may 2004© organization futures llc 20041 total organization fundraising ken phillips, organization...

May 2004 © Organization Futures LLC 2004 1

Total Organization Fundraising Ken Phillips, Organization Futures LLC CFP Workshop May 2004

Benefits to donors

Credibility

Positioning

Results Strategy

Value Added


The Role of Nonprofits• Promote a socially worthwhile cause• Provide services in health, education or welfare• Advocate to society, business and government• Educate the public regarding this cause• Use voluntary contributions and volunteer time • Maintain your independence and free voice


What Is the Future?

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Recent ActivitySelf-ReliantDependent

Today’s choices determine tomorrow’s results. Organisations that don’t grow die!!


Total Organizational Fundraising©

Six step approach to the core capabilities of an organization for effective fundraising

1. Fundamental Principles of Fundraising

2. Internal Culture of Fundraising

3. Strategic Planning, Positioning and Fundraising

4. Organizational Ethics and Standards

5. Strategic Evaluation for Learning

6. Involvement and Accountability for Donors


Strategic Thinking

Big, long term and high level thoughtsThoughts of how, not what or why

Reflection of something uniqueValue added that sets you apart from othersPrice / Quality / Innovation

Business strategies

Not operational plans or activities


The Ashoka ExperimentCriteria for Selection

1. A new idea: Is this person possessed by a truly new idea for solving a public need?

2. Creativity: Is she or he creative both in goal setting and in problem solving?

3. Entrepreneurial quality: Can this person rest until his or her vision is the new pattern across society?

4. Social impact of the idea: How many people will be affected and how beneficial will the effect be?

5. Ethical fiber: Is this person totally honest and trustworthy? Would you instinctively feel safe relying on him/her if you were in danger?

Social entrepreneurs - nonprofit leaders - 1,000 Fellows from 35 countries since 1980. www.ashoka.org


Tactical Organization

Pulling in allall directions at the same time


Why Have a Strategic Fundraising Plan?

Most NGOs have a strategic plan for programmeA strategic plan for fundraising is just as important

Improve performanceUse resources wellFocus on critical issuesClarify future direction Get everyone working togetherTake control of eventsWeave through chaos rather than be blown by itRaise more money


Strategic Organisation

Branches

Fundraising

Board and Executives

Programmes

All Staff

Pulling allall together toward the same visionTHE

NGO’S

VISI

ON


Strategic and Operational Planning

You want to be here.

How do you get there?

You are here.

Hint: Use the Strategic Planning Worksheet!


Strategy for Fundraising Strengthening internal capacity of NGOs to raise funds and other resources from local, county and national sources. Moving from ‘fundraising is proposal writing for foreign donors’ to the next stage of organizational development and diversified fundraising

local government contractsbusiness sponsorshipmembership fees fundraising eventspublic donation fees for servicerelated business income.


Strategic Fundraising Planning (3-5 Years)

Vision Why we fundraise Stakeholders Whom we serve Mission What we do Strategic Positioning What makes us special Values and Culture How we behave Situation Assessment Where we are now Critical Issues What we must solve Key Goals Where we want to get Strategies How we move forward Benefits to Donors Why they support us


Why Planning Fails 1

Lack of commitmentConfusing studies with plans - Plans require a decisionFailure to develop strategies tied to action plansLack of meaningful goals, objectivesLack of clear delegationFailure to see the scope of plansInability to put a plan into actionInability to communicate to staffLack of top management supportLack of supporting culture


New Strategic PlanningRoutine New

1. Organization Vision Leader Vision

2. Mission Strategic Positioning

3. S W O T Stakeholder Assessment/Value

4. Program Culture Entrepreneurial Fundraising Culture

5. Market Penetration Market Development

6. Proposals Diversified Fundraising

7. Benign Board Expert & Fundraising Board

8. Mixed Roles Separate Board & Management


More

Grazing sheep Hunting Wolf

9. Grant Development Product Development

10. Income Generating Projects for Nonprofits

Business Thinking for Social Marketing Ventures

11. Fulfilling Terms of Grant

Public Accountability

12. Evaluation for Donors Strategic Evaluation

13. Ignore Competitors Analyze, Benchmark, Share

14. Structure for Control Structure for Effectiveness


What is Your Vision?

What value can you provide to society?What social needs could you meet?How can you motivate others?How can you articulate it?Why should others follow?


Desired Results

What are your desired Long Term Results?

Think broadly from society’s perspective

Think broadly from your participants’ perspective

Think broadly from your donors’ perspective

The results have to be measurable


Identifying Stakeholders (Whom We Serve)

Organisations that do not pay attention to stakeholders’ needs are soon in trouble!Who our stakeholders are?What we get from them?What demands they make?How they influence us?How they are satisfied?


Expanding the Boundaries of NGOs

Key interest groups become larger, more complex.Beneficiaries are the first group to be identifiedVolunteers,family members, board and staffFoundations, corporationsGovernment officials Individuals in the public

All have their own agendas

It is up to you to meet themBeneficiaries

Volunteers

Donors

Government

Public

Staff

Beneficiaries


Stakeholders

Our Stakeholders are


Creating an Empowering Shared Mission Statement

Focuses on contribution, on worthwhile purposes that create a collective deep burning ‘Yes!’Comes from the heart of the organization, not from somewhere elseIs based on timeless principlesAddresses the needs of stakeholdersMotivates and inspires


Identifying Core Values (How We Behave)

Core values are beliefs, norms, ideas that shape how an organisation carries out its missionThey influence activities within the organisation as well as with outside groupsHow we want to treat volunteers and donors


Childreach CultureIdentifying and creating a “can do” culturePassion for the MissionObsession with GrowthCommitment to Customer Service Let everyone shine

Good results30,000 donors to 100,000 donors$10 to $30 million income100 staff to 75 staff


Typical External Barriers to Growth

Recession and economic malaise

Worry about future

Private economy

Government cutbacks

Wealth concentrated

Lack of culture of giving and laws

Severe competition among NGOs


Real Barriers to Fundraising Success

Not making the cause appealing

Not responding to your donors

Uninvolved top executives and board

Just hoping it works (not planning)

Not making it work (management)

Internal conflicts

Being afraid to ask

Lack of fundraising culture (the #1 issue)


Our Fundraising Situation Assessment

Internal Strengths Weaknesses + - + - + - + -External Opportunities Threats + - + - + - + -


Status Quo and Change

What to Change and What to keep

Best of the status quo•Keep and expand

Best of change•Adopt and expand

Worst of the status quo•Change

Worst of change•Avoid


Critical Issues (What We Must Solve)

The major issues, with huge impact, for the next few years

Flows directly from our AI/SWOT analysis

Each impacts significantly on our ability to perform

We have some influence over it

The issues most in need to be addressed to perform well and survive

Serious problems if we fail to address them


Fundraising Goals (Where We Want To Be)

General destinations on our missionProgramme funding needed in 5 yearsSources of funds in 5 years

Responses to the critical issuesRealistic but significant changeFit within the overall missionRespond to stakeholder expectations

Single focus, single key result for eachSpecify only the what (not the how or why)Written as a completed action


Fundraising Strategies (How We Will Get There)

The road map to accomplish our goalsClear and logical explanation of exactly how, what path, what means we will followEach strategic statement is the basis for formulating objectives, activities and budgetsGuidelines for planning decisionsEstablishment of prioritiesAssignment of personnel Allocation of resources


Mountain ClimbingGoal: Get to the top of the mountStrategy: Walk upObjectives: Climb 20% each dayActivities: Get financial sponsors

Select teamTrain hikersIdentify trails, 6 camps

Monitor: How are we doing?Blizzard happens

Manage: Change the trail, get a …


Fundraising Strategies

1. Creating value for society2. Relying on one donor3. Growth as strategy4. Diversification of funding resources5. Developing new markets6. National image and reputation7. Uniqueness and competitive advantage8. Total Organization Fundraising ©9. Change and Organizational Development


Uniqueness as Core Strategy

Why is unique important?

What makes you offer special? Better?

Why should I give to you rather than to ___?

What value do you add?


Differentiation Matrix 1. Determine competitive differences 2. Choose what to emphasize

Develop Innovate Copy &Exploit & Lead Follow

Our strength

Their weakness

• David Clare


National Image as Strategy

Name

Mission

Unique Identity

Benefits to Donors

Slogan


Diversification as StrategyGrants from partners

Government contracts

Corporate sponsorship & grants

Profit making activities

Fees for services

Events

Individuals

Resource Mobilization


Strategic PositioningBuilds on the program mission statementWhat we do in the program?

Includes the essential appeal to donorsWhat they value in us?

Includes our unique ‘value added’What makes us stand out?

Includes conclusion of differentiation analysisWhat we do better?

Considers barriers to entry or expansionWhat would stop us?


Creating Value as Core Strategy

In business, profit is the reward for creating value.In nonprofits, what is the reward for creating value?Solving or ameliorating a significant social problemDelivering value to participants and beneficiariesDelivering value to donors and volunteersMaking better use of resources to get better resultsBuilding an organization to help moreFeeling good at the end of the day


Marketing as Strategy1. Market Penetration

• Satisfy donor demand• Share the pie (0 sum game)• Competitors: Other NGOs• Get the money instead of other NGOs

2. Market Development• Create donor demand• Increase the pie (++ sum game)• Competitors: other uses of disposable income• Get the money instead of other uses

customer profile 80/20 rule competitor marketing


Relying on GovernmentBenefits

1. It is easy to get synchronized with one donor2. You can develop a good relationship over time3. You have a low cost of getting the funds4. You have a chance to influence government as contractor5. You can focus on program not worrying about other funding

Drawbacks1. You may have to follow the government’s political approach2. You have to change the mission if the government changes3. You can quickly lose the funding if the government falls4. You generally operate in response to government RFPs5. You cannot easily engage in advocacy with the government


Diversified Funding Benefits

1. Your funding will be more secure over time2. You can continue work even if one major donor goes away 3. With a portfolio of many donors, you have independence4. You have more control over your mission5. You have a public reputation and can influence opinion

Drawbacks1. It is harder to manage a portfolio of diversified funding2. You still have to meet the needs of various donor segments3. The costs of fundraising are much higher4. You face new responsibilities in planning and fundraising 5. You need staff and board members with more diverse skills


Management by Objective

Set the objective with those responsibleDetermine activities to get thereEstablish responsibilities and deadlinesDevelop indicators of progressDetermine cost in time and moneyRevise the plan as you go alongRaise level of resultsReduce costsMake other changes to achieve results

Communicate, monitor and adjust


Operational Fundraising Planning (12 Months)

Objectives Exactly where we want to be Activities What we will do day to day Responsibilities Who does the activity Deadlines When it will be completed Progress Indicators Steps to indicate progress Support/Budget Resources needed Management Monitoring, helping & correcting Projected Revenues Money, time and materials Organisation Chart Fundraising responsibilities Next Steps Actions to improve & implement


Specific Objectives

ObjectiveActivity

Date to be accomplishedIndividual responsible

Progress on the way/changes

Result


Operational PlanningFor each unit in the organization Objectives to be achieved How it contributes to the goals and value added Activities to achieve the objective Individual responsible Date to be accomplished Indicators of progress for monitoring Reporting and evaluation system Baseline data and inputs into the planning Resources, staffing and support needed Budget with income and expenditure


4 Change ConditionsExternally Imposed Internally Imposed

C1 Most common

Group allowed latitude in implementation

Broad policy shifts/change in organizational mission

C2 Occurs sometimes

Group itself is initiating & implementing change

Changes in work design, resp.,goals, objectives, etc.

C3 Next most common

Demanding re: outcomes & implementation

Implementors must comply or suffer consequences

C4 Rare

Usually related to group norms & values—quick action

Group sees immediate threat & responds strongly

Negotiable

Non-Negotiable


WIIFM?

What’s In It For Me?

Change is not good or bad—it simply is

Change itself is neutral

We influence change by our own beliefs, attitudes, assumptions, expectations, values


What We Know..

2%Innovators

60%Cautious--But Can Be

BroughtOn Board

18%Early

Movers

18%Waiting

2%Resistors

20% will embrace change60% dubious—but can be brought along

20% resist—don’t spend much time here in early days


Major Donor Cycle

The relationship cycle with major donors goes on and on and on and on.

IDENTIFICATION CULTIVATION

STEWARDSHIP SOLICITATION


Working with a Major Donor

IdentifyResearchCultivateInquireAdaptAskThank - AppreciateResearch – Cultivate – Inquire – Adapt - Ask Again


The Case for Support

Know your donor’s interests and need

Prepare the Case Statement

1. Who we are (credibility)

2. The needs we can meet1. The results we will get

3. How we can do it

4. How we will evaluate it


Credibility Statement

• Why people should trust you• What would you produce to show them• Evidence of reliability• A paragraph – less than a page• Used in proposals, brochures and elevators• Draft key points now


Key Elements in A Proposal

Cover Letter - Engage the DonorExecutive Summary- Best Selling PointsCredentials - ExpertiseStatement of the Need - The ProblemStatement of Results - The ResultsProject Description - The SolutionMethod of Evaluation - EffectivenessReporting - AccountabilityBudget - Efficiency


How to Prepare a Winning Proposal

Analyse what the specific donor does and wantsDecide what to propose to meet this donor’s needsLearn about their deadlines, rules, requirementsEstablish direct personal contact with donor to learnGet the funds - start the program - do a good jobReport and evaluate to persuade the donor it was really of public benefitOn this basis, the donor and others will decide to fund you again in the future.

Lyuba Palyvoda, Counterpart Creative Center


Open Society Foundation

Key elements for successNeedLarge scopeNational impactReplicabilitySustainabilityEvaluation

Dr. Adriana Dan


The Donor Pyramid

Develop the relationship with donors over time

Move donors up the pyramid to larger gifts

Seek donors at all levels

A few really big gifts

Many major donors

Upgraded givers

Regular givers

Lots of small gifts


80-20 Rule

Your lead donors are the most important.

20% of your donors will give you 80% of your income (average case)Several top donorsOther major donorsAll the other donors $ $ $

$ $ $ $ $$ $ $ $ $ $ $


What Strategic Fundraisers Do

Research what donors like and don’t like about the organization and its work

Determine your value added and strategic positioning in the market place

Plan strategically with assessment and stakeholder analysis from a fundraising view

Advocate an organizational fundraising culture Develop a code of ethics for your organization Demand evaluations with lessons learned Develop new ways to provide value to donors


Message: Who Are You?

Answer quickly and clearlyWhat is your mission?How do you help people?What makes you special?Why should I help?Why now?

Needs are greater; government spending cuts; taxesHelp meet society’s obligations; reduce costs to

society


Events and Meetings

See an event as developing a relationship

Plan the desired outcome of each contact

Plan the follow up of contacts

Work the room

Get names, addresses and other information

Follow up contacts by staff with board support


Fundraising Systems1. Data Management System

2. Desk Research System

3. Prospect Management System

4. Staff Organization and Revised Job Descriptions

5. Organizational Culture and Priorities

6. Board Roles and Responsibilities in Funding

7. Scripts and Role Playing


Prospect Management1. Research for information on prospects2. Selection of top prospects3. Review of top prospects by Board and GMT4. Contacts with current donors about other donors5. Actions identified for each top prospect6. Follow up to get actions implemented by __(date)7. Meetings or calls for further information8. Ongoing cultivation at meetings, conferences, etc9. Feedback and coordination10. Contact and the ‘ask’ by the best contact11. Proposal tailored to the specific donor’s interests


Assessment of Donors

Workshop to assess benefits and problems

1. Foreign donors 10. Interest Groups

2. National government 11. Civic Associations

3. Local government 12. Churches

4. Foundations 13. Businesses

5. Rich people 14. Events

6. Average donors 15. Activities

7. Small Donors 16. Fees for Service

8. Members 17. Business ventures

9. Participants 18. Other activities


Assessment of Methods

Workshop to assess benefits and problems

1. New Strategy 10. Product Development

2. Organization Culture 11. Brand Development

3. Board Development 12. Public Relations

4. Fundraising Committee 13. Community Outreach

5. Honorary Board 14. Education and Advocacy

6. Executive Role 15. Lobbying

7. Code of Ethics 16. Message

8. Staff Fundraiser 17. Elevator Speech

9. Benchmarking 18. Website


Childreach Growth

ChildReach tripled its income & donors.

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1972 1977 1982 1987 1992

Trend

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Actual


Organization Futures LLC

Consultancy to help organizations assure their futureAnalytic Studies to determine needs and actionConsulting in Strategic PlanningTeam, Management and Board DevelopmentFundraising and Skills Training Workshops

Ken Phillips, Fundraising and Capacity Building Rebecca Stiles Phillips, Management and Leadership Organization Futures LLC

32 Wykeham Road, Washington, CT 06793 USA Tel +1 860 868 9260 Fax +1 860 868 9261 [email protected] and [email protected] www.organizationfutures.com

may 2004© organization futures llc 20041 total organization fundraising ken phillips, organization...

Documents

tactical organization

strategic fundraising

time slide

money slide

effective fundraising

strategic evaluation

strategic planning worksheet

free voice slide