Author: Hank Lewis, MA, CFRM

A key problem for many new nonprofits is that most of their founders, that “small number of caring people who want to help,” have the impression that fundraising has to do with “fundraisers” — special events or sales: dinners, circuses, golf tournaments, T-shirts, cookies or candy.

That couldn’t be farther from reality. While those activities seem to produce “quick” money, they don’t help you create a constituency that cares about your success and your long-term survival. Fundraisers and sales attract people looking to be entertained or who really like those thin-mint cookies.

Corporations and foundations are perceived as major sources of funding, so most people new to the non-profit community look to them for support. But, only 12% of funding for NPOs comes from those two sources, combined.

The truth is that corporations will usually provide substantial gifts only if they can benefit/profit by a relationship with your organization; and, most foundations will only support you for a limited time — they don’t want to adopt you, just help you get something started that can-and-will become self sustaining. And, self-sustaining means having ongoing, reliable sources of long-term funding.

Over 80% of funds raised by non-profit organizations come from individual donors or their estates – gifts solicited by various methods, often on a face-to-face basis by volunteers … including founders and other board members.

The traditional methods of ongoing fundraising include direct mail and/or telephone, often supported by email. The majority of funds (roughly 60-65% of all dollars) contributed to nonprofit organizations are in the form of major gifts from individuals.

Successful long-term fundraising, therefore, means creating a plan to identify, educate, cultivate and involve prospective (major) donors with your organization. It also means that, somewhere along the way, you’re going to have to ask them for the gift. “If you don’t ask, you don’t get.”

Non-profit organizations are important, often essential elements of a community, and they provide valuable, and often vital services to people in great need. Creating and operating an NPO must, therefore, be a serious undertaking – with strategic and development plans to ensure long-term survival. When needed, seek expertise and specialized knowledge — accountants, attorneys, consultants….

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Have a comment or a question about starting, evaluating or expanding your fundraising program, your major gifts fundraising program or a capital campaign? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

Non-profit organizations (NPOs) exist to provide services that would not otherwise be available to many in the community. Too many NPOs fail to survive, however, because the people responsible for their creation aren’t fully aware of what it takes to effectively provide for the needs of the community.

Non-profits are usually created by a relatively small number of caring people who “want to help.” The majority of those people have little more than their good intentions to sustain them, and they create their NPOs without many of the “tools” that would help them tip the odds in favor of long-term survival.

Success requires a strategic plan that defines the organization’s mission, direction and future, a plan that details all the activities necessary for the NPO to pursue its mission, and the funding needed to support those activities;

Success requires a development plan that defines the appropriate fund raising activities for satisfying those funding needs; and,

Success requires a leadership committed to doing whatever is required to ensure that the people who need the services of the organization can get those services.

Since you can’t be everything to everyone instantly, you have to begin somewhere. The first step in the process, therefore, is to realistically define the extent of the services you want to provide, to whom, and in what timeframe.

You must then identify what supplies, equipment and personnel you will need, and in what timeframe; whether all work and services will be provided by volunteers and/or paid staff; where those people will come from; what experience/training they will need; and, what all of that will cost.

Once you’ve identified what it will cost, the next step is to identify sources of income.

Will you charge a fee for your services, or will you have to “raise” the money? Unless you know that the need you are satisfying is of a short-term nature, you must be sure that your funding sources will be there over the long-term. And, so you can track your progress and tweak your plans accordingly, definitive goals are essential.

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Have a comment or a question about starting, evaluating or expanding your fundraising program, your major gifts fundraising program or a capital campaign? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

… So We’d better Find A Consultant in Our Area.

There is a myth about hiring campaign counsel that, in essence, says that you should hire someone from your area because they will know the area and all the people, and will be better able to point you at the right prospective leaders and donors. That’s very wrong, for two reasons:

1.  Any consultant who has worked with other organizations in your area
    is ethically bound to keep confidential any information s/he may have
    gathered (in the course of working with those organizations) about the
    leaders of and donors to their campaigns.

    That information belongs to the organization that hired the consultant.
    It’s not his/hers to share. After all, you wouldn’t want that consultant
    to go on to his/her next gig and tell them all about your donors!!

2.  You hire a consultant for his/her expertise, knowledge and experience –
    someone who can guide you through a process, not give you all the
    answers. Besides, there are no consultants who can give you all the
    answers … every campaign is different.

    It’s because of those differences that you need a consultant whose
    expertise and experience can guide you through the process. It’s not
    whom s/he knows in your community or what s/he knows about your
    community … it’s his/her expertise, flexibility, creativity and ability
    to work with you and your constituents that will make the difference.

Of course, if your organization is located in a major city there will be many consultants and consulting firms, and many (prospective) major donors. That will make it more likely that you can find counsel that would not find him-/herself in a position of conflict of interest.

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Have a comment or a question about starting, evaluating or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

An email I received not long ago asked: “What can a small non-profit, looking to raise about $5 million for a Capital Campaign, expect to pay for a consultant to conduct a study and then (guide) the Capital Campaign?”

The size of your non-profit relates to the question only in the context of whether you have the constituency that can support your campaign.

The actual cost of a Campaign Planning Study would be based on:
(1) The amount of time needed to conduct the preliminary discussions … the getting to know you meetings between the consultant and your Study Committee;
(2) The time needed to construct the questionnaire for the interviews;
(3) The number of interviews that would have to be done and the time required to generate the Study Reports; and,
(4) The expenses the consultant would incur (travel, lodging, etc.) during the process.

Pre-Campaign Planning Studies run anywhere from $12,000 to $20,000, depending on the combination of the above factors, the number of individuals conducting the interviews, and the extent to which a consulting firm feels its reputation entitles it to charge more.

You can get a good idea (not a firm figure) by calling and talking with a number of fundraising consultants. You can also get a good idea of whether the folks you talk to are the kind of people with whom you (and your constituents) would be comfortable working.

As to the cost of counsel to work with you through a campaign, since the Study will suggest how long it will take to conduct a campaign, that figure can only be determined after the Study is completed.

BTW, the preparation for a capital campaign can take a year or more. In essence, the Planning Study begins the preparation process. Then, if that preparation is done properly, the actual campaign should only take a few months.

And, you should not feel that you have to hire the same consultant/firm for the Study and for the campaign. If your planning process is adequate, you’ll need minimal help from counsel for the actual campaign.

Talk with a number of consultants, check their references, have them meet your leadership, select the one who is the most comfortable to work with.

Related Reading/Blog Postings:

• The Feasibility Study is Obsolete
• Another Reason I Object To Feasibility Studies – Part 1
• Another Reason I Object To Feasibility Studies – Part 2
• The Planning Study – Part 1
• The Planning Study – Part 2
• The Planning Study – Part 3
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Have a comment or a question about starting, evaluating or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

Last Thursday’s post addressed the participation of NPO staff in the fundraising process – staff other than those directly involved in development. A response to that posting suggested that there were other issues to be addressed.

Staff members as donors:

It would be a major plus for a nonprofit organization to be able to tell its constituents that all members of the staff feel strongly about the mission and are also donors. That the NPO is able to publicize that every staffer has (voluntarily) given to the best of his/her ability can only strengthen the org’s image.

It would also be a major blow to that image if the public were to learn that staff members were coerced into giving.

Many overly enthusiastic EDs/CEOs require staff to be donors. That “requirement” can and should be perceived as coercion; and, coercing people to give is highly unethical … and bad for the NPOs public image.

Ethically, it is a “given” that ALL giving is voluntary … including from the NPO staff.

Staff members as event designers/participants:

If an NPO is lucky enough to have staffers who are skilled at designing and implementing events, and those folks are willing to be involved with events … without their participation having been coerced, then that speaks well and loudly to the community of staff’s commitment to the mission.

If, however, the public was to hear that such participation was not wholly voluntary, it’s likely that the image of the NPO would suffer … as would its fundraising efforts.

Staff members as solicitors:

With the exception of those individuals who are hired as part of the fundraising staff, other staff members (ideally) should be involved in telling the NPO’s story, but should not be “required” to act as solicitors. The key word, again, is “required.”

In addition to the resentment that staff members would feel, it would be impossible to discount the impact that resentment would have on a fundraising solicitation … and on job performance. One must also consider that untrained and unwilling solicitors will never be able to solicit the “maximum gift” from a donor.

Bottom Line:
It’s not unusual for all staff members of an NPO to have some input in the design/implementation of an event – offering advice/direction based on their particular area of function/expertise.

But, an organization that “requires” staff to perform in areas for which they were not specifically hired is an organization that doesn’t mind putting its public image at risk.

And a good test of whether this kind of employee policy might or might not be ethical is to ask yourself whether you’d want to see a newspaper headline announcing that your organization coerces its employees….!!

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Have a comment or a question about starting, evaluating or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

A Reader Wrote: “I have been looking around your web site/blog trying to find information about the role of employees in fundraising for an NPO. I see some information about the role of board members and volunteers, but I seem unable to find anything specific about employees….”

It’s a “given” in the fundraising world that: “Everyone at a nonprofit has an impact on the organization’s ability to raise money” … even though not everyone is involved in “Asking.”

Although someone else might have the title, the CEO is also the chief development officer. S/he is the chief advocate for the organization and its mission, and should be the most knowledgeable person about how the NPO is pursuing that mission. S/he is the public face of the NPO, with the most credibility.

The CEO is (and should often be) involved in many of the major solicitations, either alone or with someone who is better suited to do the “Ask.”

Board Members, ideally, should all give to the best of their ability and should be involved in the process of identifying, cultivating and soliciting (other) major donors — but, they aren’t always wealthy, and they don’t always have wealthy friends.

I refer to “Volunteer Leaders” as the people most involved with the identification, cultivation, evaluation and solicitation of major donors. They don’t have to be board members, but they must be committed to raising (or helping raise) the needed funds.

Staff members fall into three categories: (1) Those who actually work at advancing and supporting the NPO’s development/fundraising efforts; (2) Administrative and support staff; and, (3) The program staffers who design and deliver the NPO’s services.

In the context of this posting, nothing needs be said about group #1.

The group #2 people have occasional contact with (prospective) donors, and how they treat those folks creates an impression that can/will impact the likelihood of giving.

The folks in group #3 have the most experience with advancing the mission. They design and implement the NPO’s programs, and they know the people being served. They are the best people to be describing how the donor’s money has or will impact people’s lives.

These folks don’t have to be involved in “Asking,” but they should be involved in the process of cultivating/educating prospective and current donors … ‘cause nobody can tell the story the way they can.

One more thought: Everybody should pass on to the development staff any (non-confidential) information they have that might help identify, cultivate, evaluate or solicit (potential) donors.

I hope I answered the reader’s question. If not, let me know.

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Have a comment or a question about starting, evaluating or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

In the group of attendees for a recent class in Major Gifts Fundraising was a person identifying herself as a consultant, a member of a fundraising-consulting firm, who was shortly to be working with a client organization in the creation of a major gifts program.

This started me thinking. Who/what is a fundraising/development consultant??

My old dictionary defines a consultant as an expert who is called on for professional or technical advice or opinions.

In this context, I should think there’d be heavy emphasis on the “expert” part of the definition. The problem is that I “hear” many people describing themselves as development consultants that clearly don’t have the education/training and experience it takes to be an expert.

Folks that come from various areas “somewhat related” to development —
i.e., marketing, public relations, special events, etc, even those from totally unrelated fields, feel comfortable hanging out their (fundraising) consultant shingle.

At various luncheons, workshops and seminars, I’ve met people who have worked as volunteers and think they now know enough that non-profits should risk their financial futures on them. And I’ve met folks from other fields, and those out of work, who think that “fundraising might be good to try,” and they want to start as consultants.

So, considering the above, I get the feeling that, to protect the non-profit sector from a “bad rap” and consultants (in general) from having a negative label hung on them/us, there needs to be established some set of criteria for who can/should be a fundraising consultant.

It has been suggested that one must have some sort of “credential” to be a fundraising consultant – that the CFRE (as an example) should be required and should be proof enough that the holder is qualified to be a consultant.

Realistically, however, having the CFRE attests only to the fact that the individual has demonstrated knowledge of the basics of fundraising. That’s not the equivalent of “expert“ !!

Like trusting the health of your loved ones to a physician with an on-line degree; there are many practitioners out there in fundraising-consulting-land to whom you’d not want to trust the financial health of your nonprofit organization.

So, before I get too carried away, I’ll step back and ask, “What do you think?”

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Have a comment or a question about starting, evaluating or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

The Fundraising Appeal

A few months ago, a NYTimes article suggested that donors are being highly selective in deciding whose name goes on the payee line of their checks. Non-Profit Organizations, therefore, must do all they can to get donors to want to give to them.

At most times, especially in an economically “troubled climate,” donors want to be sure that their gifts are going to support/help people in need. NPOs must be sure, therefore, that their marketing, their literature and their solicitations all focus on the people in need … not on the needs of the NPO.

And, in addition to talking about people and their needs, the best wording can also talk about how the NPO is helping those people, how cost-effective it is in its operations, and how a donor’s gift to the NPO can/will help so many people.

Major Gifts Should Be A Priority

It occurred to me, following a recent conversation with the executive director of an NPO on the brink of closing its doors … that many people may think of major gifts as those you pursue after you’ve done all of the other fundraising.

The language that the E.D. used was to the effect that, “we have to be sure we can stay in business before we can think about going after major gifts.”

I would hope that I never said anything to any client, in any of my classes or postings, that would suggest that !!

I’ve often mentioned that many (start-up and ongoing) NPOs can (and do) create major gifts programs from scratch, and can (and do) operate quite nicely on that income.

Certainly, in tough economic times, NPOs should be making every effort to raise funds by whatever (legal/ethical) means possible … keeping in mind that one major gift can (and often does) exceed what is raised via other methods.

Any NPO not actively/vigorously working on obtaining major gifts is doing a disservice to the people it serves … or could serve.

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Have a comment or a question about starting, evaluating or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

Someone asked, recently, about putting together a “fundraising plan.” My response was about creating a “Development Plan.”

Where the latter has its focus on the relationships between the organization and its constituents/donors that can result in contributed income, the former just focuses on the dollars. And, when just focusing on dollars is sometimes OK for the short-term, it’s quality relationships that result in consistent dollars over-the-long-term.

It must also be understood that Development Plans are constructed for specific sets of circumstances — there is no one-fits-all model.

The basics of a Development Plan:

Before the Development Plan comes the Strategic Plan … to determine priorities and where the organization wants to be by the end of this year, in two years, in three years … and for what programs/staff/equipment/overhead/etc. funding will be needed.

The development plan functions to help you keep in mind where the money came from last year, what you had to do to get it*, and what you’re going to have to do to get that same money this year. Secondarily, the development plan looks at how to increase funding from former sources and generate new money from new sources.

   [*…referring to the various methods of cultivation as well as the various
   methodologies for fundraising, i.e., direct mail, major gifts, events, etc.]

At the end of the process of constructing a Development Plan, you have a fundraising goal for the year (or for whatever period you’re doing the planning), a goal that MUST reflect reality. It must represent what you know of the organization’s fundraising history and what you know about your prospective new donors.

That goal must be attainable, it cannot contain any element of wishful thinking, If the fundraising goal and the projected income from all other sources don’t add up to what the budget requires, it’s the budget that must be trimmed, not the fundraising goal that must be increased.

In constructing a Development Plan, you must keep in mind that where fundraising serves the needs of the nonprofit organization (NPO), it is not about the needs of the NPO. Fundraising is about the needs of the (prospective) donor. If your Development Plan doesn’t consider the donor’s needs, how can you expect him/her to consider yours?

(See: Fundraising or Not Fundraising, That is The Question)

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Have a comment or a question about starting or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.

I respond to Michael (his comment is below) that we don’t disagree, that it’s just a difference in vocabulary.

My reference to nonprofits being public institutions is a matter of perspective, not legal language. Nonprofits are required/supposed to serve the needs of the “community,” and I write from the perspective of the “community’s” right to know how effective a nonprofit is that serves them – how cost effective and how effective at addressing the issue it was created to address.

Organizations (like AFP) that serve/represent staff and consulting fundraising professionals use language that refers to nonprofits as being “publicly owned.” The intent of that language being to maintain awareness among fundraising professionals and the organizations they serve and keep us/them focused on what is and isn’t “ethical.”

Where that language may differ from the legal language of the IRS, the intent is the same – to protect the rights of the community/public.

In that context, “Ethics” is all about doing what’s best for the community/people being served. To word it in a way that addresses a common problem: “Ethics” is about doing what’s best for the community/people being served, not what’s best for the board and staff members of the nonprofit. “Ethics” is also about using contributions (only) as the donors intended, and letting those donors know such is the case.

Excerpt from Michael’s comment:
“Hank and I are old friends and colleagues, so my disagreements
with him are always respectful – and I admit the possibility of error!

“I take issue with the assertion that charities are, in effect, public
institutions due to their tax-exempt recognition and “tax subsidy”.
In fact, legally as well as functionally, charities are explicitly private
entities run for a specific defined “public benefit purpose” (to use
IRS language).

“If favorable tax treatment alone defined whether a US institution is
public, than there would be *no* private institutions. Every taxpayer,
whether individual, partnership, or corporate, receives favorable tax
treatment to reduce or eliminate their Federal income tax burden.

“Charities, as private entities, receive favorable tax treatment in
exchange for their explicit promise to operate in a certain way and
comply with applicable parts of the IRS Code.

“I would never argue that charities and nonprofits should act without
accountability. However, nonprofits serve a valuable societal function,
recognized in law and regulation, that is collective, but explicitly not
public.” Michael Wyland — michael@sumptionandwyland.com

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Have a comment or a question about starting, evaluating or expanding your fundraising program? Email me at AskHank@Major-Capital-Giving.com. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, we’ll likely be able to answer your questions.