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Fundraising Lecture I Fundraising Trends, Reasons for Giving, Strategic Planning, and Readiness

Fundraising Lecture I Fundraising Trends, Reasons for Giving, Strategic Planning, and Readiness. Walter C. Farrell, Jr. Professor of Community Management & Policy Practice School of Social Work . University of North Carolina at Chapel Hill Chapel Hill, North Carolina 27599-3440

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Fundraising Lecture I Fundraising Trends, Reasons for Giving, Strategic Planning, and Readiness

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  1. FundraisingLecture IFundraising Trends, Reasons for Giving, Strategic Planning, and Readiness Walter C. Farrell, Jr. Professor of Community Management & Policy Practice School of Social Work .University of North Carolina at Chapel Hill Chapel Hill, North Carolina 27599-3440 wcfpr@bellsouth.net

  2. THE NUMBER OF 501(c)(3)ORGANIZATIONS 1988-PRESENT • In 2012, there are more than 1 million nonprofits registered with the IRS. This represents a more than 18% increase since 1996 and a more than 70% increase since 1988 • The number of nonprofits is actually larger than this number indicates (as many operate without formal status) Not included are most religious congregations, local affiliates of national organizations, and thousands of unincorporated grassroots groups

  3. CHANGES IN GIVING BYTYPE OF RECIPIENT ORGANIZATION1996-1997 AND 1997-2009 • Overall growth in giving was 10.7% in 1997 and approximately 15% in 2012 • Contributions to religious nonprofits grew by an estimated 2.9% in 1997 to more than 20% from 2001 to 2012 • Several categories of nonprofits reported contribution growth that exceeded 20% in 2012

  4. Reasons People Give to Nonprofit Organizations • Those with more should help those with less (55%) • Gained personal satisfaction from giving and volunteering (43%) • Met religious beliefs or commitments (41%) • Benefits derived from giving back to society (39%)

  5. Reasons People Give to Nonprofit Organizations (Cont’d) • Was asked to contribute or volunteer by personal friend or business associate (36%) • Ensured continuation of activities or institutions from which they or their family benefit (34%) • Served as an example to others (31%) • Fulfilled a business or community obligation (19%)

  6. Reasons People Give to Nonprofit Organizations (Cont’d) • Created a remembrance of oneself or one’s family (17%). Examples? • Obtained tax considerations and deductions (12%) Examples? • Was encouraged by an employer (10%) Examples?

  7. Top Giving Motivators for Million Dollar Donors • Belief in the mission of the institution (9.6) • Community responsibility and civic pride (8.1) • Fiscal stability of the institution (7.4) • Regard for staff leadership (7.4)

  8. Top Giving Motivators for Million Dollar Donors (Cont’d) • Regard for the institution locally (7.0) • Regard for volunteer leadership (6.7) • Serves on the Board of Trustees, a major committee, or other official body of the institution (6.5) • Respect for the institution in a wider circle--state, region, nation (6.2) Note: Rating is the average rating on a 10-point scale, with 10 being the highest.

  9. Reasons for Giving Rated As Least Important by Million Dollar Donors • Guilt feelings (1.3) • Appeal and drama of the campaign material requesting the gift (2.3) • Tax considerations (2.4) Note: Rating stated is the average rating on a 10-point scale, with 10 being the highest.

  10. Top Motivators As Viewed By Fundraising Professionals • Belief in the mission of the institution (7.9) • Great interest in a specific program (7.6) • Involvement in the campaign program (6.9) • Serves on Board of Trustees, a major committee, or other official body of the institution (6.9)

  11. Top Motivators For Giving As Viewed By Fundraising Professionals (Cont’d) • Memorial opportunity (6.9) • Respect for the institution locally (6.9) • Has an adult history of being involved in the institution (6.8) • Leverage or influence of the solicitor (6.8) Note: Rating is the average rating on a 10-point scale, with 10 being the highest

  12. Top Motivators for Not Giving • Lack of money • Lack of trust/Misuse of Funds • Career Youth Development (Milwaukee, WI, 1999) • Spending on unauthorized trips • Unauthorized loans • Hale House (2000) • Personal use of funds by CEO • Not adhering to guidelines for grants received • Heinz, Grable, and Hillman Foundations in Pittsburgh, PA suspended all grants to Pittsburgh Public Schools during 2002-2003 school year

  13. Top Motivators for Not Giving(Cont’d) • Disagreement with organization’s mission • Charity’s fundraising techniques • Telemarketing?? • Gave to another organization

  14. Elements of a Good Fundraising Program • Establish Goals • Maintain a strong base of annual donors • Steadily increase the giving level of annual donors • Regularly bring in new donors

  15. Elements of a Good Fundraising Program(Cont’d) • Maintain active cultivation of major gift donors • Make regular asks • Promote a positive public image of your organization

  16. Annual Campaigns Personal Solicitations Gift Clubs Membership Drives Phonathons?? Direct Mail Special Events Neighborhood Canvases Basic Methods of Fundraising(Mixer, 93) Small Business Solicitations Corporate/Found. Solicitations Project Funding Capital Campaigns Major Gifts Planned Giving

  17. Key Ethical Issues • Hard sell to incapacitated persons, due to age, mental illness, or other medical condition • MISREPRESENTATION OF WHAT FUNDING IS FOR--breach of funding contract! • Lack of an established ethical code of conduct for the nonprofit • SPENDING OUT OF CATEGORY

  18. Positioning Your Organization To Raise Funds • Legal and Organizational Prerequisites • Internal and External Readiness • Strategic Planning • Fundraising Methods

  19. Legal and Organizational Prerequisites • Deciding type of organization to become • Unincorporated association • Limited purpose, no substantial fundraising, no tax filing<25k • NOT separate legal entity from individuals • Nonprofit corporation • Long range, separate legal entity, set up to receive foundation and large donations offering charitable deductions • Affiliate of an existing nonprofit corporation • New, short term or specific, one-time project, limited or no formal structure, no staff, program-oriented • Reviewing By-laws • Assessing Board And Staff Structure

  20. Internal and External Readiness (Cont’d) • How Does This Activity Relate To Your Organization’s Central Purpose? • Are Your Employees Uniquely Qualified To Do What You Say You Want To Do? • Do You Have Adequate Volunteer Involvement? • How Much Money Will You Need And Where Do You Propose To Get It?

  21. Internal and External Readiness (Cont’d) • Where Has Support For Your Organization Come From In The Past? • What Is Your Competition? • What Is Your Community’s Climate Of Giving And The Status Of The Economy? • How Adequate Is Your Prospect Pool?

  22. Strategic Planning Basic Questions: • What Should We Be? • Where Should We Be? • Where Should We Go? • Where Should We Seek Funds?

  23. Strategic Planning Major Elements: • Vision Oriented • Market-Driven • Concerned With Clients, Resources, And Competition

  24. Strategic Decision Making Questions • Needs • What Human/Social Needs Are To Be Met? • Mission • What Should Your Organizational Purpose Be? • Goals • Where Should Your Organization Be in 3 To 5 Years?

  25. Strategic Decision Making Questions (Cont’d.) • Objectives • What Specific Measurable Activities Should Be Accomplished In 12 to 18 Months, or sooner? • Action Steps • What Steps Should Be Taken And In What Order?

  26. Nonprofit Development • Sustainable Enterprise (Business) • Business Plans, etc. • Nonprofits (Human Services) • Grants/Proposals per RFPs (Directions) etc. What are the differences?

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