Financial Challenges: Fundraising for Reserves and Deficits

Transcription

1 2017 MCN Nonprofit Fundraising Conference Financial Challenges: Fundraising for Reserves and Deficits 1:45 3:00 pm, July 19, 2017

2 SESSION OVERVIEW 1. Your Party Hosts // Introduction to us and our organizations 2. Setting the Table // Midtown Greenway Coalition Financial History 3. Some Basic Nutrition // Discussion of Reserves 4. The BIG EVENT // Tour de Fat 5. The After Party Diet and Healing // Recovering from the Loss 6. Planning the Next Party // Key Takeaways and Your Stories

3 ABOUT MIDTOWN GREENWAY COALITION The Midtown Greenway Coalition is coalition of neighborhoods, organizations, and individuals who love the Midtown Greenway and want to protect and enhance it. Our mission is to empower communities to develop, improve, protect, and enjoy the Midtown Greenway as a green urban corridor to improve people's lives. CURRENT WORK SAFETY - Trail Watch safety patrol and a Crime Prevention Task Force. GREENING volunteers care for gardens and we foster the installation of new sustainable plantings. PUBLIC ART executing our vision that the Greenway will rival the sculpture garden as an art destination in Minneapolis. NEW PARKS AND PLAZAS - on land adjacent to the Greenway, part of a community vision for more trail access, greenspaces, public walkways, and plazas at transit stations. GUIDING NEW DEVELOPMENT - on land adjacent to the Greenway so that they front the Greenway. TURF-TRACK STREETCARS - in the Greenway alongside the trails, to provide a cross-town link connecting the Hiawatha Light Rail Transit line with the future Southwest Corridor Light Rail Transit line. BRIDGING THE MISSISSIPPI enhanced infrastructure to cross the River, building a new bike/ped bridge instead of or in addition to the existing bridge freight rail bridge.

4 ABOUT FOX ADVANCEMENT Fox Advancement believes in discovering the unique opportunity, the power of partnership, and fundraising from the ground up. Opportunity Partnership Ground-Up OUR CORE BELIEFS Advancing our client s business strategy so that it is relevant and compelling to the donor. Cultivating nuanced relationships that link the goals of the donor to the goals of institution. Amplifying our clients strengths by helping them develop sustainable methods and systems that match their vision.

5 MGC WHEN SOREN STARTED (2011) & in 2015 CASH 10/11 $9,103 CASH 10/15 $153,925

6 WHAT ARE RESERVES // WHY DO THEY MATTER Nonprofits with minimal or no reserves are more likely to have cut budgets, eliminated staff positions, reduced wages and benefits. They were also less likely to have been able to increase services to respond to growing demand. - Kate Barr, Nonprofits Assistance Fund An operating reserve is an unrestricted fund balance set aside to stabilize a nonprofit s finances by providing a cushion against unexpected events, losses of income, and large unbudgeted expenses. The most common trigger for use of operating reserves is on the income side, such as when a previously reliable source is reduced or withdrawn. Buys Time Programming Must Go On Practical Reasons Why Reserves Are Important When funding is lost, reserves can be spent down while new sources of funding are sought. Nonprofits exist to advance their missions, programs cannot stop on a dime. Reserves allow for programming to continue after funding has been lost. Barr, Kate. Nonprofit Assistance Fund, Nonprofit Operating Reserve Policy Examples

7 BUILDING THE RESERVE ACCOUNT Building reserves requires the cultivation of unrestricted funding sources. Tactic Cut Expenses Increase Annual Giving Laid off one FTE and reduced printing costs by lowering the number of newsletters. ED went on spouse s health insurance. Made a plan for individual fundraising, focusing on current and lapsed donors. Goal of 24-hour thank-you letters to donors, and personal thanks from ED for top donors. Also more frequent direct mail solicitation and an annual end of year thank-you (and tax receipt). Focus on Sustainers Implemented a monthly recurring sustainer program. Online Fundraising Special Events Focused more heavily on online fundraising both for ease of acquisition and to reduce cost & increase net revenue. Built the annual Greenway Glow special event annual fundraiser with corporate sponsors that raises $25K a year. Worked to increase Tour de Fat attendance and revenue.

8 TOUR DE FAT HISTORY The Tour de Fat is a traveling philanthropic beer, music, and bike festival that is a marketing promotion for New Belgium Brewing, a certified B Corp brewery based in Fort Collins, CO. In 2017, there are 33 cities on the tour. It has been in existence since 1999 and has raised more than $4.5 million for partnering non-profits since its inception. This summer Tour de Fat hopes to generate more than $600,000 in support of local causes. Bicycles are an important part of New Belgium s brand and they have always reached out to bicycle focused organizations to share the proceeds with. New Belgium takes responsibility for all of the event marketing and expenses, the partner nonprofit must staff the event with volunteers and the nonprofit receives the profits from the event as a contribution. Annual Revenue from Tour de Fat from MGC 2013 $15, $25, $25,000

9 CORPORATE PARTNERSHIPS & FUNDRAISING Corporate partnerships are important to all nonprofits, but they have their benefits and limitations. Benefits Transaction Size Resources Brand Power Awareness Limitations Reptilian Unsustainable Inflexible Corporate giving and sponsorship is one of the easiest ways for small and/or relatively young nonprofits to increase donation size. Most individuals give gifts below $1,000, but most businesses can give much more. Working with a corporate partner can give an organization access to significant resources. Tour de Fat was supported by significant marketing resources from New Belgium Brewing. Businesses are well known through their marketing and channel activities. Much better well known than most nonprofits. Corporations want recognition and to build awareness. Increased awareness of a nonprofit is almost always a benefit of working with a business partner. Corporations can be like reptiles. They can be cold blooded and only care about the financial bottom line. Corporations sometimes don t have a solid affinity to a cause. Their commitments can very greatly from year to year and from leader to leader. Corporations can be very specific about what they support. It can be hard to fit.

10 LOSS OF TOUR DE FAT When in a fight to the death, one wants to employ all one s weapon s to the utmost. I must say that to die with one s sword still sheathed is most regrettable. - Miyamoto Musashi Attendance 2014 = 3-5K Activities undertaken to by MGC and NBB to grow attendance NBB secured The Current as the Media Sponsor. TDF was added to the Aquatennial calendar as an official event. Increased social media marketing/advertising. Created a tiered compensation system to incentivize the other nonprofit partners in the event to help drive attendance. *Attendance 2015 = 3-5K *PS the weather was great

11 STRATEGIES FOR OVERCOMING THE LOSS The Midtown Greenway Coalition found itself with a projected $35,000 hole in its annual budget. What to do now? Activities undertaken to by MGC to close the budget gap New Fundraising Event New Program New House Parties New Online Crowd-funding Campaign New Board of Directors Give or Get Effort New Direct Mail and Major Gift Efforts Organized a replacement event similar content, audience and value proposition. Re-started dormant Green Way to Go program and grant writing activity. House parties hosted by Board members. Used to match a new art grant to complete a mural in the Greenway. MGC does not have a give or get policy but we had one for last year. Special mail, and social media appeals asking our constituency to close the gap. Calls to top donors to give special one time major gifts.

12 RESULTS $32K of $35K Gap Closed Only $3K Loss for the Year, which was easily covered by Reserves.

13 KEY TAKEAWAYS // YOUR STORIES Important takeaways from today s talk. Importance of Reserves Reserves can be built in a relatively short time Reserves are built with Individual Donors Work hard to close a gap when a key funder is lost The loss of a key funder is fundraise-able Organizations without reserves are more likely to cut staff and have a harder time growing operations to meet demand Building reserves is not hard and very small organizations can do it. Every organization can achieve a lot in a three year period. Individual Giving is key to building reserves. Annual appeals, donor relations, stewardship, retention, recurring support and online crowdfunding all help to move an organization toward sustainability. When a key funder is lost, the first thing for a Board of Directors to do is raise money. The goal is to make up the gap. It is not time for business as usual and hoping something will happen. When important operating support is lost, inform your constituency and ask them to give so programs can continue. Remember to still focus on program outcomes people do not donate to funding gaps, but to successful programs with outcomes that align with their values.

14 Online Resources Resources that have helped Soren in his career. Reserves Recovering a Deficit Increase Nonprofit Revenue Building a Strong Fundraising Organization