Fundraising for Your
Thomas P. Holland, Ph.D., Professor
Institute for Nonprofit Organizations
University of Georgia
Presentation will cover
• Sources of income for nonprofits
• Approaches to fundraising
• Individual solicitations
• Board responsibilities
• Asking for gifts
• Other approaches
– Special events
– Sales and fees
– Planned giving
Total Income for All Nonprofits
• Fee for services 50%
• Public (government) 30%
– grants & contracts for restricted purposes
• Private Contributions 20%
– individuals give about 70% of that
– foundations give about 10%
– corporations give about 10%
– bequests, wills, trusts, endowments 10%
Fundraising is Vital
• Nonprofit organizations live by donations from
• The board is ultimately responsible for the life
and well being of the organization, including
• Board may ask staff for assistance with
specific tasks, but not pass off to them all
responsibilities for financial health of the
Many Approaches to Fundraising
• Fees for users of services
• Face to face solicitation
• Telephone solicitation
• Mail requests
• Special events
• Contracts (usually with public sources)
• Grants (foundations, corporations)
• Collaborative programs with corporations
• Sales and fees
• In-kind solicitations
Importance of Diversification
• Over-dependence on any single approach
– Reduced autonomy
– Goal displacement
• Multiple sources and approaches help
counteract those risks
• Rate of growth in earned income is greater
than in all other approaches (donations,
Effort and Results Vary
• Face to face appeals to persons already well
acquainted with your organization are the
most productive. They require long
cultivation: friend-raising comes first.
• The less the personal relationship, the lower
the return--across all forms of fundraising
• There is no quick, inexpensive, high
likelihood approach to fundraising.
It takes time.
Most Nonprofits Have TWO Key
• Clients or consumers for whom the organization
exists and to whom goods and services are
• Donors and volunteers who provide the majority
of resources necessary for the organization’s
services to take place.
• Sometimes these overlap (membership
association) but more often they do not
• Dual constituencies make operations complex, as
the needs and interests of both must be
Organization Needs Friends
• Community points of view, needs & interests
are vital to our successes.
• Most staff are internally focused, concerned
with quality of projects and programs.
• The external environment is increasingly
competitive, demanding responsiveness.
• Other organizations that are more attentive
and responsive will successfully compete for
our constituencies and resources.
• So we must find out what potential friends
want, in what forms and ways of delivery.
• There must be some degree of current
interest in the topic for people to respond to
overtures from the organization
• Information presented must be compatible
with listeners’ prior values and attitudes for
them to be receptive
• People respond in differing ways to the same
material, and their response depends on their
beliefs and attitudes
• Seek to understand each one’s interests and
tailor your approaches to match them
Adding Value for Sponsors
• Each party in the transaction should sense that
they are receiving more than they are giving up.
• The nonprofit must understand what target
constituencies want and how it truly provides
them their expected benefits.
• The nonprofit must satisfy efficiently and
effectively its half of the transaction
• Are we truly adding value for them?
• By building on its strengths, the organization can
better serve constituencies and strengthen their
• Cultivating sponsors involves identifying how
to get the desired response from those
individuals and groups the organization wants
• People voluntarily give up something (time,
money) in exchange for benefits they see as
more valuable (recognition, involvement,
friendship, worthiness, satisfaction)
• There are costs and benefits on both sides.
They must be in balance to create satisfied
stakeholders and a successful organization.
Many nonprofit bring in earned
• Joint ventures or social enterprises
• Membership dues
• Program activity fees
• Admission fees
• Sales of products or services
– Gift shops
– Contracted services, such as training,
– Uniforms, supplies, materials
Sales and User Fees
• People expect to pay for useful services
• Sliding scale for service fees, with top end
offsetting losses at bottom end
• Builds income over time
• Add direct sales of goods or services
• For-profit subsidiaries (museum gift shop)
• May also be used for leadership development
• Atlanta Justice Project operates a landscaping
business where clients are trained for
• Habitat for Humanity sells contributed building
materials for profit.
• Nonprofit in Brunswick prepares people for
employment. In addition to training classes, it
runs a for-profit café, where food service
trainees gain experience and skills.
• Another in employment preparation operates a
for-profit office cleaning business that makes
money and provides skill development
• BetterWorldBooks collects and sells books to
fund its literacy programs.
• Independent Transportation Network operates
van and taxi services for purpose of helping
people in outlying areas to get to health care
• Wisconsin Women’s Business Initiative operates
catering and bakery businesses for purpose of
making loans to women’s micro-enterprises. It
employs women to run its retail and loan
• Fair Trade imports and sells food products for
purpose of improving income for rural farmers in
Examples of Joint Ventures
• Nonprofit and business agree on contract that
business will hire trainees for entry level
positions while nonprofit continues with
• Company wants customers to buy and send
in boxtops from its product, agreeing to give
proceeds to nonprofit, which in turn publicizes
• Dental association endorses a brand of
toothpaste and allows use of its logo on
products in return for contribution from the
IRS rules about business income
• Activity must be directly and substantively contribute to
carrying out mission and purposes. If not, n.p. may lose
its tax-exempt status.
• “It’s making money for our organization” does not qualify.
• May be structured as an unrelated business activity,
making income from it taxable, but after-tax gains go to
nonprofit without another tax (see regulations about
Unrelated Business Income Tax)
• Why is business income taxed? Gives nonprofit unfair
advantage over similar for-profit company offering same
• Paying U.B.I.T. does not jeopardize nonprofit’s 501c3
• Most nonprofit folks find events the easiest method of
• Good way to generate lists of people to contact later for
• All types of special events require extensive input from
board and staff, often with modest returns
• Use for public awareness more than fundraising
• Think creatively. Banquets, golf tournaments, marathons
have been overdone and lack appeal.
• Invite local companies to co-sponsor events in
exchange for publicity.
• Plan to build on early events and grow to larger
attendance and income later
• Maintain data base on all givers
• Pros: will raise visibility for your cause, and
involve a certain kind of donor motivated by
events. Good way to cultivate new prospects.
Good way to socialize your board, volunteers,
staff. Can be memorable event and lots of
• Cons: Requires huge amounts of time,
people, energy. Rate of return may
disappoint. Not the best option if you’re
only in it for the $$.
Special events set-up
• Carefully plan budget; analyze goals, profitability.
• Find a “niche” – an unusual or unique event – know
• Understand your donor base – will they come? Why?
• Watch for conflicting events.
• Involve experienced volunteers, event planners.
• Have contingency plans for everything.
• Understand the difficulties in renewing special event
• Understand the tax consequences for donors.
Most Productive Method:
• 70% of contributed funds for most nonprofits
come from individuals
• 90% of gifts come from 10% of donors
• Identify people with means through research
• Then find people who know them and who will
introduce you to them
• Invite them to get acquainted with your
organization, attend events, volunteer
• Listen to their interests and increase their
• Invite them to help sponsor activities
• Thank them
Over 80% of All Adults Give.
Reasons why they do:
1. I was asked to give by someone I trust for a cause I believe in.
2. I believe those with more resources should help those with less.
3. I get personal satisfaction from giving.
4. Because of my religious beliefs or commitments.
5. I feel that I benefit when I help others.
6. Sustaining a family tradition.
7. Giving sets a good example for others.
8. Giving helps my community.
9. Gift in remembrance of a loved one.
10. Gift is tax deductible.
11. Giving is encouraged by my employer.
Sources of Individually
• Annual giving (unrestricted)
• Telephone and mail campaigns (unrestricted)
• Special Events (unrestricted)
• Capital funds (restricted)
• Bequests, wills, trusts, endowments
• In-kind contributions
Giving and Asking
• People give money because they want to.
• People don’t give unless they are asked.
• People give money to people, not programs.
• People give money to opportunities, not deficits.
• People give to successful organizations, not to
• People give money to make a change for the
• Learn potential donor’s interests
• Engage them with program
• Demonstrate accountability
• Build involvement and trust
• Offer opportunities to provide input
• Ask what form of recognition is best
Key Principles of Direct
• The board takes leadership, with staff support.
• Begin with goals for the organization, not with
whatever source seems available.
• Search for sources and people who are interested
in and share your goals.
• Develop relationships with them.
• Find ways to engage them with your organization
before asking for anything.
• Results are directly correlated with the extent of
engagement. No shortcuts.
Relationships are Primary
for Any Approach
• Begin with friends, volunteers, former users of
services, alumni, and any others with history of
engagement with your organization.
• Do not waste time or money buying lists from
vendors. You won’t raise money by calling or
writing to people who don’t already know you
or the organization.
• There is no substitute for relationships.
• Share your excitement and satisfaction with
• Invite them to participate in ways that interest
them, and listen to their responses.
The Ladder of Effective
• Two-way communication is most effective.
In order of effectiveness:
1. Face to face conversation
2. Small group discussions
3. Telephone conversations
4. Handwritten letter, inviting response
5. Large group discussion
The Ladder of Effective
• One-way methods are far less effective.
In descending order of
7. Mass-produced letter
10. News item
• Failure to demonstrate accountable use
• Playing on guilt
• Flashy campaign, expensive materials
• Asking people to bail out deficits
• Failure to build trust before asking
• Failure to connect person with mission
• Hoping somebody else will do it
The Board and Senior Staff
Develop Friends into Sponsors
• Board identifies priorities for new funding.
• It demonstrates commitment by 100% giving.
• Members and staff share enthusiasm with
• Invite them to get acquainted with organization.
• Host special events to showcase projects.
• Ask friend for support for aspect of interest or
introduce to Executive or Chairperson for the ask.
• Follow up with appropriate thanks.
• Staff supports board in these efforts, rather than
doing it for them.
• If your board is not taking leadership in
fundraising, the FIRST task is to solve that
• Willingness to learn and try are the beginning
steps. Skill comes with practice.
• Everything else depends on this foundation.
• Everybody must be involved in some way.
• No excuses allowed.
• I’ll do anything but raise money.
• Nobody ever said raising money was part of
being on this board. (problem with nominating
• We deal with substantive issues, not with raising
money. (what is more vital to organization’s
• I’m too busy. (commitment?)
• I don’t want to ask my friends for money.
• I can’t stand being turned down.
• I’m just not good at that sort of thing.
• I’ll get around to that later (procrastination)
Such Denials of Responsibility
Must be Faced and Dealt With
• The board is ultimately responsible for the
well being of the organization in every area.
• Other competitors are moving ahead with
raising money, taking your potential donors.
• Board members have various talents, all of
which are needed.
• Fundraising can be learned, practiced, and
• It can be fun and satisfying.
• The board is responsible for the future well-
being of the organization
• It sets strategic goals for the future
– identify needed enhancements of organization
– become knowledgeable and experienced about
– budget for staff to help board and CEO with
marketing, communications, fundraising,
advocacy, partnerships, volunteer recruitment
Board Applications (cont’d)
• Set up savings account or endowment fund
• Put 5-10% of every year’s budget there and
any cash beyond 2 months’ expenses
• Put 50%+ of board campaign nets there
• Allow organization to spend no more than
half of annual interest earned by fund
• Begin right now as time is your best ally
• Move to more extensive fundraising and
investment approaches in the future
Set Clear Expectations for Board
• Write board job description
– commitment to values and mission
– attendance and active participation
– 100% giving
– public representation and advocacy for organization
• Fill gaps in group’s skills by
– targeted recruitment
– board education on fundraising, communications,
• Engage volunteers in special projects
– bring in needed skills
– watch for potential nominees
• Conduct regular evaluations to learn and grow
• Demonstrate accountability to sponsors
– via financial reports and individual communications
• Oversees the preparation of a comprehensive
plan for review by full board
• Ensures a realistic appraisal is made of potential
support and reasonable goals are set
• Develops consistent message for all to use
• Participates actively in identifying prospects,
• Enlists every other board member in specific
tasks, events, recognition of donors
• Reminds every member to give and to complete
• Evaluates efforts for future improvement
for Board Members
• Work with staff to develop volunteer opportunities
• Host reception or event where CEO or Board Chair
gives brief presentation
• Introduce friends to CEO or Board Chair
• Identify and do background research on potential
donors and doorways
• Offer to be a speaker at civic organizations
• Work with staff to draft case statements, press
releases, other approaches to public awareness
• Develop donor appreciation and recognition plans
• Search for ideas and people with expertise and
bring to board education sessions
Basic Steps in a Campaign
• Set goals based on organizational strategies
• Select steering committee
• Set up record system and recognition system
• Identify roles and responsibilities for each
• Develop case statements (why should anyone give?)
• Carry out research on potential donors
• Find ways to meet them
• Engage them with organization
• Invite them to help support specific activities that
• Recognize and thank them, keep them involved
• Repeat and refine this cycle every year
Developing the Case
• Begin with the why: what is our mission?
• Then state the what: what do we want to achieve?
• Then state the how: how will this new project
meet a need and fulfill mission?
• Then who: who we are and how well we have
been serving our constituencies.
• Finally, what specific action do you want the
reader or listener to take?
• Organized effort to secure gifts on an annual
basis, either by mail, telephone, personal
solicitation, events, or all four.
• The primary fundraising method used to
broaden support, upgrade giving levels, and
provide operating support for ongoing
• The backbone of most fundraising programs.
• Complements other forms of giving: planned,
• A cyclical, multi-stage process that may
involve several solicitation strategies.
Purpose of annual giving
• Acquire new donors
• Renew donor support annually
• Cultivate donors to increase giving
• Build donor loyalty
• Identify and involve leaders
• Identify major, capital gift prospects
Rules of thumb in annual giving
1. Understand what will motivate your donors or
prospective donors before you plan your
2. Carefully match prospects to projects and to
3. Renew the same way you solicited the original
4. Provide varied giving opportunities during the
annual fund cycle.
5. Provide varied and multiple forms of appreciation
during the annual fund cycle.
6. Track your results carefully to understand your
donors’ giving patterns.
The ASK is Essential
• You are offering them opportunities to do good.
• Not everyone has to do every aspect of the
campaign, but someone must be ready and willing
to do the ask. Guarantee: It won’t hurt if you try.
• Time it to come after you already are well
acquainted with the person and s/he with you and
• Match ask to their interests and their resources.
• Ask and then shut up. (Don’t fill the space with
• Respond to questions and offer alternatives.
• Thank them several ways, regardless of results,
building relationship for the future.
The Asking Scenario
• Open with pleasantries
• Get to the subject
• Get to the asking
• Suggest a specific figure (then be quiet)
• Be ready for various negative responses
– don’t push or argue (you can’t win ‘em all)
– leave the request on the table
– be prepared with alternatives if asked
• Leave on a positive note
• Follow up with a note of appreciation
Prerequisites to the ASK
• You have the right prospect.
• You have cultivated a good relationship with
the person, and s/he is familiar with your
• You know the person’s interests well.
• You have an appointment to discuss the
specific opportunity and make the ask.
• You know the amount to ask for and the right
task needing their expertise.
• You are prepared with ways to recognize the
gift and to make use of their help.
– obtain accurate information about donor/prospect
interests, past giving history, capacity.
– Determine best person to contact the prospective
donor (let volunteers pick their donor prospects)
– Offer adequate support, training to solicitor
– Match solicitor to prospect
– Arrange to visit a prospect in person when
– Ask for a specific amount
– Follow through on any follow-up prospect requests
Personal Solicitation (cont.)
• The Close
– Be quiet. Do not fill the space with chatter.
Let other person speak first.
– Be positive, not apologetic if prospect
– Be prepared to negotiate terms of gift
– Make careful notes about next steps and
follow through with donor
– Thank them
The Basics of Major Gifts
• Build on annual gifts but seek larger amounts
• Small number of givers will provide most funds
• The most cost-effective approach to fundraising
• May be used for
– New or expanded programs
– Capital for buildings or equipment (often called
– Sponsorship of special need or activity
• Usually come from person’s assets (savings)
rather than their current income
• Go to organization’s assets rather than its
• Require extensive personal cultivation
• 1. Specify major opportunities for
sponsors, drawing from strategic
plan and linking with prospect’s
• 2. Plan the gift pyramid
• 3. Identify likely givers
– Records of prior giving
– Prior engagement with organization
– Interests and motivations
– Capacity to give
– Network of associates
• 4. Start with board members and others
already engaged with organization
• 5. Each person must make own gift first,
before asking anyone else
• 6. Timing: Consider special events in
prospects’ lives (birth, marriage, change
• 7. Prepare personalized presentation,
drawing on case statement and linking
opportunity with prospect’s interests
• 8. Presentation plan
– Personalized case statement
– Financial records of organization
– Opportunity for which gift is sought
– Benefit to giver
– Specific request and options
• 9. Peer makes appointment to present
in person, in private
Don’t Be Afraid to
Ask for a Large Gift
Giving Levels: Two Examples
• Benefactor • Senior Associate
• Patron • Associate
• Sponsor • Sponsoring Member
• Donor • Sustaining Member
• Contributor • Contributing Member
• Friend • Member
Stewardship of Gifts
• Thank the donor.
• Find appropriate ways to recognize and
publicize the gift. Ask their preferences.
• Use the money as the donor intended
• Report to donor periodically
• Continue to engage him/her with organization
• Build long-term relationship of trust
• Thank the donor again.
• Come from the donor’s capital holdings
• Bequests, insurance, gifts or property or
income, trusts, endowments
• They may be deferred gifts (pledge in a
will of life insurance) or current (interest
from a trust)
• Donors may gain by tax benefits
• Usually require specialized staff skills
Sources of Grants
• Government (federal and state)
– look for RFPs (Requests for Proposals)
– search government web sites
• Foundations (http://fdncenter.org)
– Charitable foundations
– Family foundations
– Corporate foundations
– Operating foundations
Grants and Contracts
• High competition, low yield for effort
• Require specialized writing skills
• Directed at special programs, not ongoing
operations (leaves you hanging when $ runs out!)
• Ask public officials about community block
grants that might match your programs
• Search foundation directories
(http://fdncenter.org) for those interested in your
programs and goals
• Spend time with grant officer
• Follow their guidelines for proposal
A Board Members’
• Do I have a clear picture of the mission, priorities
and needs of the organization?
• Do I really understand and support the case, why
someone should support this organization?
• Do I contribute to the extent of my means?
• Do I offer additions to the list of prospects?
• Do I share in cultivating prospects?
• Do I make introductions for others to make solicitations?
• Do I accompany others on solicitations?
• Do I write follow up and thank you letters?
• Am I prepared to make solicitations myself?
• Do I do what I say I will do?
Build Board Capacity and Skill
• Talk with people on other boards that have success
• Visit the Foundation Center Library (Hurt Building,
Main floor, 5 Points, Atlanta) for more other materials
and resources (http://fdncenter.org)
• Use prepared learning resources
– Ga. Center for Nonprofits offers short workshops
– BoardSource has several good booklets and
educational resources such as “Fearless
Fundraising: The Video Workshop”
• S. Weinstein, The Complete Guide to
Fundraising Management. Wiley, 2009.
• K.S. Kelly, Effective Fund-Raising
Management. Erlbaum, 1998.
• J.M. Greenfield, Fundraising Fundamentals.
• F. Howe, The Board Member’s Guide to
Fundraising. Boardsource, 2000.
• Other materials on many web sites, such as