Fundraising

Principles and Practice

Michael J. Worth

• Editorial: SAGE Publications, Inc
• Año: 2015
• ISBN:
  9781483393599
• Edición: 1
• Categoría: Politics & International Relations
• Categoría: Public Affairs & Administration

Fundraising: Principles and Practice provides you with a comprehensive introduction to fundraising. Taking a balanced perspective, bestselling author Michael J. Worth offers insights on the practical application of relevant theory. The text is designed to engage you in thinking critically about issues in fundraising and philanthropy to prepare you for careers in the non-profit sector.

Worth explores donor motivations and fundraising techniques for annual giving programs, major gift programs, planned giving, and corporate and foundation giving and campaigns. Traditional methods, including direct mail and personal solicitations, are discussed as well as new tools and practices, including online fundraising, crowd-funding and social networks, analytics, and predictive modelling. Written specifically for non-profit career-oriented individuals, this book helps you become successful fundraisers.

It also:

• Blends theory and practice to provide students with comprehensive coverage of essential fundraising principles and numerous real-world applications and insights
• Emphasizes ethical and legal considerations to help readers make fundraising decisions that are both legal and ethical.

Chapter 1 Overview of Fundraising and Philanthropy

If we were to stop people at random and ask them to explain the differences among the sciences of biology, chemistry, and physics, most would probably offer relatively accurate responses. Likewise, if we asked them to define architecture and psychology, almost everyone would say that architecture deals with buildings and psychology with human behavior. Asked to name some historic figures in any of these fields, many would identify names like Isaac Newton, Albert Einstein, Madame Curie, Frank Lloyd Wright, and Sigmund Freud. If we asked what doctors and lawyers do, almost everyone would know the answer. Most universities have departments of schools bearing the names of these disciplines and professions, which also appear on the diplomas of many graduates.

If we were to ask people to explain the difference between philanthropy and fundraising, to name historic figures related to either, to express an opinion on where either subject should be studied within a university, or to define what fundraisers do, many might pause before providing an uncertain response. This is understandable. Like traditional academic disciplines and honored professions, philanthropy and fundraising have been pursued in one form or another for centuries. But they remain ill-defined for many people, and their place in the academic firmament remains unclear, even a matter of debate. To be sure that we have a common understanding as a foundation for the balance of the text, let's begin our discussion by clarifying some vocabulary and concepts that are mentioned throughout the book, reviewing some history, and considering the place of fundraising as a professional field today.

Fundraising, Development, and Advancement

The Association of Fundraising Professionals (AFP) defines fundraising simply as “the raising of assets and resources from various sources for the support of an organization or a specific project” (AFP Fundraising Dictionary Online). This is somewhat broad in that it does not necessarily restrict the resources to gifts and grants or the sources to the private sector. Lindahl (2010) offers a more specific definition: ”the management of relationships between a nonprofit organization and its various donors for the purpose of increasing giftrevenue to the organization” (p. 4). Three important dimensions of Lindahl's definition are that fundraising involves relationships, those relationships have a purpose, and that the purpose is gifts—that is, financial resources voluntarily bestowed without any expectation of a quid pro quo. Lindahl's definition captures the essential meaning of fundraising as the term is used in this book.

But the definition may be somewhat broader in practice. For example, corporations make gifts to nonprofit organizations, but they also provide support through various partnerships that benefit both sides. These are quid pro quo transactions, and the payments generally are earned income of the nonprofit, not gift revenue. By Lindahl's definition, the pursuit of these partnerships is not fundraising. However, fundraising professionals within nonprofit organizations are sometimes responsible for establishing relationships with corporate partners as well as donors, and many comprehensive relationships between corporations and nonprofits entail both gifts and earned income that are not easily disentangled. Indeed, in 2004, AFP amended its code of professional ethics, which had long required that fundraisers not accept compensation based on a percentage of gifts, to include a similar prohibition with regard to the solicitation of corporate partnership arrangements (Hall, 2005). For those reasons, nonprofit-corporate partnerships are discussed in this book. Lindahl's definition also does not specifically address grants, but grants from private sources (generally corporations or foundations) are gift-like; that is, they are “philanthropic in nature,” so the pursuit of them is considered fundraising (CASE, 2009, p. 68). Grants are different from contracts, which involve payments for specific goods or services that the organization provides and are thus earned income. The pursuit of contracts might be called new-business development or something similar, but it is not fundraising. By definition in this book, fundraising involves only private-sector sources of support, not government, and so the pursuit of government grants is not considered.

The organizations with which this book is primarily concerned are those classified as charitable nonprofits within the meaning of U.S. tax law. The pursuit of gifts to these organizations is sometimes called charitable fundraising or philanthropic fundraising. to distinguish the activity from fundraising for political campaigns or for other non-charitable purposes. Other terms that are sometimes used instead of fundraising include fund development and resource development. However, again, this book just uses the term fundraising.

Two other terms are sometimes used as synonyms for fundraising, although their precise definitions are distinct. One of those is development. Depending on which historical account one accepts, the term development was introduced at Northwestern University or at the University of Chicago in the 1920s (Kelly, 1998). At that time, universities typically conducted intensive fundraising campaigns episodically, in order to secure support for specific projects, usually new buildings. However, in thinking about its future growth and development, the university determined that it would be desirable to establish an ongoing structure for cultivating relationships with donors, rather than proceeding in fits and starts as individual projects required. The purpose was to look beyond just one project at a time and make fundraising a strategy for continuous institutional development, for which the term development became an abbreviation. A new office was created at the university to manage this ongoing effort, called the “department of development” (Kelly, 1998, p. 150).

Originally, development was a broad concept. It encompassed building acceptance for the institution among its constituencies, recruiting students, and securing financial support. Although the term is often used interchangeably with fundraising today, development relates to longer-term goals. As I explain in a previous book, with reference to higher education:

In [the broader] concept of development, fund raising is but one aspect of a complex process involving the institution, its hopes and goals, and the aspirations of its benefactors. Fund raising is episodic; development is continuous. Fund raising is focused on a particular objective or set of goals; development is a generic and long-term commitment to the financial and physical growth of the institution. Successful fund raising requires a specific set of inter-personal and communicative skills; development requires a broader understanding of the institution and its mission as well as patience, judgment, and sensitivity in building relationships over the long haul. A “fund raisera” is an individual skillful in soliciting gifts; a “development officer” may be a fund raiser, but he or she is also a strategist and manager of the entire development process. (Worth, 2002, pp. 8–9)

By the late 1950s, the professional staff at colleges and universities had come to include individuals dedicated to fundraising (development) and others who worked in alumni relations, communications, public relations, and other specialties that also involved external constituencies. These functions often had no organizational relationship within the institution, and indeed, staff members belonged to two different professional associations. The American Alumni Council (AAC) encompassed primarily individuals working in alumni relations, while public relations and communications professionals belonged to the American College Public Relations Association (ACPRA). Both AAC and ACPRA included some staff members who were engaged in fundraising, creating an overlap that sometimes led to rivalry. In 1958, representatives of the two organizations met at the Greenbrier Hotel in West Virginia and developed a report that would influence the future of higher education. The report called for integrating the various functions under one campus executive, in order to gain greater coordination and lighten the burden on presidents. The movement initiated at Greenbrier culminated in 1974 with the merger of AAC and ACPRA to create CASE, the Council for Advancement and Support of Education (Worth, 2002). Despite its historically broader meaning, the term development had become identified with fundraising and was not an acceptable umbrella to encompass the diverse work of those who would be members of the new, consolidated association. The term institutional advancement was adopted as the common rubric, encompassing fundraising, alumni relations, public relations, communications and marketing, and in some cases, government relations and enrollment management. In ensuing years, the term institutional advancement, or just advancement, has come to be widely adopted in higher education, although not all campuses actually practice the organizational model implied. The term advancement also has been adopted by some nonprofit organizations and institutions outside of higher education, and its use does not necessarily imply that any particular management structure exists. Like development before, advancement has come to be used as a synonym forfundraising by some people. Thus, it is not uncommon to meet someone who works in an office of institutional advancement whose title is director of development and who, when asked what he or she does, may reply “fundraising.”

This book follows common practice and uses the terms fundraising and development interchangeably. It uses advancement or institutional advancement when those terms are in direct quotes from other authors or to describe specific situations in which fundraising and other externally focused activities are indeed linked in the organization's management structure. Whether development or fundraising is used in this book, what is implied is a process similar to that described with regard to development, rather than the narrowest meaning of fundraising as the solicitation of gifts.

Philanthropy and Charity

Like fundraising and development, the terms philanthropy and charity are often used interchangeably. Philanthropy is commonly used as the umbrella, encompassing all giving, and that practice is followed in this book, except where the distinction may be relevant. But there is a difference between the two concepts.

Charity is often defined as giving intended to meet current human needs, for example, to feed the hungry or to aid the victims of a natural disaster. It is emotionally driven and often impulsive, as evidenced by the outpouring of gifts made within days of the terrorist attacks of September 11, 2001, the Haitian earthquake in 2010, Hurricane Sandy in 2012, and Typhoon Haiyan in the Philippines in 2013. Frumkin (2006) offers a succinct definition: “It [charity] can best be understood as the uncomplicated and unconditional transfer of money or assistance to those in need with the intent of helping” (p. 5).

Philanthropy is investment in the infrastructure of society. It is often undertaken with a long-term view and is more rational than charity. In Payton's (1988) words, it is “the ‘prudent sister’ of charity” (p. 2). Typical examples of philanthropy might include gifts made to construct new hospitals, endow universities, or sustain museums. Frumkin (2006) offers another way to distinguish philanthropy from charity. He relates it to the old teaching about providing a hungry person a fish, which would be charity, versus teaching that person how to fish, which would be philanthropy. So for example, the goals of both charity and philanthropy might be to improve the lives of poor children. Charity would provide them with shelter, while philanthropy would build them a school.

The terms are sometimes used in ways that can lead to confusion. For example, the Internal Revenue Code provides tax deductions for gifts to charitable nonprofits, which include many hospitals, universities, museums, and others that most people do not think of as charities and that are often recipients of support more consistent with the definition of philanthropy. And the deduction is called a charitable deduction, regardless of whether the nature of the gift meets the stricter definitions of philanthropy or charity.

Some authors give philanthropy a broad definition. For example, Payton (1988) calls it “voluntary action for the public good” in the subtitle of his seminal book Philanthropy and includes both the giving of money and the giving of time and effort by volunteers. But it is also reasonable to differentiate volunteerism from philanthropy, since a volunteer isactively involved with the organization and/or its beneficiaries, whereas someone who gives financial resources—a philanthropist—may do so without any significant commitment of his or her time. In this book, philanthropy refers to the giving of financial resources, not to dispute the broader meaning but just to simplify and focus the discussion.

Sometimes public policy debates relate to the concepts of charity and philanthropy. For example, some argue that only gifts that directly assist people in urgent need should be eligible for a tax deduction, since, as explained later in this book, the deduction represents a form of subsidy from taxpayers. Those who hold that view might say that giving to universities, symphony orchestras, and similar institutions primarily benefits affluent, highly educated people rather than those in economic need and thus should not receive such a subsidy (Eisenberg, 2014). But these arguments may not fully recognize the role of philanthropy as, in Lohmann's (1992) words, an “investment in civilization” (p. 163). The goal of both charity and philanthropy is to improve the human condition. If the goals of philanthropists were ultimately achieved, that is, were there strong institutions to meet human needs as they arise, then perhaps the need for charity would be reduced or eliminated. As I observed in a previous work, “In the imperfect world of the present, both types of giving are important and complementary in their impacts” (Worth, 2014, p. 20).

Fundraising and Philanthropy

Fundraising and philanthropy are intertwined, and both are discussed in this text. Although the analogy is not perfect, the relationship between fundraising and philanthropy is somewhat like the relationship between teaching and learning. In both cases, the purpose of the former is to engender the latter. But there is no guarantee that the activity will produce the intended result, which may occur for reasons unrelated to the activity. In other words, students may not learn from their teachers or may learn on their own. Fundraising may not produce gifts, and some people may offer gifts spontaneously without prompting. But, surely, to be an effective teacher or fundraiser one needs an understanding of how learning occurs or what motivates donors to give. This book is primarily concerned with the practice of fundraising and management of the fundraising function in nonprofit organi...