Meeting #4 – Designing an effective fundraising model O&D, Chapter 10 (Lindahl): The Fundraising Process Chapter emphasizes research on process, prospects, etc. Also, fully understanding one’s own organization, so its goals, etc. can be explained to potential donors Lindahl, Page 119 – goal-setting Facilities, Endowment and Operating Some donors may be much more responsive to one type of donation (e.g. some may only give to facilities improvement) Steps: Cultivation Fairfield example Solicitation

Types of solicitations: Planned giving Major gift solicitations Role of Stewardship: Possible alternative goals of managers Self-interest, social status Good stewardship requires goals of nonprofit are paramount Lindahl (page 124) note that a ex post evaluation of how well the fundraising worked is critical

O&D, Chapter 11 (Pratt) – Analyzing the Dynamics of Funding Key focus of chapter is on the reliability of fund-raising and the degree to which the funding binds the hand of the nonprofit Reliability: High: Individual donors, endowments, memberships, rental income, advertising Medium: fees for services, continuing government contracts, corporate charitable contributions Low: Government grants that are project-driven, foundation grants, corporate sponsorships

Autonomy: High: small- to medium-sized individual contributions, foundations, fees for service, endowments, memberships Medium: large individual contributions, corporate contributions Low: project grants, government contracts, United Way support Pages 130-31 – Eight forms of funding and resulting reliability and autonomy Discussion – particularly the issue of government-funded nonprofits

Giving Circles and “crowdfunding” What happens when charity becomes a social act? Chapter12 focuses on giving circles: Groups that pool resources to leverage donations Eikenberry notes that these groups are educational in nature, and that giving becomes part a member’s social life Giving can be more informed and members can find new ways to engage with issues they are interested in Forms: Page 136 – Organizational form Most operate on a “fee” basis (which funds donations) Large donation groups typically have a more formalized grant-making procedure Some are formal groups that meet, some are loose networks

Eikenberry Provide 2 case studies Shared Giving: Small (16 members) group that focuses on leveraging individual donations Started by couple that realized they were giving away a lot of money, but randomly and in small amounts Decided to increase the impact of giving by organizing and targeting contributions Womenade: 38 giving circles under this name. Join for a small fee ($35) – Money used to provide small donations to women (families) experiencing financial stress Such as paying an over-due utility bill http://www.givingcircles.org/

Benefits of giving circles Charity as a way of life Giving is consistent and targeted More informed! Social aspect encourages participation List of Giving Circles can be found at: http://www.givingcircles.org/

Crowdfunding Means by which to draw in many donors at a very small price per donor. Cause and monetary goal posted on the web Rely upon social contacts to encourage participation Top ten sites can be found at: http://www.crowdfunding.com/ Example: Kickstarter – seeks individual donations to fund creative work that otherwise would not be funded (e.g. cinema)

Crowdfunding also used to fund medical treatment for those with serious long-term illnesses who are in financial stress Avoids costs of approaching donors, but visibility is an issue

Literature for Next Time 9. Heutel, Garth (2014). “Crowding Out and Crowding In of Private Donations and Government Grants,” Public Finance Review 42, 143-75. 10. Brokaw, L. (2012, November 28). “The ‘Benefit Corporation’ Movement,” MIT Sloan Management Review. Retrieved from http://sloanreview.mot.edu/artucle/the-benefit-corporation-movement/

Class Exercise Donation effectiveness Design a website that: Promotes Cause Will be easily found by those searching Details finances of nonprofit Provides searchable statistics (why?) Stories of assistance Mission statement History Media resources Major Donors (why might you want to omit this?)