FundRaiser Blog

Fund-raising has many engaging and inspiring sayings. Three that give insight into donor cultivation are:

At its heart, donor cultivation is about an organization's staff and leadership developing relationships with those capable of giving support and making them friends of the organization. I define donor cultivation as an organization-wide strategy and process to learn more about each donor's interests, desired professional and social contacts, lifestyle, and philanthropic desires so that we can better initiate and respond to contact with a donor in order to develop a stronger relationship with that donor. I can't stress enough how important this definition is - how important it is to the future of an organization's fund-raising efforts. Every successful fund-raising operation cultivates its donors - builds relationships with them. The most successful do it constantly and systematically. Let's parse this 48-word statement and examine its key components. Again, the definition, this time with its key components in bold type: Donor cultivation is an organization-wide strategy and process to learn more about each donor's interests, desired professional and social contacts, lifestyle, and philanthropic desires so that we can better initiate and respond to contact with a donor in order to develop a stronger relationship with that donor.

The Opening: How It’s Handled Will Determine Its Outcome

The first meeting should not take place in a public space such as a restaurant with its distractions and interruptions. Solicitors should begin by talking with prospects about professional and personal interests, mutual friends and acquaintances, places and times where their lives may have crossed. However, solicitors should not forget why they are there. Quickly, but naturally, discussion of the campaign should be worked into the conversation. Solicitors should mention their own personal involvement and commitment to the organization as a way of explaining why it is of such great value to the community. They must convey how important the current fund-raising campaign is to the organization’s future. When appropriate, a tour of the organization’s facilities and the opportunity to meet others involved with the organization should be offered. Finally, solicitors should ask prospects to consider supporting the organization by making a pledge in the suggested amount.

You can be creative in determining the names you'll assign to each membership giving category, but donors will be drawn immediately to "tags" specific to your organization and related to your mission. You can also employ familiar categories such as, Friends, Benefactors, Pacesetters, etc., or designations such as "Individual," "Family," "Associate," or "Sustaining.

For many people, fund-raising is the stuff of myth and magic—a series of tasks rivaling the labors of Hercules and demanding the powers of a Merlin. Myth and magic, because they offer the balm of simple acceptance in place of the pain of comprehension, can be very comforting, and in no instance is this more true, than when the myth of fund-raising magic is used to excuse fund-raising failure.

“If,” goes the justification, “running a successful fund-raising campaign is an endeavor comparable to dredging the river Styx, and soliciting large gifts equivalent to pulling Excalibur from the stone, what mere mortal can be expected to succeed?” Given that attitude, let me add a corollary: “Why bother to develop a goal or start a campaign?” The answer to those questions is, because we have to, and because the myth of fund-raising doom can’t measure up to the basic truth that fund-raising success is simply hard work on the part of people who are thoroughly prepared.

When you receive gifts of products, time and services, be aware that your organization can be held in even greater regard by donors of such In-Kind gifts, should you express your gratitude in a meaningful way—in a manner far and above how these contributions are usually acknowledged by non-profit organizations. This can be accomplished in strict keeping with the applicable IRS rules and regulations, which are especially explicit when it comes to In-Kind gifts and how non-profits handle them.

By law, non-profit organizations cannot provide a donor with the dollar value of an In-kind gift. Such valuations when applicable, relative to "fair market value" of In-Kind gifts, need to be professionally assessed and certified elsewhere—if they can be—and that is the responsibility of the donor. This certification subsequently needs to be resolved with the professionals and others who prepare the donor's tax forms—whose work in turn will need to be reconciled with IRS regulations. In instances where time and service are donated, no tax break whatsoever is allowed, as the IRS Publication 526 clearly states, "You cannot deduct the value of your time or services…"

A capital campaign raises money that will be spent to acquire or improve a physical asset. The most common use of a capital campaign is for the purchase, construction, or renovation of a building (commonly referred to as “bricks and mortar”). However, an organization can conduct a capital campaign to purchase machinery, equipment, furniture, fixtures, or any physical asset that can be reflected on its balance sheet.

The purpose of a capital campaign differs from that of an endowment campaign in that the money raised will not be used to cover ongoing, operational expenses, or to fund special projects. Capital funds are spent on one-time or seldom recurring expenditures. The primary difference between capital and endowment funds is that capital funds are not retained and invested to yield income. However, capital and endowment campaigns are very similar in their planning and management.

So, how do you know from within an organization when and if you should hire a development director? The answer is simple, and it starts with knowing the costs of running the organization as it carries out its mission as set out in the its long-range strategic plan. It continues with the development of a fund-raising plan.

The short answer is sooner rather than later! If a non-profit organization is beginning to ask whether it needs a professional development director, it probably should have hired one months, even years ago.

The biggest mistake non-profits make in hiring their first development director is waiting until the board, executive director, and other key personnel have arrived at a consensus that one is needed NOW. An organization that waits until it is necessary to hire a development director has waited too long.

The nine basic truths of fund-raising listed below are taken from the introduction to my book It’s a Great Day to Fund-Raise, and they are the foundation of my successful career as a development officer for and consultant to nonprofit organizations.

Learn more about how FundRaiser can help you acheive your fundraising goals

How your organization raises and spends money is knowledge a successful fund-raiser must also have at his or her fingertips. You need to know and understand your organization’s budget so that you can delineate the cost of operation and how the money to cover that cost is to be generated. Nearly all non-profits are, by their nature, limited in their capacity to increase earned revenues, and many are unable to produce any earned income because they serve groups that cannot afford to pay.

The inability to produce enough earned income to cover the cost of doing business is why non-profit organizations must be fund-raisers. However, understanding your organization’s capacity to produce earned income, knowing where such income comes or could come from, and maximizing it, are essential to developing a successful fund-raising campaign. If your prospective donors believe you could be producing more earned income, they will be far less likely to give of their limited philanthropic resources.

Remember the TV detective Kojak, played by the late Telly Savalas, who was always asking, “Who loves ya, baby?” Well, the question fund-raisers need to ask of their organizations is the same, although it is more likely to be phrased, Who cares about us and why?

Let’s go back to the mission statement for a moment. If an organization’s mission statement is truly in sync with what the organization is doing, it provides a way to help identify who cares about it and why. Or put another way, it explains who benefits from the existence of the organization.

You start the process of becoming a fund-raiser for an organization when you first become involved with the organization. That’s when you begin to acquire knowledge about an organization, and acquisition of knowledge is the first step in preparing to raise money. To sell any product, it is important to know just what the product is and what it does. It makes no difference whether you are a waitress explaining the intricacies of the specials of the day, a computer salesperson pitching the new improved model, or a solicitor in a fund-raising campaign.

If you are the person running a campaign, you must make sure your solicitors have access to information about what the organization is, what it does, and why money is needed in the furtherance of what goals. If you are the person asking for the money, think about how you would go about making your request without that information. Yes, you will on occasion find people who will give because you ask rather than give to the cause, but that is the exception and –this can’t be said often enough—you cannot rely on the exception to support your organization.

Many non-profit organizations serve individuals who pay very little or who are unable to pay anything in the way of fees for the services they receive. They generally are in no position to give even the smallest donation to their organizations’ annual fund. In all instances those client/user groups are grateful for the good being done for them and their families. They quite often ask if they can do anything within their power and means to show appreciation to their service organizations since they have no money to give to them. Leaders of those non-profits want to know how best they can respond when at the times the people whom they serve say, “I know you need money and I want to help. Is there anything I can do?”

I have found many such individuals were able to solicit small donations from their immediate family members, other relatives, friends, co-workers, and from other sources personal to them. They responded well to plans presented to them by their organizations’ development officers and trustees. Perhaps your organization can do the same by employing a model of such a program I have used a number of times with success.

Moving donors up the giving ladder is one of the prime reasons to keep a donor database. Here are some tips for how to prepare to ask your members to move up the giving ladder.

Compile an A to Z listing of all current donors and lapsed donors—no more than three years (excluding those whose reason for lapsing is known).

The campaign is finished. The thank-yous have been said and the money counted. However, before closing the book on a campaign for good, you should take one last look at it. The days immediately following a campaign are the time to analyze what went wrong and what went right, which fixes worked and which didn’t.

You should assess and review every fund-raising campaign, and you should make a record of what you find.

(read part 1 and part 2 of this series.

Receiving and recording gifts is simple to do, but very often poorly done. When donors make a gift or a pledge, solicitors notify their team captain and forward the pledge card or check to the organization’s development office that day. If the deal is struck in the evening, they do it first thing the next morning. The timing and process is where the first mistakes are made. The timing is do it immediately. The process is send the paperwork to the development office. There is no need for checks and pledge cards to go anyplace other than to the organization. These are official documents and should be collected in one central location as soon as they are signed. No solicitor should ever hold a check or pledge card while waiting for others to come in. Stamps and envelopes are relatively inexpensive compared to the cost of the bad will created by a lost or slowly processed check or pledge card.

(read part 1 here)

We track progress in a fund-raising campaign in order to identify problems in time to take corrective actions so that the goal stays within reach. If at any point in the campaign it begins to look as if the ability to achieve the goal is slipping away, then those managing the campaign must stop and take stock of the situation.

How do you keep a fund-raising campaign on track? By being well organized, constantly monitoring progress, and informing all campaign participants of that progress. The very reason for the pyramidal structure of a campaign committee is to simplify management. In the best of circumstances, the pyramid is constructed so that no person supervises more than five people. (To maintain this limit is why we sometimes add campaign and divisional co-chairs.)

The campaign pyramid

The receiving and the handling of donations made to non-profit organizations are simple to do, but very often poorly done. When that happens, a vital block is taken out of the foundation we strive to build in an effort to ensure donor loyalty for future gifts. Lost or misplaced checks and other communications from donors, late and erroneous recording of gift/pledge dates and amounts, delayed and otherwise neglected acknowledgments, spelling errors of donors’ names, etc., all lead to lost or upset donors. 

We can all agree that this critically important process must be done right. And it starts with the very first check or pledge from a donor when it arrives in the mail room. But in many non-profit organizations, there is a sharply divided opinion regarding just where those checks, pledges, and other donor communications should go next in order to ensure that all goes right with the receiving, posting, acknowledging, reporting, and banking process of donations. 

read part 1 Preparing for the ASK

The first meeting should not take place in a public space such as a restaurant with its distractions and interruptions. Solicitors should begin by talking with prospects about professional and personal interests, mutual friends and acquaintances, places and times where their lives may have crossed. However, solicitors should not forget why they are there. Quickly, but naturally, discussion of the campaign should be worked into the conversation. Solicitors should mention their own personal involvement and commitment to the organization as a way of explaining why it is of such great value to the community. They must convey how important the current fund-raising campaign is to the organization’s future. When appropriate, a tour of the organization’s facilities and the opportunity to meet others involved with the organization should be offered. Finally, solicitors should ask prospects to consider supporting the organization by making a pledge in the suggested amount.