Creating and Maintaining an Effective FundRaising Program Suzanne

Creating and Maintaining an Effective Fund-Raising Program Suzanne Mink World Wildlife Fund July 18, 2005

What is development anyway? • It is about people • It is about meeting goals designed by and with IPL • The focus is on values • The focus is on the donor, less on IPL • It is not just about dollars

Philanthropy is not a reply to a question

Non Arboribus Crescit !

Mass Marketing - NOT! • We are no longer in mass marketing, nor is development • We are seeking share of “customer”, not customer share • 90% of the dollars come from 10% of the donors

Fundraising is about relationships • We are in the business of creating relationships – Cultural – Attitudinal – Value – External and internal • What is important is the number of ways we communicate

Why do most people give? • • • They have been asked The believe in the institution They respect the solicitor They want to give back They want to alleviate guilt They want to memorialize others

Criteria for Successful Fund Raising Case for Support Volunteer Leadership Potential for Support Internal Preparedness

Techniques used in solicitation • • • Direct Mail Memberships Telephone In person by committee • Grant proposal • Government • Planned Giving proposal • Special events • Foundations • Corporations

Development • Annual Giving • Major/Planned Giving • Corporate & Foundation Relations • Grants & Contracts • Capital Campaigns • Prospect Research • • Proposal writing Stewardship Special Events Volunteer Management

How are Gifts Made? • Outright – Cash – Credit Cards – Stocks • Life Income – Trusts

Who Gives?

Why Do They Give? Interest Capacity Motivation • Serve as a • Have disposable • Philanthropic nature Board member, income (not Staff, necessarily • They were asked wealthy) • Regularly attend functions • Low overhead expenses (house is paid, children out of college)

Who Has the Interest, Capacity & Motivation to Give? • Donors that give to similar organizations • Volunteers

Some fund-raising myths! • Hire a development officer and let him or her do all the work • Fund raising is unpleasant and people who like it are strange • Selling is the name of the game

Qualities of Development Officers • • • Analytical/problem solving Creativity Uses time effectively Lsitening skills Self-starter

The Duties of a Development Officer • Serve the administration and board through fund-raising assignments • Develop a plan that includes goals for obtaining funds • Promote loyalty • Enlist and train volunteers • Cultivate donors and prospects • Ask for gifts

The Duties of a Development Officer • Communicate effectively • Keep a schedule • Accept responsibility

Important skills of development officers • • • Listening Working as a team Excellent communication

General Staff Assignments • • Fund raising Gift Processing Donor Records Thank you letters Computer records Mailing lists Board coordination Research • File keeping • Mail assembly • Maintain equipment

Basic Budget • • Salaries of Staff Equipment rental Postage Printing Telephone Travel Meals • • Dues/memberships Consulting fees Supplies Entertainment Volunteer committees List rentals Books/periodicals Professional development

Creating an Action Plan • • • Steps to be taken By whom? By when? Action status Comments

More on Creating a Plan • Set goals and objectives • Formulate strategies • Convert goals into specific actions • Monitor and evaluate actions

Planning overview • • • Document objectives Document need Identify prospects Segment prospects Prepare plan for prospect groups • Define appeal • Set goals • Build organization and technique • Plan cultivation • Implement plans • Evaluate results

The Annual Fund • Purpose is to raise funds for the operating budget on an annual basis • Held yearly and low profile compared to other efforts • Is the source of regular gifts • Effort is staff-driven

The Annual Fund • Ingredients for success: – A well-defined purpose – Extensive planning – Efficient organization – Realistic timetable – Realistic assignments – Logical order

Annual Fund Techniques • • • Direct Mail Phone campaigns Matching gift programs Challenge gifts Gift clubs Anniversary giving

Sample Action Plan Calendar

Cost guidelines for solicitation activities • • • Direct mail (acquisition) Direct mail (renewal) Membership Special events Donor clubs Corporations Foundations Special projects Capital campaigns • Planned Giving • • • $1. 25 -$1. 50 per $1 raised $. 25 per $1 raised $. 30 per $1 raised $. 50 per $1 raised $. 30 per $1 raised $. 20 per $1 raised $. 10 to. 20 per $1 raised $. 05 to. 10 per $1 raised $. 10 to. 20 per $1 raised

Performance Index • • Participants = # responding with gifts Income = Gross contributions Expense = Fund-raising costs % participation = participants ÷ total solicited Average gift = Income ÷ # participants Net income = Expenses ÷ # participants Cost per gift = Expenses ÷ # participants • Cost of fund-raising = Expenses ÷ income received

Donors of Planned Gifts Major Donor Special Gift Donor In cr e as ed Le ve ls of I nv o lve m en t The Donor Pyramid Renewed Donor Newly Acquired Donor The Universe Personal Solicitation, Phone Personal Mail, Phone, Personal Solicitation Mass Mail, Phone

Who are your Prospects? • • Board members Current donors Volunteers Alumni/ae Staff leadership Event attendees Corporations • • Foundations Parents (current) Parents (past) Students

What makes a good “fund-raising Board member”? • • A natural relationship or interest in the institution Affluence or influence A willingness to contribute sacrificially Ability and willingness to communicate enthusiastically to others • Willingness to be well-informed about the institution’s history, current operations and future goals • A sense of urgency about the organization’s mission

The donor/friend giving cycle • • Identification Information Awareness Understanding Caring Involvement Commitment

Donors of Planned & Ultimate Gifts Major Donor Special Gift Donor In cr e as ed Le ve ls of I nv o lve m en t The Donor Pyramid Renewed Donor Newly Acquired Donor The Universe Personal Solicitation, Phone Personal Mail, Phone, Personal Solicitation Mass Mail, Phone

Why People Give • • They were asked! Emotional attachment Influence, professional advancement Peer approval Self esteem Recognition from peers Diminish negative feelings: guilt, fear, anger Tax and financial planning considerations

Cultivating relationships • A major part of our role is cultivating friends for the cause we represent and encouraging and assisting them to contribute financially to it. In cultivating relationships, there are ethical principles that come into play -- honesty, integrity, fairness, caring and respect for others, keeping promises, and accountability. At the center of all these principles is trust.

Personal Qualities and Skill Sets of Successful Development Professionals

The Chief Advancement Officer • Commitment to, involvement in, and a broad knowledge of institution • Strong communication and leadership skills • Strong organization and management skills • Experience with and effective leadership of successful fund-raising methods • Analyst and strategist • Multi-tasker! • Ability to build and maintain relationships with broad group of constituents

Personal Qualities of a Fund Raising Professional • • Creative Energetic Uses time and resources effectively Balances leadership and followership Commitment to education/institution Passionate about advancement Highly communicative Exudes and builds confidence

Trends in Advancement

Trends influencing philanthropy • Technology • Economy – Computers/Internet • Focus on individual – Information • Globalization – Philanthropy – Education • New Generation of donors • New work styles/ethic

Other forces at work which affect fund raising • Changing support base – – – – A "maturing" population Increasing expendable dollars Generational transfer of wealth Women in philanthropy Equity base is shifting to (and beyond) the "baby boomers” Household-level prospect information Improving technology, communications capacities Changing marketing techniques

Fundraising is about relationships • We are in the business of creating relationships – Cultural – Attitudinal – Value – External and internal • What is important is the number of ways we communicate

What does this mean for Philanthropy? • Increase in the Importance of Major Gifts – Gifts equaling one percent of the goal are increasing in campaigns. 90% of the goal from 10% of the donors (or 95% from 5%) – Mega-gifts changing nature of campaigns

Other trends in fund-raising and advancement – Increase in utilization of household, demographic and psychographic prospect information (and technology to access information) – Changing volunteer involvement / time – Use of technology for communication and solicitation – Virtual everything – Personalized everything!

The donor giving cycle • • Identification Information Awareness Understanding Caring Involvement Commitment

More trends – Larger campaigns – Continuous major gifts efforts – Gift restriction and direction of uses of funds – More frequent capital and “project” campaigns – Changes in purpose of capital campaigns – Change in marketing strategies for different generations – Expectations of staff / movement of staff

Setting Realistic Goals • • Previous year’s results Next year’s operating budget Project a reasonable increase (10%? ) Establish a goal through a compromise between operating budget and the 10% factor, usually not less than the previous year

Development Assessment 3=Above average, 2=About Average, 1 = Below average • Fund-raising environment – Capacity to compete with other organizations – Corporate gift potential within geographic area – Board and volunteer leadership support – Office space and equipment/data

Development Assessment 3=Above average, 2=About Average, 1 = Below average • Donor Research – Availability of reference materials – Prospect gift evaluation procedures – Ability to retrieve donor gift data – Frequency of gift analysis reporting

Development Assessment 3=Above average, 2=About Average, 1 = Below average • Fund-raising techniques – Effectiveness of board and volunteers in conducting face-to-face solicitation – Dollars raised by special events – Phonathon – Direct mail program

Development Assessment 3=Above average, 2=About Average, 1 = Below average • Fund-raising tools – A case statement – Caliber of written proposals – Software and database – Materials to train volunteers

Development Assessment 3=Above average, 2=About Average, 1 = Below average • Leadership – The access board members have to funding sources – The board’s understanding of fund-raising program – The board’s participation in soliciting gifts

Development Assessment 3=Above average, 2=About Average, 1 = Below average • Staff – Development staff experience – Chief development offficer’s access to board and President – Extent to which development officers can learn at conferences!

Development Assessment 3=Above average, 2=About Average, 1 = Below average • Planning – Frequency of review of results – Involvement of key leadership in planning – Budget allocation

Issues in stewardship and recognition • Make sure donor’s gift is used for the purpose for which it was intended • Be cautious about recognition/benefits – Renaming buildings – Donor desires related to named endowment/chair (no ownership!) – Gift crediting during campaign – Admissions decisions – Honorary degrees

Creating an Action Plan • • • Steps to be taken By whom? By when? Action status Comments

More on Creating a Plan • Set goals and objectives • Formulate strategies • Convert goals into specific actions • Monitor and evaluate actions

What determines the size of a gift? • The donor’s ability to give • The donor’s perception that a gift can make a difference • The effectiveness of the institution’s mission or project • What others have given • Who makes “the ask”