Alumni Affairs & Development

Paul Keenan

Senior Associate Dean

FAS DevelopmentFundraising and Philanthropy

Why Does it Matter?

Non-profit organizations raise money because income generated from normal operations is insufficient to support the organization’s mission.

A wide array of organizations raise funds:

• Churches (35% of all giving)

• Schools (14%)

• Social service and relief organizations (9%)

• Hospitals (8%)

• Arts & Cultural organizations (5%)

Fundamentally, the process of fundraising is the same across all types of organizations, however specific challenges will vary widely depending on the type of organization and its mission.

Why Does it Matter: More than $

$211,770,000,000 was given away by individual donors in 2010.

Beyond the impact of the dollars, private philanthropy also strengthens non-profits by moving them toward greater

transparency, accountability and discipline

because institutions must articulate and defend their vision, priorities, and strategy for achieving them when asking donors for support.

In offering to fund our objectives, donors challenge us to test our assumptions, resist complacency and demonstrate that we are being true to our ambitions.

Why Does it Matter: Margin of Excellence

World’s top universities as ranked by Shanghai Jiaotong University, 2011

1 Harvard

2 Stanford

3 MIT

4 UC Berkeley

5 Cambridge

6 Caltech

7 Princeton

8 Columbia

9 Chicago

10 Oxford

Private philanthropic support has provided that margin of excellence that has separated American educational and cultural institutions from peers around the globe

Why Does it Matter: Patchwork Quilt

Philanthropy is embedded in our national strategy for supporting education

• “Students, individual alumni, philanthropic foundations, private businesses and industry and State

and Federal Governments all share the responsibility of supporting our colleges and universities,

and this is as it should be.” - US Dept. of Education

Defining the Case

Fundraising goals flow from the institution’s academic or strategic plan – the plan determines your case for support

Fundraising is a means to achieving strategic academic goals, not a goal in itself

The academic plan should provide fundraising staff with the ability to answer the following key questions:

What is the leadership’s vision for the future?

What do you need money for?

Why are those things important?

How will new funds change/improve the institution and make it better able to fulfill its mission?

Types of Fundraising

Generally, there are two types of fundraising constituencies:

Individuals

Corporations & Foundations

Individuals

• A personal appeal

• Focused on unique

interests and

motivations of an

individual

• Appeal to

emotions, to

intellect or to both

Corporations & Foundations

• Formal proposal

and application

processes

• Focus on

alignment of your

mission with

mission of the

donor organization

• Proposal writing is

a specific skill

Individual Giving: Annual Giving vs. Major Gifts

• Donors asked to give every

year

• Generally smaller gifts

• Participation, as much as

size of gift, is important

• Mail, telemarketing, some

personal solicitations

• Usually “special” gift in honor

of reunion or campaign, to

name a permanent fund,

building or room

• Large gift, perhaps to be

paid off over time

• Size of gift is critical

• Personal solicitation is key

ANNUAL GIVING MAJOR GIFTS

Individual giving is generally divided into three approaches

• “Once in a life-time” gift

• Transformational for the

institution

• Very top of the giving

pyramid

• Typically the result of a

lifetime relationship with

institution and the

institution’s leaders

PRINCIPAL GIFTS

Individual Giving: A Simple Process Model

The process of raising large gifts from individuals has three basic elements:

• Identify individuals who have the potential to be significant donors• Create a process to bring them closer to your organziation, so they

understand the mission and have confidence in the leadership• Ask them to demonstrate their commitment with a significant gift to

support the organization

Identification Involvement Investment

• Suspects

• Prospects

• Communication

• Cultivation

• Commitment

• Contributions

Identification: Constituencies

Constituencies Educational Institutions

Medical Institutions

Religious Organzations

Social Service Organizations

Natural: Alumni Grateful patients Parishioners Community leaders

Other ideas: Parents and/or Non-alumni local business leaders

Community leaders

Social activists National social activists

Most organizations have “natural” constituencies in which to search for donors• The natural constituency may or may not be sufficient to sustain the

organization’s growth needs, so new constituencies must be considered

Identification: Research

Pareto Principle or the 80:20 Rule (“The Law of the Vital Few”)

Top 10 gifts = 25% of total dollars raised

Top 100 gifts = 50% of the total dollars raised

Top 500 gifts = 70% of the total dollars raised

Research

Efficient and effective prospect research is crucial to identifying top prospective donors

Referrals from board members and donors

News reports, Bloomberg, Dow Jones, etc.

Donors to similar organizations

Public information (home valuations, stock ownership, board memberships)

The purpose of research is to focus your efforts on the best “suspects” and qualify them as “prospects”

Determine how large a gift they can give

Involvement: Motivations

There are many reasons why people become involved in an organization, but some are more common than others• Pride of association• Demonstration of leadership• Particular emotional link to a cause• Making a difference• Like attention

People generally prefer to “join a winning team” than “bail a leaking boat”

One goal of your research is to identify the motivations of your prospects

Involvement: Techniques

Prospect Visits

Committees

Events

Communication

• Build personal relationships with leadership of organization

• Nothing is better than face-to-face attention

• Boards of Directors / Trustees

• Issue-specific committees / task forces

• Social events for prospects & donors to meet one another

• Events that connect prospects with beneficiaries of gifts

• On-going education and information about the case

• Newsletters, brochures, website, personal letters, phone calls

Investment: Motivations

“People give to people, not to institutions”

This is true both in a figurative and literal sense

• The largest donors give to support the efforts of the organizational leaders directly, because they believe in them as individuals and as agents of change, not merely an abstract belief in the mission of the organization

• The leadership of the organization is often best evaluated by the quality of the academic or strategic plan

• Major gifts are raised, not given – they generally must be solicited by another donor or a leader of the organization

Investment: Soliciting gifts

The best solicitors are those who have leverage over the prospective donor

Ideally, the solicitor should be a donor who has made a gift in the same range as that being solicited, or has made an equivalent “stretch gift” relative to his or her own resources

Alternatively, the solicitor should be the organization’s chairman, CEO or another senior administrator

Even better, both a donor/volunteer and senior staff person could be present

Solicitations should always specify a dollar amount, never “whatever you can do”

Frame the solicitation not as a discussion of money, but rather a discussion of the change/improvements/human impact that money will enable

Investment: Stewardship (Involvement after giving)

“Your best prospects are your past donors”

• No one is more likely to give in the future than someone who has given in the past

• A gift is not the end of a process, but an inflection point in the relationship

• Effective stewardship is crucial to sustain the level of personal commitment and investment that yielded the first gift

• Stewardship can be viewed merely as an involvement strategy tailored to the needs of current donors

• A lapsed donor is a major loss of time, effort and resources – it is much cheaper to keep a current donor than to find a new one

Alumni Affairs & Development

Paul Keenan

Senior Associate Dean

FAS Development

Appendix 1:

Detailed Flow Chart

of the

Major Gift

Fundraising Process

1. Identification 2. Qualification 3. Cultivation 4. Solicitation 5. Stewardship

The Fundraising Process for Large Gifts

1 2 3 4 5

ReferralsReferrals

Basic ResearchBasic Research

List of potential prospects

List of potential prospects

Visit ProspectsVisit Prospects

Negative outcomeNegative outcome

Positive outcomePositive outcome

Assign major gift officerAssign major gift officer

Research and qualify prospect further

Research and qualify prospect further

Proceed to cultivation process

Proceed to cultivation process

End of processEnd of process

Identification & Qualification

Review Prospect Potential

Review Prospect Potential

Proceed to SolicitationProcess

Proceed to SolicitationProcess

SIMULTANEOUS & CONTINUOUS

Visits· Staff· Faculty · Administrators· Volunteers

Visits· Staff· Faculty · Administrators· Volunteers

Events· Advisory Board Meetings· Small Dinners· Receptions· Campus Visits

Events· Advisory Board Meetings· Small Dinners· Receptions· Campus Visits

Volunteer Opportunities· Committee Membership· Fundraising Committees· Alumni Affairs· Visiting Committees· Overseers/Governing

Boards

Volunteer Opportunities· Committee Membership· Fundraising Committees· Alumni Affairs· Visiting Committees· Overseers/Governing

Boards

Communications· Publications· Letters/notes/cards· Phone· Visits

Communications· Publications· Letters/notes/cards· Phone· Visits

1 2 3 4 5Cultivation

Define/Refine Cultivation Strategy

Define/Refine Cultivation Strategy

Gain input from:· Development

colleagues· Alumni and

volunteers· Faculty and

administrators

Gain input from:· Development

colleagues· Alumni and

volunteers· Faculty and

administrators

Determine solicitation strategy, including:

· Solicitor/closer· Proposal· Amount · Timing · Sequence

Determine solicitation strategy, including:

· Solicitor/closer· Proposal· Amount · Timing · Sequence

Schedule appointment with prospect

Schedule appointment with prospect

Brief solicitorBrief solicitor

Solicitation meeting occurs

Solicitation meeting occurs

Result: Yes; gift will be madeResult: Yes; gift will be made

Draft and confirm terms with donorDraft and confirm terms with donor

Define payment scheduleDefine payment schedule

Book gift Book gift

Proceed to stewardship process

Proceed to stewardship process

Result: no or maybeResult: no or maybe

Back to define/refine cultivation strategy

1 2 3 4 5Solicitation

Draft and send thank-you letters

Draft and send thank-you letters

Define further stewardship needs

Define further stewardship needs

Large giftLarge gift Choose stewardship materials or methods

Choose stewardship materials or methods

Assign staff responsibleAssign staff responsible

Determine timingDetermine timing

Small giftSmall gift No further stewardship needed

No further stewardship needed

Update/revise cultivation strategy

Update/revise cultivation strategy

Return to cultivation process

1 2 3 4 5Stewardship