Nonprofits should be encouraged: Even during these tricky economic times, philanthropy is alive and well.
Remember, foundations are still required to donate a minimum of 5% of their assets each year; wealthy individuals and corporations still need tax write-offs. Natural disasters across the globe always prove that Americans are willing to open up their wallets in time of great need.
Local nonprofits need to create that same sense of urgency when crafting their messages to philanthropists.
Certainly, nonprofit organizations need to be smarter and more strategic in their fundraising planning these days. Plans should be broad-based, diverse and comprehensive – meaning that it’s a good idea to not put all your eggs in one basket, which has always been good advice, but perhaps more critical now than in years past.
It is important that nonprofit leaders plan for shifting political and economic tides, a lesson surely most organizations learned during 2009-2010. A fundraising plan should be a dynamic, working document: a road map with clear time lines, established responsibilities and benchmarks, consistent with the overall strategic plan and mission of the agency.
A Few Points to Consider while Creating a Fundraising Plan
- For only the second time in history, charitable donations topped 300 billion dollars in 2008 (the last year for which there is complete data), during the worst economic downturn since the Great Depression (the first time donations topped $300 billion was in 2007).
- Yes, 2009 was bad. But we survived. Preliminary reports suggest that overall giving was down by about 11%, bad, but not as devastating as many had predicted. Foundation (private, family, corporate and community) gifts dropped from $46 billion in 2008 to $42 billion in 2009, again, not great, but not the stuff of doom and despair.
- According to a recent report in the Chronicle of Philanthropy: among the nation’s largest 400 charities, donations have rebounded modestly during the first two quarters of 2010 (a median of 3.1% jump compared to the same time last year).
- Natural disasters like tsunamis and earthquakes and events like 9/11 and the Gulf oil spill and The Great Recession will result in spikes and explainable variations in giving trends, but a quick glance at the figures show a steady increase in giving through the years: $306 billion in 2007; $295 billion in 2006; $283 billion in 2005; $248 billion in 2004; $236 billion in 2003, $240 billion in 2002.
- Of all the donations made in the US, 76% come from individuals, 8% from bequests (totaling 84%),11% from foundations and 5% from corporations. Clearly, when devising a fundraising plan, understanding the significant role individuals play is key.
- Individual donors say they’re still giving, but to fewer organizations; reason: they don’t know who to trust. In an age when potential donors are bombarded with requests it’s easy to understand why.
- The biggest problem in fundraising isn’t getting people to give; it’s getting people to ask.
Thoughts: People are squeamish about asking for money. Philosophically, successful fundraisers must shift from “looking for a handout” to “looking for investors of successful community enterprises.”
CEOs of major corporations need a healthy, thriving community and workforce in order to maximize their bottom line. Companies and individuals of great influence and wealth hope for a vibrant, healthy community as much as nonprofit leaders do. We need each other to make it happen.
Hugh McColl, former CEO of Bank of America, was driven to make Charlotte, NC a world-class city. His generosity to the arts and humanities and human service causes is legendary. Who are the leaders, the influencers in your community who NEED you as a partner? Who are the Hugh McColls in your town? Nobody wants gangs in their community. If an organization has a solution to the gang problem but lacks the funds to implement it, it sounds like you have a partnership waiting to happen.
Nonprofit leaders who have devoted their lives to a cause (there are much easier ways to make a living than doing nonprofit work) have the moral authority to ask wealthy individuals to do their part. Nonprofit board chairs who devote 20 hours of their time a week volunteering for a charitable organization have the moral authority to ask their golf buddies to do something relatively simple: write a check. So, don\’t be squeamish.
Nonprofits Shouldn\’t Overlook Individual Donors
The point here isn\’t to minimize the role of foundation grants, which is an excellent source of revenue for many nonprofits. There are over 80,000 private and community foundations in the US; the number grows every week. The point: nonprofits shouldn\’t overly rely on foundations nor should they overlook the role of individual donors.
- People (this includes foundations) give money to people. Cultivating relationships is key! One thing is certain: firing off a blind proposal to a foundation is almost certain to fail.
- People (this includes foundations) give to strength, not crisis. Everyone wants to be part of a winning team, not a sinking ship. An organization’s best fundraising tool is its reputation as a strong, viable, successful organization comprised of highly regarded members of the community – both on its staff and board.
- Fundraisers must be opportunistic in order to succeed.
Thoughts: Take note of who’s getting promoted at the major corporations and banks, etc. (think big pay raise and consequent need for tax write offs). What names keep popping up on the brochures of other nonprofits? Chances are that’s not all the money they have to give. Major donors tend to give to more than one organization and to give to the same ones for a few years and then look for other projects to invest in. What companies in the community would find it beneficial to ride a nonprofit\’s coattails as a way to improve their image?
- Make sure the board is working hard for the nonprofit. Successful boards are fundraising boards (natural evolution of boards: founding to organizational to fundraising); boards should have an active fundraising committee, hopefully comprised of well-connected individuals with fundraising expertise).
- Final point: people love to give their money away. Stop whining, there’s plenty of money out there! Go get some.