A CULTURE OF PHILANTHROPHY Necva Ozgur MED nozgurmeritcenterorg 1 OUTLINE FUNDRAISING FACTS AND FIGURES FUNDRAISING DEVELOPMENT AND PHILANTHROPY DEFINED CREATING A CULTURE OF PHILANTHROPY ID: 583051
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BEYOND FUNDRAISING:A CULTURE OF PHILANTHROPHY
Necva Ozgur, M.EDnozgur@meritcenter.org
1Slide2
OUTLINEFUNDRAISING FACTS AND FIGURES
FUNDRAISING, DEVELOPMENT
,
AND PHILANTHROPY DEFINED
CREATING A CULTURE OF PHILANTHROPYTHE ROLE OF BOARDS IN MAINTAINING FINANCIAL STABILITY & DEVELOPMENTDONOR DEVELOPMENT PROCESSTHINGS YOU NEED TO KNOW BEFORE YOU ASK FOR DONATIONS
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PART I FUNDRAISING FACTS AND FIGURES
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NONPROFIT FUNDRAISING FACTS
How much charitable gifts were given in the United States in 2012?
$316 Billion Sources 72% Individuals 15% Foundations 7% Bequests 6% CorporationsAccording to 2012 Giving USA Foundation and compiled by The Center on Philanthropy at Indiana University. 4Slide5
WHERE CONTRIBUTIONS WENT:
32% Religious Institutions 13% Educational Institutions 13% Human Services
10% Foundations
9% Health 7% Public-Society Benefit 6% International Affairs 5% Arts, Culture, Humanities 3% Environment/Animals 2% Unallocated 1% Individuals5Slide6
WHAT DID WE LEARN?There is plenty of money.
We need to focus our time, energy and resources Learn from successful organizationsLearn the latest strategies
Two top categories are Religion and Education; Islamic Schools fit in both
6Slide7
INDIVIDUALS ARE THE TARGET72% of contributions to charitable organizations each year comes from individuals rather than foundations or corporations.
One-to-one asks are the most effective way of soliciting funds.Slide8
PART IIFUNDRAISING,DEVELOPMENT,
AND PHILANTHROPY DEFINED
8Slide9
“
Fund-raising is going around with a begging bowl,
asking for money because the need is so great.
Development is creating a constituency, which supports the institution because it deserves it.” Peter DruckerSlide10
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FUNDRAISING, DEVELOPMENT AND PHILANTHROPY
These three elements are interdependent and somewhat circular.
Successful fundraising is an outcome of philanthropy and development.
Philanthropy and development, which require healthy nonprofit institutions in order to thrive, are dependent on the success of fundraising.
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A PARADIGM SHIFTThe three part model of the interrelationship of philanthropy, development and fundraising is powerful and it works.
Successful implementation of the three-part model occurs when its elements are integrated into a unified and seamless program. Values-based relationship building in an organization is based on a belief that prospective funders move from a basic belief in philanthropy to engagement with organizations through development to a need to act on their shared values through fundraising.
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BEYOND FUNDRAISINGPHILANTHROPHY
Philanthropic behavior is motivated by values.People do not engage in philanthropic activities on behalf of organizations whose values they do not share.
The match between the values of our organizations and the values of our constituencies predicts the success of fundraising.
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DEFINITION OF PHILANTHROPHYA love of humankind and a voluntary joining of resources and action for the public good
. There are four core components of a culture of philanthropy:
S
hared
responsibility for development Integration and alignment with mission A focus on fundraising as engagement Strong donor relationships14Slide15
TWO KEY PREMISES IN BEYOND FUNDRAISINGNonprofit organizations exist to fulfill community need.
People do not give time and money to organizations because organizations have needs, they give because organizations meet the needs of the community.
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INSTITUTIONAL READINESS FOR DEVELOPMENT
Clear Mission
Recent Strategic Plan
Board Commitment
Board and Community CultivationEffective Marketing MaterialsDevelopment Plan, Goals and TimetableAdequate Staff and VolunteersSlide17
DEVELOPMENTPhilanthropy is based on values, and development is the process of uncovering shared values.
Development is a series of deliberate activities which involve and retain funders.To be successful at fundraising, it is important to spend a lot of time in the development process.
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DEVELOPMENTDevelopment consists of those often subtle, frequently intangible, and not immediately measurable acts that draw donors and volunteers closer to the organization.
Identifying shared valuesIdentifying donorsDevelopment practices and strategies
Creating a plan
Cultivating of prospects
Solicitation of giftsStewardship18Slide19
THE ULTIMATE GOAL OF DEVELOPMENT IS
FRIEND-RAISING
The goal of development is to attract people and people will attract dollars.
The main goal is to cultivate personal, fulfilling, and lasting relationships with people.
Dollars are the result, not the goal of development.Slide20
PART IIICREATING A CULTURE OF PHILANTHROPY
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CULTURE OF PHILANTHROPHYA culture of philanthropy is one in which
everyone—board, staff and executive director—has a part to play in raising resources for the organization.
It’s
about relationships, not just money. It’s as much about keeping donors as acquiring new ones and seeing them as having more than just money to bring to the table
. It’s a culture in which fund development is a valued and mission-aligned component of everything the organization does. 21Slide22
Building a culture of philanthropy is important even for organizations that may believe they are doing fine when it comes to fundraising.
Most of the
fundraising success stems from the current leader’s
charisma. Unfortunately
, leaders come and go. And donors lose interest. That’s why it’s important to start embedding a culture of philanthropy deeper into the organization.Peter Wilderotter-Development Director22Slide23
QUIZFUNDRAISING-WHOSE JOB IS IT?Development Committee
Development DirectorPrincipalBoard
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FOUR COMPONENTS OF PHILANTHROPHY
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#1 SHARED RESPONSIBILITY FOR DEVELOPMENT
In organizations with a culture of philanthropy, fundraising isn’t just one person’s job or the job of one department or board committee.
Everyone
—staff , executive director, constituents, board and volunteers—shares responsibility for fund development. Slide26
#2 INTEGRATION AND ALIGNMENT WITH MISSION
In organizations with a culture of philanthropy, fund development is a value and
mission-aligned
component of the organization’s overall work, rather than a standalone function.
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COMMITMENT TO THE MISSION
Commitment to the mission is the core of good management and is the heart of effective development and fundraising. It must be continually validated and carefully protected.
The leadership imperative for nonprofit leaders is to prevent mission drift.
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#3 A FOCUS ON FUNDRAISING AS
ENGAGEMENT
In
organizations with a culture of philanthropy, fund development is no longer separated from engagement.
This reflects the fact that people today are connecting with nonprofits via multiple channels (e.g., social media, volunteering, blogs, meet ups, petitions).28Slide29
#4 STRONG DONOR RELATIONSHIPS In organizations with a culture of philanthropy, donors are seen as
partners in the work, not simply as targets or dollar signs. These organizations establish systems to build strong relationships and support donors’ connection to the work.
29Slide30
In
a Fundraising Culture...
In
a
Culture of Philanthropy... Development staff is responsible for revenue generation. Everyone in the organization shares some responsibility for revenue generation by building relationships with potential donors.It’s all about the money. It’s all about the relationships. Donors are contacted only when money is needed. Donors are contacted regularly with invitations to participate in activities, about how their contributions are helping.
The board relegates fundraising to the development committee.
The board development committee directs the participation of the entire board in fundraising.
It’s about acquiring donors.
It’s about keeping donors.
Mission, program goals and operations are separate from revenue generation.
Mission, program goals and operations are aligned with revenue generation.
The organization’s leaders make decisions based on what’s available.
The organization’s leaders make
decisions
based on what the community needs and a shared vision of how to meet that need.
The community isn’t engaged.
The community is intentionally engaged and participates as a partner with the organization.
Development goals aren’t part of everyone’s job description.
Development goals are part of everyone’s job description.
The focus is on big gifts.
All gifts are important.
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BUILDING A CULTURE OF PHILANTHROPY Roles for Development Staff
Integrate development into every staff and board meeting.
Spend one-on-one time with board members, donors and others involved in the organization’s work. Get to know them individually. Find out their stories—why did they get involved?
Invite donors into your organization, not just for the usual guided tours but also to attend board or staff meetings.
Keep donors, staff, board, and other constituents updated on the organization’s work, progress, challenges and accomplishments, and its development efforts.Share stories of donors, the individuals whose lives have been changed by the donors’ gifts, and staff and volunteers who do the work. Use donor communications more effectively. When planning pitches and other communications, look beyond how much donors give and personalize contact with them as much as possible by considering each person’s giving history, aspirations and preferences. Celebrate success. When you reach 100% board participation or a board or staff member has brought in new donors, recognize and celebrate it. 31Slide32
PART IVTHE ROLE OF BOARDS IN MAINTAINING FINANCIAL STABILITY & DEVELOPMENTSlide33
In a recent BoardSource study, CEOs
were asked to grade their organizations’
board
of directors in
10 different areas. Fundraising received the lowest score. 33Slide34
BOARD’S PRIMARY ROLESet and uphold the Mission and Vision of the school
Fiduciary – assuring the financial stability and sustainability of the school in the immediate and long-term
Establish a strategic vision/plan for the school
Hire, evaluate, & support the Head/Principal.Slide35
BOARD RESPONSIBILITIES
STAFF RESPONSIBILITIES
Approve annual operating budget and fundraising plan that support organization’s strategic plan
Prepare fundraising plan with specific goals and objectives that link to the strategic plan and its fiscal imperatives
Approve fundraising policies and procedures, in accordance with an articulated code of professional fundraising ethics Select and implement fundraising techniques aimed at building and sustaining donors and prospects. Support staff by identifying potential donors, participating in face-to-face meetings and special events, and fostering communication with donors Develop a donor cultivation and solicitation plan, including identification and qualification of prospects, recruitment and preparation of solicitation teams, and scheduling of face-to- face meetings Support organization’s fundraising efforts with a personal annual gift and/or a planned gift Handle all administrative tasks associated with fundraising, including data management, accounting, and donor recognition Monitor performance of fundraising results compared to approved goals and budget Prepare regular reports that evaluate fundraising efforts based on gifts received, costs incurred compared to costs budgeted, and other metrics meaningful to the organization
Ensure funds raised are used in accordance with legal and accounting requirements and any donor restrictions
Maintain stewardship of donors and their gifts by maintaining good relations and communications
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ROLE OF BOARDS IN MAINTAININGFINANCIAL STABILITY
One of the primary responsibilities of the board is to ensure that the organization has adequate financial resources to carry out its mission.
The
board approves the budget so it must be on top of how the money comes in
. The board must agree on the programmatic goals, so it must also agree on how the work gets financed. If one of the ways for the organization to fulfill its obligations is to raise additional funds, then the board must commit to make this happen. Either the board raises the needed funds or it ensures that staff is equipped with the necessary skills and expertise to organize the fundraising effort. In many organizations the two go hand in hand. 36Slide37
FINANCIAL STABILITY - IMMEDIATE
Non-profit schools rely on fundraising above and beyond tuition.On average, non-profit schools require 20% of their operating budget from sources outside of tuition and fees.
The Board must actively participate in contributing towards this annual need (give and get others to give).Slide38
FINANCIAL SUSTAINABILITY – LONG TERMThe Board must look ahead to the school’s long-term financial health.
Strategically plan for an endowment fund that can subsidize the school.
National average endowment for long-standing independent schools are: $22K per student:
200 students = $4.4MillionSlide39
ESTABLISHING GUIDELINES & POLICIES
Fundraising guidelines
Gift acceptance
policy
Donor recognition policySlide40
TYPICAL TRUSTEE COMMENTSI’ll do anything except raise moneyI give my time that should be enoughI don’t know people who can make big gifts
No one told me I’d have to raise moneyWe should raise the tuition instead of asking for moneyWe have the Development Director for fundraising
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WHAT YOU CAN DO TO HELP YOUR ORGANIZATION FUNDRAISE?
Make a personal contribution to the best of your ability
Speak frequently and positively about your organization
Understand and endorse projects and
support the fundraising effortsIdentify and cultivate prospects, provide names and addressesContact prospects personally by phoneOpen the door for solicitations or make an askAccompany staff on solicitation/cultivation visitsPersonally thank donors for their gifts and keep in touch with themDrop a personal note to lapsed donorsMonitor progress
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TAKING EVERY OPPORTUNITY TO MARKET THE SCHOOL TO OTHERS
Hello. My name is __________. I am a trustee at__________ ___________________________________________________ Insert an agreed upon standard message
Insert a short personal story that represents what makes your school meaningful to you (BE SPECIFIC)Slide43
PROVIDE TRAINING
Enthusiasm and motivation about fundraising is good but not enough, since very few people are trained in fundraising.
We need to empower our board members and volunteers by offering training on
“
Fundraising Strategies” so we can maximize their efforts.The board members and development office volunteers also need to be trained in the following areas:What is the mission of the organization?What are we trying to accomplish?What makes our organization special?What has our organization so far achieved?Why does our organization need money?Why is tuition alone not enough?How much money does our organization need to raise?
Who supports our organization now?Slide44
FUNDRAISING MATERIALS: TOOL KIT
Tool Kit: We need to have an information packet ready.
The
Tool Kit will have the following information:Organization’s Mission StatementOrganization’s Strategic PlanOrganization’s Annual Financial StatementOrganization’s Development PlanOrganization
’
s
Success Stories
Testimonials
Promotional & Marketing Information
Fact Sheets
Letters of Endorsement
Facts that M
ake
the
Organization
S
tand
O
utSlide45
TRAINING SESSIONREFRESHER-KICKOFFS-CAMPAIGN ORIENTATION
Training sessions should be fast paced, challenging, energizing and informative:Training sessions should have three ingredients:
Inspiration
Information
Motivation45Slide46
INSPIRATION-INFORMATION-MOTIVATIONInspiration ignites, but information sustains
Information builds confidence in volunteers and staff and they get motivatedIt is important to engage the heart, it is just as important to satisfy the left-brain needs of those who will ask, or be asked, for support.
Key Talking Points:
Statistics, financial as well as program materials, visual aids, budget annual reports, campaign
reports, fact sheets.46Slide47
MUNIRA’S STORY
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PART VDONOR DEVELOPMENT PROCESS
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DONOR DEVELOPMENT PROCESSSlide50
1. IDENTIFYIdentifying potential prospects for initial or major gifts is an easy aspect of development.
At every board meeting provide an opportunity for identification.“Since our last meeting, I have met the following individuals or heard about the following foundations who share our values and might be interested in our work.”
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CREATING A KEY PROSPECT LISTTier One includes prospects about whom a great deal is known and with whom there is already a relationship
Tier Two comprises those individuals who need more cultivation. These are prospects who need more connection to the organization.Tier Three, these are people whose capacity is known because of their position. They may require more research, and certainly will need cultivation.
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IDENTIFYING THE NEED
Work closely with the principal and the board to know what is needed to close the year with a balanced budget
Formula for determining the needs to be raised annually:
Annual income = Tuition
x Number of students + Other income Annual expenses = List of all the expenses for the year Annual fundraising amount = Annual expenses - Annual incomeExample: Annual expenses: $ 1,300,000 Annual income: $5000 X 180 = 900,000 + $100,000 = $ 1,000,000 Annual fundraising amount: $1,300,000 - $1,000,000 Annual fundraising amount: $300,000 Slide53
2. RESEARCHProspect Research is a technique used by fundraisers, development teams, and nonprofit organizations to learn more:
Donors’ personal backgroundsPast giving historiesWealth indicatorsP
hilanthropic motivations
Evaluate a prospect’s ability to give (capacity), and warmth (affinity) towards an organization.
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3. PLANNING
DEVELOPMENT PLAN
Step1:
Form
the CommitteeStep 2: Identify the NeedStep 3: Provide TrainingStep 4: Create Fundraising Materials—Tool KitStep 5: Identify and Expand the Donor BaseStep 6: Identify Fundraising ActivitiesStep 7: Recognize Donors Step 8: Establish a D
atabase
Step 9:
Monitor
the Plan and Reporting
Step 10: Establish
Development
G
uidelines
and
Policies Slide55
4. CULTIVATIONCultivation is a strategic, disciplined, time-sensitive, focused and continual interaction with individuals.
This is a method you will use to build a long-term relationship with the donor before you ask for their gift.
Invite the prospects to Friend
Raising Events and after any kind of event, a follow-up plan ensures a stronger connection with those who attended.Good follow-up techniques include immediate addition of names to the mailing list, thank you notes and personal phone calls.Providing information and sending the organization’s newsletter are effective way to cultivate prospects.Slide56
WAYS TO ENGAGE AND CULTIVATE
Send an article of interest about something happening on campus with a personal note.
Invite them
to events and lectures that reflect their interests, or
to a small dinner with a speaker.Invite them to lunch on campus with a tour of the facility.Set up a meeting for the prospect to meet a faculty member, student, dean, president, etc.Feature them in a publication.Invite them to come speak to student groups.Invite them to serve on a scholarship selection committeeSlide57
5. SOLICITATION-MAKING THE ASKIf the previous four steps have been well planned and implemented, this step will follow naturally.
As relationships develop, the thought of asking for gifts becomes less troublesome.Be specific about what is wanted and describe the results that gift will have.Slide58
CASE STATEMENTEvery fundraising campaign has a case statement at its center.
Your case statement sets out the argument for supporting your cause.
We
often refer to this document as a "case for support
.”58Slide59
WE NEED YOUR HELP!Cost to educate far exceeds our tuition
Tuition
$836K
Cost to educate our children
$1,025K168Slide60
MASTERFUL SOLICITORSThey are always well prepared, but never seem rehearsed.
Because they are well prepared, they anticipate and are able to respond to unexpected objections.Excellent listeners.They support the organization. They have made their own gift before asking anyone else to invest.
Focused on the purpose of their meeting, they get right to the point after a minimum of small talk.
They become so familiar with the steps in the solicitation that the process appears seamless.
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SOLICITATION STEPS1.Make the appointment
2. Plan the solicitation carefully3. Coach4. Gather and go, meet and greet
5. Engage the prospect
6. State the case
7. Invite the investment8. Keep the silence9. Work with the prospect’s answer and close10. Follow-up61Slide62
RECOGNITIONFind out if and how the person would like to be recognized.Some individuals prefer not to have a public recognition. Respect that but send a personal handwritten thank you note.
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6. STEWARDSHIPTHE HEART OF DEVELOPMENT
Stewardship – maintaining and evolving long-term relationships with donors.Stewardship can be viewed as cultivation after the fact.
Effective stewardship
Strengthens the donor/institution relationship
Helps donors continue to feel good about givingIs a return on investment for the donorProvides continuing communication between the donor and the institutionIs tied to the mission of the organizationSlide64
WAYS TO STEWARDHandwritten
notePhone call from staff, President and/or TrusteeGreeting
c
ards (birthday
, sympathy etc.)Quarterly President’s ReportMagazine and Annual ReportVideo/DVDPersonal meetingsPublicityNaming ceremoniesInvitations to campus eventsWritten report of endowmentToken of appreciationSlide65
7. RENEWALDonors usually like to renew their investment if they feel the gift has made an impact.
Renewal is not just renewal of the gift: It is renewal of the relationship.Donors, if treated like partners with the organization in meeting community needs, will want to reinvest.
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CHECKLIST FOR VISIT TO PROSPECT
The HomeworkKnow the case
Know your prospect
Make an appointment convenient for the prospect
Rehearse the conversationThe VisitThe introductionThe organization updateThe caseThe fundraising updateThe gift requestThe closure
The Follow-up
Send a letter of thanksSlide67
SCENARIO The School has a desire to build a science lab costing $250,000. The school has identified a grandparent who has the capacity to give the gift in total, but she has never given a gift over $20,000. The grandmother ‘likes’ the school, but has never been involved outside of attending the gala.
Identify (done)Research (what questions to ask?)
Planning (who, how much?)
Cultivation (is this necessary?)
Solicitation (who should be in the room, what is each person’s role?)StewardshipSlide68
PART VITHINGS YOU NEED TO KNOW BEFORE
YOU ASK FOR DONATIONS
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TEN REASONS WHY PEOPLE GIVE
They are involved in the organization or the cause
Representative from the organization really listen to them
Emotions are stirred or their hearts are touched
They are confident that contributions are used wiselySomeone they know and respect asks them to giveThey understand that their gift will really make a differenceThey are clear about the organization’s need for resourcesThey support the mission and want to go forwardThey receive appropriate recognition for the giftThey feel good donating to a deserving charity that produces resultsSlide70
SEVEN REASONS PEOPLE FAIL TO GIVE
Solicitation came infrequently or poorly
Information was lacking about the difference their gift
made
They never felt wanted or neededThe organization did not ask their opinions or include them in plans or programsNo one asked them to give again or consider giving moreThey received no direct, personalized appeal by someone excited about the organization’s accomplishments
They gave in the past and their gift went unacknowledgedSlide71
SIX ESSENTIALS TO OVERCOME THE FEAR OF REJECTIONUnderstand the importance of the need the organization is meeting and the impact a gift will have
Feel passion for the organization or project
Have adequate information about the organization to feel capable of handling objections
Have been given enough information about the prospect to feel knowledgeable about interests and concerns
Received effective training and coaching in how to askWere supported by staff or volunteer leadership with tools including appropriate materials, research and resources71Slide72
EVALUATION CRITERIA FOR VALUE OF EACH FUNDRAISER
COST EFFECTIVE:
Did the fundraiser produce an income commensurate with the involvement of time and effort of the staff and volunteers?
FREQUENCY:
How many are held? Are there so many that organization supporters are frustrated?STAFF TIME: How much quality time do fundraisers consume by the faculty, office, organization board and administrators?ORGANIZATION IMAGE: Do the constituents of the organization
perceive the
organization
as always selling something and asking for money?Slide73
RECOGNIZE &
APPRECIATE DONORS &
VOLUNTEERS
Donor Recognition
PolicyPublish an annual report to acknowledge even the small contributionsInvite all $10,000 and above donors to a dinnerInvite all volunteers to an appreciation dinnerSend a letter from the principal to major donors on the use of their gifts Slide74
IDENTIFYING FUNDRAISING ACTIVITIES
Fundraising events focus on both cultivating and soliciting individuals
.
1. Friend-raising Events: Cultivation-Point of Entry Any event throughout the year even if there isn’t an “ask”should be considered as friend-raising
2. Fund-raising Events: Solicitation-Ask
One or two fund-raising events annuallySlide75
FUND DEVELOPMENT ACTIVITY TYPESAnnual Funds (immediate needs)
Special Events (immediate needs)Grants (immediate needs)Capital Campaigns (physical building)
Endowment Campaigns (long-term needs)
Planned Giving (long-term needs)Slide76
HOW DO WE CURRENTLY FUNDRAISE? SPECIAL EVENTS
Most people consider events as the best way of fundraising because it is less threatening to ask someone to buy a ticket than give a contribution.
In actuality, events have shown to be the least effective fundraising method.
Problems associated with events:Associated Costs (can exceed 50% of revenue)Consuming of time and resourcesBurnout (volunteers and attendees)Slide77
SPECIAL EVENTSReasons for an event:
Calling attention to your organizationCelebration of the school and its accomplishments
Educating and inspiring current leaders and donors
Attracting new potential leaders
Uncovering hidden constituentsBoard’s Role in EventsBuy a tableInvite and encourage people’s attendanceHost the eventSlide78
RESOURCESThis presentation is based on the following
book and article:BEYOND FUNDRAISING: NEW STRATEGIES FOR NONPROFIT INNOVATION AND INVESTMENT By Kay Sprinkle Grace
BEYOND FUNDRAISING: WHAT DOES IT MEAN TO BUILD A CULTURE OF PHILANTHROPY?
By
Cynthia M. Gibson 78