The document discusses developing a diverse funding base for nonprofits. It covers concepts of sustainability, vibrancy and resilience. Revenue sources like individuals, corporations, foundations and government are identified along with pros and cons. Developing the capacity to pursue different funding is important. Nonprofits need to understand donor motivations and tell compelling stories to attract support. Developing the right fundraising strategies, materials, and tracking systems are essential elements of a diverse funding base.

1. Developing a Diverse Funding Base Presented by Gayle L. Gifford, ACFRE

2. Objectives for Today Understand concepts of sustainability, vibrancy and resilience Identify sources of nonprofit revenues Understand what you need to do to be successful at securing those revenues Connect with your colleagues

3. TOPICS Sustainability, vibrancy, resilience Revenue sources, pros and cons Developing capacity to pursue different funding sources Other helpful concepts

4. Working Agreement This is a taste, not the whole meal The only stupid question is the one you didn’t ask Honor newbies and old hands Respect time Adjust your environment as you need Share Hot tips

5. How does your organization define sustainability ? ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________

6. More about sustainability When funders talk about sustainability, they usually mean GET MONEY FROM SOMEONE ELSE There is no sustainable source of funding, every dollar must be re-earned every year.

7. Substitute Financial Vibrancy The capacity of an organization to transition from one sustainable moment to the next Coined by Marilyn Struthers, Ontario Trillium Foundation What might she mean?

8. Sustainability, vibrancy, resilience NEW GOALS: Ability to change while staying effective and true to mission Maneuver through instability in an opportunistic and optimistic way. Fluidity to change organizational shape, build alliances and take up the opportunities of the moment” (m. struthers)

9. What would resilience look like to you? ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________ ________________

10. How much do you need? Total dollars By category: e.g. membership, grants, government, special events Restricted vs. unrestricted Public or private More or fewer donors? Larger gifts? Donors or members? Cash or inkind? Money or labor?

11. What do you need the money for? Conducting programs Buying and stewarding properties People to do things Maintaining an office Managing data Communicating with your constituents Raising money Other ____________?

12. How does your community benefit? Connect the money you need to the impact you want to have Help potential donors visualize the change you are trying to create Tell a powerful story

13. Why do donors Give? _______________________ _______________________ _______________________ _______________________ _______________________ _______________________

14. Why donors give To realize some change in the world To preserve something of value To feel good To be recognized, appreciated To create good will To realize tax benefit Because required by law Someone asked them

15. Worksheet : Develop your Case for Support If you had more money, how would you spend it? In two paragraphs, how does the community benefit if your organization raises this money? What does your community value? Be clear, convincing and demonstrate a real , tangible benefit to the community?

16. Organization perspective: We need a bigger boat in order for our ocean classrooms program to accommodate more students Community benefit : Hundreds of schoolchildren will unlock the wonders of the sea in our ocean classroom and start their journey as livelong stewards of our oceans Case Example

17. Designing Growth What are you looking for?

18. How would you like the money? Restricted or unrestricted Public or private Many donors or few Individuals or institutions

19. Six Sources of Revenues Individuals Corporations/Businesses Private Foundations Government Fees for goods or services Income-producing assets, e.g. endowment

20. Breakdown of nonprofit revenues 38% from Dues, Fees, Charges 31% from Government Sources 20% from Philanthropy (individuals, foundations, businesses) 11% from Other (e.g. interest) Estimates, from Independent Sector, includes 501(c)3s and 501(c)4s

21. Individuals PROS Largest source of philanthropic dollars Most unrestricted Need less evidence and paperwork Can write a check “today” High ROI for face to face Relatively predictable Loyalty can be very high CONS People intensive Raising small gifts from many donors is time-consuming and expensive Requires programming of public appeal and engagement Won’t stay if you don’t engage & appreciate them

22. Corporations PROS Potential for large gifts Money from lots of pots – charitable, goods and services, royalties, contracts, advertising, sponsorships Often just people CONS Need to align with business interests Need to engage business leadership Usually avoid controversy and social advocacy Smallest source of nonprofit revenues

23. Grants from Foundations PROS Most foundations are families – act like individuals Relatively high ROI Potential for large gifts Seed money for new programming Sometimes operating support CONS “ Outcome” driven Time and project limited Usually restricted Highly competitive Not for lobbying Often lots of paperwork

24. Government PROS Same as foundations 2 nd largest source of nonprofit revenues Can be fee for service CONS Same as foundations Expect high level of sophistication in grant writing Prohibited from lobbying and sometimes advocacy

25. Fees for goods and services PROS Largest source of US nonprofit revenues Program contracts often from government No charitable intent required CONS Need to align with mission May have tax implications Requires strong business planning and marketing investment Must be customer driven

26. Benefiting from the capacity of partners: the seventh revenue source Space People Goods & Services Expertise ____________ ____________

27. Worksheet How ready are you? What is your desired source of revenue? How ready are you to meet potential donor needs?

28. Designing Growth Growth Basics

29. Growth Basics Stabilize Keep the donors & customers you already have Replace the donors you lose Add New donors or customers More dollars per donor

30. Designing Growth The Gifts Pyramid

31. How to raise $1 Million 8-10 $425,000 $50,000 2 8-10 $485,000 $30,000 2 16-20 $585,000 $25,000 4 20-25 $645,000 $15,000 5 40-50 $745,000 $10,000 10 40-50 $820,000 $7,500 10 400-500 $1,000,000 $500 110 100-150 $945,000 $1000 25 80-100 $920,000 $5,000 20 4-5 $325,000 $75,000 1 4-5 $250,000 $100,000 1 4-5 $150,000 $150,000 1 Prospects Needed Running Total Size of Gift Number of Gifts

32. How to raise the next $100,000 Four scenarios Grassroots: many small givers Large Gifts : to $10,000 Larger Gifts: up to $25,000 Major Gifts only: $1,000 to $50,000

33. The next $100,000 if your strategy is… grassroots large gifts (to $10K) 60 $100,000 15 Under $1000 224 $100,00 56 TOTALS 40 $92,400 10 $1,000 28 $82,400 7 $1,500 28 $71,900 7 $2,000 20 $11,500 5 $2,300 20 $46,400 5 $2,800 12 $38,000 3 $3,500 8 $27,500 2 $5,000 4 $17,500 1 $7,500 4 $10,000 1 $10,000 Prospects Running Total # Gifts Range ***** $100,000 1000 $25 5,000+ $100,000 1213 TOTALS **** $75,000 120 $50 120 $69,000 30 $100 120 $66,000 30 $250 60 $58,500 13 $500 40 $52,000 10 $1,000 28 $42,000 7 $1,500 28 $31,500 7 $2,000 12 $17,500 3 $2,500 8 $10,000 2 $5,000 Prospects Running Total # Gifts Range

34. The next $100,000 if your strategy is… larger gifts (to $25K ) major gifts (to $50K) 40-50 $100,000 10 $1,000 92 to 115 $100,000 23 TOTALS 32-40 $90,000 8 $2,500 16-20 $70,000 4 $5,000 4-5 $50,000 1 $50,000 Prospects Running Total Gifts Range 80-100 $100,000 20 $500 184-230 $100,000 46 TOTALS 40-50 $90,000 10 $1,000 40-50 $80,000 10 $2,500 16-20 $55,000 4 $5,000 4-5 $35,000 1 $10,000 4-5 $25,000 1 $25,000 Prospects Running total Gifts Range

35. Every prospect needs a name Example: Need 5 prospects capable of making a gift at the $5,000 level Prospects: Mr. and Mrs. José Rodriguez Good Cause Foundation ABC Corporation Jane Doe Aunt Harriet

36. Growing Donors, Members and Foundation Support

37. Individual Donors or Members Appreciate the donors you have Send timely, personal thank you Give feedback on how their gift is making a difference Provide appropriate and welcomed recognition Engage donor heads and hearts Keep your organization “top of mind” Create opportunities to get “cold and wet” Communicate needs and how they can help Tell compelling stories Produce results

38. Remember the four Cs Connect Capture Convert Communicate

39. Grant seeking Build connections and relationships Know who you are talking to Cultivate, cultivate Target communications Identify donor value Create newness new issues into existing program New audiences Appeal to donor worldview Bundle projects for maximum impact Find hidden value

40. Grant seeking (continued) Demonstrate leadership Know your stuff Prove it Be logical Communicate like a leader Think ahead Long range planning Research funder opportunities Anticipate problems or trends

41. Proposal selling points Speak the same language Establish compelling needs Prove it Focus on results Reference theory and best practices Gather strategic endorsements

42. Fund Development Plan Case for Support Individual cases as needed Target Audiences Goals and objectives Prospect research Strategies in Cultivation Solicitation Stewardship Donor and gift management Calendar Budget Research and data analysis Benchmarks Evaluation Professional development

43. Your donor database Custom-made or Off the Shelf?

44. Custom Made Pros Seems less expensive Got a volunteer willing to do this Can design for special needs Necessary in very specialized situations Cons No documentation Not designed for fundraising Minimal reporting or analysis Corrupts over time Little technical support when you need it

45. Off the shelf Pros Reflects decades of knowledge Built for raising money Reports and analysis May allow events, volunteer, grants management Lots of price options including no and low-cost, online hosted services See www.TechSoup.org for volumes of advice and low-cost options Cons Requires training Upfront costs Annual maintenance fees Training: time and costs Multiple user license adds costs Online hosted services: fees rise with volume Licensed software: higher start up costs

46. The answer to How? is Yes! With gratitude to Peter Block

47. Cause & Effect Inc. can help you make a difference in the world by creating the internal change that will strengthen your governance, improve your programming, build stronger relationships with your constituencies, or boost your revenues. We’ll work with you on Board development and training, organizational development, strategic planning, group facilitation, public engagement, program development, organizational communications or fundraising. Contact us at: 401.331.2272, [email_address] or [email_address] www.CEffect.com Gayle L. Gifford, ACFRE or Jonathan W. Howard