What fundraising tools should you use to reach these markets?
For some small tasks, the good old raffle is without parallel, but these days the amounts groups must raise and the ever emerging needs often call for a more indepth approach. No matter what tack you choose, you will need a fundraising plan, which includes:
- your case statement,
- a timeline of activities,
- deadlines for key events and for reaching your target and,
- and the precise method(s) you will use to reach your funding goal.
A word of warning. Pop a thermometer into the mouth of your market before you plunge into your campaign. Even if you are just a small sporting club or a Scouting group rather than a larger charity, check out with some prospective donors if they are likely to support you.
The tiniest amount of market research can save cancelled events and wasted effort. Will your volunteers and leaders give to the cause? Does your case statement reflect the true interests of your markets and the key givers you have identified or are there other reasons people support you that you weren’t aware of? Analyse any hurdles you may face. Check that your campaign does not coincide with another one by a major cause. In summary, establish how feasible your project and methods are before you start.
You are then in a position to decide which of the common techniques summarised below may help. A few guiding thoughts:
- Build always on the strengths and resources of the people who make up your organisation. For example, one now major children’s charity began with the support of the boating community because its founder was active in this sport. Its early fundraising was around boat races and dinners for the boating fraternity. Another now major national charity ran an early squash marathon because the husband of one of the nurses had networks of squash players as friends. Another group raised money from branches across the state, with each branch playing to its strengths. One branch ran an annual fashion parade, another piggybacked annually on a horseracing event while another had a large recycling operation – all because they followed logical outreach to their own existing networks.
- It is good to go to the smallest number of people for the largest possible support. Keep the task manageable and think big. Asking large potential supporters for help may not win the donation from them but it may see them point you in another useful direction from their networks.
- Remember you are asking for a vital community cause – not for yourself. You represent something very worthwhile. In no way, shape or form is fundraising about begging.
- It is better to do a few activities well than to burn out your volunteers with an overambitious calendar.
- Fundraising is a long road. Success is not guaranteed. However, many of the links you forge may end up being supporters later even if they are not able to help on the first ask.
Common fundraising programs
- annual funds (which includes most of the wide range of fundraising undertaken by small groups such as raffles, direct mail, monthly direct debits from loyal supporters, workplace giving, money boxes in shops, sausage sizzles and so on);
- capital campaigns;
- special events; and
- electronic fundraising (such as donations through the website, email campaigns or even mobile phone appeals).
Some of these techniques require approval from the relevant government department with reference to legislation such as the Collections Act. Refer to Chapter 16.
Annual funds raise money for normal yearly operating expenses, where the donations and income are not usually tied to a particular nominated purpose. This is necessary in an ongoing cause and organisation. While you strive to avoid administration costs, it is a fact of life that the funds will not be raised and managed without some outlay and support structure. Likewise, your programs will not run without some expenses.
Annual funds are sometimes called ‘budget fundraising’ and may use personal asking, direct mail campaigns, doorknocks, art unions, telemarketing or even telethons or radiothons. Apart from generating funds, the bonus is the opportunity to reinforce the cause each year (or several times each year) to the donors and maintain their loyalty. It provides the opportunity to account to donors regularly about how you are investing their support. Many of these donors also then choose to give to other specific campaigns the organisation runs from time to time.
The annual giving program is the backbone to other campaigns. It provides the donor base, the regular supporters that will keep the organisation alive and sets these donors into a pattern of giving and involvement with the cause.
An interesting development in more recent years has been new forms of regular giving. While many Australians have practised monthly giving in the form of ‘adopting’ an overseas child through Worldvision or the like, such giving is now more common across a range of causes. People may sign up for a direct debit to go each month or each payday from their bank account into the charity’s bank account. Or through their workplace, they may give a regular small amount and receive a tax receipt for the accumulated amount at 30 June. This payroll deduction approach has seen a lot of other workplace giving happen as well, where a workplace may link with a few charities and be sites for their events as well as willing staff members giving through their pay. Consider Jeans for Genes Day, Bow Tie Day, Shave for a Cure and the like.
Another change has been the advent of street fundraising by groups particularly such as environmental or human rights organisations. While not a form of fundraising that appeals to everyone, this approach has proved popular with often younger supporters, some of whom have not been involved in giving before. Commonly, the donor agrees to a particular amount being put on their credit card or coming from their bank account each month as ongoing support to a cause.
If you are a new nonprofit group, your donor acquisition could be timed to coincide with a launch of your cause. People do not generally give to groups they do not know about. Talk to a public relations consultant, freelance writer, volunteer marketing person or your local media about what will interest the news outlets. ‘Noise’ in the marketplace about what you are doing makes a difference to the support you will receive.
Personal visits to potential donors
If personal asking is used, many times each volunteer who will personally be asking for gifts will be given a target of five or six contributions to generate from introducing people they know to the particular project, as a manageable number. Fundraising is about relationship building rather than baldly asking and about meeting the needs of the potential supporter. Question 4 covers the process of personal asking in more detail.
A useful tip is the challenge gift, where a single donor (e.g. the government, a large donor) offers to match dollar for dollar each new gift that comes in. Obviously, this must be an honest challenge, carefully accounted for. Likewise, the nucleus fund is a good start to a campaign. This fund is generated when the campaign leaders and committees pledge their gifts to kick off the campaign. From this base, others are likely to join.
If direct mail is used, take advantage of the services and information offered by Australia Post and the range of direct mail houses in Queensland. Remember you are competing to have your mail opened and read. To be appealing, it should ideally use attractive stationery, an individually typed address rather than computer labels, a personalised greeting, crisp, direct wording, a signature by someone people would like to receive mail from and a reply paid envelope. Volunteer or freelance writers, public relations or advertising consultants can be a boon here.
Direct mail helps you reach large groups of prospective supporters who could not be canvassed personally. Because it may involve outlays for copywriting, design, printing, list purchase, postage and so on, direct mail can mean a large upfront investment. These are not tasks an amateur can easily tackle and achieving a good response to direct mail is challenging. The outlay may call for some professional input. Having said that, some volunteers use direct mail effectively by writing to their own networks and people in their local district. Some organisations have set up a healthy, ongoing base of supporters from an acorn-sized start. Smaller scale versions for low budget groups could make use of a simple letter distributed through the volunteer network, asking each volunteer to circulate an original copy of the letter to five friends he or she feels may want to help. This is not uncommon with new organisations especially.
Direct mail programs can be used initially for donor acquisition (going out to people who are not currently supporters to acquire new givers), and in this phase it is not uncommon to spend more on acquiring supporters than on what comes in from this first contact. The cycle then moves onto donor renewal (approach for another gift), then donor upgrading (suggesting a slightly larger gift over time for donors showing their continued interest) and renewal of lapsed donors (reminders to people who may have stopped giving for one reason or another). Donor acquisition sometimes involves unaddressed mail but naturally personally addressed mail has a higher chance of being opened and read. Sometimes charities may rent or purchase lists of names from list brokers so they can address mail personally to groups who may be interested in supporting their cause.
Telemarketing is being used successfully by some key charities. It simply means contacting potential supporters by phone. Telstra, Optus and other groups are able to provide background on the rationale and techniques of telemarketing that may apply to your group. Sometimes a telemarketing bureau will be engaged to undertake a pilot program to see if telemarketing works well with your cause. Telemarketing may be for merchandise sales, art unions or donations most commonly.
Capital campaigns are designed to raise a nominated large figure for equipment, buildings or expansion. Common examples would be intensive efforts to build a school swimming pool, a new club house for a sporting group, or a new wing in a hospital.
These campaigns rely largely on personal asks made by volunteers who have themselves committed a significant gift. The program chairman is selected carefully in such campaigns not only for commitment to the cause but for ability to link into other potential givers. Quite commonly, such campaigns are run with the help of a fundraising consultant.
Capital campaigns are not usually run until the cause has a strong donor base and visibility. Because of the large amounts involved, the success of capital campaigns usually rests on donors who are familiar with the cause through annual funds or other smaller programs. Gifts may not always be in cash. It is not uncommon to see a transfer of asset (for example, title to some real estate or shares, or a building that can be used to be a clubhouse, museum, playgroup etc). Gifts may also be made over a number of years. This is known as the ‘pledge’ system of giving and the power of these so-called ‘stretch gifts’ is huge. For instance, an average family wanting to support a cause they believe in may be delighted and surprised that they have the power to make a $1,000 impact by committing $10 a week for the next two years.
According to Giving Australia 2005, 58% of Australians have a will and some 7.5% of these have made a charitable bequest. This is where a person decrees in a will that a certain amount will go to a set charity (or charities) when the estate is settled. A solicitor can provide appropriate wording that your organisation can use and promote. Promotion of the idea of including the charity in a will and promotion of the bequest wording, especially on your website is important.
Many people are happy to know that the support provided to a cause close to their heart will be continued after their death, through long term thinking they have set in place. So many Australians still die intestate - without a will - and many people welcome the reminder that they need to make their wishes known and to provide for their family and perhaps for a cause special to them as well, resources permitting. Giving of this type seems to be more and more common. Many causes will use their newsletters and direct mail to invite interested donors to write to them for more information on this method of giving.
Ethically, of course, fundraisers should take care not to exert undue influence on people preparing their wills. See the FIA Codes of Conduct for more information.
The Queensland Council of Social Service manages a regularly updated grants page, relevant to those working in the community service sector.
Grants may stem from foundations, corporations and governments. They may seem like easy money. In fact, they take some effort. Grantmaking organisations in areas connected with your cause must be researched, and submissions tailored to the requirements of that group. Most will have set deadlines for considering submissions, with specific guidelines for the types of causes they will fund, and the accountability they require. Foundations are a sometimes forgotten source of community funds, yet their contribution to the community benefit is enormous each year. They may be set up to administer an individual’s or company’s giving or that from a large estate of a generous person who outlined their wishes before they died.
Various directories of philanthropic (sometimes called charitable) trusts can be sourced in libraries. Philanthropy Australia is also a useful source of information on this area, via its Directory of Trusts and Foundations. If you receive a grant, publicise this if the grantmaking body allows. It underlines the confidence that these bodies have in your organisation’s ability. A new type of foundation came into being in Australia with the new millennium, called the Prescribed Private Fund. Akin to the US family foundations, this vehicle provides a tax efficient means for people to manage their philanthropy.
More information on PPFs can be found at the Philanthropy Australia site.
The Australian Centre for Philanthropy and Nonprofit Studies has recently opened The QUT Community Collection which includes a database library for grant seekers, fundraisers and philanthropists provided by the Foundation Center USA. The QUT Centre as a Cooperating Collection allows free access to the Foundation Directory Online, the world’s leading grant seeking database. The Centre is located at the QUT Library V Block, Level 7 at the Garden’s Point Campus 2 George St Brisbane. And is open 7am -10pm Monday to Friday and 9am-6pm Saturday and Sunday.
Balls, walkathons, buy-a-button days. The list of possible special events to create interest in your cause is limited only by the imagination - and the budget. Be careful that your fundraising events are not simply attracting a list of partygoers rather than those with a genuine interest in your cause who will want to invest further in your work. Public relations and fundraising do go hand in hand. As mentioned before, people are loath to give to a cause they do not know. Special events planned to have some news value can attract media coverage and can bring new donors into contact with your organisation.
They are particularly useful when a set amount for a specific need has to be raised. Be aware of the bevy of volunteers you will have to muster, from ticket sellers to walkers, or whatever your event demands. Plan well ahead and make sure the event really is ‘special’. It must attract the people you want to target, either through a top guest, exotic venue, or tantalising theme. Remember the outlays of food and facilities. Try to achieve and promote donations or sponsorship of as many of your requirements as you can, but realise that in most cases special events need some risk outlay. Plan for break-even points so you know whether or not to go ahead, and have some target of the numbers you need to attract. Like in many areas of life and business, the old adage ‘get it in writing’ is a worthwhile one to live by in setting up the many details and negotiations that lead to a special event. Sometimes, events will take 50 per cent of the income in arrangement costs, so viewed purely in fundraising terms, there may be more profitable ways to raise a dollar. However, it may be that the profile, the new volunteers and the involvement of people in your cause are just as important to your organisation as the dollars, so special events must not simply be judged on net profit.
Further, if you can make your event a significant social occasion for your area, you have achieved a valuable yearly fundraising tool that people will look forward to being part of and that can grow in strength year after year.
Cause related marketing
In recent years, we have seen more corporations embarking on cause related marketing (CRM). For example, American Express might pledge 5¢ to a nominated charity each time a card is used in a specific city, and $1 for each new card taken out in that locality in a nominated period. Or a coffee company may add to its label that it will donate $2 to charities helping children each time someone buys it product. Or the local fruit shop might donate fifty cents every time people spend more than fifteen dollars with them in a set week. A common one people notice is the link of a toilet paper brand with a seeing eye dog charity. With full promotion, this CRM concept brings business and a goodneighbour image for the firm, and funds for the cause. This concept has broadened to encompass corporate community partnerships, where companies might ‘adopt’ a particular cause and their staff and customers work to help it.
Gifts may come to your cause in the form of funding for an award, scholarship, room or clubhouse that is then named for the donor or in honour of someone who has died or someone whose contribution has been sufficiently large to warrant a tribute. People give to such campaigns to express their admiration for such individuals. The advent of the web has made this a much more personal process with people for instance setting up web pages on a charity’s site to honour a loved one and other friends able to add comments and photos to the page as well as a memorial donation.
Quite commonly in arts organisations but also others causes, gift clubs operate as an incentive to people to give set amounts. Membership is achieved by making a gift above a certain level, and it is exclusive to belong to the club that honours this group. The club may have a special name, special yearly function (eg. dinner with the team, the research professor, a special artiste, behind the scenes tour with the backstage crew etc) or other distinction that is seen as worthwhile recognition by its members. The recognition cannot be of monetary value however.
Electronic fundraising (E-Fundraising)
The internet has revolutionized fundraising as it has so many other areas of life. Websites, charity portals that direct donations from shopping or other sites, updating and sending out appeals by email or SMS, adding podcasts, wikis and blogs to your information and outreach, using social networking sites such as Facebook, Twitter or LinkedIn, online video of the reality of your cause, downloading a ringtone or wallpaper of an endangered tiger – the list goes on.
A range of websites now offer guidance to individuals or groups wanting to raise funds online. Such sites generally help in three ways: a step by step system enabling a personal webpage to be created so you can start fundraising immediately, suggestions for outreach to your likely donors (such as email blasts to people you know) and a secure means of accepting and receipting donations. Local sites include Everyday Hero.
Remember, pictures and videos work very well online. The 3M Corporation has researched visual thinking as part of its product development and has found human process visuals 66,000 times faster than text! Think visually on your site because most people sure do. Have a look at Youtube for some tips and examples about online video campaigns for nonprofits. Remember that pictures are great storytellers and fundraising is essentially storytelling. It is worth also checking:
- Any fees charged by these sites as a percentage of any donations as these may vary;
- The payment systems in place for your donors and their security; and
- How, and how quickly you receive the money raised.
Some combination of these techniques may be appropriate for your needs, particularly if yours is an ongoing cause. Smaller organisations may simply decide to run a raffle. Either way, be sure to check your legal obligations with the relevant government department.