Sbtc f dev complete

State
Board
Training
Consortium’s
Achieving Excellence in Governance
A training series designed specifically for Boards of Directors of Nonprofit Organizations

Fund Development for
Nonprofit Boards

FREE TO NONPROFITS AFFILIATED WITH:
DEVELOPED & PRESENTED BY:
· NYS Office of Alcoholism & Substance Abuse Services
Karen M. Carpenter-Palumbo, Commissioner Council of Community Services
· NYS Office of Mental Health of New York State, Inc.
Michael F. Hogan, PhD, Commissioner
· NYS Department of Health's AIDS Institute & Center for
Community Health
Richard F. Daines M.D., Commissioner www.ccsnys.org
· NYS Office of Children and Family Services David P. Paterson info@ccsnys.org
Gladys Carrion, Esq., Commissioner
/

Governor
`

State Board Training Consortium’s ** Achieving Excellence in Governance
State Board Training Consortium’s Achieving Excellence in Governance

Key Learning Objectives
• Identify fund development
responsibilities of the board,
development committee, and staff
• Learn the components of a development
plan
• Understand resource development
strategies
• Learn ways of getting board “buy-in” to
fundraising/fund development
• Develop strategies for successful
solicitation
Council of Community Services of New York State, Inc 2008 SBTC Series


Board of Directors:
Major Policy and Monitoring Functions

• Board management and
development
• Personnel management
• Fiscal oversight
• Program - quality assurance
• Strategic Planning
• Fund Development


Fund Development Responsibilities of an
Effective Board

• Accountability

• Ethical Principles

• Oversight

• Participation


Accountability
• For all authorized activities generating
financial support on the organization’s
behalf
• Meeting all regulatory requirements:
• Attorney General’s Office
(requirements in manual)
• IRS
• Other
• Compliance with ethical standards


Ethical Principles

• Awareness of, and compliance with,
the intent of federal, state and local
laws regulating charitable solicitation
• Establish and exercise adequate
controls over fundraising activities
• Accuracy, integrity and accountability
in all solicitation activities, materials,
representations, etc.


Ethical Principles
• Motivated by mission, merits &
resource needs
• Respect for the privacy of
donors
• Administrative and fundraising
expenses should be fair,
reasonable, documented, and
disclosed to ensure maximum
support is devoted to the mission


Oversight
• Establishing a governance
structure
• Ensure development efforts
meet the budgetary needs
• Ensure resources are
available to maximize returns
• Approval of the annual
development plan



• What are the agency’s real needs?
• Is current funding sufficient?
• Would funds raised effect existing
funding streams?
• Where have the resources come from in the past?
• What are the funding trends?
• Are the funding streams diversified?
• What would be the impact of a funding cut from any
source?
• What is our goal?
• Increased name recognition
• Unrestricted dollars
• Fund a specific program
• Building donor base
• Connecting with affluent people
• Capital improvements


Participation

• Personal contribution

• Involvement

• Identifying and cultivating resources

• Government relations

• Solicitation



Who’s on First?
The Development Committee

• Prepares Development Plan for Board
approval
• Models and encourages full Board
involvement in implementation
• Monitors and reports progress
• Evaluates efforts
• Revises plan



Why have a plan?

• Gets rid of magical thinking
• Coordinates Board, fund raising and
marketing efforts with the
organizational strategic plan
• Gets “buy-in” from participants
regarding:
– Goals
– Priorities
– Accountability



Why have a plan? (cont’d)

• Helps to pace your annual efforts
• Great orientation tool for new Board
Members and Committee Volunteers
• Creates understanding of everyone’s
fund raising roles and responsibilities
• Outcome orientation helps you measure
your success!



What is a Development Plan?
(or…taking the gamble out of fund development)

A detailed plan of how needed
resources will be obtained,
including:
– The case for support…who needs us?
– Fund Development environmental analysis
– Goals
– Strategies
– Budget and human resource needs
– Timelines
– Accountability
– Evaluation



What is a Case for Support?
• What do you need money
for?
• How much do you need?
• Why would someone want
to contribute?
• Benefits to clients
• Benefits to the donor
• Benefits to the community


Analysis of Fund Development
Environment

External Environment:
• Competitors
• Community awareness
• Perceptions of activities (quality
and need)
• Economy
• Availability of human resources


Analysis of Fund Development
Environment (cont’d)
Internal Environment
• Staffing allocated to fund raising
• Adequate space and technology
• Budget availability for development
efforts
• Volunteers’ commitment to fundraising
• Strategies
• Budget and human resource needs
• Timelines
• Accountability
• Evaluation


Set SMART Goals!

Specific
Measurable
Attainable
Realistic
Tangible

Take It One Step At A Time!



Set Your Goals…
• How much funding do you want to bring into the
organization within the next year?
• What is the breakdown between operating and
programmatic monies?
• Is your current budget a realistic one or one that
reflects your ideal (you can have both!)
• How much funding do you want to bring into the
organization over the next two or three years?
• How much of an increase will your operating expense
be?
• Do you anticipate expanding current programs or
starting up new ones?



Keep in mind…

Those internal and external factors that
influence your goals but may change, such
as…
• Programmatic changes
• Staff structure (number, qualifications, etc…)
• Board and community support
• Local, state or national factors that can
influence fund raising (think 9-11 or
Hurricane Katrina)


Income-generating Strategies
• Grants
• Earned revenue
• Entrepreneurial activities
• Fund raising activities
• On-line activity
• Special events
• Direct mail
• Radio, television or print ads
• Phone-a-thons
• Planned Giving
• Face-to-face solicitation


Each Strategy Serves a Purpose
While it may not offer the greatest financial
return, it may:
• Establish credibility
• Generate positive public exposure
for organization
• Reach out to potential new donors
• Involve new volunteers —
your best ambassadors in
the community


Success Rate of
Fund Raising Activities
Based on Ratio of Time Invested to Financial Return

Personal face to face ask by a known peer 50%
Personal phone call by a known peer 30%
Personal letter by a known peer 15%
(on their stationery)
Phone-a-thon (by a volunteer or paid caller) 10%
Direct Mail 1-5%
Special Events Least Effective Strategy



Master Budget
• It takes money to raise money,
but how much can you afford?
(can cost up to 30% of anticipated revenue)
• Remember that time is money —
if it takes time, there is a cost
• Even volunteer-driven fund raising efforts
require adequate staffing, space and technology
to support volunteers
• Remember to include all costs (direct or
hidden):
– Staff time
– Space and technology needs
– Marketing and advertising


Master Timeline
Space out major events and asks

Strategy Jan Feb March April May June

Special
Event
Direct Mail
Campaign

Volunteers
Recruited

Follow-up
Solicitation

Media
Thrust
Newsletters



Exercise 2: Accountability
Prepare a Written Action Plan

Tasks Key person Resources Target Date Outcome



So How Did We Do?
Evaluating the Plan
• Review and fine-tune the plan
annually
• Were costs within 30% of income?
• Were targets and outcomes realistic?
• Consider the non-financial benefits of
each effort?
• Are you moving toward your long-term
goals?


Why Focus on the Individual?
• Source of 75% of charitable contributions
• Reduced funding from government and
foundations
• Accumulation of private wealth
– Due to stock market growth
– Transfer of wealth to baby boomer from
the generation that saved
• Need for unrestricted dollars
• Requires Board involvement


2006 Charitable Giving:
$240.72 Billion
$ 12.72 Individuals 75.6%
$ 36.50 Bequests 7.8%
Foundations 12.4%
Corporations 4.3 %
$ 22.91
Sources of
Contributions

$ 222.89



Key Concepts In Fundraising…
 People earning under $40,000 per year
donate a higher percentage of their
income than those earning more.
 80% of the money you raise will come from
20% of the donors
 Development is the process of building
relationships
 Fund-raising is setting up opportunities to
actually ask for money
 You better have a plan to cultivate those
donors!


Board Roles and Responsibilities for Cultivating
Individual Giving
Board of Directors
 Identification
 Cultivation
 Solicitation
Development Committee
 Planning
 Training/Modeling
 Oversight
 Monitoring
 Evaluation


What about the CEO’s role?
• Articulate vision of the organization
• Ensure organization operates in a way
that merits support
• Major role in identification, cultivation
and solicitation of major gift prospects
• Works closely with Board to encourage
and support their involvement
• Ensure Development staff has internal
relationships, staffing and budget to
achieve goals


What’s Left for the Development Staff?

Staff supports volunteers in the
following efforts:
• Planning and evaluation
• Resource development
• Resource management
• Implementation
• Public Relations
• Evaluation


O.K. I Get It!
Now How Do I Get My Board on Board?

• Identify skill gaps among current
members
• Recruit new members with
needed skills
• Invest in Board training
• Set an example
• Establish coaching relationships
• Set reasonable goals


Direct Solicitation...Not Me!

• What you believe in must
be bigger than what you
are afraid of.
• You are giving people an
opportunity to have an
impact on a community
problem they care about--
It’s simply up to you to
share your passion. The
dollars WILL follow.


Who Should Do the Asking?

• Develop a strategy for
approaching each
individual
• Remember that the most
effective strategy is a
personal face-to-face
ask by a known peer



Development is 90% Cultivation
and 10% Solicitation

Identification Screening Introduction

Org. Reaction Familiarization

Appreciation
Prospect Reaction

Solicitation Rating Involvement



Warning:
Don’t only target the “haves”

• 75% of all money donated to
charity comes from individuals,
and 85% of that comes from
people earning less than
$40,000 a year.
• Attitude toward giving and
helping is more important than
having or wealth.


Identification
Where Do I Find My Prospects?

• Those actively involved
• Those with some relationship
• Those with a natural inclination
• Those who are active in
philanthropy
• Those who could contribute but
have no history of giving


When Should I Ask?
Cultivation of Prospects

• The higher the ask, the longer the
cultivation period
• An annual fund gift is requested annually,
generally through direct mail, phone-a-
thons, or mass marketing
• Major gifts (10-25 times their annual gift)
are infrequently asked for or given and
require a personalized cultivation plan and
solicitation

© 2000 All Rights Reserved


Remember why people give
• Share goals the organization pursues
• Personal gratitude toward the
organization
• Enlightened self-interest
• Involvement in the life of the
organization
• Being asked
• Joy



What If They Say “NO”?
Overcoming Objections
• Anticipate objections and be
prepared
• Encourage prospect to tell
you their reasons
• Listen carefully
• Clarify misinformation and
offer opportunities to
become more familiar with
the cause
• Continue cultivation


Post Campaign Necessities
• Acknowledge all gifts and
pledges
• Thank each donor promptly and
personally
• Continue building on donor’s
interest — start working toward
the ULTIMATE gift
• Publicize the donor’s generosity
• Hold a wrap-up meeting with
solicitation team


Remember:
• People give to other people —
establishing relationships are key
• People give because of self-interest —
know what motivates your donors
• Respect donor privacy and wishes
• Raising money is a long-term process
• Money follows people—get prospects
involved
• Diversify your funding streams
• Few people give without being asked


And don’t forget:
• Plan ahead—raising $$$ takes time
• Passion and compassion are critical
• “Key person” fund raising is most
effective
• Make sure you have a quality “product”
• Marketing is how people know you
• Writing proposals is not grantsmanship
• Fund development is an every day art



Now What?
• Take a hard look at your board to identify
skill gaps and develop a recruitment
plan to fill them
• Consider board training to help
members understand their fund
development roles
• Assess if current resources are sufficient
to achieve the organization’s mission
• Prepare a fund development plan to
address current & anticipated needs


Celebrate your success!



Added Ideas, Comments,
Questions???

Council of Community Services of New York State, Inc 2007
2008 SBTC Series


Online Giving Research

• Overall, online giving climbed 37 % in
2006 over 2005
• 47 % of organizations indicated they
use the internet to solicit gifts,
compared to 34 % in 2002 and 37% in
2001. Of those who provide online
giving opportunities, 61 % raised more
money in 2003 than they did in 2002
•


• More than 65% of donors used information
from the internet before giving, whether online
or offline – and 40% always go online before
giving, regardless of whether its online or
offline
• The majority of online donors have little to no
prior giving history with an organization. This
means it could be easier to acquire an online
donor than it is to convert a current donor into
an online donor
• Roughly 19% of people donate online
(compared to shopping at 67% and banking at
41%


Getting Grants: The Process

• Need is recognized
• Idea for solution
• Identify funding source
• Relationship building
• Proposal writing
• Submission
• Celebrate!



Earned Revenue Examples

• Fees for services rendered
• Sale of a product/publication
• Medicaid/insurance payments
received
• Performance-based
government contracts



Entrepreneurial Ventures

Earned revenue generating (profit-making)
ventures that are either:
 Related to mission (consistent with
mission)
 Unrelated (not consistent with mission)
Remember, Unrelated Business Income
Tax comes into play
if the activity is
outside the mission



Exercise 1

John and Jane Dough have offered to
give a $10,000 gift of appreciated stock
to an agency in this room.

Why should it be your agency?



Exercise 1: Strategies
• Identify three strategies that you have used in
fund development
• Identify a strategy that would be appropriate
for one of your identified goals
• Consider what must happen to be successful
• How much will it cost?
• Where will the “up front” money
• come from?
• Who will be responsible?
• When does it need to be done by?
• How will we measure success?


If 80% of the money you raise
comes from
20% of the donors,
you better have
a plan
to cultivate
those donors!



How Much Should I Ask For?
Rating Prospects
• Involve 3-4 knowledgeable
community volunteers
• Provide a list of 50-100
prospects grouped by affiliation
with your organization, giving
history and pattern and
community philanthropy
• Volunteers match prospects with
a gift range & add anecdotal
information
• Information is shared with
selected solicitor


Sample Rating Form Rated by:________
Prospect Relationship >$1000 >$5000 Other Possible
Information Solicitor


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