fundraising and philanthropy
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Fundraising and Philanthropy. Why Does it Matter?. Non-profit organizations raise money because income generated from normal operations is insufficient to support the organization’s mission. A wide array of organizations raise funds: Churches (35% of all giving) Schools (14%) - PowerPoint PPT PresentationTRANSCRIPT
Alumni Affairs & Development
Paul KeenanSenior Associate DeanFAS DevelopmentFundraising and Philanthropy
Why Does it Matter?
Non-profit organizations raise money because income generated from normal operations is insufficient to support the organization’s mission.
A wide array of organizations raise funds:• Churches (35% of all giving)
• Schools (14%)
• Social service and relief organizations (9%)
• Hospitals (8%)
• Arts & Cultural organizations (5%)
Fundamentally, the process of fundraising is the same across all types of organizations, however specific challenges will vary widely depending on the type of organization and its mission.
Why Does it Matter: More than $
$211,770,000,000 was given away by individual donors in 2010.
Beyond the impact of the dollars, private philanthropy also strengthens non-profits by moving them toward greater
transparency, accountability and discipline
because institutions must articulate and defend their vision, priorities, and strategy for achieving them when asking donors for support.
In offering to fund our objectives, donors challenge us to test our assumptions, resist complacency and demonstrate that we are being true to our ambitions.
Why Does it Matter: Margin of Excellence
World’s top universities as ranked by Shanghai Jiaotong University, 2011
1 Harvard
2 Stanford
3 MIT
4 UC Berkeley
5 Cambridge
6 Caltech
7 Princeton
8 Columbia
9 Chicago
10 Oxford
Private philanthropic support has provided that margin of excellence that has separated American educational and cultural institutions from peers around the globe
Why Does it Matter: Patchwork Quilt
Philanthropy is embedded in our national strategy for supporting education
• “Students, individual alumni, philanthropic foundations, private businesses and industry and State and Federal Governments all share the responsibility of supporting our colleges and universities, and this is as it should be.” - US Dept. of Education
Defining the Case
Fundraising goals flow from the institution’s academic or strategic plan – the plan determines your case for support
Fundraising is a means to achieving strategic academic goals, not a goal in itself
The academic plan should provide fundraising staff with the ability to answer the following key questions:What is the leadership’s vision for the future?
What do you need money for?
Why are those things important?
How will new funds change/improve the institution and make it better able to fulfill its mission?
Types of Fundraising
Generally, there are two types of fundraising constituencies:IndividualsCorporations & Foundations
Individuals
• A personal appeal
• Focused on unique interests and motivations of an individual
• Appeal to emotions, to intellect or to both
Corporations & Foundations
• Formal proposal and application processes
• Focus on alignment of your mission with mission of the donor organization
• Proposal writing is a specific skill
Individual Giving: Annual Giving vs. Major Gifts
• Donors asked to give every year
• Generally smaller gifts
• Participation, as much as size of gift, is important
• Mail, telemarketing, some personal solicitations
• Usually “special” gift in honor of reunion or campaign, to name a permanent fund, building or room
• Large gift, perhaps to be paid off over time
• Size of gift is critical
• Personal solicitation is key
ANNUAL GIVING MAJOR GIFTS
Individual giving is generally divided into three approaches
• “Once in a life-time” gift
• Transformational for the institution
• Very top of the giving pyramid
• Typically the result of a lifetime relationship with institution and the institution’s leaders
PRINCIPAL GIFTS
Individual Giving: A Simple Process Model
The process of raising large gifts from individuals has three basic elements:
• Identify individuals who have the potential to be significant donors• Create a process to bring them closer to your organziation, so they
understand the mission and have confidence in the leadership• Ask them to demonstrate their commitment with a significant gift to
support the organization
Identification Involvement Investment
• Suspects
• Prospects
• Communication
• Cultivation
• Commitment
• Contributions
Identification: Constituencies
Constituencies Educational Institutions
Medical Institutions
Religious Organzations
Social Service Organizations
Natural: Alumni Grateful patients Parishioners Community leaders
Other ideas: Parents and/or Non-alumni local business leaders
Community leaders
Social activists National social activists
Most organizations have “natural” constituencies in which to search for donors• The natural constituency may or may not be sufficient to sustain the
organization’s growth needs, so new constituencies must be considered
Identification: Research
Pareto Principle or the 80:20 Rule (“The Law of the Vital Few”)Top 10 gifts = 25% of total dollars raised
Top 100 gifts = 50% of the total dollars raised
Top 500 gifts = 70% of the total dollars raised
ResearchEfficient and effective prospect research is crucial to identifying top prospective donors
Referrals from board members and donors
News reports, Bloomberg, Dow Jones, etc.
Donors to similar organizations
Public information (home valuations, stock ownership, board memberships)
The purpose of research is to focus your efforts on the best “suspects” and qualify them as “prospects”
Determine how large a gift they can give
Involvement: Motivations
There are many reasons why people become involved in an organization, but some are more common than others• Pride of association• Demonstration of leadership• Particular emotional link to a cause• Making a difference• Like attention
People generally prefer to “join a winning team” than “bail a leaking boat”
One goal of your research is to identify the motivations of your prospects
Involvement: Techniques
Prospect Visits
Committees
Events
Communication
• Build personal relationships with leadership of organization
• Nothing is better than face-to-face attention
• Boards of Directors / Trustees
• Issue-specific committees / task forces
• Social events for prospects & donors to meet one another
• Events that connect prospects with beneficiaries of gifts
• On-going education and information about the case
• Newsletters, brochures, website, personal letters, phone calls
Investment: Motivations
“People give to people, not to institutions”
This is true both in a figurative and literal sense• The largest donors give to support the efforts of the
organizational leaders directly, because they believe in them as individuals and as agents of change, not merely an abstract belief in the mission of the organization
• The leadership of the organization is often best evaluated by the quality of the academic or strategic plan
• Major gifts are raised, not given – they generally must be solicited by another donor or a leader of the organization
Investment: Soliciting gifts
The best solicitors are those who have leverage over the prospective donor
Ideally, the solicitor should be a donor who has made a gift in the same range as that being solicited, or has made an equivalent “stretch gift” relative to his or her own resourcesAlternatively, the solicitor should be the organization’s chairman, CEO or another senior administratorEven better, both a donor/volunteer and senior staff person could be present
Solicitations should always specify a dollar amount, never “whatever you can do”Frame the solicitation not as a discussion of money, but rather a discussion of the change/improvements/human impact that money will enable
Investment: Stewardship (Involvement after giving)
“Your best prospects are your past donors”
• No one is more likely to give in the future than someone who has given in the past
• A gift is not the end of a process, but an inflection point in the relationship
• Effective stewardship is crucial to sustain the level of personal commitment and investment that yielded the first gift
• Stewardship can be viewed merely as an involvement strategy tailored to the needs of current donors
• A lapsed donor is a major loss of time, effort and resources – it is much cheaper to keep a current donor than to find a new one
Alumni Affairs & Development
Paul KeenanSenior Associate DeanFAS Development
Appendix 1:
Detailed Flow Chart
of the
Major Gift Fundraising Process
1. Identification 2. Qualification 3. Cultivation 4. Solicitation 5. Stewardship
The Fundraising Process for Large Gifts
1 2 3 4 5
Referrals
Basic Research
List of potential prospects
Visit Prospects
Negative outcome
Positive outcome
Assign major gift officer
Research and qualify prospect further
Proceed to cultivation process
End of process
Identification & Qualification
Review Prospect Potential
Proceed to SolicitationProcess
SIMULTANEOUS & CONTINUOUS
Visits· Staff· Faculty · Administrators· Volunteers
Events· Advisory Board Meetings· Small Dinners· Receptions· Campus Visits
Volunteer Opportunities· Committee Membership· Fundraising Committees· Alumni Affairs· Visiting Committees· Overseers/Governing
Boards
Communications· Publications· Letters/notes/cards· Phone· Visits
1 2 3 4 5Cultivation
Define/Refine Cultivation Strategy
Gain input from:· Development
colleagues· Alumni and
volunteers· Faculty and
administrators
Determine solicitation strategy, including:
· Solicitor/closer· Proposal· Amount · Timing · Sequence
Schedule appointment with prospect
Brief solicitor
Solicitation meeting occurs
Result: Yes; gift will be made
Draft and confirm terms with donor
Define payment schedule
Book gift
Proceed to stewardship process
Result: no or maybe
Back to define/refine cultivation strategy
1 2 3 4 5Solicitation
Draft and send thank-you letters
Define further stewardship needs
Large gift Choose stewardship materials or methods
Assign staff responsible
Determine timing
Small gift No further stewardship needed
Update/revise cultivation strategy
Return to cultivation process
1 2 3 4 5Stewardship