of Funds: Individuals • This is where all the money is. • Myth: we need to broaden our base of low-level individual givers with the

idea that they will climb a “ladder” to ever significant gifts. – Research says this isn’t true—a very old-fashioned concept of fund-raising

• Myth: people will give us ever more dollars because at higher levels there are more “benefits” or perks – Does anyone really give more money to get a coffee mug, a poster or a tee-

shirt? Let’s get a grip here. – Research: million dollar gifts because “the cause was good” – “Give and get” a really horrible philosophy – not philanthropic, self-centered,

and “what’s in it for me” [exception might be a capital project gift like buying a chair or naming a concert hall]

– Never ever give tickets away as a donor benefit. Instead stage one annual thank you event like attending a dress rehearsal and having a potluck supper with the chorus afterwards or maybe a lawn party if your board leans to that sort of life-style.

Individuals/2

• The growth area in arts fund-raising is at the higher dollar levels: – Patrons level (President’s Council, Maestro’s Circle): $1,250

to $10,000 • Really big cultural organizations all have these sort of programs—

check out their websites to get an instant lesson on how they are structured and run

• At this level there are usually donor-only behind-the- scenes activities [with price tags for the events themselves—no free wine or box dinners, etc.—and you have to be a donor at this level to even be invited]

• This group is the stepping stone in a really professional fund-raising department to high-end individual major gifts, starting with three-year pledges and then underwriting of whole projects

Individuals/3

• If you do have any donors at this higher level, make sure that you do treat them nicely. Maybe have an annual lunch with the choral leader for them at a nice local restaurant. They often do not expect anything much except recognition in the concert program. Often they are experienced donors in general and give to many worthy causes.

Individuals/4

• Major Gifts from Individuals: the fastest growing area—every larger group is hiring a number of Major Gifts Officers

• Donor research – electronic screening • MOVES Management – working with a portfolio of

prospects and current/past individual donors • Goal: five, six, and seven-figure gifts; legacy gifts • This type of fund-raising activity and outcome—with

the exception of legacy gifts and the odd bail-out or gift to a special initiative--is rarely seen with very small groups. A donor called Hope.

Individuals/5 • Most groups do run some kind of low-end individuals campaign

– Cute names/benefits ladder – Pretty passive: direct mail, maybe a follow-up phone call or email

• An aside: the difficult word “member” -- so many meanings: – Member of the choir – “Member” as defined in by-laws – “Member” as synonymous with “donor” – “Member” as a series ticket buyer – “Member” as a purchaser of benefits at a museum or gallery that is not tax-

receiptable – Hideous confusion in the not for profit sector about the use of this word. – Words of wisdom: try to use only the first usage but make sure that your by-

laws when using the word have a very very clear definition since it tells you who is eligible to be a board and possibly vote at an annual general meeting.

– Strike the word from your vocabulary for your organization– call donors donors, ticket buyers ticket buyers, and, of course, you are not a museum anyway.

Individuals/6

• Can you improve your gifts from individuals? • Of course!

– Renew them -- try several times with different ways and means: letter, phone call, email

– Keep records of them – Keep messaging your “need” in all written

materials, on websites, with “pitches” at events and performances

– Improve your data capture of people who attend events and concerts

Individuals/7

• What to do with identified prospects? – Wealth screening/electronic techniques – Peer review process – Targeted invitations to activities to start the

cultivation process: board members inviting people they know as their guests to an event and serving as hosts.

– Or if you think you have a major prospect for a large gift, work out a strategy to get to know this person better: a lunch, a concert experience, some face to face interaction

Planned Giving • This is a highly specialized area of giving—a lot of material

is available on line • One can start the process by just communicating on line

and in print that you can receive legacy gifts. • Establish a policy that legacy gifts DO NOT go into annual

operations (unless the will actually states that the gift is supposed to). Most gifts of this type are to help the organization have a future so it is important to honor the donor’s intent, even if not stated. You can seek advice from your local community foundation which can set up a fund on your behalf. Wills often have non-clear language about the use of the funds but it is good business practice to have restricted funds and only draw off the annual interest from them.

Fund-Raising/Marketing

• “Trendy” activities like social media, crowd-funding, etc.

• Little empirical evidence that much of this is being very successful – maybe in large markets with a very hip prospect pool

• Websites, however, can be better designed, with more information on the organization, its repertoire, how to buy tickets, etc.

Questions and Session Wrap-Up