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Fundraising audits inside and out

The fundraising audit is a major step in fundraising planning.  When you think about planning, you think about where are we, where do we want to be, and how are we going to get there?

The fundraising audit helps you to determine, where are you.  And, it is probably the most important step of the entire planning process.  If you don’t know where you are today, how can you even plan for tomorrow?  And, it is What is a fundraising audit?important to not only look at internal things that will impact your fundraising success i.e. Board of Directors, etc., but it is also critical to examine external factors as well.  Some external things that may affect the success of fundraising include political factors (i.e. election time), economic (a down economy), sociocultural (changing demographics), and technology (changes in the web, social media, etc.).  Development audits also tend to examine others in the industry including nonprofits serving the same type of causes, similar sizes, potential collaborators, and other market factors).

Also, one can examine the feasibility of conducting a future large-scale campaign. Currently, I am conducting a development audit for a nonprofit organization, and as part of that review, I am asking initial capital campaign feasibility questions to determine if a proposed future capital campaign would be a success.

An audit is just that, a systematic attempt to gather tons of data, and then analyzing and synthesizing this data against professional best practices.  While it is best that an objective third party person conducts this process, it can also be accomplished by a new in-house development staff member who still has an objective “eye.”  It is also helpful to have someone who has their finger on the pulse regarding what is shifting and changing in the philanthropic landscape.

A development audit is also a great way to engage key stakeholders i.e. Board members, donors, etc. who may need more cultivation.  It is just as much about the product as it is about the process.

Insanity is creating a fundraising plan without first doing an audit.

Do you have a long-term strategic fund development plan?

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Why do good grant applications fail?

Why good grant applications fail.

Yes, every grant you write will not be funded.  That is a reality.  I know, you and I both wish that they were, but that’s not always the case.

According to The Fund Raising School at the Indiana University Center on Philanthropy, these are some concrete reasons why foundations decline funding applications:

  • Failure of the applicant to follow foundation guidelines.
  • The project does not strike the reviewer as significant; statement of the project does not interest him or her.statement of the project does not interest him or her.
  • The applicant failed to include other prospective client groups in the planning of project goals.
  • The proposal is poorly written and hard to understand.
  • Proposal objectives do not meet goals of funding source.
  • Proposal budget is not within the range of funding available.
  • The funding source does not have confidence that the organization submitting the proposal can carry out proposed application activities.
  • Project objectives are too ambitious in scope
  • Proposal writer did not follow guidelines provided by the funding agency.
  • Evidence that the project can sustain itself beyond the life of the grant is insufficient.
  • Evaluation procedure is inadequate.

While it seems like this is enough to say it is not worth preparing proposals, it is.  Your organization must put in the time to research and adhere to the guidelines of each funding source.  Doing so will result in a much higher funding rate.  It behooves those who cannot do the proper research, or is unable to craft a detailed proposal, to outsource a particular proposal, or all of their grant writing needs to a professional.

A professional has the expertise to understand foundation priority areas, and can craft funding applications meeting the foundation’s requirements.  Also, professionals can propose collaborative partnerships that build confidence with funding sources increasing the rate of foundation success.

For more information about the grant writing services that I offer, check out a list of select winning proposals that I have written throughout my career.

Here are some more tips on preparing your proposal before it even goes out the door!

 

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How does your fundraising ROI measure up?

How are you looking at your fundraising rate of return?

It is critical that you develop a variety of ways to measure your performance and report theFundraising Effectivenessse results to the board.

In doing so, you are ensuring appropriate stewardship of your resources through demonstrating that your fundraising is efficient and effective.  While it does cost money to raise funds, as professionals, we need to be assured that we aren’t spending excessive amounts to do so.  While our board should be looking at these types of benchmarks, we can be sure that our donors and public is.  Take a look at the recent issue surrounding the Wounded Warriors national charity.

It is important that we do invest in fundraising and administrative costs in these functions appropriately, even though there is much criticism for doing so.

What constitutes a reasonable amount?

James Greenfield wrote several important books several years ago, and I regularly still find myself turning to his outline on how to best measure the costs of fundraising.  One book, in particular, has been especially valuable.  It is titled, Fundraising Cost Effectiveness:  A Self-Assessment Workbook and was written in 1996.  He highly recommends the importance of benchmarking to other similar organizations in the sector both aggregate and on an individual fundraising level.  What are best practice and industry standards and how does your organization compare?

It is only through this analysis that we can say that our fundraising is within acceptable boundaries of efficiency.

As a fundraising consultant, I spend lots of time auditing organization’s fundraising effectiveness through auditing their development function comparing it to industry standards.

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Are you stuck in the fundraising dark ages?

With some nonprofits, there seems to be a disconnect.  These groups have operated using the same fundraising methods as they did twenty years ago, perhaps with the same leaders leading the organization.

GUSA-2015-Source-Pie-Chart-2They fail to look at national giving trends that show individuals giving more than 70% of all contributed income and only 15% made by grants and foundations, with even less by corporations.  It is these same organizations that continue
to disregard these philanthropic findings and keep on doing things the same old ways that they have always been done.  Many of them are still chasing grants and foundation that perhaps take months to make decisions and often will not give again.  It is these same organizations that will pursue funding and put their missions in jeopardy suffering from extreme mission creep.  Even grants and foundations want to know that an organization can be self-sustainable.

Well, you know what happens to folks who resist change?  They can no longer go on.

This fact is the reality.

And, reality while tough, is causing those organizations who embrace it, to move ahead.

What is this new (or not so new) reality?  Well, the once dominant paradigm of transaction fundraising has moved to relationships and transformative fund development.  This fact means that no longer are transaction special events king, but long-term sustainable donor relationships rule.  That is what our donors are exactly craving.  They don’t want to make one-time gifts and then go away.  They want to have long relationships with organizations that are making the difference that they believe.  Once an organization begins to think and act along these lines, they see tremendous results.

So banish the few choices for donors, banish the no segmentation, banish the standard donor communications, banish the reliance on special events, banish trying to fit your donors into YOUR boxes and not theirs.  Banish, banish, banish – your old ways of thinking before you disappear.

Is your organization stuck in the dark ages of fundraising?

Step out now, before you can’t.

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Plan before you prepare your next proposal.

What are the first steps to your grant planning?

First you need to document your funding priorities with custom tailored cases for supports that can be used to match up to a funders priority.Get your grants system in order before you apply

Once you have outlined your needs, the next steps are to do some detailed research to identify potential funding sources.  It is best to document a foundation schedule that includes the foundation’s priority areas, critical deadlines, and application process, among other items.  There are some helpful grant research tools available including The Foundation Center and the Foundation Directory Online.  While this is a subscription based software, you can check your local library or community foundation for free public access.

Then, you can then move to contact the potential funding sources and cultivate relationships.  Yes, even the grant and foundation process is about cultivating and stewarding relationships.  It’s not just about submitting proposals and then wishing for the best.

Now, write your application.  Answer all the questions as needed – nothing more, nothing less.  Then hit submit, and wait, often a few months.  I should add; you can submit many applications now online.  While that does make the process somewhat easier than in years past, it has its complexities with character limits, some background materials to submit, etc.

The proposal awarded?  Congratulations!  Be sure that you can administer this grant before you get the award or even apply.  You need to keep a detailed compliance record to be able to report back to the foundation promptly how the organization used the gift and the outcomes obtained.  Be sure to keep close attention to the reporting deadlines and ensure that reports get submitted.  And, most important determine how you are going to acknowledge and thank this foundation for its gift.

One pet peeve of mine, inadequate tracking systems.  More than once, I have been the staff person coming into a new office and finding out that the organization did not submit a report in the past.  Imagine my dismay, when I need to figure out how the organization used the grant money three, four, or even five years earlier.  Don’t let this happen in your organization.  Report timely and ensure proper documentation through an organized file tracking system both electronically and paper.

If you didn’t get funded, don’t dismay.  That happens more than you think.  Take this as an opportunity to reach out to the funding source to determine what the reasons for this decision are to be able to refine your proposal moving forward and to determine if there is still a possibility of perhaps receiving funding from this foundation in the future.  Maybe the proposal wasn’t meeting a particular priority area of the foundation.  Perhaps another project would have more suitable.  Or maybe the foundation just wasn’t a good match.

Also, send an acknowledgment letter to the foundation even if you didn’t get a grant.  Thank them for their time and consideration, and they will be sure to remember your organization in the future.  Don’t hesitate to keep this foundation up-to-date on your programs and progress.  Cultivation continues even if you didn’t get this award.

So, just like all aspects of development, grant writing is about doing appropriate research, building relationships, and then making the ask.  And, of course, don’t forget the stewardship in following up, reporting, and keep them apprised of your progress.

Development Consulting Solutions has a strong grant writing track record.  Check out a sampling of career awarded grants, and then email us to book your free consultation.

 

 

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I have a motive, and it is a bequest.

Yes, I have a motive, and it is a bequest. As a young woman with no children, I have already created my estate plans. Yes, I have. And while those I love will be taken care of as they should. There is a time after they are gone when my assets held in trust will be given to a charity which will receive the bulk of my estate.

You may ask, why?My motive for a bequest

Well, undoubtedly motives for donors are all different.  Some decide to leave money in their estate to avoid taxes, some choose to leave money to obtain recognition.   There is a whole host of other important motivations. For me, it is because I want to give to a charity which has given so very much to me. And, this gift that I make on my death will be impossible for me to make during my life.

We all tend to live on a set amount of disposable income.  While I have had saved and invested, surely I am not willing to take a chance and spend down a considerable amount of my assets while I may still need them.  I still have a long life yet to live.  However, after my death, who cares!  At that point, I will be able to make the single largest gift that I will ever make.  For me, that is enough.  More than I could do while alive.

I should add that at one point, I had a significant number of charities in my estate to benefit from my death.  And, that is where stewardship comes into play.  For you see, some charities are so intent on “chasing” the big donors that they forget about those little folks making small gifts out of their disposable income.  What they fail to think about is that for some, this giving may just be the tip of the iceberg. Since estate gifts are surely revocable, all donors whether large or small should be stewarded in some way appropriate to each.

I can’t tell you how many times during my career that an organization  I was working with received a bequest from a donor who may have made one $10 or $25 gift during their lifetime.

I have thought long and hard about those local charities and have narrowed it down to one – one that is extremely near and dear to my heart and one that treats me like a person when I visit, call, or make a gift.

I have a motive, and it is a bequest.

 

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Insanity? Creating a fundraising plan without conducting an audit.

When developing a fundraising plan, I am often asked whether or not, I can skip the development audit analysis. And, I arguably say “no!”

A fundraising audit is probably the most critical stage of the entire planning process looking at where an organization is now, where it has been, and where do they want to be? Without knowing the answers to these questions, how can anyone put together a solid plan for the future?Importance of a fundraising audit

An audit is a review of all the factors within an organization that may impact how an organization can expect to accomplish in the future both internally and externally.

A fundraising audit is the first essential component of a healthy fundraising plan, and it provides the “Where are we now?” component. It is only when the organization has a complete picture of the organization’s current strategic position and each of the donor markets served can the organization hope to make meaningful objectives for the future.

So, when an organization says to me, “We don’t have the time to bother conducting a fundraising audit. We’re too busy doing the fundraising.” I say, that if you don’t have a roadmap for the future, you are always going to do what you have done and how do you expect your fundraising to do any better than it has always done? It is absolutely essential and critical to the success of any planning efforts.

Don’t skimp on a development audit. You will only be skimping on solid results in the future.  And, that is just plain insanity!

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A Case Study: Donor Acquisition – It Does Work!

This week, I had a conversation with one of my very first clients. And, I wanted to share their success story. You see, too many groups don’t want to invest in donor acquisition because they know that they will lose money – in the short-term. Who intends to invest in that, particularly if you are only thinking of the organization’s short-term success.

Donor Acquisition is itWell, this group had a total of 700 names in their donor file. And, they were in serious trouble operating in crisis mode. Person after person told them that they should not invest in donor acquisition, but
really what choice did they have. They knew that their donor file was suffering from natural attrition, and if they didn’t do something, they might as well not do anything at all.

They bit the bullet and against all odds decided to invest in donor acquisition. They hired a professional list brokerage and donor acquisition company who then supplied recommendations and advice on the records that best met their needs and premiums well suited to and representing their mission. Lists are usually anywhere from around $80 to $150 per thousand names and addresses for a single use. They also invested heavily in the acquisition renewal process, so that these first-time donors, would give again through a very intensive mail series. And, in fact, for the first seven donor acquisition pieces that they sent they did lose money. But, then the tide turned, just like it should with donor acquisition, and they began to see positive returns. And, not just with donor renewals, but with the acquisition mailing itself.

Now, several years later, they make money with their donor acquisition efforts. In fact, they are seeing donors who are sending in substantial donations as a result. In fact, they have received donations from donors renewing at $25,000 or more.

Further, they recently sent an urgent appeal to their donors in need of upgrading their sprinkler system. The result of this appeal mailing – net over $100,000.

So, when they started back in 2011, they had a donor list that had no more than 700 names. Today, that list has grown to well over 40,000 names.

Do you think that donor acquisition is way too costly for your organization? For this one small organization, it was, but if they wanted to be around, they had no other choice. While you may think that you cannot afford to invest in donor acquisition, imagine what could be achieved for your mission if you had a donor file that increased by over 5,500 percent in five years time!!!  How long has your donor file remained at the same stagnant number?

Donor Acquisition is THAT important to consider, and I know that you don’t want to, but to move your organization forward, you must. Your data file is declining just by merely being. What are you going to do about it?

More on donor acquisition in future blog articles.

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Younger people want to give, but can’t!

Younger donors don’t give as much.  You can chase the Millennials and the generation whatever’s, but if you don’t take into consideration the family life cycle, then you are misdirecting your energies.

What is the family life cycle I hear you ask?

Wills and Gubar (1966) identified nine distinct life cycle stages of a family.  1966 – and this information is still relevant!  They believed that that the age and composition of the family unit has a direct impact on the buying patterns of families.  And, as the family moves through the life cycles, these stages change as well.Family Life Cycle Stages and Giving

For instance, at certain points, giving decisions are made jointly with spouses, starting a new family impacts discretionary spending patterns, and levels of disposable income vary over the lifetime of a family.  That is why you see younger people not giving as much – while raising a family, they have less disposable income to give away, saving for their child’s education, and their retirement.  As folks age and their children grow up, these same folks have an improved financial position with more disposable income and fewer demands on the future and tend to give more.

Since 1966, there have been changes in the family unit that bring to mind some questions – what about single parent households, families having children later in life, and other family units?  How do those impact philanthropic giving patterns?

However, overall, I think it is fair to say that looking at where a family is in their particular life cycle stage is an important indicator of their propensity to give, and why I believe that younger folks, while wanting to be, just cannot be as generous as their parents.

 

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A great time for bequests, but are you ready?

Data from the U.S. Census Bureau indicate that the number of people dying in the United States will double in the next forty years. WOW!

Hard to read, but surely reality. And, sometimes reality is stark.

Planned GivingThe Baby Boomers will soon be facing retirement, old age, and eventually death. And, Baby Boomers will have more wealth to leave behind – significantly more than previous generations.

Researchers have been hard at work calculating the details behind this transfer of wealth. Their findings? They estimate that approximately $41 trillion will transfer between 1998 and 2052 from a predicted eighty-eight million estates. Of that $41 trillion, it is estimated that $6 trillion will transfer to charity.

However, as large as these statistics are, only around 18% of the nation’s wealthiest individuals presently leave a gift to charity in their will. While data is insufficient, it is estimated that a small percentage leave a gift in their will.

So, are nonprofits so focused on their annual operating support that they are failing to include planned giving as part of their fundraising strategy? Are we just not asking enough? I would garner to say this is very accurate. Most of the organizations that I work with are so focused on meeting the day-to-day operational needs of the organization that they cannot even think beyond into the future. Or if they can think about the future, they just don’t want to talk about death. Or they fear that they will take away from their annual support. Or they are just impatient, and can’t wait for planned gifts to mature because the income won’t be forthcoming for many years. Or perhaps they have such high expectations within their departments to produce that their focus is more on immediate returns and not for the long haul.

We keep talking about this enormous transfer of wealth, but what are we doing as fundraisers to begin the conversations. Conversations in our organizations that confront current expectations by our superiors to raise money for today. Or how we as fundraisers don’t want to grapple with sensitive topics as death with our donors. Or because we as organizations need the money today to keep the doors open for tomorrow. Or maybe because we don’t have enough knowledge about planned giving and what it is, so we just don’t want to bring up the subject.

All organizations both large and small absolutely must begin thinking about legacy giving.

I know one thing for certain, these statistics point to us as fundraisers to do a better job. And, so the question is, what are you doing to do that better job?

 

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We need money now! An ethical decision.

This week, I read a post by the very insightful Veritus Group. In the post, they asked,”When you think of your donor, do you first think of them as a source of cash – as a way to reach the goals you have set?”

This question indeed touched a cord in me. How many organization believe that donors are ATMs. We go to them; we ask them for a certain amount of money, we get the gift, and we get a receipt.Ethics of fundraising

I have worked for organizations that think donors are partners. How refreshing. And, then I have worked for organizations, that think donors are money as in the “We need money now!” donor.

I have a difficult time hearing donors referred to in this way. I can’t conceivably fathom such talk about another human being, mainly relating to them as if they were a transaction and not a living, breathing person with feelings, and beliefs, and values.

Over my career, donors have personally “cared” for me and my well-being. When I have been traveling, they have provided me with dinner. We I was in a new town, they ensured that I got home safely. When I was sick, they called. We built relationships. We were people connecting for a higher purpose. The “Show me the money attitude” just doesn’t work for me.

Do you view your donors as mere money machines? Do you love your donors just as much as they love your mission? Do you believe that donors should be treated with worth and dignity?

Ethically, I asked myself, would I as a donor want to be thought of or treated in such a transactional way? I couldn’t answer yes.

We are in a noble profession. We transform communities; ourselves, and the donor through the process of fund development. That is what I believe in about what I do.

And, ethically, I can’t operate otherwise.

Donors give to us because we have the highest ethical standards to do what is right. Trust is the basis of all we make possible.

Perhaps we need to revisit the “Donor Bill of Rights” and ensure that there is a clause in there about “to be treated as I would want to be treated by another, not as a machine, but as a person who has beliefs in and the capacity to support a mission.”

As a fundraiser, what I want remembrance for is my success on the job, both monetarily and ethically.

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When your donor loves you way too much.

For many donors who hold great wealth, they sometimes want to do more than just give. In fact, they want to shape directly rather than just support a charitable cause. This term is often called, “hyperagency.”

In most cases, that is fine. In fact, it is very welcomed. Paul Shervish, Director of the Center on Wealth and Philanthropy at Boston College, noted that hyperagency is “a distinctive characteristic of maWealth donors and mission creepjor giving because such donors are capable of establishing the institutional framework in which they and others live.” They want to produce rather than support.

Not often, but in some cases, the donor upon giving an enormous gift expects the organization to do what he or she wishes, changing the whole agenda of the organization. They want to determine what happens and when programmatically.

To me, this can become dangerous territory. For you see, just because someone has extensive wealth and wants to give it us, does not mean that we have to entertain “mission creep.” Our organizations have been founded to serve a community through a particular mission. It is the obligation of the organization and its Board of Directors to ensure the organization’s programs, and mission continues to be relevant to the community that it serves.

We often see “mission drift” in cases where organizations “chase” foundation funding just because it is available and whether or not it meets the orgazation’s mission. As a result, programs develop that are not mission consistent, and the organization begins to take on areas that they do not have a specialty.

A case in point, in 1907, a $3 million bequest left to Swarthmore College met this description: It was made conditional on the school ceasing all participation in intercollegiate sports. (Though tempted by the much-needed funds, Swarthmore turned the gift down.)

So, are you tempted to keep the gift or would you turn it down?

Well, if the gift is going to subject your organization to terms it couldn’t possibly meet or that are not consistent with the core mission, then yes, I say it needs to be turned down. Turning down a gift is a rather difficult decision. But, you must realize that you are bound to the donors’ wishes once you accept it. If you can’t abide by the terms whether impractical, unethical, or for other reasons, then you just need to say “no!”

The dilemma mentioned above points to the importance of having a Gift Acceptance Policy in place. Yes, I know these policies are so mundane, and I know you don’t have the time to create them, but, when you start seeking major gifts, you just may come across a situation like this. Even the smallest organizations have found themselves with donors wishing to make contributions that have binding strings attached. And, when you are small, it becomes especially difficult to say no to a massive infusion of cash.

This situation is more of an ethical and moral question. But surely, the ethics involved in fundraising must be a topic that your organization discusses at a strategic level (meaning Board), and Gift Acceptance Policies provide a basis for that discussion.

So, you don’t always have to say “yes” to a donor who loves you too much. In fact, sometimes, it is best to say no, if it means you won’t hold true to your core mission and the community that you are bound to serve.

What is your take on this ethical dilemma?

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