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Archive for the ‘Fundraising’ Category

Mistakes in fundraising can be very costly – particularly for smaller organizations pressed by tight budgets and ever-increasing needs. Here are 12 pitfalls to avoid.

  1. Being reluctant to ask for donations. If you are not asking for gifts, you are probably receiving far less than your potential.
  2. Failing to do your homework. Many charitable organizations fail to adequately research their potential donors; for example, income levels, past giving history, and personal interests.
  3. Failing to inform, educate, and motivate donors. An uninformed, uneducated, and unmotivated donor is one who will probably not make future gifts.
  4. Failing to seek fundraising assistance. Fundraising information is available through the library, workshops, seminars, and competent consultants.
  5. Having board members in name only. All board members must be involved in the fundraising process, whether it is asking for gifts, opening doors, or identifying potential donors.
  6. Having board members who do not give. All board members should be asked to make a monetary contribution in accordance with their abilities to give.
  7. Having no written fundraising goals. To achieve success in fundraising, written goals that can be accomplished, changed, or modified are imperative to success.
  8. Keeping inadequate records. Not-for-profits must keep accurate records on income and expenses as well as pledges, donor files, prospect lists, and in-kind gifts.
  9. Not giving top priority to individual donors. Individuals are responsible for more than 80 percent of all gifts, while foundations and corporations combined give less than 20 percent of all gifts in the U.S.; although more time and overhead are spent in asking individuals for donations, it often pays off in the end.
  10. Not holding people to the commitment they made. Follow up with people on what they said they would do. Chances are this will remind people of their commitments and assure that they will honor them.
  11. Planning insufficiently. Don’t wait until there is a problem with your fundraising program, but instead, conduct periodic reviews of your fundraising needs, programs, and capabilities.
  12. Thinking you can conduct major funding efforts or a capital fund drive without experienced help. If you don’t have fundraising experience, attend fundraising training, hire experienced development staff, or search for a consultant.

Source: Adapted From: 18 Common Fundraising Mistakes.and How to Avoid Them, by Nora McClintock

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Fundraising is a process that has many components, and investments must be made to complete the process. Individual components of the fundraising process should be evaluated as part of a total development program, and boards of directors of nonprofit organizations should determine a reasonable rate of return on investment for their own organization based on prior results.

If only three to five percent of the donations from a particular campaign actually go to the cause, donors may want to look elsewhere. On the other hand, it may not be reasonable to expect that 90 percent of the contributions go directly to the cause. Just like for-profit entities, charities have operating expenses. Consider the following factors when evaluating an organization’s fundraising costs and returns.

  • Age of the organization. A well-established organization will likely have a greater return on investment than a newly established nonprofit.
  • Age of the fundraising department. A mature, professionally run development program will be expected to produce a higher return on investment than a newly formed department.
  • Source of funds. Nonprofits that rely heavily on small gifts from individual donors will have higher fundraising costs. In contrast, organizations that receive support from the federal government, corporations, foundations, or large gifts from wealthy donors, tend to have lower costs.
  • Different methods used in the fundraising process will produce different returns. For example:
    • A donor acquisition mailing will have a much lower return on investment than a donor renewal mailing.
    • A capital campaign will produce a much higher return on investment than an annual fundraising program.
    • A new planned giving program may have zero return on investment for the first few years.
  • The return on investment for a special event will be lower than that for a major gifts program.
  • Size of an organization. The return on investment may be affected by the size of the organization.
  • Profile of the constituency. The economic and geographic profile of the constituency being solicited will affect fundraising costs and return on investment.
  • Location of the organization. An organization located in an affluent region should expect a higher return on investment than one located in a less affluent area.
  • Popularity of the cause. The cause and its level of community acceptance will affect the return on investment.
  • Competition for funds. Within the community or constituency that the organization is appealing to for support, competition by other organizations may lower the return on investment.

Sometimes, a fundraising campaign may lose money in the short term, but generate significant returns in the long run. The cost of direct mail acquisition (mail solicitations sent to potential new donors) may range from $1.00 to $1.25 per dollar raised. However, once new donors have been identified, a second mailing to that group may cost only $0.20 per dollar raised.

Thus, while the first mailing may not bring in much money, the second mailing should bring in a substantial number of contributions. These newly identified donors may ultimately donate even larger gifts to the nonprofit (e.g., land, stocks, charitable bequests.).

Source: Association of Fundraising Professionals

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  1. Develop an income and expense budget.
  2. Determine the total amount of money to be raised.
  3. Set income goals for government, foundations, corporations, and individuals.
  4. Decide how many donors you need to meet your goals and select the best strategies.
  5. Develop action steps, put the plan onto a timeline, and implement.

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Community foundations are tax-exempt public charities serving thousands of people who share a common concern — improving the quality of life in a specific geographic area. A community foundation has an independent board that is broadly representative of the public interest and it maintains diverse grants programs that are not limited in scope. In addition to awarding grants, these foundations often play a leadership role in their communities, serve as a resource for grant information, broker training, and provide technical assistance for local nonprofits.

The following link provides a searchable database of over 700 U.S. community foundations, complete with contact information including Web sites and email addresses. The database is provided by the The Grantsmanship Center. Don’t forget to bookmark this resource! Here is the link!

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Grants.gov is a simple, unified “storefront” for all customers of federal grants to electronically find, apply for, and manage grants.

This online tool encompasses over 900 grant programs offered by the 26 federal grant-making agencies. It streamlines the process of awarding over $350 billion annually to not-for-profits and other organizations.

Grants.gov is one of the 24 federal cross-agency e-government initiatives focused on improving access to services via the Internet. The vision for Grants.gov is to produce a simple, unified source to electronically find, apply for, and manage grant opportunities. This is a vital tool in your fundraising arsenal.

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fundplanAs the old saying goes, for the sailor without a plan, any wind is the right one.

This is certainly true in fundraising. The first step in successful fundraising is developing a plan. This means designing action steps to diversify the funding of your organization.

He’s a great article on developing a fundraising plan provided courtesy of Kevin Williams of the Western Organization of Resource Councils.

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It’s interesting that so many people think that fundraising is about donor groups — individuals, foundations, corporations, even the governemnt — and success to getting support is based on techniques: direct mail, telemarketing, email, endless proposal writing. It’s a sales job.

As I remind my students, the secret to fundraising is building relationships. Pure and simple. And that’s the fundamental difference between commercial interests and charitable endeavors. Donors are seeking a relationsihp of shared convictions, and one that is personal, responsive, and ongoing.

We’ll succeed far more if, rather than being viewed as salepeople, donors see us as partners, people who share their concerns for a cause bigger than themselves. And for us who raise money, we will give up that tired, inferior belief that we are supplicants and modern day versions of Mae West, “depending on the kindness of strangers.”

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