PADM 7040 Nonprofit Management Week 7 CHAPTER 7 Part 1 (pgs 183 – 197) Bill Blake

CHAPTER 7 – Generating Funds  Recent History of Donor “Investing” (George Soros)  Balancing Mission and Fundraising Donations and Grants Revenues Miscellaneous – Investment Income

CHAPTER 7 – Generating Funds BALANCING MISSION  MISSION DISTORTION External Causes – Donor influence Internal Causes – “Attachment” and Pressure  LACK OF PROFITABILITY External Causes – Costly donors in terms of fees, time, and effort expended Internal Causes – Unsuccessful “retail” and non- mission operations

CHAPTER 7 – Generating Funds ORGANIZATIONAL STAGES OF FUNDRAISING Product Orientation Stage  “Old Boy Network”  Volunteer fundraisers  A few Loyal Donors Sales Orientation Stage  Marketing Development Director is appointed  Paid Staff uses “hard sell” to raise funds from all possible sources  Majority of large nonprofits are in this stage

CHAPTER 7 – Generating Funds ORGANIZATIONAL STAGES OF FUNDRAISING (Continued)  Customer Orientation Stage It is understood that the organization’s needs are still met via donations, so they Starts with the needs and wants of the target market (donors) United Way Example  Repositioned itself in response to “new” donor needs  Bundled organizations into “Charitable Mutual Funds”  Instituted more formal reporting and feedback mechanisms to donors

CHAPTER 7 – Generating Funds New Wrinkles in Fundraising Landscape  Internet Options for Donors  Charitable Mutual Funds  Venture Philanthropists Have established foundations Build portfolios of organizations of interest Directly intervene with management assistance of these organizations Demand performance monitoring and feedback from their “investments”

CHAPTER 7 – Generating Funds MAJOR DONOR MARKETS (4)  FOUNDATIONS  CORPORATIONS  GOVERNMENTS  INDIVIDUALS

CHAPTER 7 – Generating Funds MAJOR DONOR MARKETS FOUNDATIONS - As of 1999 held over a half-trillion dollars in assets and made grants totaling over $23 billion. Four basic categories:  Independent – wide ranging and usually run by professionals  Family (actually a subset of Individual) – set up by wealthy individuals or families to activities of interest to the family  Corporate – Set up by corporations allowed to give up to 5% of AGI  Community - Often set up as donor “pools” with many private sources including individuals, corporations, foundations, and nonprofits

CHAPTER 7 – Generating Funds MAJOR DONOR MARKETS (Continued) FOUNDATIONS – Securing Foundation Donations  Nonprofits should locate Foundation donors most likely to support their mission  In seeking Foundation Grants, Nonprofits should attempt to match donor interest(s) with its own Research prospective foundation donors Specifically identify a few prospects Contact Officials at the Foundation for more information  Identify and promote projects the donors will likely be interested in  Draft and Submit formal Grant Proposals

CHAPTER 7 – Generating Funds MAJOR DONOR MARKETS (Continued)  CORPORATIONS Donate significant amounts of Cash and Products Often Donate Abroad Includes donations of employees’ time in volunteering Can be fickle depending on their bottom line Recently instituted “Strategic Philanthropy” to help meet “corporate” goals, such as  Changing organization’s image  Building alliances for future public support  Motivating employees  Stimulating Sales

CHAPTER 7 – Generating Funds MAJOR DONOR MARKETS (Continued)  CORPORATIONS – Among the best ways for nonprofits to identify corporations which may provide contributions is to look for the following: Local Corporations Kindred Activities Personal Relationships or Contacts Structural Similarity

CHAPTER 7 – Generating Funds MAJOR DONOR MARKETS (Continued)  GOVERNMENT – Agencies at Federal, State, and Local levels Examples include: The National Endowment for the Arts, and Grants for Health, Education, and Research Government donors require lots of paperwork The reputation of the Grantee is important in securing initial and continued funding