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Preface

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

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Chapter 12

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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.

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

Fund-Raising Versus Grant Writing

Legal and Other Considerations

Fund-Raising is Done by an Organization

A Fund-Raising Event

A Fund-Raising Contribution Campaign

Getting Others to Raise Funds for You

Activities

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.

  1. The top 5% of the contributors will provide 50% of the contributions.
  2. The next 15% of the contributors will provide 30% of the contributions.
  3. 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

  1. 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.
  2. 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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