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Development for the Smaller Mission
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Development for the Smaller Mission |
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Introduction According to a recent AGRM survey, more than 75% of all AGRM rescue mission members have operating budgets under $1,000,000. Most do not receive any government or United Way funding for their programs, and many do not have support staff to assist in fundraising. Responsibility for coordinating fundraising efforts, therefore, rests heavily on an executive director's shoulders. Fundraising in a smaller community, likewise, presents unique challenges. The following article addresses some of the issues related to these concerns. Highlights are from the AGRM 1995 Development Track Super Seminar , Development for the Small Mission presented by John Frank and Kathy Tabor supplemented further with a resources section available through the Development Track. Because of space constraints, the editor took liberties in organizing and condensing the material . For an unabridged version, a tape of the seminar may be obtained from the AGRM. Be proactive.Many missions' fundraising efforts are reactive rather than proactive. In other words, a mission director finds that finances are lean and it's time to write an appeal letter, and they are always playing financial "catch-up" says John Frank. One good way to avoid this phenomena is to plan a full year's fundraising activities prior to the beginning of a mission's new fiscal year. An "annual fundraising plan" or annual "fundraising calendar" takes into account the new fiscal year budget and coordinates fundraising activities around cash flow needs. Having a "production-schedule" for example, of drop dates for appeal letters or newsletters means donor communication devices go out regularly and consistently, and can be timed around those periods or seasons of the year when donors are most likely to respond with financial gifts. The "slow periods," for example, such as the midwinter slump or the summer slump in direct mail fundraising might be a good time to hold a special event fundraiser. If larger, one-time capital items need to be in this fiscal year's budget; one might look to designing a small-scale fundraising campaign to meet the need. Larger, more dedicated, donors might be singled out as part of the plan. They might be asked to give to a one-time special project need for a capital item. The important thing about any plan is that it use a mix of fundraising tools, each suited to the various needs of the mission---direct mail for unrestricted operating, corporations to special event fundraisers, larger donors to special project campaigns (see AGRM's Online Resource Center for helpful materials).Furthermore, according to Frank, the annual development plan might be designed in conjunction with the rescue mission's annual budget and approved by its board of directors. Some amount of strategic planning during a board retreat, for example, could be used as a basis for forecasting the budget and fundraising needs. When the mission is small and the executive director is the primary fundraiser, he is more apt to rely on volunteers or part-time support staff; it is all the more important that he is organized by "planning the work" and "working the plan," according to Frank. Invest in Development.Development requires an investment of time and money. According to Jeffrey Lant, author of Development Today, the typical executive director of a nonprofit organization spends an average of 40% of his time in fundraising activities. You must invest money, because, as the old saw goes, " it takes money to make money." It costs to send out mailings. It costs to buy computer software or to pay support staff who can maintain donor records and set up speaking engagements for an executive director to do fundraising. However, failure to understand this, seemingly, paradoxical principle, is what prevents many rescue missions from growing.Monitor Results.While start-up costs of a good development program are often higher on the front-end, every development program needs methods to monitor the results of its investment in a fundraising program. A general rule of thumb is that legitimate charities should not spend more than 25% of their annual income on fundraising/administrative costs. One monitoring method known as ROI (Return On Investment) tracks the average return on each dollar spent on a mailing. This is a method Star of Hope uses in reporting results from various mailings, and which mailings had the best returns, according to Kathy Tabor. An ROI of 3:1 means for every $1 spent on a mailing $3 came in. Acquisition mailings where the goal is to acquire new donors, however, are treated differently. These mailings may be doing fine to break even. Acquisition costs can be allocated over a several year period, though organizational investment is made in one fiscal period, because the long-term value of a donor far exceeds the initial giving amount. Through monitoring their direct mail effort, Star of Hope found various devices to be effective -- a receipt reply envelope enclosed with the donor's receipt, for instance, brought in a whopping 38% return! Being able to generate reports that show the results of investment in a development program is the primary method of being accountable to a mission board, and to make decisions for cash projections for upcoming years.Development From the Inside-Out.So many missions, according to Steve Burger, Executive Director of the International Union of Gospel Missions, want to approach foundations or corporations for contributions--- whose knowledge of and values are relatively distant to that of a rescue mission. At the same time, they neglect the churches, their own board members and volunteers of their missions who should be the primary donor prospects. These people have values consistent with the rescue mission, have a relationship with the mission, and some level of commitment to the mission.Imagine a series of concentric circles. the core circle represents board members, volunteers, and committed donors. People within each succeeding circle outside the core represent those needing greater cultivation in order to influence them to make a gif t. Track Donor Giving and Build Relationships.Fundraising is "friendraising". Donors who give their material wealth to an organization make a statement about their personal values, their priorities and their commitment. They are giving of themselves and of their heart. Many first time gifts to an organization are to "test the waters". How does the organization respond to my gift? Do they express gratitude in an appropriate and timely manner? Do they keep me informed of how my money was used? Do they know who I am as an individual? Or is the organization's attitude one of, "what have you done for me lately?" When a donor's trust in the organization grows, often the amount or frequency of their giving also grows. The ability to track giving patterns and the types of projects an individual donor has interest in via a good computer system can be invaluable. A donor who has given consistently to general appeals for a period of time might be invited to a special event, for example, whereupon it is learned that they have a heart for the women's ministry. This donor might then be a good prospect for a special project donation. They with several others, might be asked at a later date to contribute a one-time gift toward purchase of furniture for the women's shelter.A deepening the relationship between an organization and a donor should reflect an approach and giving opportunities that are more meaningful and significant to the individual donor's specific interests. Depending on the extent of whether donor mailings are done in-house or out; the minimum necessities for any fundraising effort are:
Get Board and Volunteers involved.While the Executive Director will always be the primary spokesperson and representative of any mission, board members can participate in fundraising by introducing the ministry to influential friends, assisting in organizing special events fundraisers for the mission, and contributing themselves. Likewise, "small shop" development operations necessitates the use of volunteers who can assist in areas ranging from assembly of donor mailings to maintaining donor records.While both board members and volunteers will need training and guidance to assist in fundraising efforts, they have a natural advantage over paid staff because the are perceived by the community to be "neutral," that is, they do not directly benefit from the fundraising efforts. Evaluate your organizational mission and service area.Fundraising in a smaller community need not be a disadvantage. The approach, however, may be different from a larger city. Glitzy ad campaigns or direct mail pieces, though effective in larger cities, may seem out of place in a small town. The "up-close and personal" advantage in a small town should be played up---speaking engagements at local civic groups and personal visitation with donors. Special events, like banquets using an organizing committee of volunteers and drawing upon local businesses to sponsor tables, can be effective in developing relationships that continue year after year (see resource section for Banquet manual). When the mission has a good reputation, the opportunity for relationships with donors that are a mile deep rather than a mile wide can be a reality.Likewise, look at the mission statement of your organization: does it inspire and motivate people to participate and get involved in your rescue mission? Think about where your clients come from, and your service area. One rescue mission in northern Arizona, for example, determined that there was not another organization in the entire county servicing the same clients. As a result, they were able to send certain acquisition mailings to households throughout the county because they had an effective case for support. ConclusionThe fundraising process is neither so mysterious nor so technical that any organization---large or small, cannot do it effectively. Large or small, the same principles apply. Much more depends on the ability to organize the process and diligently follow-through. True consistently communicating with donors, showing interest in them, and building trust, takes no small effort; but the payoff will be a stable and growing financial support base for a rescue mission.
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