Getting Ready to Raise Money for Your Nonprofit Organization

1. Getting Ready to Raise Money for Your Nonprofit Organization Thomas P. Holland, Ph.D., Professor UGA Institute for Nonprofit Organizations

2. Overview: Basic Steps in a Campaign • Set goals based on organization’s strategic goals • Select steering committee • Identify roles and responsibilities for each person • Set up record system and recognition system • 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, evaluate and refine this cycle every year

3. The Fundraising Process:R.O.P.E.S. • 1. Research: understand the opportunities to be offered donors and their congruence with donors’ interests • 2. Objectives: set fundraising objectives that support the organization’s goals • 3. Programming: plan and implement steps to attain those objectives (cultivation) • 4. Evaluation: monitor results and adjust steps to improve effectiveness • 5. Stewardship: ensure reciprocity, responsible use of gifts, report regularly to donors, nurture relationships

4. This Presentation Will Cover • A. Getting the Organization Ready • B. Understanding our Stakeholders • C. Pulling it All Together • D. Getting our People Ready

5. A. Getting the Organization Ready Fundraising must be based in the organization’s strategic plan

6. A Strategic Plan addresses • What are the most important ways we can strengthen this organization and its programs in the coming 3-5 years? • Answers depend on careful analysis of internal and external factors. • Challenge of mission-drift, self-perpetuation for its own sake. • Clear priorities strengthen commitment and effectiveness throughout organization. • Provides foundation for all fundraising

7. Strategy vs. Operations • Most board and staff members (like most people) come from positions of responsibility for operational decisions. That’s familiar territory. • Most board and staff members (like most people) have little understanding of or experience with governance, strategic thinking, or planning for the future. • As a result, discussions slide into familiar territory-- operations. • Staff unwittingly foster such slides by providing more operational details.

8. A Strategic Plan is • Clear statement of the major goals and priorities of an organization that guide all decisions toward achieving its mission. • Specification of the main values and directions as we approach our environment and constituencies, how we invest our resources for maximum results • Demonstration of who we are, distinguished from others in our environment

9. What is Strategic Planning? Strategic Planning is a Process that: • Is filled with decisions and actions that shape and guide what an organization is, does, and why it does it • Requires broad-scale information gathering • Explores alternative directions for the organization • Emphasizes its future • Results in a tangible written document that guides all organizational actions, including fundraising

10. Why Participate in a Planning Process? • For sharper organizational focus • To concentrate on priorities and key strategies • For a systematic approach to future thinking • To compete in marketplace more effectively • To determine our priorities • To evaluate organizational effectiveness • To clarify vision, mission, critical issues, and strategies • To prepare for possible partnerships • To provide guidance to staff • To stay on track during leadership transitions • To demonstrate accountability

11. Why be Strategic? • To find best approach(es) to implementing the mission • To identify organization’s unique niche for success • To build on assets • To identify and correct weaknesses • To anticipate problems and be prepared to deal with them • To take advantage of opportunities

12. Where are We Now? • Is the organization clear about its primary purpose? • Are new strategic approaches needed for implementing the mission? • Can existing strategies be implemented in a more effective way? • Are organizational goals and outcomes clear? • Should any of our major programs be eliminated? • Is there a need for new programs and services? • Is it necessary to consider a totally new approach to our mission? • Should we consider a merger or collaboration?

13. Are We Ready to Plan? Crisis Mode is not a good time to do this, such as • Major funding shortage • Chief executive leaving • Majority of board resigns • Unexpected loss of board chair • Financial scandal If the organization is stable • Does a strategic plan already exist? Is it working? • Have key strategies been determined? • Is there time to plan? • Is funding available? • Are board and staff committed to planning? • Who should facilitate the process?

14. If a plan already exists, then is continuing to follow it appropriate? Yes, our board and staff are satisfied • Consider fine-tuning or reorganizing existing strategies and activities • Just keep on with existing strategic initiatives No, we are not satisfied with doing more of the same • A new or revised planning process should begin

15. Is there Time to Plan? Average Time Frame for Planning • Six to nine months to complete planning and have a document approved by board Time Is Needed For • Attending meetings • Gathering data • Research and analysis • Drawing conclusions

16. Funding the Planning Process • Money Is Needed To • Support information gathering, analysis, and research • Contract for consulting and facilitating services • Cover logistical expenses • Develop a Budget • Type of process chosen • Size and complexity of organization • Number of people involved • Geographic spread of mission • If Funding is Not Available, we must first • Create a plan to access funding • Seek donated services and meeting space • Look to board for financial support or planning

17. Are Our Board and StaffMembers Committed? The Board • Commitment absolutely essential • Should have willingness to • spend time planning • support expenses of planning process • monitor implementation of plan’s strategies and goals • Participate in asking for contributions, opening doors, making connections

18. Are Board and Staff Committed? (cont.) The Staff • Commitment essential • Should have willingness to • spend time planning • earmark funds for planning process • monitor implementation of strategies and goals of plan • participate in gathering information • commit to new and diverse roles and responsibilities

19. Are Board and Staff Committed? (cont.) • Board/Staff Partnership • Determine how to access needed information • Share research and interview assignments • Discuss issues that arise in planning • Communicate disagreements and differences of opinion

20. Who Should Facilitate the Process? • Should a Consultant Be Hired? • Assess whether there is a need • Determine if funding is available • Seek referrals for consultants who work best with specific organizations • Should a Board Member Act as Facilitator? • Caution: Board members are not the best option • If board member facilitates, he/she must • remain objective • limit insights and ideas • act as catalyst in planning process

21. What Is a “Plan to Plan”? • Defining our goals and purposes • Key tasks and who performs them • Time frame for completion of strategic plan • Budget • Key steps for data collection and analysis • Delegation of tasks • Process for legitimating conclusions • Plan for implementing strategies

22. Who Should Be Involved in the Planning Process? • Full board • Chief executive • Key staff members • Donors • Other external stakeholders • Consultant? • Steering committee

23. The Board’s Role • Commits to planning • Ensures adequate resources • Decides on approach • Coordinates steering committee • Helps prepare and approves “plan to plan” • Ensures full board participation • Conducts board self-assessment • Reviews and approves vision, mission, critical issues, and tasks • Makes final decision on approving plan • Ensures plan become operational • Ensures plan is fully implemented • Oversees accomplishment of goals

24. Chief Executive’s Role • Seeks board’s buy-in for planning • With the board, ensures adequate resources • With the board, decides on planning approach • With the board, appoints steering committee • Participates in “plan to plan” • Ensures participation of staff • Informs staff; encourages feedback and input • Prepares operational plan with staff • Evaluates accomplishment of strategies, goals, and objectives • Regularly reports status to board

25. The Role of Staff Staff <20: • Expect participation from every staff member Staff >20: • Create leadership team more directly involved in planning Staff will be involved with • Analyzing internal capacity • Formulating and distributing questionnaires • Organizing data collection • With chief executive, identifying critical issues (vision, mission, strategies) • With chief executive, preparing operational plan • Implementation of plan

26. Involving our Stakeholders • Who are they? • Clients, staff, funders, members, community • What can they add? • Involvement with internal/external assessments • Outsiders’ perspectives

27. B: Understanding the Organization’s Stakeholders

28. To interest potential supporters, we must be very clear about • What exactly is our mission, and how will we carry it out? • How do our various constituencies view our mission? Will they support it? • How well have we identified and communicated our goals? • What programs & services will best carry out our mission? • How will we deliver our services in ways that are positively noticed and supported? • How will we organize our efforts to be successful in accomplishing our goals? • How will we ensure resources to sustain our programs?

29. Importance of an external orientation • Most staff are internally focused, concerned with quality of projects and programs. • The external environment is increasingly complex, competitive, and demanding about accountability and responsiveness. • Our intended audiences’ points of view, needs & interests, are vital to our success. • Other organizations that are more attentive and responsive will successfully compete for our constituencies and resources. • So we must define our audiences and find out what each group wants, in what forms and ways of delivery.

30. The external environment is changing • People are less loyal to old, familiar organizations; brand loyalty diminishing • People have fewer close friends or long-term commitments; more transience • Average age is increasing • People distrust large organizations, and interest in joining organizations as formal member is declining • Investment in some civic activities has diminished • Technology emphasizes quick responses • Choices among options, brief engagement, and privacy are valued

31. Trends affecting the stakeholders of every nonprofit • The external environment is increasingly turbulent, unstable, changing • Constituents and supporters want more control, and loyalty cannot be assumed • Unplanned networking is less reliable as source for money, volunteers, publicity • Public policies are changing • Demands for accountability are rising • While some nonprofits are paying attention to such changes, most are not

32. Key Questions about stakeholders’ needs and interests • Who are our target audiences (individuals and groups we have/ want to have involved)? • What are the key segments (sub-groups) within those groups? • What are the needs/ interests of each? • What business do they think we’re in? • How much interest or awareness do our activities generate among them? • How satisfied are they with our output? Good fit? • What are our competitors doing about these issues? • Do we have any distinctions that allow us to be in a more attractive position than our competitors?

33. Strategy must match conditions of the organization’s market • Are our mission and values congruent with our consumers’ and sponsors’ interests and concerns? • Do we have programs that will accomplish our goals effectively? • Do we have the skills, commitments, and resources to deliver? • What are our best, most feasible directions for the coming years?

34. Concentric circles of interest in a nonprofit organization Board, staff, Volunteers Donors Clients People with similar interests

35. Constituencies and organization must share in the mission and goals • If they are based upon constituents’ concerns and interests, there will be energy and resources to achieve shared goals. • The organization must know what criteria stakeholders are using to judge the success of its performance. • Activities must be consistent with shared core values or there will be little chance of achieving stakeholder satisfaction.

36. Effective reciprocal relationships with constituencies • Each group is necessary for the other to succeed. Both must receive adequate benefits in order to be successful. • Organization must involve target audiences to accomplish its goals. Donors, volunteers, members must be empowered to achieve their individual goals through involvement. • Messages of encouragement, solicitation, and benefit are sent by those inside the organization to those outside, while messages of acceptance, displeasure, and encouragement are sent from those outside to those within the organization.

37. Appealing to our constituencies • There must be some degree of current interest in the topic for people to respond to overtures from the organization • Information presented by the organization must be compatible with listeners’ prior values & attitudes for them to be receptive • People respond in differing ways to same material, and their response depends on their beliefs and attitudes. • We must understand each audience’s interests and tailor approaches to match. • Example: packaging aspects of organization to appeal to donors (naming opportunities)

38. Collaboration with constituencies involves exchanges • Each party in the transaction should sense that they are receiving more than they are giving up (time, recognition, involvement, friendship, worthwhile engagement). • The nonprofit must understand what target constituencies want and how it truly provides them their expected benefits. • The nonprofit must satisfy efficiently and effectively its half of the transaction. • Are we truly adding value for them? • By building on its strengths, the organization can better serve constituencies and strengthen their loyalty.

39. Tools for understanding our constituencies’ interests • Focus group discussions • Analysis of demographic & census data • Key informants • Surveys of consumers, sponsors, referral sources • telephone • in-person interviews • mailed questionnaires

40. C. Pulling it All Together into a Plan

41. Identifying useful strategies • Can we fine-tune our current operations? Work harder at what we’ve been doing? • Should we shift our focus and resources to address an emerging opportunity? • Can we convert a barrier or threat to an opportunity? What would it take? Can we do that? What resources would be needed? • How will our answers address the factors raised in our SWOT analysis? • How will answers foster constituency engagement and loyalty? • What are some specific aspects of our organization and programs that would appeal to what kinds of donors?

42. How should we spend our money? • Some projects may operate at a loss because of centrality to our mission (core) • Some projects not core to mission but money-makers may be accepted to offset losses in others (cash cows) • We may invest in growth of programs in hope they will break even in the future (venture capital) • Some projects may be discontinued because they no longer meet the needs for which they were designed (dogs)

43. Formulating goals from analyses of the internal and external environments • Situation (SWOT) Analysis • Internal • External Strengths Weaknesses Opportunities Threats

44. S.W.O.T. Analysis • What are the key internal strengths and weaknesses of this organization? • Issues including teamwork, leadership, structure, consumer interests, program effectiveness, staff satisfaction, donor and volunteer engagement • What are the key external opportunities and threats facing us? • Issues including political and demographic trends, market changes, competitors, suppliers, interest groups, governmental policies • What are the alternative future directions this organization could take? • Weigh options in light of findings and cost-benefit for improving organizational effectiveness

45. Example of SWOT items Strengths might include • Trained fundraising staff • Board has fundraising experience • Strong involvement of volunteers Weaknesses might include • Lack fundraising experience or software • Volunteers will need office space • Limited interest in organizational change

46. Example of SWOT items • Opportunities might include • Untapped prospect base: volunteers who serve our clients • College town: can obtain fundraising help through Greek system • Threats might include • Organization X provides similar service • Community does not clearly understand what we do and why

47. Weigh program options in light of interest and competition

48. Specify multi-year financial plan and income needs • Options (on-going & new programs) • Priorities • Estimated expenses • Estimated income • Renewable income • Last year’s gifts minus non-repeatable gifts (Grants, personal gifts, contracts, fees, earned income) • New income • Use historical rate of growth, OR combine with new fundraising efforts

49. Examples of incremental strategies • Over the coming 3 years, our organization will increase its scope and influence by developing alliances or partnerships with at least two other organizations in this region that have similar missions. • By December 2008, we will have established specific procedures for evaluating member satisfaction with all our programs and services. • By December 2008, we will have enlarged our membership by 50%. • By the end of our coming year, we will have • Hired a volunteer coordinator and developed a volunteer recruitment program • Had every board and staff member complete an educational program on fundraising

50. Examples of re-directive strategies • The Montgomery History Center will redirect its focus from on-site exhibits to • Assisting other local history organizations with expanding and improving their services • Making our own resources available via the Internet • The Knoxville Faith in Action Center will move from the direct provision of services to assisting local congregations in the delivery of those services. • Eldon College will move from being a general liberal arts college to a regional center for career preparation, beginning with the fields of business, health care and electronic communications.