Category: Financing & Loans

When I started my career in fundraising, in the late ‘70s, my first employer was one of the traditional capital campaign-consulting firms — one of those firms that, for the most part, only engaged in feasibility studies and capital campaigns.

Like many like similar firms, there was little attention paid to the broad concepts of “Development” and how a campaign could/would/should impact an NPO’s future relations with its community.

I was a campaign director – the fellow who moved into town for the length of the campaign and worked with the non-profit’s leadership to guide the campaign. Most often, I was working with an NPO for which my employer had already done a “feasibility study.”

Back then, it turns out, whatever firm did the “study,” was the firm that was (almost always) “selected” to provide campaign direction.

It didn’t take me long, especially after talking with my colleagues and counterparts at other campaign-counselling firms, to figure out that the “studies” were not just the foot-in-the-door for those firms, but the means for keeping the door wide-open!!

The “tradition” had been, and still is for many consulting firms, that all study interviews must be confidential. That means, in essence, that an organization hires a consultant to conduct a study where no one could be quoted directly about what they said about their own potential giving or leadership roles … or those of others.

The study report could indicate that some interviewees thought that Mr. Xyz would make a good leader and/or that Mrs. Abc would likely make a large gift, but you couldn’t report that Mr. Xyz said he’d be happy to lead or that Mrs. Abc said she’d make a large gift. Huh !!

The report might have indicated that there were three people who would likely make six-figure gifts, eight people who indicated that they’d make five-figure gifts, and three people who would volunteer to be and would make excellent campaign leaders.

But, because the interviews were confidential, only the consultant really knew who said what, and why, and the “confidential information” was not included in the Study Report.

See Why I Object To Feasibility Studies – Part Two
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Have 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 do our best to answer your question.

I have been a grants professional since 1974 — that’s a long time. I have worked in agencies that range from the largest single local public agency in the country to a tiny seminary … and everything in between.

During that time I’ve taught countless grant seekers in graduate and continuing education courses, and in professional workshops. In those early days of teaching, I structured my courses around the three basic principles of seeking grant funding — program design, funder research and proposal writing.

The process started with a well-structured, compelling program or mission statement for organizations seeking targeted core support. Then the grant seeker needed to conduct a comprehensive search of grant makers and their priorities.

Today that’s all done electronically, but in years past it required endless hours search through printed directories. That research yielded a list of potential funders that then had to be filtered further — for a variety of factors that “qualified” them appropriate prospects to be sent an application.

Those factors included geography, applicant eligibility, funding range and program compatibility. The final list included only those funders whose priorities matched those of the applicant. Next, the applicant wrote proposals that were consistent with the funder’s guidelines, submitted those applications, and then waited.

That was, and still is the standard curriculum for courses on grantsmanship, whether one-day workshops or semester long seminars.

This structured, sequential approach is, in fact, the process that grant seekers must follow, but it is a process that hardly guarantees success.

Eventually I came to recognize that we well-meaning professionals were doing a disservice to grant seekers by presenting this cookbook approach as the road to getting funded. As I wrote in an earlier blog, grants represent the greatest effort for the least return of any fundraising strategy. Only 5% to 10% of grant application are funded in any cycle.

Want to increase your odds ?? Watch for Part 2 … next Tuesday, June 29 !!

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Have a question about starting or expanding your grants program? Email me at Andrew@GrantServices.com..

For the last 50-60 years, a Feasibility Study has been “required” before planning and/or implementing a Capital Campaign, and its basic concept and structure hasn’t changed in all that time. I contend that it’s more than obsolete, it’s counter-productive.

Now don’t get me wrong. I’m not saying that we shouldn’t first determine the feasibility of acquiring leadership for and attaining the goals of a major fund raising effort.

Of course we must interview prominent members of the community, prior donors and prospective leaders/example-setters. Of course we want to determine if success is likely, even probable. Of course we want to begin the education and cultivation of those who will be campaign leaders and major donors.

But feasibility studies are designed to ask interviewees if they think the goal is feasible, if they think there are any individuals who could lead a campaign to its goal, if the “community” will support the effort. A typical question is, “With your knowledge of the community, do you think/believe that ‘this’ goal can be achieved?”

If you’re asking people if they think you can succeed, you give them the impression that you might not. Why plant the seed of doubt? In fundraising, a “Study to determine Feasibility” is really bad psychology.

Never ask if an interviewee thinks the goal is attainable? Avoid asking “if,” but rather work to create the impression that success is a given. Get people to buy into that success, then you’re more likely to succeed.

What if the answer is “No”? Those questions raise issues you don’t want raised.

If you’re planning (even thinking about) a capital campaign, please, for the sake of your organization and that of your community, don’t do a Feasibility Study !!

Let’s do Planning Studies or Research Projects, but no more “Feasibility Studies.”

Coming soon, discussions of Study Interviews and Confidentiality, and The Planning Study As The Real Beginning of a Program/Activity/Fundraising Effort.
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Have 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 do our best to answer your question.

When the question of major gift fundraising first arises, many unsophisticated board members, volunteers and staff immediately begin talking about the “rich and famous” — with Bill Gates being the name at the top of almost everyone’s list.

The wrong assumption that many people make — and one that can become a major time waster — is that an organization’s prospect list should contain the names of every conceivable wealthy person.

Indeed, yes, the first steps of a major gifts effort should include the generation of a list of wealthy individuals. But the distinction is whether they are likely to become “prospects.”

Major Gift Prospects are people who:
1• Have wealth, and may derive satisfaction from using that wealth to advance the causes in which they believe;
2• Are accessible to you and/or (even better) are current major donors to your organization;
3• Have a need that will be satisfied by making a significant gift to your organization;

Ideally, but not necessarily, Major Gift Prospects are also:
4• Aware of the effectiveness of your programs and the business-like manner in which you operate;
5• Passionate about wanting to see your mission achieved; and,
6• Involved with your organization and/or its programs, and demonstrate a commitment to the success of your mission.

You can have a long list of wealthy people, but unless they meet the criteria, they’re not “Prospects.” They’re people you’d like to think of as likely donors, but you have no evidence to support that wishful thinking.

Bottom line is, for people to be Major Donor Prospects; you must have enough of a relationship with them to satisfy the above qualifiers, and to know them well enough to recognize/identify their needs.

Major gift fundraising is more about the needs of the donor, than about the needs of the organization.
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Have a comment or a question about starting, evaluating or expanding your fundraising program? With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, I’ll be pleased to answer your questions. Contact me at AskHank@Major-Capital-Giving.com
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Have you seen The Fundraising Series of ebooks ??
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If you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting.

Many Non-Profit Organizations (NPOs) use the term “Major Gifts” to refer to those that are larger than the usual range of gifts that arrive in the mail. Typically, $1,000 is the magic number.

But, unless an organization’s budget and/or the amount to be raised via the fundraising process is unusually small, gifts of $1,000 won’t significantly aid in pursuing financial goals.

A Major Gift, which could be a planned gift, is not based upon exceeding a specific dollar figure — as above, but requires:

1• Amounts that will significantly help to attain fundraising goals
— 1% or more of the goal would be significant. If your goal is
$1,000,000, at $1,000 each, you’d need 1,000 gifts; and, unless
you have the prospect base with that many donors who have given
at that level in the past, that’s not very likely. Realistically, for a goal
of that size, gifts of $10,000 and up are necessary. (We will address
the concept, construction and use of a Gift Table in a subsequent posting.

2• That prospects be cultivated and solicited on a face-to-face basis.
Consistent with the concept/practice of “development,” in order to get
donors to want to make “major” gifts, there must be a relationship
between the donor and the person doing the asking. And that person
must also be one of the people, in not the person, doing the cultivating
and educating of the prospective donor.
(Prospect Cultivation will be addressed in-depth in future postings.)

3• Ask amounts that are well thought out and well researched.
When asking for ANY gift to a non-profit, it should always be for a
specific dollar figure. For a major gift, it should be a figure based
on the donor’s ability to give … and you should always be able to
give the donor a good reason “why that amount” !! (For discussion
in a future posting.)

4• The development and implementation of an individual plan,
or strategy for getting each potential donor to the point where s/he is
ready to make the gift you want him/her to make. (For further discussion
in a future posting.)

[If you’ll describe a particular prospective donor [in depth, no names], we
will suggest a possible cultivation process for that individual.]
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Have a comment or a question about starting, evaluating or expanding your fundraising program? With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, I’ll be pleased to answer your questions. Contact me at AskHank@Major-Capital-Giving.com
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Have you seen The Fundraising Series of ebooks ??
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If you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting.

Had a call, today, from a non-profit organization that has never before done a “major” event, but they’ve decided that they really want to do one now. I could probably have transcribed the conversation before we began talking, as it seems like there’s not a week that goes by that I don’t get a similar call.

This organization is 4 years old, they’ve done a few (Hank, pardon my use of the word) “fundraisers,” and they feel certain they are ready for the “big” event.

First question I asked was, ”Why did you contact me? Answer: “My boss went to an event you did and loved it and wants us to do one just like it.”

Great, now we have a real problem…the event that she loved was for 500 people in an elegant expensive locale and was now in its 8th year … an event that the organization has been planning, developing and growing for longer than that.

Then I asked, “Tell me about your organization and why you want to do an event. After an overlong description of all the wonderful things the organization does, she said that they wanted to do an event to attract people to the organization and their work.

Good idea!! So I asked, “Do you have potential donors who would want to buy tickets and attend … how large is your mailing list … where will the money come from to rent the place, pay for the invitations, postage, food, beverages, etc….??

“Oh, we thought we would ask one of our board members to chair it and have the rest of the board on the committee, and they would raise the money….”

My next question, “How much money does your board raise now? Answer: “Not much.” So, why, I ask, would you think they would/could raise money for an event ??

“Why not?” they ask.

Anybody have an aspirin?
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Have a question about creating or expanding your special event? Email me at Info@NatalieShear.com. With over 30 years in conference and event planning, we can help you turn your vision into reality.

Grants represent the most effort for the least predictable return.

The question, therefore, is to first determine what resources will be needed before an organization contemplates launching a grants program!!

Researching grant sources, planning projects, preparing proposals and budgets and managing funded programs all require a lot someone’s time/labor – all of those comprise the “opportunity costs.” What, then, will the nonprofit organization have to give up to work on preparing grant proposals?

As Hank suggested in his June 1 posting, cultivating major donors is (should be) a high priority for most organizations. Most fundraisers can judge how likely it is that their efforts will result in a gift, and they move ahead in their pursuit of potential donors based on that judgment.

Annual fund experience generally is predictable, and the organization can assess the return on its investment. Similarly, special events (especially those created by Natalie) yield results that can be consistent from year to year.

On an annual basis, only about 5% – 10% of grant applications are funded. That’s not very impressive, and a good reason why organizations need to assess the benefits they will realize from pursuing grants.

But, before they do that, they should have predictable, consistent sources of hard money income. That is, those sources of funds they can rely on from year to year.
If they are at a stage in their development where they honestly can say they can rely on their normal income sources and, if they can envision special initiatives that are beyond the scope of their operating revenues, they can consider if a grant program is warranted.

If it is, they need to devote resources to funder identification, proposal writing and grants management. Such infrastructure is necessary for the pursuit of grants. If these resources incur unacceptably high opportunity costs, the organization is not ready to engage in a grants program. Their efforts are better directed to more productive sources of funding.
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Have a question about starting or expanding your grants program? Email me at Andrew@GrantServices.com..

The biggest mistake that many non-profits make is their belief that grants from corporations, foundations and government will continue, or (even) increase, over the long-term.

Historically, those sources of funding for specific programs either remain the same or decrease – especially during rough economic times (Remember !! … It wasn’t that long ago).

While overall costs of operation tend to rise, few foundations or corporations want to make long-term commitments to a non-profit organization.

Planning-for-the-future, therefore, involves identifying potential sources of funding sufficient to ensure continuation or expansion of the programs that satisfy the needs of the people and the communities being served.

Worded another way, “Ensuring future funding requires minimizing the risk of losing a large percentage of your income.”

Most foundations help a NPO initiate a program/concept, help them create the structure that will support it, and then go on to do the same with other organizations.

Corporations want to be perceived as supportive members of the community. The more NPOs they support, from the same, limited pot of money, the more visible they’ll be and (generally) the better their image.

It’s also dangerous to rely just on events — no matter how successful, as someone else’s event or activity may prove to be a greater attraction for your attendees, or the economy may engender second thoughts about buying those event tickets.

Ask yourself, “When the grant for a specific program runs out, do you end that program and discontinue service to those who need it, or will you have a backup plan … a reliable source of ongoing funding ??”

Roughly 80% of contributed dollars come from individual donors or their estates. And the common wisdom is that at least 80% of that amount — or about two-thirds of all contributed dollars – come as major gifts from individuals.

A major gift program is easier to design/implement and more cost effective than direct mail and the vast majority of events. Major gifts are also a more reliable source of long-term charitable funding than all others.

And, by the way, the second biggest mistake that many non-profits make is to assume that this doesn’t apply to them !!

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Have a comment or a question about starting, evaluating or expanding your fundraising program? With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, I’ll be pleased to answer your questions. Contact me at AskHank@Major-Capital-Giving.com
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Have you seen The Fundraising Series of ebooks ??
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If you would like to comment/expand on the above, or would just like to offer your thoughts on the subject of this posting, we encourage you to “Leave a Reply” at the bottom of this page, click on the feedback link at the top of the page, or send an email to the author of this posting.

There used to be hard-and-fast rules as to what was, or wasn’t, a special event. Today, everything gets that label, from a small cocktail reception, to a board lunch, to a Gala Auction for 1,000.

Nonprofits think special events are cool and a great way to raise money, but they’re only partially right. Events are indeed cool, but only a great way to raise money if the organization has the donor base to make it happen.

To do an event, your organization needs:
• A great donor/mailing list of people who will want to come to an event to support your work;
• Board members who will step up to the plate, and make an example-setting contribution;
• Leaders who will make calls to friends and colleagues to engender their support/participation;
• A great honoree or two who ”bring” more people and money to the table;
• Co-Chairs and a Host Committee who will deliver their own contributions and those of others; and,
• A staff event coordinator who does nothing but the event … because that person will have no time to do anything else.

No one wants to spend an evening listening to talking heads. Learn to be brief, and if you must present a long biographical history of someone, do it in the evening’s printed program and/or in a quick (2-3 minute) video presentation.

There are a lot of variables to the success of an event. The evening is only so long; don’t try to do too much. If you have two honorees and two presenters you’re done !!

And, one thing to remember, it takes years to build a major event that people mark on their calendars as a “don’t miss.”

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Have a question about creating or expanding your special event? Email me at Info@NatalieShear.com. With over 30 years in conference and event planning, we can help you turn your vision into reality.
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Have you seen Natalie’s ebook on Special Events ??

That’s an important distinction. The defining characteristic of a gift is that control over its use passes to the recipient the minute the transfer is made. While some donors may restrict a gift to a general purpose — scholarships for example — decisions over the deployment of the funds within that restriction rest entirely with the recipient.

Furthermore, the donor receives nothing in return, as is clearly stated in standard gift receipts.

The opposite is true with grants. A grant is an exchange transaction in which each party receives a “benefit.” The grantor maintains an element of control throughout the life of the grant, and sometimes thereafter.
The terms of the grant are spelled out in a grant agreement or contract that is signed by both parties, and the grantee is obligated to fulfill those terms or risk forfeiting the funds.

The terms typically include performance of the project procedures described in the grant proposal, accomplishment of enumerated outcomes, reporting on a specified schedule and adherence to accepted accounting standards … including maintenance of separate accounts for the grant funds.

What does the grantor get in return? While not a tangible benefit, the grantor’s agenda is promoted. To be successful in obtaining a grant, an applicant must address the funder’s agenda, and create a partnership in which the grantee conducts programs or projects that are mutually beneficial.

Government grants especially fit this model, although it is also true of many large foundations. Government grants essentially are elements of policy control – the government agency promotes its policy initiatives by using funds to enable the grantee to conduct programs consistent with that agenda.

In the case of corporate grants, the expectation is that the company does get some tangible return – if nothing more than good will in the community; but, more on that in a future blog on corporate funding.

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Have a question about starting or expanding your grants program? Email me at Andrew@GrantServices.com..