Fundraising, Part 1: Basics key as economy starts to recover

By Todd Cohen

[Note: This article is from a report written for Blackbaud, which asked me to look at fundraising strategies that nonprofits have found to be effective.]

With the struggling economy beginning to show some life again, and donors regaining some confidence, nonprofits need to be focusing on fundraising fundamentals.

That is the view of fundraising professionals in nine fields of interest.

“The primary tactic that seems to work most effectively is to ask people for money,” says John Taylor, associate vice chancellor for advancement services at North Carolina State University.

“So many organizations I have worked with just kind of sit back and watch the money come in the door, and expect the same dollars from the same donors every year, and fail to recognize that the philanthropic climate is changing,” he says.

Bill McGinly, president of the Association for Healthcare Philanthropy, says building a “culture of philanthropy” within a nonprofit is critical, as is building the capacity of the nonprofit’s fundraising operation.

“Until fundraising is recognized as a strategic partner in planning for today and for the future of the organization,” he says, “you’re going to struggle a bit more in order to build or grow philanthropy.”

From engaging donors and volunteers and demonstrating impact to effective branding, direct-response marketing and back-office operations, fundraising professionals say, nonprofits need to invest in their fundraising programs and operations if they expect to produce results.

This series looks at some strategies that fundraising professionals say are working in their fields of interest, starting with higher education.

Higher education

When John Taylor joined N.C. State University as associate vice chancellor for advancement services in November 2008, just after the economy collapsed, the school’s advancement operation had less than a handful of prospect researchers and roughly 1,300 rated prospects coming out of its most recent campaign.

Today, the school employs three people in its prospect management department and another six in its prospect research department, and has 21,000 rated prospects in its database, Taylor says.

That is one result of a “complete reengineering process” of its fundraising operation that N.C. State launched at about the time Taylor joined the university.

Spurring that overhaul have been not only the ailing economy but also heightened competition for philanthropic dollars, huge growth in the number of nonprofits, and the added challenge of catastrophic disasters like Hurricane Sandy, he says.

“You just can’t rely on those same dollars from those same donors,” he says.

Key to N.C. State’s strategy has been support for engaging its donors, including “more focused suggestions,” renewals of annual gifts, “more targeted” asks, and solicitation of eight-figure gifts.

And that has paid off: In the first six months of the fiscal year that began July 1, N.C. State raised $82.4 million, up from $26.9 million in the same period a year earlier.

The school is working with donors not just to renew the gifts they make every year, but to make “much more substantive, transformational gifts,” Taylor says.

Its prospect management meetings, for example, feature “focused conversations about strategies for approaching donors, prospect assignments, and making sure the assignments are fairly distributed” across the range of donor categories.

Those categories include initial “discovery” of prospects and whether they are viable as donors; “stewardship” of donors who have made a gift; “emerging” prospects who will be asked to make a gift within three years; and “top prospect” donors who will be solicited within 12 to 18 months.

The advancement office also sets expectations for major gift officers on the size of their portfolio, and on the number of asks and visits they should make, and uses that information to show their progress and evaluate their performance.

It also has invested heavily in infrastructure, increasing its advancement services staff by 50 percent to just over 30 people, and converting its operating system and development software system.

And it has been “asking people for money, and in particular for more money,” Taylor says.

In the six months through Dec. 31, 2012, annual giving totaled $1 million, up from $837,000 in the same period a year earlier.

And the number of households giving $1,000 or more has grown 25 percent.

“The most important tactic,” Taylor says, “is engagement of your constituency.”

Next: Healthcare groups invest in development capacity

The series:

Fundraising, Part 1: Basics key as economy starts to recover

Fundraising, Part 2: Health care groups invest in development capacity

Fundraising, Part 3: Human services groups focus on direct response marketing

Fundraising, Part 4: Museums aim to diversify donor base

Fundraising, Part 5: Major gifts a focus of environmental group

Fundraising, Part 6: Direct marketing a key for public society benefit group

Fundraising, Part 7: International affairs group aims to show

Fundraising, Part 8: Faith-based groups count on direct mail

Fundraising, Part 9: Independent school partners with parent volunteers

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