As the nonprofit sector struggles to deliver more services in the face of diminishing government support, the need for effective private sector fundraising has never been greater. This session will provide practical guidance on important aspects of fundraising and “friend-raising” including telling your story effectively; selecting an efficient fundraising vehicle; identifying your best prospects; asking for financial support; and following up and building a relationship.
1. Present a clear, concise and compelling case for support
Potential funders want to know why they should support your organization as opposed to the many other, equally worthy causes seeking their help.
These funders are looking for: a clear mission statement, a positive image, success stories/endorsements, strong management, a sound strategic plan, and partnerships with other organizations. They are looking for uniqueness, urgency (but not desperation), and a clear prioritization of your needs. More than anything, they are looking for evidence of the tangible impact of your organization on the community: Whom do you serve and precisely how do they benefit from your efforts?
Package this information in a clear, concise, professional and persuasive way. Don’t spend money on overproduced and expensive brochures – it’s a bad signal of the priorities of your organization. “Less can be more effective”.
Partnerships or alliances with other organizations may increase access to fundraising, build service delivery capacity and create a unique package. It can also help establish credibility for a new organization.
2. Choose the most effective fundraising vehicle(s) for your organization
There are advantages and disadvantages associated with all fundraising methodologies – special events, lotteries, direct mail, internet, telemarketing, sponsorships, personal solicitation, etc. Some may not be appropriate for your particular circumstances. Focus on one or two vehicles which will provide the most attractive return on your precious time, staff resources, volunteer effort, upfront cost, and other limited resources.
- Personal and direct solicitation – most effective and efficient fundraising tool with the highest rate of return; relatively inexpensive, costs $0.10 -$0.15 per dollar raised;
- Special events have a place – they are good for raising profile, cultivating new donors or thanking old ones however they are not good fundraising vehicles as they suck up tremendous amounts of staff and volunteer time. Use special events in a very discriminating way; typically costs range $0.70-$1.50 per dollar raised;
- Lotteries – prohibitively expensive and risky for small organizations;
- Direct mail – reasonably effective, depends on your donor base, get professional help and don’t expect immediate results, a good return takes several years especially for new organizations; costs $0.40 – $0.80 per dollar raised;
- Telemarketing – a higher return than direct mail but significant front-end costs, takes several years to develop a constituency;
- Corporate sponsorship – can be fruitful but you have to have something of commercial value in terms of name recognition or linkage to a specific marketing group; corporate sponsorships can consume a considerable amount of staff time so cultivate these relationships strategically.
3. Identify your best prospects
Target prospects with the highest funding potential for your organization. Start with those who are the most familiar with your work, such as board members, service partners, close friends and current and past supporters. Pursue only those corporations, small businesses, foundations, granting agencies and individuals who have both the financial capacity and the potential motivation to support you. Prioritize those where you have direct or strong indirect linkages. Research each significant prospect and be clear about why this particular funder could/should support your organization. Research funding organizations’ track record and funding history; respond to their interests and customize your pitch to their interest.
Set specific fundraising objectives for your organization, i.e. we will approach 15 organizations this year and ask for x amount of money; don’t be unrealistically ambitious, approaching potential funders takes time and resources.
4. Ask for financial support
Don’t be shy about asking. Be professional, specific and persuasive. Clearly explain your case for support. What is your mission and track record? What are your most pressing needs? How much money do you want and how will you spend it? What are the tangible benefits which will result…for your clients, your organization, the community-at-large, and the donors themselves? Customize your appeal to each prospect, taking into account their interests and objectives as well as your own needs.
An excellent ‘asking team’ is the executive director/CEO and a senior volunteer/board member from your organization. Don’t hire a fundraising consultant to go out and represent your organization. Fundraising professionals are best used for training, mentoring and putting together a fundraising package. Training can include role-playing and team facilitation to develop chemistry. Make sure that the ‘asking team’ understands your organization thoroughly. To develop experience and confidence, practice first with an easy ‘ask’ – a funder who, ideally, is already familiar with your organization.
There are three main reasons why organizations are not successful at fundraising: they don’t make fundraising a priority in their organization; they hope that if they just do good work the money will flow to them; and fear of rejection.
5. Build relationships
The cornerstone of fundraising. Recognize and thank your donors and volunteers-personally and frequently. Continue to provide information to donors and potential donors about the fine work you are doing and the critical importance of their support. Share your success stories. Talk about your plans for the future. Ask their advice. Ongoing “friend raising” and stewardship pave the way for strong public relations and continuing financial support.
On an additional note, recruiting board members who are both donors themselves or strong fundraisers is of critical importance. Small organizations can use smallness to their advantage here: “When you come and help us or give to us even in a small way, it will have a disproportionate impact on our organization and be transformational for our clients.” In the same way, involvement in a small organization can also be transformational for a volunteer inspiring him/her to become a strong, passionate voice for your organization.
Good Resources on Fundraising
Charity Village’s Quick Guide to Fundraising provides an extensive number of articles and online resources on a wide variety of fundraising topics including grant writing, telemarketing, corporate sponsorships, direct marketing, telemarketing, and donor prospects.
Fundraising Ideas that Work for Grassroots Groups: This book was prepared by Ken Wyman for the Volunteer Action Program of the Department of Canadian Heritage, Government of Canada. It is slightly dated (1995) but provides useful, basic information on fundraising for smaller organizations.
The Canadian Centre for Philanthropy has lots of resources available online for fundraising, philanthropy, and the management of non-profit organizations.
Membership in the Association of Fundraising Professionals offers inexpensive luncheons, conferences, networking opportunities, guest speakers, audio conferences,
other resources. The plus of this organization is that it represents the breadth of development professionals across many sectors in the Toronto region