Effective Fundraising Management

1. Effective Fundraising Management Bonnie Osinski

2. Agenda • BASIC ASSUMPTIONS • THE PLAN • TYPES OF SUPPORT • SOURCES • FUNDRAISING VEHICLES • WRAP-UP DISCUSSION

3. Basic Assumptions • The ultimate goal of fundraising is to strengthen the organization so that it can be as effective as possible in fulfilling it’s mission. • Can you raise money and not strengthen your ability to fulfill your mission? • Effective fundraising requires building and maintaining trustworthy relationships with all constituents.

4. Basic Assumptions CIRCLES OF INFLUENCE • The stronger the core; the more effective the organizations • All fundraising activities should be managed so they strengthen the core • The stronger the core; the stronger the message you can send • The further away from the core; the more expensive it is to fundraise • Public relations is directed at the outer core and should not be factored into direct fundraising expenses • Without good public relations and overall agency communications; the fundraiser has to spend more time working in the outer, more expensive rings

5. Basic Assumptions FIRST CLARIFY THE ORGANIZATION’S MISSION The stronger the connection to the mission; the stronger the supporters The value of fundraising is derived from the organization’s use of the money The mission should never be subordinated to fundraising CONNECTING THE MISSION TO FUNDRAISING Fund development is creating a constituency that supports the organization because it deserves it When an organization merits philanthropic support, fundraising becomes the process of facilitating transactions

6. The Board of Directors • You will never reach your organization's full fundraising potential without a board that supports and participates in fundraising • All members give to the best of their ability and all support fundraising in some way • Leadership is sincerely and actively working to add board members who can support the organization’s fundraising. • The board and the chief development officer work together as a team • A CEO who discourages a strong board will hold the organization back (usually a founder)

7. The Plan All the tools have to come together into an integrated, coherent plan • Fundraising cost/benefit analysis • Budget, staffing, and organizational culture • Do we have the necessary skills and knowledge in-house? • Staff or consultants Develop a calendar of activities for the year, keeping in mind: cash flow staffing the organization’s programmatic and administrative planning Plans and budgets serve as important political documents: use them to get leadership and staff buy-in.

8. Reliability/Autonomy

9. Types Of Support RESTRICTED Donor specifies the use If you accept the money, you are legally obligated to comply Make sure the specified use is in line with your mission and strategic plan Best to turn it down if it is not a fit Only a donor can legally restrict contributed funds

10. Types Of Support UNRESTRICTED • The most desirable type of support • Enables you to be flexible and responsive to changing conditions and client needs • Your best bulwark against a turbulent, unpredictable environment • Virtually impossible to run a strong and effective organization without a high level of unrestricted support OPERATING • Generally a sub-set of unrestricted • Can also be restricted funds for specific or one-time operating costs e.g. Computerization, financial systems, fundraising start-up costs

11. Types Of Support CAPITAL • Construction, purchase of facility or renovation • Generally a campaign with specified goals and time limits ENDOWMENT • Best way to insure long-term financial health • Should be big enough to generate significant annual income • Can it be too big? • Less appealing campaign than bricks and mortar • Can be built with planned giving income, much of which cannot be projected in annual operating budgets Composed of donor restricted and quasi-restricted funds

12. Sources GOVERNMENT • Contracts and grants • Really big money; often renewable over the long run • Political realities make it less stable that it appears • Lots of restrictions, paperwork, reporting • Can suppresses the impetus to build an effective constituency • You can’t use government operating funds for fundraising THE PROCESS: • Following detailed instructions in lengthy and complex RFP’s • Funding agency tells you what they want • Proposals often voluminous • Complex budgeting process • Reporting and evaluation is different for each grant

13. Sources PRIVATE FOUNDATIONS • Mostly restricted grants in their area of interest • Not meant to be an ongoing source of support • Grants much smaller than government; paperwork less onerous • Lack of contacts should not discourage application; valuable relationships can build once a grant is awarded • Potential for flexibility in project design within guidelines THE PROCESS • Creativity to develop & implement projects that meet your needs and funder’s priorities • Building relationships with program officers over time • Plan to leverage time limited grants for future benefit – capacity building; success story for other donors; learning that will inform programs • Research to find a match

14. Sources CORPORATIONS • Multiple entry points and interests possible within the same corporation • Corporate self-interest is key • Source of financial, in-kind, sponsorship, matching and volunteer support • Partnership and joint marketing possibilities Renting your good name; Compatibility; Seeking connections with your constituency • Excellent source of board members THE PROCESS • Can be very similar to foundation grantsmanship • The more contacts, the better –board networks important • Research is different from foundation research • Developing joint marketing and sponsorships can involve complex negotiations • Good source of corporate support

15. Sources INDIVIDUALS • Source of more than 80% of all philanthropic funds • Your best bet for long-term strength and survival; reliable insurance against fluctuations other funding sources • Investors; advocates for your cause – your power base • Best source of ongoing, unrestricted funds • Only source of planned gifts; best way to build endowment • Most cost effective at major gift levels THE PROCESS • Research essential • Requires ongoing maintenance of relationships and stewardship • Best returns come after years of cultivation. • Direct mail for general donors – entry way for major donors – expensive start-up • On-line email and social networking present cost-effective options • Events can bring in some new donors; reinforce & cultivate others

16. Tools SPECIAL EVENTS • Costly form of fundraising • Staff time required is often underestimated • Can be good for building visibility • Means for volunteer support and involvement; opportunity for donor cultivation • Can bring in some new donors • Can build a constituency that is loyal to the event, rather than the organization or it’s mission THE PROCESS • Determine level of substantial support from board members and current supporters- more than 50% of gross revenue required • Scale event to organization’s capacity – realistic projections • Consultants well worth it for large events; free staff to focus on donor cultivation and solicitation

17. Fundraising Vehicles DIRECT MAIL • Can be a very reliable support of annual cash income • A successful mass mail program usually loses money for the first three years; Pays off when a critical mass of repeat donors is reached • Becoming more costly as postage and other costs increase • Entry point for major and planned gift donors • Not all organizations or causes can be successful in the mail • Consider starting an in-house mailing program with contacts generated by board staff, and other supporters THE PROCESS • Get professional help to develop competitive text and graphics – even for in-house or donor renewal mailings • Don’t even think about donor acquisition – renting lists – without hiring a professional direct mail consultant • You must mail several times a year to be successful

18. Fundraising Vehicles MAJOR GIFTS PROGRAM Most effective way to raise the largest gifts and the lowest cost Requires time and effort to cultivate and upgrade donors Research and moves-management essential Very strong advocates and solicitors Board must be intensely involved Best indicator of long-term organizational strength THE PROCESS • Regularly mine general donor lists from direct mail, events, on-line, etc. for major gift prospects • Research is important • Contacts from board members and other major donors • Continuous cultivation and stewardship required • Determine and respond to donor’s interest in becoming more involved

19. Fundraising Vehicles PLANNED GIVING • The desired, ultimate result of individual giving programs • Not limited to major donors • Gifts made from assets, not income • Require long-term planning on the part of the donor, preferably with the help of a financial planner or attorney • Bequests are the most common source; not the most beneficial for donors of substantial means • The ultimate payoff does not correspond to the costs incurred in a given year THE PROCESS • Any organization can remind all donors about making bequests in newsletters, web sites, targeted mailings, etc. • Maintain awareness of the possibility of planned gifts as part of the major donor process • Stay on top of general tax law as it applies to philanthropy • Investing in outside expertise yields the best results

20. Fundraising Vehicles CAPITAL/ENDOWMENT CAMPAIGNS • Time-limited campaigns to reach specified goals • Requires existing supporters to make significantly larger gifts • Organization must be able to maintain annual giving income • Reaching the goal requires that at least 10% of income comes from one or two donors • Depends on an existing major donor base • Bricks and mortar tends to be more popular than endowment THE PROCESS • Outside counsel is highly recommended; feasibility study can make a difference • Campaign chair and committees essential • Start bringing in lead gifts as soon as possible • Silent phase until lead gifts and half the income is committed

21. Fundraising Vehicles INTERNET • Growing, source of general gifts • Good web site can be a source of on-line contributions • New prospects contacted by means of direct mail and other outreach check websites before making gift commitments • Effective ongoing donor cultivation – newsletters, event announcements, press releases, photos, etc. • Social media is viewed as an effective means of donor acquisition; especially popular vehicle for tech savvy board members, volunteers and other supporters to reach out • Does not require the level of up-front investment involved in direct mail • Studies show combination of direct mail & internet is especially effective THE PROCESS • Get on the learning curve and move up fast – periodicals, newsletters, training, consulting • Create and effective web site - expensive

22. Let’s Get Real • What will work best for my organization? • Can I identify immediate next steps? • What barriers do I face? • What changes can I make?

23. Where to Get More Information • Other training sessions • Books, articles, electronic sources • Consulting services, other sources • Keep up with the field