This post is a continuation of the study guides I created as I was studying for the CFRE exam. The source for most of this information is the AFP Review Course Book for the CFRE Exam, summarized and reorganized to match the format of the CFRE Test Content Outline.
My Notes on “Securing the Gift”
A. Develop a compelling case for support by involving volunteers, staff, and other groups in order to communicate the rationale for supporting the organization’s fundraising program.
- The content of a Case Statement should come from mission/vision and strategic plan of the organization.
- The Case Statement shows how the goals of the fundraising program support the institution and lead to its’ goals.
- A case illustrates the ways the institution will remain significantly productive, and will be able to have an impact on the organization’s mission. It should explain why the organization’s plan will work.
- A case should explain the impact a donor has if they contribute to the organization.
- A case must answer why the organization is important to society, and why it is important to the needs/goals of the donor. It should evoke a sense of long term importance.
- There’s one institutional case from which smaller case statements evolve, some for unrestricted support, some for capital campaigns and major gifts, some for special needs or planned giving.
- Once a case statement is developed it serves as the basis for websites, brochures, foundation proposals, appeal letters, press releases, newsletter articles, speeches and all communications.
- Cases should focus on all the constituents’ needs, and be reader oriented.
- A case statement should have emotional as well as rational reasons to donate.
There are five main uses of a Case Statement:
- Obtaining consensus
- Recruiting volunteer leadership.
- Testing the market.
- Telling the story.
- Creating fundraising materials.
When Writing a Case:
- Secure feedback and create ownership - use case development as a tool to engage volunteers.
- Test the market by sharing the case with various stakeholders, and revise it based on their input.
- Use key employees and volunteers to create a formal basis for case material review and revision.
- Adapt the case to constituent groups, and test different draft options, to further define the way the case can be used effectively based on constituent motivations.
- Systematically gather reactions to the draft with the markets that seem most likely to become donors. Create a checklist to obtain feedback and conduct focus groups.
- Specialize the case to fit specific constituent groups, listen to what matters to them, this helps you better understand the audience for which it is written.
B. Design and conduct studies and/or surveys to plan and evaluate specific aspects of a fundraising program.
A Development Plan should include:
- The institutions mission statement
- The case statement for the organization and for each project for which funds are being raised
- Overall development goals such as donor acquisition, retention, upgrading, awareness of charitable mission and philanthropic need for capital
- Fundraising projections of income and expenses for each development activity
- An organizational chart that outlines the roles and responsibilities of staff and volunteers by project
- Strategies for each target audience and project.
- Include an outline of how you will evaluate the success of the plan, based on the campaign and previously identified goals
Data Analysis of a Fundraising Program:
- Gift reports are used to track fundraising results, increase understanding of fundraising performance and help us prepare and justify budgets
- An organization must monitor fundraising results to quantify the return on investment (ROI) of its’ fundraising activities.
In order to measure a fundraising program, the fundraising plan must create specific goals, job descriptions, action plans and budgets for each development staff and department to map success against.
C. Design a comprehensive solicitation program in order to generate financial support for the organization’s purpose.
There are a variety of different fundraising techniques and programs to consider when creating a comprehensive fundraising program. From Annual Fund to Corporate Giving to Capital Campaigns to Planned Giving. There are a variety of considerations to make when determining which combination of programs best fit an organization, and which of the many solicitation tools to use when talking to a designated audience.
Annual Giving’s Purpose is To: - Acquire donors - Renew donor support annually - Cultivate donors to higher giving levels - Build donor loyalty - Identify & involve leaders - Identify major gift prospects
Simply stated there are three primary objectives donor acquisition, donor renewal, donor upgrade.
- Individuals are unlikely to make a significant gift to a organization if it is new to him/her.
- The demographic profile of your current donors is a good indicator of the profile you will find successful in the prospect list.
- Integration of sound personal, financial and estate planning concepts for the individual donor’s plan for lifetime or testamentary giving
- planned giving includes any type of out right or testamentary provision made by a donor in which the donor retains some kind of income or life estate interest either for oneself or someone else
- Every donor has a capacity to make a bequest or other planned gift
- Planned giving encourages the donor to think about gifts of assets as well as income
- Nonprofit organization should encourage donors to make provisions for the organization in their estate while they’re still alive
- This is the logical upgrading of donors, engaging them in a long-term relationship with the org.
- provides future funds the org can count on
Two kinds of planned gifts
- Outright or current (high intent immediate impact) -Complete transfer or realized gift of cash or stock as part of an estate plan
- cash or assets that impact a donors estate
- Deferred- Testamentary giving or life income arrangements to be realized in the future such as
- bequests (high intent, future impact): The provision made in a donors will through which charitable organization receives cash and/or other assets at the time of the donors death
- charitable gift annuities (high intent, future impact): a legal contract between the donor and charitable organization through which the donor exchanges cash, stocks or other assets for an agreed-upon income for life
- charitable remainder trust (high intent, future impact): Used by donors to transfer assets to a trust, which then goes to the charitable organization after the death of the last beneficiary. The donor retains a fixed or variable income for life.
- life estate contract: Agreement established by donors transferring a deed of real property to a charitable organization while reserving for themselves and/or someone else the right to live on or use the property for life. Charitable deductions for life estate contracts are limited to properties that are either personal residences or farms.
- charitable lead trust (high intent immediate impact): Established by a donor transferring assets to trust that provides income to a nonprofit organization for a period of years. At the end of that, the trust assets revert either to the donor or someone else the donor designates.
- life insurance policy (high intent, future impact: a) transfer of ownership if an existing policy to the organization b) purchase of a contract by the donor, in which the institution is named the beneficiary or owner
- pooled income fund (high intent, future impact): A common trust to which many donors make contributions, and retain for themselves a pro rata share of the funds earnings each year. As each beneficiary dies the value of the fund attributed to that death is severed and paid to the organization. It is similar to a mutual fund
- donor advised funds: donors give cash, stock or other assets to a community foundation, the donor claims an immediate charitable deduction, the money is invested while the donor determines what charities to contribute to
Benefits to the donor:
- Increases opportunity to give and receive a current income tax deduction
- income tax deductions
- provides a source of fixed or variable income and retirement income
- reduction of capital gains tax potential for increased income
- some allow donor to pass asset to an heir (e.g. A charitable lead trust)
When determining best giving method planned giving officers should ask:
- Are you looking for income? Now or in the future?
- Are you looking to pass an asset onto an heir?
How to market planned giving:
- Planned giving usually involves transferring assets, this is a difficult decision for donor to make therefore it is important for the planned giving officer to use a repertoire of activities to keep donors educated about giving opportunities
- most planned giving prospects are current donors, so target people who already have a relationship with the org.
- not necessarily just donors who have given large gifts, giving from assets or estates allows those with less liquid income to make a substantial investment with less immediate ramifications than a outright gift
- planned giving officers should NOT give advice, that’s the job of accountants and attorneys, they instead should just provide the options available.
- direct mail : allows education in a cost effective way - it should outline benefits to the donor and allow donor to indicate further interest
- newsletters : allow you to highlight donors who have already chosen to make a planned gift while providing info about the opportunities
- will clinics and estate-planning seminars: gives donors benefit of expert advice, allows prospects to be easily identified by attendance
- educating the professional community: share with people who work in accounting/law knowledge about planned giving options and give them ability to share info with clients.
- phone calls: use calls to qualify donors and build relationships
- An intensive organized fundraising effort to secure philanthropic gifts for specific capital needs or major projects executed within a specific time. Usually over one or more years
- requires careful planning and review of donors before beginning
- lays the groundwork for involvement of new volunteers and donors and sets the stage for increased annual giving
- generally used to secure funding for facility construction, renovations, equipment purchases, endowment development, special programs and scholarships
- this funding is usually restricted
- makes more use of personal solicitation focused on major gifts
- Both planned giving and special events are used significantly during capital campaigns
Benefits of capital campaigns
- they allow donors to become familiar with specific needs of org -“think big” about the impact they can have
- push annual giving
- build volunteer leadership
- increases orgs visibility
- enables multi year pledges
- grows donor base
- secures funds for major endeavors
- increases visibility and credibility
- Builds development staff skills
- strengthens partnership with board and the administration
- unites constituency in a common cause
Role of Board in Capital Campaign
- determines if the need for funds is justified
- determines if a campaign is needed
- the board is required to make their gifts first and set the standards and pace
- must be willing to participate in solicitations and act as a peer leader through gifts and actions
- requires a substantial commitment from senior staff ( CEO should expect to play a major role in cultivation)
- must develop a compelling specific case which comes from strat plan and board identified priorities
- must have necessary admin mechanisms in place to track gifts and interactions (e.g database, systems)
- must conduct an internal audit and feasibility study to determine if its the right time. Look at reputation of institution, donor trends and pool potential, identify volunteers, look at external landscape and SWAT analysis, build from the strategic plan.
- tests the concepts of the campaign, gathers data for the plan, and is preceded by an institutional plan.
- asks a range of donors for input, but not the whole pool so campaign can maintain secrecy before being officially announced
- Tests the case and the climate for giving
- determines availability volunteer leadership
- determines the availability of prospective donors with the ability and interest to support the proposed campaign
- determines realistic goal
- good thing for a consultant to help with
- aids in the development of a gift range table to drive specific targets for amounts and number of gifts
Developing a Capital Campaign Plan:
- Make clear and agreed upon policies about how campaign will be run, how funds will be spent, and how gifts will be counted
- Clearly define roles for staff, board and volunteers
- Define communications plan
- Define budget and duration of the campaign
- Determine guidelines for types of gifts accepted
- Establish recognition methods
Phases of a capital campaign
- Planning - The development phase where a statement of preliminary goals and a plan of action is established
- prospect screening is important part of this phase and allows a gift chat to be created- typically done in two phases 1. staff conducts prospect research then 2. volunteers (board and peer affinity groups) as a group rank prospects and divide them into proposed giving levels (e.g $100k vs. $10k) based on research and their personal knowledge about the donor - this determines the sequence for cultivation and solicitation
- a capital campaign must be first achieved on paper before it can be achieved in reality
- a specific timetable for the campaign must be created to set out volunteer expectations and drive campaign forward
- Cultivation - interested prospective contributors are developed through exposure, this involves major marketing and relationship building - this is the longest phase and can take from 18 months to several years
- volunteers play a major role as advocates during this phase
- the public marketing phase should not begin until after quiet phase when most likely prospects and largest gifts create a base which gives the campaign confidence - want to secure 50% of goal before public announcement of campaign begin PR and media relations
- once media relations begin use all the groundwork laid in planning to show momentum (announce major gifts, highlight public endorsements, share press release of the volunteer campaign team)
- Solicitation - This is when volunteers and staff ask for contributions. includes asking for gifts from corporations and foundations as well
- each volunteer should be responsible for no more than 5 prospects which should be divided according to their place on the gift chart - gift charts are determined by potential giving ability as assessed by board and key volunteers
- Pledge or fulfillment -generally takes 3-5 years to collect all funds pledged
D. Design and conduct training programmes for volunteers, staff, and other groups using various training methodologies in order to increase solicitation effectiveness.
Volunteers are one of the greatest asserts to any fundraising program.
- They amplify an organizations donor pool.
- They enable peer to peer fundraising.
- They serve as leaders to other donors through their giving.
- They are the greatest advocates for an organization.
When training a volunteer in fundraising it is important to give them all the tools necessary to feel empowered and able to succeed.
- Volunteers should not only be engaged in the Case Statement creation process they should be trained in how to use it.
- Volunteer fundraisers should be educated in the organizations history.
- They should be coached in how to make an ask of their peers.
- It is the job of the Development Staff to create briefings for volunteers on any solicitation they may be asked to do.
- Volunteers should receive job descriptions and have opportunities for evaluation and feedback.
For more notes on volunteers see the upcoming post Volunteer Involvement CFRE Study Guide Post 4/6.
E. Ask for and secure gifts from prospects in order to generate financial support for the organisation’s purpose
- When asking a donor to contribute to an organization you need to be sure you have the right person asking the right individual for the right gift, at the right time, for the right amount for the right reason - prospect research and cultivation calls help you determine all these criteria.
- Donors contribute because of various motivations (see my first CFRE Study Guide post on current and prospective donor research for list of motivations) the ‘ask’ should be focused on those needs more so than the needs of an organization.
- Before setting up an appointment to ask for a major gift the donor should be aware that such an ask will likely take place at the meeting.
- Volunteers who are also donors make the best solicitors because they can relate to the donor and testifying to their experience as a donor.
F. Prepare donor-centred solicitation materials in order to influence and facilitate informed gift decisions.
Marketing and PR principals
- Marketing attempts to bring out voluntary exchanges of values
- Marketing makes constituents want to participate
- It must be mutually satisfying
- It must present an organizations products in terms of the desires of the target market.
- Marketing plans must segment markets to better target messages to specific constituent groups.
- It should not compromise values.
Elements of Marketing process
- Identify opportunities for prospect involvement
- Know public/ markets.
- Research who public is and their priorities.
- Answer “what specific investment are you asking?”
- identify ways we can make these opportunities for involvement known and open for participation.
- Answer “How do we communicate opportunities to the public?”
- Create a plan to grow & maintain relationships / cultivation
- Define how to monitor progress.
A Marketing Plan Should:
- Sets achievable goals
- IDs target markets
- Articulates messages
- Outlines strategies
- Assigns resources
- Defines time frames
- Establishes indicators of success & determines tools for monitoring success
Use and application of market research
- must remind people 3-10 times about opportunity
- must learn market language and cater to that
Marketing and PR principals
- it is the fr job to define your product in terms of its most important benefits from the buyers point of view
- it’s not what you’re selling , it’s what they’re buying