Minor office drama can illustrate fundamental truths about fundraising. You’ve lost your stapler. Again. If you email folks in the surrounding cubes, odds are good that several of them will offer a loaner.

Imagine, though, that you need help getting your cranky bulldog, Mr. Teeth, to the vet. Even emailing forty or fifty coworkers is unlikely to generate a volunteer. Email messages aren’t a powerful enough medium for such a request. But someone has to hold onto your dog. The headrests can’t take more gnawing.

Time for the direct approach. You shuffle down two rows and over one to your friend Wendy’s cubicle. She’s always talking about volunteering at the animal shelter, and there’s a Dog Rescue calendar on her wall. “Wendy, I need a big favor,” you say. “Someone has to hold Mister Teeth in the back seat while I drive him to the vet. Can you help?” Wendy frowns thoughtfully, but her eyes travel from you, her pal, to the doggie calendar. “Sure.”

Major donor fundraisers will recognize the moral. Staplers are easy. But only a true friend will get slimed by Mister Teeth.

There are, broadly speaking, two means of communicating with nonprofit donors. One uses postal mail, special events, email, and the like to reach many donors at once. This strategy is great for soliciting many modest contributions. Technique two involves personal phone calls, personal letters, and in-person meetings to touch one donor at a time. This is the way to bring in large gifts.

This is very important since between 60% and 80% of individual donor dollars available to a nonprofit come from major gifts. They only get them, though, if they use Technique Number Two. Mass communication doesn’t buy face time with Mr. T.

Let’s talk about everyone’s favorite fundraising topic—the Fear of Asking for Money! Most of us have it. We dread asking; we dread asking in person most of all. Why? Think about the messages you heard about money as a kid. What did your family, community, friends, the media, and other sources tell you?

I was taught by Southern Baptists that money is the root of all evil, that it is strictly private, and that no one should ever talk about it. When we, as adults, ask someone for money the ghosts of these statements rise up behind us and whisper “Only bad people do that!” If you keep in mind that the ghosts are there, though, they begin to lose their power. It’s like stage fright. Face it once successfully and it starts to go away.

I train many new directors of development in our classes, and there is one more thing that I tell them. We are sometimes reluctant to solicit donors because we feel that we are “asking for charity.” Put another way, we are asking for something and the donor is getting nothing. It seems like a one-way transaction. It isn’t. Donors generally care about the issues on which we work. However, they do not believe that they have the time, expertise, training, or resources to tackle these matters themselves. But they know that you do. So they are hiring you, in effect, to do what you both want. They give their gift in return for your work.

What is a major donor, anyway? A major donor is someone who, when asked directly to make a significant gift, contributes hundreds or thousands of dollars (or more) depending on the size of your organization. Very rarely a major donor will give to you out of the blue. This, like the Tooth Fairy, is not a source of support that we can count on. Someone needs to ask them personally.

How does one find potential major donors? First rule: Stop looking for wealth! We want people who are willing to give. Some are wealthy. Most of them, and most major donors, are not. Second rule: Look at the giving records of your existing donors and see which of them are donating in ways that say “Ooh! Ooh! Look at me!!” Have they made a single contribution greater than $99? Was their first gift to you $75 or more? Do they give, consistently, in response to a high percentage of solicitations? Look for unusual, positive patterns. Show your donor list privately to your board, staff, and volunteers and ask if they know of anyone on it whom they think could give a significant gift.

Next figure out three things about each potential donor. These are in order of importance.

1) What is their connection to your group? If they have a relationship with someone in your world, that is the best person to ask for the gift. If they have no personal connection you can go on the strength of their connection as a donor.

2) What is their motivation for giving? Why do they care about the group? Knowing this will help you to frame an appropriate appeal.

3) What is their giving capacity? How much could they give if they were asked by the right person and decided to make a big gift? This will help to determine how much you should ask for.

Determine which potential solicitor is the best person to approach each donor. This is dictated by the connection question. The answers to the other two questions will indicate how to ask and for how much. Send a letter to each donor telling them who you are, that you want to meet in person, that you want to offer them a chance to increase their level of support, and that you will call them in the next few days. Hand address these donor letters. Hand addressed envelopes will be opened and read.

Call within a week to ask for a meeting. Ask “When can we get together?” If they offer you money on the phone, tell them that you really want to talk in person and that if, at the end of that meeting, they still want to give the figure that they named on the phone that you’ll happily accept it.

When you meet thank the donor for her past support, tell her about the work of your group with emphasis on the issue(s) that interest her, and then offer to answer her questions. Tell the truth! Usually the meeting will last about 30-45 minutes. When you feel the conversation winding down, thank the donor again for her past support and then ask her for a specific amount of money. I usually make this a statement: “Five thousand dollars would be tremendously helpful.” Then BE QUIET. It’s the donor’s turn to talk.

She will say one of six things; suggested responses are in italics.

1) Yes! Great! Thank her again, and ask how and when she would like to make the gift.

2) I need to think about it. Okay. Ask her if there are any questions you could answer now to help her in her consideration, then ask if you can call her on (pick a specific day in 3-5 days) to hear her decision.

3) I need to ask my partner/wife/etc. first. Okay. Ask if there are any questions you could answer now to help them both in their consideration, then ask if you can call her on (pick a specific day in 3-5 days) to hear their decision.

4) That’s a lot of money. Yes, it is a lot of money. There are not many people we could ask for such a gift. (She will then move to one of the other five responses).

5) That’s too much. What would be more comfortable for you?

6) No. No means no. Honor the refusal, and thank her for her existing support.

If each potential donor is asked in person by someone with a connection to her you will receive a gift about 50% of the time. This is the most efficient and successful way of getting large gifts from individual donors.

This article was originally published at OnPhilanthropy.com.

Buzz Harris is the Executive Director of the Development Resource Center, whose mission is to teach the fundamentals of successful fundraising and governance to nonprofits and NGO’s. The DRC offers inexpensive, web-based distance-learning and in-person courses on fundraising and board service. Buzz can be reached at http://www.developmentresource.org/contact

This seminar will be taught by Shava Nerad, former E.D. of the Tor Project, and Buzz Harris, E.D. of the DRC.  Registrants will receive information about the conference call via email.

Tuition: free of charge

Seminars will be held from 7:30 P.M. – 8:30 P.M. (EDT) on Apr. 22nd; May 5th & 26th; and June 11th, 18th, & 25th.  Check back over the next few weeks for additional future dates.

Click here to register.

Nonprofit boards often struggle to find new members. And they rarely have a documented process in place to tell them how. Let’s eavesdrop on a typical conversation between Liz, a current trustee, and Malik, a potential board member…

Liz: Hi Malik. Thanks for meeting me for coffee.

Malik: Sure Liz, no problem. What did you want to see me about?

Liz: Mal, you know that I’m on the board of the Simons County Food Bank, and when my colleagues and I were talking about other people in the community whom we felt would make great board members your name came up. Hold on! Before you say anything let me tell you what it’s all about.

It’s not that big a time commitment. You wouldn’t have to do any fundraising. It would be ok if you weren’t able to come to all of the meetings. We just think that you’re a very committed, smart person who cares about hunger in our area, and we’d like you to be at the table to offer your thoughts and counsel. Could you do that for me? Please??

Malik: Well… I’m kind of surprised, and a little flattered. But, umm… sure!

Sound familiar? You know what’s coming next, right? Malik shows up at his first board meeting, and he suddenly finds himself expected to do one or more of the following: oversee a budget printed mostly in red, help get a grip on the problem-child Executive Director, jump on the fire brigade to save the group from its latest death spiral, and—you guessed it—raise some cash fast! I mean, the rent’s due on Tuesday, right?

What happens then? Malik becomes Mister Cranky Guy! Let’s rewind a bit; what was the job description that Liz provided?

Board Member Responsibilities (per Liz)

1) The board does not require a large time commitment.

2) No fundraising work is required.

3) Regular meeting attendance is not required.

4) It’s helpful if members care about the mission.

5) Your primary role is to be present to offer thoughts and counsel.

Based on the list he was given Malik is absolutely right to be cranky! Liz, in fact, misrepresented the role (probably out of a desire to get a “yes”). If the board had no written job description for its members then Liz also had no official, documented resources to help her. That is, unfortunately, very common. Malik will certainly be annoyed. He may even walk.

This process and its cousins have two endearing qualities: they’re a set-up for failure, and they piss people off. So don’t go there! Let’s look at an alternative recruitment strategy.

The board should create and approve a job description for its members. Part One of this series of articles is an excellent resource for such a description. The board should also create a Committee on Trustees and draft a charter for them that includes four responsibilities: managing new board member recruitment, providing appropriate orientation for new board members, arranging for skills-building and educational trainings for all board members, and overseeing the board’s annual self-evaluation process.

The committee should design and recommend a written recruitment process for new trustees to the whole board. The board then finalizes the process and votes to approve it. Here is the counsel that we offer our students on this.

Boards function best when they have somewhere between thirteen and nineteen members. Fewer than that and the rate of burnout rises. More than that and the board’s group process tends to become unwieldy. Avoid situations in which the entire board comes up for re-election at the same time. 100% board turnover will create an artificial (and avoidable) earthquake for your group’s stability. Have your trustees serve two or three year terms and stagger their terms of service so that only half or a third of the board members are up for re-election each year.

The board should determine how many open slots there will be in the next election cycle, what sorts of people and/or skills are most needed, and what the deadline for the receipt of applications will be. That’s right. The Committee on Trustees advertises the fact that you are looking for new board members and invites people to send in an application and cover letter expressing their interest. The marketing material should include the board job description, your mission statement, an indication of what kinds of new members are especially encouraged to apply, a link to your website, and the deadline. The board can also approach individuals in whom it is especially interested and personally invite them to apply. This is not a guarantee of acceptance, but it is good marketing.

The Committee on Trustees reviews the applications that come in by the deadline, decides which candidates to interview in person, and, based on the interviews and application materials, makes written recommendations to the whole board on candidates that should be considered for the open slot(s). If your board is elected by your group’s membership or another body then these recommendations are passed on to them. If your board is self-perpetuating then it decides what candidates to offer positions to, if any.

Candidates who are offered positions receive written notification of that fact and are asked to provide an answer within a day or days. Candidates who are not offered a position, including those who applied and were not interviewed, are informed in writing that their interest is much appreciated but that the board could not offer them a position at this time.

Stop for a moment and imagine the experience and expectations of a new board member sitting down for her first meeting who went through the second process as opposed to the one that Malik passed through. How would they be different? Exactly.

Guess what? We’re not done. New board members need orientation resources so that they will come up to speed quickly. Two things, at least, should take place. First, each new trustee must receive a board manual that contains the following information: the board member job description, the mission statement, a brief history of the group, the most recent annual report, the current fiscal year’s budget, the group’s bylaws and articles of incorporation, a schedule of the board meetings planned for the year, sample minutes of the last few board meetings, a sample board agenda, an outline of your board meeting procedures, a list of board committees and what they do, a contact list including all other board members and the E.D., and anything else that you deem useful.

Second, all new board members should be assigned a “buddy” from among the veteran trustees. The new person and the buddy should sit down at the new member’s first meeting and schedule one private get-together (via phone or in person) per month for the next three months. They may also talk at other times, but having these meetings scheduled will make sure that there is time to talk, deal with questions, and help the new trustee to settle in.

Using this process or one like it will ensure that your board’s new recruits arrive well-informed and motivated, and that they receive the information that they need to become active and constructive members of one of the most important parts of your organization.

Next month’s column: The Life Cycles of Nonprofit Boards

Buzz Harris is the Executive Director of the Development Resource Center, whose mission is to teach the fundamentals of successful fundraising and governance to nonprofits and NGO’s. The DRC offers inexpensive, web-based distance-learning and in-person courses on fundraising and board service, including “Building a Strong Board of Directors” (next one: May 23), “Building a Donor Base” (begins May 6, four sessions) and “Grant Seeking” (April 4). Buzz can be reached at http://www.developmentresource.org/contact

© 2009 Buzz Harris, Development Resource Center

Reposting of this article is permitted as long as the author is credited, no alterations or additions are made, and hyperlinks are retained.

It will take place on Monday, March 16th, 2009 from 7:30 A.M. – 12:30 P.M. at the University of Massachusetts Lowell campus in the Wannalancit Building, 600 Suffolk St., Lowell, MA, 01854.  Parking is available in the Ayotte Garage adjacent to the Tsongas Arena.

There is no cost to attend, but RSVP is required.  Please visit http://www.tsongas.house.gov to register.

Since then Shava and I have talked regularly, often at the Diesel Cafe in Davis Square, Somerville (MA).  In response to many requests from our students we will soon offer an Advanced Grant Writing seminar taught by the woman herself.  Shava is an expert, veteran grant writer with many personal and professional connections in the foundation and corporate giving worlds.  She will be lecturing as well as offering one-on-one consultations with each seminar student.  We’re finalizing the curriculum this month and plan to offer the first class in the spring or early summer.  Hopefully soon thereafter we will begin offering it via distance learning.

Almost everyone in the nonprofit communities understands and uses the concept of stewardship.  In this time when so many of our organizations face serious challenges to their financial health it is important to see stewardship as not only the proper care of what has been entrusted to us but also the recognition of and the care for the possibilities at hand.  There is potential “out there,” we can ignore it or we can use it – that will be the measure of our stewardship.

The beginning of development simply must be a passion for excellence.  That means that our organization must have a well defined mission.  We need to be committed to exemplary standards in our management of human and of financial resources.

It’s Wednesday in the digital workplace. You’re a Luddite. An anxious Luddite. One of the office twentysomethings is in urgent monologue with you about “Web Two-Point-Oh.” Your digital footprint is “so 1995” and you need a “MyFace” account immediately! You’ve heard this before. You’ve read about it. And the kid is smart.

What’s a manager a shade greyer than the cybergeneration to do? First, don’t panic. Yes there is a new generation of marketing and communications tools out there: Facebook, MySpace, Twitter, LinkedIn, RSS feeds, and the fast-evolving Blog, among others. Your anxiety is natural. Society has hit one of those moments of rapid technological change when what was true for generations suddenly isn’t.

Nothing New Under the Sun

It’s 1439 all over again, and Johan Gutenberg’s printing press has all the scriveners in a tizzy! They’d just adjusted to pamphleteers flooding the streets with thousands of handbills (the blogs of their day) when Moveable Type 2.0 brought out newspapers. The post-medieval younger set was all over them.

So you’re driving an old Citroën 2C “Double Horse” down the Infobahn; how do you merge left? First decide why you want to. Are you looking to raise your organization’s profile?, attract donors?, recruit volunteers? We stress to our students that they shouldn’t jump in without knowing their goal(s).

Getting Started

Start with a blog (short for “Web Log”). It’s a place for posting documents, news analysis, activist alerts, newsletter articles, imbedded videos, and anything else you like. We call it “content,” and it’s key to your success. Your content should be useful, interesting, and updated at least two to three times a week. New blog material will keep your constituents interested and make them visit often. It should also be framed to move them toward your goal. Provide links in the text for people to volunteer or donate. Offer them the chance to register for an event or receive your e-newsletter. Draw them in. Choose a blog site with high traffic and high visibility and link to it directly from your home page. We recommend WordPress to our students.

Directing Traffic

Use other social networking tools to steer people to your blog. Set up a “cause” page for your group on Facebook and update it regularly with snippets of your blog content. Use links to bring them to the blog for the full text. The search function on Facebook lets you find people that your staff and board members already know and invite them to become “friends.” Your cause page can (and should) be set up to allow donations directly from Facebook users. If your organization is focused on music and the arts do the same thing on MySpace. If you have many business and professional contacts then create a group profile on LinkedIn.

Twitter is a communications system that allows users to send short messages that are accessible to its million-plus subscribers. You can post questions for feedback, put out news of new blog content, and report what your group is up to. People express their interest in your Twitter entries by becoming “followers” on your Twitter profile. RSS feeds (“Real Simple Syndication”) allow those who click on an icon to be notified via email or text message of new content on your site. Remember, these digital outposts and communications tools are there to steer people to your blog. This is quite similar to good old-fashioned donor acquisition. Throw a net out into the digital sea and draw in those who are interested. Engage with them via your blog, email, invitations to events, etc. to bring them closer and create a relationship between them and your group. Get them invested. Figure out your goal(s) for these tools, research existing content in each of them that relates to your group’s work, and jump in! To learn more see Beth Kanter’s informative blog.

Buzz Harris is the Executive Director of the Development Resource Center, whose mission is to teach the fundamentals of successful fundraising and governance to nonprofits and NGO’s. The DRC offers inexpensive, web-based distance-learning and in-person courses on fundraising and board service. This spring the DRC will begin offering a new class on social networking media for nonprofits.  Buzz can be reached at http://www.developmentresource.org/contact

NOTE: This article was originally published on the Nonprofit Conversation blog.

by Buzz Harris, Executive Director, The Development Resource Center

~ Note: This article pre-dates our blog. We decided to share it here as it is still timely. ~

Fundraising during a recession is always challenging. Here is a multi-part strategy to ensure that your organization’s journey through recession is a smoother, more prosperous one. Bring your board and staff together separately to review and recommit themselves to the organization’s mission. Inform both groups, candidly and transparently, about your income and expenses and the reasonable expectations for fundraising. Faced with this challenge they may have valuable input and suggestions. Solicit their thoughts and support.

Good fiscal practice tells us to visit expenses first. Where can you reduce spending without harming your core program? What purchases and upgrades can be deferred? Create an austerity version of your current budget. Imagine that your income comes in ten percent or fifteen percent below even this plan. What would you cut at various benchmarks? Get buy-in for any cuts before you are forced by events to make such decisions. Consider implementing across-the-board, temporary compensation reductions rather than terminating positions due to income constraints.

Do you have an endowment or a reserve fund? If so, be prepared to draw on the principal to support your austerity budget through hard times. That is why these funds exist. Prepare your board in advance for this eventuality to avoid surprise. If you do not have one set up a reserve account right away. Some or all funds from planned giving should go into such a fund. You can also budget five percent or so of your regular income to build a reserve over time. Every organization needs a financial cushion.

Next turn your eyes to your base of individual donors. Do you have a major donor program that yields about sixty percent of total donor revenue? If not, you are in luck! You have a vast untapped resource. How much staff time do you spend on individual donors at all levels? About sixty percent should be focused on relationship building and phone or in-person gift solicitation from donors who could give you gifts of roughly $500.00 or more. You can save time by cutting back on the number and size of special events, and reducing time spent on annual fund mailings and phone banks. Read the sections on major donor fundraising in Kim Klein’s Fundraising for Social Change and start a program right away. However, DO NOT reduce your donor acquisition efforts. Organizations need new donors to replace those who regularly move on.

If you already have a major donor program ask your existing donors for names of additional prospects whom they know. Check your database for suspects who gave initial gifts of $75.00 or more, whose yearly giving is more than $100.00, or who have given one or more identical gifts per year for five years or more.

Organizations that are largely grant funded should redouble their research efforts to find new prospective funders. Reframe your work to access new funders whom you may never have considered. For example, an environmental group engaged in water quality improvement should look beyond green funders to public agencies concerned with tourism (cleaner rivers mean increased tourism opportunities), poverty alleviation funders (cleaner water means increased, safer fisheries and a better food supply for local communities) and the like. Be inventive and honest in reframing your program for new funders.

DRC courses on these issues.

As part of the application process, grant applicants must provide specific information concerning their position, programs and coalition work on a range of political issues, including race, class, gender, reproductive rights, lesbian and gay rights, age, and disability. RESIST believes that building a movement for social change requires groups to discuss issues that may not be central to their organization or work. For those organizations who have not had the opportunity to address these issues, we hope that our grant process will help to facilitate such discussions.

Successful grant applicants are small-budget groups that struggle toward a broad vision of social justice, while continuing to oppose political and institutional oppression. RESIST defines organizing as collective action to challenge the status quo, demand changes in policy and practice, and educate communities about root causes and just solutions. RESIST recognizes community organizing includes a variety of stages and strategies.

Therefore, RESIST supports strategies that

• build community
• organize or educate people to take action
• encourage collaborations with other social change organizations
• increase skills and/or access to resources
• produce leadership from the constituency being most directly affected
• promote organizational longevity

To be eligible for RESIST funding, applicants must:

• have an organizational budget under $150,000 per year;
• carry out most of their work in the United States;
• submit progress reports for all prior RESIST grants; and
• be a nonprofit organization with 501(c)3 status as determined by the IRS, be a federally recognized American Indian tribal government or agency, or be sponsored by one of the above.

RESIST does not fund:

• individuals
• groups that primarily provide direct services (to individuals, families or communities) that are not part of progressive organizing activities
• research, litigation or legal service organizations unless they are directly connected to progressive organizing campaigns
• organizations located outside the United States and US Territories
• the development or production of films, videos or radio projects
• media or cultural organizations not directly connected to progressive organizing campaigns
• publications, workshops, classes, conferences, media events, arts, or theater productions unless they are part of an ongoing community organizing effort
• organizations with access to traditional sources of funding
• other foundations or grant-giving organizations

For more information see RESIST’s Funding Guidelines.

The DRC offers classes on grant writing.

The basic answer to your first question is “yes.” Existing nonprofit groups can take another group under their 501(c)(3) umbrella, if they wish, by acting as a Fiscal Sponsor. Under a Fiscal Sponsorship arrangement a group that is not currently a nonprofit signs a letter of agreement with an existing organization that is already recognized by the Internal Revenue Service (IRS) as a 501(c)(3) nonprofit. The letter, in effect, makes the new group a ‘project’ of the host organization. The advantages for the sponsoree are many. It can receive tax-deductible donations, be exempt from taxes that do not apply to nonprofits, and become eligible to apply for a much broader range of grants than those available to groups that do not have (c)(3) status, among others. The sponsoring group becomes responsible for fiscal oversight of the new group, and it must ensure that its sponsoree adheres to IRS requirements for activities permitted to and not permitted to nonprofits. The sponsoring group often holds the funds of the sponsoree in its own accounts and either reimburses them for expenses incurred by the sponsoree or issues checks to the sponsoree when requested to cover upcoming expenses. It is typical for the sponsoring group to charge a fee of between two and five percent of gross revenues of the sponsoree to cover the cost of administering the arrangement.

The sponsoree maintains its own mission statement and staff as well as its own oversight body, which is often called a Steering Committee while it is under Fiscal Sponsorship. The Steering Committee becomes the group’s board of directors once it has its own independent nonprofit status from the IRS. Sometimes groups that gain nonprofit status under a Fiscal Sponsorship agreement are intended as short-term projects, and they simply cease operations when they have achieved their goals. In such cases the sponsoree does not seek its own 501(c)(3) approval from the IRS. Fiscal Sponsorships are generally short-term arrangements in either case. The sponsoring group should probably stay in touch with its sponsoree concerning their filing of IRS Form 1023 which begins the process of seeking their own nonprofit status. It is important to remember that the sponsor is directly responsible for the conduct of group(s) that it is sponsoring. If they engage in activity prohibited to nonprofits by the Internal Revenue Code the sponsor is answerable to the federal authorities and could suffer sanctions up to and including the loss of their own (c)(3) status.

Groups considering Fiscal Sponsorship should consult with an attorney familiar with this area of nonprofit law. You can read more about Fiscal Sponsorship at the Nonprofit Genie FAQ.

If you have questions about nonprofit fundraising and fundraising-related matters email us.

We offer a wide range of classes on fundraising and board governance.