Chapter 12: Fund-Raising
Many organizations do fund-raising to
help meet their fiscal needs. Funds can be raised
through direct solicitations, fund-raising events,
and other means.
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Moursund, D.G. (2002). Obtaining resources for
technology in education: A how-to guide for writing
proposals, forming partnerships, and raising funds.
Copyright (c) David Moursund, 2002.
Section Headings for Chapter 12
Many organizations do fund-raising to help meet their
fiscal needs. Funds can be raised through direct
solicitations, fund-raising events, and other means. This
chapter contains a very brief introduction to fund-raising.
The emphasis is on fund-raising events and contribution
campaigns.
Fund-Raising
Versus Grant Writing
Fund-raising
is most often done by a non-profit organization that has a
worthy mission. Peter
Drucker (1993) provides a five step starting point.
Drucker's short workbook leads its users through answering
five key questions:
- What is our business?
- Who is our customer?
- What does our customer value?
- How have we done?
- What is our plan?
Answers to these questions provide a basis for either a
grant writing effort or a fund-raising campaign.
Fund-raising and grant writing are closely related ideas.
In both cases, the goal is to obtain resources that can be
used to solve a problem or accomplish a task. Both
fund-raising and grant writing can be highly competitive.
There are many different fund-raising organizations that are
attempting to secure resources from the general public.
In contrast to a narrowly focused grant proposal, a
fund-raising effort is generally targeted to a large number
of Resource Providers, with the intent of obtaining
resources from a number of people and organizations. The
goal may be to get a modest amount of funds from each of a
large number of contributors. Alternatively, the goal may to
be to get the bulk of the funds from a few major
contributors.
Another difference between fund-raising and grant writing
is the nature of the communication. Grant writing usually
requires a formal written proposal designed to compete
effectively against other formal written proposals.
Fund-raising uses many different modes of communication and
often involves a publicity campaign. A fund-raising campaign
may well involve a written solicitation; however,
individuals receiving the letter may receive many similar
requests from many different organizations. Fund-raising is
also done one-on-one with potential contributors. This is
especially true with the potential large and medium donors.
In fund-raising, a large number of volunteers are often used
to make personal solicitations, even to the potential small
donors.
Most fund-raising events are designed to accommodate a
large number of attendees. This means that a large number of
people need to be invited and convinced that they should
attend. Both written and oral invitations can be effective.
Some organizations conduct broad scale advertising campaigns
to attract people to their fund-raising events.
Legal and
Other Considerations
In many locations, fund-raising is controlled by a
variety of laws designed to guard against individuals
conducting fund-raising for their own personal gain. Thus,
before you undertake any type of fund-raising activity,
check into the rules and regulations that govern
fund-raising in your community. If you are working in or
through a school, you will also need to deal with the
school's and school district's fund-raising rules.
It takes money and other resources to raise money. If all
or most of the work in fund-raising is done by volunteers,
the direct costs are likely to be less than 10% of the funds
raised. This is a highly desirable situation. Almost all the
contributed money goes toward accomplishing the goals of the
fund-raising organization.
As an example, a science and technology museum might hold
a fund-raising event that includes door prizes, raffles,
silent and oral auctions, and other activities. Attendees
pay to attend. All the materials and services "sold" through
the fund-raising event are donated by local merchants.
Entertainment is donated or provided at minimal cost by
local entertainment groups. Almost all the proceeds go
toward funding the museum's operations and special
projects.
There are many legitimate fund-raising efforts in which
the costs range between 50% and 100% of the funds raised.
For example, consider the same science and technology museum
that holds an annual fund-raising event. It wants to expand
its direct-mail contribution campaign. It obtains lists of
names of all of the teachers in the community and does a
direct mailing to the individuals on the list. The museum
may be lucky if it receives enough contributions in response
to the first mailing to cover the costs of printing and
postage. However, it will probably gain some members and
enjoy increased attendance. Contributors to the first
mailing will continue to receive solicitations in the
future.
However, think about high fund-raising costs from a
contributors' point of view. How would you feel about making
a personal contribution to a fund-raising effort, and then
learn that less than half of the money you contributed was
actually used to carry out the work of the organization?
That is not a desirable situation.
It is possible to hire fund-raising consultants or
consulting firms to help you plan a fund-raising campaign.
The same person or firm will often be willing to contract to
organize and run the campaign. Such a contract may require
you to pay certain fixed costs plus a percentage of the
funds raised. You will want to have appropriate legal advice
before you enter into these types of contracts. And, keep in
mind that the costs may be high, so that the amount your
organization actually receives may be a modest part of the
contributed funds.
Fund-Raising
is Done by an Organization
The American Red Cross is a good example of a
well-established, legitimate organization that plans and
implements fund-raising programs. Major colleges and
universities (both private and public) often conduct annual
contribution campaigns, with the target audience being their
alumni. Most private schools at the K-12 level conduct
annual contribution campaigns and/or fund-raising events.
Interestingly, this is not common among public schools.
Some organizations that do substantial fund-raising are
international or national in scope, while others are
regional or local. Many fund-raising organizations are
relatively small and are local to a specific community.
Examples include a classroom, a school's computer club and
PTO, an after-school program, a "Saturday academy for gifted
and talented students," and a local science and technology
museum.
Some fund-raising campaigns may be one-shot efforts
directed toward a specific goal, such as raising funds for
the school band to participate in an out-of-town parade.
Others may be part of a continuing campaign. For example,
the Friends of the Band may conduct an annual fund-raising
event with proceeds used to buy instruments and band
uniforms.
Quite a bit of the success of a fund-raising effort
depends on the reputation, name recognition, and purposes of
the fund-raising organization. People are inclined to make
their contributions to an organization or cause they believe
in. The name recognition and reputation of a fund-raising
organization improves as it does fund-raising year after
year.
A Fund-Raising
Event
Even though common fund-raising events such as bake
sales, jog-a-thons, raffles, auctions, and gala festivals
take place over a short period of time--usually a single day
or evening--the event is preceded by a great deal of
work.
The work for a fund-raising event usually goes on behind
the scenes. It is done by a combination of staff and
volunteers who approach local merchants and other people to
ask for donations of goods and services that will then be
auctioned off at a fund-raising event or given away as
prizes.
You may want to do a cost/benefit analysis before
undertaking a fund-raising event. It may well be that the
cost of the time and effort going into the event far exceeds
the resources the event can generate. A high effort, low
proceeds fund-raising event may be an effective way to
translate the time and effort of staff and volunteers into
dollars, but it can be demeaning to them.
Many fund-raising events have a social nature. Examples
include auctions, bake sales, dinners, and dances. The
general idea underlying the design of these events is to
have the goods and services donated or supplied at greatly
reduced prices and then sell the goods or provide the
services to donors or attendees at relatively high
prices.
Figure 12.1 suggests that goods and services can be
solicited from one group of people and then provided to a
different group of people. However, some of the contributors
of goods and services may also be participants in the event
and purchase some of the goods and services. For example, a
school bake sale may solicit contributions of baked goods
from the parents of one set of students and then sell the
goods to the parents of another set of students.
Figure 12.1. A fund-raising event.
A
Fund-Raising Contribution Campaign
A fund-raising campaign is used to obtain funds for large
projects, such as remodeling or building a building. Keep in
mind that there are many professionals who work in the
fund-raising field. However, it is a field in which novices
can compete with professionals if the novices' "cause" is
sufficiently worthy.
While giving patterns vary, depending on the particular
contribution campaign, the following example is typical.
- The top 5% of the contributors will provide 50% of
the contributions.
- The next 15% of the contributors will provide 30% of
the contributions.
- The remaining 80% of the contributors will provide
20% of the contributions.
With this type of contributors' profile, a fund-raising
campaign often begins behind the scenes, before the campaign
is publicly announced. A concerted effort is made to secure
major commitments from a few key contributors. Then, when
the campaign goes public, it can announce the great progress
already made.
The time and effort needed to secure small contributions
may not appear to be worth the effort. However, small
contributors have a tendency to eventually become medium
contributors. Medium contributors have a tendency to
eventually become large contributors.
Here are some key strategies for developing and running
an effective fund-raising campaign:
- Have a worthy cause.
You should have a worthy cause or a sequence of worthy
causes. If there are several worthy causes, arrange them
in a logical order. While one fund-raising project may
have several goals, you may want to have a sequence of
fund-raising projects over a period of years, with each
building on the success of the previous ones. For
example, a school may want to have a fully equipped
multimedia lab. The first year's fund-raising campaign
may focus on obtaining computers, printers, and software.
The second year might focus on securing scanners, video
cameras,VCRs, digital cameras, and some color printers.
The third year's campaign might concentrate on remodeling
and enlarging the multimedia lab. The fourth year might
focus on obtaining more hardware.
- Identify potential contributors.
A key to a fund-raising contribution campaign is the
development of a list of potential contributors who are
interested in and supportive of your organization's
mission or work. List-building is an ongoing activity; it
occurs year after year. (That is why the colleges and
universities that you have attended put so much effort
into keeping you on their mailing lists. Alumni are
potential donors.) One of your goals should be to
cultivate the small donors over a period of years so that
they gradually move into the medium-donor category. You
then should cultivate the medium donors so that they
eventually become large donors.
- Obtain commitments from large donors before "going
public."
Do the behind-the-scenes work before "going public." In
many fund-raising campaigns, a lot of work goes on behind
the scenes before fund-raising campaign goes public. It
is common to obtain commitments of perhaps 30-40% of the
funds to be raised before going public. Typically, these
commitments are from a few large donors.
- Decide how to contact potential donors.
Fund-raising campaigns involve contact with potential
donors. Often, the more personal the contact, the better.
A television or radio request for donations is rather
impersonal. A mass mailing may be a little more personal,
individual e-mail messages may be more personal, and
individually addressed letters may be even more personal.
Phone calls can be an even better method of contact.
One-on-one meetings with key potential contributors is
the best method.
- Identify benefits to contributors.
It is important to think in terms of what the
contributors get out of contributing. Some of the same
ideas that are discussed in Chapter 10, Partnerships with
Businesses, are applicable here. Recognition for
contributions is important. To the fullest extent
possible, every contribution should be acknowledged,
usually by letter. However, larger contributions should
be acknowledged by personal contact, public recognition,
and other methods. It is desirable to provide every
person who contributes above a certain minimum amount
with a gift, such as a coffee mug.
- Keep your costs down.
Use volunteers who are supportive of your organization
and its mission. Your donors want to be assured that
their contributions are going directly toward
accomplishing a worthy cause.
- Reward your volunteers and staff.
Recognition for special achievements and celebrations
such as pizza parties will keep up the enthusiasm among
your volunteers and staff.
Getting
Others to Raise Funds for You
There are many civic and other types of community
organizations that do fund-raising for themselves and that
can be persuaded to do additional fund-raising for worthy
causes. For example, suppose that your school has one or
more physically challenged students who would benefit by
having special computer equipment. Quite likely you can get
a local civic organization to raise fund--or contribute from
its own fund--to meet the special needs of these
students.
For a variation on this, think about the possibility that
the boy scouts or girl scouts in your community would
occasionally have "computer fun meetings" at your school.
You would let them have free use of the facilities. However,
in exchange for this, they would do some fund-raising for
your school, or serve as volunteers in a fund-raising event
that your school is conducting.
Activities
- Make a list of some of the fund-raising groups that
have approached you in the past year. What approaches
have they used? Analyze their effectiveness from your
personal point of view.
- Select a general problem in the field of educational
technology. Outline a fund-raising effort that would be
appropriate for addressing this problem. Analyze the
costs this fund-raising effort will entail. Do a
time-cost/benefit analysis of your plan.
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