Creating and Maintaining an Effective Fund-Raising Program Suzanne Mink World Wildlife Fund July 18,...

Creating and Maintaining an Effective Fund-Raising Program

Suzanne MinkWorld Wildlife Fund

July 18, 2005

What is development anyway?

• It is about people

• It is about meeting goals designed by and with IPL

• The focus is on values

• The focus is on the donor, less on IPL

• It is not just about dollars

Philanthropy is not a reply

to a question

Non Arboribus Crescit !

Mass Marketing - NOT!

• We are no longer in mass marketing, nor is development

• We are seeking share of “customer”, not customer share

• 90% of the dollars come from 10% of the donors

Fundraising is about relationships

• We are in the business of creating relationships– Cultural– Attitudinal– Value– External and internal

• What is important is the number of ways we communicate

Why do most people give?

• They have been asked

• The believe in the institution

• They respect the solicitor

• They want to give back

• They want to alleviate guilt

• They want to memorialize others

Criteria for Successful Fund Raising

Case for Support

Internal Preparedness

Volunteer Leadership

Potential for Support

Techniques used in solicitation

• Direct Mail• Memberships• Telephone• In person• In person by

committee• Grant proposal

• Government• Planned Giving

proposal• Special events• Foundations• Corporations

Development

• Annual Giving• Major/Planned Giving• Corporate &

Foundation Relations• Grants & Contracts• Capital Campaigns• Prospect Research

• Proposal writing• Stewardship• Special Events• Volunteer

Management

How are Gifts Made?

• Outright– Cash– Credit Cards– Stocks

• Life Income– Trusts

BequestsFoundationCorporateIndividuals

Who Gives?

Why Do They Give?

Interest

•Serve as a Board member, Staff,

•Regularly attend functions

Capacity

•Have disposable income (not necessarily wealthy)

•Low overhead expenses (house is paid, children out of college)

Motivation

•Philanthropic nature

•They were asked

Who Has the Interest, Capacity & Motivation to Give?

• Donors that give to similar organizations

• Volunteers

Some fund-raising myths!

• Hire a development officer and let him or her do all the work

• Fund raising is unpleasant and people who like it are strange

• Selling is the name of the game

Qualities of Development Officers

• Analytical/problem solving

• Creativity

• Uses time effectively

• Lsitening skills

• Self-starter

The Duties of a Development Officer

• Serve the administration and board through fund-raising assignments

• Develop a plan that includes goals for obtaining funds

• Promote loyalty

• Enlist and train volunteers

• Cultivate donors and prospects

• Ask for gifts

The Duties of a Development Officer

• Communicate effectively

• Keep a schedule• Accept responsibility

Important skills of development officers

• Listening

• Listening

• Listening

• Listening

• Working as a team

• Excellent communication

General Staff Assignments

• Fund raising• Gift Processing• Donor Records• Thank you letters• Computer records• Mailing lists• Board coordination• Research

• File keeping• Mail assembly• Maintain equipment

Basic Budget

• Salaries of Staff• Equipment• Equipment rental• Postage• Printing• Telephone• Travel• Meals

• Dues/memberships• Consulting fees• Supplies• Entertainment• Volunteer committees• List rentals• Books/periodicals• Professional

development

Creating an Action Plan

• Steps to be taken

• By whom?

• By when?

• Action status

• Comments

More on Creating a Plan• Set goals and

objectives

• Formulate strategies

• Convert goals into specific actions

• Monitor and evaluate actions

Planning overview

• Document objectives• Document need• Identify prospects• Segment prospects• Prepare plan for

prospect groups• Define appeal

• Set goals• Build organization and

technique• Plan cultivation• Implement plans• Evaluate results

The Annual Fund

• Purpose is to raise funds for the operating budget on an annual basis

• Held yearly and low profile compared to other efforts

• Is the source of regular gifts

• Effort is staff-driven

The Annual Fund

• Ingredients for success:– A well-defined purpose– Extensive planning – Efficient organization– Realistic timetable– Realistic assignments– Logical order

Annual Fund Techniques

• Direct Mail

• Phone campaigns

• Matching gift programs

• Challenge gifts

• Gift clubs

• Anniversary giving

Sample Action Plan CalendarMonth January February March April May June July August Sept. Oct. Nov. Dec.

DirectMail

AppealMailing

AppealMailing

AppealMailing

AppealMailing

Mail/Phone

Phone ProgramDonors and LapsedDonors

AnnualGivingComm

Recruit Committee Personal solicitation ofprospects

End ofCampaign

SpecialGifts

SpecialMailing

Invite toevent

Fdns. Research and contact funders Proposaldeadline

Proposaldeadline

Report tograntmakers

PlannedGiving

Newsletter mailing Newsletter mailing Newsletter mailing

Cost guidelines for solicitation activities

• Direct mail (acquisition)

• Direct mail (renewal)

• Membership

• Special events

• Donor clubs

• Corporations

• Foundations

• Special projects

• Capital campaigns

• Planned Giving

• $1.25-$1.50 per $1 raised

• $.25 per $1 raised

• $.30 per $1 raised

• $.50 per $1 raised

• $.30 per $1 raised

• $.20 per $1 raised

• $.20 per $1 raised

• $.10 to.20 per $1 raised

• $.05 to .10 per $1 raised

• $.10 to .20 per $1 raised

Performance Index

• Participants = # responding with gifts

• Income = Gross contributions

• Expense = Fund-raising costs

• % participation = participants ÷ total solicited

• Average gift = Income ÷ # participants

• Net income = Expenses ÷ # participants

• Cost per gift = Expenses ÷ # participants

• Cost of fund-raising = Expenses ÷ income received

Incr

ease

d Le

vels

of

Invo

lvem

ent

The Universe

Newly Acquired Donor

Renewed Donor

Special Gift Donor

Major Donor

Donors ofPlanned GiftsPersonal Solicitation

Personal Solicitation

Personal Solicitation, Phone

Personal Mail,Phone, PersonalSolicitation

Mass Mail,Phone

The Donor Pyramid

Who are your Prospects?

• Board members• Current donors• Volunteers• Alumni/ae• Staff leadership• Event attendees• Corporations

• Foundations• Parents (current)• Parents (past)• Students

What makes a good “fund-raising Board member”?

• A natural relationship or interest in the institution• Affluence or influence• A willingness to contribute sacrificially• Ability and willingness to communicate enthusiastically to

others• Willingness to be well-informed about the institution’s

history, current operations and future goals• A sense of urgency about the organization’s mission

The donor/friend giving cycle

• Identification• Information• Awareness• Understanding• Caring• Involvement• Commitment

Incr

ease

d Le

vels

of

Invo

lvem

ent

The Universe

Newly Acquired Donor

Renewed Donor

Special Gift Donor

Major Donor

Donors ofPlanned &

Ultimate GiftsPersonal Solicitation

Personal Solicitation

Personal Solicitation, Phone

Personal Mail,Phone, PersonalSolicitation

Mass Mail,Phone

The Donor Pyramid

Why People Give

• They were asked!• Emotional attachment• Influence, professional advancement• Peer approval• Self esteem• Recognition from peers• Diminish negative feelings: guilt, fear, anger• Tax and financial planning considerations

Cultivating relationships

• A major part of our role is cultivating friends for the cause we represent and encouraging and assisting them to contribute financially to it. In cultivating relationships, there are ethical principles that come into play -- honesty, integrity, fairness, caring and respect for others, keeping promises, and accountability. At the center of all these principles is trust.

Personal Qualities and Skill Sets of Successful Development

Professionals

The Chief Advancement Officer

• Commitment to, involvement in, and a broad knowledge of institution

• Strong communication and leadership skills• Strong organization and management skills• Experience with and effective leadership of

successful fund-raising methods• Analyst and strategist• Multi-tasker!• Ability to build and maintain relationships with

broad group of constituents

Personal Qualities of a Fund Raising Professional

• Creative• Energetic• Uses time and resources effectively• Balances leadership and followership• Commitment to education/institution• Passionate about advancement• Highly communicative• Exudes and builds confidence

Trends in Advancement

Trends influencing philanthropy

• Technology– Computers/Internet

• Focus on individual

– Information

• Globalization– Philanthropy

– Education

• Economy

• New Generation of donors

• New work styles/ethic

Other forces at work which affect fund raising

• Changing support base– A "maturing" population

– Increasing expendable dollars

– Generational transfer of wealth

– Women in philanthropy

– Equity base is shifting to (and beyond) the "baby boomers”

– Household-level prospect information

– Improving technology, communications capacities

– Changing marketing techniques

Fundraising is about relationships

• We are in the business of creating relationships– Cultural– Attitudinal– Value– External and internal

• What is important is the number of ways we communicate

What does this mean for Philanthropy?

• Increase in the Importance of Major Gifts– Gifts equaling one percent of the goal are

increasing in campaigns. 90% of the goal from 10% of the donors (or 95% from 5%)

– Mega-gifts changing nature of campaigns

Other trends in fund-raising and advancement

– Increase in utilization of household, demographic and psychographic prospect information (and technology to access information)

– Changing volunteer involvement / time

– Use of technology for communication and solicitation

– Virtual everything

– Personalized everything!

The donor giving cycle

• Identification• Information• Awareness• Understanding• Caring• Involvement• Commitment

More trends

– Larger campaigns– Continuous major gifts efforts– Gift restriction and direction of uses of funds– More frequent capital and “project” campaigns– Changes in purpose of capital campaigns– Change in marketing strategies for different

generations– Expectations of staff / movement of staff

Setting Realistic Goals

• Previous year’s results

• Next year’s operating budget

• Project a reasonable increase (10%?)

• Establish a goal through a compromise between operating budget and the 10% factor, usually not less than the previous year

Development Assessment3=Above average, 2=About Average,

1 = Below average

• Fund-raising environment– Capacity to compete with other organizations– Corporate gift potential within geographic area– Board and volunteer leadership support– Office space and equipment/data

Development Assessment3=Above average, 2=About Average,

1 = Below average

• Donor Research– Availability of reference materials– Prospect gift evaluation procedures– Ability to retrieve donor gift data– Frequency of gift analysis reporting

Development Assessment3=Above average, 2=About Average,

1 = Below average

• Fund-raising techniques– Effectiveness of board and volunteers in

conducting face-to-face solicitation– Dollars raised by special events– Phonathon– Direct mail program

Development Assessment3=Above average, 2=About Average,

1 = Below average

• Fund-raising tools– A case statement– Caliber of written proposals– Software and database– Materials to train volunteers

Development Assessment3=Above average, 2=About Average,

1 = Below average

• Leadership– The access board members have to funding

sources– The board’s understanding of fund-raising

program– The board’s participation in soliciting gifts

Development Assessment3=Above average, 2=About Average,

1 = Below average

• Staff– Development staff experience– Chief development offficer’s access to board

and President– Extent to which development officers can learn

at conferences!

Development Assessment3=Above average, 2=About Average,

1 = Below average

• Planning– Frequency of review of results– Involvement of key leadership in planning– Budget allocation

Issues in stewardship and recognition

• Make sure donor’s gift is used for the purpose for which it was intended

• Be cautious about recognition/benefits– Renaming buildings

– Donor desires related to named endowment/chair (no ownership!)

– Gift crediting during campaign

– Admissions decisions

– Honorary degrees

Creating an Action Plan

• Steps to be taken

• By whom?

• By when?

• Action status

• Comments

More on Creating a Plan• Set goals and

objectives

• Formulate strategies

• Convert goals into specific actions

• Monitor and evaluate actions

What determines the size of a gift?

• The donor’s ability to give

• The donor’s perception that a gift can make a difference

• The effectiveness of the institution’s mission or project

• What others have given

• Who makes “the ask”