Resource Development

Resource Development Raising funds for the non-profit organization

Methods of Fundraising Non-profit resource development can be approached by anorganization using any number of methods, or a combination of many. This resource will give a brief overview of the following fundraising strategies: • The Annual Fund • Major Gifts • Small Gifts • Direct Mail • Telephone Solicitation • Planned Giving • Capital Campaign • Special Events A separate resource is available from the OFBCI which covers Grant-Writing. Office of Faith-Based and Community Initiatives

The Annual Fund • An organization’s “annual fund” should be an ongoing campaign that encourages strong financial support from a variety of sources throughout the year. • The goals of an annual fund should be to generate and build a donor base, but several helpful “by-products” may result as a consequence of the annual fund as well, such as creating awareness of the organization’s programs, an enlarged volunteer base, and identification of possible major or planned gift donors. Continued… Office of Faith-Based and Community Initiatives

The Annual Fund Continued The basic formula of an annual fund throughout a series of years should be to: • Get a gift from a donor • Repeat the donor’s gift annually • Upgrade the gift each year This is typically achieved through a direct mail and/or telephone campaign. The annual fund campaign should involve all members of an organization, including the board, staff, and volunteers. It also may be advantageous to include previous donors in identifying prospective donors. Office of Faith-Based and Community Initiatives

The Annual Fund – Goal-Setting The first step in the annual fund process should be to identify a monetary goal. Once a goal has been identified, an organization may begin to target previous and prospective donors to solicit for the fund. Large grants provided by foundations and corporations can provide a significant amount of money, but donations from individuals make up greater than 80% of all charitable giving.1 1Results according to Giving USA 2005 study. (The Resources Now National Institute: Finding $$$ in Your Community. St. Paul, MN: Campaign Consultation, 2006.) Office of Faith-Based and Community Initiatives

Major Gifts Major gifts are those gifts which are significantly larger than other donations an organization receives and which have the potential to make a significant impact on the organization and its programs. They account for approximately 60% of the money raised in the typical annual fund, but only come from about one-tenth of donors and are difficult to solicit. For this reason, major gifts solicitation should be the first step in an annual fund and the prospective donors should be carefully researched and targeted. Continued… Office of Faith-Based and Community Initiatives

Major Gifts Continued Five to fifteen percent of prospective donors should be identified for major gift solicitation. These will most likely be previous donors with an established link to the organization who have upgraded their gifts in the past. A prospective donor of a major gift should be personally solicited by someone within the organization (board member, previous major gift donor, etc.). Each solicitation will be a “mini-campaign” in which a relationship is established and cultivated between the potential donor and the organization. The keys to major gift solicitation are preparation and patience. A major gift prospect can take anywhere between a few months to over a year to come to fruition. It is important to remain persistent, but not to cross the line into pushiness. Major gifts can be given to the general fund or to a specific purpose, such as a program or building project. Office of Faith-Based and Community Initiatives

Small Gifts Approximately 20% of the money raised in an annual fund comes from an estimated 70% of donors. Although these gifts may seem less significant and small compared to major gifts, remember that they are still important, making up the base of the donations received in the annual fund. These gifts are often received as a result of a direct mail campaign or through telephone solicitation and are much more likely than major gifts to come from first-time donors. Office of Faith-Based and Community Initiatives

Fundraising Methods The annual fund goal may be achieved by any number or combination of the following strategies: • Direct Mail • Phone solicitation • Personal solicitation • Grant proposals • Special Events Following are brief explanations of each of these methods. Office of Faith-Based and Community Initiatives

Direct Mail The purpose of a direct mail campaign should be to seek new prospects and first-time donors, renew prior donors, and to make special appeals for specific purposes, such as a building campaign or a new program. Direct mail is a mass appeal, not an individualized request. In order to keep costs at a minimum, each appeal will be identical. Mail should be sent out not only to the organization’s constituents and past supporters, but also to the wider community in an attempt to initiate relationships with new donors. In order to reach new donors, the organization will need a mailing list, which may be rented from or exchanged with another organization. List brokers are also available for purchase of targeted mailing lists for direct mail campaigns. Office of Faith-Based and Community Initiatives

Components of a Direct Mail Package • Outer Envelope: Standard size for a mailing envelope is a #10 business envelope. The outer envelope should be kept simple, but may include a teaser. Keep in mind that if the target audience does not get past the outer envelope, he or she will miss the letter, so be very careful of the appearance of the other envelope. Check with the local post office on discounts on bulk postage rates for non-profit organizations. Use first class postage only when appealing to generous donors for large gifts. Office of Faith-Based and Community Initiatives

Components of a Direct Mail Package • Letter: The letter will carry the message of the appeal. The main elements of a letter should be a problem (the cause), a proposed solution (the program), a recommended gift to support the solution, benefits of making the donation (both for clients and for the donor), and a thank you. The letter can be long or short, as long as it is easy to read, and should give a persuasive case for support. A personalized letter will require more time, but will have a greater impact. Office of Faith-Based and Community Initiatives

Components of a Direct Mail Package • Response Device: This is a very important element of the direct mail package. This card should include: • Name and address of the donor • A list source code used to track returns • Name and address of the organization • A listing of suggested giving ranges and/or membership categories (gold and silver levels, etc.) Office of Faith-Based and Community Initiatives

Components of a Direct Mail Package • Reply Envelope: The inclusion of a reply envelope is nearly as important as the reply device. Potential donors are more inclined to give when all of the required elements are included. If it is possible within the constraints of the fundraising budget, paid postage envelopes also increase the response rate. • Extra Elements: Be very cautious when adding extra elements to the package. In some instances, a photograph or brochure may add to the appeal, but extraneous items or flashy colors and patterns may detract from the sincerity of the message. Office of Faith-Based and Community Initiatives

Direct Mail – Timing The best time to carry out a direct mail campaign is either from January to April or from August to November. Due to the amount of mail circulated at the time, it is best to avoid the Christmas holidays unless a strong seasonal tie can be drawn to the campaign. A way to project the results of the campaign is to keep in mind that an estimated 50% of the total returns received will arrive within the first three weeks after the mailing has gone out. From that point, the approximate total amount of money which will be received through the course of the campaign can be gauged by doubling that initial three week total. Office of Faith-Based and Community Initiatives

Telephone Solicitation Telephone solicitation can help with any number of fundraising goals: the annual fund, acquiring new donors, a capital campaign, etc. This type of campaign can target names in the organization’s database, new donors, or local residents. A goal should be established in terms of number of prospects reached and amount of money raised. IMPORTANT: Any organization conducting telephone solicitation must comply with Do-Not-Call laws. For information on these regulations, consult http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt129.shtm Continued… Office of Faith-Based and Community Initiatives

Information sheets should be filled out and kept on hand by the caller for each prospective donor before they are contacted. These should include the following information: Name Address Phone number Occupation and title Giving history Suggested gift for the caller to request A script should be prepared for callers that will include: Pitch of the program Solicitation of a donation Thank you Any upcoming special events All phone calls should be documented by the caller and followed up with a mailing, including pledge reminders and a thank you. Continued... Telephone Solicitation Continued The one-on-one interaction involved in a telephone solicitation can be more personal than a direct mail approach. Office of Faith-Based and Community Initiatives

Telephone Solicitation Continued Trained callers can either be volunteers, paid temporary workers, or staff members. Telemarketing firms are also an option. They will handle all of the details of the campaign for a fee, but keep in mind that the organization will then have less control over the operation. Office of Faith-Based and Community Initiatives

Planned Giving Planned giving is the donation of a gift that is legally provided for during the donor’s lifetime, the full benefit of which is temporarily deferred– usually until the death of the donor. The donor usually receives an immediate tax benefit from the gift. A common example is a bequest made in a will. Continued… Office of Faith-Based and Community Initiatives

Planned Giving Continued Planned gifts usually come from long-time donors who have previously “upped” their donations and show a continued interest in supporting the organization. The decision to make a planned gift is usually very significant for the donor, and the gifts tend to be large. For this reason, recruiting planned gift donors should be handled much the same as that for major gifts, as mentioned earlier. Face-to-face solicitation and long-term cultivation of a relationship with the potential donor are the best methods of encouraging planned giving. Continued… Office of Faith-Based and Community Initiatives

Planned Giving Continued Since a planned giving donor has decided to make a significant investment in an organization, the gift should be used to contribute to an organization’s endowment or special fund rather than to pay for daily expenses. Of course, the specific requests and stipulations of the donor should be honored as well. All details should be clearly specified in a legal contract signed by both the donor and the organization. Continued… Office of Faith-Based and Community Initiatives

Planned Giving Continued There are major advantages of planned giving for both the donor and the recipient organization. • The donor benefits by paying less income and estate taxes and with financial planning assistance. Additionally, some forms of planned gifts allow the donor to receive an annual income taken from interest earned on the gift. • Due to the projected nature of the gift, a planned gift allows an organization the opportunity for institutional planning. Additionally, a planned gift donor often becomes a better annual giver due to their investment in the organization and its programs. Continued… Office of Faith-Based and Community Initiatives

Planned Giving Continued Due to the complexity of the process, an organization should confer with a lawyer or financial consultant knowledgeable in planned giving or estate planning before launching this type of program. For more information on the different types of planned gifts, refer to the PG Calc Planned Giving website at http://www.pgcalc.com/pginfo/pginfo.htm. Office of Faith-Based and Community Initiatives

Capital Campaign The basic feature of any capital campaign is a large fundraising goal that is more ambitious than the organization’s annual fund, the objective being to provide funds for a special purpose. The complexity of this fundraising method requires an extensive pre-planning phase including needs assessment and a goal-setting phase. Also very important for the capital campaign is a post-campaign analysis which will assist in the pre-planning phase of any subsequent campaigns. Continued… Office of Faith-Based and Community Initiatives

Capital Campaign Continued An organization’s capital campaign can be conducted in a variety of forms. Some of the most common include: • “Bricks and mortar” campaign: One of the most common types of campaign; money raised goes toward the construction or renovation of a building for the organization. • Endowment: Money raised goes toward the organization’s endowment, providing the organization a permanent source of funds or income. • “Combined” or “comprehensive” campaign: Seeks to cover all of the organization’s expenses for a specified period of time. • “Project” campaign: Money raised serves to endow a new project or program taken on by the organization. Office of Faith-Based and Community Initiatives

Capital Campaign – Soliciting Donations • When soliciting donations for a capital campaign, an organization should first seek a “lead gift.” This will be a major gift that will kick off the campaign. As with other major gifts, the most reliable method of securing a lead gift is to cultivate a long-term relationship with a previous donor. • Once a lead gift has been secured, the solicitation process should continue with contacting past major gift donors and other prior donors capable of pledging major gifts. Smaller gifts may also be solicited from small donors, but it is important to begin with a base of large gifts to reach the overall fundraising goal. This is more cost-efficient in terms of labor and time used in the campaign. • An organization may wish to have trained volunteers solicit pledges for the capital campaign to reduce costs in terms of employee time and wages. Office of Faith-Based and Community Initiatives

Capital Campaign – Planning Factors Before launching a capital campaign, the following factors should be planned: • Letters of intent or pledge cards designed for distribution • Recording system for gifts and pledges, as well as a banking or accounting system to handle funds • System for handling restricted gifts. Will the organization allow for donor-ordered restrictions on gifts, and if so, what is the minimum amount a gift must be for donors to request restrictions? • Plan for recognizing capital campaign donors Finally, the organization may wish to consider bringing on board a consultant or a volunteer with capital campaign experience. Office of Faith-Based and Community Initiatives

Special Events One of the most common methods of fundraising is the special event. Some examples are: • Sales • Auctions • Walkathons (or any “marathon” event) • Raffles • Meals The focus should be on the event itself, not on making money. In fact, the main benefit is usually not the money raised, but rather the publicity and exposure gained by the organization. It is an excellent opportunity to recognize previous donors and to drum up new supporters for the organization. Office of Faith-Based and Community Initiatives

Choosing the Special Event When planning the type of event an organization will conduct, keep in mind that the event should merge the interests of potential donors with the mission of the organization. Additionally, the event should be suitable for the target audience– both donors and clients. For example, a family game night might be more appropriate than a cocktail hour to raise money for a group focused on responsible parenting, or a raffle rather than a marathon to raise funds to build a senior center. Office of Faith-Based and Community Initiatives

Basic Steps of Special Event Planning The basic steps in the planning process of any special event fundraiser are to: • Secure funds ahead of time to pay for the event itself. • Form a committee whose sole focus is on the special event. • Develop a list of tasks that must be completed and a timeline that includes each task. • After the actual event, conduct an evaluation to assess successes and areas for improvement. Office of Faith-Based and Community Initiatives

Additional Points All of the aforementioned fundraising methods have a few consistent variables which should be considered. • A fundraising goal should be set. • The donor prospect list should be continuously built upon. • Volunteers should be utilized whenever possible. • Anyone requesting funds of a prospect should be a donor him- or herself. • Timing is key: the largest amount of donations is given between September and December. (See section on “Direct Mail” for exceptions.) • Keep in mind the target audience when planning events and campaigns. • Ask for a specific amount for a specific purpose. • Thank donors early and often. • Follow through: Keep donors updated, sending non-“ask” mailings, such as newsletters. Office of Faith-Based and Community Initiatives

Final Note This is merely a sampling of the many opportunities there are for non-profit resource development. For more information about these types of fundraising methods and others, please consult the resources listed on the following slide. Office of Faith-Based and Community Initiatives

Additional Resources • Blackbaud Resources:http://www.blackbaud.com/resources/white-papers.aspx#Fundraising • Free Management Help:http://www.managementhelp.org/fndrsng/np_raise/np_raise.htm • The Fundraising School at the IU Center on Philanthropy: http://www.philanthropy.iupui.edu/TheFundRaisingSchool/ • “Fundraising Tips and Tools:”http://nonprofit.about.com/od/fundraising/Fundraising_Tips_and_Tools.htm • The Nonprofit Timeshttp://www.nptimes.com/ Office of Faith-Based and Community Initiatives

Resource Development