Fundraising Fundamentals

Jeanne Minnicks
January 31, 2014

To broaden awareness of the
fundraising/development profession
by familiarizing you with the culture
of philanthropy, common terminology, key staff
members and their functions, and best practices.

I. Overview
A. The Importance of Philanthropy
B. Why People Give, What They Expect & Don’t
Want, Other Findings
C. The Fundraising Environment
II. Fundraising’s Basic Elements
A. The Development Team
B. Primary Sources of Contributions
C. The Integrated Development Plan
D. Ethics
III. Friend a Fundraiser

Philanthropy means "love of humanity" in the sense of caring,
nourishing, developing and enhancing what it is to be human.
It is experienced by both the benefactor and the beneficiary
but in different ways. The former exercises his or her values
by giving (time, resources) and the latter by receiving.
Philanthropy and charity are related but are not the same thing.
 Charity relieves the pains of social problems.
 Philanthropy attempts to solve those problems at their root
causes.
Wikipedia

Altruistic behavior: Acts that intentionally benefit another
organism, incur no direct personal benefit, and sometimes
bear personal cost.
 Meet critical needs of an organization
 Give back to society
 Help those who are less fortunate
 Advance a cause they believe in
Altruistic ? . . . not so much
 Feel good
 Recognition
 Because they were asked
Advice: Don’t guess . . . ask questions!
*Howard , Anne W.; New Brain Study Hints at Why People Are Altruistic; Chronicle
of Philanthropy; February 22, 2007

 Prompt thank-you letters and calls
 Opportunities to be engaged other than just monetary
donations
 Information on results achieved with their gift
 Communications with staff whose programs they supported
 Compliance with terms of the gift

Gifts
High fundraising costs
Over-solicitation

 The rich aren’t the most generous.
 Insulated rich give less than those in economically diverse
neighborhoods
 Red states are more generous than blue states.
 Conservatives give more than liberals, yet liberals sit on more
non-profit boards
 Tax incentives matter.
 Regions of the country that are deeply religious are more
generous than those that are not.
Gipple, Emily and Gose, Ben; How America Gives - America’s Generosity Divide;
Chronicle of Philanthropy; August 19, 2012

Marketing – employed by commercial enterprises to influence
prospective customers to purchase products.
Development – process by which nonprofits influence
prospective donors to support their needs through gifts and
grants
Berendt , Robert J. and Taft, Richard; How to Rate Your
Development Office; The Taft Group; Washington, DC; 1983

Marketing Development
 Research identifies and defines
customers and their needs
 Positions products to
correspond to customer
characteristics
 Dedicates a significant portion of
budget to builds awareness
through advertising & PR
support
 Trains employees to sell
 Research identifies prospects,
giving potential & interests
 Creates institutional case for
support and giving
opportunities that match
donors’ interests
 Communicates in a variety of
ways to build awareness
 Trains volunteers (board
members & others) to solicit
Berendt , Robert J. and Taft, Richard; How to Rate Your Development Office; The Taft Group; Washington, DC; 1983

 Highly diverse and ubiquitous

 Executive Director
 Director of Development
 Director of Annual Fund/Annual Giving
 Major Gifts Officer
 Planned Giving Officer
 Grant writer
 Database Administrator
 Board of Directors
Development Associate/Assistant
Membership Coordinator
Special Events Coordinator
Volunteers

 Key spokesperson & lead fundraiser for the organization
 Possess real working knowledge of the development
profession
o Different constituencies, giving cycles, forms of giving, donor cultivation
and engagement, gift management and record-keeping, functions
performed by various development department staff
 Makes vital decisions about the place development holds
within the organization’s operations
 Measures effectiveness of existing and new programs in
terms of short and long term goals for raising money
 Evaluates effectiveness of development staff
 Understands the role of board members in fundraising and
engages them appropriately
Berendt , Robert J. and Taft, Richard; How to Rate Your Development Office; The Taft Group; Washington, DC; 1983

The mythological “Fundraiser” . . .
What’s in a name?
Peer relationship with trustees and often deals with
corporate and foundation officers. The title accords
respect and should reflect the importance and impact of
the role.

 Primary role: to create a process of outreach to donors by
organizing & using others to seek funds
 Involved in the institutional planning process.
 Multi-talented:
Strategist Tactician
Financial planner Marketer
Party planner Market researcher
Networker Competitor
Trainer Cheerleader
Diplomat Psychologist
News Junkie Communicator

 Prospects for & stewards individuals
 Manages the Annual Fund and other individual-giving
oriented initiatives, i.e. Giving Tuesdays, Day of Giving

Annual Fund – a program that annually solicits a body of constituents
for unrestricted contributions
 Time consuming and expensive with relatively low return
 Goal is to establish a giving habit and provide a basis for planned
giving
 Funds are in the form of cash and used primarily for ongoing
programs
 Typically directed towards individuals who receive multiple
contacts during the fund period using a variety of methods
 Most begin in the fall, conclude end of the tax year
The Center on Philanthropy at Indiana University – The Fund Raising School in
partnership with the Bayer Center for Nonprofit Leadership and support of The
Forbes Funds; Developing Donors; Indianapolis, IN; 2004

 Solicits funds for special needs
o Programs and projects
o Limited capital improvements
o Equipment
o To build or add to an endowment fund
 Higher $ value “asks”

Planned Gift
 A legal vehicle to carry on the charitable values of an
individual/family converting property into a program of good
works which continue after his death.
 Created during the donor’s lifetime but benefits do not
accrue to the institution until some future time, usually at
the donor’s death
Voluntary vs. involuntary philanthropy discussion
Englund, Gregory J.; Beyond Death and Taxes, Old Questions,
New Answers; Estate Planning Press; Boston, MA; 1993

 Requires specialized knowledge - financial concepts, financial
products, & charitable giving strategies to take best advantage
of existing tax laws
 Defer to an expert
 Great interpersonal skills and sensitivity in discussing delicate
matters
 Considerable expenditure of time & possibly expense
 Process can’t be rushed
 Timing of gift can’t be predicted

 Misleading title
 Development - writing-intensive
 Paper & on-line submissions - applications, proposals, letters,
reports, and agreements
 Variation among funders’ preferred formats
 Standardization vs. customization
 Versatile writing skills – creative, personalized, formal,
structured, technical
 Very different skill set from marketing & PR

 Donor information management and analysis

 Fiscal stewardship & strategic advice about investments &
financial direction
 Input on specific management problems
 Member recruitment
 Expertise – law, finance, marketing, etc.
 Personal gift
 Fundraising support – gift solicitations, attendance at events
 Advocacy

 Individuals
 Foundations
 Corporations
 Government Entities
 Capital Campaign

 In 2012, largest single source of charitable contributions – 72%
of $316.23 Billion
 Sources of major and planned gifts
 A strong individual base hedges risk
 Many ways to engage – mass marketing, group, or one-one-
one
 Larger base provides the basis for specialized appeals &
avoidance of donor fatigue
The Giving Institute & Indiana University Lilly Family School of Philanthropy

 Instrumental in pressuring nonprofits to define with greater
clarity their missions, goals, outcomes
 Divorced from the emotion of giving
 Arms-length relationship with grantees and applicants
 Focus - goals & outcomes, sustainability, board participation
 Primary contacts - executive and/or program officer
 Structured application process

Corporate Relations or Community Affairs
 Relationship-oriented; board contacts are key
 Focus - brand visibility (event sponsorships, naming rights)
 Selective
 Contractual
 Quid pro quo
Corporate Foundations – similar to private foundations
 Focus - programs tied to corporate initiatives
 Primary contact – mid-level manager
 Structured application process

 Funding availability fluctuates widely depending upon
budgets and political climate
 Contact with elected representatives is important; lobbyists
helpful but expensive
 Application process – similar to foundation process, but more
cumbersome and less transparent

Intensive program designed to raise a specified and large sum of
money over a specified time period to meet capital needs
(building construction, remodeling, expansion, equipment)
Elements:
 External consultant often hired to steer
 Usually multi-year
 Feasibility study
 Creation of the case for support
 Giving charts
 Prospect review to identify sources of funds
 Prominent leadership
 Volunteer committees
 Quiet & public phases
 “Pledge” system of giving

 A comprehensive plan to raise funds needed to
support the organization’s mission
 Identical to a business plan used in the for-profit
world:
o Mission & vision statement
o Organizational description
o Plan goals
o Market opportunity analysis
o SWOT analysis
o Strategies and tactics to be used in pursuing opportunities
o Resource needs
o Budget & detailed forecast
o Measurement and evaluation

Development professionals serves the public trust by
promoting ethical and effective fundraising practices by
demonstrating values in all aspects of our personal,
professional, organizational and public lives.
These values require that we:
 Observe and adhere to all relevant laws and
regulations
 Build personal confidence and public support by
being trustworthy in all circumstances
 Demonstrate honesty in relationships
 Remain accountable for professional, organizational
and public behavior
 Are transparent and forthcoming in all dealings
Association of Fundraising Professionals

 Understand that our focus is not on technology but on our mission
 Recognize constraints of our limited resources
 Add value to your nonprofit clients by understanding the functions
of the individuals with whom you may deal
 Remind us of the resources at your disposal – partnerships, training,
etc.
 Be an agent of change
 Broaden your knowledge of the nonprofit sector
 Create a culture of philanthropy in your workplace

 Association of Fundraising Professionals
 Pittsburgh Planned Giving Council
 The Bayer Center for Non Profit Management
 The Forbes Funds
 Greater Pittsburgh Nonprofit Partnership
 PANO
 Chronicle of Philanthropy

Bibliography
Bell, Jeanne and Cornelius, Marla; Underdeveloped, A National Study of Challenges Facing Nonprofit Fundraising;
A Joint Project of CompassPoint and the Evelyn and Walter Haas, Jr. Fund; Compass Point; 2013
Berendt , Robert J. and Taft, Richard; How to Rate Your Development Office; The Taft Group; Washington, DC;
1983
Englund, Gregory J.; Beyond Death and Taxes, Old Questions, New Answers; Estate Planning Press; Boston, MA;
1993
Gipple, Emily and Gose, Ben; How America Gives - America’s Generosity Divide; Chronicle of Philanthropy;
August 19, 2012
Hall, Holly; Fiscal Crisis Reshaped How Donors Give; Chronicle of Philanthropy; September 22, 2013
Howard , Anne W.; New Brain Study Hints at Why People Are Altruistic; Chronicle of Philanthropy; February 22,
2007
Lewis, Nicole; Half of Affluent Americans Say Tax Policy Doesn't Affect Their Giving; Chronicle of Philanthropy;
November 9, 2006
The Center on Philanthropy at Indiana University – The Fund Raising School in partnership with the Bayer Center
for Nonprofit Leadership and support of The Forbes Funds; Developing Donors; Indianapolis, IN; 2004

Fundraising Fundamentals

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