A collaborative capital campaign created an entire new arts and business district in Cleveland. Photo: Gordon Square Arts District

Collaborative fundraising takes time and trust. That’s what we heard over and again in our interviews with seven nonprofit executives in Rhode Island, Boston, Cleveland and Spokane, each of them successful collaborative fundraisers.

We looked into the topic at the prompting of our friends at New Roots Providence and presented our early findings at a New Roots workshop on January 19.

The short version of what we learned from our informants:

• Successful collaborations flow from a deep process of trust-building among the partners. The right partners may take years to self-select, discover their shared goals and commit to combined action.
• Detailed legal agreements help establish trust and smooth functioning by exploring and resolving the partners’ deepest worries in advance. (These also take time)
• At the same time, good partners must be ready to make commonsense adjustments to agreements when they create unfair or unproductive results for some partners.
• Long-term and permanent collaborations need to form an independent organization to fundraise and distribute revenues. (Another time-consuming process.)
• The collaborative case must promise more than the sum of its partners: new funders respond to a transformative vision.
• Truly successful collaborations can reach more and larger funders and generate more income at lower cost than the two partners could achieve separately.

Our cases covered five forms of joint fundraising: grants, workplace campaigns, events, capital campaigns, and, finally, our elusive ideal of truly integrated annual fundraising. We’ll tell you more about three very interesting cases in future posts:

• The YWCA and YMCA in Spokane, Washington created a fully integrated capital campaign to build new shared buildings in two locations.
• The Gordon Square Arts District in Cleveland, Ohio brought two theater companies together with a community development organization to build not just theaters, but a whole theater-oriented arts district with major economic benefits for the city.
• The Central Square Theater in Cambridge, Massachusetts began by building new shared performance space for the the Nora Theater Company and the Underground Railway Theater. The partnership then went on to take on all fundraising, business and back office operations, leaving both groups free to focus on their artistic missions alone.

If you have had a good – or bad – experience with collaborative fundraising that you think could help others, please send me an email. We’d love to hear from you.

Did you know that the typical major gifts officer meets with 7-10 donors a month?

I’m just wondering how many donors or prospective donors your organization – whether that was your Executive Director, your fund development staff, or your leadership volunteers -  visited last month?

For many small organizations I know, they’d be lucky to visit that many donors in a year!!

No wonder most of us aren’t raising the money we’d like to raise.

Want to see the metrics that universities use? Take a look at this slide deck presented by Eduventures at a 2011 CASE Conference in Vancouver.

We can create giving pyramids all day. We know that we need 4 or 5 qualified prospects to realize one gift. What those gift pyramids keep telling us is that we have to find, qualify, cultivate, solicit, and steward a heck of a lot of people to reach our fundraising goals.

It’s really hard to do that from your office chair. Or during a committee meeting.

So, let’s finish up the plans, polish up the case, and then get down to the really important work — those one-on-one conversations that are essential to our fundraising success.

Wondering where to start? Start with the people who already love you… your donors, your volunteers and your board members. I’ll bet that list will keep you busy for a while.

Too soon, you say. Mustn’t bother our donors but once a year, you protest.

I’m with you that it might be too soon for those donors who always send you a generous gift at the end of the year. (Though many direct marketers would dispute that).

But what about the donors who haven’t responded to your annual appeal?

In our work, we often encounter small nonprofits or new fundraisers who believe that the “annual” appeal is just that, a once-a-year request for a donation.

These small organizations often don’t analyze the giving patterns of their donors. They may have no useful donor database, or haven’t thought about what just how much work it might take to get donors to give again.

If an “annual” appeal raises the same amount of money or even just a bit more than it did the year before, it’s considered a success. But what isn’t known is how many of last year’s donors gave a gift again this year. Because that mailing list often contains donors and not-yet donors, new gifts from new donors will offset donors who failed to give again this year.

Keeping more of your current donors is one sure-fire way to raise more money.

According to fundraising researcher Adrian Sargeant, if nonprofits just increased donor retention by 10%, they’d see up to a 200% gain in revenues over donor lifetimes.

Yet Jon and I still bump into organizations of all sizes that can’t tell us what percentage of their donors renew from year to year.

While there are many ways of increasing donor retention by increasing donor loyalty, I’d like to put in a good word for just getting better at one of the technical aspects of raising money — don’t ask just once a year! Especially from your lapsed donors.

In my own experience, and that of my direct marketing colleagues, it might take anywhere from two to five renewal requests to get the vast majority of your donors to renew. I know of one grassroots organization that saw its membership returns increase by $40,000 in a year after they invested in a decent donor database, started tracking renewals, and increased the the number of times they asked not-yet-renewed members to renew their gift.

Think about your own response to fundraising appeals. Do you rush to the checkbook when you open a letter? (Thankfully, many donors still do.) Or do you put aside that appeal to respond at a later date and then forget to send a check, even if you had the best intentions?

Don’t you often need to be reminded that you haven’t renewed your membership, or made a charitable gift this year? (I wonder how many donors there like me who keep a running list of contributions they make throughout the year. I do it to speed up my tax filings, but it also helps me keep track of which of my favorite charities I haven’t given to yet this year.)

So before you think you’ve finished writing appeals for another twelve months, please reconsider.

There are probably a majority of your donors who haven’t make a gift yet who are waiting to be reminded.

Related post:

Give donors something worth reading

A while back I was facilitating a workshop on donor and member renewals. To get started, I asked the room — board members and staff of environmental organizations — to explore their own personal giving by sharing their own experiences as donors or members. I asked them to think about experiences that really stood out, good or bad.

Bob’s* wife, an artist, was interviewed by the local newspaper. In the article, she shared her fondness for a particular repertory theatre which she said was one of the things she loved best about her State.

Not too much later, the couple attended a play at the named theatre. As they arrived, they noticed an envelope on their seat. Inside the envelope was a note to his wife from the theatre, thanking her for mentioning her love of this theatre in the newspaper article.

Also inside was a gift certificate for coffee and dessert after the show at a nearby restaurant.

WOW!

An unexpected and lovely thank you. A real show of gratitude. Needless to say, this particular act made a lasting impression… and really cemented the love of a fan.

I just finished reading the recently released report Growing Philanthropy in the United States. The report summarizes two think sessions held with top leaders in the nonprofit world this past year.

While I’ll have more to say about this report in coming posts, it’s worth underlining the major problem the report seeks to address:

While overall, the dollars given to charity have increased, individual charitable giving in the USA as a percentage of after tax income  (2%) has remained stagnant for the last 40 years.

The report noted low retention rates, especially for donors new to a cause. It recommended that charities need to do much, much more to understand the individual behind the giving and build relationships that matter.

So what does this all have to do with saying thanks?

Past studies have shown that a top reason that donors say they stop giving is indifference by the charity they give to – a feeling that they and their giving don’t really matter.

In her book, Effective Donor Relations, my friend Janet Hedrick CFRE, eastern region development manager for the Buffalo Bill Historical Center, strongly pushes the attitude of gratitude as an essential factor in building donor loyalty.

What is gratitude? It’s meaningful, thoughtful, heartfelt and individualized appreciation.

And when that appreciation is unexpected, it packs a powerful punch.

What thank you has taken your breath away lately? I’d love to hear.

**************************************************************************

*Not his real name. But definitely a real person.

1. A gift pyramid is really helpful to determine the level of effort you need to raise money. It’s not just for big campaigns. You can use it to plan for special events and even annual giving programs. See how one works online at blackbaud.

2. If their website doesn’t list them, you can discover what grants foundations made in what amounts to what organizations by looking at their 990-PFs. You can find those on Guidestar or The Foundation Center’s 990 finder.

3. The Center for What Works has free sample logic models for 14 types of nonprofits.

4. You can find a lot of really helpful data through the Census Bureau, e.g. how many wealthy households are in your community. Get acquainted with their American Factfinder.

5. You can get low cost technology products (and free advice) at TechSoup.org

As a small business person myself, I had to wonder how my plumber could stay in business with such delays in invoicing. I guess cash isn’t a problem for them.

What’s this got to do with your nonprofit? It made me think about delays around money.

As a donor, it makes me crazy when I mail a check for a contribution to an organization I care about and the check doesn’t get cashed right away. Let me say that my definition of “right away” stretches to a few days (I’m willing to give small organizations some leeway, though they tend to really need the money the most).

But after that, the failure to cash my check raises a series of doubts in my mind:

• First, did my check arrive at all?
• Second, did they really need my gift so much if they don’t feel a need to deposit it in their bank account.
• Third, should I have other worries about their internal cash controls if  checks are undeposited for more than a day or two?

If this describes you, it’s time to tighten up your internal controls.  Here’s a helpful toolkit from the Center for Nonprofit Excellence at the United Way of Central New Mexico to get you started.

Please don’t make your donors ask “did you get my check?” It doesn’t inspire confidence or the next gift.

The website of the National Association of State Charity Officials has a list of all of the state contacts and links to the state agency websites (though check them as not all are still current). In some cases, they also have links to the state statutes so you can read the rules yourself.

Registration Requirements for Charities Soliciting Funds

In general, if your organization is soliciting for funds in a state, you are likely to be required to register for charitable solicitation in that state. Each state sets its own rules and there may be various exemptions depending on the budget size and type of the organization.  (See below for a discussion of  internet fundraising)

The registration process generally includes completing a form that tends to ask for much of the same information that could be gained from the Form 990 that nonprofits are required to file with the IRS. Many states ask for additional information about your fundraising programs, including whether or not you have used fundraising counsel or professional solicitors in the last year. There is usually a fee for filing and for completing your yearly renewal. And each state has guidelines for whether you meet the income threshold to require an annual audit.

Take a look at the article by Joanne Fritz that appeared on About.com — she has some very specific recommendations for you.

Registration Requirements for Professional Fundraisers

Most states also require those of us in the business of assisting nonprofits with their fundraising – aka professional fundraisers —  to also register in the state. Usually a distinction is made between fundraising counsel and fundraising solicitors.

Fundraisers solicitors are engaged in either actively soliciting for funds and/or may have access to donations directly whereas fundraising counsel (like Cause & Effect Inc.) may plan, manage, advise or assist charities in their fundraising but don’t have access to donations or solicit directly. Usually employees, directors and volunteers of a charity are excluded from this registration requirement.

The fees for registration are steep. For example, New York charges fundraising counsel $800, Rhode Island $240 – that’s annually! And depending on the state and what type of fundraiser you are, you may also be required to take out a bond.

Professional fundraisers are required to send a copy of all contracts to the appropriate state agency, usually within 10 days of signing. Many states require a “closing statement” upon completion of the contract (and some an interim if the work isn’t completed in a year) with extensive disclosures on types of fundraising and funds raised.

If you are involved in providing any services to a charitable nonprofit that involves raising money – even if you don’t consider yourself a professional fundraiser – you would be wise to check to see if you fall under state statute.

The net is pretty broad and some states are extremely aggressive in tracking down professional fundraisers. Don’t get me started on how crazy I think these registration requirements are for fundraising counsel in particular … what other professionals offering comparable management services to nonprofits require these costs and this degree of scrutiny?

Of course there are bad apple solicitors out there who intimidate prospects or raise money for phony causes. But state statutes across the country already forbid fraudulent solicitation and have penalties for such. I could say more, but this post isn’t meant to be rant. (But let me say, as professional fundraisers and through our associations, we could be much more active at the state level educating lawmakers about our profession and engaging in advocacy on these issues).

Internet Fundraising

So, what about raising money on the web? What are the registration requirements?

Here’s where things get really cloudy.

There should be very few nonprofits left that don’t have a web donation presence. And with sites like Guidestar that have partnerships with enterprises like Network for Good that support online giving, in reality, every nonprofit could be considered soliciting in any state.

Just the paperwork alone, never mind the cost, of registering in all states is significant and overwhelming for the vast majority of nonprofits. So the state Attorneys General came together many years ago to try to create some guidelines – known as The Charleston Principles –  to help state lawmakers consider how to treat internet solicitation.

The guidelines, which are voluntary recommendations, suggest that “organizations located outside of a particular state must register if they use their website to specifically target people in that state, or receive contributions from the state on a repeated and ongoing basis or a substantial basis through its website.” Email solicitations count.

I wish I could give more practical advice, but the application and interpretation of these principles is pretty uneven. You may find this Nonprofit Times article from September 2010 helpful.

Bottom line:

If you are a nonprofit, be very familiar with the statutes in each state you solicit, get advice from your legal counsel, and make sure that your board of directors understands the legal requirements and sets expectations for your registration.

P.S. Did I mention that a number of states also require disclosure statements on any solicitation mailed to residents of the state? Check on the back of the reply coupon in a number of the direct mail solicitations you received to see what I’m talking about. The Association of Fundraising Professionals has a summary of the states and their required language on their website (though don’t rely solely on this).

P.P.S. I would appreciate hearing your stories about what decisions you made to register in multiple states, why, and whether you’ve ever encountered difficulty with any state agency.

Disclaimer: This column is meant to be informational only and for the purpose of giving legal advice. You should check with your attorney to get advice on any particular aspect of your fundraising registration requirements.

You may remember that I wrote in October about my attempt a few months before to get this gift of a microloan shifted directly into a donation to KIVA’s general fund. KIVA was simply unwilling to do that, preferring instead to let this money remain unused for ONE FULL YEAR until their arbitrary deadline expired, despite my attempts to have them do otherwise.

You can read the story here: Do your fundraising rules bedevil your donors?

I guess their customer service department also forgot to annotate my account noting the correspondence we had previously. By failing to pay any attention to my past history with them, KIVA has now given me a new reason to remember the frustration I had almost forgotten.

Luckily May 8th will soon be upon us and the KIVA tale will end.

The Coalition for Buzzards Bay got much better results by spreading nets in many different waters when they set out on their own New Bedford-based quest: to grow membership by more than 50 percent over  two years. The Coalition started in 2009 with 5,200 members. A generous donor offered them $500,000 if they could add 3,000 new members before December 31, 2010.

“He wasn’t kidding,” said Mark Rasmussen, the Coalition’s Executive Director of his anonymous donor. “He made it clear: if we missed the target, we wouldn’t get the money.” Last week, my colleague Anne Garnett and I sat down with Mark just a few blocks away from the Seaman’s Bethel and other opening scenes of Herman Melville’s Moby Dick to find out how the Coalition met the challenge, won the prize and set a new direction for its future. Here are some lessons:

• Share the drama. “It’s wonderful – and frankly a bit scary – to have a challenge like this,” said Mark in his 2009 announcement. The compelling $500,000 challenge and the possibility of failure helped excite and engage the Coalition family and the general public.
• All hands on deck. Volunteers moved mountainst to get targeted mailings out the door, saving thousands of dollars. Board members stepped up, ransacking their Rolodexes and buying gift memberships. That commitment brought other friends and members in on the project.
• Know what you are counting. The goal was member numbers, not member dollars. The Coalition already had clear criteria for counting individual members (family memberships count as two members) so everyone, including the challenge donor, knew the score.
• Make it easy. Any donor of $10 or more ($30 for families) who opts to be a member is a member. That low price point made it easy to say “yes.”
• Try everything. Mark handed us a pie chart with 12 slices breaking out where the members came from. Their traditional Bay swim and newer Bay bike ride accounted for 42 percent of the new members. The rest were spread over 11 separate member recruitment projects.
• Recruit the friends of your friends. As noted, the Coalition got the biggest boost just by offering a member option to riders, swimmers and their sponsors. Mark has been pleasantly surprised to find event sponsors responding well to direct renewal requests this year.
• Go grassroots. Who loves the Bay? Boaters and shellfishers for sure. Volunteers moved mountains to merge and purge records from 18 coastal communities. Personalized mailings to these two groups of public permit-holders snagged 13 percent of the total new member catch.
• Let people help. The owner of Not Your Average Joe’s restaurant created an entire promotional effort on his own, including hats, table cards and personal appeals from servers as well as mini-matching gifts of $5, to encourage diners to add membership dues to their dinner check. That brought in an astounding 550 members in just five weeks.

The Not Your Average Joe’s campaign added to a late surge that put the campaign way over the top in the later months of 2010. The Coalition wound up adding about 3,600 new members by the deadline, blowing the doors off their goal.

Spreading efforts across a dozen different initiatives required a lot of work from staff and uncounted volunteer hours. In hindsight, we can see that the top five member acquisition strategies recruited just enough members to achieve the 3,000-member goal. But going in, no one could have told the Coalition which five would work.

Conventional direct mail would not have worked. Even if it somehow managed to mail to every one of the approximately 115,000 households in the Buzzards Bay watershed, the Coalition would have spent a fortune. And at standard response rates of well under one percent for new member acquisition by mail, they would still have fallen far short of the goal.

Mail did play a large role, but guerilla marketing tactics, such as data-mining town lists of marine permit holders and using volunteers for mailings yielded higher returns at far lower costs than conventional DM. The Coalition also needed both face-to-face transactions (events, the restaurant and the Coalition store) and online payments (particularly the swim and ride) to make the whole goal.

Putting the matching gift aside, the Coalition hasn’t made a ton of money on $10 memberships. But that was never the point. Consider the value of having 25 percent of the population of a coastal town like Marion, Mass., as members when the Coalition has business with local government.

As with any new donor campaign, the Coalition looks to the long-term value of its 3,700 new members. There’s nowhere for a $10 member to go but up. Of course, that assumes these easy-come members won’t go away just as easily. Donna Cobert, the Coalition’s Director of Membership, doesn’t think that will happen. Renewals have been strong in 2011, she says. Now she’s working on the 2011 member challenge, a member-gets-member campaign, to close in on 10,000 members by the end of 2011.

Based on our conversation, I could immediately tell that Judy and Al are big cheerleaders for their organization – what all of us hope for in our board members. They were pitching me on the good work of Opportunity Works from the moment I asked what organization they were with.

And the frosting on this board member cake was that they are both actively involved in making friends and raising money for Opportunity Works.

I was intrigued by their annual fundraising event, the Lend-A-Hand auction, not being an auction expert myself. They told me that the event, which has become a much anticipated tradition in their community, grossed $75,000 last year, its top year ever! Kudos to them for the increase. I know many an organization whose big events even with auctions don’t raise this much.

The auction, entering its 27th year, takes place on cable television. This is the second year it was streamed over the Internet. It was broadcast live in nine Greater Newburyport communities and for the first time in Haverhill.

They use the local middle school during school vacation week to stage the auction. Set up takes place during the week, the telecast and bidding is on Saturday from noon to 9 pm. and pickup is the next day, Sunday, all before school opens again on Monday.

As Judy, described it, “there is something for everyone” with 600 donated items ranging from dog grooming to decorating to the big ticket, an African Safari. You can see the list for yourself here.

Al told me that the community values the work Opportunity Works does so they are very supportive. Sponsors get to auction off the tables the night of the auction and businesses and other community groups send volunteers who answer the phones and take the bids. Both Judy and Al are extremely active in the auction.

I was impressed by the enthusiasm and hard work of these board members and wanted to share it with you.