Essentials of Fundraising
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CULTURE OF PHILANTHROPY AND ENGAGEMENT
Effective fundraising does not happen in a vacuum or a silo. It happens when an organization adopts a culture of philanthropy and engagement that permeates the organization.
First, understand why donors give. They don’t give because you are great. They give because they are great.
Why do people give? From Tom Ahern, Seeing Through a Donor’s Eyes:
• They give because they want to give back.
• They have special interests.
• They have cherished priorities.
• They have firm beliefs.
• They have experiences and memories.
• They have values.
Donors give because they want to make a difference and an impact, and you can help them feel they are doing so. And they give from their hearts, with emotion.
The more invested a donor feels in your organization, the better the relationship. Engaging with them often through multiple communications and with various people can help them feel invested.
So why do people give again?
• They feel welcomed and appreciated
• They know where their donation was spent
• They understand your mission and value it
• They have a relationship with the organization outside the development office
• They feel they made a difference
What does a culture of philanthropy and engagement look like?
• You ask your donors – for help, for advice, to participate, to visit, to introduce you to their friends, and how they want to receive communication.
• Everyone recognizes the importance of donors – staff, board and volunteers – and know their roles in engagement.
• Development staff and leadership are key to helping donors build relationships throughout the organization.
• Staff and volunteers are eager ambassadors.
• Your organization welcomes questions and is keen to learn.
• The development budget is seen as an investment rather than an expense.
What are roles for board members?
• Make your gift first
• Know your personal involvement story and tell it
• Thank you calls/handwritten notes
• Ask people to attend events, productions, openings
• Be an ambassador
• Open doors and introduce your organization to new people
• Ask for a gift (when appropriate)
• Identify potential donors
• Be a connector
• Build relationships
What are roles for staff members?
• Collect stories of impact and share them with staff, volunteers, board members and donors
• Find ways of showing donors the impact of their gifts – visits, notes, video, blog
• Be kind and welcoming to donors
• Say thank you
• Review communications and website and make them donor-focused
A culture of philanthropy and engagement encourages donor loyalty, which leads to retaining donors, recruiting them as monthly donors, and eventually asking them to put your organization in their will.
It’s not about the money, either. It’s about inviting donors to make the difference they want to see in the world through you.
Section Resources: Dr. Adrian Sargeant’s 7 Principles of Donor Loyalty, by Tom Ahern
Before we look at different types of donors, let’s see where not-for-profit income typically comes from (yours may be slightly different):
Earned income related to your mission (e.g. ticket sales, fees for classes, etc.) – 46%
Government funding – 32%
Gifts and donations – 18%
Individual – 75%
Corporate – 15%
Other sources (foundations, unrelated income) – 4%
Note that the majority of gifts and donations are from individual donors, as opposed to corporations. That means that you should put most of your effort into engaging your individual donors.
As we see from the Culture of Philanthropy and Engagement page, people are motivated by wanting to make an impact in the world. You can help them because you are making an impact every day and they can help you. Here are some ways donors give:
• Special events (galas, golf tournaments, etc.)
• Donations at the till
• Third-party fundraisers
• Direct mail appeal
• Email appeals
• Via mobile
• Major gifts to operating or special appeals, such as capital or endowment campaigns
• Planned giving (usually leaving something in their will)
The most important thing to remember is that fundraising is not about asking for money. It’s about developing relationships, nurturing those relationships and inviting people to join you in having an impact.
Resource: What Canadian Donors Want
Businesses are part of your community and want to support not-for-profit organizations where they live. They may want to give you a philanthropic donation, or they may prefer to sponsor your special event, or gallery opening, or production. Make sure you understand the difference – philanthropy and sponsorship are not the same.
Foundations are set up to give funding to charitable organizations, and all have specific criteria that
outline what they support. They may be established by communities (e.g. The Winnipeg Foundation),
corporations or individuals. To find foundations that support arts and culture, visit a library in Winnipeg
to search using the database Grant Connect. The libraries have a license so you don’t have to pay to use it.
Resources: Community Foundations of Canada
DEVELOPING YOUR CONSTITUENCY
Your constituency should be made up of your board members, staff, donors, patrons and supporters. You should be in constant contact with this constituency to engage them with your organization and your plans.
If you want to grow your constituency, you have to ask them for help. Here are some ways to do so:
Ask board members and donors to introduce you in their social and civic networks. Can they introduce you over coffee or at an event such as a Chamber of Commerce or other community meeting?
Ask your board members, staff and volunteers to provide names and contact information so you can send direct mail or email messages.
Ask all of them to talk about you on social media – retweet your Twitter messages, share on Facebook and Instagram, comment on LinkedIn. Provide interesting content they’ll be happy to share.
Provide an incentive for patrons to invite someone who has never attended what you offer – 2-for-1 admission or seats, discounted tickets they could offer their friends, family and colleagues, special days for new visitors, etc. Use your imagination!
Find out why they love you, and tell their stories. Community and local newspapers and newsletters are always looking for stories to fill their pages, and local radio stations love to feature interesting goings-on in the community.
If funds allow, join your local Chamber of Commerce. There are often times when you can set up a booth at a membership lunch or after business mixer and let people know what you’re all about. Attend as many events as possible so people get to know you.
Communicating with donors
This is the foundation of communicating with donors. If you miss any of these steps, you will lose donors or not attract them in the first place.
Developing the case for support
Contrary to conventional wisdom, a case for support is not only for capital campaigns. Your case is critical to your annual appeal, planned giving program, and corporate and foundation giving.
If you haven’t articulated a persuasive case for support, it will be hard to approach your donors and potential donors. You need to know what they need from you so they can say yes.
One of the gurus of the art and science of the case for support is Tom Ahern. His book, Seeing Through A Donor’s Eyes: How to Make a Persuasive Case for Everything from your Annual Drive to your Planned Giving Program to your Capital Campaign, is a must-read and must-follow for making your case.
Who needs the case for support? Everyone in your organization. It allows everyone to sing from the same songsheet, with the same words. It’s your key messages all in one document. It’s your go-to place for the annual appeal, grant-writing, website, direct mail, planned giving, speeches, media releases and op-ed pieces.
According to Tom, the three most important questions for getting to the essence of your case are:
1) Why us? (What are you doing that’s so uniquely wonderful that the world should want more of it and support your mission and vision?)
2) Why now? (What’s the big hurry? What changed? Why is this crucial now? Why can’t it wait?)
3) Why you, the donor, might care? (Why are donors critical to your mission? Have you made them the heroes? What are your emotional triggers? What is the philanthropic opportunity you have to offer? What part of the world will the donor save or change through you?)
If you just work through the first question, you haven’t involved the donor. If you leave out the second question, there’s no urgency to respond. And if you don’t answer the third question, you’ll never discover what will motivate your donors and they’ll feel free not to respond.
Working through this process has a profound effect on how you view donors. Because at the heart of it is the realization that it’s just not about you. It’s about the donor, and about what moves them to help you solve problems in the world.
Telling stories to talk about impact
One of the most powerful tools you have to show the impact your organization has on individuals is storytelling.
In general, donors are not moved by statistics or descriptions of how good your programs are. They are moved when their heart is engaged through emotion. And stories are full of emotion.
A theatre company can talk about the number of productions or size of their audience, but where they will appeal to the donor’s heart is reminding them of the power of their plays on individuals. That their art form has the power to make people proud, sad, delighted, moved or question their beliefs.
A museum’s list of artifacts or new exhibits are in themselves not exciting or emotional. But telling stories about what those artifacts or exhibits mean to individuals and the difference they make in their lives can be profound and moving.
Storytelling is not about your organization. It’s about showing the impact that donors have on individuals through their gifts.
Writing appeal letters and donor newsletters
Writing for fundraising is very different from other forms of writing. Rather than piling on statistics and lists of why your organization is great, you write like you are having a conversation with a donor, telling them why they are great.
Because of you…
Thanks to you…
You have made it possible…
Donors don’t give because your organization is great. They give because they themselves are great.
– Jeff Brooks, The Fundraiser’s Guide to Irresistible Communications
The key is to let the donor know that they are the hero. They make it possible for the problem to be solved, for your client to be affected, for change to happen.
The same is true whether it’s an appeal letter (where you’re asking for their help in solving a problem) or a donor newsletter (where you’re telling them how they’re helping solve a problem).
What is donor newsletter really for? Aside from delivering news, it has one other primary purpose: to bring joy into the homes of your supporters.
– Tom Ahern, Making Money with Donor Newsletters
And the way you do that is by telling stories. Because stories show impact. And good storytelling is told in plain language with concrete imagery and emotion.
An excellent resource for board members and staff is Nonprofit Storytelling for Board Members – booklets and DVD are available.
DVDs and books are available through the Non Profit Best Practices website. You can order the videos separately or buy a subscription to all of the videos including those from the Nonprofit Storytelling Conferences.
How to Turn Your Words into Money, Jeff Brooks
You’ve got to have a plan in order to be successful in fundraising. Hope is not a plan.
Understanding how donors come into your organization can help you formulate plans to engage them in your work.
The Donor Cycle
IDENTIFY AND EVALUATE
Let’s say you’ve identified a group of patrons that have been coming to your organization for awhile, but have never given a gift. You can look at what they’ve been attending to get a sense of what interests them. (Notice you’re identifying people that already attend your organization’s offerings, not cold calls.)
CONTACT AND DEVELOP THE RELATIONSHIP
You’ll contact them and invite them to be part of something – a behind the scenes look, a special presentation or something else that makes sense in your organization. When you see them, ask them how you’re doing. Ask them for advice on how you can be better. Ask them why they are loyal patrons. Listen to their questions and answer – you’ll get to know more of what is on their mind. Ask them if you can keep in touch.
ASK FOR A GIFT
This group may already get your annual appeal and have never responded. Consider a special, smaller appeal for them and make reference to what you heard and what you did as a consequence. Show the impact that their opinions had and ask for their support.
Once you’ve received their gift, acknowledge it right away and send a tax receipt within a week. (Never “batch” all your receipts and send at the end of the year.) Engage them further into your work – put them on the list to receive your donor newsletter, and make sure they stay informed about the awesome things you’re doing because of them.
The Cycle – the reason it’s a cycle is because it keeps going. You will contact them again, further develop the relationship, ask for another gift, and steward and engage them again. Many organizations fail to do anything once a donor has received their tax receipt and then wonder why their donors abandon them.
The Annual Fund
Most patrons/donors expect an annual appeal letter from you and most will respond if you have touched them emotionally (see section on Writing appeal letters). The annual fund is a great help in keeping the lights on, as you’re generally asking for unrestricted gifts as opposed to funding for programming. If you’re doing it right, you can come to depend on this amount every year, and plan accordingly.
You can also begin to build your relationships through the annual fund and analyze the results each year to do further planning (see section on Databases). For example, you may identify people that you can ask to be monthly donors, or others that are giving at a level where you can ask for a larger (major) gift. You can then plan your strategies around what you’ve discovered.
Major gifts sound daunting, but in reality, a major gift in one organization may be completely different from another. If you are a large arts organization, a major gift may be $25,000 or more. If you’re a tiny (but fierce!) arts organization, a major gift may be $500 or $1,000. Major gift fundraising is really identifying those supporters who are really engaged in what you’re doing, are already supporting you at a substantial level (either in the amount or number of times they’ve given) and who are open to discussing increasing their investment in you (see section on Personal solicitation).
While there are many vehicles through which planned gifts can be made, the simplest and most common is for someone to leave a bequest in their will.
We know that the main reason people don’t make gifts is because they aren’t asked. So by asking people to leave you a gift in their will, chances are higher that they will actually do that.
At a certain time in people’s lives, they begin to think about their legacy. It’s an opportunity for you to engage with your donors to enable them to see how their dedication to your mission can be carried on after they’re gone.
1. Build awareness. Put the following phrase in all* your marketing and communications pieces and online:
Please consider leaving a gift in your will to (your organization.)
*pledge cards, donor newsletters, advertising, brochures, magazines, letterhead, etc.
Add the phrase to your email signature.
2. If you have stories about or from donors who have included you in their estate plans or from whom you have already received a bequest, tell those stories in your newsletter and on your website.
3. Identify your audience. If you have the capability in your database:
• target by age – 50 plus
• target by giving history – giving five years or more, or 7 of 10 years
• volunteer leaders and donors, regardless of size of gift
• older individuals without children and surviving spouses
• members of volunteer committees and general volunteers
4. Send a survey with questions asking about their life story and how it relates to your organization, and ask whether they have included you in their will or if they intend to.
5. Follow up on responses, and thank people who’ve said they are leaving you a gift in their will. Ask them why they’re involved and what they like about the organization or a particular project they are passionate about. Schedule more follow-ups through invitations, phone calls or visits.
David Valinsky and Melanie Boyd, Raising Money Through Bequests
Larry Stelter, How to Raise Planned Gifts by Mail
Direct mail continues to be an effective tool for acquiring and retaining donors. It works best for those who already know you or who may have an interest:
• Donors or past donors
• Prospective donors
• Audience members/subscribers/patrons
• Donors to like organizations
Note that this list doesn’t include the general public. Effective direct mail is about identifying your audience as much as it is about the written appeal.
Note that most donors are age 55 and older, and they appreciate receiving your appeals by mail.
Direct mail (like all fundraising materials) needs a strategy that is built around the answers to three questions:
1. Who is your specific, target audience?
2. What do you want that target audience to do once they’ve encountered your communication?
3. What’s in it for them if they do the action you’re proposing?
For example: This appeal letter will convince our current subscribers to also make a gift that will ensure support for artists entering the field.
From Tom Ahern’s How to Write Fundraising Materials That Raise More Money.
AFP International has a host of resources related to direct response marketing.
Asking someone for a gift in person probably seems scary. What if they say no? On the other hand, what if they say yes?
Donors are awesome people. They are people just like you who want to have an impact. So keep in mind that asking is not about the money – money is only a tool. And it’s not about you, so don’t take it personally. It’s about helping people achieve their dreams.
The most successful asks are ones where all of the “rights” are lined up:
Select the right person,
To ask the right person,
At the right time,
For the right amount,
In the right way,
For the right reason.
You’ll have to do some respectful research to determine these “rights” and be very familiar with why you’re raising money. If you’re the right one to ask, you’ll need to make your gift first. It’s more powerful when you can ask someone to join you in making a gift to the organization, because you can tell him or her your reasons for giving.
Ask for a face-to-face meeting – asking over the phone or social media doesn’t convey the importance of the ask. Make sure you spend time listening to their comments or concerns, and address them if you can. If not, you can get more information and follow up at a later date. Once you’re ready, ask for a specific amount and then be silent. Wait until they have had a chance to think about it and have spoken before you say anything. This is very important, and also very difficult.
Whatever the response, be sure to follow up with a thank you. If it’s a “Yes!”, then provide either a pledge card they can sign, or ask when you can pick up a cheque, or invite them to donate on your website.
If it’s a “No.”, there may be other ways you can turn it into a “Yes!”. Read about the Nine Fundraising Rejections and how to overcome them.
Email and social media
If you choose to use email as a vehicle to ask people to give, make a strategy and write for it in the same way as you would direct mail i.e. plain language with a clear call to action.
Make sure you’re formatting for maximum effect, with a clear call to action. Read about The 5 Essential Elements of a Fundraising Email.
Fundraising emails are exempt from Canada’s Anti Spam Law, but other emails will be considered commercial electronic messages (CEM) if you are asking people to buy tickets to events, raffles or lotteries, or if you are selling merchandise through your website, for example. In that case, make sure you are emailing only to people with whom you have an existing relationship, or from whom you have received permission to send email.
Social media – Facebook, Twitter, Instagram, Pinterest etc. – is another tool for both creating awareness and asking for gifts.
A Quick Guide to E-mail Fundraising, The Fundraising Authority
Special events must be viewed through the lens of “opportunity cost”:What is the true cost of staff and volunteer time vs. expected rate of return, and what other activities (personal solicitation, grant-writing, sending an appeal, etc.) might produce a greater return?
Events are time-consuming with often a small profit. Make sure you know what your goals are for the event:
• Are you trying to raise money?
• Are you throwing a great party?
• Is it an opportunity to showcase your mission and programs?
• Is the focus on cultivating relationships with current and potential donors?
For example, if your goal is to maximize revenue, but your audience won’t pay a high ticket price and you’re limited in numbers by the space available to you, then your rate of return may be low. However, if your goal includes cultivating your current donors, you may decide to proceed.
The point is to think about your goals beforehand and especially if yours is an annual event. Ask yourself: Are there other activities that will help meet our goals?
Resource: Special Event Evaluation Form – AFP
Phoning to ask for gifts
Calling donors to ask for a gift can be a cost-effective and fun way to reach out for board members and volunteers. You can bring people together over one or several evenings, provide a script and training, give them a list and let them call.
The advantage of calling rather than emailing or sending a letter is the personal touch. You can hear directly from donors about why they give to your organization and how they feel you’re using their donations. You can answer questions or promise to get back to them with answers. And you will make notes on your conversation that will go into your database for future contact with her.
DONOR STEWARDSHIP AND ENGAGEMENT
Donor stewardship is critical to the long-term success of your fundraising. It’s much easier and more cost effective to keep a donor than to go and get new ones every year.
It’s important to have a plan to thank and report back to donors on the impact their gifts have made. In return, donors will reward you with their loyalty and give again.
The 12-month plan should include:
• thank you letter, ideally within 48 hours but no longer than a week
• tax receipt
• thank you calls by board members
• schedule of donor newsletters
• invitations to donor events or community events
• opportunities for “behind the scenes” visits
The foundation of your stewardship and engagement plan is excellent data in a robust database, which will allow you to segment your donors and make your plans for donors at all levels.
For major donors, plans might also include:
• invitation to dine with the CEO, artistic director or board chair
• exclusive opportunities pre-show or to artists’/curators’ talks
Wherever possible, give donors the opportunity to interact with artistic or program staff, as the donors are truly interested in how their gifts are making a difference.
Tom Ahern, Making Money with Donor Newsletters
Roger M. Craver, Retention Fundraising
Fundraising Effectiveness Project for tools and reports on retaining donors.
USING VOLUNTEERS IN FUNDRAISING
Volunteers can be valuable in building relationships for your organization.
Board members should understand their role as ambassadors, in identifying and engaging potential donors and maintaining the relationships once the individuals have given.
Some board members may ask for gifts, but not all are comfortable in doing so. However, all members must first make their gift, and commit to activities that engage donors. For example:
• be an active ambassador in the community
• make thank you calls and send handwritten notes
• attend the organization’s fundraising events and invite others to attend
• host events in your home
• attend donor recognition and stewardship events and engage donors
• identify potential donors and sponsors
• serve on the fund development committee
• participate on the event planning committee
You can recruit volunteers for your fundraising or marketing committees who have specific skills and knowledge. You can also ask volunteers to participate in specific campaigns e.g. on a campaign cabinet or committee for a specific constituency.
Other volunteers can be recruited for events or administrative tasks. Be sure to define the tasks and roles clearly to respect volunteers’ time and contributions.
Spending money on development is an investment, not an expense.
Retaining donors over several years has a higher return on investment than constantly seeking new donors. The Fundraising Effectiveness Project shows that for organizations in the U.S. and Canada, almost as many donors are lost each year as those gained. And it costs much less to retain and motivate existing donors than to attract new ones.
Policies play a critical role in ethical and effective fundraising for staff and board members. When a board has had the opportunity to think each policy through, it creates the opportunity for them to be more engaged in fundraising. It also makes it clear to donors that the organization has a process for accepting gifts.
Key board policies:
An overall fundraising policy lays out who is responsible for fundraising and the coordination of approaches to donors.
A gift acceptance policy.
A prospective donor research and clearance policy.
A policy on named programs or spaces (if applicable).
Third-party fundraising policy and guidelines.
Database and managing donor relationships
Keeping track of your donors is key to retaining them, so it’s important to invest in a database. Manual records and spreadsheets don’t allow for in-depth analysis or reporting. Another important consideration is that the database becomes your institutional memory. If a staff person with all the historical knowledge about your donors leaves, so does the knowledge.
One cost-effective data management tool is Sumac – a Canadian company offering a comprehensive database, with options for all sizes of organizations. The really good news is that it qualifies for funding from Techsoup Canada, which supplies donated software for Canadian charities and nonprofits.
Your database can be used to track your research on your donors and prospective donors. Research assists in the development of relationships by allowing you to:
• make effective and informed decisions about your donors
• target only those people with an interest in your organization
• develop a cultivation and solicitation strategy to make an ask appropriate to their ability to give
Your database will allow you to efficiently and effectively report on your activities related to fundraising and donor relationships. For example, after you’ve sent your year-end appeal, you will be able to analyze how many gifts you received, from whom, when and how much. You can calculate the median gift or average gift size and use this for planning next steps. You can track who your loyal donors are, and who has fallen off the radar. You can also pinpoint who you might approach to become a monthly donor, or to ask for a major gift.
Evaluation is also important when reporting to donors and funders. They want to know that you know where their money goes and how it is used.
It’s important for anyone involved in fundraising to take professional development opportunities to increase their skills and knowledge. This includes executive directors, development and communications staff and volunteers.
AFP Manitoba Chapter offers regular professional development sessions over lunch hour, and occasional networking opportunities. The AFP International website has a vast array of articles for members on every topic related to fundraising, as well as announcements on conferences and webinars. AFP Toronto runs the Canadian Congress each November.
The Nonprofit Storytelling Conference is a unique opportunity to learn about storytelling and how to write for donors.