What We’re Reading: 5 Best Practices to Strengthen Your Fundraising Cycle

When Team Moda curls up with a good book — or device, you can be assured the time spent absorbed is meaningful and informative. With Giving Tuesday only days away, it’s no wonder Guidestar Blog Author Adam Weinger’s latest article 5 Best Practices to Strengthen Your Fundraising Cycle caught and kept our attention. Read the full article here:

[ Fundraising is one of the most important tasks that your nonprofit team undertakes year after year. Without the donations of your generous supporters, you wouldn’t be able to fund your projects and act as a champion for your cause.

Every nonprofit professional should know the fundraising cycle: identification, qualification, cultivation, solicitation, and stewardship. These five steps lay out the groundwork for building and maintaining strong donor relationships and achieving your fundraising goals.

But how can you make sure you’re optimizing each step of the process to ensure that you’re giving donors and members what they want?

To help your organization increase its fundraising capacity and strengthen its donor relationships, we’re going to break down each step and suggest some best practices:

Identifying prospects and current donors with potential.
Determining the qualification of each prospect.
Cultivating a relationship with each prospect.
Delivering the perfect solicitation to the prospect.
Maintaining a strong connection with recognition and stewardship.
If you’re ready to learn about how you can increase the success rate of your own fundraising cycle and help your nonprofit achieve more of its objectives, read on!

5 Best Practices to Strengthen Your Fundraising Cycle

1. IDENTIFYING PROSPECTS AND CURRENT DONORS WITH POTENTIAL
The first step of the fundraising cycle is to find individuals within your community that may be interested in donating to your organization! Frequently, this step includes searching for people who have a history of philanthropic behavior with other organizations.

As the first step in the cycle, you need to assemble a list much larger than the amount of donors you really need. This is because individuals drop off through natural progression of the fundraising cycle—you won’t get a donation from everyone you ask!

While relying on the lists of donors from other organizations to find prospects is a tried and true practice, don’t forget to turn to your own community as a way to find more potential donors.

During your fundraising strategy assessment, don’t forget about those who have already proven their interest in your organization: your previous donors! But we’re not talking about individuals that you already engage with your solicitation and stewardship efforts.

The types of donors that often go overlooked during prospect identification are:

One-time midrange gift donors
Low-level recurring gift donors
Volunteers, who donate their time
And don’t forget to consider other organizations, like local companies or charitable foundations, that could be cultivated for a donation or grant!

Once you have a list of people involved in your organization, carefully consider their donor profile. How long have they been giving their recurring gifts? What was the event that precipitated the one-time donation?

If the answer to these questions indicates that they might be willing to give more, keep these people (and companies!) in mind as we move onto step 2.

2. DETERMINING THE QUALIFICATION OF EACH PROSPECT
If the first step was the very beginning of your research process, this step is all about more in-depth research.

Starting with your list of potential donors from step one, research each individual or company to determine their philanthropic habits and capacity to give. But how can you learn enough about an individual to determine their propensity to give if you don’t personally know them?

Determining the qualification of a prospect entails finding out if the prospect might be willing and able to give after a period of cultivation.

If someone has a connection to your organization, but doesn’t have the capacity to give, you don’t want to spend a ton of energy on cultivating them. In the same vein, if someone has a capacity to give but no philanthropic tendencies, they might drop off of the fundraising cycle before getting to know your organization.

Best Practice: Conduct Prospect Research

In step 2, you want to learn as much as you can about your list of prospects. But how can you find out enough about someone to determine their affinity and capacity for giving?

Conduct prospect research! During this process, you use publicly available information to determine affinity and capacity for giving. This publicly available information can be split into two categories: wealth indicators and philanthropic indicators.

Wealth indicators, analyzed through wealth screening tools and services, signify a person’s financial capacity for making gifts to a nonprofit organization. These data points include things like:

Home, vehicle, boat, and plane ownership
SEC holdings
Salary, if publicly available
Philanthropic indicators are bits of information that allow you to glean whether or not someone has a history of interacting and engaging with charitable or cause-motivated organizations. For example, someone with a history of philanthropic behavior might:

Donate to charitable organizations.
Volunteer for organizations.
Donate to political campaigns or advocacy organizations.
These things can also help you determine whether or not the prospect will be interested in donating to your organization. For example, individuals who have already given between $5,000 and $10,000 to a nonprofit are statistically five times more likely to make a charitable donation than the average person!

For help conducting prospect and donor research, check out this awesome guide from Donorly to get started!

Narrow down your list from step 1 to just include people with the affinity and capacity to give to an organization like yours. Now let’s move on to step 3!

5 Best Practices to Strengthen Your Fundraising Cycle

3. CULTIVATING A RELATIONSHIP WITH EACH PROSPECT
Step 3 is definitely one of the most fun parts of the fundraising process. This is the stage in your relationship with the prospect when you get to know them personally and encourage them to get to know you and your organization.

During this period of time, which can take anywhere from 6 to 12 months, your job is to find out where their passions are, what motivates them to give, and what their goals for their philanthropic gifts are.

Every person is different, so it’s crucial that your organization practices “moves management,” or recording each move you make, by systematically keeping track of interactions between a prospect and your organization in a central database like your nonprofit CRM (customer relationship management software).

This keeps your fundraising team on the same page regarding the prospect’s cultivation timeline, as well as helps your own memory of where you stand with the prospect. But how do you build this type of relationship with a prospect?

Best Practice: Offer a Variety of Engagement Opportunities

Because every individual is different, your organization should focus on providing a plethora of different engagement opportunities to get your prospects engaged with your organization’s mission.

What does a potential donor need to see about your organization to help form an opinion and decide on whether or not to make a gift?

Some of the most common engagement opportunities include:

Meetings with the prospect and your board and executives.
Tours of your office and any other facilities you may operate out of.
Fundraising events like dinners and charity auctions.
Donors-only thank-you dinners.
Volunteer opportunities.
With a broad variety of opportunities to interact with your prospects, you can get to know them in more nuanced and multifaceted ways.

Getting them involved in the day-to-day workings of your organization, like volunteer opportunities, also gives prospects the ability to get to know your community better as well. If they become a donor, it’s important that they fit in with and appreciate your existing community!

4. DELIVERING THE PERFECT SOLICITATION TO THE PROSPECT
This step, the solicitation, can be one of the most nerve-wracking parts of the fundraising cycle. During this stage, you ask the prospect for the donation.

This is a simple idea, but infinitely complex in execution. Has the prospect come to love your organization, or do they want to donate elsewhere? Will they be a valuable member of your nonprofit community, or do you feel as though they’re not a good fit?

You have to ask for the right amount at the right time, or you risk being turned down. Too low of an ask, and you might inadvertently offend the prospect; too high, and you might be shot down outright.

You also have to be prepared to leave without an answer! Making a financial decision requires a lot of thought, and the prospect might not be ready yet. So how do you consolidate all of these ideas into one perfect ask?

The worst way to ask a donor for something as personal as a donation is to give every prospect the exact same solicitation. It makes the prospect feel as though your organization doesn’t care about them, and it may make them want to donate elsewhere.

The easiest way to combat this is to completely personalize your asks based on the information that you’ve learned about the person in the past year or so. Common materials distributed during the official solicitation include:

  • A letter to the prospect
  • Marketing materials detailing your future plans
  • Your annual reports and financial information

But yours might vary based on your organization’s mission! But no matter what you bring to the solicitation, make sure that it’s personal.

Put the donor’s name on everything. Create marketing materials for that person, based on what you know inspires them to donate. Focus your solicitation on the person as an individual, not on your organization.

The ask amount should also be based on careful research. Between their current financial situation and your understanding of their previous donation sizes, you can probably ballpark an appropriate gift size.

If you’re having a hard time with your asks, give this guide from Double the Donation a quick look to pick up some new tips!

No matter how you do it, remember that the solicitation is supposed to be the culmination of the cultivation process. Show your prospects that you were genuine and sincere while you were getting to know them, and your asks will be more successful!

5. MAINTAINING A STRONG CONNECTION THROUGH RECOGNITION AND STEWARDSHIP
Even though you’ve made the ask, your job still isn’t over! The relationship that you spent so much time carefully building isn’t going to maintain itself. Once your prospect has become a donor, you have to make sure that they feel appreciated.

Recognition and stewardship are two of the most important parts of strengthening relationships with donors. Recognition is important because people like to know that their efforts are acknowledged and appreciated.

Stewardship is important because donors need to know that their contributions are being put to good use. Ensure that you keep your donors in the know about new projects and buildings, fundraising campaigns, and more.

Best Practice: Balance Public and Private

When considering how best to show your gratitude to your donors, keep in mind that they probably want both public and private appreciation. Public appreciation is nice for donors because then their communities get to see their good works. Private appreciation is important because the donors feel your organization’s gratitude on a personal, intimate level.

So what can you do to ensure that you strike the right balance, and maintain a strong relationship?

Include your donors’ names in a prominent place. This could be a donor recognition wall in your organization, bricks along a walkway, or even naming a whole wing or building after a major donor. Don’t forget to keep your donor list updated on your website and in your annual report.

Invite donors to your events. Inviting donors to both private and public events is a great way to show your appreciation. A donors-only event demonstrates your gratitude, but invitations to public events reminds donors that they’re a valuable part of your community and that you want them to remain engaged with your efforts.
Send notes to your donors periodically. Whether this is a handwritten thank-you note immediately after the gift is made, or a Christmas card a few months or years down the line, donors will appreciate the effort that your organization makes to keep them involved and included.
When you balance public and private displays of gratitude in your stewardship efforts, you can build a more sustainable fundraising community.

CLOSING THOUGHTS
The fundraising cycle may seem overwhelming, but with these simple best practices, your organization can strengthen its fundraising capacity and continue to succeed long into the future.

Adam Weinger is the president of Double the Donation, the leading provider of tools for nonprofits to help them raise more money from corporate matching gift and volunteer grant programs. Connect with Adam via email or on LinkedIn.

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Planning an End-of-Year Mailing? What nonprofits need to know before sealing the envelope

For many nonprofit organizations, the last few weeks of the year signals the race for the final appeal. Reminding donor-prospects of the December 31st cutoff date, the last ‘ask’ of the year, the urge to consider a pledge or establish a lasting legacy.

Nonprofit communications to reach donorsNonprofit organizations oftentimes rely on traditional ‘snail-mail’ to communicate their message as the appeal letter is accompanied by a return envelope and perhaps, a marketing piece. Some organizations solicit to their entire database, leading to a mass mailing of the hundreds or thousands. This equates to time and quite a bit of money earmarked for a successful campaign. But before you round up the staff for a Saturday envelope-stuffing session, consider if your nonprofit truly qualifies for nonprofit postage pricing.

According to the requirements as listed on the USPS.gov site: 

Organizations that typically are eligible for Postal Service nonprofit privileges include:
  • Agricultural
  • Educational
  • Fraternal
  • Labor
  • Philanthropic
  • Religious
  • Scientific
  • Veterans
  • Some political committees

Individuals are NOT eligible for nonprofit prices; also, not every organization is eligible, even though you may think it qualifies based on the list above. For example, business leagues, chambers of commerce, social and hobby clubs, and certain political organizations usually are NOT eligible.

Your organization may apply for and receive nonprofit authorization, but you’re not quite finished — there are restrictions as to what may be mailed at those prices. For instance, there are restrictions on the amount and kind of advertising you can do. It’s always best to check with your local Business Mail Entry Unit staff before you design and print your mailpiece.

In addition to your local Business Mail Entry Unit, Publication 417, Nonprofit USPS Marketing Mail Eligibility provides complete information about nonprofit eligibility, including the types of materials that may be mailed at the Nonprofit prices and instructions for applying for nonprofit mailing privileges

  1. How to apply for permission to use nonprofit prices?
  2. Calculate your nonprofit postage
  3. How to prepare a nonprofit mailing

If you have questions about your nonprofit mailing, marketing for nonprofit organizations, or ways your nonprofit can leverage its brand in the marketplace to donors, donor-prospects, or grantmakers, contact us. We’re happy to help and ready to start the conversation.

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Is Your Board Fiscally Fit? Free Ebook to help you avoid theft in your nonprofit

Sure, you have a robust and well-respected Board of Directors, many of whom are industry influencers, pillars of the community, and rich with a connected network to help advance your organization. But while many board members serve graciously, lending time and talent without hesitation, some do not realize that despite not holding the title of “board treasurer”, they too are responsible for the organization’s financial position.

While not every board member need be a financial analyst, each must be engaged in the organization’s financial processes and be confident and comfortable to review financial information and to ask questions.

According to the Ohio Attorney General’s Office report on nonprofit fraud, theft happens in large and small organizations, and often it involves individuals who are widely respected and valued within the organization, the report says. Often there is no rational explanation, other than perhaps greed, according to the report.

What can you do to avoid theft in your nonprofit? We’re pleased to share with you this free Ebook published by the Ohio Attorney General’s office and encourage you to contact Moda Communications to schedule our newest workshop “Effective Board Communications” for you and your Board of Directors.

Download the free Ebook Avoiding Theft in Your Nonprofit

Join Us: Build a Brand that Builds Your Business

Do customers recognize your nonprofit brand as different from others?

Do you know how to position your nonprofit as a well-respected and sought-after brand?

two men and two women standing on green grass

Join us for a two-hour Master Class to learn how your brand can help position your organization to become recognized and respected while generating prospects that lead to growth.

Join Moda Communications and visual identity expert Barry Edwards, CEO of Edwards Communications on Wednesday, November 7th beginning at 8:30am for a two-hour Master Class to learn how your brand can help position your organization to become recognized and respected while generating donor-prospects that lead to funding and engagement.

In this session, you’ll learn about:

Building your Brand

  • Identify common branding problems that keep donors, funders, and prospects away
  • Establish a brand identity that people will recognize and respect

Managing your Brand

  • Learn the importance of brand reputation and online reviews
  • Uncover the 3 ways your employees can tarnish your brand

Leveraging your Brand

  • Discover how to be the organization people want to do associate with
  • Learn how SEO and branding help search engines like Google prioritize branded listings in organic search results that drive interest to your website

WHO SHOULD ATTEND?

  • Nonprofit Executive Directors, Development Directors and Communications Officers
  • Business owners and managers
  • Professional service executives  (Physicians, Attorneys, Dentists, Therapists, Social Workers/Counselors, Realtors, Insurance Agents, CPAs)
  • Marketing professionals (managers, directors, vice presidents)

A well-thought-out brand and branding campaign can help position your business and provide favorable returns in online traffic, improve product or service sales, and create high visibility for your company.

Date: Wednesday, Nov 7th

Time:
8:30 am      check-in
8:45 am      session begins
10:30 am    session concludes

Location: Panera Bread • Meeting Room
6130 Kruse Dr, Solon, OH 44139

Hurry! Seating is limited (25 maximum)
$30 per person  |  Continental breakfast included


Plus, following this session, all attendees will receive the 2018 Business Branding Checklist that will help position your business for growth and industry recognition!


Cancellation Policy
Sessions are non-refundable but may be transferred no less than 3 days from the event. Please email Barry@edwardscom.net to transfer your reservation.

How to Be A More Effective Board Member

One of our favorite reads. This article appears on the Zinner & Co. blog page and was authored by Chris Valponi, CPA, Audit and Assurance Manager for Zinner & Co. CPAs and Management Consultants


Q:  I volunteer as a Board member for a mid-sized not-for-profit. At times, I feel that I am just going through the motions of reviewing and approving the balance sheet or the Treasurer’s report during our monthly board meeting. Are there duties that I could take on to be a more effective board member?
Pat M. – Volunteer board member, Cleveland

Great question, Pat, and one we hear quite often. For many, serving on a board is rewarding both for the organization and for the folks who generously give their time and talent. What some do not realize is, board members have a fiduciary responsibility, which is designed to protect and preserve the integrity of the organization. In order to meet this responsibility, one must do more than just go through the motions.

Let’s take a look at three things you can begin to do to become a more effective board member:

  1. On a regular basis, review the details of individual transactions or journal entries
    Routine board meetings present figures as compiled by the finance office. Yes, the hope is all is right and just, however, while it may feel like the status quo is a good thing, in reality, this opens the door for unwanted transactions related to fraud, theft, abuse, noncompliance, and simple human error.Request that the Treasurer or a member of the finance committee, on a regular basis, review and then report their findings to the Board at regular Board meetings. This simple monthly review of the general ledger (listing of all transactions) is a great way a Board member can become more effective in uncovering and deterring unwanted transactions.

Read more articles from Chris Valponi

young business people group have meeting and working in modern bright office indoor.jpegIt’s within the right and the reason for board members to review a general ledger for unusual transactions and activity, such as, but not limited to:

  • Unapproved vendors or customers (employees business, insolvent customers),
  • Unreasonable payments to vendors (rates and totals as compared to service descriptions),
  • Avoidable costs (unnecessary bank fees, transactional costs or interest expense),
  • Unusual compensation (bonus pays, fictitious employees, related party payments),
  • Misclassified transactions (items dumped in miscellaneous accounts),
  • Duplicate transactions (evidence of duplicated payments to vendors),
  • Unusual items (Expenses just under the threshold requiring a board approval),
  • Significant or new types of transactions (typically warrant further financial considerations), and
  • Descriptions relating to the wrong fiscal year.

Board members may even ask to review supporting documentation on an as needed or sample basis.  Aside from items noted above, a board may just select a sample of transactions every month to agree to supporting documentation, such as actual invoices for expenses, salary notices for payroll expense, and actual checks clearing the bank to vendor names in the accounting record.

At a minimum, this review sends a very important message to management….There is involved oversight at the organization.

  1. Analyze the relevance or usefulness of each report.
    We recommend the finance committee meet in session well ahead of the end of the fiscal year to discuss which reports are relevant to the needs of the organization and then bring their thoughts and recommendations to the board for discussion and approval. We see many organizations that generate routine (financial) reports or follow cyclical (fiscal) processes because “that’s how we’ve always done it,” rather than stepping back and assessing if it serves the needs for the direction the organization is headed. Routinely, Board members review reports compiled in a summary form or in a format that was defined by predecessors in the organization. As a Board member, one must ask “Is this report answering the questions we need or is it being utilized the best way for where we are headed?”

Additionally, the status quo for the classification of individual accounts in reports or financial statements may not hold true this year as it did one, two or ten years ago. The auto-pilot approach may actually misrepresent sources of funds coming in or going out of the organization.

Board members may not be aware that new accounts may have been added (by the finance office) and as a result, funds could be misclassified, resulting in an inaccurate or misstated reflection of the organization’s financial health. Simply seeing the reports once a month is not sufficient, one must access the details and relevance.

  1. Grab a cup of coffee and have a brainstorming session.
    Board members are often a great resource to the finance, programming and development departments of an organization, but they often are not aware of their full potential. Make it a goal to meet with leaders in different areas of the organization and learn about how each side can benefit from the other.  For example, board members often work with donors to secure contributions involving property, goods, or restricted dollars.  These types of transactions have special accounting considerations that need to be made known to the finance office and conversely, the finance office can inform Board members how to collect more useful information in the future.  Valuable information and opportunities can be lost when failing to just touch-base on occasion.

As you have read, while some board members just attend meetings and rely on the report data compiled and presented by others, your fiduciary role as a board member should include asking questions and digging deeper in the activity of your organization.

Become a Certified NonProfit Accounting Professional 

Board members who are not financial professionals should be comfortable asking questions about the finances of the organization, either at Board meetings or one-on-one with the finance staff or Board Treasurer.  Remember, not all board members are versed reading financial statements, but all hold a fiduciary responsibility.

Your active role as a board member helps to reduce the internal and external risks related to fraud, theft, abuse, noncompliance and simple human error.

This article appears on the Zinner & Co. blog page and was authored by Chris Valponi, CPA, Audit and Assurance Manager for Zinner & Co. CPAs and Management Consultants

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