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Strategic Planning The Path To Fundraising Success Wvdo 10 08
 

Strategic Planning The Path To Fundraising Success Wvdo 10 08

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This half day workshop covered institutional strategic planning, project planning leading to comprehensive campaign components, and planning for your fundraising office

This half day workshop covered institutional strategic planning, project planning leading to comprehensive campaign components, and planning for your fundraising office

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  • TRISH: Brief comments on relevant experience, pass to Tom TOM: Brief comments on relevant experience

Strategic Planning The Path To Fundraising Success Wvdo 10 08 Strategic Planning The Path To Fundraising Success Wvdo 10 08 Presentation Transcript

  • Strategic Planning The Path to Fundraising Success WVDO Advanced Skills Workshop Tom Wilson October 21, 2008
    • “ The only people in nonprofits who really care about strategic planning are us fundraisers. We sell the future.”
    • Tom Sanders
    • Vice President for Development and Planning
    • Field Museum of Natural History 1986
  • Impact of Strategic Planning The Path to Fundraising Successes
    • 1) Confirms importance of institutional planning for good fundraising
    • 2) Strengthens fundraising by thorough project planning
    • 3) Maximizes limited resources by defining fundraising priorities through planning
  • Tom’s Background
    • Musician by training
        • Conductor, high school music teacher
    • First fundraising job — consultant
    • Executive director
    • University vice president
        • Strategic planning team
    • Strategic plan facilitator
        • Drucker Self Assessment Tool
  • Winning Gifts Make Your Donors Feel Like Winners
    • I. A Winning Gift for Your Donor
    • 1) People Centered Fundraising
    • 2) Donor Values
    • 3) Listen
    • II. Winning Gifts for Your Organization
    • 4) Make Your Case
    • 5) The Win Win Ask
    • 6) After Winning the Gift
  • 2007 Sources of Giving — $306 Billion Giving U.S.A. Bequests Foundations Individuals Corporations $127 Billion, 62% $39 Billion, 19% $23 Billion, 11% $16 Billion, 8% Sources of giving excluding giving to religion by individuals of $102 Billion
  • Perspectives
    • After 9/11, the late fall and winter of 2001-02 was a “quiet time” for fundraising
        • But, one university’s campaign started on 9/11 and went $400 million over goal
    • In October 1987, the stock market lost 22% of its value in one day
    • Unemployment rate today is 6.1%, in 1982 it was 11%
    • From 1972-75, the inflation rate was 55%
    • On Friday 10/11, the stock market is at the same level it was 5 years ago
  • Total Giving through Good Times & Bad 1969–70 1973–75 1980-82 1990–91 2001 Inflation-adjusted dollars Current dollars $ in Billions 1967 2007 Recessions (light green)
  • The Next 6 Months
    • 1) We need to be patient
        • Until the election is over, the new president is in office, and the impact of their first 100 days
    • 2) Cultivate authentic, life-lasting donor relationships
    • 3) Strengthen your case and plans
    • 4) Essential fundraising will still need to take place
    • 5) Planned estate giving can be accelerated
    • It’s a great time to plan
  • 3 Levels of Strategic Planning
    • Institutional Planning
    Project Planning Fundraising Planning Financial Gaps I dentify Donor Friendly Projects Case Impact Project Budgeting Test Case Externally Volunteer & Staff Resources
  • Importance of Visionary Strategic Plans
    • Mega gifts come from bold plans
        • Southwest Washington Medical Center
          • Secures two $15 million lead gifts in first campaign
        • University of Arizona James E. Rogers School of Law
          • $115 million naming
  • Institutional Planning Is Essential
    • a) Clarifies and/or reaffirms the mission
    • b) Promotes proactive approaches to challenges
        • Focuses organization on the most important issues
    • c) Identifies major goals requiring philanthropic support
        • Assures success for annual fundraising and capital campaigns
  • “ All things are created twice . . . first, there’s a mental creation, and then a physical creation to all things. “ If you want to have a successful enterprise, you clearly define what you’re trying to accomplish. “ You carefully think through the product or service you want to provide in terms of your market target, then you organize all the elements: financial — research and development — operations marketing — personnel — facilities” Covey 7 Habits of Highly Effective People Habit #2 Begin with the End in Mind
  • The Magic of Planning
    • Connects internal and external constituencies
      • Planning is a process not a product
      • Discussing the plan so people own it mentally is more important than a pretty or hefty document
    • “ There is in the act of planning, the moment you start caring.” Winston Churchill
  • Peter Drucker’s Robust & Flexible Planning Guide
    • Drucker Self Assessment Tool
    • www.LeaderToLeader.org — Jossey-Bass/Wiley
    • The Tool asks 5 key questions to guide discussion
    • Question #1
    • What is your mission?
  • One on One Discussion
    • What is your mission?
    • Question #2
    • Who is your customer?
    • Question #3
    • What does your customer value?
    • Question #4
    • What are your results?
    • Question #5
    • What is your plan?
  • Elements of Your Strategic Plan
    • 1) Mission
      • 2) Goals
        • 3) Objectives
          • 4) Strategies
            • 5) Tactics
            • Champions
    • Your Mission Should Fit on a T-Shirt
  • Steps in the Planning Process
    • Limit to 5 to 7 elements per level (3 to 5 is better)
        • Goals should be lofty
        • Objectives should be measurable
        • Strategies flesh out how to carry out the plan
        • Tactics need people assigned and resources allocated
        • Champions (staff and volunteer) are critical to success
  • Institutional Planning Mission Educate Students for a Life of Service Goal 1 Improve Learning Environments Goal 2 Upgrade Financial Vitality Goal 3 Improve Economic Diversity of the Student Body Goal 4 Engage with Community Goal 5 Create Continuous Learning Environment for Faculty & Staff
  • Institutional Planning Mission Educate Students for a Life of Service Goal 1 Improve Learning Environments Goal 2 Upgrade Financial Vitality Objective 1 New Library by 2013 Objective 2 Faculty Time Freed 10% to allow more time for Students
  • Mission Educate Students for a Lifetime of Service Goal 1 Improve Learning Environments Objective 1 New Library by 2013 Strategy 1 Architectural Design & Cost Estimate Strategy 2 City or County Partnership Strategy 4 Capital Campaign Strategy 3 Single Donor to Fund
  • Mission Educate Students for a Lifetime of Service Goal 1 Improve Learning Environments Objective 1 New Library by 2013 Strategy 1 Architectural Design & Cost Estimate Tactic 1 Visit New Libraries at other campuses Tactic 2 Interview Librarians, Students, Faculty Tactic 3 RFP for Library Architects Tactic 4 Form Architect Search Committee Involve Donors
  • One on One Discussion
    • What other tactics are needed for the library?
    • Who should be assigned to each tactic and what resources will they need?
  • Steps in the Planning Process
    • Monitor progress continuously
        • Quarterly accountability reports to your board
    • Update the plan yearly to grapple with reality
    • A new plan every 3 years
        • Your organization changed a lot during this time
        • The world is different
        • New staff and volunteers need to participate now
  • Sound Strategies Are Critical to Big Time Fundraising
    • Capital campaigns take time
        • 3 years average — for higher education 5 to 7
        • 5-year pledge period can take your campaign cash flow out 10 years from now
        • Planned estate gift donors want 25-year plans
          • They don’t expect to die soon
        • Endowment gifts are in perpetuity
          • That’s a really long time
  • Has Your Plan Been Shared Internally?
    • Thorough planning includes sharing with internal constituents
        • Tenured faculty
        • Physicians
        • Program staff
        • Everywhere as a courtesy
          • Good planning builds operational teams
    Knowledge Management Cycle Ross Dawson
  • Peter Drucker on Constructive Dissent
    • “ All the first-rate decision makers I’ve observed had a very simple rule:
    • “ If you have quick consensus on an important matter, don’t make the decision.
    • “ Acclamation means nobody has done the homework.
    • “ The organization’s decisions are important and risky, and they should be controversial.
    • “ Trust requires that dissent come out in the open .”
  •  
  • Board’s Role in Planning John Carver
    • Board’s Role as Owners
    • Ends
    • What will happen out there?
    • Outcome driven
    • Owner
    • Policy
    • Where is our mouth?
    • CEO / Staff Role as Operators
    • Means
    • How are we doing it?
    • Performance driven
    • Operator
    • Implementation
    • Put our money where our
    • mouth is
  • Involving External Stakeholders in Institutional Planning Process
    • Who?
    • Board members
    • Major donors
    • Community members
    • Other key stakeholders
    • How?
    • Planning committees
    • Retreats
    • Surveys
    • Leadership briefings
    The fundraiser may need to lead the external aspect of institutional planning
  • Institutional Planning Mechanics
    • Hire a planning guide and facilitator
    • Determine outcomes
      • Required for accreditation
      • Nice to do, but what’s driving planning?
      • A campaign coming up, need to do
    • Who are you planning champions?
        • Form them into the planning task force
        • Internal coordinator selected
  • Institutional Planning Mechanics
    • 4) Do you need an environmental scan?
        • Discover key facts and trends impacting your organization
    • 5) What’s your planning timeline?
        • 6 to 12 months may be needed
    • 6) Why is benchmarking important?
        • What to watch out for
  • Endowment Benchmarking for Healthcare 2005 Assets as Reported in Chronicle of Philanthropy June 2006
  • Institutional Planning Mechanics
    • 7) What budget for planning will you have?
        • Staffing resources?
    • What work do you want done before engaging board members?
        • Results survey
        • Customer values survey
    • What types of customer engagement survey work will need to be done?
  • Board Retreat Options
    • A weekend retreat with spouses / partners
    • A full day session
    • Three 2-hour sessions over a few months
    • Bimonthly sessions for a year
    • One on One Discussions
    • Where is your organization’s plan right now?
    • What should it do next?
  • 3 Levels of Strategic Planning
    • Institutional Planning
    Project Planning Fundraising Planning Financial Gaps I dentify Donor Friendly Projects Case Impact Project Budgeting Test Case Externally Volunteer & Staff Resources
    • Strategic Project Planning
  • Project Planning
    • Define the projects that have a financial gap
    • Which projects are donor friendly?
    • Get involved on the implementation task forces
    • As you plan the project, capture case notes
    • Dig into project budgeting
        • You get to fundraise it
  • Types of Fundraising Campaigns
    • 1) Building Campaigns
    • Endowment Campaigns
        • Planned estate giving
    • 3) Annual Giving Campaigns
    • 4) Comprehensive Campaign
        • Includes all three of the above
  • Building Campaigns
    • What is the 50-year plan for the building(s)?
    • How will the building help your organization succeed in pursuing its mission?
    • How do the floor plans make the case for the impact of the building on your constituents?
  • Building Project Budgeting Sound Strategy
    • Fundraisers want a fully loaded building project number to take out to their donors
    • Architect’s budget forecasts using conceptual plans can be off 10%
        • And, they are not fully loaded
    • Here’s what an architect’s $10 million building means for fundraisers
  • Building Campaigns Project Planning Model Ideally, add 10% to 25% more for an operating endowment
  • Building Planning Aids to Fundraising
    • 1) Attend all building planning sessions
    • 2) Help with the request for proposal process for the architect and for the contractor
        • Seek key donors with building expertise to join the selection process
    • 3) Don’t be afraid to ask dumb questions
    • 4) Help your organize plan a rough project budget before engaging the architect
  • Building Planning Aids to Fundraising
    • 5) Request information about operational costs for the new building
        • How will it impact future fundraising?
        • What can be built into the building to lower operating costs later?
          • A tradeoff of higher construction costs versus higher operating costs
    • 6) Will you have a “green” building
        • LEED certification?
  • Building Planning Aids to Fundraising
    • 7) Work with the architects to determine what design displays are needed for fundraising
        • Conceptual floor plans
        • Artist renderings
        • Model
        • Computer walk through
    • Questions
  • Endowment Project Planning
    • What is endowment?
    • Money or property transferred to institution
        • Money (principal) is invested for long-term returns to the organization
          • 5% distribution annually
        • Power of endowment is perpetuity
          • Some institutions leavening this commitment
            • To meet changing needs
            • The donor’s life plus 25 years
  • Benefits of Endowment Campaigns
    • From the donor’s perspective:
    • Perpetuates personal values and priorities
    • Obligates institution
    • Creates a sense of immortality, permanent tribute
    • From the institutional perspective:
    • Significant investment in the future
    • Can fund planning initiatives
    • Enhances financial stability
  • Endowment Campaigns
    • What endowments do you have that are critical to:
        • Your mission?
        • Your strategic plan?
    • What endowments do you need?
    • What endowment benchmarking can you do?
  • Endowment Naming Opportunities to Create Tangible Projects
  • Endowment for Financially Fragile Organizations
    • Financial stabilization model
        • With thanks to the NAS Fund & Ford Foundation
    • Six Steps
      • 1) Balanced operating budgets with 5% contingency
      • 2) Eliminate debt
      • 3) Cash reserves to 25% of operating budget
      • 4) Risk, venture fund equal to 10% of budget
      • 5) Endowment to provide 20% of operating budget
      • 6) Building and capital equipment needs
  • Endowment for Financially Fragile Organizations
    • Lessons painfully learned
        • A robust endowment is not enough
        • A 5% operating contingency is critical otherwise unpredictable events force the organization into debt
        • Debt must be eliminated otherwise endowment proceeds just go to debt service
  • Endowment for Financially Fragile Organizations
    • Lessons painfully learned
        • The magic bullet is cash reserves to buffer operations
        • Venture funds provides safety valve from budget discipline
        • 20% of operating budget from endowment is your ultimate goal
  • Endowment for Financially Fragile Organizations
    • Budget model for $10 million organization
        • “Just” balances budget in most years
        • $100,000 in endowment fund now
        • $500,000 of accumulated debt
        • $300,000 of equipment needs over the next 5 years
  • Endowment for Financially Fragile Organizations
    • Raising $45 million is not possible
        • Here is the impact of a $4 million campaign
  • Endowment Planning through Estate Giving
    • You need to share your 25-year plan
        • Not your three-year plan
        • By actuarial tables
        • A 65-year old man will live to age 84
        • A woman to age 89
      • What’s your long-term, perpetuity plan for this “gift of a lifetime?”
    • Questions
  • Annual Giving Campaigns
    • A sustained, yearly effort to secure an ever-increasing base of (usually) unrestricted support for current operations
        • Needs a well developed plan and timeline
        • Has its own clearly articulated case, visual identity
        • Should be part of every major solicitation
        • Makes a difference and donors need to feel valued
  • Annual Giving
    • Why include annual giving in your capital campaign?
        • Protects annual funding continuity and momentum
        • Provides opportunities for all donors to participate
        • Raises donors’ sights
        • Broadens and deepens donor base for the future
  • Comprehensive Campaigns
    • Include:
        • Building + Endowment + Annual Giving
      • Planning helps determine the 5-year objectives and the interconnections between projects
  • Comprehensive Campaigns The Triple Ask 1) Confirm continuation of annual giving 2) Request capital funding over 5 years for buildings and/or endowment 3) Consider a planned estate gift to leave a legacy
    • Questions
  • 3 Levels of Strategic Planning
    • Institutional Planning
    Project Planning Fundraising Planning Financial Gaps I dentify Donor Friendly Projects Case Impact Project Budgeting Test Case Externally Volunteer & Staff Resources
    • Strategic Fundraising Planning
  • Create A Strategic Plan for Your Fundraising Office
    • Match your fundraising strategic plan with your institution’s strategic plan
        • If you can’t get your organization to do a strategic plan, lead by example by creating your own strategic plan for your office
  • Create A Strategic Plan for Your Fundraising Office
    • Hold an “all-hands” fundraising office retreat to create your own mission statement
        • Define specific, measurable objectives, goals, strategies and tactics for the next year
        • Answer the questions of:
          • Who will do what?
          • When?
          • With whose help?
          • How much it will cost?
  • Create A Strategic Plan for Your Fundraising Office
    • Meet with your team for several sessions until you have the big picture and all strategies set
    • Ask each person to write a 3-year strategic plan for their area to share with each other focused on their strategies and tactics
        • Major gifts program € Grantsmanship
        • Annual fund € Special events
        • Board giving
        • Direct mail, telemarketing, e-fundraising
        • Communication and materials
  • What Is the Distribution of Gifts You Receive? Gifts of $1,000,000 or more $500,000 to $9,999,999 $250,000 to $499,999 $100,000 to $199,999 $50,000 to $99,999 $25,000 to $49,999 $10,000 to $24,999 $5,000 to $9,999 $1,000 to $4,999 Up to $1,000
  • Sound Strategies by Gift Level
  • Create A Strategic Plan for Your Fundraising Office
    • After the presentations, refine ideas by looking at mutually supporting ideas and efficiencies
        • Create a master calendar for the year
        • Ask each person to prepare fundraising objectives for each of these 3 years
        • What budget resources do they need?
        • How can we sell the request for additional support?
    • Table good ideas for year two or three
  • Strategic Plans for Your Staff
    • New ideas and new plans require sound strategies
  • “ Know Thy Time” The Essential Drucker , Peter Drucker
      • “ Effective knowledge workers do not start with their tasks. They start with their time.
      • “ They do not start out by planning . They start by finding out where their time actually goes.
      • “ Then they attempt to manage their time and to cut back unproductive demands on their time.
      • “ Finally they consolidate their ‘discretionary’ time into the largest possible continuing units.”
  • Time Management Matrix Covey IV Trivia, busy work, some mail, some phone calls, time wasters, pleasant activities III Interruptions, some calls, some mail, some reports. some meetings, pressing matters, popular activities Not Important II Prevention, Relationship building, new opportunities, planning, recreation I Crises, Pressing Problems, Deadline-driven projects Important Non Urgent Urgent
  • Time Management Matrix Covey IV Trivia, busy work, some mail, some phone calls, time wasters, pleasant activities III Interruptions, some calls, some mail, some reports. some meetings, pressing matters, popular activities Not Important II Prevention, Relationship building, new opportunities, planning , recreation I Crises, Pressing Problems, Deadline-driven projects Important Non Urgent Urgent
  • Time Tracking Professional development Institutional misc. Fundraising office misc. Debriefing calls Preparing for calls Face-to-face donor contact Sun Sat Fri Thu Wed Tue Mon
    • The “One a Day” plan
  • Contact Reporting Sheet for ________ Week of ____/__ 8) 7) 6) 5) 4) 3) 2) 1) Contact Report Filed Contact Date Prospect Name
  • One Full Time Major Gift Officer
    • Effectively manages
        • 100 – 125 prospects
          • With little travel or institutional duties
    • Optimally divides time
        • 50% face-to-face major gift fundraising
        • 25% constituent relations (internal and external)
        • 20% major gift administration
        • 5% professional development
  • Determine How Many Fundraisers You Need
    • 1) Determine the number of donors and prospects
        • 500 donors x 3 prospects = 1,500 prospects
    • 2) Determine the number of contacts needed
        • 6 contacts per prospect = 9,000 contacts
    • 3) Decide the rate of contacts per fundraiser
        • 250 contacts x 5 year campaign = 1,250 contacts
    • 4) Determine the number of fundraisers needed
        • 500 donors, 1,500 prospects, 9,000 contacts divided by 1,250 contacts = 7 fundraisers needed
        • 2 now, hire 5 more or extend duration of campaign
  • Fundraise Face-to-Face
    • Pareto’s 80 / 20 rule applies to annual fundraising as well as capital campaigns
        • Spend 80% of your time face-to-face
    • Meet the top 1% of your donors face-to-face
        • Then the top 5%, 10%, 20%
          • 55% of communications are nonverbal
    • Use mechanical fundraising techniques for the 80% you can’t see personally
  • How Long Does Each Contact Take?
    • Average face-to-face contact takes 4 or more hours
        • Getting the appointment 1/2 hour
        • Prospect review, meeting strategy 1/2 hour
        • Travel time (includes both ways 1-2 hours
        • Meeting 1-2 hours
        • Call report, follow up letter or note 1 hour
        • Next contact plan 1/2 hour
    • Plan your day-to-day activities, like your institutional plan, by establishing priorities
  • Building the Staff Fundraising Plan
    • It’s a group process, working from the overarching goals
      • A written plan for each fundraising area
        • Include database, research, stewardship
      • Integrate plan, integrate actions
      • Measure achievements against objective targets
      • Monitor progress, allow for adjustment
      • Achieves seamless operation
  • Planning the Budget
    • Some basic tips
    • Build the budget as you write your plan
    • Develop it in detail and document thoroughly
    • Identify realistic and reliable revenue projections
    • Establish spending guidelines for campaign activities
    • Monitor the budget and demonstrate thrift
  • How Much Will the Campaign Cost?
    • Annual fund
      • 15% to 25%
    • Capital campaigns
      • 5% to 10%
    • Factors that impact costs
      • Mature program = smaller incremental increase
      • Greater donor readiness = less cultivation cost
      • Larger the goal = more economies of scale
    • Strategic Planning for Board Development
  • What Type of Board Do You Envision for Your Future
    • What fundraising capacity should they have?
    • What access to donors do you want?
    • What will be the rules of engagement?
  • Board Assessment Matrix
  • Strategies for Improving Your Board
    • Consent agendas
    • Board evaluations and monitoring discussions
    • Orientation process for new members
    • No executive committee
  • Strategies for Improving Your Board
    • 5) No term limits
        • Only if there is a yearly self-assessment and debriefing process
    • 6) Yearly board retreat for institutional strategic planning
        • Board champions for planning initiatives
  • Why Are Campaign Planning Studies Important?
    • The old feasibility study has been replaced with the philanthropic market research study and the planning study
        • What do your key customers (current and potential future donors) perceive of you?
        • How much do they value your case?
        • Who is willing to volunteer to provide you additional fundraising resources?
        • Are your internal systems ready for a campaign?
        • What’s the campaign timeline and budget?
    • Select an Accountability Partner
    • What 3 planning issues will you tackle in the next 30 to 60 days?
  • 3 Levels of Strategic Planning
    • Institutional Planning
    Project Planning Fundraising Planning Financial Gaps I dentify Donor Friendly Projects Case Impact Project Budgeting Test Case Externally Volunteer & Staff Resources
  • Strategic Planning The Path to Fundraising Success [email_address] (503) 789-4366 www.MajorGiftsGuru.com