Effective Frontline Fundraising: A Guide for Nonprofits, Political Candidates, and Advocacy Groups

253 Pages·2011·5.14 MB·English

by  Jeffrey David Stauch

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matter material after the index. Please use the Bookmarks
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Contents
About the Author.............................................................................................................vii
Acknowledgments............................................................................................................viii
Introduction..........................................................................................................................ix
Chapter 1: Nonprofits, Cash Flow, and Philanthropy................................................1
Chapter 2: The Role of a Fundraiser............................................................................13
Chapter 3: The Gift Cycle..............................................................................................23
Chapter 4: Assembling Your Team..............................................................................35
Chapter 5: The Basic Tools............................................................................................55
Chapter 6: The Annual Plan...........................................................................................71
Chapter 7: Crafting Your Message...............................................................................93
Chapter 8: Stewardship.................................................................................................107
Chapter 9: Face Time.....................................................................................................125
Chapter 10: The Ask........................................................................................................149
Chapter 11: Major Gifts...................................................................................................171
Chapter 12: Political Fundraising...................................................................................193
Chapter 13: Charity, Advocacy Group, or Both?......................................................209
Chapter 14: Get Out There and Start Asking............................................................219
Appendix A: Additional Resources...............................................................................229
Appendix B: Example Appeals and Websites You Should Envy.............................231
Appendix C: Funding Sources beyond the Individual Donor..................................243
Index ..................................................................................................................................245

v
Introduction
There’s No Such Thing as Luck
My first job as a fundraiser was not glorious. I was working for a for-profit
company that contracted with progressive nonprofits that had opted to out-
source their fundraising operations. While the job was far from glamorous, it
was a great training ground, and I was fortunate to meet many people dedi-
cated to what we called internally the movement, or the left-wing conspiracy.
My first year, I was put in charge of directing the street canvassing office in
Boston, in the lead-up to the mid-term US elections. Our client at the time,
not surprisingly, was the Democratic National Committee (DNC). I worked
six to seven days a week, averaging more than 60 hours a week (and often-
times pushing 80). Three or four of those days, I was out with my crew, clip-
board in hand in a bright blue DNC t-shirt, waving down pedestrians with a
smile and a question along the lines of, “Do you have a minute for the
Democrats?” or “Have a second to talk about the mid-terms?”
The work was grueling, and there were certainly moments when I ques-
tioned what I was doing. Back at the office, the saying went: “The hours are
long, and the work is thankless, but at least the pay sucks.”
One of the first lessons I learned, direct from the mouth of one of the vice
presidents of the company, let’s call him Stan, during our week of intense
training in Newton, Massachusetts, was there’s no such thing as luck. It was an
interesting thought, and just counterintuitive enough to make all the young,
starry-eyed liberals in the room pause for a second to internalize what ex-
actly that meant.
Stan’s point was that becoming an effective fundraiser is about developing a
skill set, just as in any other job. His conviction proved true first in my job
canvassing on the streets of Boston, then down the hall as I grew the call
center of the canvassing company’s sister organization, and now, at a small
college in New England, soliciting six- and seven-figure gifts and coordinating
eight-figure solicitations in collaboration with the college administration.
ix
We often get into fundraising by accident; that was certainly the case for
me. I was fresh out of graduate school, and I took the first job I was offered.
Despite the long hours and lackluster paycheck, I was fortunate to have a
solid training program and great supervisors who were goal driven and
checked in weekly on how my staff was doing (or more frequently if per-
formance was down). In most of the nonprofit world, this type of diligence
and attention to quantitative data, at least with respect to the development
shop, is rare.
Granted, this organization was a for-profit, whose sole duty was to raise
money for nonprofits. The fact that nonprofits are outsourcing, however, is
a sign that they aren’t terribly good at doing the development work them-
selves. This can bring with it a number of problems, especially as an organi-
zation first turns toward making its fundraising department a professional
“shop.” Many clients that this company brought on were quite large: the
American Civil Liberties Union (ACLU), the Sierra Club, Save the Children,
the Democratic National Committee. All of these organizations were able
to make that investment to outsource significant components of their de-
velopment operations to a third party.
Smaller, younger nonprofits do not have that luxury. First, you might not
have the money to spend to pay the vendor. Second, and more important, it
is unlikely that you would be taken on as a client. The company I worked
for operates on a profit motive, so it wants to concentrate on clients that
already have name recognition, nonprofits readily recognizable to the aver-
age passerby on the street as canvassers like me tried day after day to flag
someone down. Name recognition matters. In fact, the company I used to
work for is now turning away business. So instead, young, protean nonprof-
its are left to their own devices when it comes to fundraising.
Even if it were financially viable for your organization to consider outsourc-
ing, I would recommend against it. As you’ll read later on, when I discuss
messaging in Chapter 7, when you outsource your fundraising operations,
you are also sacrificing a certain degree of quality control. You risk your
message getting convoluted by a profit incentive as opposed to a sincere
dedication to the mission that your nonprofit represents.
This book is intended to guide you through the steps of setting up a profes-
sional development shop, to help you come up with ambitious but achieva-
ble annual goals, to make you aware of the important behind-the-scenes as-
pects of the shop that are essential to moving your operations forward, and,
of course, to provide you with the necessary tools to solicit gifts ranging
from a one-time donation of $25 to a five-year commitment of $1 million—
or more.
x
You should walk away from reading this book with the confidence to ap-
proach your nonprofit’s top decision makers with a strong case for why you
need to develop and staff a fundraising shop, and why it is a wise (and ne-
cessary) investment in the organization you represent. You should also be
able to recruit, train, and manage a top-notch development team; come up
with a strong annual plan; craft effective messaging; and follow it up with
solid stewardship, which in turn prepares you to resolicit your donor base
all over again.
Another lesson, which I learned in my second fundraising post working with
a college’s “Young Alumni” program was this: You are not responsible for the
outcome of the conversation, but you are responsible for the preparation going
into that conversation.
To that end, this book will also teach you how to plan a great fundraising
trip, how to provide your prospects with meaningful follow-up, and how to
shine in your face-to-face meetings with prospects small and large. This
book will also provide you with lessons on how to solicit by phone and e-
mail, which will in turn help you to train volunteers to do so. In short, you
will learn how to ensure your organization has an impact on society for
decades to come.
Before we get into the details, however, let’s first look at philanthropy
within the context of the nonprofit world.
xi
C H A P T E R
1
Nonprofits,
Cash Flow, and
Philanthropy
Fitting the Puzzle Pieces Together
The aim of this book is to provide you with the tools necessary to expand
and improve your nonprofit’s fundraising operations. There are many rea-
sons that make the effort worthwhile. Most importantly, more money em-
powers your organization to do more of what it’s designed to do.
What you’ll learn is that there’s a lot of work that goes into an individual
solicitation, whether for $100 or $1,000,000. Preparation and follow-up is a
big part of what we do as fundraisers. The actual execution (i.e., the solici-
tation) is a small, small part of a much larger process.
The Road Ahead
This chapter will ease us into the wide, wide world of philanthropy. I’ll begin
with a broad sketch of nonprofits in the United States and where cash flow
and philanthropy intersect. I’ll then talk briefly about philanthropy, both in
the United States and abroad. We’ll end the chapter with a road map and
preview of the path that your fundraising shop might follow.
2 Chapter 1 | Nonprofits, Cash Flow, and Philanthropy
Nonprofits in the US
The best way to explain how philanthropy fits into the nonprofit world is
with an example. One with which I’m most familiar involves my current em-
ployer, a small liberal arts college in the heart of New England.
Like almost every college and university in the United States, it has three
main sources of revenue. The first and most visible source of revenue is tui-
tion. Every parent of a college-aged child knows about this one, as does
every student graduating with thousands of dollars of college debt.
For many small, liberal arts colleges, a full-paying family will spend over
$40,000 to send a son or daughter to college for one year. While a hefty
price tag, to be sure, this amount does not even cover the entire cost of
educating, housing, and feeding a student while at college, plus the costs of
extracurricular activities, such as sports, speaking engagements, social
events, etc. In many cases, the total cost is closer to $80,000 per year.
So, in the “best” of circumstances (i.e., when you have a full-paying student),
there is still a gap of tens of thousands of dollars between tuition and the
actual cost of obtaining an education. Also, since upwards of 40 percent of
students receive some sort of financial aid (the average grant at many col-
leges is about $30,000), the gap between a student’s family’s financial contri-
bution and the cost of educating that student is even greater. Financial aid
can represent 15–20 percent of a top college’s expenditures, usually second
only to what it spends on instruction.
How do such colleges make up the difference between the true cost of edu-
cation and the tuition charged? Many colleges and universities have endow-
ments that help to alleviate some of the cost. The endowment is invested (in
global equities, private equity, alternative assets, etc.) and grows over time.
Small colleges and universities have endowments ranging from hundreds of
millions to a few billion dollars (larger universities have endowments in the
multi-billion dollar range). An average “spend-rate” for a college’s endowment
is 5 percent,1 and the hope is that the endowment grows at a rate faster than
5 percent. In 2008–2009, the desired rate of growth was not achieved, which
got a lot of institutions of higher education into some pretty troubled waters.

1Institutions of higher education are not taxed on these endowments, so long as they’re actu-
ally spending the money. Some institutions have actually gotten into trouble, or almost gotten
into trouble, because their endowments had grown to such proportions that they were only
spending 2 percent.
Effective Frontline Fundraising 3
Even with expensive tuitions and large endowments pushing $1 billion, these
elite colleges still rely on philanthropic support in the millions, each year,
from alumni, parents, and friends.
Many schools in this category will, for example, raise $15–20 million each
year in expendable support (i.e., money that is spent immediately) and up-
wards of $20 million in endowed funds each year (i.e., money that is rein-
vested into the endowment and spent at the 5 percent spend rate).
This financial model is the industry standard for independent, private liberal
arts colleges and universities, insofar as there is an industry standard. Some
colleges rely more heavily on tuition than others, but philanthropy always
plays a role in keeping educational institutions afloat.
The college that I represent now, and the nonprofits on whose behalf I can-
vassed in Boston, are relatively affluent. When I was working as a canvasser in
Massachusetts, I was under contract with nonprofits that were large enough
to outsource their fundraising—large in the sense that they had the money to
spend on outsourcing and also in the sense that they had name recognition.
Some of the nonprofits that my organization represented were ACLU, the Si-
erra Club, Save the Children, the Democratic National Committee, Amnesty
International, Human Rights Campaign, People for the American Way, and
even political candidates. There was a time, in the heat of the 2008 presiden-
tial elections, that my organization had to turn away business because it did
not have enough staff to meet the demand for services.
Some of these very well-recognized nonprofits that outsource certain aspects
their fundraising also have in-house operations. Arguably, this ability to invest
in fundraising gives these nonprofits a distinct advantage over smaller non-
profits. One of the ways for smaller nonprofits to compete (and survive) is to
invest in their own development shops. Outsourcing fundraising operations
raises standards concerns and quality-control issues that can be avoided if the
fundraising staff is on a nonprofit’s payroll.
My own experience observing and managing canvassers that were fund-
raising for multiple clients at a time revealed several problems. Some of
those were tied to pay structure, while other problems arose due to the
fact that the canvassers were only indirectly working for the client. A good
number of canvassers were there solely for the paycheck, and they lacked
devotion to the cause of the nonprofit that they were representing. This
problem can be avoided by making the investment to pay professional fund-
raisers to represent the nonprofits directly.
Whether protecting women’s rights, saving the rainforest, eradicating
poverty, or sustaining the local soccer organization, many nonprofits find
4 Chapter 1 | Nonprofits, Cash Flow, and Philanthropy
themselves in similar situations: they are fiscally solvent, but are held back
from expanding programming because they are just making ends meet every
year. These nonprofits need someone to manage their fundraising programs,
so that they can worry about advancing their main goals.
You can bring your nonprofit to new heights if you make the leap of faith
that investing in a fundraising shop is a good idea.
Nonprofits Need Cash
Let’s face it: asking for money can make people uncomfortable. Often, when
I explain to friends or new acquaintances what I do for a living, the immedi-
ate response is “Oh, I could never do that!” My initial reaction is “Yes, fund-
raising is not for everyone,” but I think that this mindset is little more than a
mental barrier that must be overcome if you want to succeed in the non-
profit world.
Think about it: You asked your parents for an allowance. You negotiated a
raise. You negotiated the price of a new car. While not exactly the same
thing as asking someone for money to support a nonprofit, the skill set, I
would argue, is quite similar. You just have to begin to see it that way.
Sometimes, asking for money makes people feel somewhat ashamed, much
like asking for help with something that they should be able to take care of
by themselves. This mindset must be abandoned if you are to be an effective
fundraiser. This book will help you do just that.
It is also easy to start perceiving money, or those with money, as dirty, im-
pure, and compromising to your mission. This outlook is perilous. Money,
like it or not, is critical to your mission. The more quickly you can accept
this truth, the more quickly you can set your sights on doing a good job so-
liciting people for money.
One of the most disarming questions a new fundraiser can face is, ironically,
the most basic one. The question can come in many different forms, but
usually is something along the lines of the following:
(cid:1) Are you asking me for money?
(cid:1) What do you need from me?
(cid:1) What’s the bottom line?
We’ll get to how to respond to questions like these later on, but for now,
know that your prospects, particularly the savvy ones, are going to be asking
you these kinds of question every day, so you better have good answers at