Useful Past Tips: FUNDRAISING: Some big direct mail mistakes Monthly giving is becoming more prominent Development relationships take time Closing the deal needs an attitude Roles Pressures on appropriate costs Post Office has sweepstakes rules Presenting your funding case statement Considerations when planning an auction Making a family campaign work Launching a comprehensive campaign Incorporating moves management Best practices for online fundraising auctions Donors of the faithful Big gifts for small groups A crisis and your major donors > More Fundraising tips

1. Some big direct mail mistakes

Any organization that has used direct mail can testify that it costs money before it brings in money. Further, and sadly, a badly conceived or badly executed direct mail campaign can backfire on your fundraising plan.

Speaking at a recent nonprofit direct marketing conference, Brenda G. Barnes of Joyce Meyer Ministries and Mary Hutchinson of CreativeOne Direct offered a few caveats for direct mail campaigns.

• Gross income may look good, but it can be costing a lot of bottom line money. Fixating on gross income without attention to cost or response rates can work against an organization.

A better measure of success is growth in net income, acquiring more donors than those who have lapsed or tracking to see if donor gifts increase each year.

• Do not keep possible donors on file if they have never given any money. Collecting random names adds non-responsive people who don't care about an organization, even though the organization spends money on them. You want donors, not names.

• Remember that many donors renew the way they are acquired. Don't forget why the donor gave in the first place. Donors respond when they are made to feel that they are important.

2. Monthly giving is becoming more prominent

A large growth area in individual giving is regular or monthly giving.

In their book Building Donor Loyalty, Adrian Sargeant and Elaine Jay wrote that by the mid-2010s the majority of individual-giving solicitations will be for this kind of gift. They offered a step-by-step guide for establishing a monthly giving program.

1. Research and plan. Check the activities of competitors and of charities of the same size in different fields.

2. Make cost projections. For this you must have accurate data on current donors.

3. Set up payment arrangements. Your organization's bank should be one of the first suppliers you contact.

4. Establish database and reporting routines. For each monthly donor, your system needs to be able to hold a record of the gift arrangements and the payment made.

5. Emphasize donor care. Monthly givers should receive a high standard of care, with high-value givers selected for special treatment.

6. Test existing donors, existing media. Start by trying to convert existing donors to the new method.

7. Test donor recruitment. Use media that can be controlled tightly, such as direct mail.

8. Test new media. Use means of communication that donors prefer.

9. Monitor and evaluate. New measures, such as calculation of lapse rates, must be instituted.

10. Expand the program. Monthly giving should be rolled out through all viable recruitment routes using all possible fundraising methods.

3. Development relationships take time

Although teamwork and cooperation within an organization are important, teamwork at the top also stands as an essential factor.

Writing in Lilya Wagner's Careers in Fundraising, fundraising consultant J. Patrick Ryan maintained that the best institutional development programs benefit from a close working relationship between the chief development officer, the president/CEO and key trustees.

He offered six key activities affecting fundraising in which these individuals can team up to produce maximum results.

• Recruiting, working with and inspiring trustees. Trustees want to serve a nonprofit and feel good doing it. They appreciate quality staff assistance.

• Strategic long-term planning. Good planning usually ends with a case for fundraising; when it starts with the chief development officer's participation, the plan benefits from the talent and focus the top people bring and the institutional relationships that are built.

• Approving and overseeing the institutional advancement program. Trustees and CEOs work best in helping carry out the fundraising program when they have helped shape it.

• Developing relationships with key friends. Most key constituents want to have a direct relationship with the CEO and key trustees.

• Recruiting key volunteer leaders. Identifying the right candidates for important institutional development tasks should be a joint decision.

• Asking key prospects for support. Rarely can the top three get together for any activity, but for all top solicitations all three should work together to develop the right strategy and prepare the presentation.

4. Closing the deal needs an attitude

Fundraising is an endeavor that is often accompanied by an attitude -- a negative one.

There is something about asking for money that makes many people uncomfortable, but James E. Gillespie, CFRE, president of CommonWealth, a development counseling organization, maintains that a positive attitude is crucial for fundraising.

He offers the six essentials he has learned for true success:

• Understand why people give. Gillespie believes that his question, "Tell me why you gave your last gift and how you felt after it was completed" almost always gets a positive rather than negative response. When you truly believe that raising money makes people happy, you will be a winner in the profession.

• Develop your personality. This goes all the way from a positive mental attitude to a great sense of humor, and even a good handshake.

• See yourself as a problem-solver. Recognize that you were hired to solve problems. Have a plan, share it with your boss and volunteers and say "Unless you stop me, here's what I will do."

• Be entrepreneurial. See your department as "your company." You are the profit center of your organization.

• Work by objectives. See the goal and purpose in each thing you do, especially contact with donors. Constantly ask yourself, "Why am I doing this?"

• Get out of the office. If you see this as an office job, you are doomed to mediocrity. The winners in the profession spend time with donors.

5. Roles

Fundraising is a key element in nonprofit operation. In her book Careers in Fundraising, Lilya Wagner offers advice about this crucial activity, and she outlines a range of activities that fall under the general heading of fundraising.

Understanding the differences between these areas can help clarify the role each plays and even help in discerning the type of person who can thrive in them.

• Direct mail or direct marketing -- producing and distributing written materials to a target audience. Skills include writing ability, working with a deadline, creativity and technical expertise.

• Special events -- organizing functions or benefits to meet a variety of goals. Qualifications include organizational ability, management of many details, creativity in selecting an event and patience and flexibility.

• Prospect research -- finding and managing appropriate information about prospects and donors. Skills include ability to use the Internet and other technical sources to conduct research and gather information.

• Major donor solicitation -- working with people who have the capacity to make large gifts. One must be able to identify major gift prospects, plan strategy and execute follow-up. These people, usually senior members of an organization, are often expert communicators with good human relations skills.

• Planned giving - a growing subspecialty that involves learning about giving instruments, tax structures and implications and benefits to donors and organizations.

• Data and records management. Gift receipting and acknowledgement are often a part of this job.

• Consulting. Ability to work independently and having a broad base of fundraising knowledge are essential.

6. Pressures on appropriate costs

The issue of appropriate costs is a vexing one for nonprofit organizations, as senior managers struggle to get the most return possible while realizing that very often it is necessary to spend money in order to make money.

Although the fundraising profession does not have industry-wide standards about what constitutes appropriate fundraising costs, the Association of Fundraising Professionals (AFP) has developed a set of guidelines that can be useful to nonprofits in evaluating the appropriateness of such costs.

The following are the factors that the AFP says should be considered:

• The age of the organization. A well-established organization will be likely to have a return on investment greater than a newly established one.

• The age of the development department. A mature development department, professionally run, would be expected to produce a greater return on investment than a newly formed one. Different methods will produce different results.

• The size of an organization. The return on investment may by affected by this.

• The profile of the constituency. T he economic and geographic profile of the constituency solicited will have an effect on the ROI.

• The location of the organization. An organization located in an affluent region of the country should expect a greater return than one in a poorer area.

• The popularity of the cause. The cause and its level of acceptance will be important.

• The competition for funds. Heavy competition may lower return.

7. Post Office has sweepstakes rules

Scandals that rocked for-profit sweepstakes mailings have had their effect on similar nonprofit operations, with regulations that have been passed by the U.S. Postal Service.

For-profits encountered trouble when they implied in their mailings that recipients would have better chances of winning if they made a purchase or subscribing to one of the publications that were included in the sweepstakes promotion. These companies also got into trouble by misleading people into believing they had won something when in fact they had not.

The USPS has passed regulations, included in its standards section C031, that allow sweepstakes mailings if the organization adheres to certain guidelines.

The organization must disclose:

• "In the body of the mailing, in the rules and on the order or entry form, that no purchase is necessary and that a purchase will not increase the odds of winning."

• "All terms and conditions, including rules and entry procedures of the sweepstakes."

• "The sponsor or mailer, with the principal place of business or address at which the sponsor or mailer may be contacted."

• "Sweepstakes rules, including the odds of winning, quantity, value, and nature of the prize."

There are other provisions:

• Sweepstakes are not permitted if the organization represents that individuals not making purchases may be disqualified from receiving future solicitations.

• Organizations are prohibited from sending a mailing if it requires a donation with the entry form.

• The organization must include a phone number for people to call in order to be removed from a mailing list.

8. Presenting your funding case statement

Any case statement must do an effective of conveying its message. Jerold Panas, author of Making The Case, recognizes the fact that each writer has a unique style, but he offers six suggestions that he maintains will help any writer produce a case statement that has a sense of force and urgency.

• Sell your reader. Tell the truth, of course, but make the case in a way that propels the reader to get out the checkbook. Motivate. Make the organization look as though it has been destined since the beginning of time to address this special challenge.
  
  Appeal first to the emotions then to the intellect. Personalize statistics with true stories and case histories. Resist the mundane. Don't be subtle. Be specific. If it makes the reader tingle and break out in goose bumps, then you're on your way.

• Hone your words painstakingly. When talking about a project, mention the things it makes possible. Never ask for help. Instead, talk in terms of the exciting opportunity that exists. Be brief about expressing the problems.

• Punctuate the case with opportunities.

• Break the copy with interesting headings and subheadings. Give readers a chance to pause and catch their breath.

• Tell your readers what you want them to do. Ask for donor participation.

• Be certain to use visual aids and quotations. Maps, graphs, charts and photographs add high impact to the case. The case can transform the institution into a cause.

9. Considerations when planning an auction

Auctions can be helpful and joyful fundraising vehicles, but they carry risks such as small return and volunteer burnout. In her book Benefit Auctions: A Fresh Formula for Grassroots Fundraising, auctioneer Sandy Bradley suggests several considerations that should go into the decision about having a fundraising auction.

• An auction needs a critical mass of attendees. Bradley offers a formula of at least two bidders for each item. With a small number in attendance, it is possible that an item will draw no interest. A group of 225 to 450 seems good for optimum yield.
  
  
• An auction needs stuff. A good turnout is pointless if there is nothing on which to bid. People might be shy about asking for financial donations, but soliciting in-kind donations for an auction is easier. The auctioned items can consist of goods or services. On the average, an auction will draw a minimum return of 50 percent of the value of the items.
  
  
• An auction needs a secret ingredient. That secret ingredient is board commitment. Without board participation, it is going to be an uphill battle, so the commitment must be explicit and guaranteed. Don't try to sneak this one by the board.

Bradley also suggests the possibility of charging admission to the action. This may cover the expenses of holding the event.

10. Making a family campaign work

A family campaign, one in which staff and board members are treated as donors and included in the strategy of a campaign, can be very effective, according to Gerry Backs, a senior international fundraising consultant. Involvement is extremely important for fundraising. At a recent seminar on family campaigns, Backs offered six tips for running an effective family campaign. They are:

• Don't expect anything. Treat your staff and board as if they don't know anything about your organization because chances are they don't know everything.
  
  
• Create a separate recognition program. Employees and volunteers are core people, and they should be treated better than donors.
  
  
• Create a method to communicate what you are doing with your staff and board in an ongoing manner, such as a newsletter.
  
  
• Solicit peer to peer. Break down asking into teams. Most people can probably ask five to 10 other people, at the most, for money.
  
  
• Evaluate yourself. Because your family giving campaign is going to be an ongoing process, you must monitor it in some way to measure your successes and failures.
  
  
• Build the family campaign into your organization. Make it a part of your annual calendar and your orientation materials. If you don't communicate your expectations to staff and members, they are not going to give.

11. Launching a comprehensive campaign

Although the term "Comprehensive Campaign" might be familiar to many in the fundraising industry, it may be good to have an idea of just what the term means and what is involved.

At a recent fundraising conference, an outline was provided that could be of help to anyone contemplating a comprehensive campaign. First is the definition of comprehensive. It is annual for at least five years, it is planned and it can involve gifts-in-kind and pledges. Also, it must address the accounting questions that will be raised: What do we actually count and how do we count it?

The organization must prepare with an overall vision, specific objectives and individual projects. The campaign should be tested with donors.

Once all of that is done, there are six essentials for success. The six essentials are:

• Do not announce your goal until you have solicited your top 50 to 100 prospects.
  
  
• Organize your campaign sequentially, over time and as needed.
  
  
• Make sure that your volunteers thoroughly understand the plan, with a clear picture of objectives.
  
  
• Set two goals: A monetary goal and funding for all projects.
  
  
• Market your named gift opportunities.
  
  
• Do not announce your campaign. Let it be an ongoing effort.

Also, certain areas need to be kept in mind. These areas may take on added importance at some point in the campaign. They are: accounting, publicity, goal setting, adjustments to the goal and use of counsel.

12. Incorporating moves management

Moves Management is a strategic approach to fundraising and communications; it is a proven method of coordinating solicitor activities, streamlining day-to-day operations, and ultimately improving bottom line results.

According to Anthony J. Powell, CFRE, vice president of consulting services for Blackbaud in Charleston, S.C., every organization is unique, and there are a number of different -- and equally effective -- approaches to donor and prospect management. Regardless, there are a few key elements to an effective Moves Management program:

• Program and pipeline management: Like every nonprofit, your organization wants to turn prospects into donors. Do you have a formal process for managing the identification, qualification, cultivation, and solicitation of key donors? How do you identify your best prospects and ensure they are being engaged appropriately?
  
  
• Information management: If you don't already do so, start with a single system of record for tracking and managing contacts and activities with donors. Often referred to as a constituent relationship management (CRM) system, this alone will help coordinate activities between different departments and solicitors within your organization and can provide the platform you need to collect, analyze, and report on results.
  
  
• Strategic analysis: Evaluating your programs in light of specific, quantifiable goals and success criteria can help to measure progress and identify opportunities for improvement. This information is critical to making smart decisions about your fundraising strategy and improving results over time.

According to Powell, this all s ounds great in theory, but how do you get started? Begin by assessing your organization in each of the three areas above, What is working well? Where do you have room for improvement? Do you have the staff, training, and tools necessary to move donors through your pipeline effectively? Every organization is different, and the process and activities you employ to move donors through your pipeline must be closely aligned with your specific goals, objectives, and mission.

A successful Moves Management program increases the success rate of every solicitor action, communication, and appeal and can help your organization provide excellence in terms of responsiveness to donors, internal efficiency, and bottom-line results.

13. Best practices for online fundraising auctions

Research indicates that donors are more likely to give when they get something in return for their contribution. Online fundraising auctions take advantage of that phenomenon. Plus, auctions tap into dollars that are often separate from the "charitable giving" budget: household discretionary spending.

According to Greg McHale, founder of cMarket, the online fundraising auction services company in Cambridge, Mass., if you have a strong community of members, people to donate items, potential event sponsors and the willingness to actively involve all of them in your online event, you're well equipped to run your own successful online auction.

Here are some of the best practices you can use that we've gleaned from our customers -- among the most successful non-profits in the country.

1. Create a compelling auction Home Page: Make sure your auction Home Page says something about you. The best auctions share their passion with their community. According to McHale, there's no better place to share the history behind your organization, the purpose for this online auction, and how the proceeds will be used to benefit your organization's cause than on your auction homepage. One of the advantages of an online auction is being able to reach out to charitable bidders.

2. Tap your community for item donations: If you have to spend money to get items for your auction, that's less net profit for your organization. Use your auction home page to solicit donations. Email your community for donations. It's best if you can secure some unique items from high-profile donors, such as an autographed baseball from a major league baseball star, mayor for a day, dinner for six prepared by a local chef in the donor's home. One-of-a-kind items add interest to your catalog and can spur friendly competitive bidding.

3. Leverage board members, staff, and volunteers to recruit sponsors: Sponsors can more than cover the costs of an online auction, and your board members, staff, and volunteers can help you make contact with potential sponsors. Make sure they are able to solidly communicate the value of sponsoring your online auction: repeated exposure to a community that is usually many times larger than the number of people in a traditional in-room auction.

4. Reach out to your members -- over and over: Your members care about your cause. Chances are that they want to contribute somehow to your online auction -- and they have options. Invite them to donate items, ask them to refer-a-friend, tell them when the auction is open and remind them to bid often. You're marketing your online event and your organization. Repetition works.

5. Promote your auction outside your immediate community, too: McHale suggests that you have a media partner, perhaps a radio station or community newspaper that could promote your online auction on-air, in print, or on their Web site? And, even if you don't have access to a specific media partner, consider taking out an ad for your auction in your community newspaper or on your local cable station.

14. Donors of the faithful

The issue of faith-based nonprofits and their roles in the sector can be a contentious one, especially when the matter is politicized. In the matter of fundraising, however, faith-based organizations, which includes houses of worship, can provide a model of success.

In his book Big Gifts for Small Groups, Andy Robinson argues that faith communities collect more than one-third of all charitable dollars, the biggest recipients by far of American generosity. How do they do it? Robinson offers seven keys to this success:

• They ask. And ask, and ask. Remember, many churches pass the plate every week.
  
  
• They ask everybody. Faith-based organizations make little distinction between the rich and the poor. Nobody is screened out because of a perceived ability or inability to give.
  
  
• It's expected. There is little shame or guilt regarding the ask. It is accepted that everyone who attends is a potential donor.
  
  
• They provide lots of options. In addition to weekly gifts, most congregations request an annual gift or something like the building fund, overseas relief fund, etc.
  
  
• Thy create opportunities for donor interaction. They see their constituents several times a month.
  
  
• Volunteers ask for the gifts. Most church fundraising is built on the backs of volunteers who not only pass the plate but also organize fundraising events.
  
  
• They do a great job building relationships. They know their people really, really well.

15. Big gifts for small groups

The process of soliciting the big gift usually involves three steps: a letter, a telephone call and a visit. In his book Big Gifts for Small Groups, Andy Robinson wrote that, although those are the steps, there are also three points that are vitally important in the solicitation of big gifts.

The key points are:

• Honesty and transparency generate the best results. At each stage — letter, phone call, visit — you must be completely clear about your purpose, which is to raise money for the organization. If you ambush people — go see them on other pretenses and then spring the fundraising question like a loaded trap — you will annoy them and consequently not raise as much money. Transparency means naming numbers right from the start.
  
  
• Don't start what you can't finish. Once you begin, you must follow through. The worst thing you can do is mail a letter that promises a follow-up phone call and then not make the call. The credibility of the organization depends on honoring commitments.
  
  
• Begin with reasonable expectations. The beauty of a straightforward approach is that it screens out those who are less likely to give. True, you will lose some candidates at each stage, but the ones who remain will be strong prospects.

16. A crisis and your major donors

If an organization finds itself in a situation bad enough to be considered a crisis, fundraising, especially among major donors, is an extremely important function, regardless of how difficult the crisis may have made it.

In her book Fundraising in Times of Crisis, Kim Klein asserts that donors know that a crisis is not just a suddenly appearing big problem but something that has been brewing. Klein suggests four items that will reassure major donors, many of whom will be satisfied with one or two.

The four things are:

An explanation. Major donors, especially long-time major donors, are like family. When a family member becomes ill, relatives expect to receive more information than neighbors do. Tell these donors whatever you have agreed can be told to anyone in the organization.

A fundraising plan. Be prepared to show donors a cash-flow chart and strategy-by-strategy description, including gross and net incomes for each strategy. Show them the gift-range chart and talk to them about how many other prospects there are.

Help from other donors. Evidence that other people have bought into the plan is important. As gifts come in, ask if the donor's name and gift size can be shared with other prospects.

An escape plan. Some donors need to be offered a contingency they will give only if certain things happen. Such a way out should be offered only if the donors indicate that is what they need.

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