We’re starting out by looking at the big picture of all types of nonprofit revenue to answer the question, How are nonprofits supported? Looking at the nonprofit sector as a whole, fees for services/earned income is the largest category of revenue (Aside: Can anyone give us an example or definition of earned income?). Institutional grantmakers, like foundations, fit into the “Private contributions” category, which includes foundations as well as corporations and individual donors. (Aside: “Other income” is primarily membership fees and special events.) Source: The Nonprofit Sector in Brief, Facts & Figures from the Nonprofit Almanac 2007
Now we are focusing in on just the “Private Contributions” slice of the pie. As you can see, despite what most people may assume, foundations and corporations together account for only a modest proportion of charitable giving in the U.S. The vast majority of private giving comes from individuals, people like you and me, supporting our religious congregations or favorite charities. Therefore, although foundation giving may be one component of your overall fundraising strategy, you can’t depend solely on foundations to meet all your funding needs. No nonprofit organization can survive indefinitely on foundation giving alone, no matter how successful it may be. You will need to develop multiple revenue streams, which may include (especially) individual, corporate, and/or government support and earned income from fees and services (categories which were included on the previous slide). For more information on this, you may want to take our full-day seminar, Developing a Fundraising Plan, and we also offer a free, one-hour Introduction to Fundraising Planning.
The goal of your research is to focus on the match between your organization’s needs and the funding interests of a grantmaker in order to develop a list of prospects. It’s important that you take notes; you can’t keep everything in your head. In your handouts we’ve included a worksheet, which is one way of keeping track of your prospects. This and other prospect worksheets developed by the Center are available on our Web site. Some people use index cards or software. Use whatever works for you, but make sure you’re organized and that you keep some sort of a record of your work that you can refer to. There are several basic questions that you need to answer as you try to find finding parters: Who is interested in my area of interest? You’ll need to indentify grantmakers that have expressed an interest in funding programs in a specific subject field. Look for and read a funder’s purpose and activities statement when it is available. This will give you insight into the goals a foundation has set for itself. Who funds in my geographic region? Although some give nationally and even internationally, most funders limit their giving to specific geographic areas, so you’ll need to locate organizations that give in a particular city, state, or region. Who will provide the type of support I need? You’ll need to find grantmakers that provide specified types of support such as building funds, seed money, operating support, or endowment funds. Pay particular attention to any limitations statements. Does the potential funder have any criteria that would prohibit your organization from obtaining funding? Are there types of support the funder will not provide? These statements will also give you very specific geographic funding priorities and indicate whether or not a foundation is accepting proposals.
Need to look at both books and online sources… Sometimes books are more specific and can save searching time. Ie..Religious guide to funding sources…HIV funding…
Prospect research is the gathering of relevant information to measure those three factors, looking for people who could fit in the intersection of the 3. As we go along today I’ll use words like “substantial” and “major” in referring to gifts—and I know that each of you may have a different interpretation of what constitutes “major” in terms of gift size. The point here is that, since prospect research is time-consuming, you are not likely to do it unless you have reason to believe that the person may be a big donor. Another underlying trait is LINKAGE—people with whom we have a relationship.
Depending on which of these categories your prospect falls into, it will require different search strategies as well as different approaches for the ask. Unlike foundations and corporations, there is no central source of information or database listing the giving interests of individuals. You can’t expect to automatically go online and find a list of willing, ready and able donors. Even more importantly, when you can find information on an individual’s giving history, this information does not include how to approach this individual. Because we are individuals our giving is personal reflecting our unique interests. The closer a person is to your organization, the more likely he/she will give. You picture a series of concentric circles (target)—and you’re starting in the center (bullseye) with those you already know about.
The best prospects are usually close to home —those at the heart of your organization. most large gifts come from those individuals already involved with your organization— Your board and their families and friends—their contacts. And other key volunteers. Your current and past donors For organizations with established constituencies , such as schools or hospitals, prospects can be former students and their families, patients, community residents, faculty, or volunteers.
To broaden your search, think creatively. It may be those individuals involved with other organizations in your community or a related cause. We’re moving further out here, to people not in your “inner circle”. Examples of where you might find prospects: -- Find out the board members and donors of organizations in your community or to similar causes. How? General search engines/ Guidestar -- Donor Series Search: individual, corporate and foundation gifts to annual funds of the largest non-profits nationally. Hundreds of thousands of individual donors can be searched by name, recipient organization, subject category, city or state, and gift size. (We will look at this resource at the end of the class) Use lists of the wealthy, large gifts and givers, top people by profession, leading executives by industry and state and by population group such as Women or Hispanics. [Refer to examples on resource list.] This is not really useful unless you already have ties to these people. Just having “capacity to give” is not enough! However some of the population-specific lists may be of interest depending on your focus. The key to developing an expanded list of prospects (beyond your close friends) is to constantly be looking. Keep your eyes and ears open—and read, read, READ!! --broad range of published and online sources including magazines and newspapers that cover leaders in the community and in business in your region. Once you have created your list of prospects you will want to research each individual on your list. You will spend most of your time online doing this research. Find more information before you can effectively approach them for a gift request.
The effort or inclination to increase the well-being of humankind, as by charitable aid or donations.
Love of humankind in general.
Something, such as an activity or institution, intended to promote human welfare.
Securing Your Organization’s Financial Stability
Source: Nonprofit Almanac 2008 National Center for Charitable Statistics, the Urban Institute Other Income 2.9% Fees for Services and Goods 70.3% Private Contributions 12.3% Sources of Revenue for Reporting Public Charities Government Grants 9.0% Investment Income 5.4%
Individuals $229.28 Corporations $14.50 Foundations $41.21 Bequests $22.66 Total Giving: $307.65 billion 75% 5% 13% 7% Private Contributions by Source ($ in billions) Source: Giving USA 2009, Giving USA Foundation, researched and written by the Center On Philanthropy at Indiana University