PADM 7040Nonprofit Management

Week 7 CHAPTER 7

Part 1 (pgs 183 – 197)

Bill Blake

CHAPTER 7 – Generating Funds Recent History of Donor “Investing”

(George Soros) Balancing Mission and Fundraising

Donations and Grants Revenues Miscellaneous – Investment Income

CHAPTER 7 – Generating FundsBALANCING MISSION

MISSION DISTORTION External Causes – Donor influence Internal Causes – “Attachment” and Pressure

LACK OF PROFITABILITY External Causes – Costly donors in terms of fees,

time, and effort expended Internal Causes – Unsuccessful “retail” and non-

mission operations

CHAPTER 7 – Generating FundsORGANIZATIONAL STAGES OF FUNDRAISING

Product Orientation Stage “Old Boy Network” Volunteer fundraisers A few Loyal Donors

Sales Orientation Stage Marketing Development Director is appointed Paid Staff uses “hard sell” to raise funds from all

possible sources Majority of large nonprofits are in this stage

CHAPTER 7 – Generating FundsORGANIZATIONAL STAGES OF FUNDRAISING (Continued)

Customer Orientation Stage It is understood that the organization’s needs are still

met via donations, so they Starts with the needs and wants of the target market

(donors) United Way Example

Repositioned itself in response to “new” donor needs Bundled organizations into “Charitable Mutual Funds” Instituted more formal reporting and feedback

mechanisms to donors

CHAPTER 7 – Generating FundsNew Wrinkles in Fundraising Landscape

Internet Options for Donors Charitable Mutual Funds Venture Philanthropists

Have established foundations Build portfolios of organizations of interest Directly intervene with management assistance of

these organizations Demand performance monitoring and feedback

from their “investments”

CHAPTER 7 – Generating FundsMAJOR DONOR MARKETS (4)

FOUNDATIONS CORPORATIONS GOVERNMENTS INDIVIDUALS

CHAPTER 7 – Generating FundsMAJOR DONOR MARKETS

FOUNDATIONS - As of 1999 held over a half-trillion dollars in assets and made grants totaling over $23 billion. Four basic categories: Independent – wide ranging and usually run by

professionals Family (actually a subset of Individual) – set up by

wealthy individuals or families to activities of interest to the family

Corporate – Set up by corporations allowed to give up to 5% of AGI

Community - Often set up as donor “pools” with many private sources including individuals, corporations, foundations, and nonprofits

CHAPTER 7 – Generating FundsMAJOR DONOR MARKETS (Continued)

FOUNDATIONS – Securing Foundation Donations Nonprofits should locate Foundation donors most

likely to support their mission In seeking Foundation Grants, Nonprofits should

attempt to match donor interest(s) with its own Research prospective foundation donors Specifically identify a few prospects Contact Officials at the Foundation for more information

Identify and promote projects the donors will likely be interested in

Draft and Submit formal Grant Proposals

CHAPTER 7 – Generating FundsMAJOR DONOR MARKETS (Continued)

CORPORATIONS Donate significant amounts of Cash and Products Often Donate Abroad Includes donations of employees’ time in volunteering Can be fickle depending on their bottom line Recently instituted “Strategic Philanthropy” to help meet

“corporate” goals, such as Changing organization’s image Building alliances for future public support Motivating employees Stimulating Sales

CHAPTER 7 – Generating FundsMAJOR DONOR MARKETS (Continued)

CORPORATIONS – Among the best ways for nonprofits to identify corporations which may provide contributions is to look for the following: Local Corporations Kindred Activities Personal Relationships or Contacts Structural Similarity

CHAPTER 7 – Generating FundsMAJOR DONOR MARKETS (Continued)

GOVERNMENT – Agencies at Federal, State, and Local levels Examples include: The National Endowment for the

Arts, and Grants for Health, Education, and Research

Government donors require lots of paperwork The reputation of the Grantee is important in

securing initial and continued funding