Fundraising for Small Shops

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How do you create a successful fundraising program with a small development staff? It's not impossible, but requires resourcefulness, creativity, and, of course, hard work! In this session, we'll address "mission critical" tasks for your development program, how to recruit volunteers to extend your resources, and how to prioritize your many responsibilities to be efficient and effective.

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Fundraising for Small Shops

  1. 1. Fundraising for Small Shops Alice L. Ferris, CFRE James S. Anderson
  2. 2. Things we have in common with larger shops
  3. 3. Things we have in common with larger shops  Philanthropic intent  Primary elements of the development cycle  Prospecting and research  Cultivation  Solicitation  Recognition and acknowledgment  Accountability  To donor  To supervisor  To board of directors  To communities you serve  NEED  Show me the money!
  4. 4. What’s Different?
  5. 5. Differences  Resources  People  Donors  Budget  Reliance on philanthropic giving  “Insulation” from the rest of the operation  Generalist v. specialist
  6. 6. What is Mission Critical?  Activities that you must do in development to:  Generate revenue  Insure sustainability of the fundraising program  Fulfill reporting and legal requirements
  7. 7. What is “Might do”?  Activities that you may do in development to enhance your existing activities and build additional resources
  8. 8. Where should you invest your time?  Evaluate based on  Cost per dollar raised  Time per dollar raised
  9. 9. How to calculate these stats 1. Track your time for one month 2. Group hours by fundraising technique that you’re using 3. End of the month, look at your actual revenue and expenses 4. Group revenue by fundraising technique 5. Group expenses (not including your salary) by fundraising technique
  10. 10. Example  Direct Mail  Spent two hours writing the letter and designing the package  Spent one hour getting the printing ordered  Spent 30 minutes scheduling the mailing  Spent two hours supervising volunteers to stuff the mailing  Spent 10 hours processing gifts and thanking donors  TOTAL: 13.5 hours
  11. 11. Example (continued)  Direct Mail  Revenue from the mailing  20 responses at $50 each: $1,000  Expenses  500 pieces at $2 each, including postage: $1,000  Cost per dollar raised: $1.00  Time per dollar raised: 810 minutes/$1,000 = 47 seconds
  12. 12. Example  Grant proposal  Spent one hour researching the funder  Spent 30 minutes on initial contact with funder  Spent 2 hours meeting with program staff  Spent 20 hours preparing the grant proposal  TOTAL: 23.5 hours
  13. 13. Example (continued)  Grant proposal  IF funded: $10,000  Expenses  Postage and printing of proposal: $100  Cost per dollar raised: $0.01  Time per dollar raised: 1,410 minutes/ $10,000 = 8.5 seconds
  14. 14. Typical Priority Order 1. Major gifts (one to one solicitation) 2. Corporate grants 3. Foundation grants 4. Direct mail 5. Telemarketing 6. Special events
  15. 15. Mission Critical Solicitation 1. Pick at least TWO strategies 2. Diversify your donor base  Make sure you are not reliant on one donor for more than 50% of your revenue
  16. 16. Insuring sustainability of the fundraising program  Regular prospect research  Consistent cultivation  Appropriate acknowledgment  Consistent planning and preparation  Regular investment in your tool kit
  17. 17. Mission Critical Research  Why do it at all?  Need to continually move more donors into the pipeline  Keep what you got and go get more!  Sources  Local media  Board members  Other staff  Other donors  Other organizations  Time management  Once a month  An hour or two on this
  18. 18. “Might do” Research  Get volunteers involved to share leads  Databases  Your local library  Regional and specialty databases  Free resources  Free e-newsletters  Google it!
  19. 19. Mission Critical Cultivation  Whatever is a quick way to touch base at least once  Phone  Email  Note/Postcard  Newsletter
  20. 20. “Might do” Cultivation  Social Media  Engage volunteers in the “touches”  Cultivation event
  21. 21. Small shop acknowledgment  Automate where you can: learn how to use your database  Mission critical: one receipt letter with IRS reporting standards
  22. 22. Acknowledgment “Might Do’s”  Volunteer follow up  Annual event  Other staff member follow up  Program person  Executive director  Board member thank you calls
  23. 23. Mission Critical Planning  Financial projections  Call planning  Deadline mapping
  24. 24. Planning “Might Do’s”  Cultivation plans  Longer range planning
  25. 25. Mission Critical Investment  Take the time to invest in YOURSELF!
  26. 26. Reporting and Legal Requirements  There are no “might do’s” here!  Form 990 if revenue requires  Audit highly recommended  At minimum, report to donors
  27. 27. MISSION CRITICAL SUMMARY  Solicitation: pick two primary methods  Research: once a month  Cultivation: touch base with your donors once a month at least  Acknowledgment: send a receipt within 48 hours  Planning: update your numbers, know your deadlines, and plan your calls in advance  Investment: do formal professional development once a quarter, but learn all the time  Reporting and legal: know your requirements and meet them
  28. 28. Managing your time
  29. 29. Action planning  Systematize as much of mission critical stuff as possible  Weekly  Acknowledgments  Solicitations  Monthly  Planning  Research
  30. 30. Action planning  Quarterly  Personal investment  Cultivation updates  Annually  Legal requirements
  31. 31. What you need  Calendar  Computer and telephone  Database  Library card!
  32. 32. When do you add more staff?  When you can’t complete mission critical items with the person you have  When you have opportunities for additional fundraising strategies that will potentially raise more than you need to spend  When you need a level of professionalism to access different donor pools
  33. 33. Options for additional staffing: Hire someone  Part-time  Full-time  Pros  Pros  Less financial investment  Investment in resources  Good opportunity to “grow  Longer term commitment your own”  Could be higher skill level  Cons  Cons  Less long term commitment  Higher financial investment from the employee  May overextend resources  Lower level of expertise,  May be a challenge to transfer typically duties and responsibilities from incumbent
  34. 34. Options for additional staffing: Hire someone  Management Level  Assistant  Pros  Pros  Higher level of expertise  Trainability  Longer term commitment,  Lower cost in the short term typically  Cons  Indicates importance of  Level of expertise fundraising to rest of organization  Who’s doing the heavy lifting?  Cons  Higher cost  “Empire building”  Personality is key
  35. 35. Options for additional staffing: Hire someone  Consultant  Staff  Pros  Pros  Higher level of expertise  Grow your own  May be quicker start up  Longer term commitment  Potential for short term  Potentially less orientation commitment time  Cons  Cons  Higher cost  Level of expertise  Availability for day to day  Overall cost with benefits operations  Familiarity with market
  36. 36. Options for additional staffing: Use interns and externs  Interns  Externs  Great for limited term  Older students, so projects like events sometimes more mature  Tend to want to be social with their work  Great for limited term,  Short term commitment, established projects where but usually unpaid they can have discrete responsibility  Need resume building, so you can potentially retain longer  Usually paid
  37. 37. Options for additional staffing: Volunteers  Retirees  Stay at home parents  Usually have some level  Great for ongoing of professional administration expertise  Can also be good for  Good for ongoing one time projects projects, usually  Tend to want to be social with their work  Can have access to useful networks for prospective gifts
  38. 38. Mission Critical: Managing staff  Don’t forget to add time to manage when you add people  Training  Motivation  Feedback and Evaluation
  39. 39. Summary  We’re not so different from large shops, but we have to be more creative with resources  Identify your Mission Critical items and plan around those things  Add the “might do’s” as you have additional resources  Be prepared to add staff (paid and unpaid) when possible
  40. 40. Questions?
  41. 41. Contact Information: Alice L. Ferris, MBA, CFRE alice.ferris@goalbusters.net James S. Anderson jim.anderson@goalbusters.net www.goalbusters.net http://bit.ly/GBBlog http://bit.ly/GBFB1 http://twitter.com/GoalBusters

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