Planning for Successful Fundraising

Michael J. Worth June 12, 2013

Philanthropy overview

Understanding donor motivations

The fundraising process

The fundraising team

Fundraising strategies

The fundraising plan

Today’s Agenda

Purposes of Philanthropy, 2011

Total $298.42 billion (% of total to each purpose)

Religion 32%

Education 13%

Human services 12%

Health 8%

Public-society benefit

7%

Arts, culture, humanities

4%

International affairs

8%

Environment, animals

3%

Foundations 9% Other

4%

SOURCE: Giving USA, 2012

Sources of Philanthropy, 2011

Individuals 73%

Foundations 14%

Bequests 8%

Corporations 5%

SOURCE: Giving USA, 2012

Total $298.42 billion (% of total from each source)

Flow of Philanthropic Funds (Based on Frumkin, Strategic Giving, 2006)

Living individuals

Estates

Corporations

Private foundations - Independent - Family - Corporate - Operating

Public charities -Federated funders -Community foundations - Charitable gift funds

DONORS INTERMEDIARIES

Nonprofit organizations and institutions

RECIPIENTS

Understanding Donor Motivations

Corporations

Business strategy and goals

Foundations

It’s the business they’re in (and they have their own priorities)

Individuals

Complex and mixed motives

“The heart leads the mind where reason points the way.”

Harold J. Seymour Designs for Fund Raising, 1966

Individual Donor Types (Prince and File, The Seven Faces of Philanthropy, 1994)

Communitarians 26.3%

Devout 20.9% Investors 15.0% Socialites 10.8% Re-payers 10.2% Altruists 9.0% Dynasts 8.3%

Interview with philanthropist Conrad Prebys

The Fundraising Pyramid

CORPS 7-8% INDIVIDUALS 85% FOUNDATIONS 7-8 %

Constituency

First-time donors

Regular donors

Major gift donors

Principal gift/ultimate gift donors

Direct response: Mail, phone, Internet

Cultivation/ personal solicitation

Cultivation/personal solicitation/ gift planning

The Fund Raising Cycle

Define the case

Identify prospects

Cultivate relationship

Solicit the

gift

Acknowledge gifts, recognize donors

Steward the gift and relationship

Step 1 Step 2 Step 3

Step 4 Step 5 Step 6

Fundraising begins with a case for support

Relates to a cause larger than the organization (It’s not about you!)

Describes achievable goals

Justifies financial needs in terms of impact

Uses stories and examples

Warms the heart and stirs the mind

Creates urgency

Fundraising is a team effort

Volunteer Leaders (Board) owners, blockers, runners

President/Director/CEO

manager, runner Chief Development Officer

coach, quarterback, runner

Worst Case Scenario (All too common)!

Board “gives their time” Organization has no plan, no goals, no prospects— “we just need money!” “Maybe Bill Gates…” CEO “too busy” to raise money Trouble on the board Trouble between CEO and board “We just need someone energetic with a nice personality to go out and raise money.”

Development staff responds appropriately to this scenario

TYPE OF FUNDS SOUGHT LIKELY GIFT SOURCES

CURRENT SUPPORT

Unrestricted/general support Individuals Local and family foundations Businesses (usually as sponsors)

Program/project support Foundations Businesses Individuals (especially investor/ entrepreneurial donors)

CAPITAL

Physical capital (buildings, equipment)

Individuals Foundations (rarely) Businesses (sponsorships in certain situations)

Financial capital (endowment)

Individuals Foundations (rarely) Businesses (very rarely)

METHOD/CHANNEL ADVANTAGES DISADVANTAGES

DIRECT MAIL Inexpensive Creates a visual image Long life Can communicate complex message

Easily ignored, lost in clutter Requires donor initiative Limited ability to personalize

PHONE Two-way communication Can negotiate gift Can tailor message to individual Immediate gift (credit/debit card)

More expensive than mail Barriers (caller ID, cell phones) Intrusive

PERSONAL SOLICITATION Focused attention of prospect Includes nonverbal cues Builds relationship

Expensive Low volume

EVENTS Visibility/involvement Point of entry for new donors

Not usually cost/beneficial (hidden costs) Often no connection to the case No proportional giving

INTERNET/WEB/SOCIAL MEDIA Inexpensive Can personalize/segment message Interactive/relationship building Leverage relationships

Email list maintenance Barriers (e.g., spam filters, overload) Website is passive Possibly intrusive

TEXT Inexpensive immediate response

Limited content Intrusive

Giving Channels SOURCE: TargetAnalytics, 2011

Direct mail still largest source of total gifts Direct mail still largest source of new donors

Online largest source of new donors under age 65 Online giving growing rapidly as percentage of new and regular donors

Significant generational change

Donor Strategies

AFFILIATION (Inclination) CAPACITY

Upgrade annual giving

Top prospects for major gifts

Annual giving, but manage costs

Prospects for projects

SOURCE: Adapted from Blackbaud

Planning With the Gift Chart

What is our current pattern of gifts?

What gifts are needed to reach higher goals? Are these gifts available ? (Do we have the prospects?)

What are alternative strategies (larger base, new donors, upgrade current donors, major gifts, etc.)?

What are the most promising sources (individuals, corporate sponsor, foundations)?

What are the best methods to use? (mail, phone, Internet, events, etc.?)

Who needs to do what to make this happen? What will we need to spend?

Gut check: Can this be done or do we need to change our goal?

Using  the  Gi+  Range  Chart    Total  raised  now  $1  million,  goal  to  

increase  to  $2  million  

     Range  

     #  gi)s  now  

 Total  in  range  now  ($1  million)  

 #  gi)s  needed      ($2  M  goal)  

Total    In  range  needed  ($2M  goal)  

200,000   0   0   1   200,000  

150,000   0   0   1   150,000  

100,000   1   100,000   2   200,000  

75,000   2   150,000   3   225,000  

50,000   3   150,000   5   250,000  

25,000   5   125,000   8   200,000  

10,000   10   100,000   20   200,000  

5,000   20   100,000   40   200,000  

1,000   50   50,000   75   75,000  

<1,000    

1,125    (Avg.  $200)  

225,000   1,500  (Avg.  $200)  

300,000  

TOTAL   1,216   $1,000,000   1,655   $2,000,000  

ELEMENTS OF A FUNDRAISING PLAN Background

Analysis of past/current support By market Individuals (by affiliation: board, member, former client, etc.) Businesses/corporations Foundations Other (sponsoring church, intermediary, etc.) By purpose (operating, capital, endowment) By program (annual fund, campaign, planned giving, etc.) By channel/method Direct mail Phone Internet Events Personal solicitations Proposals

ELEMENTS OF A FUNDRAISING PLAN Background

Current expenditures By category Personnel Materials and supplies Travel and entertainment Etc. By program By method/channel

Current return on investment (by program, method)

Benchmarking data (if available) How and from whom do other organizations like us raise money? What resources do they expend (staff, budget, etc.)?

Trends in giving (in relevant marketplace)

   ELEMENTS  OF  A  FUNDRAISING  PLAN  ObjecHves,  Strategies,  Goals    ObjecHves,  for  example:  

 Acquire  new  donors,  broaden  base    Upgrade  current  donors    Increase  corporate  support    Increase  foundaHon  support  

Strategies,  for  example:    Increase  mailings    Increase  number  of  personal  solicitaHons    Engage  more  board  members    Write  more  proposals    More  (or  fewer)  events  

Goals  (dollars  and  donors):    By  market  (consHtuency)    By  program    By  channel/method  (direct  mail,  Internet,  phone,    events,  etc.)    By  gi)  level                      

         

         

   ELEMENTS  OF  A  FUNDRAISING  PLAN  ImplementaHon      Specific  acHviHes  (mailings,  events,  etc.)    Timetable/calendar    Budgets    ResponsibiliHes  (CEO,  staff,  board,  etc.)    Performance  metrics      

               

         

         

Resources

Association of Fundraising Professionals http://www.afpnet.org Board Source http://www.boardsource.org Partnership for Philanthropic Planning http://www.pppnet.org Michael J. Worth & Associates, LLC http://michaeljworth.com