NON-PROFIT FUNDRAISING AND FUNDRAISING STRATEGY

JUAN A. MCGRUDER, PH.D. CFRE

WHAT WE WILL COVER TODAY…

○ State of Non-profit Giving in America ● Who’s giving to what…and why

○ Generational Considerations ● Digital Fundraising (Gen X and Y)

○ The Color of Money

○ Non-profit fundraising strategies

○ The Importance of Stewardship

○ The Impact of Philanthropy on Non-profits

○ Where do you fit in?

Reported Annually in June

GIVING TO NON-PROFITS IN AMERICA

○ The total donated to charitable causes in 2013 was estimated to

be $335.17 billion. Although this is the fourth straight year that giving has increased, it is still not at the pre-

recession level of $349.5 billion seen in 2007.

○ Overall Giving Trends by American individuals, estates,

corporations, and foundations grew by 4.4% in 2013.

○ Individual giving accounted for 72% of all charitable giving in 2013.

○ This is the fourth consecutive year of increases in giving, a period of growth that began in 2010.

Source -Giving USA 2014 report

GIVING TO NON-PROFITS IN AMERICA

○ Giving by individuals was up 4.2% in 2013.

○ Several factors influenced this growth including a 2.9% in personal income, a lower unemployment rate, a 1.9% increase in personal disposable income, and rising consumer confidence.

○ A 2% increase in GDP and 27.8% increase in the S&P 500 also helped drive more giving in 2013.

○ Research has found a statistically significant correlation between changes in total giving and values on the S&P 500.

Source -Giving USA 2014 report

GIVING TO NON-PROFITS IN AMERICA by SOURCE

Source -Giving USA 2014 report

GIVING TO NON-PROFITS IN AMERICA BY SECTOR

○ Giving to Religious organizations was flat on a year over year basis while giving to Education was up 9%. 

○ Giving to Human Services was up just 2.2% and the Health sector was up 6% compared to 2012 giving.

○ Foundations saw a 15.5% decrease in giving in 2013.

Source -Giving USA 2014 report

GIVING TO NON-PROFITS IN AMERICA

Source -Giving USA 2014 report

DONORS ARE BECOMING REALLY SAVVY PHILANTHROPISTS

AMERICAN GENERATIONS THROUGH THE YEARS

○ Matures (1945 and before)

○ Baby Boomers (1946 to 1964)

○ Generation X (1965 to 1980)

○ Millennials (1981 to present)

MULTI-GENERATIONAL MARKETING

GENERATIONAL HABITS

GENERATIONAL HABITS

GENERATIONAL HABITS

GENERATIONAL HABITS

2015 PREDICTIONS: NONPROFIT FUNDRAISING TRENDS TO WATCH IN 2015

○ Digital Fundraising

○ Youtube Video

THE COLOR OF MONEY

The Building Blocks of Fundraising

Endowment

Facilities

Current Operations

○ Volunteer led, volunteer driven

○ Volunteer led, staff driven…the GT model ● Role of Campaign Cabinet and Steering Committee ● Role of Advisory Boards

MANAGEMENT MODELS

○ Centralized

○ Decentralized

○ Distributed…GT Model

ORGANIZATION MODELS

○ No single reason why donors give, but a combination of factors ● Major gift donors give to vision ● Take the business of philanthropy seriously ● Often feel an obligation to give back ● Believe in the mission of the organization ● Are fully engaged with the organization ● Respect the leadership

○ Up to us to identify the most important motivators, donor by donor, gift by gift

WHAT MOTIVATES GIVING?

• Pride of association

➢ Wanting to feel needed

➢ Being a worthwhile member

➢ of a worthwhile group ➢ Being actively involved

• The example of others

• Caring for others

WHY PEOPLE GIVE

If we know

why people give

we will know how to ask

HOW TO SUCCESSFULLY SOLICIT

• Know the facts

• Know your prospect

• Nurture your prospect’s interest

• Solicit in person

• Consider taking someone along

• Set goals for the meeting

• Talk about programs and ideas

• Be direct about the gift amount

HOW TO SOLICIT

•Key Messages

o I believe strongly in this cause. o I am pleased to work actively for it. o This is important and urgent. o I am giving generously to it. o We need and ask for your support.

HOW TO SOLICIT

○ Identification

○ Information

○ Involvement

○ Investment

○ Stewardship

FOUR “I’S” OF FUNDRAISING

From Suspect to Prospect: Development Research ● Public information ● Electronic screening (P!N) ● Peer screening ● Questionnaires ● Self-identification ● Records reviews (data mining) ● Referrals

IDENTIFICATION

○ Prospect evaluation ● Capacity, from A1 to C2 (scale) ● Propensity, from bleeds school colors, to

just among philanthropic interests, to angry

○ Prospect assignments in a distributed model ● Central ● College, School and program

○ Field research required to fully qualify the prospect

IDENTIFICATION (CONT)

○ One way communication ● Message developed and conveyed by us to alumni

through GT Magazine, Tech Topics, Web site, College and School newsletters

○ Knee to knee ● Create flow of information in both directions on a

personal level

○ Evaluate and develop propensity and interests

○ Further define capacity

INFORMATION

○ Develop propensity ● Build relationships ● Develop trust in the vision/leadership

○ Engage through ● Visits with organization leadership ● On site visits ● Board involvement ● Requests for advice ● Invitations to do events and activities

○ Listen… ● Donor centric versus project centric fundraising

INVOLVEMENT

○ Solicitation clearance ● Managing intersections ● Managing next steps (moves management) ● Managing the pipeline

○ Present the proposal, make the ask

○ Shhhh!

INVESTMENT

The meaning of No

○ No may mean “maybe” or “yes, however”. ○ Probing for the meaning of no.

● Is it the institution/organization? ● Is it the right project? ● Is it the amount of the ask? ● Is it the person making the asking? ● Is it the timing? ● Are there competing interests?

INVESTMENT (CONT.)

THE DONOR PYRAMID OF GIVING

○ Best prospect for a gift is a well stewarded current donor

○ Standards for: ● Timely acknowledgements ● Donor recognition

○Facilities construction and renovation ○Named endowments

○ Impact reports ○ Renew the process of cultivation for the

next gift! ○ It’s Cyclical!

STEWARDSHIP

THE VALUE OF STEWARDSHIP

1. Practice the Art of the Thank You

● Every gift deserves a prompt thank you. ● Make it an organizational priority to respond to donors with brief personal

notes. ● When it comes to donor thank you messages, the more personal the better.

2. Do Some Segmenting to Prioritize Outreach

● separate your donors into different groups to make sure that you are spending your time as wisely as possible

● By splitting your donors into different groups, you can come up with an appropriate thank you and engagement plan for each group.

THE VALUE OF STEWARDSHIP

Show Them the Impact ● your ability to connect with your donors

will be shaped by how you communicate with them

● make sure that the impact created with their gifts is a central element of the conversation.

● Focusing on communicating impact helps eliminate common complaints.

Create Opportunities for Personal Interaction

● there’s no substitute for actually meeting people in person and talking to them!

● start by getting creative and brainstorming with your team. Think about things from the outside in.

THE VALUE OF STEWARDSHIP

At the end of the day, there are no one-sized fits all solutions

for creating an effective donor stewardship plan.

And that’s a good thing because you know your donors best!

○ Can be SIGNIFICANT ● The Centennial Campaign

1985 – 1990

○ Initial Goal - $145 M ● $202M Raised ● $102M Unrestricted ● $9 M Scholarship/Fellowship ● $15 M Faculty ● $12 M Facilities

IMPACT OF PHILANTHROPY

○ Can also be TRANSFORMATIONAL ● The Campaign for Georgia Tech ● 1995-2000

○ Initial Goal - $300 M ● $711.9M Raised ● 233 Scholarships/Fellowships ● 54 Endowed Chairs ● 10 Buildings

IMPACT OF PHILANTHROPY

○ Campaign Georgia Tech ● 2004 – Present (ending December 2015)

○ Initial Goal of --$1B ○ Presidential Transition in 2010 ○ Increased Goal to $1.5B ○ Goals: $600M Endowment,

$400M Facilities, $500M in Current Operations

● Raised to-date, Over$1.5B; Over 83,000 donors ● 85 Endowed Faculty Positions ● $50M Gift, booked in June, 2012 ● Still seeking a $100M Gift, by campaign end.

IMPACT OF PHILANTHROPY

IMPACT OF PHILANTHROPY

IMPACT OF PHILANTHROPY

1/31/2015Gifts in the

range ofNumber

Required For a total of PercentGifts in the

range ofNumber Received For a total of Percent

$100,000,000 1 $100,000,000 $100,000,000 - $0$50,000,000 2 $100,000,000 $50,000,000 2 $105,978,467$25,000,000 4 $100,000,000 $25,000,000 4 $131,266,808$10,000,000 15 $150,000,000 $10,000,000 13 $166,186,018

22 $450,000,000 30% 19 $403,431,293 26.0%

$5,000,000 30 $150,000,000 $5,000,000 25 $157,909,941$2,500,000 50 $125,000,000 $2,500,000 61 $210,483,907$1,500,000 100 $150,000,000 $1,500,000 66 $124,606,984$1,000,000 100 $100,000,000 $1,000,000 101 $117,057,435

280 $525,000,000 35% 253 $610,058,268 39.4%

$750,000 100 $75,000,000 $750,000 69 $59,778,553$500,000 150 $75,000,000 $500,000 114 $65,969,397$250,000 300 $75,000,000 $250,000 303 $103,689,224$100,000 750 $75,000,000 $100,000 716 $108,052,077

1,300 $300,000,000 20% 1,202 $337,489,251 21.8%

$50,000 1,000 $50,000,000 $50,000 809 $55,290,545$25,000 2,000 $50,000,000 $25,000 1,305 $43,417,598$10,000 5,000 $50,000,000 $10,000 2,750 $41,626,045

< $10,000 80,000 $75,000,000 < $10,000 77,033 $58,681,61888,000 $225,000,000 15% 81,897 $199,015,806 12.8%

TOTAL 89,602 $1,500,000,000 100% TOTAL 83,371 $1,549,994,618 100%

Summary of Objectives

Standard

Scale of Gifts

Received thru:

IMPACT OF PHILANTHROPY

○ 2006 Total $1.2B

○ 2013 Total $1.7B

○ 2015 Total $2.0B

VALUE GT ENDOWMENTS…

TOP 25 FASTING GROWING UNIVERSITY ENDOWMENTS - 2011

○ #1. University of Virginia 2011 Endowment: $4.8 billion 2010 Endowment: $3.7 billion Annual Change: 28.4%

Over $1B increase in one year

○ #25. Harvard University 2011 Endowment: $31.7 billion

2010 Endowment: $27.6 billion Annual Change: 15.1%

Over $4B increase in one year

○ Everywhere! ● Providing the Vision for Resource Development ● Goal Setting ● Identifying and Hiring God Talent

● Prospecting: Identify Inform Involve Invest Steward

○

WHERE DO YOU FIT IN… IN YOUR ORGANIZATION?

○ Prospect Coordinators ○ Central Clearance System ○ College, School, Program based officers ○ Collaboration with

● Other Internal Entities ● Planned Giving ● Regional Officers ● Corporate Relations ● Foundation Relations

PROTOCOL

1) Learning the culture of the organization and its constituents

2) Formulating the strategic plan

3) Designing the case for support

4) Casting the organizational vision to external constituencies

5) Deepening engagement of top donor prospects

ESTABLISHING ADVANCEMENT/DEVELOPMENT ROLES

6) Cultivating new donor prospects

7) Participating in (as well as understanding) all phases of the giving cycle

8) Creating an Executive Advisory Board or Executive Fellows program

9) Encouraging staff involvement in all areas of advancement

ESTABLISHING ADVANCEMENT/DEVELOPMENT ROLES

1) Answer these critical questions: ○ Vision - What do we aspire to be tomorrow? ○ Mission - Who we are today and what is our

purpose?

2) Complete a SWOT Analysis ○ Strengths (Internal) ○ Weaknesses (Internal) ○ Opportunities (External) ○ Threats (External)

FORMULATING THE STRATEGIC PLAN

○ Positioning (Clarity)

○ Branding (Distinctive)

○ Market Differentiation (Persuasive)

○ Experiential (Social Interaction/Learning)

○ Value (Repetition and Retention)

ORGANATIONAL VISION CASTING

One thing is certain, fundraisers are a totally dissimilar group. They look different. Act differently. Work differently. They are diverse – hard charging and hard driving – quietly effective. They include used-car salesmen types, ministers and priests, scholars and backslappers. Computer freaks and computer frightened. Great writers and virtually illiterate.

~ Jerold Panas, Born to Raise (1988)

AN IMPORTANT NOTE!

○ Never short change the mission ○ Spend the time required to get organized ○ If you plan to have a cocktail at your event do so only after you are

absolutely sure that all details are covered ○ Take the work seriously, not yourself. ○ Laugh ○ Take your personal philanthropy seriously ○ Meet constituents where they are and they will go with you to where

your organization’s mission needs them to be ○ Listening “fluently” is an essential skill for success in

advancing philanthropy ○ NEVER get caught without a business card ○ Engage people in conversation at every opportunity

TOP 100 THOUGHTS TO LIVE BY CHARLES R. STEPHENS

○ Never schedule a solicitation visit before you are fully prepared to ask and the prospect is fully prepared to respond

○ Do not ask before the prospect gives you permission ○ Asking for too much is not offensive; asking for too little is ○ Always be reachable ○ Do not sacrifice family for mission or ambition ○ Maintain personal contact with your top donors; keep the list on your

desk in sight ○ Resist pressure to re-invent the wheel ○ Include significant others in major gifts and ultimate gifts solicitation

strategies ○ Advancement is 75% research and cultivation and 25% asking;

ask for no gift before its time

TOP 100 THOUGHTS TO LIVE BY CHARLES R. STEPHENS

NON-PROFIT FUNDRAISING AND FUNDRAISING STRATEGY

Questions & Answers

Juan A. McGruder, Ph.D., CFRE

Director of Development

Georgia Institute of Technology

Ivan Allen College of Liberal Arts

Atlanta, GA 30332-0525

Office: 404-894-1898