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Foundations Give Away the Most Money (and Other Myths about Grants and Foundations)

Guest post by Kathie Kramer Ryan 

My favorite thing about foundations is that they exist to give money away. Program officers are paid to answer questions from potential grantees and share information about funding priorities. And when you receive a grant, the award letter stipulates the reporting schedule. Foundations are donors who tell you what they’re interested in, their process for considering a gift, and how they like to be stewarded. How great is that?  kkr

Less great is media focus on the largest grants given by the largest foundations. I’m always thrilled to see philanthropy in the news, but covering only the upper echelon of grant funding is misleading. Here are 3 foundation myths of which to be aware as you plan your grants strategy. 

Myth #1:  Foundations are the best source of charitable support because they give away the most money. 

Board members and other stakeholders (your CEO perhaps?) may believe you can raise your entire annual fundraising goal from foundations alone.

Reality:  If you step back and look at the big philanthropic picture, foundations are responsible for only a small sliver (between 10% and 15%) of total charitable donations in the U.S. each year. The vast majority of charitable giving (usually over 80%) comes from individuals. In fact, an additional portion of foundation giving is attributed to individuals since many foundations are family foundations—funded and guided by the interests of a single donor or family. 

Giving USA releases an annual state of philanthropy report in early summer each year, so keep an eye on their website for the latest figures. Also, here’s a good article on the 2012 figures from the Nonprofit Times

Myth #2:  Foundations are good sources of ongoing and unrestricted support. 

Reality:  There may have been a time when foundations gave out large, multi-year general operating support grants, but if so, those days are gone. More and more, foundations target support toward specific programs and/or help new projects get off the ground. Planning grants are another opportunity. 

Regarding ongoing support, foundations often prohibit organizations from receiving grants for more than three years in a row and sometimes less. Additionally, grant applications increasingly ask nonprofits to provide a sustainability plan for continuing a program after the grant period has ended.  

Myth #3:  Foundation grants are the quickest, easiest way to raise money.                Chalkboard - Facts And Myths

A lot of people seem to know a little something about foundations. You might run into the view that a foundation is like an ATM machine—you feed in your proposal and out comes a check.

Reality:  It’s seldom, if ever, this easy! Many many organizations are applying for the same grant money for which you are applying. To be successful with grants, consider these major gifts tactics:

  • Cultivate a relationship with the foundation
  • Ask a lot of questions
  • Have multiple meetings or site visits
  • After submitting a proposal, revise that proposal according to foundation feedback

As the foundation’s board (decision makers) may only meet four times per year, the process takes time. The entire cycle may take as little as 1-2 months. More common is 3-6 months, sometimes close to a year. Once your grant program is up and running and you have multiple proposals in the pipeline, you’ll get answers from different funders more often. But it takes time and elbow grease to build the pipeline.

Also keep in mind the significant amount of staff time required on the back end to manage grants. Grant money arrives on your doorstep with strings attached. If it’s a restricted grant, your finance staff must have the capability to track spending of grant funds so you can report back to the foundation on how funds were used. Your progress report’s narrative component will require program and development staff to gather data and prepare an analysis and conclusions about your work over the grant period.

Grants are certainly a viable funding stream but they are not a fix-all for your entire budget. For inspiration, check out Unlock Your Grant Writing Talent.

Please share some of your foundation fundraising experiences. What surprises have you encountered and what hurdles have you overcome?

Kathie Kramer Ryan has 15 years of frontline fundraising experience. A former development director, Kathie enjoys sharing her knowledge of nonprofit management and development with other fundraising professionals. You can learn more and find fundraising tips from Kathie at ArroyoFundraising.com.

The Two Cornerstones of Fundraising

By: Sandy Rees

Fundraising can be easy or it can be hard. I know because I’ve done them both ways.

When it’s easy, it’s fun and effortless. When it’s hard, I dread it and find ways to procrastinate. (I bet you understand that!)

Successful, easy fundraising is built on two things that are so important, you should be working on them every day.  They are trust and attention.                               Easy Vs Hard Way Road Sign                                       

Everything you do in fundraising should build trust with your donors and prospects. People need to feel they can trust you before they’ll make a gift. After all, they want to know you’ll do the right thing with their money.

In addition to building trust, you must pay attention to your donors and prospects. Too many nonprofits work from their ego.  Their communications are inwardly focused and boring. They talk about what they’re doing: “We served 500 people last month. We offer 4 programs. We’re the only certified center in the Midwest” And on it goes, blah, blah, blah.

Even though lots of people think they can multitask, they can really only pay attention to one thing at a time. That means we all have dozens if not hundreds of things begging for our attention and we can only choose one at a time.

 

In this world of overscheduling and time deprivation, you’re competing for the attention of your donors, not their dollars.

 

Seth Godin wrote

“The two scarce elements of our economy are trust and attention. Trust is scarce because it’s not a simple instinct and it’s incredibly fragile, disappearing often in the face of greed, shortcuts or ignorance. And attention is scarce because it doesn’t scale. We can’t do more than one thing at a time, and the number of organizations and ideas that are competing for our attention grows daily.”

What can you do to get your donors’ and prospects’ attention? When you get it, will you have something worth their time?  And once they decide to make a donation, what can you do to build trust with your donors? How can you make sure that you help them feel really good about their decision to give to you? It’s worth the time to think about and plan for.

 

 

 

Focus on your donors in three easy steps

By: Karla Kurtz

Being donor focused will make all the difference in your fundraising success. It means that everything you do is centered on them and how they see things. It helps them feel good about their decision to give to you, and ultimately, this will keep your donors around for a long time.

Put yourself in their shoes and look at your organization through your donor’s eyes.  Committing to be more donor-centric can have a dramatically positive impact on your organization and its fundraising efforts.  When your donors stop feeling like an ATM machine, and instead feel like a partner in your work, the magic begins to happen. 

When a donor feels engaged, she will give more and give longer.

                                                                                                                                                                                                                                                                                                               Education child Mathematics Class
So where do you start to become more donor-focused?  Here are three things you can start doing this week that will pay big rewards with a minimum investment of time.

1. Get good at first impressions. Think about the donor’s first impression when they call your organization, stop by your office for a visit, or make a donation.  Who do they see and talk with first (a live friendly person or automated system)?  Can they easily find their way into your parking lot and building and is the environment warm and welcoming?  Is their donation quickly acknowledged?  We are so familiar with our surroundings that sometimes it’s hard to think about it from a visitor or outsider’s perspective.  Your Challenge – Critically look around and find one or two things you can improve in the next week to make a better first impression.

2. Share only relevant and interesting info. Look at your website, brochure, latest direct mail letter, and newsletter. Remember, try reading these as a donor or prospective donor and see if anything stands out to you (if you just can’t do it, ask a friend or family member to read them).  Is the content relevant?  Is it mostly dry reporting of facts and numbers and a short “state of the organization?”  Now be honest, does this excite or motivate you?  It may not be doing anything for your supporters either.  Donors want to hear stories about the lives you are changing and the impact it has on them, the community, and the world.  You must share great stories that warm their hearts or even move them to tears.  You only need one good one to share each time so they aren’t overwhelmed.  It’s okay to include a few statistics for your number crunching readers, but focus on the stories.  You need to be working closely with your program staff and volunteers to get at least one new story to share each month.  Your Challenges:  (1) After looking through your communications, make a list of at least one thing for each communication mode that you could do differently to make them more donor-focused. Then work to incorporate these ideas in the next round of your communications.  (2)  Start collecting stories monthly from staff, volunteers, and those you serve about how your organization is changing lives and making the world a better place.

3. Follow up consistently. You don’t want your organization to be like the friend or relative who is only heard from when they want something.  Remember that when someone makes a financial investment, they like to know what’s happening as a result.  They could have given to any organization and they chose you.  Too often our only communication is to ask for money and we fail to follow up and let them know what’s happened since their gift and allow them join in our celebration when there’s a success.  Following up gives you an opportunity to reach out to your donor by sending a note or letter maybe with a picture, calling, or it might be a personal visit over coffee/lunch.  Your Challenge:  Choose a donor and make a progress update contact this week to thank them for their investment in your organization. Let them know you couldn’t do it without them. Do two donors if you can.  Then repeat each week until you at least work through the list of your best donors.

Doing something innovative? We’d love to hear about it!  Visit our Facebook page at www.Facebook.com/GetFullyFunded and share your story.

Top Fundraising Nuggets in 140 Characters or Less

By: Sandy Rees

Last week, I was in San Antonio for the annual AFP International Conference on Philanthropy. It was an amazing conference with many of the brightest minds in our field in attendance. Fortunately, many of those bright minds led workshops.

And since lots of us were tweeting like crazy (over 5,000 tweets from a 3-day conference!), most of the best tidbits can be found on Twitter.
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Of course, when I decided to do a compilation of my favorite nuggets, I saw that my friend Gail Perry had done the same thing. Great minds think alike! (You can read Gail’s article at www.gailperry.com). I’m going to share mine, too, and if you follow her too, it won’t hurt you to see some of these twice.

Here are some of my favorite takeaways.

Have you ever thought how different history would have been if Marin Luther King, Jr. had said “I have a strategic plan”? Dreams inspire. @gailperrync

How donors define oversolicitation: being asked to give again before learning first gift had an impact. @rachelmuir @gailperry

Your donors are being approached about & converted into monthly givers; get in the game or get left behind. @dan_blakemore

You don’t choose donors. They choose you. And then it’s your move. @SMacLaughlin

Opportunity only presents itself to a prepared mind. #gettingtoyes @FundraiserBeth

To get your nonprofit story right, step back! Think about your audience before you present your problem in your marketing. @rdhawthorne

It’s seven times more expensive to get new donors than to keep current ones. @mattforgood

Each ask should have 2 TYs: thanks (gratitude) and thanks (accountability; here is what your gift did). @donorguru @FundraiserBeth

Your challenge this year is to thank donors in a way that doesn’t require a #10 envelope. @donorguru @sldoolittle

55% of nonprofits have no plan for donor relations. @sldoolittle

Stop producing an annual report. Produce an impact report. Show where the money was used. (And put a face on the cover). @Network4Good

The internet is not “the Easy Button” for fundraising, especially mid-level donors. People still want meaningful contacts. @emthesooner

Millenials ACTIVELY follow only 5 organizations. If you don’t interact with them, welcome to their outer circle. @rdhawthorne

Donor loyalty is not about the donor being loyal to you, it is you being loyal to the donor. @harveymckinnon

Smiley faced kids don’t work! Sad faced kids tell donors “I can help those kids.”  @thattomahern @gailperry

Major gifts: What will the donor feel as a result of this cultivation move? @tammyzonker @gailperry

It’s not about the WHAT. It’s about the SO WHAT. @blackwelderlisa

Be clear about your #1 goal and measure it. @leamerman

Make communication with donors natural so they don’t say ‘oh dang, they’re cultivating me.’ Dan Samuels

And since I was tweeting out the nuggets from the sessions I attended, here are a few that I tweeted myself:

Complacency is enemy #1 for nonprofits.

There’s a difference between spectators and fans. What does your nonprofit have?

Stop asking people to support your annual fund. Boring. Ask them to help you change lives.

Build a brain trust of people to support and guide you. It’s a safe place to learn and grow.

If you are a workaholic, they will always expect you to be a workaholic. Time for a different strategy.

Overcoming the Fear of Raising Money – the First Step Toward a Successful Major Gift Campaign

By: Amy Eisenstein, ACFRE

I love Sandy’s post from earlier this month about “money ceilings” – the idea that most people have a limit, or “ceiling,” in terms of how much money they feel comfortable soliciting from a donor. In fact, reading that post reminded me of the many times I’ve had to coach my own clients through their fear of asking for any amount at all!

In my experience, many people are afraid to ask others for money. As Sandy says, our early experiences with money tend to determine how much we feel comfortable asking for – and whether we feel comfortable asking at all. In addition to the experiences she cites, though, I’d add one more: the fact that, at least in the United States, it’s considered impolite to ask someone how much they earn or how much they’re worth.

How can you ask for money if you don’t feel comfortable talking about money?                                                                                                                                                                       fundraising-consultant-amy-2

When working with clients – and in my recent book – I outline a few ways to overcome the fear of talking about and asking for money, particularly major gifts. The most important tip is to remember that soliciting major gifts (or any donation) isn’t about the money: it’s about what the money will allow your organization to do.

After all, money is just a tool; a tool you use to change lives, save lives, shelter people or animals, educate children … the list goes on.

In addition, you’re not merely asking for a major gift. You’re allowing your donor to have an impact on an issue they care about and make a difference in the world. Our donors don’t necessarily have the time or ability, for example, to single-handedly cook and serve meals to five dozen homeless people. But they can still feed those people; all it takes is their signature on a major gift check to your organization.

In other words, when you approach a donor for a major gift you’re not just asking for something – you are offering your donors the chance to make an impact that they can’t make on their own. New clients often don’t believe me at first, but the fact is that major gift donors actually thank fundraisers as much (or even more) than the fundraisers thank them!

If you’re working with board members or other volunteers who are having issues with soliciting major gifts, by all means follow Sandy’s suggestions for helping them (and yourself) find and break their money ceilings. But if the issue is a fear of talking about or asking for money in the first place, start out by reframing the conversation. Get your board and volunteers thinking in terms of tools and offering opportunities to donors and you’ll be surprised by how quickly many, if not most, of them lose their fear altogether.

Amy Eisenstein, ACFRE, is an author, speaker, coach and fundraising consultant who’s dedicated to making nonprofit development simple for you and your board. Her books include 50 A$ks in 50 Weeks, Raising More with Less, and her latest book, Major Gift Fundraising for Small Shops.

Special offer: be one of the first 100 people to purchase Major Gift Fundraising for Small Shops between 6 am – Midnight on Tuesday, March 18 and receive free access to Amy’s webinar, The Art of the Ask (a $129) value.  http://www.tripointfundraising.com/increase-your-annual-fund-with-major-gifts/

You can’t manage what you don’t measure

                                                                                                                   

How many curves are in the road you’re on?

Do you know why country road are so curvy? It’s because way back when the roads were built, they didn’t have the resources to move large sections of earth. So to make things easier, they just constructed the roads to follow the natural contours of the land.

What does that story have to do with fundraising? 

 Find out in this short video where I talk about how to shorten your path to fundraising success, raise more money faster, and why doing things “your own way” could take you off the path to reaching your goals. 

 

 

If you’re new to raising money and are ready to take a serious shortcut to success so you can get your fundraising up and running fast, then check out the Fundraising Quickstart program aimed specifically at start-up nonprofits and new executive directors (or anyone new to the fundraising world). 

 But don’t be a Sunday driver, the program begins next week:  http://getfullyfunded.com/quick/

Are you a white-knuckled fund raiser?

As humans, we tend to like staying in our comfort zone.

I admit, I’m not always a big fan of doing new things. I don’t consider myself a Nervous Nellie, but I’m not likely to engage in extreme sports either.

It’s actually good for us to stretch and do things that are a little scary. It’s only in those moments of uncertainty where we find out who we really are and what we’re really made of.

Here’s a HUGE aha moment I got last week having some fun at the beach and doing something a little outside of my comfort zone.

No part of fundraising has to be scary. Focus on the people who will benefit from the work your organization does, instead of the nervousness you might be feeling. Their need is greater than your fear.

 

 

Get Over Your Fear of Asking for Big Gifts – Part 3

What if building relationships with donors didn’t feel awkward or uncomfortable?  Would you do more of it? (I hope you’re thinking “yes!”)

Check out this video where I explain how to shift your thinking about building donor relationships.

 

3 Little Tips That Bring BIG Results

Usually when I teach a webinar or a workshop, people consistently tell me they love the practical tips I share. They love hearing something they can easily implement and see results from.

Today, I have 3 simple tips that may seem really elementary, but trust me, they’ll bring you BIG results. Each one will help you put that little extra touch on your fundraising that will help deepen donor relationships. And after all, good fundraising is ALL about the relationships!

  1. Tell your donors how you will use their money. This is critical. Make sure the donor knows how you plan to use the donation he or she just sent you. Text like “Your gift will ensure that 15 children will go to summer camp for one week” makes the process of donating more real and tangible to the donor. Include this text in your Thank-You letter, then include a little update in your print and email newsletters. When donors know what you’re doing and how things are going, they’ll feel “in the know” which builds trust, and that leads to loyal donors.
  2. Add personal notes to Thank You letters. Taking a few minutes of a busy day to go through a stack of letters may seem like a chore, but trust me – donors who get a Thank You letter with a personal note will be thrilled that you took the time to personally acknowledge their gift. It lets the donor know they aren’t just a number, but are a valued supporter, and that you care about them.
  3. Invite donors for a tour of your facility. Always welcome donors and prospects in for a personal tour (if appropriate). You may never have anyone take you up on this, but they will remember that you offered. Seeing firsthand the work that you do may make all the difference in the world to a particular donor. I had a donor once that came for a tour and got really interested in a particular program. After a few minutes of asking quizzing me about the program, he asked the Magic Question – “What does it cost to run that program?” I told him, and he pulled out his wallet, handed me his credit card, and said “Go run it.” Talk about awesome!! He made a $15,000 gift right there on the spot. Moral of the story? Seeing your work first-hand can be a powerful, moving experience for a donor.

Always remember that your donors are your most important asset. Without them, you’d have no fundraising program. Do everything you can to take care of them and your efforts will be rewarded.

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