Donor relationships seen as key to fundraising success

By Todd Cohen

HIGH POINT, N.C. — A coach at the Boys & Girls Clubs of Greater High Point with a natural gift for connecting with people has helped cultivate important relationships for the nonprofit. When a parent of one of his soccer players was sick, for example, the coach sent get-well cards.

Later, that parent’s spouse phoned the Boys & Girls Clubs and asked how to help the organization. So it invited the spouse to serve on its board of directors. That individual, in turn, invited the nonprofit to apply for grants from the family’s foundation. Then the donor began volunteering for the organization, reading with children and helping them with their homework.

Over the course of a 10-year relationship, the donor has become one of the Boys & Girls Clubs’ top contributors, making a string of individual gifts of more than $10,000 each, compared to an average gift to the organization of roughly $150.

“All you have to do is say, ‘This is what’s going on,’ and that donor will say, ‘Let me write a check, let me help alleviate that problem,'” says Holly Ferree, vice president for development at the Boys & Girls Clubs.

Managing relationships

At a time of growing competition among charities for donor support, continuing uncertainty about the economy, and increasing expectation from donors for a measurable return on their investment, nonprofits increasingly are focusing their fundraising on building relationships with donors who have the ability to make large gifts.

“The number one lesson for any nonprofit is maintaining a close relationship with donors,” says Whitney Jones, president of Whitney Jones Inc., a fundraising consulting firm in Winston-Salem. “Fundraising is all about relationships management.”

Ferree agrees.

“The key to any fundraising is establishing relationships, making sure you’re letting donors know how the money is being used, and reporting results, being transparent,” she says.

Keeping it personal

At many charities, Jones says, 80 percent of the income comes from 20 to 30 donors.

“Even in a small organization, some donors are giving significantly more than anyone else,” he says. “The key is to maintain really close relationships with them, which is regular, personal visits to keep them informed.”

The goal of those visits, which should take place every three months, he says, is not to ask for money but to talk about “here’s where we are, here’s who we’re serving, here’s a touching story of someone we’ve served.”

Ferree says building relationships with donors requires “constant communication, making sure you have touch points throughout the year where you’re trying to reach your donors through quarterly publications, and having them in for special recognitions.”

The best approach is to have one-on-one conversations with key donors, she says, “making people feel special, making them feel they are part of something and really contributing to something that is making a difference.”

Board role

Jones says many nonprofits are small and lack sufficient staff to maintain relationships with donors, making it “incumbent on the board to get involved.”

And that makes it important that the CEO of a nonprofit work to build the board by developing relationships and identifying potential board members who are “connectors” who can connect the nonprofit to prospective donors.

To help find those connectors, a nonprofit CEO can ask either a board member or community leader to host a “friendraising” event in their home at which they can “share the vision and the passion for the organization,” Jones says.

A nonprofit also could host a luncheon both to raise money and identify prospective board members, he says. The organization might recruit sponsors to contribute, in advance, 90 percent of the total to be raised, and ask existing board members and donors to invite prospective board members and donors to the event. At the event, the nonprofit also would spell out its “vision and passion,” Jones says.

Setting priorities

With small staffs, limited resources and significant demands on their time, nonprofit CEOs need to focus and be resourceful about how to invest their time and the organizations’ efforts to raise money, Jones says.

“You’ve got to set your own priorities, goals in terms of the people you’re going to visit based on the potential return on investment of your time,” he says.

Accompanying the CEO on those targeted donor visits, he says, should be a member of the nonprofit’s board or development committee, which typically might include individuals such as those connected to foundations, corporations or local businesses, or a lawyer who handles trust work, or a banker who focuses on wealth management.

Peer connections

At Guilford College, a key strategy has been to recruit “passionate” major-gift donors to help secure major gifts from their peers, says Mike Poston, vice president for advancement.

“If somebody gives $100,000, put them in front of someone else who can give $100,000, he says. “Here is a passionate person, and make sure they talk to another person who hasn’t given but will give if they see someone who has the same passion and will invest. It’s matching the passion with the ability to invest through a gift.”

Equally important, he says, is to “cluster” those volunteers around a set of core needs, so existing donors who have made gifts to support a particular need will talk to prospective donors with a passion for the same need.

Organizations also should give prospective donors an opportunity meet people who have benefited from the programs that donors are supporting.

“You want to know that what you’re giving your money to is appreciated,” Poston says.

Volunteers as leverage

Community Foundation of Greater Greensboro has engaged volunteers to work closely with its staff on developing and soliciting key prospective donors, says Gordon Soenksen, chief development officer.

That requires communicating effectively with key volunteers “so you’re developing strategies that are appropriate for the prospects but also comfortable for the volunteers,” he says.

It also requires “engaged volunteers who are passionate about the mission of the organization and who are clear on the vision of the organization,” and “who are confident enough that they are willing to ask for the commitment or the gift, or appropriately set up the fundraiser to ask for the gift,” he says.

“Most of us at nonprofits are small staffs,” he says, “and engaging volunteers appropriately allows us to leverage our activity.”

Investing in infrastructure

Boys & Girls Clubs of America is promoting a program known as “Advancing Philanthropy” that encourages its more than 1,140 independent local Clubs to invest in their infrastructure “to get the best payoff for the kids we’re serving,” Ferree says.

“Donors want to see what their investment is doing,” she says. “That takes a greater investment of time and more people. We’re starting to see we have to do things differently.”

Instead of spending time on special events that might raise $20,000 and consume staff time, for example, local Clubs could assign a staff member to work with prospective donors and make requests for major gifts that might generate as much in donations, if not more, she says.

“It’s a culture shift,” she says. “It takes time.”

Telling stories, and selling

To raise money, Jones says, nonprofits need to create a “compelling vision” and two or three stories that reflect that vision and show how their organizations have helped transform the lives of the people they serve.

Soenksen says nonprofits should focus their fundraising on individuals — who account for well over three-fourths of charitable giving in the U.S. — and avoid “the trap of grantwriting as the sole fundraising activity.”

Grantwriting can consume “enormous amounts of time that could otherwise be spent with individual prospects.”

Nonprofits also should not be “afraid to hear ‘no,'” he says.

“It gives you a chance to come back to the conversation later on,” he says. “Fundraising success comes from relationships that have been carefully developed over time.”

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Giving inches up; recovery from plunge slow

Charitable giving in the U.S. grew slightly in 2011, regaining some of its losses from the collapse of the economy in 2008 but posting a two-year pace that marks the second-slowest post-recession recovery since 1971, a new report says.

After adjusting for inflation, giving grew 0.9 percent to $298.42 billion from a revised estimate of $268.91 billion in 2010, says Giving USA, a report from the Giving USA Foundation and its research partner, the Center on Philanthropy at Indiana University.

In 2010 and 2011, giving grew by an average rate of 1.1 percent, compared to an average of 2.6 percent, after adjusted for inflation, in the two-year period after each recession over the past 40 years, the report says.

Individuals accounted for 88 percent of all giving, with living individuals accounting for 73 percent total giving, and bequests and family foundations accounting for 15 percent.

Giving by living individuals grew to $217.79 billion, an increase of 0.8 percent after adjusting for inflation.

Individual giving as a share of disposable personal income was flat at 1.9 percent in 2011, the same as 2009 and 2010, but far below the 2005 high of 2.4 percent.

Corporate giving totaled $14.55 billion, down 3.1 percent from 2010 after adjusting for inflation, and represented 5 percent of total giving.

Corporate pre-tax profits, traditionally a key factor in corporate donation levels, grew 4.2 percent, compared to 25 percent in 2010, the report says.

Between 1971 and 2011, giving by companies grew more slowly than the average inflation rate, with donations by U.S. companies growing 3.1 percent a year, on average, during the period, compared to inflation that averaged 4.4 percent a year for the period.

“Corporate generosity is real, and the nation’s charities would certainly feel its absence should the contributions go away,” Jim Yunker, chair of the Giving USA Foundation, says in a statement. “However, at a year-in, year-out 5 percent-sized slice of the giving pie, pragmatic nonprofits should consider additional potential funding sources when planning their appeals.”

The report calculates total giving by roughly 117 million households in the U.S., 12.4 million corporations that claim charitable donations, an estimated 99,000 estates, and about 76,000 foundations.

Those donations go to about 1.1million charities registered with the IRS, plus at least 222,000 religious organizations.

Gifts by bequests totaled an estimated $24.41 billion in 2011, up 8.8 percent from 2010 after adjusting for inflation, and represented 8 percent of total giving.

Giving by foundations totaled $41.67 billion, up 8.8 percent after adjusting for inflation, and represented 14 percent of total giving.

Religious groups received $95.88 million, down 4.7 percent when adjusted for inflation, and accounted for 32 percent of all giving, the most of any sector.

That represented the second straight year of lower giving to religious groups, the report says, citing declines in church membership and attendance, especially among mainline Protestant denominations, as well as the changing economic climate.

Those declines coincide with average population growth in the U.S. of 1 percent a year, on average, the report says.

“Any charity that is heavily dependent on its members for the majority of its annual budget needs to be cognizant of issues that could affect growth, commitment and donations,” Thomas W. Mesaros, chair of the Giving Institute, the group that formed the Giving USA Foundation, says in a statement.

Giving to human-services totaled $35.39 billion, down 0.6 percent after adjusting for inflation, and represented 12 percent of overall charitable donations.

Still, giving to human services was the third-highest ever, trailing only 2008 and 2010, the report says, adding that human-services giving typically is strong during times of perceived need.

“It is possible that pertinent messaging from these charities is still resonating with donors,” it says.

Giving to education totaled $38.87 billion, up 0.9 percent from 2010 after adjusting for inflation, and represented 13 percent of all charitable donations, while giving to health totaled $35.39 billion, down 0.4 percent after adjusting for inflation and representing 8 percent of overall giving.

Giving to foundations fell 8.9 percent in inflation-adjusted dollars to $25.83 billion and represented 9 percent of overall giving, while giving to “public-society-benefit” groups such as United Ways and the Combined Federal Campaign grew 0.9 percent in inflation-adjusted dollars to $21.37 billion and represented 7 percent of overall giving.

In comparison, the report says, the three largest donor-advised funds in the U.S. – Fidelity Charitable Gift Fund, Schwab Charitable Gift Fund, and Vanguard Charitable Gift Fund – realized average growth of 77 percent in contributions received between 2010 and 2012.

Giving to arts, culture and humanities grew 1 percent in inflation-adjusted dollars to $13.12 billion and represented 4 percent of all charitable giving, while giving to international affairs grew 4.4 percent in inflation-adjusted dollars and represented 8 percent of overall giving.

From 2001 to 2011, giving to international groups grew 167.1 percent when adjusted for inflation, representing the fastest growth of any sector for the period.

Since 1987, giving to international affairs grew at an annual average rate of 9.4 percent, compared to a 4.4 percent average annual rate of inflation.

Giving to environmental and animal groups grew 1.4 percent, adjusted for inflation, to $7.81 billion, or 3 percent of overall giving, with gifts of $1 million or more to support the ongoing cleanup from the 2010 oil spill in the Gulf of Mexico likely contributing to the increase.

And giving to individuals, mainly medications from operating foundations created by pharmaceutical makers, accounting for 1 percent of overall giving, and another $8.97 billion, or 3 percent, representing “unallocated” giving.

High Point group serves Latinos

By Todd Cohen

HIGH POINT, N.C. — Last fall, nine juniors and seniors from High Point Central High School and Andrews High School completed their resumes and college applications with the help of eight students from a Spanish class at High Point University who worked with them over five work sessions.

Fostering the collaborative effort was the Latino Family Center of Greater High Point, a nonprofit that was formed in July 2010 from a program spun off from Catholic Social Services.

Operating with an annual budget of $118,000 and a staff of four part-time employees and a volunteer part-time executive director, the organization serves about 800 people a year.

With a staff that is entirely bi-cultural and bilingual, the center provides mentoring programs for students in middle school and high school; offers parenting courses; provides translation and interpretation services for adults and helps them get access to community services; and serves as an advocate for the Latino community.

“Helping people achieve their potential and their ability to further contribute to society is the American way,” says Evelyn Morales, a second-generation Mexican-American who serves as the agency’s volunteer, part-time executive director. “That’s what made our country great.”

Last summer, the Latino Family Center sent a group of kids to a NASA camp in Ohio.

It also works to plug Latino youth into local enrichment opportunities, and has participated in research by the University of North Carolina at Greensboro on attitudes and knowledge of Latino parents about helping their children move on to higher education.

And some older Latino youth volunteered last summer at a camp that was a joint project of the Latino Family Center and Wesley Memorial United Methodist Church, with some of those volunteers having attended the camp themselves as youngsters.

The center is the only local agency dedicated solely to working with Latino families in a city of 100,000 people, including 8,500 Latinos, Morales says.

Now that it is a separate nonprofit, she says, the agency is working to boost its fundraising, and has worked with consultant Michelle Speas on its fundraising strategy.

That effort will include doubling its 12-member board, getting more board members involved in designing a signature fundraising event, and raising awareness of the organization in the community, particularly among larger donors.

It also is making greater use of volunteers, and now counts on a core of 20 active volunteers.

And it is collaborating with other organizations.

Through a grant from the High Point Arts Council, the Latino Family Center and the YWCA will offer a drama program to provide diversity training to Latino children to help them better understand discrimination and bias, and how to deal with it, Morales says.

“We really want to give our kids hope,” she says, “and help them believe in themselves and not be dismayed by the lack of external validation from society.”

Brookstone Schools aims to grow

By Todd Cohen

CHARLOTTE, N.C. — At Brookstone Schools, where 87 percent of the 105 students qualify for free or reduced lunch, many of the students also are performing well above grade level in reading and math.

Serving low-income kids from throughout Charlotte, the Christian school is part of a broader effort to boost academic performance at underperforming schools in low-income West Charlotte.

Growing steadily since it was founded in 2001, Brookstone Schools now has moved into a larger building and added a summer program, and is considering a campaign to raise capital and endowment funds to help it add two more grades and possibly a residential program.

Founded with 18 children in kindergarten and first grade, Brookstone Schools has added additional grades as it recruited new students, including a sixth grade this school year.

The school operates with an annual budget of $740,000 and 13 employees working full-time and four working part-time, and generates seven percent of its funds from student tuition and fees.

Contributions from individuals account for 48 percent of its funding, along with 39 percent from foundations, 8 percent from corporations, and 5 percent in church support.

That funding includes $2,500 sponsorships from individuals and organizations to support each of 88 students for a year.

Brookstone Schools also received a big boost from Carolina School for Children, a 10-year effort to create a faith-based residential school for children in need modeled on the Milton Hershey School in Pennsylvania.

Last year, however, the organizers opted to contributed to Brookstone Schools the roughly $250,000 they had raised.

That gift could serve as seed funding for a campaign to raise endowment and capital funds to support expansion, says Suzanne Wilson, director of development.

And at its annual fundraising dinner March 22, Brookstone Schools raised over $98,000, giving it a big boost to match a $125,000 dollar-for-dollar challenge grant from the Leon Levine Foundation, which offered a challenge grant for the third straight year.

While planning for a campaign still is in the early stages, Wilson says, the goal could range from $4 million to $5 million.

After spending its first 10 years in space leased from a series of churches, the school in December moved into the Amay James Pre-K Center, which had been a public school but was closed by the Charlotte-Mecklenburg Schools.

Located in the Reid Park neighborhood, the school is near the Stratford-Richardson YMCA in a region that is the focus of Project L.I.F.T., an effort supported by a coalition of foundations that supports nine elementary and middle schools that feed into West Charlotte High School.

The region also is the focus of the Reid Park Collaborative Initiative, a partnership of Mecklenburg County, Charlotte-Mecklenburg Schools, Council for Children’s Rights and other human-services agencies that provide support services for students and families of Reid Park Academy, a public high school adjacent to Brookstone Schools.

Partners who support students in Brookstone Schools participate in special events throughout the school year when they can spend time with students in hands-on activities and tutoring in the classroom.

And nearly every child has an adult “lunch buddy” who eats lunch with them at least twice a month.

With its building, which it is leasing for five years from the Charlotte-Mecklenburg Schools, the school also is considering subletting some of that space to a group that serves the neighborhood.

Brookstone Schools last year launched a six-week summer program that drew roughly 50 new and existing students, and it plans to continue the program this summer, expecting about 80 students.

All the efforts seem to be working: In general, Wilson says, 35 percent of Brookstone students taking the Stanford Achievement Test are scoring among the top 25 percent of U.S. students in math and reading.

“Our goal,” Wilson says, “is to equip students to get a taste early on for academic success.”

Political values tied to charitable giving

Americans are more likely to give to a charity that reflects the values of their political affiliation, a new research paper says.

Donations to a specific charity by Republicans and Democrats are strongly affected by their perceptions of its alignment with each party’s respective “moral foundations,” Vikas Mittal, co-author of the paper and a marketing professor at Rice University, says in a statement.

Republicans’ moral foundations are rooted in respect for authority and traditions, loyalty and purity, he says, while those of Democrats are rooted in equality and protection from harm.

“The political divide not only impacts political actions, but everyday actions such as donating to charity,” he says.

The paper, which will appear in the International Journal of Research in Marketing: Special Issue on Consumer Identities, is based on three studies.

Two of them consisted of nationally-representative samples of adults, while a third was based on a randomized experiment with students who were asked why liberals or conservatives would give more or less to a specific charity.

In that experiment, researchers gave participants a description of the same charity, Rebuilding Together.

But they tweaked small parts of the description to suggest the charity either was supporting American traditions and loyalty or ensuring equality.

Among participants who indicated morals are highly important, Republicans were nearly three times as likely as Democrats to give when the charity was described as supporting working American families, following traditions and supporting their communities.

Democrats, on other hand, were twice as likely as Republicans to give when the charity was described as ensuring the protection of a home to every individual.

The researchers said their findings were supported in two additional studies that focused on children’s charities, including one for children’s advocacy that seeks to break the cycle of child abuse through prevention, education, advocacy and funding. The charity was described as in sync either with Republican values of purity and loyalty, or Democratic values of equality and protection from harm.

Focusing on participants who value morals highly, the researchers found that when the charity description emphasized protection from harm, Democrats were much more likely than Republicans to give, and when the charity description emphasized purity and loyalty to community, Republicans were more likely than Democrats to give.

“We found that while both Republicans and Democrats tend to equally value justice and caring for the vulnerable, Republicans place a much higher value on issues of purity and respect for authority,” Karen Page Winterich, study co-author and assistant professor of marketing at Pennsylvania State University, says in a statement.

“Given these differences,” she says, “Republicans are more inclined to donate to a charity when these values of purity and respect are met, whereas Democrats are more inclined to donate when the emphasis is purely on equality or protection rather than respect or purity.”

Yinlong Zhang, study co-author and associate professor of marketing at the University of Texas at San Antonio, says that, in addition to focusing on their main mission, charities “must also clarify how their mission is aligned with the moral foundations of a donor’s political identity.”

A simple “repositioning of the charity’s description so that it aligns with a person’s political identity can increase donation intentions two- or threefold,” he says.

“Of course, this raises important questions for charities in terms of their communication strategy,” he says. “But assuming this divide does not exist can only hurt their chances of maximizing donations from liberals and conservatives.”

Catholic foundation counts on gift planning

By Todd Cohen

CHARLOTTE, N.C. — After dropping 15.6 percent to $15.1 million in the fiscal year that ended June 30, 2009, the period that included the collapse of the economy, assets at The Foundation of the Roman Catholic Diocese of Charlotte grew by nearly $1.8 million and $4.7 million, respectively, the next two years.

In each of those three years, including the year the markets plunged, bequest gifts to the foundation totaled $1.3 million.

Those gifts reflect a strategy the foundation actively has pursued since its founding in 1994 to encourage donors to make planned gifts, or those that are deferred such as bequests, trusts or charitable gift annuities, says Judy Smith, director of planned giving for the foundation.

“If you’re consistent, you will build a pipeline of bequest gifts, and that’s certainly been made obvious during the recession,” she says. “Annual funds may have suffered, but if you had a mature planned-giving program, you would continue to receive bequest gifts.”

The foundation’s gift-planning strategy recently yielded its 200th endowment gift, bringing its total assets to over $20 million for the first time.

Formed to provide financial security for the diocese, which serves 92 parishes and missions, 19 Catholic schools and 20 diocesan agencies in 46 counties in western North Carolina, the foundation raises endowment funds that generate income.

That endowment income helps pay for parish maintenance, seminarian education, faith-formation programs, tuition assistance, food pantries and outreach programs.

The foundation also distributes grants that focus on the poor, minority communities and evangelical initiatives.

In the most recent fiscal year, it awarded a total of $41,000 in grants to 19 churches, schools and agencies.

And in the first nine months of the fiscal year that ends June 30, it received $147,627 that created seven new funds, including two bequest gifts totaling $79,914.

Endowment gifts can take a variety of forms.

A member of the diocese and his wife, for example, made provisions in their wills to leave bequests to an endowment they agreed to create at the foundation, Smith says.

But after she died, he decided to give $100,000 to the endowment while he still was alive in addition to the bequest gift in his will.

Endowment funds also can grow through gifts from donors other than those who created the endowments.

Father Ed Sheridan, a retired priest who lives in Hickory, established an endowment with a gift of $52,714 to provide tuition assistance for students at Asheville Catholic School.

Sheridan had served parishes in Asheville, Brevard, Charlotte, Hickory and Winston-Salem, and was superintendent of schools for the diocese in 1972.

After a story about his gift appeared in the Catholic News Herald, the diocesan newspaper, the endowment received another $7,000 from other donors.

In addition to talking with individual donors about their gift planning, Smith works with parishes, schools and other agencies in the diocese to help them establish new endowment funds or grow existing funds, and to help make their parishioners aware of those funds.

Those groups, as well as any nonprofit, can begin a planned-giving program by identifying donors who have given to their annual fund consistently for six to eight years, letting them know about gift planning, and promoting planned giving on the organization’s website and in its newsletter and other publications, Smith says.

It also is important to recognize donors who have made planned gifts. Through its Catholic Heritage Society, for example, the foundation has recognized nearly 900 donors who have agreed to make a planned gift to the diocese.

And patience is critical.

“Don’t start and stop,” Smith says. “Make a commitment to it.”