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What’s the Real Cost of a Fundraising Opportunity?

Every fundraising opportunity has three categories of costs. One is obvious, the second is obscured by the opportunity itself, and the third is investment inherent in the structure of an organization. The first is always considered when deciding whether to pursue an opportunity. It is a direct cost. The other two are indirect. One of the indirect costs forms an either-or question and is often neither seen nor considered. The other is a question of capability. The three categories of opportunity costs are….read the full article


Blog Entries

Sharing the Good News of a
Campaign on the Road to Success

Recently, I was asked again what a non-profit organization should do about announcing that a fund-raising campaign is racing toward its goal at a record-setting pace. It’s a question asked more often than one might think. If you’ve got a positive story to tell, especially one of community support, you tell it, right? The reality is that I have known many campaign leaders who have wanted to downplay their success during the campaign. Some have even wanted to under announce results. Why? They believed that their organization would have difficulty maintaining a continuous flow of funds once they announced that 50% or 75% of the goal had been reached. Some have thought it necessary to project a crisis atmosphere in order to keep the “need” front and center. Some have believed that people wouldn’t give unless the “wolf was at the door.” In reality, making donors and volunteers think a campaign is in crisis, can actually cause support to falter. We all know the expression, “Don’t throw good money after bad.” A campaign or an organizaion perceived to be on the road to failure is more likely to lose support and energy. Others have feared that good news could slow or even halt donations. That people would think, “They don’t need my money?” What those campaign leaders didn’t appreciate is the fact that success breeds more success. The philanthropic spirit is infectious. If most of the people around you are giving, it’s hard not to make a contribution yourself. People want to support winning causes. Prospective donors have their intent strengthened by good news. Volunteers doing the asking are...

Say No to Contingent Pay

"Why not work on a percentage, bonus or commission for funds raised?" I am often asked. To increasing numbers, that seems to be the new "wave" of things. They suggest that maybe the old practice of working for a salary–one that should be fair and reasonable–is not working anymore. "Times have changed!" they say. I, however, am never able to agree. When it comes to non-profits, I have long and unyieldingly stood against any form of contingent pay–compensating an organization's development staff based on a percentage of funds raised, a bonus, or a commission. Such arrangements, or any variations, are denounced by major associations representing professional development officers. They go so far as to state, emphatically, that contingent-pay is unethical. Most development professionals think it's a bad idea. I would go further than citing high standards and strong ethics as good reasons to have nothing to do with the contingent pay. Very real harm is possible for both individuals and organizations involved in a contingent-pay arrangement. An article I have written on the subject lists a number of very real and damaging consequences. Several years ago, I found my hard stance against contingent pay bolstered by a personal experience. I had been engaged by a major organization as a fund-raising consultant. During my several months serving the organization, I conceived, developed and produced fund-raising plans where there had been none. Annual, endowment, capital, sponsorship, and underwriting campaigns were all fully developed and were being phased into the duties of the organization's first director of development–a person I had helped recruit and hire. As I was nearing the end of...

When I Forgot the Meaning of Philanthropy

Recently, during a meeting at our Church, I talked to Alice, our pastoral associate, about my wife Joyce and I offering to give a special major contribution for a program she heads. Alice is in charge of a group who regularly review the cases of fellow parishioners in desperate need of money to pay overdue bills for household utilities, rent, mortgage, medical expenses, and other critical needs. I have a long history of assessing and evaluating the financial "sustainability" of non-profit organizations and know it to be one of the key factors donors use in deciding whether or not to make contributions. Grant-making organizations and donors in general want to be sure their money will both go to a worthy cause and be wisely used. While most solicitations of donors are made without the presentation of spreadsheets and statements, we know that numbers usually do count, and that at the very least we better be ready to produce them when requested. Thus, I found myself carrying forth those lessons learned from my non-profit evaluation experience when I began asking Alice questions at length about the designated recipients of our proposed donation. I probed the "worthiness" of those in need of the generosity of our gift. I asked questions such as: What degree of research goes into the amounts requested? How sure is the church that the beneficiaries will use the money for the purpose for which it is given? Will the recipients do their best to get on their feet so that further assistance isn’t needed? In the middle of a question, I suddenly stopped and began to silently...

Are You Responding to Inquiries Quickly Enough?

Nonprofit organizations are not entities with the principal mission to sell their goods and services in a way that maximizes the profit that reaches the bottom line. After all they are called nonprofits. However many nonprofits do have an earned income component. And all nonprofits need to respond to inquiries in a timely fashion, especially when those inquiries touch on the possibility of a donation.  So the question is, how quickly does your organization respond to inquiries, and do you do it speedily enough? Before you answer, read the next paragraph. According to the Harvard Business Review, companies that contacted potential customers within an hour of receiving a query were nearly seven times more likely to qualify the lead as those that contacted the customer an hour later — and more than 60 times as likely as companies that waited 24 hours or longer. Now, is your organization responding quickly...

Say Thanks even if You Don’t Get the Grant

I was greatly saddened recently to learn of the death of a key foundation official in our area whose generous and caring philanthropy was instrumental in giving me a running start as the new and first development director of a major non-profit organization. In my early months on the job, his was the very first large donation made to our organization. Over the 20 years of my business and personal association with Bob, I learned a great deal about the workings of granting foundations and how best to interact with them. Of all those relevant and meaningful lessons, one pithy incident has often come to mind, and it seems to me that it may offer good instruction for grant seekers. While preparing a fund-raising workshop, I wanted to add to the process of courting foundations in ways that would further build and maintain receptivity and loyalty to my organization. Principal among the tactics was the importance of showing proper recognition for the support given. I was thinking in terms of the usual display of gratitude for gifts given. But when I asked Bob if in the main, he was satisfied with the way in which grantees displayed their appreciation when they were awarded grants, much to my surprise, he responded by talking about grant requests he had turned down. He spoke of his disappointment over the years when he failed to get a note of appreciation if a grant was not awarded. Bob explained that for the most part all of the proposals the foundation received were put through an extensive review and evaluation process. The work was done...

Why Give to the Arts When People
Are Starving in the Gutter?

I actually read that riveting question in the marginal notes of a proposal for funding an orchestra. The notes were penned by a trustee of a grant-making foundation during a meeting to review the proposal. Another trustee of the foundation, the one who presented the proposal on behalf of the orchestra, later showed them to me and asked what I could do help counter his colleague’s questioning remark. Arts and cultural institutions are often forced into such defensive postures. They’re accused of only benefiting the elite. The needs of the hungry, the homeless, the physically, mentally and emotionally challenged are cited as so great that something as frivolous as the arts should not be drawing from the pool of available support for non-profit organizations. Those of us who work with and passionately support the arts are asked how we can justify "diverting" funds to the arts when such need exists. The arts community rightfully provides data showing its economic impact and benefit to the community—statistics tabulating the number of people employed by arts and cultural organizations, tourists attracted to the area, money spent on purchases from vendors, etc. Those facts deliver a true story, but they are not always compelling. Then there is the "quality-of-life" argument, but, it too does not always convince. We’re told it is too subjective, too broad, too general. I believe the answer is to stop defending the arts. That what we need to do is step out of the defensive posture our critics would force us into. We need to start asserting the value of the arts with some questions of our own. Would...

Use of Social Networking Sites on the Rise

If you are managing a nonprofit or some aspect of a nonprofit’s fundraising and have not yet found yourself faced with the question of what to do about online social network participation, you will be—and more likely sooner rather than later. Year after year the data keeps piling up, and it says social-media use just keeps growing. No organization can afford to ignore the constantly growing reach, power, and peer-endorsement clout of social networks. The latest study to reinforce that conclusion—Social Networking Sites and Our Lives—was released June 16, 2011 by the Pew Internet & American Life Project. Among its findings: In 2008, 26% of adults used an online social network; in 2010, it was 47%. In 2008 only 18%of Internet users over age 35 used a social network; in 2010, it was 48%. Average user age in 2010: My Space 32. Twitter 33. Facebook 38. LinkedIn 40. Percentage of users who check a social network site at least once a day in 2010: Facebook 52% Twitter 33% MySpace 8% LinkedIn 6% It’s hard to extrapolate exactly what all this and the rest of the far more detailed data to be found in the study mean to nonprofit organizations. But, the amount of time and the level of involvement that social media is garnering makes them a major conduit of communications and places to build awareness of an organization and its mission. For those who figure out how to turn that awareness into action, social media can become important sources of contributed income. Others have done it to the tune of millions of dollars—depending on the scale, appeal, and...

Can One Non-Profit Donate Money To Another?

I was asked if one 501(c)(3) non-profit can give money to another 501(c)(3) charity. With the usual, and necessary, caveat of, “I am not attorney, nor am I giving legal advice,” I responded that, Yes, when the transaction advances the donor non-profit’s charitable mission, a non-profit can donate money (and other resources) to another non-profit. In some instances doing so is an essential part of a non-profit carrying out its mission. Example: An orchestra could donate funds to an organization which seeks to develop overall marketing and PR education and outreach to that city’s arts and culture population. Along with that necessary start to the process, the donor non-profit needs to make absolutely certain that there is: No conflict of interest. Any person or persons responsible for the transfer of the donated funds must not personally (their families, friends, associates, etc.) benefit in any way. Example: The donated funds are used to purchase equipment in some way connected to business interests of a Board member of the donor non-profit No violation of donor restrictions. While exacting restrictions are not generally connected to most donations, nevertheless, the risk is that some donors would not approve of their money, in principle, going to another charity they did not choose, no matter how it fits or how worthy. No misuse of the donated charitable resources by the receiving non-profit. Should the receiving non-profit subsequently have publicized financial problems, even though the donated funds were not in fact misused, the overall perception of the receiving organization trumps the reality. Perception is everything. There could be serious trouble for the donor non-profit requiring it...

Survey Shows Blacks & Hispanics More Likely Than Whites to Support Causes Online

African American and Hispanic adults are more likely to make charitable donations online than Caucasian adults, according to a study jointly conducted by Georgetown University Center for Social Impact Communications and Ogilvy Public Relations Worldwide and released in June, 2011. Hispanics 39% African Americans 30% Caucasians 24% The study delineates beliefs regarding the support of causes, involvement in specific causes, and sources of information about causes for the three ethnic groups. The three groups ranked their belief in the support of causes in the following order: Caucasians Supporting our troops Feeding the hungry Bullying Tea party movement Global Warming Childhood obesity African Americans Childhood obesity Supporting our troops Breast cancer Feeding the hungry Bullying Global Warming Hispanics Supporting our troops Global warming Bullying Gay marriage Breast cancer Feeding the hungry Read a PDF of the study...

Foundations: Are They Really
Where the Money Is?

Why is it that the new and emerging non-profits all too often see foundations and other grant-making entities as their first and best source of funding? Why do they think that’s where the easy money is to be found? Is it because foundations are required by law to contribute a specific percentage of their assets to non-profit organizations each and every year? If you look at it that way, I suppose the logic is pretty simple. Non-profits need money, and foundations have to give money to non-profits. On top of that, foundations have a process that makes it relatively easy to ask for their money. You submit your proposal following their rules and await the answer. Whether the answer is yes or no, it’s a clean, straightforward process. No messy asking people for their own earned or saved money to support your cause. A match made in Heaven! Right? Not necessarily. Only about 13% of the funds given to non-profits annually comes from foundations, and about half of that 13% is from small foundations that are essentially giving mechanisms for individual donors. Think family foundations and those set up by individuals to further the causes in which they believe. So that makes about 7% of annual charitable giving coming from independent, grant-making foundations. On the other hand, about 75% of charitable giving comes directly from living individuals. Add to that the 6% that is provided by family and personal foundations, plus the 8% from individual bequests, and the total amount of charitable giving that rests in the hands of individuals is 89%. Think of foundations and individuals as two...

Raise-Funds.com

Raise-Funds is dedicated to providing information that can help nonprofit organizations survive and grow. Content falls into three main areas:

  • Articles written by experienced nonprofit managers and fundraisers.
  • A blog calling attention to whatever catches the fancy of site managers and contributors.
  • Curated content drawn from online and other sources.

Raise-Funds was founded by Tony Poderis. It’s main contributors have been Tony Poderis, Dave Patterson, and Joyce Braun Poderis. The site is managed by Dave Patterson with generous assistance from Zuri Group.


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