Essential Principles for Fundraising Success: An Answer Manual for the Everyday Challenges of Raising Money

Overview

Essential Principles for Fundraising Success is a single-source, easy-access guide that offers answers to the most commonly asked questions posed by  professional fundraisers and volunteers. Organized in a clear, easy-to-use question and answer format, Essential Principles for Fundraising Success takes on the challenges that arise daily in the ongoing, high-pressured business of raising money. In this book, G. Douglass Alexander and Kristina Carlson (the founders of the successful Internet-based, fundraising...

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Overview

Essential Principles for Fundraising Success is a single-source, easy-access guide that offers answers to the most commonly asked questions posed by  professional fundraisers and volunteers. Organized in a clear, easy-to-use question and answer format, Essential Principles for Fundraising Success takes on the challenges that arise daily in the ongoing, high-pressured business of raising money. In this book, G. Douglass Alexander and Kristina Carlson (the founders of the successful Internet-based, fundraising consulting firm FundraisingINFO) offer insight from their combined forty-six years of experience working with thousands of nonprofit organizations. Based on the enduring principles of fundraising, this important resource shows how to master the three mainstays of fundraising—developing a case statement, creating a campaign strategy, and securing big gifts. Essential Principles for Fundraising Success also offers creative, out-of-the-box solutions for convincing reluctant board members and other stakeholders to follow proven, effective fundraising strategies

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What People Are Saying

From the Publisher
"Simply put, if you will read this book, believe in the principles, and then follow the principles, you will raise a ton of money."
Michael E. Shapiro, Nancy and Holcombe T. Green Jr. Director, High Museum of Art

"Put this book in your back pocket and don’t leave home without it. The Essential Principles for Fundraising Success is the quintessential guide for the fundraiser—both the novice and the seasoned professional."
Cynthia M.Adams, CEO and president, Grantstation.com, Inc.

"This is a wonderful, practical guide that every professional will find valuable. It is full of advice and tips that are insightful and timely."
Jimmie R. Alford, founder and chairman, The Alford Group

"Too many times we complicate the basic fundamental principles needed for successful fundraising. Doug and Kristina have simplified it for us. Whether you are a 30-year professional who needs reminding, or a new professional who need all the tools, Essential Principles for Fundraising Success fills the bill."
Kurt Aschermann, senior vice president, chief marketing and development officer, Boys and Girls Clubs of America

"A terrific review of fundraising from direct mail to Internet, in a question and answer format. It can’t get any easier."
Ted Hart, president and CEO, ePhilanthropy Foundation

"A 'must read' for fundraisers, regardless of their experience. Easy to read, well written, and to the point, this book will become the manual for professionals and volunteers in development."
Daniel T. Gura, vice president for development and university relations, The University of Tampa

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Product Details

  • ISBN-13: 9781118427330
  • Publisher: Wiley
  • Publication date: 10/3/2005
  • Edition number: 1
  • Pages: 208
  • Sales rank: 1,331,019
  • Product dimensions: 6.90 (w) x 9.90 (h) x 0.50 (d)

Meet the Author

G. Douglass Alexander is chairman of Alexander Haas Martin & Partners, Inc., one of the nation's leading fundraising consulting firms, and chairman of FundraisingINFO.com. Alexander is also the chairman of MaGIC (Major Gifts Identification and Consulting), a database research firm that provides computerized screening.

Kristina J. Carlson, CFRE, is president of FundraisingINFO.com, an Internet-based fundraising consulting company.

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Read an Excerpt

Essential Principles for Fundraising Success


By G. Douglass Alexander

John Wiley & Sons

ISBN: 0-7879-7584-2


Chapter One

ESSENTIAL FUNDRAISING TOOLS: FOCUSING YOUR WORK

In the Introduction and in Chapter One, we introduced a time-tested approach to fundraising. Much of your fundraising success will depend upon your ability to educate others in your organization about these principles. The tools and techniques described in this chapter will provide you with ways to demonstrate and communicate these basics of effective fundraising. They will also help illustrate the difference between fundraising and development. In order to thrive in fundraising, you and your organization need to understand the difference and not rely on quick-fix strategies that become long-term nightmares.

Additionally, you can use these tools to position yourself as the chief development officer and avoid the "we-are-unique" trap or worse, the "we-are-really-unique" trap.

This chapter will answer the following questions:

What is a Range of Gifts Table?

How do I build a Range of Gifts Table for a capital campaign?

Do these same guidelines apply for annual campaigns?

What role does a Range of Gifts Table play in planning special events?

If the Range of Gifts Table shows that we need four gifts at $50,000, how many prospects should we have for those gifts?

If our Range of Gifts Table shows what we consider to be an unobtainable top gift, should we add more gifts at the bottom of the table?

Should volunteers and donors be shown our Range of Gifts Table? Or is it a tool for staff only?

What is a Gift Grid?

What is the Hierarchy of Fundraising?

What is the value of prospect research?

What is the Connectivity Matrix?

How is the Connectivity Matrix used?

What other fundraising tools are essential?

Let's address each of these questions in turn.

What is a Range of Gifts Table?

A Range of Gifts Table (sometimes referred to as a Range of Gifts Chart or Table of Investments) is a written plan of action that shows the number of gifts your effort will need at various gift levels, ensures agreement on the fundraising process, and measures your progress as the fundraising unfolds. Though they are traditionally used in capital campaigns, every fundraising plan-whether an annual fund, special event, or capital campaign-should include a Range of Gifts Table.

The Range of Gifts Table shows the number of gifts your effort will need at various gift amounts. Traditionally, Range of Gifts Tables have been used in capital campaigns. However, they are very useful tools for other fundraising efforts including annual campaigns and even special events.

The general guidelines vary for building tables based upon what kind of fundraising effort is planned. We developed our guidelines based upon the review of many successful campaigns.

How do I build a Range of Gifts Table for a capital campaign?

The most successful campaigns start with a top gift that makes up about 20 percent of the goal. The next ten to thirty gifts make up 40 to 70 percent of the goal, and general gifts comprise 10 percent or less of the goal. These guidelines for building a table for a capital campaign apply whether the goal is very small or very large. See Tables 2.1 and 2.2 for examples.

Do the same guidelines apply for annual campaigns?

Different rules apply when making a table for an annual campaign, in which broadening the base of support is as important as raising dollars. Often with annual campaigns, there is not one lead gift but a number of lead donors who belong to your highest gift club level. The five largest gifts will probably make up about 20 percent of the goal. The next ten largest gifts will make up approximately 10 to 15 percent, with the next thirty gifts also contributing about 20 percent of the goal. The next fifty gifts add about 10 percent, and the next hundred after that add 10 percent, with all remaining gifts making up about 20 percent of the goal. Table 2.3 displays this pattern.

What role does a Range of Gifts Table play in planning special events?

Creating a Range of Gifts Table for a special event can help you educate your organization's leaders and volunteers about the need to secure significant sponsorship dollars prior to relying on the public to buy tickets.

As we show in Table 2.4, even with a title or underwriting sponsor that gives 30 percent or more toward your fundraising goal, $50,000 will have to be raised from general ticket sales. Other sponsorship levels can be table sponsors for galas or hole sponsors for golf tournaments.

If the Range of Gifts Table shows that we need four gifts at $50,000, how many prospects should we have for those gifts?

If you will be involving volunteers and staff leadership in conducting face-to-face solicitations, you need to identify roughly two to three prospects for each needed gift. If you will be using telephone solicitations or other less personal methods, you will need many more. If you are conducting a capital campaign, you can also plan that you will need approximately one volunteer for every five prospects to be personally solicited.

If our Range of Gifts Table shows what we consider to be an unobtainable top gift, should we add more gifts at the bottom of the table?

Sometimes the building of your Range of Gifts Table can be an eye-opening experience, especially if you are undertaking a new and large fundraising effort. If the top gift seems unobtainable, we find it is helpful to create a table that relies on an increase in the number of smaller gifts, as this typically will show you that without a large top gift the goal needs to be reconsidered.

Once you have created a table with many smaller gifts making up for the lack of a large gift, review how many prospects you will need for each gift and how many volunteers you will need for each prospect. In other words, raising many smaller gifts will take many more volunteers or significantly more resources (if you plan to conduct solicitations by phone or mail).

This type of exercise usually helps an organization's leadership understand that if the top gift seems unobtainable, they might need to reconsider the goal.

Should volunteers and donors be shown our Range of Gifts Table, or is it a tool for staff only?

Once you have analyzed and developed the table, use it as an educational tool with your volunteers, staff, and upper management to help educate them about the gift sizes that will be needed to succeed.

Most people who are not involved in fundraising as their profession tend either to be optimists or pessimists when it comes to raising money. The pessimists think there is never a good time to raise money. They say things such as, "Donors are tired of giving," "We cannot keep going back to the same people," or "The economy is bad or will be soon." The optimists think there is plenty of money "out there," and corporations and others could give money and not even miss it. A wellthought- out and sound Range of Gifts Table can help bring a sense of reality to these two extremes.

What is a Gift Grid?

A Gift Grid is a tool that illustrates the interrelationships between the prospects and the solicitation techniques that might be most effective. It helps drive home the point that the larger the gift the more personal the solicitation strategy must be. It also shows how best to use certain fundraising techniques.

Each organization should develop its own definition of what a small, major, and mega gift is so that the grid can be customized to its constituency. Again, this is a good tool to use with your board development committee and others to help explain fundraising concepts that work and to develop strategies for your fundraising program. Tables 2.5 and 2.6 display different aspects of the Gift Grid.

What is the Hierarchy of Fundraising?

The Hierarchy of Fundraising (HFR), shown in Figure 2.1, shows how a total fundraising program can be built over time. Annual support over a period of time is most often the basis for the growth of a fundraising program. Annual giving provides a base of donors, which will grow.

Your best prospects to give you money in the future are ones who have given you money in the past. This is a well-documented principle of fundraising. The ultimate goal for many organizations is to conduct a large, institution-changing capital or endowment campaign. The HFR shows that it is best to have received several major gifts and to have a strong annual fund before undertaking a large-scale capital campaign.

A corollary to this concept is that major gifts programs can be launched as a follow-up to a successful capital campaign. Many well-run capital campaigns will have more prospects at the end of the campaign than they had at the beginning.

The HFR also helps to illustrate that mature development programs are the ones that usually receive deferred gifts.

What is the value of prospect research?

There are many prospect research tools you can use to help make your fundraising effort more effective. Prospect research is based upon the famous bank robber Willie Sutton's method of fundraising. When asked why he robbed banks, Sutton replied, "That's where the money is." Thus it is with prospect research.

Your staff's time and resources are best spent with prospects who have both high donor potential and passionate interest in your organization. We have a whole chapter on prospect research later in this book, but for now you, like Willie Sutton, want to know where the money is.

Good research about a prospect can result in better and more effective solicitations. The more you know about a person's philanthropic ability, the greater your chances of securing a gift.

What is the Connectivity Matrix?

Another tool that further amplifies the principles of fundraising is the Connectivity Matrix, which is shown in Table 2.7.

The horizontal axis shows the degree of personal connection the prospect has with the nonprofit. The vertical axis shows the donor's ability to give.

The Bill Gates/Warren Buffet example in the upper-left quadrant represents a high ability to give but a low expectation of donation. Your best prospects for gifts are those who are involved in your mission, not wealthy people who could give money away and not even miss it.

How can we use the Connectivity Matrix?

As you are reviewing prospects with your fundraising committees, the Connectivity Matrix can be an effective tool to help evaluate your best prospects based upon both their ability to give and their likelihood of giving. It can also help you develop strategies to move your prospects farther to the right-hand portion of the matrix. Your largest donors will be those who have passion for your cause along with strong philanthropic capability (in the upper-right quadrant of the matrix).

What other fundraising tools are essential?

Every fundraising effort should use a fundraising software program to track prospects, donors, and results. These commercially available software programs have already considered the various tasks that need to be accomplished and the reports that are helpful during a fundraising effort. They will make it easier for you to measure the results of your fundraising efforts; produce appropriate acknowledgment letters and receipts to donors; track the history of relationships that your organization has; develop lists of prospects, volunteers, or donors; and identify prospective donors for your next fundraising efforts.

Because there is a wide variety of fundraising software programs commercially available that meet the budget needs of most nonprofit organizations, we see no reason for you to try and develop your own system. (See Chapter Thirteen for more information on software and technology.)

Summary

With a Range of Gifts Table, the Gift Grid, the Hierarchy of Fundraising, the Connectivity Matrix, and a good database system for managing your fundraising records, you will have the tools you need to educate and motivate your organization to follow the principles of successful fundraising effectively.

(Continues...)



Excerpted from Essential Principles for Fundraising Success by G. Douglass Alexander Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Figures, Tables, & Exhibits vii

Preface ix

Acknowledgments xi

Introduction: Purpose and Observations 1

1 Principles of Fundraising: Time-Tested Truths 5

2 Essential Fundraising Tools: Focusing Your Work 10

3 The Board: Where Fundraising Begins 19

4 Research: Working Smarter 29

5 Annual Campaigns: The Basis for the Future 39

6 Direct Mail: How to Build Your Donor Base 54

7 Special Events: Making Friends, Raising Funds, and Having Fun 66

8 Major Gifts: Getting to the Big Gifts 84

9 Capital Campaigns: Building Success 96

10 Planned Giving: You Can Do It 116

11 Foundation Grants: Writing and Other Keys to Success 131

12 Corporate Dollars: Sponsorship, Marketing, and More 143

13 Technology: Embrace It 154

14 Stewardship: Saying Thanks Pays Dividends 164

15 Putting It All Together 180

References 183

The Authors 185

Index 187

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  • Anonymous

    Posted March 8, 2006

    Superbly thorough fundraising primer

    The quest for funding is a high-pressure, never-ending process for nonprofit organizations large and small. Authors G. Douglass Alexander and Kristina J. Carlson break the process down into manageable pieces while covering each major avenue that fundraising professionals travel in the search for financial support. The authors use a question and answer format to explain and illustrate the premise outlined at the beginning of every chapter. Packed with useful, applicable information from cover to cover, this book deals with a range of topics including the basic principles of fundraising, annual and capital campaigns, special events, major gifts, foundation funding and stewardship. Such a comprehensive, well-organized analysis of any one subject is rare. We strongly recommend this book as a primer for any individual or group seeking guidance for a strategic approach to raising funds.

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    Posted March 12, 2010

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