FUNDRAISING

STRATEGIES Module 2
Course Readings
MODULE 2
TYPES OF FUNDING
Frequently Asked 12 MINS
Questions
 Fundraising Strategies 3

A Note from Tom Wolf

In this series of lectures, we've considered many different

types of funding that might be available to you. I first
introduced the concept of restricted versus unrestricted
money, emphasizing how important it is to have plenty of
unrestricted funds to cover basic costs. One source of
unrestricted money comes from fundraising events. In
addition, individual giving and small businesses can provide
such support. We looked at techniques for raising money
from individuals and fundraising from small businesses and
larger corporations. We also considered foundations and
government. Finally we looked at planned giving and
venture philanthropy. So, obviously, prioritizing your
strategies and deciding where to place your effort for
maximum success is the name of the game. Are there any
questions about this series of lectures?
 TYPES OF FUNDING
Frequently Asked Questions

QUESTION: It’s very clear that unrestricted donations are

? an important type of money you'd like to get. But how do
you convince donors they are really supporting some
worthy cause? How can they be ensured that their
investment will be put to some good and specific use?

ANSWER: I have to laugh, because there is a little trick

that I teach my students about how to make donors feel
that they're supporting something very specific, and yet
make an unrestricted gift. And it's one little, tiny phrase.
When you make your request, you can say that “gifts like
yours will support our scholarship fund” [but at this point it
is a restricted gift, right?]… “and our educational program”
[still a restricted gift]… “and our shelter program” [still a
restricted gift].” Then comes the little magic phrase: “and
other programs, activities, and needs of the organization.”
With that one additional phrase, you have changed what
sounded as if it were a restricted gift into an unrestricted
one and that allows you to use the money as you wish. So
I always tell people give lots of examples about what their
money might be used for but always add that one phrase:
“and other programs, activities and needs of our
organization.”

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 TYPES OF FUNDING
Frequently Asked Questions

QUESTION: You suggested that you shouldn’t let a

? fundraising event become a public relations event that
makes no money. But some events might actually do
better as PR opportunities as opposed to fundraising
opportunities. Do you have any recommendations about
balancing each of those?

ANSWER: A public relations event is just that. It's a public

relations event. I have no objection to doing a public
relations event if that's what you set out to do. Plan it that
way, budget it that way, and make sure you get the biggest
bang for the buck. My concern is when people start with
the idea of doing a fundraising event and they find
themselves failing and they say, “Oh well, we're not going
to make a lot of money but at least it was a great
opportunity for us to get good PR.” The problem is that you
still have the fundraising need and you probably could have
planned a much better PR event if that had been your
intent all along. So I like to hold my volunteers' feet to the
fire. Everybody agrees on a goal, and until they reach it, no
one should sleep soundly at night. I want them to be
absolutely focused on the fact that we have to meet or
exceed that goal.

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 TYPES OF FUNDING
Frequently Asked Questions

QUESTION: I was just wondering if there a specific time of

? year that is better for this fundraising than other?

ANSWER: Institutional donors will often tell you when to

apply. Foundations and government agencies will have
grant cycles with specific deadline dates. With individuals,
it can depend on many factors. In the United States, much
fundraising from individuals occurs late in the calendar
year, in the final quarter of the year, because individuals
are calculating how much they want to give away to
achieve the maximum tax deductions.. I often wait until the
week between Christmas and New Year's day to do most of
my giving.

In some cases, the fundraising cycle depends more on the

soliciting organization than the donor. For example, if
there is some high profile event that will receive maximum
attention in the press – like a humanitarian crisis where
aid is needed – the most money will come in during the
weeks immediately following. So the timing can depend on
that.

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 TYPES OF FUNDING
Frequently Asked Questions

QUESTION: Our organization puts a lot of emphasis on

? memberships. You seem to be cautious about that. Can
you give a specific example of when a membership
program does not make sense?

ANSWER: The advantage and the disadvantage of a

membership program over an annual fund is the same.
The advantage is that you are giving the donor a benefit
that can be an incentive. The disadvantage is that you are
giving the donor a benefit that can have a cost to the
organization. By comparison, you can use all of the annual
fund gift to benefit the organization. Let’s say your
organization puts on five events each year and a $100
member gets free admission to all your events. He or she
comes five times and doesn’t pay the $20 admission fee.
You have given up $100 to bring in $100.

I once did a project for one of the largest museums in the

world and they told me that they were having trouble with
their membership program. They didn't seem to be making
very much on it.

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Frequently Asked Questions

Continuation of previous page

And when I analyzed the program and I analyzed what

they were charging for membership and what they were
giving away, the value of what they were giving actually
exceeded the amount of money that the memberships
were bringing in.

So you always have to think about net income when

you're dealing with membership, whereas with an annual
fund where you're looking for donations, your only cost is
the cost of actually asking for the money.

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 TYPES OF FUNDING
Frequently Asked Questions

QUESTION: You spoke about fundraising events not

? necessarily being having to be linked directly to the
mission of an organization. Could you dive in a little bit
deeper there and talk about how, if a fundraising event
isn't mission-related, you successfully get information out
to the audience to keep them interested in the work of the
organization?

ANSWER: Let’s not confuse fundraising with PR. The

purpose of a fundraising event is to make money. I want
people to have a great time. Now if my organization is a
Hospice, do I really want to have people spending a lot of
time thinking about dying people? The organization deals
with one of the greatest needs in society – helping sick
people die peacefully and without pain. But when the
hospice does a fundraising event, it wouldn’t design an
event that is focused on its mission. That is for another
time. Indeed, as part of the thank you, or as part of the
ask, you can remind people of the services that the hospice
provides. My only point is that the event itself should be
fun.

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Frequently Asked Questions

Continuation of previous page

By the way, one of my favorite fundraising events and

one that I used to support every year was done by our
local hospice. It was called a fundraising nonevent.
Knowing how tired of events people were, they advertised
a non-event. You could sign up for all the things you
wanted to avoid – the expensive parking garage, the
mediocre meal, the untalented band, the cheap wine. It
was basically a simple mailer that allowed people to
support the organization without having to endure yet
another evening out. All you had to do was just give
money and you didn't have to come. Now that's for a
certain kind of crowd that probably goes to way more
events than they would like to. But, this was a very, very
successful one.

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 TYPES OF FUNDING
Frequently Asked Questions

QUESTION: Would you say that venture philanthropy and

? planned giving are more of an American phenomenon?
Would it really apply to an organization like ours in South
America?

ANSWER: Yes, venture philanthropy definitely is

something that has come out of the U.S. and a small part
of the U.S. at that – Silicon Valley. I mention it, however,
because many organizations from outside the U.S. fund
raise within the States and many venture philanthropists
are interested in world problems.

With respect to planned giving. Life insurance vehicles are

common throughout the world as is giving via bequest or
will. Some of the more sophisticated trusts though are
more commonly found in the US where tax laws offer
donors big savings in their tax bills. Again, because many
organizations outside the US fundraising in partnership
with US entities, it is important to be familiar with these
vehicles, especially in conjunction with fundraising for
endowments.

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