Category: Finance

This is a follow-up to an earlier posting – see: Who/What is a Fundraising Consultant?

Sometimes a client will accept as gospel every bit of advice/direction that a fundraising consultant provides. Sometimes everything the consultant advises/suggests is questioned.

I’ve worked with organizations/institutions that fit each category, and of course I prefer working with the former type. [In fact, if/when I can identify the latter type during pre-contract discussions, those conversations terminate early.]

The best client to work with, however, is the one that asks questions so they can learn. Working with a client that wants to learn is better than working with NPOs that never question or question everything.

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Often, when working with a client, I have found that the advice/direction I was providing duplicated what their (development) staff person had already suggested. They’re willing to take advice from a stranger, but not a person they’ve hired….

The old phrase, “Familiarity breeds contempt,” may be a partial explanation for why that happens so often, but it’s probably not the only explanation.

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Sometimes I find that organizations view fundraising consultants with a jaundiced eye. They just feel uncomfortable about talking with/hiring/using consultants.

I imagine that they’ve had and/or have heard of other NPOs that have had bad experiences with consultants. After all, not every consultant can be highly rated !!

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I recently met with an executive director who said that she called me because all of the other fundraising consultants she’d contacted had the “template” that they were going to apply to whatever situation they encountered !!

Some fundraising consultants are so locked into one pattern, one philosophy, one approach to every problem, that their mind-set doesn’t allow them to approach a client’s needs with an open mind.

I expect that one of the things that “fundraising consultants” need do is focus on the needs of the NPOs they (want to) serve, not on a method that puts process over the interests/needs of the “client.”

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When a consultant’s ethics don’t put the effective pursuit of a NPO’s mission above the pursuit of a consulting fee, when those ethics consider what the client wants above what the client needs (to pursue it’s mission), one of the frequent end results is some degree of discomfort/distrust of consultants.

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Right now, anyone can say that s/he is a consultant – anyone can hang out that shingle.

If we don’t, by our actions, convince the public that we’re honest, honorable and ethical, and that our advice is based on experience and expertise — not a couple of courses we’ve taken or some volunteer works we’ve done, fundraising consultants won’t engender the level of trust that we’d like.

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If you’re a fundraising consultant, work with an NPO that hires fundraising consultants, or just have a thought (or two) that can add perspective to any of the above “questions,” I’d really like to hear your thoughts on the subject.

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Have a comment or a question about starting, evaluating or expanding your fundraising program? Contact me at [email protected] 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.

Not Exactly…
There are a variety of grants available, but they’re not all the same. Sure, the basic proposal stuff will be the same: organization information, mission, history, and general agency overview, but the guts of these proposals may differ significantly.

Program/Project Support Grants

• The most common type of foundation grant, and funded by most foundations
• Grants to support specific projects or programs
• Require detailed program description, including: program need, target
  audience, and program goals and objectives
• Require program evaluation section that specifically relates back to program
  goals and objectives
• Require program budget including revenue and expenses in addition to annual
  operating budget
• Often require a detailed listing of program activities and timeline
• May also require personnel section with qualifications of program staff

General/Operating Support Grants

• Grants to support operating costs of an organization, also called unrestricted
  grants or general-purpose grants
• Desirable, as they help “keep the lights on,” but not available from all
  foundations
• In place of specific program information, usually require section on programs
  and general activities of the organization
• Require section that addresses the need to be satisfied and the population
  to be served
• Evaluation section is often less specific than for program/project support
• Require annual operating budget

Capacity Building Grants

• May seem very desirable – after all, what nonprofit doesn’t want to build
   capacity – but, and this is a big but, they have a very specific goal, and
   they are not funded by many foundations
• Goal is to assist nonprofits in securing the professional assistance they need
   to address organizational development and effectiveness and enhance
   organizational capacity
• Include support for short-term initiatives, including: strategic planning,
   organizational assessment, board development, financial management,
   information technology assessment/planning, among others
• Most exclude hiring staff from list of allowed activities
• Require capacity building plan, list of activities, timeline and evaluation
   methodology

Capital/Building Grants

• Grants to support capital campaigns for building construction or acquisition
• Not funded by many foundations
• Usually require extensive financial data to show that completion of the project
   is financially feasible

Matching/Challenge Grants

• Help nonprofits increase their fundraising effectiveness by matching other
   donors’ contributions
• Not funded by many foundations
• Grant money is most often released after the challenge has been met;
   i.e., $100,000 in contributions has been raised as 1:1 match for the grant

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Lynn deLearie, owner of Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. She can be contacted at [email protected]..

In response to an email request….

“This” committee was created with the understanding that, to obtain the gift income needed for this organization to effectively pursue its mission, an organized approach to the acquisition of major gifts must be designed, and assiduously followed.

Major gifts, for this purpose, are those that are obtained from a relatively small percentage of this organization’s donors and that (should) constitute a large percentage of this organization’s income.

Committee Membership shall include selected Trustees, Volunteers, Major Donors, and this organization’s Chief Executive and Chief Development Officers.

Committee Members shall be well educated about the organization’s Mission, History and Strategic, Development & Marketing Plans.

Committee Members shall Participate in:
   •   Identifying Prospective Major Donors —
            Suggest Names and Prepare & Review Lists
   •   Generating Timetables for the Identification,
            Education, Cultivation and Solicitation of Prospects
   •   Educating/Cultivating Prospective Major Donors —
            Invite/Escort Prospects to Events/Presentations
            Contact Regularly, based on developed timetable
   •   Evaluating Prospective Major Donors
   •   Soliciting Appropriate Prospects
   •   Weekly (periodic) meetings to review plans, timetables and progress

Committee Members shall take, and present to the Chief Development Officer, notes on the dates and substance of all contacts with those prospects that have been assigned to him/her.

Committee Members shall also respect/maintain the confidentiality of all information relating to all prospects and donors.

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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 [email protected]
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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.

Being able to tell a convincing story is an important issue for anyone working on a government grant proposal; but, sadly, too many proposals tell no story. Proposals may contain plenty of information, but they must also incorporate a cohesive story line that unifies the narrative.

What is a Powerful Story?
According to Jennifer Aaker, a well-known author and business school professor at Stanford University, powerful stories can be a great asset. As Aaker illustrates, a well-told story can become a powerful tool for advocacy and persuasion.

“Tell me the facts and I’ll learn.
Tell me the truth and I’ll believe.
But tell me a story, and it will live in my heart forever.”

In our grant proposals, we are supposed to be clear and factual. There is no place for emotion and subjective thinking. But throughout human history, great stories have always inspired, motivated, moved, and persuaded others. The Bible – a collection of stories – is perhaps the best example of the incredible power of storytelling.

One of the books Aaker recommends to her students is Annette Simmons’ Whoever Tells the Best Story Wins (2007). Simmons recommends that you consider using these kinds of stories throughout your proposal:
  • Who I Am Stories: What lessons have your NPO’s experiences taught you?
  • Vision Stories: What is your NPO’s vision for the future?
  • Values-in-Action Stories: What programs of your NPO typify its values?
  • I-Know-What-You Are-Thinking Stories: What stories can you tell that
    will dispel the objections that reviewers might have about your proposed
    project? Good proposals dispel the element of risk or uncertainty which
    always unsettles reviewers.

Stories and Reviewers
The reviewers of your proposal are submerged in a deep ocean of data that may appear disconnected and overwhelming. They are reviewing many proposals, not just yours, and they may have trouble remembering one proposal from another.

In this choppy sea, meaningful stories can act as life preservers by enabling you to connect with them and create meaning in ways that no mere recitation of facts can accomplish. Stories help win reviewers over to your point of view, and help reviewers remember who you are and why your project is important.

The most powerful communications tool in human history has been and will remain the art of storytelling. We were entranced by good stories as children, and we still read them as adults.

Use effective stories to create meaning in your grant proposals, and you will be more successful.

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Dr. Jayme Sokolow, founder and president of The Development Source, Inc., helps nonprofit organizations develop successful proposals to government agencies. Contact Jayme Sokolow

A couple of months ago I wrote my first posting on fundraising ethics. In that posting I posed three questions — three situations that required ethical resolutions. And, although there have been a few emails from readers that related to ethical questions, the situations that I posed have not been addressed.

So, in the context of the rights of the donor, the public’s right to know, the appearance/reality of conflict-of-interest and how those issues impact the people served by a nonprofit organization, I’ll try to address those questions … without giving direct answers.

1. Is it ethical for an NPO to hire a firm to run a “fundraiser” where the NPO realizes $10,000 it wouldn’t
have had, while the vendor actually retains 90% of the generated income ??

Would your donors feel comfortable giving to you if they knew that only
10% of their giving would actually go to help the people you serve?

Would you inform the people paying to attend your fundraisers that
only 10% of their giving would actually go to help the people you serve?

If you wouldn’t so inform the attendees, why not?

Would you want to see that information on the front page of your local
newspaper? If not, why not?

Where the cost of most fundraising doesn’t exceed 20%, is it reasonable
to use a fundraising method that costs 90% of the gross?

2. Is it ethical for a major donor to a hospital to get his/her child moved to the top of the “treatment” list ??

How would the parents of children already on the waiting list react
to having someone jump to the head of the line?

How would the public react to an article on the front page on the
local newspaper that children in need of treatment were delayed
in getting that treatment because a major donor got “special
treatment?”

What would happen to an institution’s reputation of being fair and
caring? …or don’t people care?

3. Is it ethical for the CEO of a nonprofit to recruit family members to serve on the organization’s board ??

How would current and potential donors react to learning that the
CEO’s family has a vote on what the CEO is paid?

Assuming that the CEO and his/her family members are in
agreement on the issues that the CEO must decide, would the
public see the decision-making process as one designed to
benefit the community? …or the CEO and his/her family?

A good rule of thumb (but not the only rule) to use in judging whether something is or isn’t ethical is whether it feels right. If you’d rather not see it on the front page on your local newspaper, then it probably doesn’t pass the smell test.

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Have a comment or a question about starting, evaluating or expanding your fundraising program? Contact [email protected] With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, he’ll be pleased to answer your questions.

When I was young, there was a rule about thank-you notes. If I got $5 from a distant aunt, I wasn’t allowed to spend it until after I had written and mailed her a thank you note. When you were young, you probably had a rule at your house that was similar.

It’s a great rule for fundraising professionals too, yet we often do a lousy job of it online.

After you’ve struggled to improve your online donation process [See: Audit Your Own Website (Part 1) & Audit Your Own Website (Part 2)] you need to appreciate that a first-time online donor is on a trial relationship with you. The way you communicate with that donor sets the stage for whether you will broaden and deepen that relationship, or whether it will be a “drive-by” donation.

Thank-you Page: Immediately after the gift is processed, the donor should see a page that promptly proclaims “Thank you for your gift!” If you are able to access the information on the gift when you display this page, thank them by name, e.g. “Hank Lewis, Thank you for your gift!”

Then, immediately, invite them to take more action.
• Invite them to watch a video on your website showing how their gift is being put to good use.
• Give them a button they can click to proclaim to their FaceBook friends that “I support [Your Organization here].”
• Invite them to complete a short survey, so they can express their interest in your mutual cause (open-ended survey questions are great because you can learn more about the vocabulary that the donor uses – this is great for follow-up appeal copywriting)

Thank-you Email: Most donation processing systems send an email immediately after the gift is completed (though one out of six organizations to whom we gave recently sent us nothing). Make sure this is a welcoming email. As my colleague, Heather Fignar, puts it: “This should not be a receipt, but a receptionist.” She means that the email should be welcoming and gracious, not merely a recitation of the details of the gift. Again, offer them options for learning more about your organization and proclaiming their shared passion for your cause.

If your donation process merely spits out a receipt, and you can’t change it, then you need to regularly import your new donors into your email system and send them the email message you want to send them. Two email messages are better than one.

Thank-you Letter: It is common, but not required, to send online donors a printed thank-you letter in the mail. This is a great way to introduce them to the direct mail appeal cycle. Here are some important things to consider:
• This does not replace the need for an immediate online thank-you page and email.
• Get them into your direct mail system quickly – within four weeks – or you will lose the connection you established with the gift
• Some people will not want a mail relationship with you. Honor that. Make it easy for them to opt out. It will not only save you money on wasted mail costs, but it might help maintain the relationship with the new donor.

Questions about the online giving thank-you process? Or about how to improve your results? Ask Me.

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Rick Christ has been helping nonprofit organizations use the internet for fundraising, communications and advocacy since 2009, and has been a frequent writer on the subject. He delights in your questions and arguments. Please contact him at: [email protected] or at his LinkedIn Page

That was the subject line in a recent email in which the writer asked:

“We have a skilled fundraiser who wants to do an event for us. She is willing to do it for 10% of profits after expenses. She is passionate about our cause and has worked hard for us for a couple of year — often at her own expense — to promote other successful, but, much smaller events.

“To do this big event she wants to get paid…and I can understand that, as it will be a big undertaking.

“Seems we won’t have any risk involved. We know her, we trust her and if we don’t make any money then she won’t make any money. Is there something I’m missing, or do you think under these circumstances this could work ok?”

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I responded that I’ve always believed in and adhered to the “rule” that no consultant/vendor to a nonprofit organization should be compensated based on a percentage of funds raised. (There’s good reason for that “rule,” and AFP has a comprehensive “white paper” discussing the issue — AFP Ethics Paper.)

So, not to repeat what you can read in that document….

In essence, a nonprofit organization should be able to afford/pay for the services of any consultant/vendor that they engage. If they can’t afford it, they shouldn’t be doing it !!

All consultants/vendors should be able to put a dollar price on the time/effort/services they provide … a price that reflects the current “market.” And the consultant and the organization should come to an agreement (contract) as to the specific dollar figure and how it is to be paid.

I understand what you said about your “skilled fundraiser” being passionate about your cause, about having worked for you in the past, and having given of her time and resources. That was her choice — commendable, but her choice.

Let me use an exaggerated example to advocate for not compensating on a percentage basis. If your event raises $11,000,000 at a cost of $1,000,000, then the consultant will get $1,000,000. How can you possibly justify giving a consultant that much money … money that could do so much good for your constituents ???

Using the same percentages on a smaller scale doesn’t justify using money that people give to you to help the people you serve, to instead compensate a vendor/consultant.

And, by-the-way, you refer to this person as a “fundraiser,” but describe her as an Event Planner/Organizer/Manager. Those two titles do not usually equate … unless she is actually raising the money for you.

If she is raising the money for you, there is not likely a relationship between the ticket purchasers and your organization; and what an NPO must have to ensure future funding is a relationship with those who support that organization.

That you believe you would go into the proposed relationship with no risk cannot be a justification for unethical behavior — as per the “rule.” And, there is a risk you haven’t considered: What if your community/constituents/local newspapers find out about a consultant/vendor getting so much money from your organization that could have helped lots of people !!??

In addition, I get the impression from your note that your organization does (has done) smaller events as “fundraisers.” “Fundraisers” don’t result in ongoing donors … people you can count on for support over the long term.

For my reaction to “fundraisers,” let me refer you to two early postings on my blog:
Fundraising Or Not Fundraising, That Is The Question
“Development” Is Not A Synonym For “Fundraising”

You should know, the above is a compilation of comments from both my wife and I.
I looked at your question from the perspective of a fundraising professional, and she from the perspective of a long-time Special Events Planner/Organizer/Manager.

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Have a comment or a question about starting, evaluating or expanding your fundraising program?
Contact Hank at [email protected]. With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, he’ll be pleased to answer your questions.

… in the Combined Federal Campaign…

is to run a stealth CFC campaign. If a nonprofit has done all the work to become admitted to the CFC, and then they keep it a secret, it shouldn’t be a “surprise” when the results are not as good as they hoped.

With apologies to Jeff Foxworthy, You Might Be Running A Stealth Campaign If:

1. The CFC logo and 5 digit code are not on your nonprofit’s home-page.
2. Your email “signatures” do not include the fact that the nonprofit participates in the CFC, and they omit the CFC code.

3. There is no section on the website describing what workplace giving is, and the benefits to the nonprofit for donations made through workplace giving.

4. You don’t have a communications plan for reaching anonymous donors.

5. You don’t have a communications plan for reaching current supporters that have a Federal “connection,” meaning that in addition to current Federal employees, your current supporters may have children, parents, friends, spouses, etc. who are Federal employees and thus able to give via the CFC.

6. Your nonprofit’s buildings, windows and/or real estate that are visible from the street, don’t have signage with the CFC logo and your CFC 5 digit code.

7. There is no mention of the CFC in any of your nonprofit’s materials: newsletters, annual reports, special reports, etc.

8. At your recognition events, the CFC donors and volunteers are not recognized or thanked.

9. Your nonprofit’s fundraising database has no code for CFC donors.

10. You don’t ask current supporters who are Federal employees to give via the CFC through payroll deduction. (Payroll deduction often dramatically increases the size of a gift, even from the same person).

There are five stages in a CFC campaign, and the solicitation period is just one of the stages. It’s important to have a communication plan in place that allows you to develop relationships with your current CFC donor pool, as well as with potential donors.
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In the next post in the series, we’ll take a look at the unique aspects of the CFC and some specific ways to increase your nonprofit’s visibility.

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During his 25-year career in the Federal sector, Bill Huddleston, The CFC Coach, served in many CFC roles. If you want to get involved in the Combined Federal Campaign, maximize your nonprofit’s CFC revenues, or just ask a few questions, this is the guy to contact …
Bill [email protected] .

An email asked if I know of any resources for designing an “Ask Package”

The writer explained: “I’ve found lots of general rules such as ‘include your mission statement’ and ‘specifically outline what their donation will cover’ but I can’t find any templates for designing one. Are there any websites you could recommend?

“We’re a very small non-profit organization developed to raise funds to cover costs for a martial arts tournament team, and we’re just in the beginning phases of developing the materials.

“The “ask package” is what we want to give to prospective sponsors to ‘sell them’ our Non-Profit so they will donate to us. It’s more than just a fundraising letter, we want to include our mission statement, biographies of team members, statistics from past tournaments, pictures and then end with the sponsorship opportunities they can choose from.

“Do you have any suggestions on where on the internet I might be able to find free resources for this purpose?”

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So, to start, There’s no such thing as an “ask package” – or there shouldn’t be !!

Packages of materials (even with a cover letter) don’t do the asking. People who have established relationships with prospective donors do the asking. And looking to corporations to fund a nonprofit is to look to the least productive source of funding.

To put money/time/effort into creating a “package” could likely not be the best use of your resources.

Having said that, if you’re committed to raising money from corporations, the key is to focus on what the corporation can/will get from giving you money. They are profit making entities, and they are driven by their bottom line … they must be, they answer to their stockholders/owners.

Sending corporations a lot of unsolicited material often just annoys people. Your best bet is to (first) call the community relations or contributions departments of the corporations that might have an interest in your activities and ASK them what you’d need to do to get the corporation to want to give you money. That’s what those departments do.

I also suggest that you read the three postings at Corporate Fundraising

So, my answer to your question … create the narratives on your computer, and keep them there. If/when a corporation asks for more information, you can send them (only) what they ask for.

But, if you send them a pile of slick materials, they may well think that you already have more money than you need … since you’re spending it on brochures/photographs/printing.

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Have a comment or a question about starting, evaluating or expanding your fundraising program? Contact [email protected] With over 30 years of counseling in major gifts, capital campaigns, bequest programs and the planning studies to precede these three, he’ll be pleased to answer your questions.

If you’ve started down the yellow brick road to foundation funding, then get set to meet some different characters (foundations) along the way – specifically: Private, Corporate, Family, and Community Foundations.

Much of the information below comes from the wizards at the MIT Office of Foundation relations; I’ve added the bulleted items in italics. You can download the MIT summary at MIT Resources

Private Foundation
• Nongovernmental, non-profit, self-governed organization
• Funds (usually from a single source, such as one individual, family, or corporation) and programs managed by its own trustees or directors
• Often is a large, complex, professionally managed organization
• Must “pay out” approximately 5% of the market value of its assets each year
• Must pay a yearly 1-2% excise tax on its net investment income
• Usually have formal grant application and reporting procedures

Corporate Foundation
• Assets are derived primarily from contributions of a for-profit business
• Funding comes from an initial endowment and/or periodic contributions
• May maintain ties to the parent company but is an independent entity
• Abides by same rules and regulations governing private foundations
• Often have formal grant application and reporting procedures

Family Foundation
• Technically, not a legal term; refers to any independent private foundation whose funds are managed or strongly influenced by members of the donor’s family
• Family members often serve as officers or board members
• Family members often have a significant role in grantmaking decisions
• Comprise ~40-45% of all private and community foundations
• Most are small, informal organizations
• Usually do NOT have formal grant application and reporting procedures

Community Foundation
• Serves a specific geographic community or region (e.g., The Boston Foundation)
• Usually focuses mainly, if not exclusively, on local needs
• Usually a “public charity” (raises a significant portion of its funds from the public each year), not a “private foundation”
• Funds usually derived from many donors but managed in a single endowment
• Income from the endowment is used to make grants
• Make grants from donor-advised funds that reflect the donors’ interests
• May make grants from discretionary funds to support key regional initiatives

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Lynn deLearie, owner of Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. She can be contacted at [email protected]..