1. Lecture 3 – What Fundraising Funds
Lets explore why organizations raise money (i.e. answer the questions: what is fundraising going to fund?).
Learning Objectives:
Understanding of the three basic targets for philanthropy
Understanding how philanthropy supports the organizations mission
Apply personal case assignments to the classroom lessons

2. Lecture 3 – What Fundraising Funds
Personal Case Discussion
Hand in assignments
Questions
Challenges

3. Lecture 3 – What Fundraising Funds
The Planning Process will undercover funding needs of the organization
In order to design a development plan and implement a program, it is important to work with the finance office (and other departments) in order to prioritize the organization’s funding needs.
E.g. if your organization requires $150,000 of operating support each year, a gift of $250,000 for the endowment is not going to add value
Organization’s generally raising money to fund:
General Operating Expense
Capital Needs
Endowment

4. Lecture 3 – What Fundraising Funds
General Operating Expenses
Pay for the expenses that carry out the mission of the organization
Can be programs, can be salaries, can be services
Also referred to “General Fund” or “Unrestricted Donations”
Stigmatized
Interesting Parody: Organizations mostly need General Operating contributions, but they are the hardest to solicit/acquire due to:
Increasing trend of donors wanting ownership
Overall negative stigma of “paying for administrator’s salaries”
Difficult to marketing/report outcomes
Sustainability (will need again next year)

5. Lecture 3 – What Fundraising Funds
General Operating Expenses (continued)
Are recruited through:
Fundraising Events
Direct Mail Appeals
Corporate Sponsorships
Internet Giving
Grants (…however, requires some creativity)
Planned Gifts (e.g. bequests)
The task in recruiting philanthropy revenue to support General Operating Expenses is finding a component (or components) in your organizational budget where the impact of the gift can be measured.
E.g.: Aftercare Program, Charity Care, …

6. Lecture 3 – What Fundraising Funds
Capital Expenses
“Brick and Mortar”
New Buildings, wings, major renovations (that result in expanded or enhanced capacity)
Large pieces of equipment
E.g.: MRI, DaVinci Robot, TMS Chair, Van/Delivery Vehicle
Donations to fund capital expenses are recruited through:
Grants (foundations/government)
Corporate Gifts
Individual Major Gifts

7. Lecture 3 – What Fundraising Funds
Capital Expenses (continued)
Contra to General Operating Expenses, it is easier to recruit philanthropy revenue to support Capital Expenses because:
The project timeline is finite
It can be measured (you build it, order it, install it)
Appeals to wider masses (due to: naming opportunities, committee work,...emotion)
Its easier to recruit large gifts for capital since the overall project is also large
Multi-year pledges
The impact to the organization’s financial position – a bona fide revenue stream that can be leveraged!
A Capital Campaign is a specific fundraising initiative that occur over a period of years to raise a predetermined goal
Both timeframes and monetary goals of Capital Campaigns are both trending upward

8. Lecture 3 – What Fundraising Funds
Endowment:
According to the AFP Dictionary – is a permanently restricted net asset, the principal of which is protected and the income from which may be spent and is controlled by either the donor’s restrictions or the organization’s governing board.
Many organizations have an endowment that provides revenue to support operations or a specific program
Prominent in Academic Setting with growing popularity in Healthcare settings
e.g. Endowed Chair – The revenue earned from the fund is used to pay the salary (or specifics mentioned in the endowment policy associated with that endowment)

9. Lecture 3 – What Fundraising Funds
Endowment (continued)
Endowment Policies provide the details of the administration (and often the investment) of the endowment
4% of interest earned from the ABC endowment goes to support the salary of the Chief of ABC. Any additional earnings above 4% will be reinvested into the ABC endowment
The endowment will be invested in portfolio comprised of 40% stocks 60% bonds
ADVANCED: policies should consider the mission of the organization
Are recruited through
Planned Gifts (mainly bequests)
Major Gifts (primarily from Individuals)
Special Campaigns (major, regular individual giving, events)
Endowment funding is generally never recruited from Foundations or Corporations

10. Lecture 3 – What Fundraising Funds
In Class Assignment:
What does your organization fundraise for?
What is the % or $ amount expected (or raised) for:
General Operating Support
Capital Needs
Endowment
Get actual numbers from the most recent completed fiscal year and the year prior (for comparison) Note: might be able to get from annual reports; may need to contact someone (let them know you are a student – it will make the conversation easier)