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FundClass Archives:

Discuss the primary fundraising methods

Edited Digest of FundClass Topic #01, April 1997

The first topic for FUNDCLASS, begun on April 23rd, and closed on April 30, proved to be too broad a topic, but as you'll see from the discussion-digest below, contained some great information. This first topic was a learning experience in many ways, and one thing we learned is that future topics will be much more focused!

Where do we find money for our program?

  1. Try looking for corporate and foundation grants while you're building a donor base of individuals who support your cause.
  2. Build your Board of Directors: those who have resources of their own to contribute, but also those who have ties to people in your community who can donate.
  3. Perhaps buy a donor-list from an organization which does similar work, and use it for direct-mail appeals.
  4. Think about a special event: a show of children's artwork, or benefit auction, etc etc . . . if you try an event, be sure to get data on those who attend for your donor database: names, addresses, phone numbers, amount of contribution, and everything else you can: why they give to your particular cause, whether they might volunteer time, or do fundraising, or any other task, who they might know who'll get involved, etc. etc. etc.
  5. Do the speaker's tour of Chamber of Commerce, civic organizations and service clubs (Elks, Rotary, etc), churches -- tell everyone you can think of what you're doing -- don't be afraid to "sing your own praises".
  6. When you speak to people, either one-on-one or in groups, about your cause, be clear about what you need and why . . . be specific. Many people/organizations will give better/more to specific programs than to general operating expenses.
  7. Make sure everyone in your organization can/does talk to people about your cause and its needs. Make up "cheat sheets" if need be; list equipment or items needed; give history of the organization; be able to tell people where the money goes clearly and succinctly.

Fundraising is "Friend-raising"

Several fundraisers wrote messages to FUNDCLASS saying that the most important thing you can do in fundraising is develop a relationship with your donors. This applies to individual donors, and to others: if you're applying for a grant, try to get to know (even a little bit) the contact person who has a say in granting funds; if you're looking for a corporate sponsor, find the person at the company who makes these decisions and get to know him/her . . . make some kind of personal contact, so they'll remember you and your organization. With individual donors, cultivate a relationship through appeals letters and newsletters, events, phone calls -- you want them to feel involved in the good work that your organiztion does, so they'll be motivated to continue their financial (and other) support.

This needs to be an organization-wide effort. All Board members should be aware of the need to cultivate such relationships; all staff and volunteers, too -- in other words, not just the "development staff". Fundraising is not just for a few people in an organization, but for everyone. Come up with training programs to get everyone involved.

What is an Annual Fund?

This question from a newcomer to fundraising elicited several responses:

  1. The broad definition: the regular solicitation of donors who support you every year . . . usually in support of the general fund, usually unrestricted giving (i.e. not restricted to being spent for a particular purpose).
  2. A process repeated each year to encourage donors to become loyal to your organization. . . used as a base to promote larger gifts later on . . . you can be very creative when designing annual giving programs: try special events, direct mail, personal solicitation, etc. . . . "a positive constant attitude makes an annual giving program work".
  3. . . primary fundraising method which helps acquire donors, builds a broad base of support for your organization, offers you an opportunity to talk to a lot of your constituents at least once a year, and builds gift histories that are useful as you need to approach donors for larger gifts. The key is to be consistent: do it every year at about the same time. . . follow up a mailing with a phone call from a volunteer or someone enthusiastic about your cause . . . find out where people work: their employers or spouse's employers may match charitable gifts. . . be sure to record how much people give, what appeal they responded to, when they gave, what they gave it for, what particular interests they have -- all info about donors lets you write better, more personal appeals letters! . . . include "address correction requested" on mailings, to keep track of changes in address.

Tell me about solicitation letters

A solicitation letter needs to talk about your organization, what it does for the community, what it does for the people involved in it. . . "why we do what we do, and why we think it's so important to ask you for money to help us keep on doing it" . . . . give success stories, updates on new developments, anything to make your donors feel involved, as if they belong to an important effort. . . . The letter should be signed by whomever is the best person to do so: if someone on your Board knows the donor, have him/her sign it, or at least add a handwritten note. . . Be as personal as possible; much better than "Dear Friend" is "Dear Tom and Betty" (insofar as is appropriate -- overfamiliarity is not good, either!) . . . If you can afford to send letters out first-class, do it . . .If you can afford/have volunteers to hand-address envelopes, do it.

Be aware that donor acquisition (getting people to give for the first time) is expensive. You can expect to spend at least dollar for dollar -- and maybe more -- for the first gift. But if you can get donors to keep on giving, become loyal supporters of your organization for years, it's worth it.

Try to call each donor/prospective donor within a month of a letter going out. Do a "caller training session" with your Board, or volunteers, or staff, or whoever's going to do the phoning; it doesn't have to be elaborate: a brief history of the organization (people want to know how long you've been around, what got you started, etc); why support is important to your organization and how money is spent; and go thru the script people will work from when calling. It should include an introduction, a rapport-building (finding something in common to talk about, get a dialogue going); transition to "the ask", always for a specific amount; details of how the gift can be made (check, credit cards; membership info, etc); negotiation of the amount, and the close.

Direct mail will usually generate a 1-3% response from donors. Calling donors will increase that considerably. And even if the call doesn't result in a donation, it can be well worth the effort: gather information about the donor (why they might give in the future, or what about your organization doesn't appeal to them); and a good chance to cultivate a new friend for your organization: if they didn't give this time, they might in the future; and perhaps you give them a chance to learn more about your cause, and ways they can help.

Dealing with your Board of Directors

Several questions about dealing with a Board of Directors came up:

  1. One fundraiser says she has a Board which is good at managing organizational crises, legal matters, etc, but dismal at doing any fundraising. Answers included:
  2. the key seems to be leadership of the board: having a chair and a few senior people who understand the importance of soliciting and who are trained in how to conduct solicitation properly, really makes a difference.
  3. an accidental positive result of a fundraising event was that our Board members came away with a new perception of themselves which included the recognition that their title (of Board member) is an important part of the fundraising process.
  4. think in terms of "board development": form a committee to evaluate the Board's strengths and weaknesses, and then recruit new members to fill in the weak points.
  5. make sure the Board members understand exactly what is expected of them; don't assume that everyone knows what a nonprofit's board is supposed to do! -- If the board's key purpose is fundraising, say so; if you expect board members to give (or solicit to) a certain level each year, say so; etc.
  6. be creative with your board members. Some may not be good at public speaking but could do one-on-one solicitation, and some just the opposite. . . speak honestly with each member and find out what their interests and skills are, and then use them . . . don't assume that because a member doesn't come to each meeting and serve on several committees that they're of no value to your organization: discover what they can/want to do, and go from there.

Another writer has a problem with Board members who are no longer active/contributing and how to gracefully-but-firmly remove them. Answers:

  • make sure your by-laws include a clear term-limit for board members, allowing for no more than one or two terms of two-three years, and a hiatus of one or more years before being re-elected.
  • send these individuals a formal thank-you-for-your-years-of-service, and an invitation to a reception in their honor on the day or evening of their final board meeting . . which will also include the introduction of new board members to take their place.
  • grant these members inactive status: they continue to receive mailings, and may contribute as much as they like, and feel committed/a part of the organization, but do not vote, and do not take up a space which should be used for active members.

Corporate Membership Fundraising

One fundraiser asked about Corporate Membership programs: how well does it work, what's a realistic expectation, etc. Replies included:

  1. Try to tap into the advertising budget of corporations late in the fall for next year: sponsorship money, for an event or mailings, etc. . . . Then, appeal for an annual gift separate from that sponsorship money, using a strong "case for giving". . . . Perhaps ask for permission to present your case to the employees thru a payroll stuffer. . . . Develop a leadership giving club, for those who give $1000 or more per year, with levels of recognition for increasing their gift each year. . . . Remember that people generally give to causes, not for operating budgets; be careful how you ask for funds: be specific. . . . Look for foundations who will support you: i.e., Exxon will give $1000 for equipment, if you have an Exxon employee in your organization.
  2. In our experience, many companies are refocusing their giving priorities to eliminate gifts to general operating funds -- they want to support specific projects. . . . Also, many large corporations have consolidated philanthropy into regional giving offices, meaning our requests are competing with more and more applications for funding. This means writing proposals just like I would for foundations! . . . on the idea of getting companies to give a gift based on sales (a percentage for the day, or on the sale of a particular item) where you help advertise it: beware! We tried it and got bitten: we did a lot of advertising, giving the company a lot of promotion, but got very little money! So you might want to get a guaranteed minimum donation in writing before you do a lot of work.
  3. Do you have a diverse Board of Directors that have access and connections to the corporate powers that are targeted? More importantly, are they willing to be part of the solictation team?

Grant Guides

One subscriber asked about using grant guides. . .

  1. In Canada: The Canadian Directory to Foundation and Grants; in the US: The Foundation Directory. . . . almost like buying an encyclopedia, thses come cross-referenced according to subject areas of funding, geographic areas of funding, etc. It's quite expensive, and there are options to purchase different types of these books, where, for example, all education-related granting foundations are listed. For more info, contact the Foundation Center in New York City.
  2. When looking at grant guides, look for:
    • current information: name of foundation, purpose, interrests, geographic areas for giving, grant limitations, grant information, officers of the foundation, application procedures.
    • cross-referencing; support services such as newsletters.
  3. They're expensive: expect to pay anywhere from $150 to $300, and more. To find the most appropriate guide for your organization, contact the nearest local philanthropic registry or organization.

Not all nonprofits need to raise large sums of money

One detailed message addressed the idea that many small, local organizations need to raise only small amounts of money . . . for instance, a local Scout troop can easily focus so much on raising funds that it loses sight of its original purpose (and perhaps send the message to the kids involved that the money is the important thing!). Here are some suggestions for raising an easy $250, in an afternoon, having a good time, and even spending some time with the kids to boot:

  • special food/other product sales
  • service events, like car washes
  • performances (plays, band-in-the-park)
  • _____-a-thons (walk, climb, bowl, bike, dance)
  • events: ice-cream socials, carnivals, haunted houses

Each of these have in common the characteristics that the participants can organize and execute these kinds of programs to benefit themselves.

Advantages: simple to plan and organize; easy to find community and business support (local gas station lets a youth group set up a car wash); inexpensive to start; little staff involvement needed; efficient -- especially if you can draw on the boundless energy of youth, instead of relying on busy/tired/overwhelmed adults; no long-term maintenance of resources or donors required; provides community visibility -- also popular with local news media as positive community news events; very short term -- possibly just a few hours; and easily repeated because of low donor-burnout. . . . AND beneficiaries draw a sense of accomplishment from earning their own money.

Disadvantages: you'll never get rich, as these events don't attract big givers (but maybe you don't need to!); keeping adults interested is tough, though kids will stick with it over and over; typically does not generate a donor/contact list (so no maintenance needed!); can be hard to find someone to help clean up after the fun.

These methods are great for groups that benefit children. These ideas are simple but effective if you're looking for events that will build pride and teamwork, generate some local interest, and pay for the next field trip.

A "Friend-raising" Success Story

Let's close this digest of the first FUNDCLASS topic with this wonderful story from a senior center in Bristol, PA:

In its first year and a half, the senior center grew to a membership of 400, with a Meals on Wheels and dine-in program tally of 70 per day and activity offerings including health and wellness, educational and recreational programs, volunteer opportunities, and more. The budget grew to over $75,000, and the center received many equipment donations and more than $150,000 in grants to renovate the building and construct an addition. The center "friend-raised" constantly, offering volunteers to many community efforts, including schools, disaster relief efforts, and various community based organizations, winning many awards and becoming a real presence in the community.

When disaster struck, in the form of a flood which destroyed the center and its equipment, supplies, and furniture. The community support for the senior center was amazing: the school district gave free use of space for activities; the hospital helped with the meal program; media provided coverage and assistance; agencies and business provided help with rebuilding and new furniture and equipment.

The four months of rebuilding the center and its programs were difficult, but doable because of the help that came from all those "friends". In some ways, the program emerged stronger than before, with an increased sense of community ownership and valuing of the mission. The investment in friend-raising paid off handsomely!

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