Philanthropy and economic conditions go hand in hand. If the economy is suffering, philanthropy is also suffering. According to Giving USA’s Annual Report on Philanthropy for 2010, estimated charitable giving in the United States increased 3.8%, reflecting the modest economic recovery achieved in 2010. According to the annual report, charitable giving was $290.89 billion in 2010. The increase in giving is good news for nonprofits that continue to be assertive with their fundraising messages and goals, and shows that an organization that focuses on giving can and will prosper. End of the year donations are a key element in achieving fundraising goals.
This article outlines the five elements of year-end giving and how to be successful when the economy is still recovering.
1. Case to give
There is always a case or a reason for donors to give. Regardless of the economy, a case for giving must continue to be made in the market. Since donors tend to give more in the last three months of the year, it’s critical to take advantage of year-end giving.
Nonprofits should keep the following in mind when making their case to donate:
- Don’t ignore the economy. Donors will understand that there are financial challenges, but the organization should also illustrate steps taken to ensure donor money is spent wisely.
- Be worthy, not needy. If a nonprofit is “tightening its belt” in preparation for a year that may be more austere than anticipated, donors need to know. This will show that the organization is being careful but staying the course due to the importance of its mission.
- Do not panic. Crisis fundraising does not work well and will not lead to fundraising success. Many other nonprofit organizations face similar challenges.
- Appeal to emotion. The gifts are “generated from the heart and justified by the head.” There is a social need for what nonprofits do, and the results of fundraising benefit the entire community. Non-profit organizations are worthy and have value – They should not be shy about asking for support.
2. Annual Fund
The annual fund isn’t about big expansion or acquisition plans, it’s about today. It tends to represent a substantial percentage of a nonprofit’s operating income. A nonprofit organization must stay focused on its core mission and how donors can help.
When soliciting donations for the annual fund, remember:
- Stay within the philanthropic culture. Lawyers must be themselves, not too sophisticated and not too austere. They should focus on the basics of the solicitation and stay personal and respectful.
- Make your needs known from the start. Adhering to organizational integrity, staff and volunteers must present the needs of the organization to achieve goals and fundraising initiatives.
- Don’t eliminate year-end mailings. Donors are used to year-end emails and look forward to them. However, the organization should plan for slower returns and possibly smaller gifts, but should stay on track with direct mail appeals.
- Develop and carry out “the perfect question.” It is better for a nonprofit organization to be active in the philanthropic marketplace than to sit on the sidelines. Lawyers must be prepared with a strategy for asking “the question.”
- Create an end of the year challenge. Nonprofits should consider tapping into loyal top donors to create a year-end challenge that inspires others to give. For example, the organization may ask a major donor to match any new or improved gifts.
- Promote attendance. Even if an organization is confident of meeting its annual fund goals, it is beneficial to continue to acquire new donors at any level and encourage participation.
3. Capital campaign planning
Although the economy is affecting the psychological state of donors, organizations still have needs, plans and goals; therefore, campaign planning and implementation must continue. Stagnation is harmful and very difficult to overcome. Still, nonprofits need to be cautious and cautious, as they continue to move forward. Take end-of-year donations into account when planning your capital campaign.
To plan a successful capital campaign, a nonprofit organization must:
- Build an urgent and compelling case for giving. Requisition teams must be trained and prepared to handle major gift requests. If an organization spends time building trust with volunteers, it can spread the nonprofit’s message in a positive and proactive way. The more personal the message, the more effective it will be.
- Take time to review the pool of prospects. Members of the organization must identify potential prospects, conduct prospect research, and determine which ones have influential relationships that can “win the campaign on paper.”
- Cultivate current and potential donors. The nonprofit organization needs to engage its current and potential donors and let them know how important they are. These people will be your most likely prospects to support the organization during the campaign.
4. Capital Campaign Requests
Applying is never an easy task. To make donor solicitation more successful and less stressful, donor solicitors need to recognize that the campaign may take longer than expected, gifts may be smaller than expected, and fundraising in general will be more hard.
To be successful with capital campaign requests:
- Prepare for a longer campaign timeline. Campaign leadership must make adjustments to the plan and timeline. This will take into account requests that take longer and donors who will be conservative and cautious about their philanthropy.
- Increase the group of prospects. The organization should continue to build relationships with potential donors in an effort to increase the pool of prospects. The acquisition of new donors is the basis of all fundraising activities. Ask your current donors and volunteers to suggest others who might be asked.
- Keep asking. If the organization is not making progress with the current “application,” campaign leadership and advocates should reevaluate the amounts requested, review application training, and ensure the correct application teams are in place. In today’s economic environment, nonprofits need to be active in the marketplace.
- Use letters of intent. If prospects are uncomfortable with the idea of making a multi-year commitment, the applicant should offer a letter of intent as an alternative and consider other creative options for commitments. One solution, for example, might be to suggest that the donor submit 20 percent of the proposed requested amount now (this fiscal year) with the understanding that the attorney will return next year to discuss a four-year pledge.
- Ensuring that the team remains engaged and motivated. Although the original plan may change, the tender team must be confident that a reasonable strategy is being implemented. Knowing that there is a path to success, regardless of the economy, will keep your team motivated and committed to the initiative.
5. Stewardship
Management is the vital connection between the nonprofit organization and its components. It allows the organization to develop relationships with donors by thanking them in a way that cultivates future donations to the organization.
To create a successful and ongoing stewardship program:
- Maintain strong relationships. Donors with whom an organization has a strong and secure relationship will continue to support the organization.
- Show results. Donors will continue to invest when they can see that their dollars are making a difference. They will know and understand their value to the nonprofit organization.
- Add value. Donors who have experienced the productivity of the organization and understand the “value added” to the community will not only continue to donate, but will also help attract other supporters.
While philanthropy and economics have a symbiotic relationship, it’s important for nonprofits to stay focused on their fundraising goals and remain active in the marketplace. Organizations should continue to maintain strong relationships with current donors, while always working to identify potential new donors.
End of the year donations are critical to the overall success of your fundraising, annual fund, stewardship, and campaign goals. By following these five elements of year-end giving and remaining calm during economic downturns, an organization will achieve fundraising success.