2nd edition Effective Fundraising for Nonprofits Real-World Strategies That Work by Ilona Bray SECOND EDITION JANUARY 2008 Cover Design SUSAN PUTNEY Production MARGARET LIVINGSTON Proofreading PAUL TYLER Index SONGBIRD INDEXING SERVICE Printing CONSOLIDATED PRINTERS, INC. Bray, Ilona M., 1962- Effective fundraising for nonprofits : real-world strategies that work / by Ilona Bray 2nd ed. p. cm. Includes bibliographical references and index. ISBN-13: 978-1-4133-0748-1 (pbk.) ISBN-10: 1-4133-0748-5 (pbk.) 1. Fund raising United States. 2. Nonprofit organizations United States Finance. I. Title. HG177.5.U6B73 2008 658.15'224 dc22 2007031796 Copyright © 2005 and 2008 by Nolo ALL RIGHTS RESERVED. PRINTED IN THE U.S.A. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without prior written permission. Reproduction prohibitions do not apply to the forms contained in this product when reproduced for personal use. Quantity sales: For information on bulk purchases or corporate premium sales, please contact the Special Sales Department. For academic sales or textbook adoptions, ask for Academic Sales. Call 800-955-4775 or write to Nolo, 950 Parker Street, Berkeley, CA 94710. Dedication To my mother, who showed me how commitment to a cause can help you accomplish things you never thought possible; and my father, who knows how to greet each new day with entrepreneurial optimism. Acknowledgments is book was envisioned as a collaborative effort, in which the voices of many nonprofit staff and experienced fundraising experts would be heard. Still, I was overwhelmed by the generosity with which the people named below offered their time, knowledge, and stories of successes as well as frustrations. You’ll see many of their names and stories within the book—others preferred to play a more behind-the-scenes role. My deepest thanks to all of them for their contributions, and for keeping me inspired during the many months of pulling this book together. In addition, I’d like to thank the various organizations whose sample letters and printed materials you’ll see throughout the book (not listed below). Bob Baldock, KPFA Radio Randolph Belle, formerly of the East Bay Nonprofit Center Lauren Brown Adams, nonprofit fundraising consultant Sarah Clark M. Eliza Dexter, formerly of Save e Bay (Oakland) Grant Din, Asian Neighborhood Design Laurie J. Earp, events planner Lisa Ruth Elliott, Zen Hospice Project Jan Etre, KPFA Radio Judy Frankel, Project Open Hand Susan Freundlich, e Women’s Foundation (of San Francisco) Lupe Gallegos-Diaz, Multicultural Student Development Office at UC Berkeley Karen Garrison, Bernal Heights Neighborhood Center Schuyler Gottwald, PTI Graphics Leanne Grossman, Global Fund for Women Christine Grumm, Women’s Funding Network Keven Guillory, KQED Radio Don Kiser, formerly of the Human Rights Campaign Pat Joseph, Sierra Club Lynn Eve Komaromi, Berkeley Repertory eatre Greg Lassonde, San Francisco Symphony Sophie Lei Aldrich, Boston University Marisa Lianggamphai, formerly of the World Institute on Disability Harry Lin Jim Lynch, Compumentor Sonja Mackenzie, WORLD Kate McNulty, formerly of Sacred Heart Cathedral Preparatory Susan Messina, professional grantwriter Cathy Meyer, Children’s Hospital & Research Center Foundation Nick Parker, Communications Director, the California School Age Consortium Angelina Ramsay, independent marketing consultant Peggy Rose, San Francisco Mime Troupe Ron Rowell, e San Francisco Foundation Jim Schorr, Juma Ventures Duane Silverstein, Seacology Linda Solow-Jaffe Elizabeth Stampe, Greenbelt Alliance Anthony Tusler, World Institute on Disability Amanda Vender, DAMAYAN Mona Lisa Wallace, formerly of the East Bay Nonprofit Center Anita Wetzel, Women’s Studio Workshop Lauren Williams, Mission of the Sacred Heart J.R. Yeager, CompassPoint Nonprofit Services Audrey Yee, Golden Gate National Parks Conservancy Many of my colleagues at Nolo also helped this book in important ways: Marcia Stewart, with early conceptualization and advice; Stan Jacobsen, with research; Jake Warner, whose first-draft edits incorporated his own extensive nonprofit as well as business experience; final editor Lisa Guerin, who took the manuscript up a notch with her wit and practical instincts; Wendy Copley, with technical advice on blogging; and the production folks, with all-important design and graphics help, including Margaret Livingston , Jaleh Doane, Emma Cofod, Susan Putney, and Toni Ihara. A final special “thank you” to C.S. and other friends, for ongoing support, and for apparently remembering my name even after these many months of self-imposed hermitage. Table of Contents 1 Your Fundraising Companion 1 2 Fundraising Tools 5 Fundraising People 7 Fundraising Skills 33 Fundraising Equipment and Technology 43 3 Developing Your Fundraising Plan 55 Getting Started: Set Your Fundraising Goal 58 Evaluate Your Nonprofit’s Fundraising Assets 69 Develop Your Fundraising Strategy 75 Create the Final Plan 83 4 Attracting Individual Supporters 85 Make Your Organization Look Support-Worthy 87 Understand What Motivates Your Supporters 96 Bring in New Supporters 106 5 How to Keep the Givers Giving 141 ank Your Supporters 143 Communicate Your Essential Message 146 Invite Supporters to Get More Involved 158 Analyze Your Donor Base 159 When to Call Your Supporters 162 6 Midscale and Major Donors 167 Background Research 169 Get to Know Your Existing Supporters 176 Annual Renewals of Support 183 Lectures, Small Events, and Parties for Major Supporters 184 One-on-One Meetings 189 Setting Up a Focused Major Gifts Campaign 206 7 Funds From the Great Beyond: Bequests and Planned Gifts 211 How to Attract Inheritance and Other Planned Gifts 214 Handling Simple Inheritance Gifts 216 First Steps Toward Attracting Inheritance Gifts 224 Preview of Other Planned Giving Arrangements 235 8 Special Events 239 Survey of Special Events 242 Choose the Right Event for Your Organization 262 Develop a Realistic Budget 265 Plan and Pace Event Activities 270 Deal With Risks and Liability Issues 278 Last-Minute Tasks and Tips 281 After the Event 283 9 Raising Money rough Business or Sales Activities 287 Tax Rules for Business Activities 290 Learn From Other Nonprofits’ Experience 298 Develop Your Own Great—And Low-Risk—Business Idea 310 Measure Your Ideas Against Reality 316 Final Planning and Test Runs 322 Licensing, Sponsorships, and Other Relationships With Existing Businesses 329 e Next Steps 333 10 Seeking Grants From Foundations, Corporations, and Government 335 Understand the Funders 336 Research Grant Prospects 343 e Proposal Process, From Query Letter Onward 359 Follow Up With the Funder 382 Grant Renewals 384 11 Creating Printed Communications Materials 387 Brochures 389 Newsletters 392 Annual Reports 395 12 Designing Your Website to Draw in Donors 403 Basic Contact Information 406 Your Organization’s Personality 407 Freshness 412 Content 415 Donation Information and Opportunities 416 Information on Where the Money Goes 421 Information About Funders and Donors 422 Tracking Users 422 13 Media Outreach 425 What Makes a Good Story 427 Who to Approach With Your Story 433 Pitching and Placing Stories 443 Protecting Yourself in Media Interactions 456 A Appendix 461 Fundraising Worksheet 1: Sample Cost Analysis Fundraising Worksheet 2: Fundraising Assets Fundraising Worksheet 3: Fundraising Strategy Chart Fundraising Worksheet 4: Mailing Evaluation Fundraising Worksheet 5: Meeting Checklist Fundraising Worksheet 6: Projected Special Event Expenses Fundraising Worksheet 7: Projected Special Event Income Fundraising Worksheet 8: Grantseeking Chart Fundraising Worksheet 9: Grants Worksheet Fundraising Worksheet 10: Check Your Website’s Fundraising Effectiveness Fundraising Worksheet 11: Press Release Template I Index 484 Your Fundraising Companion “B ut I don’t have time to read a book on fundraising!” If that phrase could have come from your lips, you’re not alone. I’ve worked in some of the hardest-to-fund nonprofits around, and fully appreciate that you may be reading this while simultaneously gulping down lunch and photocopying a grant proposal. But you probably know in your heart that when a person is too harried to learn to do fundraising right, mistakes and inefficiency are the inevitable result. With all this in mind, I’m going to skip the traditional lectures on personal philosophy and fundraising history, and get right to the heart of the matter: how this book will help you succeed as a fundraiser. It’s an attempt to distill and assemble, in plain English, the most important things you need to know in order to do your fundraising job well (most likely as a development director or staffperson, executive director, or board member). I won’t be expounding new theories of nonprofit philosophy, or giving you touchy-feely ways of using Jungian symbols to contemplate your mission. (I’ve sat through too many meetings and retreats that did just that, without giving me any new information on how to actually raise money.) Instead, I’ll discuss how fundraising is being done, at its best, today. Gone are the days when a nonprofit could charm people with its desperation and grassroots inefficiencies. You’ll learn how current technology, business savvy, and public attitudes toward nonprofits are shaping the fundraising environment. You’ll get right into the nuts and bolts of how to plan your fundraising strategy, assemble the right people, technology, and other tools you’ll need in order to maximize your returns, attract supporters, ask for gifts from individuals, businesses, and foundations, and much more. ough this book will teach you the basics, it will also help you to think creatively. By understanding how other nonprofits are raising funds, you’ll be better able to think up ways to outdo them, or to see where bending the rules a bit may attract positive attention. roughout the chapters, you’ll find stories 1 CHAPTER [...]... them for help on a regular basis Performing minimal board activities—attending meetings and the occasional workshop, for example—can be less than soul-satisfying Ideally, you want board members to see that raising the money your group absolutely needs to do its good work 16 | effective fundraising for nonprofits What If the Board Just Won’t Fundraise? Coping with board members who won’t take the fundraising. .. marketing, fundraising, and human resources, and places them in nonprofits that have successfully gone through a service grant application process • Volunteer Match, at www.volunteermatch.org This site presents some interesting focuses, such as getting companies involved in group volunteer efforts, and virtual volunteering for those who want to work online, from home 26 | effective fundraising for nonprofits. .. for chapter 2 | fundraising tools | 7 501(c)(3) tax-exempt status and any required state tax permits In addition, most states require you to register with the attorney general before soliciting funds within that state, and many states also require you to report on your fundraising expenditures and revenues For further information on these requirements, see the links provided on the Association of Fundraising. .. job, leaving the nonprofit with a huge leadership and fundraising void J.R Yeager of CompassPoint notes that, “The 10 | effective fundraising for nonprofits wise organization (no matter its size) engages in ‘Succession Planning.’ This means having an internal structure in place where a formal and clear line of succession, cross-training, and information sharing is planned in advance, so that a ‘void’... sued or collapses as a result, they can be held 12 | effective fundraising for nonprofits financially accountable (Many boards buy insurance to guard against this type of liability.) As a practical matter, a good board not only sets the direction of your programs, but will also be critical to the success of your fundraising efforts, both by making fundraising an organizational priority and by participating...2 | effective fundraising for nonprofits from experienced development professionals—many of them at small, struggling nonprofits whose constraints may be similar to yours—who’ve employed interesting strategies to gain fundraising success The next question is, how much of this book do you really need to read? Every ne should start with Chapter 2, which lays out all the tools you’ll need o for effec... group might actually need: perhaps scientific or other professional information, community input, contacts with the rich, famous, or influential, or continuity 18 | effective fundraising for nonprofits with your organization’s past That means you might look for members who are experts in a certain field, represent a community you’d like information from, are well known (whether or not they’re in a field... successful fundraising office will always be in close communi ation with c the rest of the organization, and can call on program staff as needed For starters, you want program people to keep your office informed about what they’re doing, including supplying you with interesting stories (with photos, if possible) illustrating the important work donors are funding 20 | effective fundraising for nonprofits. .. disaster shots Although evocative photos of grieving family members and emaciated victims are undoubtedly moving, and can be of some use in fundraising, more upbeat pictures showing your successes are 22 | effective fundraising for nonprofits usually even more effective For example, a photo of the new buds of a nearly extinct flower that your group helped preserve will be far more powerful than a photo... plans are for the future, fundraising plans included Also encourage brainstorming about fundraising A staffer may have the next great idea for bringing in support As program staff hopefully get more attuned to the symbiotic relation hip s between themselves and your fundraising staff, you’ll want to encourage the more charismatic ones to help you with occasional, specific fundraising activities for example, . 461 Fundraising Worksheet 1: Sample Cost Analysis Fundraising Worksheet 2: Fundraising Assets Fundraising Worksheet 3: Fundraising Strategy Chart Fundraising Worksheet 4: Mailing Evaluation Fundraising. Capabilities 53 2 CHAPTER 6 | EFFECTIVE FUNDRAISING FOR NONPROFITS S ince the days when fairy tales were first told, people have been looking for a way to spin straw into gold. Unfortunately, this impulse. reproduced for personal use. Quantity sales: For information on bulk purchases or corporate premium sales, please contact the Special Sales Department. For academic sales or textbook adoptions, ask for