2/23/ which leads us to...working Smarter Not Harder!
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1 Principal, Elderstone Resource Development since training and coaching boards, chief executives and senior fund development teams Orchestras Canada Small Business Orchestras January 10, 2015 Cynthia J. Armour, CFRE Elderstone Resource Development Fundraising monthly columnist for Charity Village from inclusive Certified FundRaising Executive (CFRE) since 1995 and served as a Subject Matter Expert for CFRE International 2 8 at full board complement No orchestra (surveyed) has 100% annual donor support from its board but 16 say some support annually Higher percentage of board involved in special events and operations than strategy/governance 9 have volunteer committees supporting board work 8 provide Committee Terms of Reference 13 have a Fundraising/Development Committee (I should have asked if they re Event-oriented and I suspect so correct me if I m wrong!) 1 orchestra has a full-time fundraiser; 14 have no paid FR, remaining 7 have part-time 21 generate revenues from ticket sales, special events and business sponsorships (among other methods/sources but those areas scored highest) 14 consider Return on Investment somewhat when considering which fundraising activities to pursue 5 orchestras use Fund Development software to track donation revenue 4 issue tax receipts within 48 hours, 14 either weekly or monthly and 4 issue annually 15 identified room for improvement with donor relations have increased their private sector revenues by 1-15% over the last 2 years and 4 increased by more than 15%, 3 stayed the same, 4 decreased under 15% and 3 decreased by more than 15% The biggest fundraising challenge being faced by 19 orchestras was not enough time...which leads us to...working Smarter Not Harder! While not the most fruitful strategy it s typical for charities to move down this list of approaches as the organization matures: Special events including thing-a-thons, galas, silent auctions, etc. Sales of stuff people don t need (e.g. Chocolates...) Gaming (e.g. bingo, lotteries) Grant writing (project-specific) Direct mail/letter writing Sponsorships (business exchange) Major gifts (defined by your area & charity) Planned gifts(bequests, life insurance, etc.) 5 6 1
2 Direct mail acquisition $1.25 to $1.50 per $1.00 raised Benefit/Special events $0.50 per $1.00 raised (gross to net) Membership associations $0.20 to $0.30 per $1.00 raised Donor clubs $0.20 to $0.30 per $1.00 raised Planned Giving $0.20 to $0.30 per $1.00 raised Direct mail renewal $0.20 to $0.25 per $1.00 raised Corporations $0.20 per $1.00 raised Foundations $0.20 per $1.00 raised Volunteer-led led solicitations $0.10 to $0.20 per $1.00 raised Special projects $0.10 to $0.20 per $1.00 raised Capital campaigns $0.10 to $0.20 per $1.00 raised PROS (when planned well they might...) Bring in new supporters Engage existing supporters Offer publicity opportunities Recognize and steward donors and volunteers Have special appeal to targeted audiences based on theme Launch a new project or campaign Involve your community Provide sponsorship opportunities to underwrite costs so ticket sales are profit CONS Goal(s) often not defined Labour intensive work leads to burnout Not linked to mission May cost more than raised Detours resources Misses friend-raising potential when ticket-buyers aren t recorded Not necessarily a good ROI Results often not measured Lack of follow through with attendees Staff costs typically hidden 7 8 Total number of volunteers and estimated work hours Total number of paid staff and estimated work hours Income pledged and collected from the event Total expenses paid Net income from event Record 3 greatest benefits to the organization Record 3 greatest drawbacks of the event How would you improve volunteer participation? What changes should be made in staff participation? Do you recommend repeating this event? 9 10 Effective fund development depends on strong relationship-building and board/ volunteer/staff teamwork 80% of private sector donations come from individuals and out of that, 80% of their support comes from 20% of the donors (which is why fundraisers focus limited time and energy on major gift potential) People give to people they know and trust What challenges are you facing in building strong and lasting relationships with volunteers, donors and subscribers? Exchange ideas on what makes or breaks successful partnerships with volunteers, donors and subscribers
3 Linkage start with internal connections who can open doors or make introductions Ability identify prospective volunteers and donors who have significant capacity to give Interest be sure their interests and values correspond with your mission Focus your energy on the prospects with the greatest chance of success Define your non-market by recognizing those without Linkage, Ability or Interest and let them go at least until they meet two (ideally all three) L-A-I criteria Define your goal with a prospect (e.g.) Volunteer? Donor? Subscriber? Sponsor? Ask thoughtful questions and listen actively to your prospects responses Establish common ground by introducing the prospect to your cause and demonstrating how their interests coincide with your mission Engage major donors/prospects by seeking (and heeding) advice, inviting them to a special event or rehearsal Integrate the prospect s feedback into your strategic request Provide an irresistible, compelling case for investment based on your research and their priorities your goal is to address what s in it for them (not your charity) Must be ongoing, sincere and from a variety of players and levels Involve prospects, volunteers and donors in non-asking experiences Handwritten notes are still considered the most highly appreciated Channel your human and financial resources where the ratio of return is maximized Learn about your prospect from your prospects Say thank you even if they refuse your request! If you ve addressed L-A-I, it s probably just bad timing
4 Document a contact trail with prospects Insure that pertinent information learned during conversations is noted in the file Record comments you would happily share with the prospect and respect their right to privacy in the process Determine the right time to ask for the right purpose and right amount at the right location by the right person Major gift requests usually are face-to-face and for individuals, often include the (real or perceived) decision-maker s spouse A staff and volunteer (with the closest Link) often co-present in a well-researched, wellchoreographed minute meeting Written proposals to foundations and corporations should be succinct and clear Positively address the most resistant prospect imaginable Try not to exceed 15 minutes reading time maximum (grant officers are inundated) Tell a personal story and make the reader an agent of change Content should be factual and evocative Illustrate the case with verbal pictures Involve the reader with a good story or compelling quote (with permission) Focus on how the reader can make a difference Answer these questions succinctly: Answer these questions succinctly: How much money is needed over what period of time? What do you want to do? Who will benefit and how? What results do you hope to achieve? What are your expenses? and What are your expected sources of income? (demonstrate multiple investment streams) How will you raise the money required? What is your strategy for future sustainability of the project? Who is responsible and how will funds be spent? How will success be measured? What benefits or recognition will the donor get?
5 Expected Results Activities What do you want to accomplish? How will you accomplish it? Performance Indicators How will you know you ve accomplished your goals? What s the tangible evidence? Studies indicate that finding new donors and dollars is on the decline There are fewer new donors Retention of first-year and multi-year donors is falling Recruiting new donors can cost up to 10 times more than retaining existing ones! Source: Mutual Appreciation Advancing Philanthropy Jan/Feb Acknowledgement the process of saying thank you for the gift Recognition the process of publicly recognizing the gift Stewardship the process of using the gift as the donor intended Reporting - communicating with the donor about the use of the gift 93% would definitely or probably give again 64% would give more 74% would continue to give indefinitely 70% of donors would increase the overall value of their philanthropy if charities were more effective at acknowledging their gifts and communicating results Source: Effective Donor Relations Janet L Hedrick Source: Donor-Centered Fundraising Penelope Burk Communications meaningful, 2-way, frequency and face-to-face interaction increases as relationship grows Involvement or engagement in the life of the organization, treated as a member of the family, donor will talk about the organization using the term we rather than you Effective donor relations is an organizational philosophy, advocated by decision-makers and practiced by everyone. Source: Effective Donor Relations Janet L Hedrick
6 How do your charity s decision makers support donor relations? Separating fund development from philanthropy Treating giving as a financial transaction rather than an emotional act Trespassing on personal and professional relationships How can you improve the situation? Universalizing your own passion. Instead, find theirs or leave them alone and move on! Asking prematurely Source: Keep Your Donors, Tom Ahern and Simone Joyaux Nurture the relationship to develop commitment Evaluate interest and readiness for the request Ask and thank Monitor progress and measure results Source: Keep Your Donors, Ahern and Joyaux Be honest Be sincere and let your commitment show Be prompt Be regular Source: Relationship Fundraising, Ken Burnett Be interesting and memorable Be involving Be cheerful and helpful Be faithful Be cost-effective Source: Relationship Fundraising, Ken Burnett For already acquired donors, the things that influence their decision to give or not give again happen in the space between solicitations, not at the point of asking for a gift. That is why so many donors say that, once acquired, meaningful acknowledgement and measurable information become the ask; solicitation is merely the convenient point in time to offer the already-determined yes or no
7 Start with the board creating, approving and adopting a donor relations policy Form a donor relations task force involving board members, other volunteers, a development or administrative staff member, and some donors Analyze the donor base where gifts cluster and establish four or five preliminary (test) giving recognition levels Source: Beyond Fundraising, Kay Sprinkel Grace Assign names to giving levels. Avoid being too clever or too complex. If possible, keep names linked to the mission; otherwise use generic names Determine the (ideally no cost) benefits for each level Present the levels and benefits to the development committee or board for approval Source: Beyond Fundraising, Kay Sprinkel Grace Create a plan that promotes recognition levels in all donor outreach Thank before you bank Monitor and track the relationship between stewardship and recognition practices and renewal/upgrade of gifts Follow through on recognition and ensure names are spelled correctly and requests for anonymity are honoured Review the program, benefits, and impact annually, and adjust based on donor feedback, retention, and changes in the levels at which gifts cluster Source: Beyond Fundraising, Kay Sprinkel Grace Find opportunities to keep in touch and inform donors of news between asks Report back to donors on the impact of their gift; what difference is their support making? To increase your ability to build strong and lasting partnerships with donors, volunteers and subscribers identify one thing you intend to do differently in the next week and share it with the group. Cynthia J. Armour, CFRE Elderstone Resource Development Strategic Leadership & Management Phone: (705) Fax: (705) Web: answers@elderstone.ca
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