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Introduction to effective fundraising

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The elements of building a successful fundraising strategy
*Fundraising in context
*New Zealand's individual giving market
* Strategy options
* Critical success factors

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Introduction to effective fundraising

  1. 1. Introduction to Effective Fundraising The elements of building a successful fundraising strategy Fiona McPhee February 2016
  2. 2. What is effective fundraising? • Low spend / high return? • Cost per dollar raised • Return on Investment • A program delivering more net each year? • A sustainable program delivering more net each year? • Diversification – are you eggs all in one basket? • So more people need you than you can reach today?
  3. 3. Today •Fundraising in context – big picture sources of funding •New Zealand’s individual giving market •Strategy options •Couple of critical factors to success
  4. 4. What does Effective Fundraising Look Like? It is hard work You have to make choices and set priorities Fundraising is an indistinguishable part of your organisation, not a separate function just generating the money There is no one-size-fits- all or magic template
  5. 5. Fundraising in context The big picture Facts not anecdotes
  6. 6. The Big Picture Overall Fundraising Strategy
  7. 7. The Big Picture Overall Fundraising Strategy Investments
  8. 8. The Big Picture Overall Fundraising Strategy Government
  9. 9. The Big Picture Overall Fundraising Strategy Government Trusts & foundations
  10. 10. The Big Picture Overall Fundraising Strategy Government Trusts & foundations Consider Corporate & Events
  11. 11. “Chasing the corporate dollar”
  12. 12. Home of capitalism, most generous nation on earth. 1966 0.9% of corporate profit donated Rise of the Triple Bottom Line, Corporate Social Responsibility 2012 0.8% of corporate profit donated 1986 Peaks at 2.1% of corporate profit donated Source: www.slate.com
  13. 13. 1 55% 2 3% 3 42% NZ 2014 1 80% 2 5% 3 15% USA 2014 Source: Giving USA & Giving New Zealand
  14. 14. Gross Income - by year – New Zealand $0 $40 M $80 M $120 M $160 M 20052005 20062006 20072007 20082008 20092009 20102010 20112011 20122012 20132013 20142014 Income Individual Organisation
  15. 15. The Big Picture Overall Fundraising Strategy Government Trusts & foundations Consider Corporate & Events
  16. 16. The Big Picture Overall Fundraising Strategy Government Trusts & foundations Consider Corporate & Events Consider Associations, groups
  17. 17. The Big Picture Overall Fundraising Strategy Government Trusts & foundations Consider Corporate & Events Consider Associations, groups Individuals – Long term growth
  18. 18. The Big Picture Overall Fundraising Strategy Government Trusts & foundations Consider Corporate & Events Consider Associations, groups Individuals – Long term growth The Giving Constituency
  19. 19. Types of Individuals Occasional Strong Relationships Total Commitment • Singular emotional response • Other motivation – raffle, auction, peer-support • Regular Givers • Multi touch point • Longevity giving • Bequests • Major Donors
  20. 20. The Big Picture Overall Fundraising Strategy Government Trusts & foundations Consider Corporate & Events Consider Associations, groups Individuals – Long term growth The Giving Constituency Bequests / Legacies Major Donors Regular Giving
  21. 21. The Big Picture Overall Fundraising Strategy Government Trusts & foundations Consider Corporate & Events Consider Associations, groups Individuals – Long term growth The Giving Constituency Bequests / Legacies Major Donors Regular Giving Other areas: •Lottery •Merchandise •Community / Peer-to-Peer
  22. 22. The Big Picture
  23. 23. Simplified Overall Fundraising Strategy Government Individual – Long term Growth Trusts and Foundations Corporate
  24. 24. Acquisition, Renewal and Retention Bequests Major Gifts Regular Gifts Individual giving is currently the ONLY long term solution for growth
  25. 25. New Zealand’s Individual Giving Market
  26. 26. Fundraising Individual Report 2015 Benchmarking
  27. 27. Amnesty International New Zealand | Blind Foundation | CBM New Zealand | Child Cancer Foundation | Child Fund New Zealand | Coastguard New Zealand | Fred Hollows Foundation New Zealand | Greenpeace New Zealand | IHC New Zealand | Life Flight New Zealand | Mary Potter Hospice | New Zealand Breast Cancer Foundation | New Zealand Red Cross Society | Oxfam New Zealand | Plunket | Royal Forest and Bird Society of New Zealand | SPCA Auckland | St John New Zealand | Starship Foundation | The Stroke Foundation of NZ | UNICEF New Zealand 2015 Members: New Zealand 33
  28. 28. Gross Individual Income - by year $0 $50 M $100 M 200520052005200520052005 200620062006200620062006 200720072007200720072007 200820082008200820082008 200920092009200920092009 201020102010201020102010 201120112011201120112011 201220122012201220122012 201320132013201320132013 201420142014201420142014 Income Bequest Cash Child Sponsorship Regular Gift Event Other
  29. 29. New Recruits - by year 0 50 K 100 K 150 K 200720072007200720072007 200820082008200820082008 200920092009200920092009 201020102010201020102010 201120112011201120112011 201220122012201220122012 201320132013201320132013 201420142014201420142014 Recruitment Year Recruits Bequest Cash Child Sponsorship Regular Gift Event Other
  30. 30. Individual Gross Cash Income - by channel of solicitation $0 $10 M $20 M 200520052005200520052005 200620062006200620062006 200720072007200720072007 200820082008200820082008 200920092009200920092009 201020102010201020102010 201120112011201120112011 201220122012201220122012 201320132013201320132013 201420142014201420142014 Income Direct Mail Face to Face Media Online Other Phone
  31. 31. Regular Giving Income - by channel of solicitation $0 $10 M $20 M $30 M $40 M 200520052005200520052005 200620062006200620062006 200720072007200720072007 200820082008200820082008 200920092009200920092009 201020102010201020102010 201120112011201120112011 201220122012201220122012 201320132013201320132013 201420142014201420142014 Income Direct Mail Face to Face Media Online Other Phone
  32. 32. Average Bequest - by charity (excluding gifts below $1K) Avg Gift last 5 yrs $0 $100 K $200 K $300 K AverageBequest
  33. 33. Pledged Bequest Rate - by type of support 0% 1% 2% 3% 4% FacetoFaceCS FacetoFaceRG RegularGivers CashDonors LoyalF2FDonors ActiveCashDonors NonFacetoFaceRG RG&CashDonors LoyalActiveCashDonors LoyalNonF2FDonors 1k+Donors ConfirmedBequestRate
  34. 34. Older is better
  35. 35. Major RG Cash Bequest New Zealand Donor Pyramid 0.2% 0.3% 44.0% (234,784 donors) 55.5% (296,271 donors) $37,344 $4,800 $240 $81 28% 20% 7% 46% 2014 Income
  36. 36. Lots from few v little from many •Bequests •Major Donors •Grants •BIG events •Appeals •Regular giving •Sponsors •Lotteries
  37. 37. Lots from few v little from many •Bequests •Major Donors •Grants •BIG events •Appeals •Regular giving •Sponsors •Lotteries
  38. 38. Approaching Strategy
  39. 39. The need for growth What is your fundraising vision?
  40. 40. A fundraising vision that answers the questions • How many donors do we want? • Do we want a large number of donors or do we want to focus on larger gifts from fewer sources? • What kind of donors do we want? • Do we want a donor base of individuals? • Do we want corporate donors? • Do we want to take funds from the government? • Are we looking to diversity or to focus our fundraising? • What do we want our funding source pie chart to look like at the end of five years? • What donor audiences can we best reach with the channels of communication have we built? • Will these channels of communication most effectively carry our message to our target donor audiences? • What do we want our donors to do for us? • Just give money? • Or is there some other way we want them involved in our mission? • How can we best leverage their support to make real change on our issue? http://www.frontrangesource.com
  41. 41. The need for growth What is my fundraising vision? What sort of strategy do I need to achieve my vision?
  42. 42. Ten Steps to Fundraising Success Assess your current fundraising efforts Assess the fundraising strengths and weaknesses of your board and staff Assemble the team to select the best fundraising strategy Weigh the costs and benefits of the available strategies Chose the strategy that is right for your mission Set fundraising goals that support your fundraising strategy Turn fundraising goals into achievable objectives Choose the right tactics for this fundraising strategy and goals Create a master calendar and keep on track Measure your progress Mal Warwick & Stephen Hitchcock. www.josseybass.com
  43. 43. Growth Audacious goals. Bold. Big Impact Resource intensive Involvement Voluntary. Lobbying. Public participation Staff intensive Visibility Brand identification. Broad public awareness Resource intensive (usually) Efficiency Cost-conscious. Well established Frugal management Staff and time intensive Stability Unchanging values. Broad $ base Cash reserves. Long term view Resource intensive
  44. 44. How have others grown?
  45. 45. Cancer Council NSW Example 1997 - 2007 • Visibility - events 2002 - 2007 • Growth – Regular Giving 2005 - onwards • Involvement – Relay for Life, Volunteers, Relationships Extension 2007 – onwards • Stability – Major Gifts, Bequests 2012 – onwards • Stability – Channel diversification (cash, regular giving, events) 2 year growth 2013 – 2015: 8% 9 year growth: 66%
  46. 46. Amnesty Australia Example • 2008 – strong regular giving program, small occasional pool, tens of thousands of interactions, monologue not dialogue • Involvement & Efficiency focused • 2009 – Seven year vision to inspire over 500,000 people every year to take action (more people = more activism = more members and donors = more impact) • Stability & Involvement focus • Building engagement through online actions, social media, volunteer groups, donor care, tied giving • Cross-sell, Regular Giving, Acquisition, Major Donors, Bequests • Refining programs 2 year growth 2013 – 2015: 18% 9 year growth: 115%
  47. 47. Critical Factor: Your Proposition
  48. 48. Your fundraising proposition 1.What the charity does – the services you provide, the research you do, the teams helping, the campaigns undertaken 2.Your history and track record 3.Your board, your leader
  49. 49. Your fundraising proposition 1.What the charity does – the services you provide, the research you do, the teams helping, the campaigns undertaken 2.Your history and track record 3.Your board, your leader
  50. 50. Your fundraising proposition “Your donation makes a difference. We promise. Donate today.”
  51. 51. Your fundraising proposition “Your donation makes a difference. We promise. Donate today.”
  52. 52. Your fundraising proposition http://www.kaygrace.org/ People give to you because you meet needs, not because you have needs • Are you clear on the needs you meet? A gift to your organisation is a gift through your organisation to the community • You are not the end user of the gift (its not about you) Fundraising is not about money, its about relationships based on shared values • Are you really clear what your values are?
  53. 53. Your fundraising proposition Answers the question: Why should I give?
  54. 54. Your fundraising proposition Creative Audit Audience framing Competitor review Stakeholder consultation Understand strengths, weaknesses and points of difference Creative workshop(s) Know what you need money for – how you are going to spend it but more importantly for what outcome Its not about huge numbers or big brand statements. It's a simple fact that brings home, in human terms, your impact You are offering a solution to the problem as the donor understands it, not as you do Focused & emotive
  55. 55. Assessing Impact
  56. 56. Assessing Impact What you focus on affects your ability to grow • Classic measures • Cost Per Dollar (CPD) / Cost of Fundraising (COF) • ROI
  57. 57. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2 3 4 5 6 7 8 Series2 Series3 Series1 Cost of fundraising year on year…
  58. 58. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2 3 4 5 6 7 8 Series2 Series3 Series1 Cost of fundraising year on year… Massive investment in acquisition
  59. 59. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2 3 4 5 6 7 8 Series2 Series3 Series1 Cost of fundraising year on year v net
  60. 60. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2 3 4 5 6 7 8 Series2 Series3 Series1 Cost of fundraising year on year v net Maintained slight growth in net – money to spend on cause
  61. 61. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2 3 4 5 6 7 8 Series2 Series3 Series1 Cost of fundraising year on year v net Maintaining acquisition, but rewards of year 2 acquisition beginning to show through
  62. 62. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2 3 4 5 6 7 8 Series2 Series3 Series1 Cost of fundraising year on year v net Decided to STOP acquisition for one year – nearly $1.5m bonanza for capital projects and service development – COF plummets
  63. 63. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2 3 4 5 6 7 8 Series2 Series3 Series1 Cost of fundraising year on year v gross
  64. 64. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2 3 4 5 6 7 8 Series2 Series3 Series1 Cost of fundraising year on year v gross Reduced acquisition leads to slight decline in gross
  65. 65. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2 3 4 5 6 7 8 Series2 Series3 Series1 Cost of fundraising year on year v net v gross
  66. 66. $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2 3 4 5 6 7 8 Series2 Series3 Series1 Cost of fundraising year on year v net v gross Growth phase complete – charity stabilises, but still acquiring more donors than losing, hovering around 0.4 cost of fundraising
  67. 67. Assessing Impact What you focus on affects your ability to grow • Classic measures • Cost Per Dollar • ROI • Comparing programs (includes staff costs) • Overcoming their limitations • Net return – how much more do you have for your services / program? • Income per fundraiser
  68. 68. Net return is key – example Monthly giving
  69. 69. Expected Fundraising Return on Investment Bequest Major Gifts Regular Giving Grants DM Renewal Events Lottery Acquisiti on 10 10+ 10+ 9 9 9 8 8 8 8 7 7 7 7 6 6 6 6 6+ 5 5 5 5 5 4 4 4 3 3 3 2 2 2 1 1 1.0 -1 0.5
  70. 70. Making it all happen Make a concrete, measurable plan Get organisational buy in Avoid being internally focused Don’t overestimate your ability Seek experience & expertise Review
  71. 71. THANK YOU Fiona McPhee fiona.mcphee@paretofundraising.co.nz Twitter: fimcphee Phone: 021 336 905 Web: www.paretofundraising.co.nz Experts worth reading: Dan Pallotta, Mal Warwick, Ken Burnett, Kaye Sprinkle Grace, Bill Toliver, Simone Joyaux, Sean Triner Excellent resources: • Showcase of Fundraising Ideas & Innovation http://sofii.org/ • Resource Alliance http://www.resource-alliance.org/ Support in New Zealand • Grants: Strategic Grants https://www.strategicgrants.co.nz/ • Major Donors & Capital Campaigns: Giving Architects http://www.givingarchitects.com/ • Fundraiser Recruitment: Execucare http://execucare.co.nz/
  72. 72. Pareto Fundraising

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