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Fundraising 101 Presented by:

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1 Fundraising 101 Presented by:
Erin Morantz, CFRE, KCI Ketchum Canada Inc.- Consultant Heather Wardle, Seva Canada - Director of Development

2 Agenda Understanding the language
Understanding the fundraising environment Understanding the donor Understanding fundraising programs Understanding the development process Understanding the role of volunteers Understanding the role of information management Understanding the role stewardship and recognition Glimpse at how the current economic downturn is affecting philanthropy ERIN Our purpose with this presentation is to give you a very high level overview of the basic theories and principals of fundraising in the hopes that it will provide you with some understanding and insight into the fund development process that will help you with your respective roles. We understand that there is quite a diverse group here – can we see by a show of hands, how many of you work for an organization where you are the only paid fundraiser? Please keep your hands up as I ask the next few questions. How many of you work for organizations where there is less than 5 paid fundraising staff? Less than 10? How many people have a database? How many of you have an annual giving program? A major gifts program? A planned giving program? This presentation is a quick overview of fundraising theory, for those of you who are new to it. And because it’s the topic du jour, we’ve sporadically included information about the economy and the impact it is having on philanthropy. Along the way, we’d like to share some personal anecdotes and stores that we hope will make some of this theory seem more “real” and practical. Feel free to jump in with questions and comments as we go along.

3 Fundraising Buzz Words
Acquisition Annual Giving Bequest Capital Campaign Case statement Cultivation Direct Mail Donor Donor Acquisition Donor Pyramid Donor Retention Endowment Gift In Kind Major Gifts Moves Management Planned Giving Prospect / Qualified Prospect Recognition Renewal Solicitation Stewardship Volunteer HEATHER

4 Philanthropy in Canada
Over 80,000 charities in Canada 6.8% gross domestic product 12% of Canadians employed in the charitable sector Revenues total $112 billion per year 78% of individuals 15 years and older donate money to charity ERIN Questions from questions

5 Distribution of Support from Individual Canadians
Wide Distribution Distribution of Support from Individual Canadians Distribution of Charities HEATHER Who do Canadian donors support? (Source: 2000 NSGVP) Religious organizations continue to receive half of all donations Health care donations up to 20% from 18% Social service organizations declined slightly from 11% to 10% Education and research about 5% International charities approx 3% ERIN Talk about what we’re hearing in the market place from donors with regards to how they are changing their giving focus due to the current economic climate

6 The statistics tell us…
Individual giving will be the cornerstone of successful development programs with major gifts leading the way Donors are more sophisticated and want “impact” and involvement HEATHER 85% of money donated in Canada comes from individuals or family foundations Individuals continue to make 7,8,9 figure gifts – however we are seeing that due to the economic downturn donors are taking longer to make decisions after an ask and gifts at the 7+ figure level are harder to come by. Donors are definitely being more cautious in making long term commitments. Bad news for large scale campaigns like I’m working on. The good news though, is that organizations are seeing record numbers of smaller donations come in. Again, there’s no research or stats to back this up yet, but it would seem that because everyone is feeling the pinch they feel like they have to take more responsibility and support people who are not doing as well as they are. ERIN Tell a story from current campaign

7 Who or what is a donor? Individuals & Families
Corporations / Businesses Employee Groups Foundations Government Associations/Clubs ERIN Basically any group or individual who chooses to make a gift they don’t have to make to a registered non profit organization is considered a donor. Give examples for each donor category. Non profits can include: associations (like Trial Lawyers Association of BC), political parties, public sector bodies (i.e. hospitals and colleges) or charitable organizations whose primary mission is to secure donations to benefit the cause they represent Only registered charities and political parties however can issue tax receipts

8 Why do people give? to demonstrate power
tax and financial planning considerations gain influence, professional advancement peer approval ego gratification/self esteem recognition from peers identify with a worthy cause of goal sincere desire to help/care belief in the mission immortality diminish negative feelings, guilt, fear, anger express deep emotion - grief (memorial) or Joy (commemorative) give something back for the joy of it. HEATHER

9 Why do people give? BECAUSE THEY ARE ASKED!!!!!!

10 What are Donors Looking for?
Positive image Vision, uniqueness, urgency Impact on community / society Strong strategic planning / financial management Prioritized needs Clear description and outcomes of the project(s) to be funded “Fit” with the donor Sense of permanence ERIN – cover the slide HEATHER – it would be great if you have any specifics here about what donors to international causes want

11 Donor Bill of Rights Information about mission, use of donated resources and organizational leadership Access to financial statements. Assurance that gifts will be used as intended Receive appropriate acknowledgement and recognition. Assurance that gifts handled with respect and with confidentiality Expect all relationships with organization be professional in nature. To know if those seeking donations are volunteers, employees of the organization or hired solicitors. To remove their name from mailing lists Freedom to ask questions. We will be distributing a list of websites and other resources to you – the Donor’s Bill of Rights can be found on the Association of Fundraising Professionals (AFP) website. The vast majority of registered charities subscribe to the Donor Bill of Rights and the Code of Ethical Conduct in Fundraising Practices. These rights and codes are adopted by all associations related to fundraising (i.e. association of fundraising professionals, association of health care philanthropy, Canadian association of gift planners). Most charities post the donor bill of rights on their website and include it in some of their literature.

12 Special Events or Fundraisers
Fund Raising Pyramid Bequests Major gifts Annual Gifts ERIN Special Events or Fundraisers

13 Donor Pyramids ERIN If you take a look at the traditional donor pyramid, the largest # of people are the enquirers and the smallest number of donors is the legacies but when you look at where the $’s come from it is totally reversed.

14 Annual Gifts Made from a donor’s cash flow
Do not require financial planning Support the ongoing needs of an organization – they are the sustaining gifts Many gifts at lower levels are sought HEATHER

15 “Ladder of Effectiveness”
1. Personal visit by a team 2. Personal visit by one person 3. Solicitation by personal letter with a follow-up phone call 4. Solicitation by personal letter 5. Group direct mail ERIN

16 Major Gifts Generally require thought or planning on the part of a donor Fewer solicitations for larger gift amounts Generally, the gifts support an organization’s long-term goals Donors can be individuals, corporations or foundations The key is that someone must ask for a significant gift face to face ERIN

17 Corporate Giving Corporations often have established giving criteria by which they judge programs and organizations seeking support They are not generally annual donors. Instead, they provide major gifts for programs and capital The face of corporate giving in Canada is changing in a number of ways ERIN – talk about the economy as it relates to corporate giving ANNNECDOTES

18 Corporations Looking Beyond Dollars
Strategic partnerships Longer timelines Greater scrutiny, higher expectations Need to manage competition and increase in requests Their context: spotlight on corporate governance, continued increase in competition, globalization ERIN

19 Planned Giving Includes gifts of shares, wills and bequests, life insurance, etc… Usually, only the most sophisticated organizations will have an organized planned giving program However, it never hurts to make donors aware of the options for giving available to them. HEATHER – story

20 The Donor Development Process
ESTATE Investment OR PLANNED GIVING Bequests / Legacies Planned Gifts Involvement MAJOR GIVING Endowment Campaigns Interest Capital and Special Campaigns ROSE The application of the Five I’s helps move donors up the pyramid. Not all donors will move up, but some will continue to make ongoing and bigger investments in the organization. Major Gifts from Individuals, Corporations and Foundations Information ANNUAL GIVING Special Events Annual Appeal, Direct Mail, Telemarketing Identification Small Gifts from the Public-at-Large

21 Donor Development Cycle
ERIN Another, more detailed way, to look at the five I’s is through the donor development cycle (or cultivation cycle or the relationship cycle). While this process works for all fundraising activities, it is especially critical in the major, capital and planned giving categories of fund development. The cycle always begins with the identification of potential donors Careful research should tell us who the prospect is, who they know, how much they might be capable of giving and what their areas of interest are. If they make the cut, then a program of cultivation is established. Cultivation is the steps you take to inform, interest and involve a potential donor. Cultivation activities can include meetings, tours, invitation to events, volunteer involvement. When the time is right (which is usually sooner than people think it is), then the prospect is solicited for their support. If they say no you put them back to cultivation and start all over again. No is only no for now, not forever. If they say yes, you recognize them appropriately. Recognition can involve thank you letters, plaques, donor walls, donor thank you receptions and a bunch of other stuff. Stewardship is the act of informing a donor about the use and impact of their gift. Good stewardship can keep a donor engaged with an organization and prepare them to be solicited yet again. And then you begin cultivating again. Sometimes its hard to understand the difference between stewardship and cultivation. Basically stewardship is for gifts that have already been given, whereas cultivation is for future gifts. But the better stewardship you give, the less cultivation you’ll need to do for future gifts.

22 The Constituency Circle
Board PAC Staff Students Donors HEATHER Particularly when you move into major and capital campaign gifts, there is a method for applying the cultivation cycle based on who is closest to your organization. When it comes to securing large, and even transformational, gifts, fundraising should always begin with those who are closest to the organization. They have already proven their commitment to the institution. Consider the college student heading off to school who needs tuition and living expenses. Who is he going to turn to for this funding? The next door neighbour? The parents of a friend? No, he will first turn to the people who have a vested interest in his success – his parents. That same principle applies in fundraising. You first turn to the people who most want to see you succeed. Employers, suppliers, successful alumni People or organizations with similar interests

23 Why do people volunteer?
Altruism Desire to make a difference Desire for status Employer encouraged employee Desire to develop skills and expertise Desire to build personal relationships Because they were asked HEATHER

24 Primary function of Volunteers
Governance i.e. serving on a board of directors Set policy, establish direction, hire/fire CEO, ensure fiscal integrity and financial health Program i.e. being a Big Sister or Big Brother Helping to organize a fundraising event Development i.e. fundraising (i.e. face to face solicitation) HEATHER Volunteers are one of the single most valuable assets a charitable organization can have. They can open doors, raise money, deliver services, and help ensure the charity meets its obligations to the community. Volunteers are especially critical to the success of major giving and capital campaign projects. Their leadership, influence and respect in the community can help open doors that the institution may not be able to open on their own.

25 Staff obligation to volunteers
Empower Lead while appearing to follow Provide opportunities for meaningful volunteer work Disclose appropriate information to enable them in their volunteer duties Provide orientation and training Provide job descriptions Conduct performance evaluations/give effective feedback Provide appropriate and frequent recognition HEATHER

26 Information Needed Biographical:
Individuals: name, address, contact #’s, spouse, employer Organization: name, address, contact #’s, contact names, address Relationship to charity Giving history, alumni status, volunteer involvement LAI / Prospect Info Link to the organization, giving ability, areas of interest, cultivation status Cultivation & Solicitation Activity Record of donor contact (call reports, briefing notes, action tracking, proposals submitted) Recognition & stewardship provided ERIN

27 How is Donor/Prospect Information Used?
To identify potential donors along with their LAI (Link, Ability, Interest) To track gifts for receipting and recognition purposes To track giving patterns in order to determine RFA (recency, frequency, amount) To track and coordinate “moves” with the prospect/donor ERIN

28 How is Donor/Prospect Information Collected?
Personal contacts Participation records (giving history, volunteer history, past contact between donor and charity) Public information (internet, newspapers, research sites, business journals, directories) HEATHER – ways of finding prospects

29 Ethics & Confidentiality
FOIPP (Freedom of information; protection of privacy) APRA Code of Ethics: Confidentiality, accuracy, relevance, accountability, honesty Donor Bill of Rights Code of Ethical Fundraising Practices HEATHER

30 Difference between Stewardship & Recognition
Stewardship is the process of ensuring the donor’s gift is used as intended and that the use, impact and results of their gift are communicated back to the donor, thereby gaining their confidence Recognition is one element of effective donor stewardship. Recognition can be used to honour a gift (annual) or the relationship (cumulative) or both. ERIN

31 Recognition Methods Naming opportunities Donor walls
Donor thank you events Plaques/mementos Thank you letters & phone calls Meetings with senior leadership ERIN

32 The key to good stewardship is communication.
Stewardship Methods Stewardship reports Newsletters Meeting with key constituents involved in the funded area. Invitation to events pertaining to the funded area (i.e. ground breakings, awards ceremonies). Tours The key to good stewardship is communication. ERIN

33 Helpful resources Henry A. Rosso, Achieving Excellence in Fundraising – the Bible of fundraising Association of Fundraising Professionals Canadian Association of Gift Planners fundraising articles by Mal Warwick

34 More helpful links An online gift range chart calculator Ketchum Canada Inc. and publishers of Philanthropic Trends

35 More helpful links
A showcase for fundraising Lots of resources and tips on online fundraising

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