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"No Surprises" Is a Good Motto for Board Fundraising

April 2013

Excerpted from the second edition of Fundraising Realities Every Board Member Must Face: A 1-Hour Crash Course on Raising Major Gifts for Nonprofit Organizations

When it comes to fundraising, nonprofit boards are smart about many things.

They know, for example, that every campaign needs a dollar goal, that objectives must be carefully defined, and that you need a strong chair.

But unless your board has experience in big gifts fundraising, they may be surprised to learn about the following three realities.

The Buck Starts Here

Every field has its first principles. You might call them axioms to live by.

For Apple Computer, Steve Jobs's mantra was "No Compromises." For serious journalists, the first obligation is to the truth. Physicians since the 5th century BC have been guided by the words of Hippocrates: "First do no harm."

Fundraising, too, has a first principle. It is that boards have an obligation to give and to get. Here, let's focus on board giving.

Some organizations actually prescribe a giving level for board members. One prominent college recommends a gift equal to its yearly tuition. An established arts center suggests $50,000 per year. More affordable is the request from a mid-Atlantic advocacy group: $2,500.

That's one bold approach. The more common one is for organizations simply to encourage each board member to make a generous gift. Some even spell out what generous means in the job description: "While serving on the board, I commit to making our organization one of the top three charities I support each year."

Regardless of your organization's approach, your gift is critical.

First, by virtue of your position, you are expected—by the staff and by the community at large—to be the organization's steadfast supporter. Can you legitimately expect others to give generously if you won't?

Second, your gift is tangible evidence of your commitment. Nothing says "I believe in this cause" more convincingly than writing out a check.

Third, your generous gift gives you standing as a solicitor. "This cause is so important, Tom, that my wife and I have pledged $5,000. I'm hoping you and Alicia will join us in making a gift." Your credibility is undermined if you have to say to your prospective donor, "To tell you the truth, I haven't given anything myself."

It may not be what you expected when you came aboard. And probably you can list a dozen reasons why giving now is inconvenient. But you accepted the job and what comes with it.

Make your gift, if you haven't already. You'll feel good, and you'll smell good, too. You have it on the word of Confucius: "A bit of fragrance always clings to the hand that gives roses."

Money Costs Money

On average, U.S. couples spend nearly $26,000 for their nuptials, according to The Wedding Report (theweddingreport.com).

It doesn't have to be this way, of course. The Valley of Fire wedding package in Las Vegas, which includes a stretch limo, 100 photographs, an eight-inch round wedding cake and bottled water, can be yours for $999 (plus applicable taxes).

Much like weddings, fundraising costs run the gamut.

To begin with, you'll need money for operating costs, things like printing, postage, office space, additional staffing, transportation, and clerical help. Then there are pesky consulting fees (more on consultants later). These can range anywhere from a few hundred per month to $250,000 annually for full-service, on-site campaign management.

How much, specifically, should your campaign cost? It all depends, of course. Some established organizations spend less than 10 cents for every dollar they raise, while many new groups spend 50 cents or more.

So much is dictated by the following variables:

  • The amount you're trying to raise.
  • The number of prospects you've identified.
  • Your plans for cultivating these individuals.
  • Where your prospects live.
  • Whether you'll be hiring an independent consultant or a full-service firm.
  • The duration of your campaign. And,
  • Your current level of support.

William Krueger, writing for capitalcampaigns.com, offers the following figures as a rule of thumb for large campaigns (these assume a consulting firm providing soup to nuts service—your costs for a smaller drive using an independent consultant could be less):

  • For a $2,000,000 campaign, expect to pay 8 to 15% of the goal.
  • For a $2,000,000 to $5,000,000 campaign, 7 to 12%.
  • For a $5,000,000 to $25,000,000 campaign, 4 to 8%.
  • Campaigns over $25,000,000 might be as little as 1 to 2%.

By the way, "little" in the preceding sentence is Krueger's word for $500,000, not mine.

Consultants Will and Won't

They've been the butt of jokes, for sure. Dilbert's Scott Adams, speaking of consultants, said this: "They have credibility because they're not dumb enough to work at your company."

Former aerospace executive Norman Augustine says, "All too many consultants, when asked what is 2 and 2 respond, 'What do you have in mind?'"

Despite the ribbing, consultants can serve an instrumental role. Certainly this is the case with a major gifts campaign. The undertaking is simply too big for staff, given their other responsibilities.

So just what is the role of the fundraising consultant?

Let's first clarify what it is not.

  • It is not to solicit money for you. That's the role of the board and, in some cases, the staff.
  • It is not to haul in hundreds of new prospects. The best ones you already know.
  • It's not to replace the work of staff or board members. It is to supplement their work and enhance their knowledge.

In sum, the role of a consultant is not to raise money for you, it is to help you raise it. In this regard, what the seasoned consultant will do is:

  • Help you evaluate your needs.
  • Uncover your strengths and weaknesses.
  • Assess your fundraising potential.
  • Outline a plan of action (if you're ready).
  • Help prepare materials.
  • Conduct trainings.
  • Troubleshoot. And,
  • Serve as a catalyst to keep your campaign moving.

Can you succeed without a consultant? Absolutely. Some people purchase kits and build their own houses. Says Mother Earth News: "If you have lots of time, and are self-reliant, patient and a fast learner, you may be able to do much (or all) of the work yourself." Just read the directions and start pouring the foundation.

David Lansdowne © 2013, Emerson & Church, Publishers. Excerpted from Fundraising Realities Every Board Member Must Face: A 1-Hour Crash Course on Raising Major Gifts for Nonprofit Organizations; excerpted with permission.

David Lansdowne has spent his professional life in the nonprofit sector, serving in a wide variety of development and administrative positions for educational, cultural, and health organizations throughout the United States.

Note: The views expressed in this article are those of the author and may or may not represent GuideStar's opinions. GuideStar is committed to providing a range of topics and perspectives to our users. We make every effort to obtain articles from knowledgeable, trustworthy sources, but we make no warranties or representations with regard to articles written by persons outside GuideStar.