Planning & Budgets

Planning & Budgets NPST 402 Michele Berard, MBA, CFRE

Introduction History of Fundraising Philanthropy began 6000 years ago in Egypt • Gave to Religion (first form of Foundations/Trusts) The Middle Ages • New needs for philanthropy arose • Plagues, poverty, and destitution • Government got involved • A trend of founding & endowing university emerged • “Statues of Charitable Uses” in 1601 – The Cornerstone for Anglo-Saxon law on philanthropy • AKA “Poor Laws” protected trusts and the poor • Taxes collected to fund the “Poor Laws

Introduction History of Fundraising History of Philanthropy in the US – flourished like no other country • 1641 – first fundraisers were three clergymen sent from Boston to London to raise funds for Harvard College • A Discovery: philanthropy could bring about social change • Revenue Act of 1913 = Tax Exempt Organizations or 501(c)(3) • 1917 = Income tax deductions for charitable contributions • 1935 = Social Security

Introduction History of Fundraising Three Sectors: • Business (for-profit) • Government • Non-profit (or voluntary) – which is needed because of limitations of business and Government • Often referred to as the “third sector” • PBN stated the Third Sector was largest employer

Introduction Today… Philanthropy is a major growth industry • Research in philanthropy is expanding our base of knowledge • Education in philanthropy and nonprofit management is available in colleges/universities • The # of graduates entering the workforce from fundraising schools is increasing • Fundraising standards have been developed, along with professional principles and practices • Self-regulation is carried out through compliance with accepted standards and the AFP code of ethical conduct • Nonprofits need the alternative revenue stream

Introduction What’s in a name? • Fundraising grassroots initiatives • Advancement universities/colleges • Philanthropy healthcare/non-profit • Development non-profit • Fund Development non-profit For the purposes of this class, all terms will be used interchangeably. Note: Please review the glossary of terms in the handout section as this course will use technical jargon

Introduction A Donor Bill of Rights (see handout section) • Developed by AFP, AHP, CASE, Giving Institute • Endorsed by Independent Sector, NCDC, NCPG (PPP), CRD, United Way of America • The official “gut-check” for all Development Professionals • We will refer to often throughout this course

Donor Bill of Rights Assignment What organizations do you contribute to? Do they publish A Donor Bill of Rightson their website? If you can’t find it on the organization’s website, call the Development Office and inquire. If you don’t make charitable gifts, pick three non-profits. Does your assigned organization publish the donor bill of rights on its website? Email your findings to mrberard@butler.org

Introduction What Fundraising is NOT • Passing the can (or hat) • Hitting people up • An independent activity Fundraising is… “Aligning funding needs of an organization to donor interests” • Managing • Planning • Motivating • Partnering • Mentoring • Coaching • Leading • Listening • Responding • Champion Building • Learning • Informing • Asking • (however, this is the only part that others see)

Planning If the ask is the “Tip of the Iceberg” what is below the water line? An organization cannot raise funds without: • A clear sense of mission, what community/constituency it serves, and how that mission relates to the community/constituency • A clear sense a vision of the organization’s direction, familiarity with the organization’s direction, familiarity with the organization’s activities, and understanding of how those activities relate to the mission and how those activities serve the community • Planning how it will achieve the mission; and • Knowing how much it will cost Source: CFRE Review Course Faculty Manual 2004 Edition

Planning As development professionals, we cannot lead the process without: • Knowing how the organization(s) for which we work meet(s) the needs and desires of the community/constituency being served; • Having a fundraising goal and a plan for achieving that goal; • The ability to articulate our organization’s mission and activities in a manner that communicates to the targeted constituencies the benefits of those activities to the community and the benefits to them of supporting those activities Source: CFRE Review Course Faculty Manual 2004 Edition

Planning The Strategic Plan • Organizational mission/vision review – are they still relevant? • SWOT Analysis (SW – internal/OT – external) • Outlines where an organization will be at some point in the future (usually three to five years) – “Tells us when we get there” Note: this is usually not a straight or direct path!

Planning The Strategic Plan (continued) • Includes quantitative measurement and specific objectives • (SMART: Specific, Measureable, Achievable, Realistic, Time) • Includes a list of resources necessary to carry out the plan • Includes a list of tactics a long with persons responsible and a timelines (“how we will get there”) • Budget and resource allocation • Written institutional plan approved by the Board of Directors

Planning What the Strategic Plan does for the Development Professional/Program: • Provides a story for “how the donor’s money is being invested” • Outlines a road map for how the organization will enhance it capabilities (again, validating the donor’s investment) • Illustrates what resources the organization will need in order to reach its new goals (often recruited through philanthropy) • A reason to share dialogue (cultivation, stewardship)

Planning The Development Plan - is derived from the Strategic Plan; it is the plan that outlines the tactics that will recruit philanthropy to support the various components of the Strategic Plan. • Includes specific fundraising techniques (e.g. direct mail, major gift solicitations, etc.) • Gift Acceptance Policies (approved by the Board of Directors) • Is often not approved by the Board of Directors (However, the Board approves the budget and indirectly approves the fundraising revenue projection line item!) • Includes measurement as well as an environmental scan (a.k.a. feasibility study) – Prospect research, etc.

Planning The Development Plan A word about Gift Acceptance Policies According to the AFP Dictionary – Definition: the rules and regulations developed by a donee organization to determine which types of gifts should or should not be accepted FACT: you can say “no” to a gift • Gift Acceptance Policies tie into your organization’s financial needs • Should be a collaboration between the CDO (Chief Development Officer) and the CFO (Chief Financial Officer) • A requirement of new IRS regulation (990) • Butler Hospital sample (MRB to provide)

Planning Marketing and your Development Program The purpose of Marketing is to know and understand your constituents: • A constituent who wants to use your service • A constituent who wants to support your mission Eight Marketing Functions: • Opportunities for involvement/participation • Public(s) • Research • Investment in the organization; its programs and its future • Distribution: making opportunities easily available to prospects • Communication • Cultivation • Documentation Source: CFRE Review Course Faculty Manual 2004 Edition

Planning Key Marketing Points • Know your audience (alignment) • Bring about a transaction • Remember your audience’s message • Do a limited number of things well • Communicate good will • Communicate your activities to targeted audiences • Don’t overestimate communications Source: CFRE Review Course Faculty Manual 2004 Edition

Planning Elements of a Written Marketing Plan • Sets achievable goals • Identifies target markets • Articulates messages • Outlines specific strategies to achieve goals • Assigns resources • Defines time frames • Establishes indicators of success • Determines how progress will be monitored and evaluated Source: CFRE Review Course Faculty Manual 2004 Edition

Planning In lieu of a written plan… Some organization’s (very prominent in small or one-person shops) have: (1) a Development Calendar; or (2) a Marketing Calendar; or (3) a combined Development & Marketing Calendar • Since most of the tactics are carried out by one person, there doesn’t need to be a detailed plan • Limited resources don’t allow for a lot of time for planning • The calendar is enough to be accountable, engage volunteers and gain a strategic perspective of the year (or other time frame) Source: CFRE Review Course Faculty Manual 2004 Edition

Planning Communication – Transmission of information thought, or feeling so that it is satisfactorily received or understood Specific Communication Tools: Name some… Source: CFRE Review Course Faculty Manual 2004 Edition

Planning Communication – Transmission of information thought, or feeling so that it is satisfactorily received or understood • Specific Communication Tools: • Websites • Newsletters – general and insider • Promotion in print and electronic media • Public Service Announcements • Publications (Annual Reports, Brochures, Newsletters) • Personal Mail • Personal Visits • News Conferences • Public Speaking • Word of Mouth • Trade Shows • Direct Mail • Letters to the editor • Editorials • Packaging (i.e. logo, uniforms) • Billboards • Bus stop shelters Source: CFRE Review Course Faculty Manual 2004 Edition

Budgets Budget– An estimate of income and expenditure for a set period of time; the plan feeds the budget. • Organizational Budget • Program Budget • Capital Project Budget • Department Budget • Special Events Budget Revenues > Expenses Everything starts with the budget NOTE: We will touch more on this later on this semester

Portfolio Addition Does your assigned case organization have a strategic plan? If yes, what is the timeframe (e.g. three year)? What year are they in? Ask for a copy (for your portfolio) Does your personal case organization have a written development plan and/or calendar? What is your personal case organization’s fiscal year? What is their organization budget (expense, i.e. cost to deliver their mission)? Note: all answers will remain confidential and will not be shared

Planning & Budgets