Fundraising, Part II: Individual Solicitations

1. Fundraising, Part II:Individual Solicitations Thomas P. Holland, Ph.D. Institute for Nonprofit Organizations University of Georgia

2. Presentation will cover Steps in a campaign Roles for board members Annual gifts Making the Ask Capital campaigns Major gifts and planned giving Stewardship of gifts

3. Most Productive Method of Fundraising:IN-PERSON SOLICITATION • 70% of contributed funds for most nonprofits come from individuals • 90% of gifts come from 10% of donors • Identify people with means through contacts and research • Then find people who know them and who will introduce you to them • Invite them to get acquainted with your organization, attend events, volunteer • Listen to their interests and increase their involvement accordingly • Invite them to help sponsor activities • Thank them

4. Over 80% of All Adults Give.Reasons why they do: 1. I was asked to give by someone I trust for a cause I believe in. 2. I believe those with more resources should help those with less. 3. I get personal satisfaction from giving. 4. Because of my religious beliefs or commitments. 5. I feel that I benefit when I help others. 6. Sustaining a family tradition. 7. Giving sets a good example for others. 8. Giving helps my community. 9. Gift in remembrance of a loved one. 10. Gift is tax deductible. 11. Giving is encouraged by my employer.

5. Sources of Individually Contributed Income • Annual giving (unrestricted) • Telephone and mail campaigns (unrestricted) • Special Events (unrestricted) • Capital funds (restricted) • Bequests, wills, trusts, endowments • In-kind contributions

6. Giving and Asking • People give money because they want to. • People don’t give unless they are asked. • People give money to people, not programs. • People give money to opportunities, not deficits. • People give to successful organizations, not to distressed ones. • People give money to make a change for the good.

7. Motivations Differ • Learn potential donor’s interests • Engage them with program • Demonstrate accountability • Build involvement and trust • Offer opportunities to provide input and support • Ask what form of recognition is best

8. Key Principles of Direct Fundraising • The board takes leadership, with staff support. • Begin with goals for the organization, not with whatever source seems available. • Search for sources and people who are interested in and share your goals. • Develop relationships with them. • Find ways to engage them with your organization before asking for anything. • Results are directly correlated with the extent of engagement. No shortcuts.

9. The Gift Pyramid • Rule of thirds: 1/3 of goal will come from top few gifts; the second 1/3 from larger number of mid-range gifts; bottom third from larger number of smaller gifts • Must cultivate smaller donors to make giving a practice and to enlarge gifts in subsequent years • Must know donor capacity and approaches that will produce larger gifts (donor research) • Begin campaign with top prospects (quiet phase)

10. Relationships are Primary for Any Approach • Begin with friends, volunteers, former users of services, alumni, and any others with history of engagement with your organization. • Do not waste time or money buying lists from vendors. You won’t raise money by calling or writing to people who don’t already know you or the organization. • There is no substitute for relationships. • Share your excitement and satisfaction with others. • Invite them to participate in ways that interest them, and listen to their responses.

11. The Board and Senior Staff Develop Friends into Sponsors • Board identifies priorities for new funding. • It demonstrates commitment by 100% giving. • Members and staff share enthusiasm with friends. • Invite them to get acquainted with organization. • Host special events to showcase projects. • Ask friend for support for aspect of interest or introduce to Executive or Chairperson for the ask. • Follow up with appropriate thanks. • Staff supports board in these efforts, rather than doing it for them.

12. PREREQUISITE • If your board is not taking leadership in fundraising, the FIRST task is to solve that problem. • Willingness to learn and try are the beginning steps. Skill comes with practice. • Everything else depends on this foundation. • Everybody must be involved in some way. • No excuses allowed.

13. Common Excuses: • I’ll do anything but raise money. • Nobody ever said raising money was part of being on this board. (problem with nominating committee) • We deal with substantive issues, not with raising money. (what is more vital to organization’s survival?) • I’m too busy. (commitment?) • I don’t want to ask my friends for money. • I can’t stand being turned down. • I’m just not good at that sort of thing. • I’ll get around to that later (procrastination)

14. Such Denials of Responsibility Must be Faced and Dealt With • The board is ultimately responsible for the well being of the organization in every area. • Other competitors are moving ahead with raising money, taking your potential donors. • Board members have various talents, all of which are needed. • Fundraising can be learned, practiced, and refined. • It can be fun and satisfying.

15. Board Applications • The board is responsible for the future well-being of the organization • It sets strategic goals for the future • identify needed enhancements of organization and programs • become knowledgeable and experienced about fundraising • budget for staff to help board and CEO with marketing, communications, fundraising, advocacy, partnerships, volunteer recruitment and retention

16. Set Clear Expectations for Board • Write board member job description • commitment to values and mission • attendance and active participation • 100% giving • public representation and advocacy for organization • Fill gaps in group’s skills by • targeted recruitment • board education on fundraising, communications, volunteering • Engage volunteers in special projects • bring in needed skills • watch for potential nominees • Conduct regular evaluations to learn and grow • Demonstrate accountability to sponsors • via financial reports and individual communications

17. The Board’s Fundraising Committee • Oversees the preparation of a comprehensive, written plan for review by full board • Ensures a realistic appraisal is made of potential support and reasonable goals are set • Develops consistent message for all to use • Participates actively in identifying prospects, cultivation, asking • Enlists every board member in specific tasks, events, recognition of donors • Reminds every member to give and to complete assigned tasks • Evaluates efforts for future improvement

18. Support Roles for Board Members • Work with staff to develop volunteer opportunities • Host reception or event where CEO or Board Chair gives brief presentation • Introduce friends to CEO or Board Chair • Identify and do background research on potential donors and doorways • Offer to be a speaker at civic organizations • Work with staff to draft case statements, press releases, other approaches to public awareness • Develop donor appreciation and recognition plans • Search for ideas and people with expertise and bring to board education sessions

19. Basic Steps in a Campaign • Set goals based on organizational strategies • Select steering committee • Set up record system and recognition system • Identify roles and responsibilities for each • Develop case statements (why should anyone give?) • Carry out research on potential donors • Find ways to meet them • Engage them with organization • Invite them to help support specific activities that interest them • Recognize and thank them, keep them involved • Repeat and refine this cycle every year

20. Developing the Case • Begin with the why: what is our mission? • Then state the what: what do we want to achieve? • Then state the how: how will this new project meet a need and fulfill mission? • Then who: who we are and how well we have been serving our constituencies. • Finally, what specific action do you want the reader or listener to take?

21. Personal Solicitation The most effective and efficient form of fundraising • Requires training, planning and follow-up • Best way to involve board, other committed volunteers and donors • Requires understanding of volunteer recruitment, management and support needs, including prospect research and preparation for asking

22. Personal Solicitation • Preparation: • obtain accurate information about donor/prospect interests, past giving history, capacity. • Determine best person to contact the prospective donor (let volunteers pick their donor prospects) • Offer adequate support, training to solicitor • Presentation: • Match solicitor to prospect • Arrange to visit a prospect in person when possible • Ask for a specific amount • Follow through on any follow-up prospect requests

23. Personal Solicitation (cont.) • The Close • Be quiet. Do not fill the space with chatter. Let other person speak first. • Be positive, not apologetic if prospect declines • Be prepared to negotiate terms of gift • Make careful notes about next steps and follow through with donor • Thank them

24. The ASK is Essential • You are offering them opportunities to do good. • Not everyone has to do every aspect of the campaign, but someone must be ready and willing to do the ask. Guarantee: It won’t hurt if you try. • Time it to come after you already are well acquainted with the person and s/he with you and your organization. • Match ask to their interests and their resources. • Ask and then shut up. (Don’t fill the space with nervous chatter.) • Respond to questions and offer alternatives. • Thank them several ways, regardless of results, building relationship for the future.

25. Key Steps in Asking for the Gift • 1. Build rapport, show interest in prospect’s issues and concerns • 2. State the case for support of opportunity • 3. Encourage further involvement • 4. Identify benefits of action • 5. Ask for the gift, identifying a specific amount and a specific purpose • 6. Be quiet • 7. Respond appropriately • don’t push or argue (you can’t win ‘em all) • leave the request on the table • be prepared with alternatives if asked • 8. Follow up with thank you, regardless of outcome • 9. Update records • 10. Report to donor about use of gift

26. Prerequisites to the ASK • You have the right prospect. • You have cultivated a good relationship with the person, and s/he is familiar with your organization. • You know the person’s interests well. • You have an appointment to discuss the specific opportunity and make the ask. • You know the amount to ask for and the right task needing their expertise. • You are prepared with ways to recognize the gift and to make use of their help.

27. Annual Giving • Organized effort to secure gifts on an annual basis, either by mail, telephone, personal solicitation, events, or all four. • The primary fundraising method used to broaden support, upgrade giving levels, and provide operating support for ongoing programs. • The backbone of most fundraising programs. • Complements other forms of giving: planned, capital, endowment. • A cyclical, multi-stage process that may involve several solicitation strategies.

28. Annual Giving in the Pyramid of Giving • New donors are unlikely to make significant gifts to an organization that is unfamiliar to them. • Annual giving programs build on initial gifts or expressions of donor interest to develop a consistent giving pattern. They represent an essential stage in the giving cycle before a major donor commitment is possible. • Time (3-5 years), energy, work and budget are required to build a broad base of predictable annual donors and identify those making larger gifts.

29. Purpose of annual giving • Acquire new donors • Renew donor support annually • Cultivate donors to increase giving levels • Build donor loyalty • Identify and involve leaders • Identify major, capital gift prospects

30. Rules of thumb in annual giving • Understand what will motivate your donors or prospective donors before you plan your solicitation strategies. • Carefully match prospects to projects that interest them and to solicitation strategies that will reach them. • Renew the same way you solicited the original gift. • Provide varied giving opportunities during the annual fund cycle. • Provide varied and multiple forms of appreciation during the annual fund cycle. • Track your results carefully to understand your donors’ giving patterns.

31. Major Gifts • Build on annual gifts but seek larger amounts • Small number of givers will provide most funds • The most cost-effective approach to fundraising • May be used for • New or expanded programs • Capital for buildings or equipment (often called Capital Campaigns) • Endowments • Sponsorship of special need or activity • Usually come from person’s assets (savings) rather than their current income • Go to organization’s assets rather than its current operations • Require extensive personal cultivation

32. Don’t Be Afraid to Ask for a Large Gift • Benefactor • Patron • Sponsor • Donor • Contributor • Friend • Senior Associate • Associate • Sponsoring Member • Sustaining Member • Contributing Member • Member Giving Levels: Two Examples

33. Steps • 1. Specify major opportunities for sponsors, drawing from strategic plan and linking with donor’s interests. • 2. Plan the gift pyramid • 3. Identify likely givers • Records of prior giving • Prior engagement with organization • Interests and motivations • Capacity to give • Network of associates

34. More steps • 4. Start with board members and others already engaged with organization • 5. Each person must make own gift first, before asking anyone else • 6. Timing: Consider special events in prospects’ lives (birth, marriage, change in business) • 7. Prepare personalized presentation, drawing on case statement and linking opportunity with prospect’s interests

35. Steps (continued) • 8. Presentation plan • Personalized case statement • Financial records of organization • Opportunity for which gift is sought • Benefit to giver • Specific request and options • 9. Peer makes appointment to present in person, in private

36. Planned Giving • Come from the donor’s capital holdings • Bequests, insurance, gifts or property or income, trusts, endowments • They may be deferred gifts (pledge in a will of life insurance) or current (interest from a trust) • Donors may gain by tax benefits • Usually require specialized staff skills

37. Stewardship of larger gifts • Thank the donor in multiple ways. • Find appropriate ways to recognize and publicize the gift. Ask their preferences. • Use the money as the donor intended. • Keep accurate ongoing records on gifts and donors’ intentions or interests. • Add notes to file on issues related to individual donors that may be relevant to next ask. • Report to donor periodically on how gifts were used • Continue to engage him/her with organization. • Ask for advice on fundraising plans, potential donors • Build long-term relationship of trust and engagement • Thank the donor again.

38. A Board Members’ Fundraising Checklist • Do I have a clear picture of the mission, priorities and needs of the organization? • Do I really understand and support the case, why someone should support this organization? • Do I contribute to the extent of my means? • Do I offer additions to the list of prospects? • Do I share in cultivating prospects? • Do I make introductions for others to make solicitations? • Do I accompany others on solicitations? • Do I write follow up and thank you letters? • Am I prepared to make solicitations myself? • Do I do what I say I will do?

39. Build Board Capacity and Skill • Talk with people on other boards that have success with fundraising. • Visit the Foundation Center Library (Hurt Building, Main floor, 5 Points, Atlanta) for more other materials and resources (http://fdncenter.org) • Use prepared learning resources • Ga. Center for Nonprofits offers short workshops (www.gcn.org) • BoardSource has several good booklets and educational resources such as “Fearless Fundraising: The Video Workshop” (www.boardsource.org)

40. Recommended Reading • S. Weinstein, The Complete Guide to Fundraising Management. Wiley, 2009. • K.S. Kelly, Effective Fund-Raising Management. Erlbaum, 1998. • J.M. Greenfield, Fundraising Fundamentals. Wiley, 1994. • F. Howe, The Board Member’s Guide to Fundraising. Boardsource, 2000. • Other materials on many web sites, such as www.managementhelp.org