Many organizations when seeking to start their first development office do not which way to turn or where to start first.
Far too many organizations often start and end with grant writing. They don’t get beyond this particular strategy and never get to the point of having a diversified fundraising function.
If done correctly from the start, organizations can set themselves up for success both today and well into the future.
With a few simple steps taken right from the start of your new fundraising office, you can create a strong and impactful program that will support your organizations mission well into the future.
Let me share with you steps on how to set up your fundraising office for success
1 – Start by conducting an assessment of the organization’s opportunities and challenges including getting an accurate read on the culture in which fundraising will operate. Does the organization have different programs and functions that operate differently, perhaps off-site, or on other campuses?
2 – Research and obtain a Donor Management System. Excel and Access are not database systems that you can efficiently use for development purposes. Today’s software is geared towards building the most effective development program at simple pushes of buttons. Many provide dashboards with important metrics built in so that you can instantly gauge important development benchmarks such as donor retention and donor engagement. Many also offer wealth screening capabilities for modest fees. These days an organization does not have to go with the top-of-the-line software suite to have a substantial impact on its development program.
3 – Then I would determine what the leverage points are for your organization based on the prospective donor base demographics. At this point, creating an ideal donor profile would be helpful. After creating this donor profile, you can then use that profile to find donors that match up to the characteristics that you have identified. This profile will help you to define your strategies. For instance, if you are a senior housing program, a reasonable approach that your organization should consider is planned giving and what I have termed a “Grateful Resident” Program. If you are a domestic violence shelter, then perhaps a special event to bring awareness to your mission.
4 – One thing that you can immediately start doing is to conduct grant research. Most charities are eligible for some form of private and public support. With the lead time necessary both in conducting research and in the application process, it behooves organizations to conduct the research straight out. Some application deadlines are months away and in some cases, foundations take months to make decisions. So, this is one area that you don’t want to delay in starting.
5 – Start to build a culture of philanthropy that supports your development program whether that is one-on-one meetings or “Meet and Greet” events. The important thing is to dispel myths surrounding fundraising. Most Board members do not have clear instructions and expectations regarding their role in fund development. Most are afraid of it, given the fear that they are expected to ask for money or to ask their friends in a “quid pro” way. So, meet and speak with those closest in your organization so that they get an understanding of what philanthropy and development are in support of your efforts. From there, you can work with each of them to begin developing a prospect list with a new understanding of the important purpose.
So there you have the simple steps that you can immediately take to build your organization’s first development office to support and even supercharge your charitable mission.
These are the same steps that I use when setting up a client’s first development office. And, they work!
Far too often I see organizations using a blanket approach with their donor base. With a few minor tweaks in their strategy, they can increase their revenues by a third, sometimes even double.
What strategies do I recommend?
Well, what I often see is that one of the most overlooked areas of planning in small to mid-sized nonprofits is segmentation and personalization of their campaigns.
What do I mean, don’t send everyone the same letter for starters.
Let me share with you steps on how to segment and then personalize your year-end fundraising efforts.
1 – Start by determining all of your different donor segments and audiences. For instance, you may have Board members, Honorary Trustees, major donors, planned giving donors, monthly donors, lapsed donors, LYBUNTS, loyal and consistent donors, staff, volunteers, etc.
2 – Once you have your “buckets” of possible segmented donors, then begin to think about your various approaches to them. For instance, with major donors “hold” their letters, and instead engage the Board of Directors in making personal visits and calls. Also, have designated staff members conduct an in-house campaign.
3 – Once you have determined your specific strategies for segments, you will move to creating your actual solicitation approaches. For personal and telephone solicitations, you may need a “pre-call” letter and a packet of collateral materials with the letter prepared.
4 – For the bulk of your segments, you will probably be utilizing some form of direct mail appeal. Do NOT use a “Dear Friend” letter. In today’s age, mail merging even in office is easy and simple to do.
5. I do NOT recommend using a generic, blanket letter approach. Instead, you want to custom tailor a letter for each segment identified. What do I mean? Well, in most cases, you are not going to create an entirely new letter for each segment. What I recommend you do is creating a paragraph or two of custom-tailored text that you will insert into a “base” letter. You may have loyal and consistent donors who have been giving to you for multiple years. In this case, you may have a paragraph front and center that thanks them for all their past support of the organization. For a sample of segments and custom tailored text, email me!
6 – You may also personalize gift strings. Personalizing gift stings helps to upgrade donors to a higher giving level. There are many formulas to use, but pick one and be consistent.
7 – Once you custom tailor the letter and the gift strings, then you need to determine if you will use a “lift” note or write personal notes right on the letters themselves and to what segments of donors are you using this technique.
8 – Determine how you are going to mail these letters. Major donors you may want to consider sending a personalized letter with a first-class stamp. Other donors you may want to use a non-profit pre-cancelled stamp or bulk mail indicia.
9. All of these techniques can be done for your online audiences as well. You can custom tailor segments in your email marketing provider program, create separate emails, and email out to them. Don’t forget when doing second or third emails to filter out all those who have given by using a dynamic filter.
So there you have the simple steps that you can immediately take to enhance your year-end fundraising campaign to inspire your donor’s sights to support your charitable mission.
These are the same steps that I use when designing and implementing my client’s year-end fundraising campaign. And, they work!
Each year, approximately 10% of your non-profit donor base will attrition naturally through death, moving, or just not giving any longer. Then you add lapsed donors on top of that natural attrition, and you are looking at an eroding donor list. Sound familiar?
In this article, I tackle the ever important question of “How to find new donors for your nonprofit?”
Here are some simple steps that you can take to combat this natural attrition and to begin adding new names to your donor list. These are the actual suggestions that I use with my very own clients.
1.) Conduct a fun exercise with your Board members such as a “Treasure Map” activity to help them to think of all those who they come into contact with in their networks i.e. people who they attend church with, volunteer on other Boards of Directors, friends, etc.
2.) Host a gathering or tour and have Board and staff bring those prospective donors to this event. This event should have a program that shares information about the organization and its mission, services, ways to get involved, and most importantly, a testimonial. Don’t forget to conduct follow-up with all those who attend these events to find out what they thought about the event and to determine further interest for engagement.
3.) Use social media as a way to find new donors. Consider having a presence on Facebook, LinkedIn, Twitter, etc. Don’t overwhelm yourself with having to manage and pay attention to too many networks at a time. Instead, be strategic, profile your ideal donor and then determine what networks that you are most likely to find them. Keep up to date on your competitor’s website and how they are managing their social media presence. Then promote, promote, promote and have your Board and staff act as “Social Media Ambassadors” sharing the page with friends, family, and other interested individuals. Keep content fresh, consider automating content with an automating app, and don’t forget to comment and interact with others. Keep content 80% of interest and 20% promotional.
4.) Take a look at similar organization’s annual reports, websites, and newsletters and compile a list of who is giving to them. Compile a prospective list of donors. Ask Board and staff if they happen to know anyone on these lists. If so, begin to cultivate them.
5.) Get the local voter or street records list, sometimes referred to as “Grand” lists and review this list with Board and staff based on property assessment, location, or other criteria that meet your ideal donor profile. From there pull together a prospective donor list and cultivate!
6.) Ask for referrals from your current donors. These donors already are giving to you and love you. So why not just ask them who else may they know who might be interested in becoming more involved in the organization.
7.) Be sure when you are doing outreach at events or speaking engagements to bring along a guest book so that interested attendees can sign up to receive more information. You have a captive, interested audience, so you want to be sure to get their names and contact information. Research them if possible, segment out those with greater interest and capacity for cultivation, and add all the other names to your mailing list.
8.) Identify new attendees to your organization’s fundraising events and create strategies that will take their transactional attendance to possible transformational engagement in your organization. One possible first step is to call those new attendees and find out what they thought about the event and if they see themselves getting more involved or interested in learning more.
9.) Capture interested website visitors with a website “pop-up” offering free information and resources. Send these folks a welcome and begin to send them relevant informational emails in cultivation. Ensure that your site is mobile-friendly as more and more folks are using their mobile devices to access content.
10.) And, of course, you can always rent and purchase mailing lists from a list broker.
So there you have ten steps that you can begin immediately taking to start to stem the tide of donor attrition by adding new names to your donor lists. These are the same steps that I use to help my clients build their donor lists. And, they work!
For a FREE half hour coaching session with me, email me now to schedule your complimentary time. Offer ends Friday, August 4.
A lapsed donor is one who has lapsed from giving at least a calendar year. They are the most significant donors to focus your efforts on re-engaging since they have already demonstrated an interest in your organization.
There are several ways to re-engage these lapsed donors. Here are some suggestions that you can implement within your organization.
Identify those donors who gave last year and yet have to donate this year. Those are your lapsed donors.
Add up the total giving from these lapsed donors. Surely after seeing this number, you will want to spend some time trying to recapture them.
Segment out the major donors from this list. A major donor giving level will vary from organization to organization i.e. $250, $500, $1,000, or even more.
Share this list with your Development Committee of the Board and discuss the plan of action.
Have Board members identify those major donors that they can personally call on.
Intend to call on these donors either through personal visits or telephone to secure a gift commitment.
Plan to send a specialized segmented direct mail letter to all others not identified as major donors.
You could also use this same strategy for each appeal that you send out to be proactively trying to prevent lapsing from occurring in the first place.
You have just been offered a job as a Director of Development and now what?
Well, over the past twenty years, I have had my share of jobs and have started some fundraising offices within nonprofits as part of my consulting practice. As a result, I have gotten pretty good at figuring out what the first steps need to be when setting up your development office.
I am going to share with you some of these first steps on what to get started with immediately to make your first three months a success. These first three months are a particular time of “newness” that you can use to your advantage.
Step #1 – Get established on your working location and equipment. Ensure you set up your office area so that it will be conducive to your work style and habits and ensure that you have all of the hardware and software you need including training.
Step #2 – If you don’t have the required software, don’t skimp by using Excel. Start right out by determining what your current and future needs may be and begin to research and present options for a donor database/CRM system that will meet those needs. You cannot build a successful development program without this foundational component. It is the “brains” behind your program.
Step #3 – Begin conducting a development assessment of the past fundraising efforts of the organization.
Step #4 – To carry out this assessment and to get acclimated to the new organization, use this time to meet with
Key leadership staff
Board of Directors
Any past and/or current donors
Anyone else deemed important to the organization
Step #5 – Use the data that you obtain during this development assessment process to begin to put together a series of recommendations based on best practices that you can put into place during your tenure. Share these recommendations with key leadership and Board members to obtain approval and “buy-in.”
Step #6 – Begin to immerse yourself in the new organization’s programs and services.
Step #7 – Begin to craft a Case for Support if your organization does not already have one in place.
Step #8 – Determine the key projects that need attention in the immediate future and begin to manage them. Get a handle on your development calendar including your annual fund and grant application and reporting deadlines.
Step #9 – Begin to put into place some of the recommendations that you outlined after conducting your development assessment whether they focus on major gifts, planned giving, individual giving, direct mail, etc.
These are some easy and straightforward ways that you can get up to speed quickly and efficiently in your new role and have an immediate impact on your organization’s fund development program. Early wins=your success.
Now that it is development planning season for many with the start of a new fiscal year looming, I am often asked, where do you start first when putting together your development plan and calendar.
Well, for me, I start at the beginning. I tend to look at the key metrics and how past Return on Investment (ROI) has been for each fundraising activity including events, appeals, major gifts, etc., etc., etc. By looking at ROI, you will determine whether or not a particular activity is effective or not. It prevents that “well we have always done it this way” or “we hold this event every year, so we can’t stop it now.” It allows you to keep the proverbial “winners” while deciding to eliminate those activities that are not as effective or are not meeting best practices.
I should add a disclaimer before I go on that – not all activities have a sole purpose of raising money! So, specific metrics would need to be developed for those particular activities.
So what are some of those key metrics and how do you calculate them?
I start by gathering:
# of pieces – # of pieces mailed to select group of the database or number of direct requests
# of gifts – # of gifts received by mailing or number of donors responding with gifts
Gross income – Income without expenses calculated or values of gifts and contributions received
Expenses – expenses of mailing including copywriting, design, mailing services and postage or amount of fundraising budget spent
Then I calculate:
Net income – Expenses minus gross income
Participation rate – # of participants divided by total solicitations
Average gift – Divide revenue received by participants
Average cost per gift – Divide expenses by participants
Cost of fundraising – Expenses divided by revenue
Net ROI – Net income divided by expenses; multiplied by 100 for percentage rate of return
I put this all in a spreadsheet document with like appeals spanning a number of years together i.e. Spring Appeal 2012, 2013, 2014, 2105, etc. So that ROI comparisons can be easily made. If you would like a sample copy of this Appeal Comparison spreadsheet to use for your purposes, email me here!
Then from there, I evaluate all of this data against Industry Best Practices in terms of Solicitation Activity Reasonable Cost Guidelines as found below.
Solicitation Activity Reasonable Cost Guidelines
Direct mail (acquisition) $1.00 to $1.25 per $1.00 raised Direct mail (renewal) $0.20 to $0.25 per $1.00 raised Special events $0.50 per $1.00 raised Volunteer-led personal solicitation $0.10 to $0.20 per $1.00 raised Corporation and Foundation Grants $0.20 per $1.00 raised Capital campaigns/ Major Gifts $0.05 to $0.10 per $1.00 raised Planned Giving $0.20 to $0.30 per $1.00 raised
If an activity meets the Reasonable Cost Guidelines then it is a keeper, if not, then it is time to evaluate why. Don’t throw an activity out solely on not meeting these guidelines, especially if you have other “goals” in mind for the particular strategy, but do be conscious of this in your planning process.
And, rightly so, the weather is turning warmer and everyone’s thoughts seem to be on getting out after a long winter.
I am often asked by organizations who are holding galas or other fundraising events, what is the key to turning event attendees into loyal donors?
I do have to say that this is not an easy feat in and of itself. Most folks who attend a fundraising event are doing so because they have either been invited, they are attending because it is a social night out, or for a host of other reasons that are not necessarily about a measure of donor commitment or loyalty.
I believe that there are a number of things that you can do to stimulate interest both pre, during, and post-event to at least begin to develop a relationship with some donors who may be interested in supporting your charity in a more transformative way.
I will outline several steps below that you can take to steward your event attendees after the event.
Here is a possible post-event stewardship plan:
New attendees – Call preferred for all by Board member with a relationship or other assigned designee. Mention donation made, how the money will be used, and learn about their possible interest in the organization.
Repeat attendees that did NOT donate – Handwritten note by Board member with a relationship or Executive Director. Thank for continued support of the event and ask about their interest in learning more about the organization.
Repeat attendees that did donate – Call if a relationship or donated more than $1,000, note for everyone else. Mention donation made, how the money will be used, and learn about their possible interest in the organization.
Donated but did not attend – Call if a relationship or if donated more than $1,000. Mention success of the event and how the money donated will be used. Ask about their interest in learning more about the organization.
People who donated significant auction items – Personal call by the person with a relationship and letter of acknowledgment. Executive Director and/or Board Chair may send a note as well. Mention how the money will be used and ask about their interest in learning more about the organization.
While you don’t have to follow this post-event stewardship plan to an exact science, the one thing that you need to do is to have already developed your post-event stewardship plan before the event even happens so that immediately after the event, you can put this plan into action.
Think expansively and creatively about how you can recognize your donors. But, the important part is to put some thought in it, to begin with.
Key things to think about:
Who? To what categories of event attendees? For instance, Silent auction and raffle donors? First-time attendees, etc. And, who will be doing the follow-up? Board members with relationships, staff with relationships, etc.
What? What vehicle will you use to steward your donors? Will it be a hand-written note, a telephone call, or a visit, etc? Will you use e-mail and social media? And, how? What is the message? What do you intend to share with them?
When? When will this stewardship take place? Immediately after the event? A week or so later?
Other follow-up and planned engagement? What planned follow-up after the initial engagement will you schedule in?
The key piece again, please do not wait until it is too late. Think through your post-event stewardship plan, seek buy-in and ownership from the Board, and be ready to implement fairly soon after your event concludes.
While these are some of the hardest folks to take from transactional to transformative, it can be done with a bit of thoughtful planning and strategy.
Don’t let your event, just be an event. Use it as a way to cultivate potential new donors who may be interested in who you are and what you do.
So, maybe you have been operating without a plan up until now. And, that is ok, but it is not strategic, and to meet your goals, you need to have a plan that you follow, monitor, and correct if needed.
Here are some simple instructions on how you can quickly create a development plan if you have been operating without one.
Once you have your gift chart created, it will guide your strategies. Take that gift table and think about how you are going to raise your top gifts.
Then break out all the possible fundraising strategies into key categories. Those key categories may be major donors, individual donors, Board giving, special events, corporation and businesses, private grants, government grants, and earned revenue.
Plan on how many you are going to solicit from each category and how i.e. individual donors you may send out a lapsed donor appeal, an annual renewal appeal, and perhaps a prospective donors appeal using direct mail appeal and maybe phone follow-up. Your complete mail out will be close to 1,000. You can even go a step further and calculate the average gift amount if you are able.
From the numbers that you will be soliciting and the calculated average gift amount determine what your estimated income will be. Know or have any expenses, calculate those and subtract them from your expected income, and you have a net income number.
Then the last key element of this plan is to determine when you will complete each strategy by and who is responsible for the strategy i.e. development staff, executive direct, Board of Directors, etc.
Then implement your plan. But, most importantly use this plan as a monthly monitoring tool. Share it at your Management Staff meetings and with your Development Committee or the Board of Directors. If it appears as if you are “off” on projections, make mid-course corrections and adjust your budget.
But, don’t let this sit on a shelf. Get it in action.
You may want to consider putting all of the key plan information in a spreadsheet to have it all in one place. Or you can use a Word document table. Whatever format you use, start with the gift table, develop the plan, keep this plan in a prominent place, share it and monitor it, and make mid-course corrections.
You can’t operate successfully without a plan in place to drive and focus your effort
Then you will be on your way to reaching your yearly fundraising goals.
One may think that there are only a limited number of donors to go around, but think again.
In my work, I assist small to mid-sized organizations in running their first capital campaigns. Many do not have established donor bases to tap into for an already existing pool of major donors. So, I assist. And, I am here to say that yes, you too can, even in your small nonprofit, develop a list of 25 or more possible major donors to your organization.
I am going to take you step by step on how to begin establishing that prospect list for your nonprofit organization and then share with you some next steps on how to prioritize that list.
Here are the steps you can take to develop your prospect master list:
Use informal organizational networks including organizational friends and family members i.e. Board members, staff, volunteers, etc. to identify prospects within their respective networks who have both wealth and affinity for the cause.
Ask your current donors when meeting with them if they know of anyone else who may support the cause.
Research prominent donors to other similar organizations who may be making small gifts to your organizations. It is helpful to obtain copies of their annual reports, newsletters, and even event programs to see the giving levels of the prospective donors. Annual reports may be found online or hard copy by request.
Research who has been attending your events. There are folks here who already know of your mission and may be willing to deepen their relationship with you.
Research others who live in your community who might give to you using voter, property (Grand), the local chamber of commerce, houses of worship, and other lists.
So now what do you do when you have all this information?
Here is what I recommend:
Cull through all these lists to create a Master List of prospects whom you think “make the cut” regarding any possibility of capacity, affinity, or connection.r
Let me define these for you.
Capacity – ability to give
Affinity – philanthropic to a similar cause or interest
Connection – involvement in your organization
Once you have this Master List developed then work with the fundraising/development committee, Board of Directors, or other volunteers (they should know folks in the community) to rate and rank each donor during a rating session to determine potential giving capacity, interest, and affinity.
And, from there you have a Master List of the top 20-25 prospective donors to your organization. Even the smallest of non-profit organizations should be able to come up with a Master List of at least 25 potential donors after following these steps.
So, your consultant has just finished your capital campaign feasibility study. The report is sitting on your desk, and you are wondering, where do I go from here?
Here are some possibilities:
The report may recommend that the organization takes some time to prepare its fundraising infrastructure before going into full campaign mode. Preparation may include things such as strengthening volunteer leadership, identifying campaign chairs, enhancing their fund development office, etc. The organization should take the time to heed these recommendations and work either internally or with the/a consultant to strengthen some of the key identified areas before mounting a full capital campaign effort.
In some cases, the report may recommend that the organization move into full capital campaign mode. In that case, the agency should seek to hire outside counsel either the firm that conducted the feasibility study process or another fundraising firm specializing in capital campaign management.
This report should be presented to the Feasibility Study Committee for review and once accepted by this committee; the committee should then give the report to the organization’s full Board of Directors for approval. Once the Board approves, it should move to act on the recommendation found in the study.
In no shape or form, should this study be allowed to slip away or be placed on a shelf somewhere. Time for action is now. You do not want to lose the interest of donors and other key community members who have been part of the process and in some senses cultivated for a capital campaign effort.
In fact, the organization should share an abbreviated format of the study with these key donors and community members, and seek their opinions and possible engagement in the findings and campaign next steps. The worst thing that can happen is that momentum is built through the study process and then grinds to a halt.
Accept the report, begin recommendation implementation, and engage key stakeholders throughout the process.
I often get asked from my clients, how many touchpoints do you need to give to a donor at a certain level?
And, my answer – it varies.
There is some science to the whole matter. In fact, after I conduct a rating and ranking session, I will combine all of the numbers and come up with a formulaic cultivation quotient. The number of touches estimated for a particular donor’s rating score and ranking.
To me, that is a guide. What we must remember is that each donor is an individual. They have different motivations for giving, different ways that they would like to be recognized, and different things that they are interested in giving to support. And, that means that they all have different cultivation and stewardship needs as well. So, while I could say that the cultivation quotient for Mrs. Smith came out to 20 touches per year, she may not want to be contacted or that involved with the organization.
I advocate that each necessitates a thorough review and a particular strategy custom and unique for them. And, often, it takes a wise fundraiser who has been in conversation with the donor to recognize what is or is not important to them.
Now, I am not advocating that we throw the “moves management” system of relationship-building out. However, what I am recommending instead is that we seriously advocate instead for a very donor-centered process that takes in the uniqueness of each donor into the “moves management” equation when developing strategies for cultivation and stewardship. Let’s not reduce our donors down to formulas, quotients, or tactics. They are people – unique and compassionate!