The Essential Nonprofit Fundraising Handbook

Getting the Money You Need from Government Agencies, Businesses, Foundations, and Individuals

Michael A. Sand, Linda Lysakowski

• Publisher: Career Press
• Year: 2009
• Print ISBN: 9781601630728
• eBook ISBN: 9781601638670
• Topic: Business
• Subtopic: Nonprofit Organizations & Charities
• Index: Business

Are you a staff member, a board member, or a volunteer of a faith-based, human service, arts, or other nonprofit organization that needs additional funds to accomplish its mission? Are there not enough hours in the day to raise the money your agency needs? Do your colleagues not have the expertise or interest to generate the needed dollars? Do you need a quick source of practical information about ways to raise funds? Then you need The Essential Nonprofit Fundraising Handbook.

This book is for individuals who are dedicated to helping their communities but who need useful recommendations on how to raise money. Written by two of America's foremost fundraising experts, you will learn how to:

• Develop a clear, efficient fundraising plan.
• Ask for contributions from individuals.
• Target businesses, foundations, and government agencies.
• Hold special events.
• Conduct a Capital Campaign.
• And lots more!

How many times has a well-meaning board member suggested that you do a golf tournament (gala dinner dance, art auction, walkathon) because the Girl Scouts (local hospital, Rotarians, PBA) scored big with theirs—only no one has any experience with such an event?

With The Essential Nonprofit Fundraising Handbook, you'll learn exactly what to do, step by step, to pull off a successful event of any kind or size, or to raise badly needed funds in a wide variety of other ways.

Chapter 1

Planning for Fundraising

“Cheshire Puss,” Alice began, “Would you tell me please which way I ought to go from here?”

“That depends a great deal on where you want to get to,” said the cat.

“I don’t much care where,” said Alice. “So long as I get somewhere,” Alice added.

“Then it doesn’t matter which way you go,” said the cat.

—Lewis Carroll

Planning is critical in all aspects of managing a nonprofit organization. However, even organizations that understand the value of agency-wide long-range strategic planning often fail to use these same strategies in their development program. Fundraising is often done in a haphazard way because, like Alice, novices sometimes have no idea of where they want to be. They are caught up in the day-to-day management of myriad fundraising activities, many of which are often unproductive or counter-intuitive to the building of lasting donor relationships.

Undue pressure may be put on fundraising staff or volunteers by boards and executive management who think of fundraising as a “necessary evil.” Despite the extensive body of knowledge on the subject of fundraising, these individuals still think of fundraising in the “tin-cup” mentality. They often refuse to make the necessary financial investment in a professional development office or the time commitment to develop an agency-wide comprehensive development plan. How many times has a well-meaning board or staff member attended a board meeting and offered this advice: “We should run a (golf tournament, gala dinner dance, art auction, walkathon, and so on) because (Girl Scouts, my church, the hospital, and so on) ran one and raised $100,000?” Before the meeting ends, the whole board is caught up in event fever and begins to discuss the invitations, the flowers, and potential T-shirt sponsors. What is the alternative to having the board being bitten by the event bug? Having a development plan in place is the answer!

Another fatal mistake many organizations make is relying solely on writing grant proposals to raise all the money they need for programs and operations. Given the fact that foundation grants only account for approximately 12 percent of all philanthropic giving in the United States, this approach seems equally as foolhardy as depending exclusively on special events to raise money for the organization. Although both grants and special events are important parts of a well-rounded development program, they should not be the only methods of fundraising used by nonprofits. So how does one handle these board suggestions or (in some cases) mandates?

Often boards and volunteers do not realize that special events and grant research can be costly, not only in terms of hard costs and staff time, but in opportunity costs. In other words, what activities must be dropped in order to focus the limited time available on this proposed new activity? The first reaction to the individual who has suggested a new fundraising activity should be “Let’s review our development plan and see if this special event or grant is part of our plan. If not, what other activities will need to be eliminated in order to concentrate on this activity?” However, many organizations do not have a development plan to review. This is one good reason why the agency needs such a plan.

Other reasons include the facts that the development plan provides:

• A way to determine the appropriate budget for fundraising activities.

• Assurance that fundraising activities provide a balanced approach (in other words, “don’t put all your eggs in one basket”).

• Assurance that the agency has the resources to implement the fundraising activities that are planned.

• Timelines that allow staff and volunteers to best utilize their time.

• A way to measure success of the organization’s fundraising activities.

Organizations that have a development plan complete with timelines, areas of responsibility, and budgets will be successful at keeping the staff, board, and volunteers focused on the activities that are most cost effective and that produce the best results.

How Should the Development Plan Be Prepared?

Start with the fundraising staff person, if one is in place, and a dedicated board member who will head the fundraising committee. Add the following individuals to the committee:

• Several board members.

• Executive director.

• Staff members.

• Donors.

• Clients.

How to Develop a Plan

First, the organization must commit to strategic planning at an organizational level if fundraising planning is to be successful. Second, as the organization grows, it must allocate sufficient funding for a development office, allowing the agency to hire staff that has the ability and interest in planning for fundraising. In cases in which the organization is too small to have staff members devoted to fundraising, an experienced volunteer or group of volunteers must be committed to developing a fundraising plan.

Many of the techniques that apply to organizational strategic planning can be easily translated into fundraising planning. An analysis of the current fundraising program is a good place to start: Analyze the internal strengths and weaknesses of the organization’s fundraising efforts and evaluate the external threats and opportunities for fundraising. Some questions should be asked to assess what kind of fundraising activities the organization should consider. For example:

• Does the organization have a base of donors who faithfully support the organization?

• Has a staff member been assigned to coordinate the fundraising activities?

• Does the organization have a compelling reason to support the agency financially?

• How committed is the board?

• How many other volunteers can be invited to help plan and implement fundraising activities?

Building consensus, a vital part of strategic planning, is also critical in the fundraising planning process. Involving key stake-holders in the fundraising program—board members, volunteers, management staff, program staff, donors, and development staff (if there is staff for the development program)—is critical. Just as in strategic planning, the development plan must be focused on the mission and vision of the organization. Each goal should be assessed in light of its relevance to the organization’s mission and vision.

As with strategic planning, the development plan should focus on a limited number of goals in different areas. SMART (Specific, Measurable, Action-oriented, Realistic, and Time-defined) objectives should be listed for each goal. The operational plan also needs to contain strategies and action steps for each objective. A measurement system must be established. One individual must be responsible for the implementation and monitoring of the plan.

What Should the Development Plan Include?

The planning process should start with an analysis of current fundraising activities. Some questions to ask are:

• What has been the history of agency fundraising?

• Have results increased or decreased throughout the years?

• What are the costs of these activities, including financial costs and staff and volunteer time?

• Are there sufficient human resources to manage this activity?

• Is the technology needed to manage this activity in place?

• How do current economic and political events affect this activity?

• Are there ways to increase the effectiveness of this activity?

Once the current activities have been analyzed, a decision should be made to keep present fundraising activities, focus more time and energy on them, or drop them.

A solid development plan lists detailed objectives. Goals and objectives do not always have to be monetary. For example, an objective might be to increase constituent participation by 10 percent this year, to increase the size of the fundraising committee by four individuals, or to personally visit three major donors each month. Without specific objectives, it will be impossible to measure success of the plan at the end of the year and to plan for the future.

Who Develops and Implements the Plan?

How does the nonprofit organization find time for planning? Who will implement the plan once it is approved by the board? By involving the right individuals in developing the plan and then implementing it, the organization can move forward in a timely manner and provide a framework for evaluating its programs.

Typically, these are the individuals involved in the fundraising planning process and implementing the plan:

Chief Fundraiser

If the organization has appointed a staff member or volunteer to serve as the chief fundraiser for the organization, this individual has the primary responsibility for the plan. This individual will create a detailed fundraising budget. He or she also assigns responsibilities to those who will implement the plan. This individual will be held responsible for implementing the plan, evaluating the plan’s success, and adapting the plan as needed.

Other Development Staff

In an office where there are additional development team members, they should be involved with the planning process and will implement the various segments of the plan that pertain to their duties. It is important to include support staff in the planning process; goals can suffer serious delays if support staff and technology are insufficient to implement the strategies to meet the objectives.

Non-Development Staff

The chief executive officer (executive director, pastor, administrator) of the organization may be the chief fundraiser. He or she should be involved in setting the goals of the development program. The CEO’s role in implementing the plan, particularly the identification, cultivation, and solicitation of major gift prospects, will be critical in the plan’s success. Therefore, the CEO must be willing to support the plan and to fulfill his or her role in the process. The chief financial officer (this might be the accountant or bookkeeper) must also be involved in the plan, particularly to budget for additional staff, technology, or other resources that will be needed to implement the plan. For some organizations, other staff members may be involved, such as program staff members who may be consulted regarding their funding requests and facility managers who might have capital needs that will require funding.

Board Members

The board is instrumental in developing a strategic plan for nonprofit organizations and should be involved in the development planning as well. Their role in developing all the details of the plan may be less intense if there is a development staff or a fundraising committee, but the board must be involved in establishing goals and objectives. Where there is no development staff, the board will be more involved in setting the details of the plan. In any size organization, the board’s role in implementing the plan will be critical. Similar to the CEO, board members will have a key role to play in identifying, cultivating, and soliciting donors, so they must, at the very least, help establish goals and objectives.

Fundraising Committee

The fundraising committee will have a larger role in the planning process than the full board because this is their area of focus. The committee should include several board members and is usually chaired by a board member. However, it is important to expand the committee beyond the board and involve community members, especially those with community contacts and specific skills and talents that can be used on the committee. Include individuals such as an estate planning attorney, a financial planner, or an accountant who can help with planned giving. This committee, along with the staff, will play a key role in implementing the plan.

Other Volunteers

If other volunteers, such as a parent group, auxiliary, alumni association, planned giving committee, or events committee are involved in the fundraising program, they might also be invited to review and provide input into the parts of the plan that pertain to their activities.

Consultants

A consultant is often involved in the planning process, particularly in the assessment phase. Many organizations engage a consultant to conduct an assessment of their past fundraising performance before they establish goals for the current plan. A consultant can provide an objective view of the organization’s fundraising program and help establish realistic objectives as well as recommend strategies for the plan. When there is no development staff or a volunteer experienced in fundraising, a consultant may be called in to assist in preparing the plan.

What Does the Plan Look Like?

One thing to remember about the plan is that it is more than simply a document! Both the process and the product are important. Whereas it is important to discuss who should be involved in the planning process and the process itself, it is equally important to produce a written document. The document itself will be critical to the evaluation process.

The plan should start with an analysis of prior fundraising efforts (assuming, of course, that the organization has done fundraising in the past). It should also state the mission and vision of the organization, because the mission and vision sho...

Table of contents

• Table of Contents
• Title Page
• Copyright Page
• Dedication
• Acknowledgements
• Preface
• Introduction
• Chapter 1 - Planning for Fundraising
• Chapter 2 - The Role of the Board
• Chapter 3 - The Role of the Staff
• Chapter 4 - Involving Volunteers
• Chapter 5 - Looking for Grant Sources
• Chapter 6 - Writing Proposals and Getting Them Funded
• Chapter 7 - Raising Money From Businesses
• Chapter 8 - Major Gifts
• Chapter 9 - Direct Mail
• Chapter 10 - Telephone
• Chapter 11 - Special Events
• Chapter 12 - Fundraising Dinners
• Chapter 13 - Open-House Events
• Chapter 14 - Raising Funds Through the Internet
• Chapter 15 - Planned Giving
• Chapter 16 - Capital Campaigns
• Chapter 17 - Collaboration
• Conclusion
• Appendix A - Questions and Answers
• Appendix B - Books You Might Find Helpful
• Appendix C - Glossary
• Appendix D - Typical Segment of a Development Plan
• About the Authors
• To Contact the Authors