Non-Profit Chas

As I recently wrote, some people think about fundraising out of desperation. I take a more pragmatic approach to fundraising.

I have an intimidating fundraising goal in front of me for 2009. I’m going to beat that goal. Here’s how.

1. Use a budget

What’s your fundraising goal? Once you know, then you need to plan out how you’ll get there. Don’t forget to plan for your expenses, though – marketing, printing, postage, events, etc. Use the budget to set milestones.

2. Celebrate Milestones

Milestones serve two purposes in fundraising: leverage to raise more money. Donors love to finish projects, and milestones are something they can finish. Being close to completing a big milestone can be reason enough for a donor to help push you over the edge with a second gift.

More importantly, to my mind, is that a milestone is a small victory. As I’ve written before, every victory builds momentum, creates energy, and grows into more success.

3. Balance and diversify

All your eggs in one basket? Is that basket your annual appeal? Or a single event? When the low-carb diet craze hit, the Girl Scouts were hit hard. Cookie sales plummeted. They bounced back by creating sustainable fundraising programs that weren’t as vulnerable.

4. Maximize returns

Special events are the bane of too many organizations. They take a lot of time to produce, often target people who aren’t engaged in your mission, and rarely produce significant financial returns. They might produce a profit, but they aren’t the most profitable way to raise funds.

Break down your fundraising efforts for last year and figure out what makes you the most money, and focus on those activities.

5. Spread it out

If your late fall appeal doesn’t go well, what can you do? If you’re pinning your funding hopes all at the end of the year, you risk falling short and having no opportunity to adjust on the fly. Spreading your efforts throughout the year also lets your staff and volunteers spread the work efforts out.

6. Hit the streets

Most importantly, you absolutely have to get off your ass —make phone calls and visits all the time. The more contacts you make the higher the donations. Frequent and meaningful contact requires a lot of time and energy and work, but it’s the tried and true way to build relationships and funding.

There are two fundraising models that don’t work, but seem to be immensely popular:

The tin cup and the lottery ticket.

The Tin Cup

The tin cup is the beggar who bangs on doors and asks for money. Until it became illegal, the firemen would stand at the intersection, holding a bucket, and asking people for change. Or they call everyone in the phone book and they don’t care about the do-not-call list.

The problem? You’re asking lots of people who don’t care about you to give. It’s like spamming the world: it might work in volume, but it’s a battle of escalation that requires more and more resources to get what you need. And you start from scratch every time, so it’s not terribly predictable.

The Lottery Ticket

The lottery ticket is the long shot that should solve all your problems. Organizations put all their chips on one color or one lottery ticket and hope that they win. They put all of their resources into applying for a huge grant, which is always highly competitive. Or they send letters to rich people asking for large donations.

The problem? Wealthy grant-making organizations and rich people are big targets: everyone wants their money. Not only are the competitive, but they create foundations and processes intended to narrow down to the best choice. It’s harder to make a personal connection because they have layers of bureaucracy to keep desperate organizations at arm’s length.

The Successful Model

There are lots of “models” that promise results. They could all work, but the best ones have something in common:

Relationships. Slow, steady, and sustainable. Ask the right people. It’s not easy, but it’s a LOT more likely to get you where you need in the long run.

Last year, I missed a board meeting. I was eager to hear how it went, since we were in a time of turmoil and many of our meetings took unexpected turns.

The board made up a fundraising goal for me.

Yep, that’s pretty much how it went.

1. Start with your budget.

The biggest difference between last year and this year is that we have a budget for 2009. We’ve had “budgets” before, but they weren’t really based on reality – they were based on the previous year’s numbers and mostly uneducated guesses about how we were going to change. They had lots missing. They were unnecessarily complicated.

Assume for now that this is your barebones budget, no extras or dreams included:

There you go! You need to raise $200. I call this an operational goal.

That’s your Mendoza line. That’s how much you have to raise to break even. This is a good start. It’s part of the general health of your organization, being able to sustain your current way of life.

Obviously, you should work hard to bring those expenses down and push that income up. It takes a lot of pressure off of the fundraising goal.

2. Identify your needs.

This year, we need to repair buildings, replace our pier, and buy some equipment for a new program. These are outside of the $200 goal above.

The #1 question I get when I talk to prospects is “What do you need?” This list is a great answer.

3. Dream big.

What’s on your list for next year? The next five years? Start planning and raising money for these dreams now. If you have a $3.5 million project you want to take on, most of us aren’t going to accomplish that overnight.

If you’re lucky enough to have a major donor willing to make a large gift, you don’t want to dream too small. Don’t leave your donors disappointed by asking for too little when they are willing to make the big dreams come true.

4. Don’t do it alone.

Get buy-in. The board, the staff, and your biggest donors must be able to support your fundraising goals. They must respect the magnitude of the number and be willing to help you get there. Help everyone understand how you came to this goal and just what it will do for the organization if you can reach it.

5. Meet the goal.

I’m just kidding. I’ll write about how to meet your fundraising goals in my next post. But it’s on this list for a reason: setting goals don’t mean anything if you don’t work to achieve them. Like creating a strategic plan with no implementation, a fundraising goal you can’t realistically achieve is a mountain you wistfully admire but will never climb.

Fundraisers, gather round!

Who should you ask for money?

The obvious answer: People who will give you money.

But you’re not sure who will give you money, so the next answer is: People who are most likely to give you money.

Ok, then who are those people?

Smart fundraising boils down to these two things:

1. Research: Finding people who are likely to give.

In other words, you should seek out and ask for money from people who want to give you money. But people aren’t born wanting to give money to you (or if they are, they quickly learn that’s not the most financially responsible way to live ones life).

2. Development: Creating people who are likely to give.

If you can’t find people who want to give you money, you need to convert people into
those who want to give. This is the bulk of fundraising. It’s creating relationships, telling stories, holding events, making visits, etc.

It’s a process.

Who shouldn’t you ask for money?

Answer? Everyone else. That’s right, don’t ask for money from people who don’t know you and believe in your mission. Don’t call strangers and ask for donations. Don’t hold events for the general public and beg for cash. Don’t sell something that has nothing to do with your mission and expect to create sustainable value. What do you think happened to the Girl Scouts when the low-carb diet craze hit?

In a couple of weeks, we’ll resume strategic planning. We took a break to figure out some urgent issues, and like any intimidating task we found it all too easy to put it off for much longer. I’ll be posting more about our efforts as we go.

Exercise Your Optimism!

Anyway, as we get started I want to go through some group and individual exercises designed to get us all thinking, challenging the world around us, and feeling optimistic.

What would you do if we had $20 million dollars?

With money issues out of the way, what would we do? Borrowed from For Impact, this question lets you dream about what you could really accomplish. It’s important to bring this back to the real world and let your dreams and vision inform your decisions.

Share a Mission Moment

I want everyone to tell a story about why they are involved in Camp Fire – why they joined, something that kept them going, etc. I’ve mentioned the Mission Moment in earlier posts, too. It reminds you why you’re here and gives you the strength to keep going.

If we were successful, what would we look like?

What is the profile of a winning organization? Dream big! Write up the characteristics that make up such an organization. Circle the things you already do, and ask what you can do to be ever better at them. How you can aspire to the others?

What are we great at?

Pair off and have each group list things that your organization does well. List only good things, and be as comprehensive as possible. Then, bring the lists back to the group and share what you’ve come up with. Based in Appreciative Inquiry, this approach is the “opposite of problem solving.” Instead, it’s all about creating more of what works.

Any others?

Do you have any team exercises that you’d recommend? Have you tried the ideas here? Share ‘em in the comments!