Fundraising For Dummies / Edition 2

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Find out how to cultivate donors and solicit donations online

Covers new changes in tax and philanthropy law

Whether you're a small outfit or a big organization, you're competing for donors' dollars and time. This hands-on, vital guide shows you how to take full advantage of the strategies and resources available and advises you how to promote your cause, research potential donors, organize events, write winning grant proposals, and utilize the latest technology.

Discover how to

* Define your group'sfocus

* Create a viable plan

* Organize your board of directors

* Find and train volunteers

* Market via print and online

* Promote yourself with the media

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Product Details

  • ISBN-13: 9780764598470
  • Publisher: Wiley, John & Sons, Incorporated
  • Publication date: 10/24/2005
  • Series: For Dummies Series
  • Edition description: REV
  • Edition number: 2
  • Pages: 384
  • Product dimensions: 7.44 (w) x 9.14 (h) x 0.81 (d)

Meet the Author

John Mutz is the former chairman of the United Way of Central Indiana and the former president of the Lilly Endowment.

Katherine Murray has written several books about fundraising and advises nonprofits.

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Read an Excerpt

Fundraising For Dummies

By John Mutz

John Wiley & Sons

ISBN: 0-7645-9847-3

Chapter One

Identifying the Fruits of Your Fundraising Passion

In This Chapter

* Finding the spark that brought you to nonprofit work

* Delving into nonprofit organizations

* Uncovering money sources

Fundraising folks have an old saying: "People don't give to causes. People give to people with causes." This saying means that, in essence, you're the important part. Your inspiration, your perspiration, your passion. So that brings us to the Big Question....

What are you passionate about?

Chances are, passion for some cause led you to fundraising in the first place. Oh, sure, you find professional fundraisers out in the field who are interested first and foremost in turning a fast buck. But those people are few and far between in our experience. People are drawn to organizations because they see a need - perhaps up close and personal - and they feel compelled to do what they can to make a difference.

That spark of passion makes you want to help. Your passion is one of the best tools to use as you fan the embers of possibility into a full fundraising flame.

In this chapter, you take a look at having and staying in touch with that initial spark - the spark that brought about the birth of your organization, the spark that keeps it going, and the spark you caught and are helping to flame. We also show you how to fan the flame to ignite others for your cause, give you the rundown on some basic fundraising lingo, and attach fundraising at large to a dollar figure (so you know just how vast the industry is). And for newbies just breaking into the nonprofit world, we highlight the various types of these organizations, give you some advice on maintaining the buzz, and share a few tips for the road on marketing your new venture.

Sparking Fundraising Action

As anyone who's ever had any experience with trying to raise money can attest, fundraising isn't a pretty word. In fact, it's a tough term to confront, a kind of "oh-no-here-comes-the-pitch" sounding word. Some people say that fundraising is really "friend-raising," but that's like putting a bit of polish on an otherwise slippery word.

Nonetheless, fundraising is a necessary part of a nonprofit organization - the part that puts the hinges on the doors so it can open and the part that keeps the blankets on the beds and the food in the pantry. It pays the salary for the midwife and provides the day-camp scholarships for inner-city kids.

But fundraising isn't the main objective of a nonprofit organization, although you may sometimes feel that it gets the bulk of the focus. Fundraising is the means to the end, the way of fulfilling your mission, whether that mission is reaching homeless people in need, healing the sick, or promoting the art or music you're passionate about.

Chapter 2 deals with the important issue of ethics in fundraising - how you think about what you do. In that chapter, you consider the biases, apologies, and reactions that you battle against - within yourself and from the general population - when you set out to raise funds.

Remembering why you signed on

You may be involved with fundraising today, or you may be considering a request for involvement, but the initial spark is what we're talking about here. Like the Olympic flame, your spark gets carried from person to person and warms the very lifeblood of your organization, whether you're a volunteer, staff member, or board member.

Knowing your spark story is important for several reasons:

  •   When you share it, it inspires others.
  •   When you remember it, it inspires you.
  •   When you recognize its importance, it helps you remember your priorities.
  •   When you keep it in mind, it provides a common ground where you can meet - and enlist help from - others you bring into your organization's cause.


Some people work with many different organizations at the same time. If you're charged with fundraising for your nonprofit group - whether your role is a volunteer, paid staff member, or board member - chances are that you work with a select few, just given the amount of time and effort that solid fundraising requires. Even if you work with several nonprofit organizations, take time to remember why you selected them over others. Knowing why you care about these causes is important to keeping you motivated - even if you're overextended, time- and responsibility-wise.

Helping your donor catch the spark

We talk in this chapter about the importance of knowing what brought you to nonprofit work in the first place. That spark shows in your eyes and your smile. It carries in your voice and makes your story ring true. It shows in the manner in which you promote your organization and in the personal pride you take in your relationship to your work or your cause. This section presents a few key fundraising philosophies and tools that can help your donor catch the spark that you hold. For more specifics about working with donors, visit the chapters in Part II of this book.

The best thing you can do for your donor is believe in the mission you're representing. When you're gung-ho for your cause, others see it and are encouraged to join. They start to imagine themselves working for a solid cause, a good effort, a positive change.

Today's philanthropy realizes that you can't always see or touch the person who needs the help. Nonprofit organizations arose to help people help others whether they live down the block or on the other side of the world. These organized bodies provide the channels for your help to get to Rwandan refugees, Kosovan orphans, or the homeless families in your neighborhood, which enables you to do something concrete to help change the world for the better.

As a fundraiser, remember that you're the all-important link that helps a caring donor give to others. When you view what you do in this way, you recognize the importance of your role as a service provider. You also see how that spark can pass from one to another. And suddenly, the conversation is no longer about simply raising funds.

Making friends with fundraising

Before going any further, we need to clearly define the terms we bat around in fundraising. We offer the following definitions, with our own commentary added. You see and hear these terms again and again as you proceed to raise money for the causes you believe in:

  •   Philanthropy: Actions and giving that attempt to improve the lot of people.

In the fundraising field, one standard definition of philanthropy is "voluntary action for the public good," meaning any action one takes - with or without a financial component - that is an act to make life better for someone else. When you tithe at church, it's philanthropy. When you drop coins in the container on the counter at the local convenience store, you're a philanthropist. When you include your local theater or your alma mater in your will, you're practicing philanthropy.

  •   Gift: Something you offer to somebody else with no thought of compensation. A gift may appear in many facets of life. When Aunt Mildred gives you her parakeet, it's a gift. In fundraising, a gift may mean that any number of things that build on this basic definition.

You may hear about a lead gift, which is the first, usually sizeable, gift of a capital campaign. Go to Chapter 20 for more about capital campaigns.

A major gift is another type of large gift that a donor may give in order to support a particular program, launch a campaign, further a cause, or be applied in another specific area. Check out Chapter 21 for more on major gifts.

A general gift is one a donor gives to an annual fund or contributes to operating expenses.

Still, a gift is a gift, freely given, with no theoretical arm-twisting and no product or service given in return.

  •   Fundraising: Collecting money for a cause.

Another definition may be as follows: Fundraising is the intentional and strategic activity of acquiring contributions for support and growth. Those contributions can include money, time, services, labor, donations of hard goods, or in-kind contributions.

  •   Volunteer: One who freely gives of his or her time to render a service.

In other words, at a basic level, a volunteer is someone who works for no monetary payment. As a volunteer, you get other benefits - the ability to help build something you believe in, acquire new skills, forge new relationships, and more. Head to Chapter 4 for more on finding and recruiting volunteers.

  •   Annual Fund: A yearly fundraising effort.

Most organizations run a yearly fundraising campaign, in addition to any program specific efforts. This annual fund is often earmarked for ongoing operational expenses. See Chapter 18 for more about annual funds.

  •   Endowment: A substantial fund that generates ongoing income from its investment.

An endowment is usually a large sum of money that can be invested, and the profits from those investments, or even the interest the money generates, help to support an organization. See Chapter 23 to discover more about how endowments work.

Fundraising today - and in the future

Fundraising is Big Business. In 2004, the American Association of Fundraising Counsel ( released fundraising figures for 2003 in the latest edition of Giving USA, the annual report on philanthropy in the United States. Total contributions to nonprofit organizations weighed in at $241 billion, a 2.8 percent increase over amounts in the year 2000. You may think that's one heck of a lot of hot meals. Or free condoms. Or community leadership seminars. Or tithes.

When you look at the societal statistics about who fundraisers are, where fundraising is going, and where you spend both your energies and your dollars, you may be surprised to find that Americans are living in a philanthropic age. Americans volunteer their time; they give blood; they write checks; they build houses. In this time of media hype, "negativism," and preoccupation with social ills, just seeing the flip side of that negativity in increased involvement, higher levels of giving, and a greater number of human service organizations - of all different flavors, springing up to make life better for generations today and tomorrow - is reaffirming.

We are also at a time when fundraising is changing. For example, giving is becoming more global, with gifts given across borders at times of national strife such as disastrous weather or terrorist attacks. Estate planning will grow as baby boomers retire and determine where to leave their wealth. These and other trends make this an interesting time in the world of fundraising. (See Chapter 24 for more predictions about future trends in fundraising).

Building Nonprofit Organizations

The nonprofit organizations (NPOs) you care about were born from passion - a response to an identified need in the local, national, or international community. The very frame of philanthropy rests on the idea that "when people work together, they are stronger" - that when you share your resources, whether those resources are your wealth, time, effort, or ideas, others can benefit. Basically when people provide help, comfort, education, and more to people in need, society as a whole benefits. But putting together solutions is hard work - and passion and hard work are essential ingredients to carry the idea from that initial spark of recognized need to the realization of a program that achieves its mission.

Recognizing the many nonprofits

NPOs exist to battle every imaginable ill - from environmental to health to human service issues. And don't forget animals, arts, and political groups. Your organization undoubtedly falls into one of the following categories:

  •   Arts/cultural organizations
  •   Educational organizations
  •   Environmental organizations
  •   Health organizations
  •   International aid and relief organizations
  •   Public policy/social benefit organizations
  •   Religious organizations
  •   Social service organizations

All in all, more than 1.23 million charitable organizations are in the United States, (give or take a few hundred), according to the Independent Sector's survey, "Giving and Volunteering in the United States." Luckily, there are also millions of people wanting to help, most of whom are also willing to give.

Competing for dollars

So if tons of people are giving, then doesn't it follow that many people are also receiving? How many people are doing what fundraisers do - raising funds for your various NPOs? How many of these organizations exist today, and how does that compare to a decade ago? In other words, what does your competition for fundraising dollars look like?

The IRS reports that the number of charities that filed tax returns with the government rose from 180,931 in 1995 to 240,559 in 2001. That's a pretty hefty growth in only six years! By comparison, between 1999 and 2000 the number of private foundations filing during that period grew 7 percent, for a total of 66,738.

So what form do all these nonprofit organizations take? Typically, your competition will be one of two kinds:

  •   501(c)(3) is one section of the IRS code that defines and qualifies nonprofit organizations for special treatment under today's tax laws. Having 501(c)(3) status allows nonprofits to be tax-exempt and to accept donations for which donors receive tax deductions. A nonprofit with 501(c)(4) status is a nonprofit in the social welfare arena.
  •   Independent sector, or third sector, is a phrase used to describe the group of charitable organizations that include both 501(c)(3)s and 501(c)(4)s.

Although the increasing number of 501(c)(3)s is a good thing, which spotlights the growing awareness of and responsiveness to human need, a downside to all this growth exists: increased competition. Missions overlap. Different organizations seek to serve the same populations. Donors are pulled in different directions, recognizing that their dollars may be coveted by a number of similar organizations addressing similar needs.

The sad fact is that a nonprofit mortality rate does exist. Each year, nonprofits fold up their 501(c)(3) umbrellas and disappear. The level of competition for today's fundraising dollars means survival of the fittest. In order to survive, you need to stay on your toes, ready for anything. Sometimes you may even ask yourself, "Is this service worthwhile? Are there other organizations repeating our services?"

Keeping your organization going

What does this competition mean to you? For starters, if you want to keep your agency active and growing:

  •   Know your mission statement inside and out. A crystal-clear "why are we here?" mission statement (also called a case statement) helps keep everyone focused on the organization's vision. If your statement's language is outdated, be willing to speak in terms that reach your constituents' hearts. See Chapter 3 for more on creating this case statement.
  •   Be different. Be sure that you stay plugged into your environment. Be active in local fundraising groups - know who else serves the population you serve. When possible, work with, as opposed to against, other agencies so that you both can complement and not duplicate each other. Then you need to differentiate your cause from other similar organizations: Many opportunities abound for giving, but not so many that duplicating services is okay - at least not for the long term.
  •   Know what's out there.
  •   Be responsive to the people you serve. The ever-changing world presents you with opportunities for refocusing and retooling at every turn. If the social ill you battle is no longer viable, step back and reconsider your clients' needs.


Excerpted from Fundraising For Dummies by John Mutz 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


Part I: Putting Your Fundraising Ducks in a Row.

Chapter 1: Identifying the Fruits of Your Fundraising Passion.

Chapter 2: Finding the Right Perspective: Fundraising Issues and Ethics.

Chapter 3: Making Your Case Statement: Your Agency’s Reason to Be.

Chapter 4: Organizing Your Team: Board Members and Volunteers.

Chapter 5: Creating a Winning Fundraising Plan.

Part II: Finding — and Winning Over — Donors.

Chapter 6: Getting the Lowdown on Your Donors.

Chapter 7: Meeting Your Donor.

Chapter 8: Cultivating Major Givers.

Chapter 9: Asking for a Major Gift.

Part III: Assembling Your Fundraising Toolkit.

Chapter 10: Printing for Profits: Direct Mail, Annual Reports, and More.

Chapter 11: Writing Winning Grant Proposals.

Chapter 12: Projecting Your Image by Using the Media.

Chapter 13: Working the Phones (You Don’t Have to Be Hated).

Chapter 14: Charging Ahead with Tchotchkes: Giveaways, Gifts, and Sales.

Part IV: Leveraging the Internet.

Chapter 15: Creating and Using a Web Site.

Chapter 16: Getting the Most from E-mail and E-Newsletters.

Chapter 17: Extending Your Branding Online.

Part V: On the (Fundraising) Campaign Trail.

Chapter 18: Organizing, Implementing, and Celebrating Your Annual Fund.

Chapter 19: Planning a Special Event.

Chapter 20: Building Buildings, Nonbuildings, and Futures: The Capital Campaign.

Chapter 21: Securing Major Gifts, Planned Gifts, and the Challenge Grant.

Chapter 22: Approaching the Corporate Giver.

Chapter 23: Building and Growing Endowments.

Part VI: The Part of Tens.

Chapter 24: Ten Predictions about Fundraising.

Chapter 25: Ten Great Opening Lines.


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