Fundraising Questions

We're thinking about hiring a Fundraising Consultant. Can you give us any advice?

How could a professional fundraiser help our organisation?

Why won't our Fundraiser accept comission?

We're doing some fundraising for our sports club /school / church / other community organisation. Can you give us some ideas?

Where can we get chocolate bars / sunscreen / scratchies / etc. to sell for our fundraiser?

What is a Donor Bill of Rights?

Hiring a Consultant

Why Hire One?

A 'consultant' is a person who gives professional or technical advice, such as a doctor, lawyer, engineer, editor, etc ...  Their advice is dependant on the academic training they have had in their chosen field and their subsequent experience in the profession.

The fundraising profession is one business in which chemistry between the client and the consultant must be strong and supportive.  The consultant must be flexible to meet the organisation's needs and have enough experience to help the organisation work through its problems. The development team (or Board) must have faith in the consultant and not work counter to an agreed on strategy.

Fundraising Consultants generally offer services within four broad categories:

1. Capital and special campaigns;
2. Operating and annual programmes;
3. Other direct fundraising activities;
4. Support services

How to hire a Consultant

1. Determine the organisation's need
2. Build a list of prospective consultants
3. Refine the list
4. Arrange to meet the consultants face-to-face
5. Prepare for the interview
6. Check references
7. Manage the interview
8. Select the consultant
9. Negotiate a contract
10. Start work
11. Communicate with non-contracted consultants

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How could a professional fundraiser help?

There are three types of fundraising campaigns or programmes:

Capital Purpose Campaigns
Capital Purpose Campaigns are conducted in response to an organisation's need to undertake a defined capital project (such as the construction of an auditorium, sporting centre, or headquarters). This is, or should be, a rare event in the life of the organisation. It requires that a small number of gifts, at the required levels, be pledged over an appropriate period. Organisations often retain Professional Fundraising Counsel to assist with the preparation for and direction of a Capital Campaign.

Development Programmes
Development Programmes are ongoing processes for organisations which are designed to build a loyal group of supporters who will share their resources with the organisation. This source of on-going funding is untagged and unrestricted. It requires relatively small, renewable gifts from as many people as possible each year. It requires the input of either an appropriately trained Development Officer, or the regular supervision of a Fundraising Consultant.

Planned Giving Programmes
Planned (or Deferred) Giving Programmes concern themselves with facilitating individuals (usually through appropriate information mediums) to consider making provision in their Will, or through the bequest of an insurance policy or other negotiable securities, for the furtherance of a cause which was important to the donor during their lifetime. Donors in this area have typically supported the chosen organisation during their lifetime in a modest way and have the opportunity to give a gift which can make a real difference to the life and work of the organisation.

To be effective, an on-going fundraising programme must include more than just the raising of funds. In the fundraising profession, we refer to it as a Development Programme. Programmes work best when all elements carry the genuine support and conviction of the organisation's Board, staff and volunteers. The Fundraiser acts in an advisory, designing and co-ordinating role - more like a coach than a player.

Typically there are three areas in which a Professional Fundraiser can assist an organisation in establishing and conducting a Development Programme.

The first is with the preparation of the organisation's Case Statement - a document which sets down the organisation's unique case for funding support from its constituency. This document covers the organisation's past, present and future with a focus on why society needs the organisation rather than on the financial needs of the organisation. The role of the Fundraiser here is to help draft the Case Statement and begin the consultation process with key members of the Constituency which will lead to its acceptance.

The second requirement is to have or develop a group of people who are dedicated to the organisation and who are able to commit their energies to making the programme work. The Board has a major responsibility here. These people must become "passionate advocates" for the organisation. Here the role of the Fundraiser is to train these individuals to represent the
organisation well and sincerely and to ask appropriately for support for programmes which need support.

The third area springs from the first two. It is to develop a timetable for the implementation of the elements of the Development Programme in a way which is realistic and achievable. Goals should be set which you can confidently work towards. These goals should be the result of impartial research by the fundraiser and relate to the needs of the organisation, rather than just a desire to “balance the books”. Few donors will give for such a purpose.

Hiring a Fundraiser, either as a staff member or as a Consultant does not provide a "get rich quick" solution for organisations, but enables the organisation to maximise their present support and to work with a process which will increase their number of donors and supporters in the future. Thoughtful cultivation of these donors will increase your annual fundraising results.

Fundraisers who are members of the Fundraising Institute of New Zealand must all comply with its Code of Ethics and Code of Conduct.

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A percentage of the take – why not?

By Lisa Wells FFINZ, Chair of the FINZ Ethics Commitee

For those who would regard Philanthropic Fundraising as a type of sales and marketing activity it would seem to make sense to remunerate fundraisers in relation to the “sales” they make.  However, as ethical fundraisers all over the world know, fundraising is far more complex than that.

Let’s think about the psychology that motivates philanthropic behaviour.

Donors generally don’t give money to receive a tangible benefit, but to meet their own needs in being part of something bigger than themselves. The benefits are intangible and may well include identification with the Mission of the organisation, reciprocity, desire for continuance, pride of association, habit of service, as well as many other motivators.

The reason for a donation may be the result of any of these motivators and may be precipitated by the person asking, or it may be in spite of the person who is asking. The donation may be made because of the donor’s past history of giving, or the emotional pull of the cause, or even because the donor had dinner with the Chairman the night before. Essentially – the ‘ask’ may have little to do with the decision to give and the amount given.

I need to say that fundraising on a commission basis is not illegal. The FINZ Code of Ethics defines it as “unprofessional”. Codes of other fundraising institutes describe it less favourably as “unethical”. Ethics, then, concern what is right rather than what may appear to be right. Most of the items in our Code of Ethics are included because they provide a level of protection to the donor.

When an industry becomes a profession there is a need for those involved to put the interests of the client or the community ahead of the cause or themselves.

So, from the donor’s point of view, why would it be inadvisable to pay the asker a proportion of the gift?

When fundraising gets media attention the most often asked questions are “how much of the donated funds reaches the organisation?” and “how much goes to actual service provision?” When the asker invests the same amount of time and skill in each solicitation (for example by internet, telephone or direct mail) it is hard to argue and even harder for the public to understand just why the asker should deserve greater remuneration because one donor is more generous than another. In these cases, it is essentially luck rather than skill that is being rewarded.

I work most often in capital campaign and major gifts strategy management. One reason against commission fundraising is unique to capital campaigns. In a capital campaign it is necessary to secure the top gifts early. These gifts are sequential and standard setting and are often made by persons already known to the organisation. If the Campaign Manager was in line to receive a “cut” of the gift then the donor, with the best interests of the organisation in mind, may quite rightly decide to defer giving until the campaign is over.

Such a decision would ensure that the campaign would certainly be over before it began!

What would I say to the Board member who sees this approach as leading to “fundraising heaven”? I would tell him/her that commission fundraising is not conducive to long-term donor retention and relationship building, that fair remuneration is a far better motivator for best fundraising practice and that the donors simply don’t like it. Oh, and by the way I’d ask the Board member to sign off on a carefully developed, achievable (with a stretch)
fundraising plan so that we have no danger of jumping on ad hoc fundraising “opportunities” like this again!

James Mutch FFINZ says…

"No professional fundraising institute in the world condones relating fundraising fees to the amount raised.  The ethical fundraiser’s recompense is properly a predetermined fee based principally on the levels of knowledge, skill, experience and time employed plus logistical factors such as travel where applicable.

Modern professional fundraising got started in the first decade of the 20th century. By 1920 it had been learned - the hard way - that relating fundraising fees to the amount raised resulted in ineffective fundraising and bad relationships. Theory did not tell the early practitioners this - experience did.

Below are some of the fruits of their experience. Common sense dictates that we not repeat their sad experiences:

- Donations do not result from the work of fundraisers alone. The fundraiser merely harvests the crop. It would not be there to harvest if others had not previously planted and cultivated it. Why should the fundraiser get all the kudos?  Most substantial donors have had long standing relationships with the donee institution. These relationships have mostly been fostered and cultivated over the years by staff, trustees and volunteers. They understandably would feel resentful if an itinerant fundraiser was to receive pecuniary gain because of substantial gifts resulting largely from their good work in cultivating the donors over the years.

- Large and generous pledges made early and made known are a powerful dynamic in setting the standard of giving among other givers. Some potential standard setters would delay their pledges until after the fundraiser had been paid off to avoid paying the fundraiser a percentage. This would deprive the campaign of one its most powerful fundraising dynamics and result in a lot less money being raised.

- There is a consistency in the giving patterns in successful capital fundraising campaigns. The top gift is at least 10-15% of the amount raised; the top 10 gifts amount to 45-55% of the amount raised. These are not arbitrary rules that professional fundraisers have made up; rather, they are facts of life that they have discovered. They occur with remarkable consistency in all types and sizes of campaigns. Consequently, for the goal to be achieved, it is crucial that the professional fundraiser indicates the level of gifts required from the top donors. It requires tact, skill and experience to perform this necessary task effectively. It would render a delicate, difficult job virtually impossible if the fundraiser was getting a percentage of the gifts.

- Other things being equal, it would be easier, cheaper and take less time to raise a given sum for say distressed children than for drug addicts, for guide dog puppies than for unmarried pregnant teenagers. Fundraising institutes consider it to be unethical for fundraisers to “cash in” on the emotional pull of their client’s cause, which they would do if recompensed by a percentage of the amount raised. The emotional pull of the cause is not the property of the fundraiser.

- Astute fundraisers identify those prospective givers who will respond better if the Board Chair, CEO or other staff person participates in the solicitation process. They, understandably, resist participating if the fundraiser is getting a percentage.  Most great fundraising campaigns are characterised by intense support and enthusiasm of the organisation’s trustees and staff. One of the fundraiser’s roles is to generate, and cultivate this enthusiastic support and project it to the wider constituency. The fundraiser’s best efforts to do this will be perceived as self-interest and resisted if the fee is related to the amount people give; and so the campaign is robbed of one of its most potent weapons.

- If a trustee or other stakeholder introduces a substantial donor to the campaign, who should get the percentage?

- In most capital fundraising campaigns the money is raised in pledges and given over a 3-5 year period. It would be impracticable for a professional to wait that long for his/her fee.

- Mostly when the fundraiser has completed the service period there are several gifts still in the pipeline. These include: people who have made a decision and informed the campaign committee of it but for a variety of reasons have not completed the paper work; corporate and trust gifts where the decisions cannot be ratified until their board meets; etc.  If payment to the fundraiser was made in anticipation of these gifts there is scope for the fundraiser to inflate the figures, or through rationalisation to claim the benefit of any doubt. If payment is made only after all gifts come in, there is scope for the client to claim that the gift was entirely generated after the fundraiser departed. Either way there is scope for a lot of bad feeling and messy litigation.

Anecdotally, I recall a situation where skilful and timely intervention by the fundraiser, despite opposition from the CEO and the board chairman,brought in a gift of $1500 from a previously alienated prospect. A few months after the campaign ended, the same donor gave the organisation an additional $450,000! Should the fundraiser have got a percentage of that too?

In some campaigns, substantial amounts are contributed by central or local government, quangos, trusts and foundations. The presentations to these bodies are usually one-offs, specially tailored to that particular prospect. Not infrequently the presentations are a team effort entailing various inputs from the fundraiser, staff, board member and specialist. It would extend the wisdom of Solomon to determine how much of the commission each participant should get.

If a proportionate percentage was to be paid to those who prepared the presentation, it is likely that all or nearly all of it would be prepared by the most dominant of those people, to the detriment of the quality of the presentation. So, as well as acrimony among those who should have been more involved, the organisation is likely to receive less money by reason of an inferior presentation. The likelihood of these unfortunate occurrences is minimised if the fundraiser is paid a predetermined fee.”

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Fundraising Ideas

To raise funds for your club or group you do not need to be registered with anyone, nor do you need a licence.

The following are various simple fundraising ideas you can undertake yourself, without necessarily enlisting the services of a professional fundraiser. These fundraising activities are usually used by schools, social groups, sports clubs, etc. when raising small amounts of money for equipment, group trips or activities, etc.

Casino Nights, Bingo Nights, Sweets & Confectionery, Fudges & Candy, Raffles & Lotteries, Pizzas & Savouries, Entertainment Events, Sporting Events, Greeting Cards, Calendars, Cakes & Lamingtons, Cosmetics, Pies, Scratch Cards, Flowers & Bulbs, Organic Products, Gourmet Food, Family Portraits, Compost, Socials & Dinners, Gift Baskets, etc.

Fundraising through merchandising (supplying of items for resale) is not necessarily considered a form of professional fundraising and therefore not many such suppliers find it necessary to be members of the Fundraising Institute of New Zealand.

There are many different opportunities to fundraise through merchandising. Refer to the Industry Links section of this website for contact details of some businesses that could help.

Whatever you decide to do please do it considerately and well. The success of your fundraising endeavours and the satisfaction of your donors and clients reflect on us all.

Good luck and good fundraising!

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A Donor Bill of Rights

Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To assure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the not-for-profit organisations and causes they are asked to support, we declare that all donors have these rights:

  1. To be informed of the organisation’s mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.
  2. To be informed of the identity of those serving on the organisation’s governing board, and to expect the board to exercise prudent judgement in its stewardship responsibilities.
  3. To have access to the organisation’s most recent financial statements.
  4. To be assured their gifts will be used for the purposes for which they were given.
  5. To receive appropriate acknowledgement and recognition.
  6. To be assured that information about their donations is handled with respect and with confidentiality to the extent provided by law.
  7. To expect that all relationships with individuals representing organisations of interest to the donor will be professional in nature.
  8. To be informed whether those seeking donations are volunteers, employees of the organisation or hired solicitors.
  9. To have the opportunity for their names to be deleted from mailing lists that an organisation may intend to share.
  10. To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.

Developed by:
American Association of Fund Raising Counsel (AAFRC)
Association for Healthcare Philanthropy (AHP)
Council for Advancement and Support of Education (CASE)
Association of Fundraising Professionals (AFP)

Endorsed by: (in formation)
Independent Sector
National Catholic Development Conference (NCDC)
National Committee on Planned Giving (NCPG)
Council for Resource Development (CRD)
United Way of America

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