Fund Raising and Revenue Generation for non-profit @ Diffusion Pune 2012


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"Fund Raising and Revenue Generation" module lead by Shifa Soomar from ISB (Diffusion Pune - 2 day residential workshop for non-profit and social enterprises)

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Fund Raising and Revenue Generation for non-profit @ Diffusion Pune 2012

  1. 1. Sponsored by Fund Raising &Revenue Generation Shifa Soomar
  2. 2. Agenda Introduction Donor Behaviour Fundraising Planning Framework Methods of Fundraising Direct Response | Online Major Gift | Corporate Importance of Donor Retention The Government & FR in India Revenue Generation
  3. 3. Introduction to Fundraising CoverBackbone of a non-profit Expenses‘People give to people to help people’ Relativity of gift size Giving starts at Home Higher Raise Impact Fundraising Awareness Bond with Society
  4. 4. Donor BehaviourSuccessful fundraising is the right person asking the right prospect for the right amountfor the right project at the right time in the right way. To whom Context or what How Where much How Who When
  5. 5. Who Gives? Gender Age Education Marital Status Income Employment No. of children Homeownership
  6. 6. Why They Give? Self Interest Emotions • Self-Esteem • Sympathy Empathy • Atonement for Sins • Recognition • Access to Services • Fear, Pity & Guilt Values • Reciprocation • Social Justice Altruism • In memoriam • Tax
  7. 7. Reasons for Support Personally asked to contribute Those who have more 21% should give to those who have less 30% To get a tax deduction 7% To fulfill religious obligation Something is owed to the or belief community 20% 22%
  8. 8. Reasons for Non Support I feel that charities are not deserving 3% In the past, charities have Other not acknowledged my 9% support 4% The quality of services provided by charities to I cannot afford to offer my their donors is poor support to charity 7% 23% I find charity communications inappropriate Charities ask for 12% inappropriate sums 23% The government should fund the work undertaken by charities 19%
  9. 9. Fundraising Planning Framework Vision/Mission Budget Schedule Organizational Monitoring & Tactical Plans Objectives Control Fundraising Key Strategies Audit Where are we now? Where do we want to be? Fundraising SWOT Analysis Objectives How are we going to get there?
  10. 10. Vision/MissionServes as a focus point for fundraisersReinforces the ‘reason for the fundraiser’s existence’Powerful motivating factorUseful reference point for potential donorsAll organisations have a vision/mission:•Some unwritten•Some unstated•Some termed otherwise
  11. 11. Organizational ObjectivesWhat the organisation aims to achieve FinanceApplies for the whole organisation Human Resources Service Delivery
  12. 12. Fundraising AuditMost crucial stage of Planning process PEST Framework Market StudyThe Fundraising function and itsenvironmentInternal and external factors affecting APPROACHorganisation’s fundraising ability Competitor Analysis Internal environment
  13. 13. SWOT AnalysisTake only key information from auditContextualise strengths and weaknessesOne step further: SWOT Analyses for each donor segment Internal drawbacks Strengths What are you good at? Weaknesses Barriers to Competitive advantage development Opportunities New audiences, new Potential P,E,S,T Threats techniques Challenges
  14. 14. Fundraising ObjectivesYardstick for measurement of FR performanceBase for accountability The amount of funds to be raised The segments of donors from whom these funds will be raised The acceptable costs of raising these funds
  15. 15. Key StrategiesBroad means by which objectives will be achieved Overall Direction Case for Targeting support Elements of Fundraising strategy Branding Positioning Segmenting
  16. 16. Tactical PlansFiner detailing of strategiesAction points to achieve key strategies Large Organisation Small organisation = Customised action =1 Action plan plan for each donor segment
  17. 17. BudgetEasier with experience % of previous year’s donations % of current year’s What can budgeted be afforded donations Approaches Competitor Task matching Method
  18. 18. SchedulingWhen will the action points be undertaken? By whom? PERT TOOLS Gantt CPM Chart
  19. 19. Monitoring & ControlImportant to keep a constant check on•Costs•Targets•Performance.For effective control, break these down into monthly targetsAlso, check appropriateness of adopted strategies and tactics
  20. 20. Assessing Fundraising Performance Cost per Percent Average Average Face Ratio dollar ROI Participation gift size cost per gift raised
  21. 21. Fundraising Methods Bequest, In Direct Corporate Online Major Gift Memoriam Planned Grant Response Giving & Fundraising Fundraising & Tribute Giving Fundraising Fundraising Fundraising giving
  22. 22. Direct Response FundraisingPrimary Elements Pillars of Direct Response Sufficient Offer Targeting Continuity Information Explicit ‘call to A means of Interaction Control action’ response
  23. 23. Direct Response FundraisingKey Stages Monitoring, Defining Fulfillment Control and Objectives Appraisal Segmenting Message Media: Targeting Selection and Planning
  24. 24. Stages of Direct Response FundraisingObjectivesDefine: From how At what cost many? How Much? How?
  25. 25. Stages of Direct Response FundraisingSegmentationCheapest, Hardest, mosteasiest source expensive source Warm Donors of List of EMGO Lapsed potentials other Cold supporters ’ list nonprofits prospectsTargeting: You may have the best campaign/approach, but is it reaching the right people?
  26. 26. Stages of Direct Response FundraisingMedia: Selection & Planning Press & Magazine Direct Mail Free-Standing Inserts Advertising• List Purchase • Placed in • Tried and tested• Test Mailing magazines/newspapers • Works well for• Pack Design • Attractive design emergency causes • Should be suitable for • Provide the problem audience and the solution • Higher effectiveness, but higher costs too
  27. 27. Stages of Direct Response FundraisingMedia: Selection & Planning Direct Dialogue Tele-Fundraising Radio• Face-to-face • Donor Acquisition & • No visual recall• Sites of high foot fall Development • Works well when• Increasing use of • Inhouse or outsourced integrated with other technology • Can be integrated with media• More first-time donors campaigns on various (80% under 30) media
  28. 28. Stages of Direct Response FundraisingThe Message • Content over length • Get to the point Writing Copy • Active over passive • Passion, honesty and conviction • Back of envelope more important than front • Top, Bottom, Middle. Illustration, Typeface & • Handwriting vs printed text Design • Numbers vs words • Don’t forget the P.S.
  29. 29. Stages of Direct Response FundraisingFulfillment‘Back-end’ of a recruitmentcampaign Acknowledge AnswerHoneymoon stage is criticalClose the deal Bank
  30. 30. Stages of Direct Response FundraisingMonitoring, Control & AppraisalEasy to monitorKeep tab on statistics through media ownersPerformance appraisal based on historic data and across mediaBe wary of:•Outliers•Ignoring fulfillment costs
  31. 31. Online Fundraisinge-Philanthropy: advocacy, education and fundraisingCreation of communitiesWider, stronger reachNot ask-give or top-down, but building relationships between the organisation andsupporters
  32. 32. Online Fundraising Characteristics of a successful website Commerce Accessibility Content Accountability Community Education Interaction Empowerment Successful Online strategy
  33. 33. Online FundraisingE-Fundraising Mix Search Engine Online Opt-in E-mail Marketing Partnerships Online PR Interactive Ads Viral Marketing
  34. 34. Major Gift fundraising The Communitarian The Devout The Investor Seven faces of Philanthropy The Altruist The Socialite The Repayer The Dynast
  35. 35. Major Gift fundraisingMajor Gift Development Process Identify & Evolve Strategise Engage Focus Strategy Continued Acknowledge Ask Assign ‘ask’ engagement Renewal
  36. 36. Corporate Giving and FundraisingWhy do Corporations give? Corporate Ethical Political Stakeholder productivity Reasons Influence Satisfaction
  37. 37. Corporate Giving and FundraisingForms of Support: Donations of Donation of Donations of Cash Donations products/servic employees’ stocks & shares es time Employee Workplace Publicity Events Matching Gifts collections Group Employee Workplace Sponsorship Presentations Fundraising giving
  38. 38. Corporate Giving and FundraisingSelecting the Right Organisation Profitability Turnover Longevity Country of Nature of Business Sector ownership Shreholding Fit can be analysed Potential Fit through values, brand and objectives
  39. 39. Corporate Giving and FundraisingBenefits Drawbacks Increase in Larger volunteer ‘Selling out’ amount and base Exclusivitystability in revenue concern Increased Wider reach for Access to Credit on awareness donor acquisition non-profit’s collateral database Ability to leverage knowledge of corporate entity
  40. 40. Importance of Donor Retention‘Customer Service’ aspect of FundraisingFor every $6 raised through new donors, 5$ are lost through leakage of existing donorbaseFix the leaky bucket before pouring more water into itEasier, Cheaper to retain than acquireStrengthen while Expanding
  41. 41. Importance of Donor RetentionHOW TO MAKE YOUR DONORS STAYKeep your donors informed: Make them feel important: Timely gift Donor Recognition Newsletters Annual Reports acknowledgements (plaques/certificates) (email/telephone) Donor Milestone Preference & Invitation to Understand the Correspondence Permission based Events motivation Personalized Communication
  42. 42. The Government & Fundraising in IndiaFCRA ActRecently thousands of registrations cancelledService TaxProviding education to children considered a serviceTRAI RegulationsCharities not exempt from ‘DND’ RuleNo Infrastructure support‘Bill Mail Service’ for commercial companies, but not nonprofitsTax ExemptionSec 80G, but no ‘Gift Aid’
  43. 43. Emergence of Revenue GenerationSocial enterprises apply business solutions to social problems.Ultimate goal: achieve sustainabilityGeneration of:•Social value (measurable impact)•Economic value (revenue).
  44. 44. Integration Models • The enterprise and the social program are one and the same Embedded • The business is created to serve clients (central to the mission) • The business activities overlap with the social programs Integrated • The business is created as a funding mechanism and to expand/enhance the mission of the organization • Social and business activities are separate and may or may not be related to the mission of the organization External • The business is created mainly as a funding mechanism to support social activities
  45. 45. Hybrid OrganisationsPrimarily pursue a social mission but high reliance on commercial revenueReasons for popularity:•Less dependency on donations and subsidies•Creating sustainable financial modelsTraditionally existed in job training, health care, and microcredit. Recently inenvironmental services, consulting, retail, consumer products, catering, and informationtechnology.
  46. 46. Hybrid OrganisationsChallenges of the Hybrid Structure: Legal Financing Structure Organizational Customers & Culture and Beneficiaries Talent Development
  47. 47. Key Factors for a Successful Social Enterprise Good fit Industry Realistic Knowledge expectations Consider it a Hire Right business
  48. 48. Perfect PitchWhat do you want? Give Create Get the Connect Information Awareness Money
  49. 49. Perfect PitchElements of the Pitch Introduction What you Who you want are Why you Who you are serve important
  50. 50. Corporate Giving and FundraisingDelivery Technique Opener Memorable Phrase The Ask
  51. 51. Perfect Pitch