Introduction to effective fundraising

Introduction to Effective Fundraising

The elements of building a successful fundraising strategy

Fiona McPheeFebruary 2016

What is effective fundraising?

• Low spend / high return?• Cost per dollar raised• Return on Investment

• A program delivering more net each year?

• A sustainable program delivering more net each year?• Diversification – are you eggs all in one basket?• So more people need you than you can reach today?

Today

•Fundraising in context – big picture sources of funding

•New Zealand’s individual giving market•Strategy options•Couple of critical factors to success

You as a donor

My favourite Charity:

How you support:

Why?

My favourite Charity: Blind

Foundation

How you support: Regular

gift from credit card &

volunteer

Why?

My daughter was born with

cataracts, they have made a

huge difference to her life

and I want to ensure other

children can get the help

they offer

What does Effective Fundraising Look Like?

It is hard workYou have to make

choices and set priorities

Fundraising is an indistinguishable part of your organisation, not a separate function just generating the money

There is no one-size-fits-all or magic template

My fundraising strategy

Because of the need to

diversify from our reliance

on events and corporates,

our plan is to keep the

income from those secure,

whilst investing our surplus

in a new regular giving

program. We will also be

investing more in....

Data / information we

collected to come up with

that strategy

Corporate and events have

been growing, but seem to

be harder every year and

our demand for services is

greater. World Vision seem

to do well from regular

giving, and I went to a

training...

My fundraising strategy driver

Growth? Stability?

Diversification? Other?

My fundraising strategy targets

Next year

Three years / five years

Net / Gross / Return on investment etc

Fundraising in context

The big picture

Facts not anecdotes

The Big PictureOverall Fundraising Strategy


Investments


Government


Government

Trusts & foundations


Government


ConsiderCorporate &Events

“Chasing the corporate dollar”

Home of capitalism, most generous

nation on earth. 19660.9% of corporate

profit donated

Rise of the Triple Bottom Line,

Corporate Social Responsibility

20120.8% of corporate

profit donated

1986Peaks at 2.1% of corporate profit

donated

Source: www.slate.com

http://www.slate.com/

155%

23%

342%

NZ 2014

1 80%

25%

315%

USA 2014

Source: Giving USA & Giving New Zealand

Gross Income - by year – New Zealand

$0

$40 M

$80 M

$120 M

$160 M

2005

2005

2006

2006

2007

2007

2008

2008

2009

2009

2010

2010

2011

2011

2012

2012

2013

2013

2014

2014

Inco

me

Individual Organisation


Government




Government



ConsiderAssociations, groups


Government




Individuals – Long term growth


Government





The Giving Constituency

Types of Individuals

Occasional

Strong Relationships

Total Commitment

• Singular emotional response

• Other motivation – raffle, auction, peer-support

• Regular Givers• Multi touch point• Longevity giving

• Bequests• Major Donors


Government






Bequests / Legacies Major Donors Regular Giving


Government






Bequests / Legacies Major Donors Regular Giving

Other areas:• Lottery

• Merchandise• Community / Peer-to-Peer

The Big Picture

Government, trust &

foundations offer

immediate funds

But in 10 years

time…?

Bequests / legacies,

major donors

and regular giving

Appeals and acquisition

are the means

to this end

Simplified

Overall Fundraising

Strategy

Government

Individual – Long term

Growth

Trusts and Foundations

Corporate

Acquisition, Renewal

and Retention

Bequests

Major Gifts

Regular Gifts

Individual giving is currently the ONLY long term solution for growth

New Zealand’s Individual Giving Market

Fundraising

Individual Report 2015Benchmarking

Amnesty International New Zealand | Blind Foundation | CBM New Zealand | Child Cancer Foundation | Child Fund New Zealand | Coastguard New Zealand | Fred Hollows Foundation New Zealand | Greenpeace New Zealand | IHC New Zealand | Life Flight New Zealand | Mary Potter Hospice | New Zealand Breast Cancer Foundation | New Zealand Red Cross Society | Oxfam New Zealand | Plunket | Royal Forest and Bird Society of New Zealand | SPCA Auckland | St John New Zealand | Starship Foundation | The Stroke Foundation of NZ | UNICEF New Zealand

2015 Members: New Zealand

33

Gross Individual Income - by year

$0

$50 M

$100 M

2005

2005

2005

2005

2005

2005

2006

2006

2006

2006

2006

2006

2007

2007

2007

2007

2007

2007

2008

2008

2008

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2011

2011

2011

2011

2011

2011

2012

2012

2012

2012

2012

2012

2013

2013

2013

2013

2013

2013

2014

2014

2014

2014

2014

2014

Inco

me

Bequest Cash Child Sponsorship Regular Gift Event Other

New Recruits - by year

0

50 K

100 K

150 K

2007

2007

2007

2007

2007

2007

2008

2008

2008

2008

2008

2008

2009

2009

2009

2009

2009

2009

2010

2010

2010

2010

2010

2010

2011

2011

2011

2011

2011

2011

2012

2012

2012

2012

2012

2012

2013

2013

2013

2013

2013

2013

2014

2014

2014

2014

2014

2014

Recruitment Year

Recr

uits

Bequest Cash Child Sponsorship Regular Gift Event Other

Individual Gross Cash Income - by channel of solicitation

$0

$10 M

$20 M

2005

2005

2005

2005

2005

2005

2006

2006

2006

2006

2006

2006

2007

2007

2007

2007

2007

2007

2008

2008

2008

2008

2008

2008

2009

2009

2009

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2011

2011

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2011

2011

2011

2012

2012

2012

2012

2012

2012

2013

2013

2013

2013

2013

2013

2014

2014

2014

2014

2014

2014

Inco

me

Direct Mail Face to Face Media Online Other Phone

Regular Giving Income - by channel of solicitation

$0

$10 M

$20 M

$30 M

$40 M

2005

2005

2005

2005

2005

2005

2006

2006

2006

2006

2006

2006

2007

2007

2007

2007

2007

2007

2008

2008

2008

2008

2008

2008

2009

2009

2009

2009

2009

2009

2010

2010

2010

2010

2010

2010

2011

2011

2011

2011

2011

2011

2012

2012

2012

2012

2012

2012

2013

2013

2013

2013

2013

2013

2014

2014

2014

2014

2014

2014

Inco

me

Direct Mail Face to Face Media Online Other Phone

Average Bequest - by charity (excluding gifts below $1K)

Avg Gift last 5 yrs

$0

$100 K

$200 K

$300 KAv

erag

e Be

ques

t

Pledged Bequest Rate - by type of support

0%

1%

2%

3%

4%

Face

to F

ace

CS

Face

to F

ace

RG

Regu

lar G

iver

s

Cash

Don

ors

Loya

l F2F

Don

ors

Activ

e Ca

sh D

onor

s

Non

Fac

e to

Fac

e RG

RG &

Cas

h Do

nors

Loya

l Acti

ve C

ash

Dono

rs

Loya

l Non

F2F

Don

ors

1k+

Dono

rs

Confi

rmed

Beq

uest

Rat

e

Older is better

Major

RG

Cash

Bequest

New Zealand Donor Pyramid

0.2%

0.3%

44.0% (234,784 donors)

55.5% (296,271 donors)

$37,344

$4,800

$240

$8128%

20%7%

46%

2014 Income

Lots from few v little from many

•Bequests•Major Donors•Grants•BIG events

•Appeals•Regular giving

•Sponsors•Lotteries

Lots from few v little from many

•Bequests•Major Donors•Grants•BIG events

•Appeals•Regular giving

•Sponsors•Lotteries

Approaching Strategy

The need for growth

What is your fundraising vision?

A fundraising vision that answers the questions• How many donors do we want? • Do we want a large number of donors or do we want to focus on larger gifts from fewer

sources? • What kind of donors do we want?

• Do we want a donor base of individuals? • Do we want corporate donors? • Do we want to take funds from the government?

• Are we looking to diversity or to focus our fundraising? • What do we want our funding source pie chart to look like at the end of five years?

• What donor audiences can we best reach with the channels of communication have we built?

• Will these channels of communication most effectively carry our message to our target donor audiences?

• What do we want our donors to do for us? • Just give money? • Or is there some other way we want them involved in our mission? • How can we best leverage their support to make real change on our issue?

http://www.frontrangesource.com

http://www.frontrangesource.com/

http://www.frontrangesource.com/

The need for growth

What is my fundraising vision?

What sort of strategy do I need to achieve my vision?

Ten Steps to Fundraising Success

Assess your current fundraising efforts

Assess the fundraising strengths

and weaknesses of your board and staff

Assemble the team to select the best

fundraising strategy

Weigh the costs and benefits of the

available strategies

Chose the strategy that is right for your

mission

Set fundraising goals that support your

fundraising strategy

Turn fundraising goals into achievable

objectives

Choose the right tactics for this

fundraising strategy and goals

Create a master calendar and keep

on track

Measure your progress

Mal Warwick & Stephen Hitchcock.www.josseybass.com

http://www.josseybass.com/

Growth Audacious goals. Bold.

Big Impact Resource intensive

Involvement Voluntary.Lobbying.

Public participation Staff intensive

Visibility Brand identification.

Broad public awareness

Resource intensive(usually)

Efficiency Cost-conscious. Well established

Frugal management Staff and time intensive

Stability Unchanging values. Broad $ base

Cash reserves. Long term view

Resource intensive

How have others grown?

Cancer Council NSW Example

1997 - 2007• Visibility - events

2002 - 2007• Growth – Regular Giving

2005 - onwards

• Involvement – Relay for Life, Volunteers, Relationships Extension

2007 – onwards

• Stability – Major Gifts, Bequests

2012 – onwards

• Stability – Channel diversification (cash, regular giving, events)

2 year growth 2013 – 2015: 8%

9 year growth: 66%

Amnesty Australia Example

• 2008 – strong regular giving program, small occasional pool, tens of thousands of interactions, monologue not dialogue

• Involvement & Efficiency focused• 2009 – Seven year vision to inspire over 500,000 people every year

to take action (more people = more activism = more members and donors = more impact)

• Stability & Involvement focus• Building engagement through online actions, social media, volunteer groups, donor

care, tied giving• Cross-sell, Regular Giving, Acquisition, Major Donors, Bequests

• Refining programs

2 year growth 2013 – 2015: 18%

9 year growth: 115%

Critical Factor: Your Proposition

Your fundraising proposition

1. What the charity does – the services you provide, the research you do, the teams helping, the campaigns undertaken

2. Your history and track record3. Your board, your leader


1. What the charity does – the services you provide, the research you do, the teams helping, the campaigns undertaken

2. Your history and track record3. Your board, your leader


“Your donation makes a difference. We promise.

Donate today.”


“Your donation makes a difference. We promise.

Donate today.”


http://www.kaygrace.org/

People give to you because you meet needs, not

because you have needs

• Are you clear on the needs you meet?

A gift to your organisation is a gift through your organisation to the

community

• You are not the end user of the gift (its not about you)

Fundraising is not about money, its about

relationships based on shared values

• Are you really clear what your values are?




Answers the question:

Why should I give?


Creative Audit

Audience framing

Competitor review

Stakeholder consultation

Understand strengths,

weaknesses and points of

difference

Creative workshop(s)

Know what you need money for – how you are going to spend it but more importantly

for what outcome

Its not about huge numbers or big brand

statements. It's a simple fact that brings home, in

human terms, your impact

You are offering a solution to the

problem as the donor understands it, not as

you do

Focused & emotive

Assessing Impact

Assessing Impact

What you focus on affects your ability to grow• Classic measures

• Cost Per Dollar (CPD) / Cost of Fundraising (COF)• ROI

1 2 3 4 5 6 7 80

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Series1

Series2

Series3

Cost of fundraising year on year…

1 2 3 4 5 6 7 80

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Series1

Series2

Series3

Cost of fundraising year on year…

Massive investment in acquisition

1 2 3 4 5 6 7 80

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Series1

Series2

Series3

Cost of fundraising year on year v net

1 2 3 4 5 6 7 80

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Series1

Series2

Series3


Maintained slight growth in net – money to spend on cause

1 2 3 4 5 6 7 80

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Series1

Series2

Series3


Maintaining acquisition, but rewards of year 2 acquisition beginning to show through

1 2 3 4 5 6 7 80

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Series1

Series2

Series3


Decided to STOP acquisition for one year – nearly $1.5m bonanza for capital projects and service development – COF plummets

1 2 3 4 5 6 7 80

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Series1

Series2

Series3

Cost of fundraising year on year v gross

1 2 3 4 5 6 7 80

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Series1

Series2

Series3

Cost of fundraising year on year v gross

Reduced acquisition leads to slight decline in gross

1 2 3 4 5 6 7 80

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Series1

Series2

Series3

Cost of fundraising year on year v net v gross

1 2 3 4 5 6 7 80

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Series1

Series2

Series3

Cost of fundraising year on year v net v gross

Growth phase complete – charity stabilises, but still acquiring more donors than losing, hovering around 0.4 cost of fundraising

Assessing Impact

What you focus on affects your ability to grow• Classic measures

• Cost Per Dollar• ROI

• Comparing programs (includes staff costs)

• Overcoming their limitations• Net return – how much more do you have for your services / program?• Income per fundraiser

Net return is key – example

Monthlygiving

Expected Fundraising Return on InvestmentBequest Major

GiftsRegular Giving

Grants DM Renewal

Events Lottery Acquisition

10 10+ 10+

9 9 9

8 8 8 8

7 7 7 7

6 6 6 6 6+

5 5 5 5 5

4 4 4

3 3 3

2 2 2

1 1 1.0

-1 0.5

Making it all happen

Make a concrete, measurable plan

Get organisational buy in

Avoid being internally focused

Don’t overestimate your ability

Seek experience & expertise

Review

THANK YOUFiona [email protected] Twitter: fimcpheePhone: 021 336 905Web: www.paretofundraising.co.nz

Experts worth reading: Dan Pallotta, Mal Warwick, Ken Burnett, Kaye Sprinkle Grace, Bill Toliver, Simone Joyaux, Sean Triner

Excellent resources:• Showcase of Fundraising Ideas & Innovation http://sofii.org/ • Resource Alliance http://www.resource-alliance.org/

Support in New Zealand• Grants: Strategic Grants https://www.strategicgrants.co.nz/ • Major Donors & Capital Campaigns: Giving Architects http://www.givingarchitects.com/ • Fundraiser Recruitment: Execucare http://execucare.co.nz/

mailto:[email protected]

http://www.paretofundraising.co.nz/

http://sofii.org/

http://sofii.org/

http://www.resource-alliance.org/

http://www.resource-alliance.org/

https://www.strategicgrants.co.nz/

https://www.strategicgrants.co.nz/

http://www.givingarchitects.com/

http://www.givingarchitects.com/

http://execucare.co.nz/

http://execucare.co.nz/

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Introduction to effective fundraising