Donor Intent
Are there restrictions on your fundraising revenue?
Organizations have a legal and ethical responsibility to use donors' contributions for the purposes intended by those donors. This holds in at least two arenas:
1. Donor-restricted funds.
2. The purposes announced by the organization during fundraising campaign - including purposes implied in the mission statement and appeal language.
Organizations define a mission based on a perceived need - this mission often also defines those who are served. That mission motivates donors to give. Failure to use donors' dollars in direct pursuit of the defined mission or as designated by donors may alienate donors at the minimum, and, in extreme cases, it may open the organization to legal consequences.
Donor Restricted Funds:
Donors have the right to earmark their contributions for specific purposes. In many cases, these restrictions are fairly general. For example, a donor may restrict a contribution for use in one of the organization's programs. Grants from foundations usually have these stipulations, but individual donors may also be motivated to give based on the reputation of an individual program.
In these situations, it's essential to create a separate bookkeeping account to track these funds and ensure that expenses posted against these resources meet the donor's stipulations. In many cases, however, the restrictions are little more than an accounting burden, since the organization would have pursued the initiative anyway. In these cases, unrestricted funds are freed to be used for other purposes while the accounting department diligently exhausts the donor-restricted funds for the designated purpose.
Some donors may more substantially restrict funds for purposes of an endowment, a capital campaign or other, less flexible purposes. Nonprofit organizations are required to honor the donor's intent. If it appears that the donor's declaration of intent is at odds with the organization's needs, it's reasonable to approach the donor and discuss the matter. If the donor amends the restriction, it's important to get a brief letter or other written acknowledgement of this change.
General Restrictions on Funds:
Donors have the right to expect that the purposes stated in a fundraising appeal will be the purposes for which their contributions will be used. While well written appeals rarely impose any burdensome restrictions on these contributions, here are a few examples of shifting priorities that may put an organization at odds with its donors:
Advocacy: An organization's commitment to legislative advocacy is a powerful motivator for donors. Conducting a fundraising campaign in which advocacy is a featured mission component commits the organization to that advocacy. If the organization were to abandon its advocacy efforts without achieving a decisive victory, suffering a resounding defeat, or exhausting resources accumulated for this purpose, donors might be justified in demanding their money back.
Special Programs: Many organizations develop branded programs that become reputation builders for the organization. These image builders generate tremendous donor loyalty. Occasionally organizations discover that emerging initiatives may be incompatible with these workhorses. If the brand name program is updated radically to fit better with new initiatives, and if the organization is not successful in selling these changes to donors, dismantling the branded program may precipitate a donor revolt.
Grassroots Networks: Many organizations recruit members and urge them to form chapters. These chapters may be formal or informal, but all have one thing in common. They count on the parent organization for support and guidance, and the parent organization relies on the chapters and chapter members to support the parent organization. If the nonprofit organization attempts to substantially alter or dissolve these relationships, donors may resent this apparent "breach of contract." In extreme cases, chapters and their members represent a relatively well organized and potentially formable force to be reckoned with.
The fundraising premise, or case statement, should be considered an implied contract or commitment to donors that dictates the organization's responsibilities to its donors. Failure to live up to this commitment places the organization in jeopardy. Although it's unlikely, if the breach is material and substantial, a wealthy, resentful donor could easily mount an individual or class action suit against the organization for failure to adhere to donor's intent.
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Special Events
How do they fit in your fundraising plans?
Fundraising special events can be the bane of a nonprofit organization's existence. Events are labor intensive, expensive, and they often generate disappointing financial results. They can exhaust volunteers, consume board members' and major donors' good will, and they contribute to donor fatigue.Yet many organizations rely heavily on special events. If you're considering adding a special event to your organization's fundraising roster, how can you be sure that your event will be an asset and not a millstone around the neck of your organization?Successful special events primarily serve these purposes:
1. Donor relations and recognition
2. Public relations
3. Building esprit de corps and having fun
4. Friend-raising
5. Public education
6. Raising money
This model is based on the concept of telethons. Little money is raised at telethons. It's raised well in advance, and the telethon is the "pay-off" for donors. A corporation that gets to hand over a giant-sized check on TV gets a lot of PR value for its support - this is excellent recognition.Exceptions include: bowl-a-thons, walk-a-thons, and other events built on "low-impact" participation by a large number of volunteers. These are a good bang for the buck, because they are grassroots methods of building a wide donor base and raising awareness.At the other end of the spectrum are golf tournaments, black-tie dinners, and other elite events. They can be of questionable value, because they generally return little cash for donors' and volunteers' efforts.
Often the primary motivation for participating is the golf, the dinner, the networking, or "being seen." People often buy tickets to these events as favors to their friends, but they aren't necessarily engaged by the organization's mission. The same effort and expense could easily generate far more revenue and sustainable support using other methods.That said however, the six-point list above does point to the potential for an event to have significant value for an organization beyond the bottom line. It's important to balance effort and reward on many fronts and to determine how much value can be attributed to each purpose. This is organization-specific. For example, a black tie dinner, as I mentioned previously, may have little value in many of these areas, yet they can be excellent friend-raisers. And political black-tie fundraisers are usually strong in all areas.
A fair evaluation of special events using these criteria may help your organization recognize that events may be more valuable than the net proceeds might suggest. On the other hand, they may help your organization realize that your event is just a black hole for volunteers' energies and donors' good will, and that corporate underwriting is being eaten up by expenses. Perhaps the recent trend toward "non-events" is the right choice for your organization. After all, donors may be just as happy to limit their "donations" to the price of a golf tournament entry fee, and everyone else might be happier to skip all the work and accept a donation equal to the ticket net proceeds. "Non-event" events have become popular because they cut to the chase, let everyone off the hook for showing up and cleaning up, and they leave volunteers with time and resources to engage in other public education and fundraising initiatives.
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How to Build a New Base of Individual Donors
Who's on First?
CommUlinks has heard from several organizations that are currently working on annual gift campaigns, "non-events" and matching grant prospects. Even if you are not working on any of these, a burning question all of the nonprofits have (as do most of you) is "how do we increase our individual donor base?" Some would add "on our budget, that is." The answer is in two simple words: Who and How
ASK WHO
Send this list of questions to your board, volunteers and staff. The key to doing this is to try not to "qualify" people. Don't rule out anyone. By that we mean, don't ask yourself who has money to donate, just to ask, "Who supports us, and who should support us?"
Who do we already know?
Your list may include: Current donors, volunteers, board of directors, vendors, neighboring businesses, other organizations and so on. Don't forget your constituents and your staff.
Who do the people we know also know?
For now, answer as much as you can about this question. These can be specific names of individuals or they can be groups to which they belong. For example, a vendor may belong to a professional association; a volunteer may belong to a service organization. In the future, you may consider asking the people you know to share this information with you in some formal way.
Who do we want to know?
This is an important question to ask of everyone who is involved in your organization. Another way to ask it is, who should know about us? This list should include everyone who should have an interest in your mission, even those that seem far-fetched.
Who already knows who we want to know?
Here is a scenario that may seem improbable but is not: You believe a certain celebrity should know about your organization. You find out that one of your volunteers has a brother who belongs to the screen actor's guild because he did some acting years ago. Remember six degrees of separation? This list should include someone who may know the person you want to know, even if you are not sure.
Who don't we know?
How do you make a list of those you don't know? The best way to start is by knowing more about your donors. If you don't collect data on your individual donors, it would be a good idea to start doing so. These data will be very important in finding "like-minded" people for the second part of this exercise.
Next: Compile your comprehensive lists:
Send the compilation back out to your board, volunteers and staff for review and additions. Ask each of them to highlight relationships they have with everyone on the list, no matter how slight. This list should evolve over time.
How Do We Get To Home Base?
ASK HOW
How do you reach everyone on your list? Here is a list of ways to reach the people on your new list. In each case, we will provide the inexpensive way and the costlier way:
Reach the people you already know and some of the people they know:
Inexpensive methods:
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Send them an e-mail that includes a list of goals you are trying to achieve, items you need, a story about your organization. Include a simple donation form. Ask everyone on this list to forward the email to their contacts.
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Provide each person on this list with several copies of a one-page sheet about your organization and how to donate and ask them to pass them on to people they know.
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Create a letter about your organization that people can include in their own holiday card mailings. This is especially effective if targeted to people who are affected personally by your organization. The individual can tailor the letter as well.
Costlier methods:
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Have an open house or another event (such as a guest speaker or forum) and invite everyone you know. Send an extra invitation they can share with someone else or, give each person you know a set number of invitations and ask them to personally invite others. Invite the media - especially local print and radio. If you have a speaker or forum, send the media a news story containing a summary of the presentation. Many hometown newspapers will print your story.
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Include everyone you do know on your mailing list. Make sure you gather information in everything you do. Everyone who has contact with your organization should be on your mailing list. Get e-mail addresses whenever possible. Then, write a letter and tell your organization's story to everyone on your list.
Inexpensive Methods:
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Post a list on your website of organization contacts you want to make: "Our organization is seeking to make connections with people who belong to . We believe these organizations may have a special interest in . If you belong to one of these organizations or know someone who does, please contact us."
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Ask a person you know (or who knows someone who knows) to approach a group to which they belong to hold a special event in your honor.
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Recruit volunteers to research and make calls to as many people as possible on your lists - work through people you know.
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Send a survey to your current donors asking them why they are involved with your organization and some demographic information. (Or post one on your website).
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Establish a speakers-bureau of board members, volunteers and staff who can tell your organization's story to service organizations, clubs, business groups and associations.
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We mentioned this already, but always collect the name, address, telephone number and e-mail address of every person who is in contact with your organization.
Costlier Methods:
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Purchase or rent mailing lists and send out donor/member acquisition letters.
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Develop a comprehensive marketing, communications and public relations strategy. Dedicate a staff member or hire a consultant to do it.
Keep track of your contact lists and your progress toward reaching the people you wanted to reach. Get the people who know and support your organization to help you build your donor base, and, by the end of a year, you will have new friends who know your organization well enough to help you recruit even more new friends.
It is also important to make donating to your organization as easy as possible.
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Communications are Vital for Donor Satisfaction
Once upon a time, I treated myself a maid service. Two women came to my home and cleaned it top to bottom. They did an excellent job, and I put their magnet on my refrigerator. I never heard from that company again. No direct mail. No customer satisfaction survey. No phone calls.
The truth is, if they had done any follow-up at all, it wouldn't have taken much to convince me to indulge. All I needed was a little push to splurge on their service again. I remember the great job they did. But, more importantly, now I remember that they never bothered to follow up. That was more than three years ago. They haven't been back.
Acquiring donors (or customers) is expensive. Keeping the ones you have is cheap by comparison. Losing a donor is more expensive still. You must not only find another donor, but you've also reduced the universe of donor prospects by one.
Over the years, I have donated time and money to many nonprofits, and I recommend that you do the same, because you'll learn what it is like to be on the donor-supporter end of communications. The results of my research into how organizations communicate with donors have been very interesting.
A few months ago, I sent small donations to two national organizations that have similar missions. One thanked me for my donation immediately, and they sent me address labels as a token of their appreciation. The other organization never acknowledged my gift. The first organization followed up a month later with another appeal from their Colorado chapter. They also enclosed more address labels and a custom printed note pad with my company name on it. The labels don't amount to much, but it felt good to be appreciated. I never heard from the second organization again. I will continue to support the first organization.
Two years ago, I sent a donation and a personal letter to a local nonprofit organization I have always respected. I told them in my letter how much I admired their work. They acknowledged my donation with a form letter. Then a year later they sent a standard direct mail appeal. They never responded to my letter, and I have not heard from them since. I probably won't donate to them again.
I donate regularly to a nonprofit that has a direct impact on my life. They contact me personally and they contact my business. I always take their telemarketing calls, and I read everything they send me. I donate to them at least four times a year, and they never forget to thank me. They make sure to keep me posted on their activities.
Years ago, I volunteered for a nonprofit organization. I never gave them a cash donation. Even though I no longer volunteer, and I never donated, they keep me on their mailing list. They send all their appeals and their annual report, which I always read. I make many referrals to this organization, because I feel I know them well, and they care enough about what I think of them to send me their information.
What can you learn from these experiences?
1. People who send unsolicited donations may be among your best prospects. They may have a very personal interest in your organization. They should get your immediate, personalized attention. They can be cultivated and will most likely give more money if you ask. It would be worthwhile to send a brief survey to ask how they learned about and chose to support your organization.
2. Human services agencies should not assume that those you serve cannot or will not donate. Always ask! These are the people who know best the value of your work.
3. Put everyone on your mailing list who has contact with your organization. Never forget your volunteers, and don't give up on lapsed donors.
4. Don't under estimate the impact of educating people about your mission simply because they do not donate to your organization. They may be your best advertisers.
5. The largest organizations can still make every donor feel important by personalizing responses, even when the response is mass-produced. Did you spell the name and title correctly? Did you "remember" and acknowledge the amount of their last donation?
6. An effective appeal does not require expensive materials or lots of color. Some of the best pieces I have received have been simple, one-color pieces that had great pictures and generated lots of emotion. Even post cards can do the trick.
Above all, follow-up and thank donors. Don't give up. True story: In 1997, an Aspen woman became a member of a Denver nonprofit. She renewed in 1998, and then never sent another penny. That organization never gave up on her, sending newsletters, legislative action alerts, member updates, progress reports and fundraising appeals. In 2003, five years after her last contact, the organization received a check for $1,000,000 from her estate.
Let CommUlinks help your organization bring an integrated approach to donor relations, marketing and fundraising.
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