OD180 Nonprofit Management Letter #42

November 2009
Foundational Concepts in Fundraising

Dear Friends,

For many nonprofit organizations, the recession continues, even if it is over technically. I am reminded of this reality by the fact that I have fielded more questions about fundraising this past month than about anything else.

So, this month let me review some important foundational concepts relating to fundraising. I believe these will be especially pertinent and helpful to those organizations that have a one-person development shop or perhaps rely entirely on a combination of external consultants and volunteers.

I always appreciate your comments and questions. Write to me anytime at davidnorgard@OD180.com.

Peace, David

The Five Foundation-Stones of Organization-Building

Courage of Commitment... Creativity in Approach... Generosity of Spirit...
Honesty in Communication... Steadfastness of Purpose

OD180's Five Specialties

Board Training & Development... Organizational Assessment
Strategic Planning... Development Assessment & Planning
Constituent Relations Programs

Foundational Concepts in Fundraising

The Fundraising Cycle

Cultivation:
Cultivation starts with making the organization known to those who are likely to identify positively with its purpose and/or values. Investing regularly in measures to gain familiarity with new audiences is important because donor attrition is a fact of life even under the best of circumstances. People lose their jobs, their interest in the cause, their extra assets, or their connection to what your organization represents. If you are not cultivating next season's donors, your goals for that next campaign will inevitably suffer. The proverb applies here: Don't be penny-wise and pound-foolish.

Solicitation:
You may be strapped for time and for people to help... but resist the temptation to treat all donors alike. Before launching any appeal, sort out those who deserve or require a special touch in order to be most responsive. A general, impersonal letter will not likely result in your major donors responding with another major gift. A prospective donor with a special interest in some aspect of what you do may not find the shotgun approach appealing enough to respond at all. For every appeal, the campaign plan should have two coordinated parts, a general one for the main audience and a special one for those from whom you seek special generosity.

Recognition:
This simple truth cannot be stressed enough. Virtually all donors want to be thanked for their generosity and many appreciate special recognition for special gifts. Even the anonymous major donor usually will feel more confident about an organization knowing that its practice is to express gratitude appropriately. How many times should the average donor be thanked? I recommend at least twice, once upon receipt of the gift and again in some public communication to constituents such as an annual report or on a website page.

Documentation:
It is a given that it is important to keep accurate records from a financial perspective but that is only a third of the story. To be fully effective, donor databases need to track three types of information: prior giving, communications and interactions between the organization and the individual, and pertinent facts about the donor's personal family, career, and other interests and associations. It may seem too time-consuming (or boring) to enter these notes into the computer while in the midst or immediate aftermath of a campaign... but the next appeal will be more successful if you do.

The Essence
On the most fundamental level, successful fundraising comes down to a systematic approach to interactions and communications with past and potential supporters. While most donors appreciate an organization's attempts at keeping fundraising costs down, don't cut so much that they feel ignored or unappreciated. See the proverb above...

A Few Words of Advice

Concerning Annual Campaigns:
When planning, ask yourself: What are we doing not just to renew support but also to attract new support? And remember to avoid the most common pitfall of all for annual campaigns, staleness. Keep it fresh!

Concerning Special Gifts:
The annual campaign may require 90% of your time, effort, and budget and a capital campaign is out of the question. Even so, the remaining 10% of development investment can often go profitably to "special gifts." Consider what might be feasible in terms of memorials, tributes, sponsorships, designated gifts, and in-kind gifts, and then prepare a special gifts plan just for these. Keep it special!

Donor Relations:
After honesty and integrity, the next most appreciated virtue when it comes to relating to donors is regularity. A monthly newsletter needs to be monthly (although the summer usually affords a grace period). An annual event needs to be held annually. Keep it consistent!