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Michele R. Berard, MBA, CFRE lecture for 5/4/11 class - Nonprofits & Philanthropy at Rhode Island College. Contains fundamentals of fundraising, ethics, and establishing your professional brand.

Michele R. Berard, MBA, CFRE lecture for 5/4/11 class - Nonprofits & Philanthropy at Rhode Island College. Contains fundamentals of fundraising, ethics, and establishing your professional brand.

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  • In regards to the Alignment Questions:1. Add some antidotal information about how your organization/cause can be 100% perfect from an internal perspective, but if there are no audiences that want to support it, then you’ll never recruit funding. 2. This exercise provides that testing step or validation that is important in any fundraising initiative3. 360 degree look (or 10,000 foot view)4. Butler Hospital e.g.Comment on file bullet point:5. Too often case statements are for cc only; too much focus on dollar goal, where the focus s/b on the constituent’s needs/wants/desires
  • Read the details from C-8 – C10 to explain each bullet point
  • Major Donors – Research Fund Campaign – invite to hear from researchers about how they are using and going to use (important b/c of endowment) your moneyCommunity – Charity Care, staff as volunteers, support of complementary services/organizations (community mental health orgs, AD/PD, NAMI walks)Corporations – Corporation Campaign for Building – “We help your bottom line” “85% of mental illness is 100% treatable”Foundations -
  • Figure 7.1 on page 62 provides a nice illustration of the overall development program; tactics and the source of individual giving Explain the illustration
  • Reminder/Disclaimer – the lessons of the lectures and the text are suggestions and are not a “just a water” approach. You will need to adjust for your own situation and “right size”. The needs: you will serve as the intrepreter between finance and operations to look for the “money loosers” and “money winners” of your organzation.Resources: staffing, databases, budgets, volunteers, etc.Champions: is your ED a fundraisers, any board members, other internal staff?Butler – I had, and continue to have a lot of resources, however, not a lot of champions. Other orgs have a great volunteer army, but very little resources…explain how that creates a different strategy for each organization.
  • After you have completed your planning, your case and case statements and you know why you are raising money and what those funds will Identify support, you can begin to invite people to invest in your mission.The steps outlined on this and the next pages outlines the process of moving a donor through and up the donor pyramid.elaborate on predisposed=linkages Doesn’t need to be a separate step if very small/young development shopThe ask – the stronger the predisposion, the more likely the gift/ The acknowledge is VERY important here as it validates the donors desire to give and removes “Buyer Remorse” (which always happens…use e.g.)
  • 4. The renewal gift is (1) one of the highest ROI activities; and a sign of a loyal donor5. Involve could be a tour of your organization, meet with program heads to witness the “organization at work”; Gift Club – Giving Levels over time; or recruiting $X to support a specific program for the year – basically any incentive that will motivate your donor to give more money than last time.
  • 7. As reflected on slide #2 – Major Gifts often come from disposable income, but they also come from assets (e.g. appreciated stock…which was very common prior to 2008). The capacity to give must be validated before the DO pursues this tactic with a prospect (i.e. regardless of commitment and loyalty). Involving the donor in the planning and case evaluation is a meaningful step; also research shows that donors make better solicitors than non-donors. Furthermore, participating in the solicitation process (of a prospect) or recruiting new donors to the organization will further strengthen the donor’s commitment to the organization.Recognition should align with the donor’s personality, desire – this is not a one size fits all approachDisclaimer – Recognition should happen at all levels…not just the really big stuff!
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  • The public expectations are higher for NPOsAFP – via their code of ethics (found in the handouts section –long and short versions)The ethical practice of philanthropy through increased public confidence and trust and the professionalization of fund raising as a field of practiceRosso quotes the Independent Sector – from a 2002 editionFundraising provides many opportunities to challenge ethics…turn to the next slide for examples…
  • Rosso outlines three factors why ethical challenges exist in the FR professionAt the AFP-RI Conference in 2010 – the following example was put forth during the ethics session: Donation of a foursome for golf to the prestigious Augusta National Golf Club – should organization accept?(is this ok for The Women’s Fund? What about the Urban League? Or any other social justice organization?)
  • Say something about “The Technician vs. The Professional” – mention and confirm that this is a process…continual learning…
  • R Payton Quote- Fundraisers must be continually mindful of this quote as person gain is the vulnerable point of public trust
  • R Payton Quote- Fundraisers must be continually mindful of this quote as person gain is the vulnerable point of public trust
  • Provide examples of each bullet point:Our professional development is experiential…what lessons can be carried forth? How are we able to help others learn? E.g. me teaching this class and the things that I am sharingObviously, we can’t leverage “opportunities” in the organization to obtain philanthropic gifts; We CAN however use this as a tool to engage other organizational leaders in the development process – e.g. new building – every that wants to receive an invitation to bid will get one…however, there will be distinct qualifications that get you to the next step. Same with board members and business…is it the best option for the organization and is the relationship transparent/disclosed.The answer is both; you are ensuring that donor money is being used for the intended purpose…but you are also only recruiting (and accepting) philanthropic gifts that can advance the organizations mission!!!Bottom line – people and entities does things for multiple reasons…are any of those reasons going flag the criteria we talked about on slide #4? If not, proceed…but keep and eye on thingsIntegration and continuous conversations – E.g. CADASIL donationsWe are aligning donor intent to funding needs of the organization (not personal benefit)
  • Read from page 424 the extensions of each commitment – explain some of them to add more to the slide
  • Let’s work this out…The scenario points out three ethical situations (1) personal accountability of the fundraising professional (2) loyalty to the organization/donor (3) promises made to the donor..Expand and go through using the steps in the slide
  • Transcript

    • 1. Non-Profits &amp; PhilanthropyRIC Certificate Programfor Nonprofit Studies<br />Michele R. Berard, MBA, CFRE<br />Director of Funds Development, Butler Hospital<br />President/CEO, Ascent Advisors, LLC<br />May 4, 2011 Lecture<br />
    • 2. Learning Objectives – May 4, 2011<br />What Fundraising Funds <br />The Case &amp; Case Statements<br />The Development Process<br />Fundraising Vehicles<br />Establishing Your Professional Brand<br />Ethics in Fundraising<br />Note: Time dependent<br />
    • 3. A couple of points before we dive in…<br />Fundraising or Fund Raising<br />Association of Fundraising Professionals (AFP) changed Fund Raising to Fundraising in 2000 when they changed the organizational name, formerly National Society of Fund Raising Executives (NSFRE))<br />Philanthropy <br />Healthcare, large institutions<br />Development, Fund Development <br />Smaller non-profits, social service agencies<br />Advancement <br />Education<br />For the purpose of this class, they all mean the same thing…<br />
    • 4. …from 819,008 to 1,238,201 in 10 years<br />Source: Giving USA 2010 The Annual Report on Philanthropy for 2009, Executive Summary<br />
    • 5. Government Spending 2010 - $3.55 Trillion<br />Discretionary Spending (total $1.368 trillion) some line items:<br /><ul><li>Defense ($664b)
    • 6. HHS ($79b)
    • 7. Education ($46.7 b)
    • 8. Homeland Security ($42.7 b)</li></ul>and the list goes on…<br />
    • 9. Operations = Your Organization’s Purpose<br />Nonprofits exist to fill the gaps in services that public and private sectors do not provide<br />The trend of increasing non-profits provides evidence that unmet needs are increasing<br />Recent attention to reducing the Federal deficit will result in:<br />Less government funding for non-profits<br />More gaps in services; smaller government<br />Opportunities for Private and Nonprofit Sectors<br />Organization’s Purpose = Mission = Operations<br />
    • 10. #1 - What Fundraising Funds<br />The Planning Process will undercover funding needs of the organization <br />In order to design a development plan and implement a program, it is important to work with the finance office (and other departments) in order to prioritize the organization’s funding needs.<br />E.g. if your organization requires $150,000 of operating support each year, a gift of $250,000 for the endowment is not going to add value <br />Organization’s generally raising money to fund:<br />General Operating Expense<br />Capital Needs<br />Endowment<br />
    • 11. #1 - What Fundraising Funds<br />General Operating Expenses<br />Pay for the expenses that carry out the mission of the organization <br />Can be programs, can be salaries, can be services<br />Also referred to “General Fund” or “Unrestricted Donations”<br />Stigmatized<br />Interesting Parody: Organizations mostly need General Operating contributions, but they are the hardest to solicit/acquire due to:<br />Increasing trend of donors wanting ownership<br />Overall negative stigma of “paying for administrator’s salaries”<br />Difficult to marketing/report outcomes<br />Sustainability (will need again next year)<br />
    • 12. #1 - What Fundraising Funds<br />General Operating Expenses (continued)<br />Are recruited through:<br />Fundraising Events<br />Direct Mail Appeals<br />Corporate Sponsorships<br />Internet Giving <br />Grants (…however, requires some creativity)<br />Planned Gifts (e.g. bequests)<br /><ul><li>The task in recruiting philanthropy revenue to support General Operating Expenses is finding a component (or components) in your organizational budget where the impact of the gift can be measured.</li></ul>E.g.: Aftercare Program, Charity Care, …<br />
    • 13. #1 - What Fundraising Funds<br />Capital Expenses <br />“Brick and Mortar”<br />New Buildings, wings, major renovations (that result in expanded or enhanced capacity)<br />Large pieces of equipment<br />E.g.: MRI, DaVinci Robot, TMS Chair, Van/Delivery Vehicle<br />Donations to fund capital expenses are recruited through:<br />Grants (foundations/government)<br />Corporate Gifts<br />Individual Major Gifts <br />
    • 14. #1 - What Fundraising Funds<br />Capital Expenses (continued)<br />Contra to General Operating Expenses, it is easier to recruit philanthropy revenue to support Capital Expenses because:<br />The project timeline is finite<br />It can be measured (you build it, order it, install it)<br />Appeals to wider masses (due to: naming opportunities, committee work,...emotion)<br />Its easier to recruit large gifts for capital since the overall project is also large<br />Multi-year pledges<br />The impact to the organization’s financial position – a bona fide revenue stream that can be leveraged!<br />A Capital Campaign is a specific fundraising initiative that occur over a period of years to raise a predetermined goal<br />Both timeframes and monetary goals of Capital Campaigns are both trending upward<br />
    • 15. #1 - What Fundraising Funds<br />Endowment:<br />According to the AFP Dictionary – is a permanently restricted net asset, the principal of which is protected and the income from which may be spent and is controlled by either the donor’s restrictions or the organization’s governing board.<br />Many organizations have an endowment that provides revenue to support operations or a specific program<br />Prominent in Academic Setting with growing popularity in Healthcare settings<br />e.g. Endowed Chair – The revenue earned from the fund is used to pay the salary (or specifics mentioned in the endowment policy associated with that endowment)<br />
    • 16. #1 - What Fundraising Funds<br />Endowment (continued)<br />Endowment Policies provide the details of the administration (and often the investment) of the endowment<br />4% of interest earned from the ABC endowment goes to support the salary of the Chief of ABC. Any additional earnings above 4% will be reinvested into the ABC endowment <br />The endowment will be invested in portfolio comprised of 40% stocks 60% bonds<br />ADVANCED: policies should consider the mission of the organization <br />Are recruited through<br />Planned Gifts (mainly bequests)<br />Major Gifts (primarily from Individuals)<br />Special Campaigns (major, regular individual giving, events)<br />Endowment funding is generally never recruited from Foundations or Corporations<br />
    • 17. #1 - What Fundraising Funds<br />
    • 18. #2 – The Case &amp; Case Statements<br />The Case for Support<br />Case for the Institution - The case is the statement of the cause<br />Mission and strategic plan drive the case<br />Explains why donors might want to contribute to the advancement of the mission<br />Describes the organization’s goals and objectives<br />Explains the role of philanthropy in achieving organizational goals<br />One large case for the organization, from which smaller individual case statements are developed for various constituencies and programs<br />Align organizational funding needs to donor’s wishes<br />Also known as “The Case” or “The Boilerplate” (internally)<br />Purpose – Show the organization’s impact on the community economically, socially, artistically, spiritually and/or historically for today and tomorrow<br />
    • 19. #2 – The Case &amp; Case Statements<br />Who Creates The Case? <br />Development Staff – they act as interpreters between external constituencies and external constituencies<br />Review, comments, approval, support by internal and external constituencies<br />CDO begins the process <br />back to the CDO for edits<br />Hands off the CEO for review<br />Goes to the constituency for testing<br />The Development Committee to review, endorse<br />The Board to endorse <br />
    • 20. #2 – The Case &amp; Case Statements<br />The Case Contents: (Hank Rosso refers to this as case resources)<br />Mission Statement<br />Goals<br />Objectives<br />Programs and services<br />Finances<br />Staffing<br />Facilities and services delivery <br />Planning and evaluation<br />History<br />These are the parts that create your organizational whole. When put together, the case may also be referred to as the “boiler plate” or “template” for foundation grant requests. <br />
    • 21. #2 – The Case &amp; Case Statements<br />Case Statements - what are they:?<br />Written version of The Case for a specific constituency or campaign and should state:<br />The institution’s services, programs, and objectives<br />How the goals of the fundraising program support the institution<br />Ways in which the institution will remain significantly productive in the next decade<br />The difference it would make if a donor supported the cause<br />What the institution must do to improve or change its activities and aims, and why the institution is valuable to society<br />The Case Statement must align donor wishes and funding needs of the organization<br />
    • 22. #2 – The Case &amp; Case Statements<br />Internal vs. external cases (Hank Rosso)<br />The completed case or template = the internal case<br />The external case tells the story to the constituency<br /> E.g. “…brochures, foundation (and corporation) grant proposals, direct mail letters, web site development, campaign prospectuses, news releases, newsletters, speeches, and face to face solicitations…” (Rosso, 2003)<br />To maintain alignment with organizational needs and donors’ desires, the following questions should be answered:<br />What is the problem or social need that is central to our concern?<br />What special services or programs do we offer to respond this need?<br />Why are the problems and services important?<br />What constitutes the market for our services?<br />Continued on next slide…<br />
    • 23. #2 – The Case &amp; Case Statements<br />Alignment questions (continued):<br />Are others doing what we are doing to serve our market – and perhaps doing it better?<br />Do we have a written plan with a statement of philosophy, objectives, and a program?<br />What are the are the specific financial needs against which private gift support will be sought?<br />Is the organization competent enough to carry out the defined program?<br />Who are the people associated with the organization: staff, key volunteers, trustees, directors?<br />Who should support the organization?<br />Preparation of a case statement is first step in any aspect of the organization’s total development program (including: annual giving, capital giving, planned giving)<br />Case Statements are just for Capital Campaigns any more!<br />SWOT Analysis is helpful here…<br />
    • 24. #2 – The Case &amp; Case Statements<br />The Case Statement is an internal document and the basis for and external “sales” publication with many uses:<br />To secure feedback and create ownership<br />To recruit volunteer leadership<br />To test the market<br />To form a basis for case (marketing) materials<br />To tell a story<br />
    • 25. #2 – The Case &amp; Case Statements<br />Applying/Adapting to Your Market Segments<br />The final step before writing the case statement(s) is to determine your most critical constituencies<br />Which Constituencies:<br />Are the strongest supporters?<br />Give on a regular basis?<br />Have the greatest ability and interest to give?<br />Are the most interested in specific components of a campaign?<br />The most effective tactic is to develop an individualized case for each constituent group as you are getting the greatest alignment (however, this is not practical)<br />Individualized attachments<br />Individualized cover letters<br />
    • 26. #2 – The Case &amp; Case Statements<br />Grouping Constituencies<br />Source: CFRE Review Course (faculty manual) 2004 Edition<br />
    • 27. #3 - The Development Process<br />
    • 28. #3 - The Development Process<br />Donor<br />Estate Planning<br />Income, Assets<br />Current Income<br />Source:<br />Assets<br />Buildings, Equipment, Endowment<br />Special Programs &amp; Projects<br />Ongoing Programs &amp; Services<br />Benefit:<br />Endowment, Capital<br />Annual Fund<br />Major Gifts Program<br />Capital Campaign<br />Planned Giving<br />
    • 29. #3 - The Development Process<br /> No organization is similar; therefore needs different strategies and tactics to build and sustain a successful development program.<br />The Development Officer’s Job…<br />to “Right Size” it for your organization’s needs<br />Answer the following questions for direction:<br />What are the needs of your organization?<br />What are the resources available to you?<br />What champions to you have?<br />
    • 30. #3 - The Development Process<br />Stages of Development - Getting in moving up the Donor Pyramid<br />Identify potential prospects<br />Compile and develop lists of predisposed individuals<br />Similar organization’s annual reports, book of lists, professional organizations, natural constituencies,etc.<br />Convert potential prospects into qualified prospects<br />Test the list effectiveness by identifying linkages<br />Engage volunteers, staff (e.g. rating session)<br />May be combined with step 1<br />Convert qualified prospects into initial donors<br />Build on linkages, test interest by asking for gift<br />Solicit by personal contact (telephone, direct mail, special event)<br />Acknowledge gift (opportunity to validate the linkage; negate buyers remorse)<br />
    • 31. #3 - The Development Process<br />Stages of Development - Getting in moving up the Donor Pyramid<br />Convert initial giver into donor of record<br />Build on interests and linkages<br />Report to the donor how the organization used their gift<br />Invite to renew, Acknowledge<br />Increase the gift<br />Research, building on linkages and interests<br />Inform (report on use), involve in organization<br />Invite to renew at a higher level (use gift club concept)<br />Acknowledge<br />Secure Special Gift (e.g. $1,000)<br />Continue research through linkages, involve, build on interests<br />Align interests with a special need of organization <br />Personally solicit (face-to-face) , invite to gift club membership<br />
    • 32. #3 - The Development Process<br />Stages of Development - Getting in moving up the Donor Pyramid<br />Secure Special Gift (e.g. $1,000) (continued)<br />Acknowledge<br />Secure Major Gift (e.g. $10,000+)<br />Validate donor as a major gift prospect via linkages and donor research (i.e. capacity)<br />Involve the donor in the institution via planning, case evaluation (“testing the case statement”)<br />As a loyal donor, ask him/her to participate in cultivation events or help in identifying new prospects; join board committee<br />Share needs of the organization; align solicitation to donor’s desires, face-to-face solicitation by CEO/Board Chair, acknowledge<br />Reward/Recognize <br />
    • 33. #3 - The Development Process<br />Stages of Development - Getting in moving up the Donor Pyramid<br />Secure Big Gift<br />Continue to involve and engage through linkages and interests<br />Employ donor as an important advocate; invite to serve as volunteer leader (board member); <br />Foster a desire to give and ask by involving in cultivation events and engaging his/her personal contacts<br />Ask, Acknowledge, Reward/Recognize<br />Secure Planned Gift<br />Continue involvement with the purpose to strengthen bond between the donor and the organization<br />Create feelings of belonging to and identifying with the organization<br />Foster mutuality of interests<br />Giving in perpetuity (endowment) or legacy<br />
    • 34. #3 - The Development Process<br />Stages of Development - Getting in moving up the Donor Pyramid<br />HOWEVER:<br />Evolves over a very long time horizon (e.g. 10 - 20 years)<br />Through many Development Professionals<br />Very time consuming<br />As donor progresses up the pyramid, the tactics become more personal (hence dedicated MGO)<br />Greater access; involving the time/energy of organizational leadership outside of the Development Office<br />80/20 rule: 20% of your donors will provide 80% of the funding <br />Most of your donors will only progress so far in up the donor pyramid<br />
    • 35. 2009 Contributions: $303.75 billion by givingsource of contributions<br />Different funding streams contribute<br />(or invest) for different reasons<br />Hint: start with funding needs of the organization, then work to align those needs to your constituencies<br />Source: Giving USA 2010 The Annual Report on Philanthropy for 2009, Executive Summary<br />
    • 36. #4 – Fundraising Vehicles<br />The Donor Pyramid illustrates the process of a development program and is a common element in fundraising education (note: google “donor pyramid” for other examples). <br />Donors enter at the base (the widest part of the pyramid) and are “stewarded” up the pyramid to more significant giving.<br />
    • 37. #4 – Fundraising Vehicles<br />Direct Mail<br />Direct Mail is used to acquire new donors and to renew current donors (note: Individual Donors)<br />Via a Direct Mail Appeal <br />CLARIFICATION: “Appeal” is the call to action that motivated the donor to respond with a gift. Often in fundraising, we use “Appeal” to describe a direct mail solicitation – e.g. Fall Appeal<br />Direct Mail Appeals come in all shapes and sizes and should be right-sized/right-toned to your organization (i.e. mission and culture)<br />
    • 38. #4 – Fundraising Vehicles<br />Direct Mail (continued)<br />Main components of the Direct Mail Solicitation (a.k.a. Appeal):<br />The letter…<br />evoke emotion (Anger, Exclusivity, Fear, Flattery, Greed, Guilt, Salvation)<br />write to get the attention of “scanners” and “readers” (use readability statistics on Microsoft Word)<br />clearly state the purpose of the letter<br />clearly state the goal; how success will be measured; what results a gift will produce…<br />use a “P.S.”<br />signature<br />Via a Direct Mail Appeal <br />CLARIFICATION: “Appeal” is the call to action that motivated the donor to respond with a gift. Often in fundraising, we use “Appeal” to describe a direct mail solicitation – e.g. Fall Appeal<br />Direct Mail Appeals come in all shapes and sizes and should be right-sized/right-toned to your organization (i.e. mission and culture)<br />
    • 39. #4 – Fundraising Vehicles<br />Direct Mail (continued) <br />Main components of the Direct Mail Solicitation (a.k.a. Appeal):<br />The reply device…<br />Draft first – before the letter<br />Test <br />Include credit card options, “in memory of”, specific programs, check boxes for additional information (E.g. planned giving)<br />Revise and test, etc.<br />Use as another communication device (for the scanners)<br />Include on-line giving instructions if applicable<br />
    • 40. #4 – Fundraising Vehicles<br />Direct Mail (continued) <br />Main components of the Direct Mail Solicitation (a.k.a. Appeal):<br />The remittance envelope…<br />Self Addressed and Postage Paid<br /> The internet is giving the USPS major competition. Don’t make it harder for your donors (or prospective donors) to have to buy a stamp, look up your address, write it down, and deliver it to the post-office!<br />Note: You’ll need a BRE Permit from your local post-office to use self-addressed, post-paid envelopes.<br />
    • 41. #4 – Fundraising Vehicles<br />Direct Mail (continued) <br />Main components of the Direct Mail Solicitation (a.k.a. Appeal):<br />The outside envelope…<br />#10 window or plain (research has shown that this is the most effective/efficient)<br />Teaser Copy – If you appeal doesn’t get opened, it doesn’t matter how long you spent on your reply device, or how well written your letter is, or even how compelling your call to action is!<br />“From the Office of the President”<br />“Learn how your can help others access healthcare”<br />“See inside for details on a great investment offer “<br />
    • 42. #4 – Fundraising Vehicles<br />Direct Mail (continued) <br />Main components of the Direct Mail Solicitation (a.k.a. Appeal):<br />Premiums and gifts…<br />Premiums are Give-A-Ways included in the direct mail package to entice (guilt) a prospective donor<br />Premiums are most effective for donor acquisitions; less effective for renewals<br />Gifts are given only to donors; more control on the organization side, but also more time consuming<br />
    • 43. #4 – Fundraising Vehicles<br />Direct Mail (continued) <br />Other forms of Direct Mail (used more for stewardship):<br />Newsletter<br />Invitations<br />Announcements<br />Surveys<br />Annual Report Mailings<br />Event Calendars…<br />Basically, any time you mass mail to your constituency or a segment of your constituency<br />
    • 44. #4 – Fundraising Vehicles<br />Direct Mail (continued) <br /> Is the tactic most used to recruit donors because it can be mass produced at somewhat of a low cost. However…it is impersonal, which explains why first time donors don’t necessarily renew their support.<br />Long-Time Donor = Strong Relationship<br />Personal Attention = Strong Relationship<br />Personal Attention = Expensive, Time Consuming and not replicable<br />
    • 45. #4 – Fundraising Vehicles<br />Special Events/Fundraising Events<br />An opportunity to capture new donors (“Donor Acquisition Vehicle”<br />Good for organizations that:<br />need to build a donor base<br />have a dedicated volunteer group to recruit corporate sponsorships<br />A mission that resonates with the community at large (to recruit new supporters) -or-<br />Have a large beneficiary base (Alumni, Patients, Staff, Members, etc) to support the event (note: not a donor acquisition vehicle)<br />
    • 46. #4 – Fundraising Vehicles<br />Special Events/Fundraising Events (continued)<br />Usually funds General Operating, however could be appropriated to a specific fund or project (this should be discuss with you organization’s CFO ahead of time)<br />A huge variety, for example:<br />Golf Tournaments<br />Gala (Dinner &amp; Dancing)<br />Silent/Live Auction (stand along or an add-on) <br />Fashion Show <br />Food &amp; Wine Tasting<br />Celebrity Luncheon<br />The only limit is imagination!<br />
    • 47. #4 – Fundraising Vehicles<br />Special Events/Fundraising Events (continued)<br />A downward trend<br />Expensive (% of net vs. gross)<br />Ethical considerations (misleading donors)<br />Time consuming<br />Sponsorships correlated to economic times<br />A purpose beyond raising money<br />Communicating your mission <br />Recruiting new volunteers<br />Recognizing community leaders<br />Bonding experience for organizational staff<br />Opportunity for your Board Members to participate<br />
    • 48. #4 – Fundraising Vehicles<br />Corporate Gifts/Sponsorships<br />First, some background<br />Charitable contributions to non-profit organizations reduces a corporation’s tax-liability <br />A contribution to your organization helps the corporation pay less in taxes<br />Good Economy = Sponsorships <br />Two “pots” to pull from:<br />A charitable division of the corporation (usually larger with giving guidelines)<br />The marketing department (usually smaller with less restrictions)<br />
    • 49. #4 – Fundraising Vehicles<br />Corporate Gifts/Sponsorships<br />The marketing department:<br />Contacts are usually public; reach out to them<br />Personal/Professional relationships are helpful (engage Board Members and Volunteers) note: we will discuss in greater detail in future modules<br />Do your research – What organizations has the corporation sponsored in the past and for what project? (usually located on the organization’s website under “Community Relations” or a similar heading)<br />Tailor your ask to what the corporation has done in the past<br />Make sure it contains a marketing benefit<br />Examples<br />
    • 50. #4 – Fundraising Vehicles<br />Corporate Gifts/Sponsorships<br />The Charitable Division:<br />Contacts are also public; reach out to them<br />But first, do your research as there is usually a distinct mission of this function (see Foundation Center – www.foundationcenter.org) or call them directly for their “Giving Guidelines”)<br />Review the funding needs of your organization – do they fit within the giving guidelines? If yes, begin proposal process<br />A word on square peg round hole approached<br />Proceed with caution on exploiting Personal/Professional relationships <br />Examples<br />
    • 51. #4 – Fundraising Vehicles<br />Foundation Grants<br />Similar to Charitable Division gifts from Corporations<br />Usually fund specific components of your mission:<br />A program<br />A building project<br />Vary in size, scope, geographic area, mission requiring a substantial amount of research before the solicitation process<br />www.foundationcenter.org (free resource) <br />Foundation Directory Online - http://fconline.foundationcenter.org/ - annual membership based on level of service/access<br />Guidestar – 990s<br />
    • 52. #4 – Fundraising Vehicles<br />Foundation Grants<br />Researching Foundation Grants (note: will be discussed in future module)<br />The 990 – All non-profit/501(c)3 IRS Status file thee 990 as their annual tax return (foundations are non-profit/501(c)3 IRS Status)<br />The 990 contains valuable information, such as:<br />The value of the endowment<br />Application instructions (note: “…gives to only preselected organizations…” is the default on the 990)<br />Board of Directors Listing<br />Grants Awarded Listing – with amounts to each organization and often an explanation of the purpose<br />Website<br />
    • 53. #4 – Fundraising Vehicles<br />Major Individual Giving<br />Individuals who give major gifts (the amount that qualifies one as “major” is determined by the organization) have a strong connection to the organization or the cause (e.g. your board members)<br />They are usually not first time donors, nor do the gifts come out of the blue (i.e. unsolicited)<br />These gifts are in the upper-tiers of the donor pyramid<br />Donors are engaged and want to see their gifts make a difference (measurable, innovative)<br />
    • 54. #4 – Fundraising Vehicles<br />Major Individual Giving (continued)<br />The focus on MG programs is increasing:<br />Less expensive; High ROI (return-on-investment)<br />Less dependent on the economy like Corporate Sponsorships (however, not isolated from it either)<br />Major Givers are usually great stewards of your organization (if they are going to give multi-figure gifts to your organization you can bet they will say great things about you!)<br />Due to the proven success of MG Programs, good MGOs (Major Gift Officers) are often the highest paid in the Development Office<br />
    • 55. #4 – Fundraising Vehicles<br />Major Individual Giving (continued)<br />However (the downside):<br />High pressure to meet metrics<br />Lack of organizational strategic<br />Generally does not support General Operating Expenses<br />The donors are very knowledgeable about non-profit operations (they are using the same research tools you are using!)<br />The cultivation period is long (two-years)<br />The investment in a MG Program is hard “to sell” to Executive Leadership when return is in future fiscal years<br />Ethical considerations<br />
    • 56. #4 – Fundraising Vehicles<br />Planned Giving (or Gift Planning)<br />According to the AFP Dictionary - “a systematic effort to identify and cultivate a person for the purpose of generating a major gift that is structured and that integrates sound personal, financial, and estate-planning concepts with the prospect’s plans for lifetime or testamentary giving. A planned gift has tax implications and is often transmitted through a legal instrument, such as a will or a trust.”<br />For the purpose of this course, Planning Giving will be presented as an overview to the average Development Officer <br />
    • 57. #4 – Fundraising Vehicles<br />Planned Giving (or Gift Planning) - Two kinds: (1) outright or current gifts (2) deferred (realized in the future)*<br />A donor who is considering, or has already made, a planned gift is at the top of your donor pyramid:<br />They know, believe and trust in your organization<br />They’ve donated (money and/or time) for several years, if not decades)<br />They tend to be savy; appreciate the tax benefit and creativity involved in establishing a planned gift to a non-profit organization<br />They want to be involved up until their passing (if deferred)<br />
    • 58. #4 – Fundraising Vehicles<br />Planned Giving (or Gift Planning)<br />Types of Deferred Planned Gifts<br />Bequest <br />The most popular type of deferred planned gift and the least daunting<br />Once made, less than 10% change, those that do increase the amount to charity<br />Easiest to publicize; verbiage should be on your organizational website (See http://www.butler.org/body.cfm?id=245); on reply devices, in newsletters, etc.<br />Discuss with the donor the intent of the gift <br />Gift Acceptance Policies should reflect every situation imaginable<br />
    • 59. #4 – Fundraising Vehicles<br />Planned Giving (or Gift Planning)<br />Types of Deferred Planned Gifts (continued)<br />Charitable Gift Annuity – A legal contract between the donor and the charitable organization, through which the donor exchanges cash, stocks, or other assets for an agreed-upon income for life<br />Charitable Remainder Trust – The Donor transfers assets to a Trust, which then goes to the charitable organization after the death of the beneficiary. The donor retains a fixed or variable income for life<br />Life Estate Contract – The Donor transfers the deed of real property to a charitable organization while reserving the right to live on the property for life. <br />
    • 60. #4 – Fundraising Vehicles<br />Planned Giving (or Gift Planning)<br />Types of Deferred Planned Gifts (continued)<br />Charitable Lead Trust – Donor transfers assets to a trust; the trust provides income to the charitable organization for a period of X years. After the said period, the assets revert back to donor (grantor) or someone else (non-grantor)<br />Life Insurance Policy – Two types (a) transfer ownership of an existing policy to the organization or (b) purchase a new policy/contract that names the charitable organization as the beneficiary (note: can also add charity to existing policy as another beneficiary)<br />Pooled Income Fund – A common trust with many donors; pro rata shares; as each beneficiary dies, the value of their portion transfers to the organization<br />
    • 61. #4 – Fundraising Vehicles<br />Planned Giving (or Gift Planning)<br />Advantages to the Organization:<br />Long-term relationships with donors<br />Provides future funds<br />Promotes alternative thinking: “assets as gifts”<br />Benefits to the Donor<br />Opportunity to give (via assets as gifts)<br />Income tax deductions<br />Fixed or variable income<br />Retirement income<br />Reduction of capital gains<br />Asset management<br />
    • 62. #4 – Fundraising Vehicles<br />Planned Giving (or Gift Planning)<br />What the experts won’t tell you - “You don’t need to know it all; the details are done by estate attorneys and financial planning experts!”<br />Resources:<br />RI Foundation – Videos on Options for Giving http://www.rifoundation.org/ProfessionalAdvisors/VideosOptionsforGiving/tabid/530/Default.aspx<br />Partnership for Philanthropic Planning (PPP) – formerly the National Committee on Planned Giving (NCPG) <br />National website: www.PPPNET.org<br />RI website: www.PPPRI.org (for RI meeting schedule/info)<br />Invitation to attend a PPP-RI Meeting:contact me if you would like to attend a meeting as my guest at no charge. <br />
    • 63. #4 – Fundraising Vehicles<br />Other Tactics – Telephone &amp; Internet<br />Both are in a state of transition but each has a role in recruiting first time donors and renewing donors<br />Phone-a-thons are a good way to follow-up on a direct mail appeal<br />Provides a higher level of personalization and acts as a reminder<br />A great way to engage volunteers in the process (especially in phone-thank-a-thons)<br />The prominence of cell phones/cancellation of land-lines makes it difficult to reach a “live person”<br />“Do not call” list myths<br />
    • 64. #4 – Fundraising Vehicles<br />Other Tactics – Telephone &amp; Internet (continued)<br />Internet Giving depends on the scope, target audience, and mission of the organization<br />Walks, Bike Rides, etc. have sophisticated web programs that are very successful as they empower the grassroots based fundraising team<br />Most organizations don’t have such a force and should regard internet fundraising as a add-on<br />Have an on-line giving option and include that link on all direct mail pieces<br />Incorporation a scope of programs to support on your on-line portal<br />Increase the number of credit cards accepted on your on-line portal<br />Great way to get more information about your donor, e.g. email address, mailing information, preferred phone number; can also include one or two survey questions on your online portal<br />
    • 65. #5 – Creating your Professional Brand<br />“Industry Champion”<br />AFP/PPP<br />…and other professional associations<br />“Industry Expert”<br />Ascent Advisors<br />…and clients<br />“Organizational Expert”<br />Butler Hospital<br />…and other employers<br />“Teacher/ Mentor”<br />RIC/Bryant<br />…alumni relationships, teaching positions<br />“Community Volunteer”<br />American Red Cross<br />…and other volunteer opportunities<br />Linked In<br />My Profile<br />
    • 66. #5 – Creating your Professional Brand<br /><ul><li>Your skills of aligning funding needs to your prospective constituencies depends on your knowledge of external and industry factors (note: SWOT analysis will help with this)
    • 67. Get feedback from people outside of your organization; objective feedback
    • 68. Affiliation with other networks helps to provide credibility to you as a professional and to your organization (where you are not the paid “mouth-piece”)
    • 69. Provides you with Best Practice information; use in your own organization; use to provide leverage for new idea implementation
    • 70. Opportunity for Peer Learning</li></li></ul><li>#5 – Creating your Professional Brand<br /><ul><li>Get out of the office and interact with others
    • 71. AFP, CASE, AHP, PPP gatherings – Professional Associations
    • 72. Alumni Groups – Not only for Colleges (e.g. LRI)
    • 73. Chamber of Commerce Events – membership is not required
    • 74. Civic Clubs (Rotary, Lions, etc.)
    • 75. Sports – golf leagues, tennis, etc.
    • 76. The Internet provides other opportunities
    • 77. Social Networking - LinkedIn – Groups, Facebook, Twitter</li></ul>E.g. Lenny Silva<br /><ul><li>AFP Open Forum (and other listserv groups)</li></li></ul><li>#6 – Ethics inFundraising<br />“We in the nonprofit sector are held to a higher level of trust than our colleagues <br />in the for-profit sector”<br />(Rosso, 2003)<br />Association of Fundraising Professionals (AFP) challenges its members to<br />Accept responsibility for their own behavior<br />Accept responsibility for the behavior of their institutions<br />In the areas of stewardship, accountability, confidentiality<br />A Trust Crisis<br />57% trusted private higher education<br />395 healthcare<br />31.6% private and community foundations<br />15.8% Congress (however this increased post 9/11)<br />“Those who presume to serve the public good must assume the public trust”<br />(Rosso, 2003)<br />
    • 78. #6 – Ethics inFundraising<br />Factors that Challenge Ethics in Fundraising<br />Fund raising is not “business as usual” <br />Due to the amount of personal attention, engagement and creativity it impossible to outline every single scenario that can occur can document an ethical response<br />The challenge comes from changes in non-profit organizations, changes in the public’s assumption about nonprofits, and from technological shifts in how fund raising is done<br />Increased education and professionalism helps, but still dependent on the professional<br />Being responsive to changing circumstances and conditions leads non-profit leaders and managers to consider moral issues that pertain to their organizations<br />What is fine for one organization, may be a contradiction to the mission of another organization; no one size fits all approaches (some examples)<br />
    • 79. #6 – Ethics inFundraising<br />Answers to Ethical Dilemmas are not always clear<br />AFP suggests using the following guidelines:<br />If you use this solution, will you be able to look in the mirror and feel proud?<br />Is your solution one for which your organization can stand tall in front of its donors and clients?<br />Given today’s climate, would this solution stand up under the scrutiny of the press?<br />As a Development Officer progresses through their career they achieve higher levels of professionalism…and an ethical sense (they progress from technician to professional).<br />There is no substitute for experience in this field<br />
    • 80. #6 – Ethics inFundraising<br />Ethics and Professionalism<br />The text outlines six criteria that are essential to the fund raising profession; they are:<br />Autonomy <br />Systematic knowledge<br />Self-regulation<br />Commitment and identification <br />Altruism and dedication to service (fund raisers are more generous with their resources and time than other citizens) <br />Ethics and sanctions (AFP has a process in place to sanction unethical behavior by members)<br />“Do we live for philanthropy or do we live off philanthropy”<br />(Robert Payton, Former Executive Director Center on Philanthropy at Indiana University)<br />
    • 81. #6 – Ethics inFundraising<br />Section 501(c)(3) of the Internal Revenue Code<br />Professional Fundraisers must always be cognizant of the non-distribution clause<br />“…no part of the net earnings of which inures to the benefit of any private shareholder or individual,…”<br />Commits nonprofits and those associated to the public good<br />Establishment of trust between donors and organizations<br />Professional Fundraisers must be the protectors; ensure that we, and all others, do not benefit personally from the funds being donated to an organization<br />This do NOT mean that fundraisers should not be paid fairly and equitably; it does mean:<br />Fundraisers do not accept personal gifts from donors<br />Salaries must be commensurate with public expectation<br />Board members should not have competitive advantage in bidding for business with the organization<br />
    • 82. #6 – Ethics inFundraising<br />Issues of Professionalism (Rosso, 2004)<br />What is the role of trust in our development as fund raising professionals?<br />What are the burdens placed on us as fund raising practitioners by the “non-distribution clause” in Section 501(c)(3) of the code?<br />As fund raising practitioners, who is are client: the donor or the organization?<br />In every transaction, what are the intents of the donor and what are the intents of the organization?<br />How can we, as fund raising professionals, protect and maintain our integrity as “boundary spanners” between donors and organizations?<br />How do we manage the tensions that arise as fund raisers working for organizations assist donors expand their philanthropy?<br />
    • 83. #6 – Ethics inFundraising<br />The Josephson Institute surveyed more than 10,000 to define the values that are important to an ethical or virtuous person.<br />Josephson’s 10 ethical values that form the basis for ethical decision making:<br />Honesty<br />Integrity<br />Promise-keeping<br />Loyalty (fidelity)<br />Fairness<br />Source: Achieving Excellence in Fund Raising, Rosso, 2003<br />Concern for others<br />Respect for others<br />Law-abidingness and civic duty<br />Pursuit of excellence<br />Personal Accountability<br />
    • 84. #6 – Ethics inFundraising<br />A Sample Ethical Dilemma:<br />What does the professional fund raiser do (the matter of personal accountability) when the organization (loyalty-fidelity) decides to use funds given for one purpose by a donor (promise-keeping, integrity, honesty) for another purpose?<br />Three step process:<br />All decision must take into account and reflect a concern for the interests and well-being of all shareholders<br />Ethical values and principles always take precedence over non-ethical ones<br />It is ethically proper to violate an ethical principle only when it is clearly necessary to advance another true ethical principle, which according to the decision maker’s conscience, will produce the greatest balance of good in the long run<br />
    • 85. #6 – Ethics inFundraising<br />Payton’s Ethics Cube: Individual (fundraiser) against the Organization surrounded by Competence, Language, Relations and Mission<br />First Ethical Tension – Individual vs. Organization<br />Is the fund raising executive acting in the best interest of the organization?<br />Is the organization treating the professional fairly (compensation, etc.)<br />Who is the client?<br />Competence <br />Competent in ethical and technical standard of the fund raising profession<br />Law abiding<br />Pursuit of excellence<br />Personal accountability<br />
    • 86. #6 – Ethics inFundraising<br />Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To ensure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the nonprofit organizations and causes they are asked to support, we declare that all donors have these rights: <br />(see next slide)<br />Payton’s Ethics Cube (continued):<br />Language<br />The way we talk about our profession<br />The way we discus the process of fund raising<br />E.g. don’t refer to donors as “targets”; or “hit people us”<br />Integrity, honesty, commitment to openness<br />Relationships<br />Who owns the relationship? <br />Promise keeping, loyalty and fidelity, fairness, concern for others<br />Mission<br />Fund raising begins with Mission<br />The Donor Bill of Rights<br />
    • 87. #6 – Ethics inFundraising<br />The Donor Bill of Rights<br />I. To be informed of the organization&apos;s mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.<br />II. To be informed of the identity of those serving on the organization&apos;s governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities. <br />III. To have access to the organization&apos;s most recent financial statements.<br />IV. To be assured their gifts will be used for the purposes for which they were given.<br />V. To receive appropriate acknowledgement and recognition. <br />VI. To be assured that information about their donation is handled with respect and with confidentiality to the extent provided by law.<br />VII. To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.<br />VIII. To be informed whether those seeking donations are volunteers, employees of the organization or hired solicitors. <br />IX. To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.<br />X. To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.<br />
    • 88. #6 – Ethics inFundraising<br />“Moveable Assets” - You have built an excellent reputation as development officer for a fine arts organization in a small city. You’ve been able to enlist the support of many new donors and have cultivated numerous major gifts. You’ve been offered a higher paying job at the city hospital.<br /> <br />A. Suppose you have been cultivating a wealthy philanthropist, Mrs. X, who has no real interest in the arts. Mrs. X has numerous health concerns. She is likely to respond favorably to a request for support of the hospital primarily because she has high personal regard for you. Would it be a violation of the AFP Code of Ethical Principles to ask Mrs. X to make the gift to the hospital instead?<br /> <br />Yes<br />No<br />It depends<br />Don’t know<br /> <br />B. Suppose you have worked hard to write original text for planned-giving brochures <br /> that have been successful for the arts group. Would it be a violation of the Code to copy <br /> from them when you create the brochures for the hospital?<br /> <br />Yes<br />No <br />It depends<br />Don’t know<br />
    • 89. #6 – Ethics inFundraising<br />“Not-So-Good Form”<br />You are a development officer in a three-person development office. One day while reviewing your organization&apos;s government-required federal revenue agency reporting form (such as the Form 990 in the U.S., or the T-3010 in Canada) you discover a sizable difference between the total amount of donations reported on the Form and the amount published in the institution&apos;s campaign publicity. When you ask the Chief Financial Officer about the discrepancy, the CFO replies, &quot;Don&apos;t worry, the Form is only an informational return. The revenue agency does not audit it.“<br />A. To be consistent with the AFP Code of Ethical Principles, what should you do?<br />1. Inform the Chief Development Officer about the discrepancy.<br />2. Tell the CFO that the Form must be filled out correctly.<br />3. Inform the CEO that the Form must be filled out correctly.<br />4. Ignore the matter because the Form is not your responsibility.<br />5. Other<br />B. Suppose the Form is prepared each year by the organization’s accounting firm. Under the AFP Code of Ethical Principles, would this arrangement absolve you from any duty in connection with the Form?<br /> 1. Yes<br />2. No<br />3. It depends<br />4. Don&apos;t know<br />
    • 90. CONTACT INFORMATION:<br />Michele R. Berard, MBA, CFRE<br />Butler Hospital <br />(401) 455-6565<br />mrberard@butler.org<br />Ascent Advisors <br />(401) 263-4902<br />mberard@ascentadvisors.net<br />
    • 91. EXERCISE<br />SWOT Analysis :<br />Identify general operating expenses that are taboo<br />Conduct a SWOT Analysis for each one<br />Strengths Opportunities<br />Weaknesses Threats<br />

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