The Timothy Group

Money Business

Whether you raise no contributions currently, assuming you are always involved in seeking contributions, or are somewhere in-between, it is appropriate to ask, "Are we doing what we should be doing in the area of seeking contributions?"

For some the answer may be: "We are doing everything we can and we are doing it right." For most, the answer is more likely: "We could be doing more and we could be doing it better." But what should we be doing and what can we do better? This article will provide answers to that question.

Three Purposes

One way to approach an answer to this question is to consider if you are seeking contributions for all the right purposes. These purposes can be divided into three major categories: operating, capital and endowment. Probably the most common use of contributed dollars is to keep the cost of the camp or conference center services affordable. But there are other operating uses that can be featured in fund raising. Suzanne Bates, of Camp Westminster (MI) needs to replace program supplies like crafts materials, canoes and bow and arrow sets. Some camps may simply buy supplies out of operating revenue, but Camp Westminster will feature these items for donors to consider giving to. The list of operating items you need to buy can be as varied as your program.

You don't have to be in a capital campaign to raise money for capital items. Suppose you have a vehicle that needs to be replaced. The replacement cost could be combined with many other, similar items into a capital campaign. But, if there are not a lot of capital items at the moment, or the timing of a major capital campaign is a year or two away there may be specific capital (can't normally be funded out of the operating budget) items to list as projects. Donors respond to these lists because they can relate their gift to a specific improvement.

Currently not many camps raise money for endowment purposes. There are a variety of reasons why you might want to have and grow an endowment. You might need income for camperships to complement what you fund raise. You might need money to maintain buildings, or replace vehicles. You can raise contributions each year for endowment purposes.

Four Sources

A second perspective from which to answer the question of whether you are doing all you can is the sources of gifts from which you seek gifts. Are you asking from all appropriate sources? There are four different types of sources: individuals, businesses, foundations, and churches. Each category may be further divided. For example individual gifts sources might be: Board members, employees, service recipients, volunteers, church members and other friends. Even some of these categories may be further sub-divided. Your Board member category might be current and former Board members. You could extend "Board" into "Board and Committees", some of which might have other-than-Board members on them. Individual donors might be further broken down into service recipients, families of service recipients, current and former recipients, and so on. Businesses might be further sub-divided into vendors, businesses owned by constituents, and nearby businesses. Churches may be divided into those fro which you have served people and those which you would like to in the future. Foundations could be divided into those that provide only capital grants and those that will fund programs. You develop the detailed scheme that makes sense for your camp or conference center.

Six Methods

Still a third way to answer the question of whether you are doing all the right things can be in terms of the methods you use. There are five different kinds of current fund raising methods: personal, telephone, mail, events-product sales and mass media. This list is arranged from most effective to least effective and from least costly to most costly. By that I mean that personal solicitation is the most effective and least expensive. One of the reasons this is so is that personal solicitation is usually reserved for the donors of the largest gifts. Another is that most often solicitors are volunteers whom you do not pay, and often pay their own out-of-pocket expenses. Generally a higher proportion (50% or more) of donors will respond to personal solicitation than other forms. The average gift ($500 or more) will be higher. And the cost to raise each dollar (less than $0.05) will be less than with other methods.

Telephone is usually reserved for donors of smaller gifts than personal solicitation. The response rate will be somewhat less maybe 50%. The average gifts will likely be less; maybe $100-500. The cost may be somewhat higher ($0.05-0.10) especially if there are long-distance costs involved.

Mail (or direct mail or mail only) solicitation is usually reserved for the smallest gifts you are likely to receive, perhaps $100 or less. The percent of response (10% or less, for your natural constituents, less for new prospects) will be lower. The average gift will be less (less than $100). Therefore the cost to raise each dollar (from $0.10 for renewal appeals, to possibly more than $1 ,yes more than $1, for new donor acquisition) will be more.

The events category includes any occasion at which you gather people (banquet, golf outing, walk-a-thon. One of the values of this method is the opportunity to deliver the same message to a group of people. But the cost of the event will consume about 50% of the gross receipts. Is there an appropriate place for events? Ask Greg Anderson of Inspiration Point (MN) who last night raised $34,000 in the first of four banquets in one week; when the largest amount raised previously was $8,000 from an audience twice the size. Events may also be justified partly as educational. They can be morale boosters when your donors come to understand that many others give too. You can bring in a new friend and communicate much more that you could with letters or newsletters.

Product sales likewise have higher expense to gross revenue relationships because the cost of what is sold, and added selling costs may consume 50% or more of the gross revenue.

Media fund raising includes use of print or electronic media to address large audiences, often to seek contributions. It may be done via newspapers, magazines, radio, TV or the internet. Some forms of media fund raising can be relatively expensive (for example buying a full page advertisement in a newspaper, or buying prime television time). But the reasons they are used is to generate new donors whom you would otherwise not be able to contact.

Four Strategies

You should use a combination of strategies throughout your methods including: acquiring new donors, renewing support, increasing support, and re-contacting a lapsed donor. With the types of donor categories, within the methods you can use, you should eventually be able to target these groups within your mailing list. The old advertising maxim is: The smaller the group you can identify, the more you can speak to that group uniquely, the more likely you will get the desired response from them. Thus, it is no more defensible to send a major donor a direct mail renewal letter asking for a gift of $50, than it is to send a gift increase letter to a lapsed donor.

Three Essentials

So, how do you keep track of all these details? How do you remember what strategy to use with what source? The first essential that you will need to keep track of the plan is to have an annual development calendar.

The second essential you will need is an appropriate donor information system that will allow you to segment your mailing list and to track the result of different strategies and methods. Here you will be faced with a myriad of choices. Some organizations will try to use an under capacity resource such as a data base file. Others will be dazzled into paying thousands of dollars for a program that has much more capacity than they will ever use. The solution in terms of capacity and cost is, as usual, somewhere in-between the extremes.

While many camp and conference center administrative staffs are small in number, the work of a fully developed financial development program cannot usually be carried out in the spare time of the director. There is a role only the director can play but, like other areas of work it is not usually at the detail level. Therefore most camps and conference centers that want to see this area reach its potential hire a director of financial development. This person may be part time at first. The work to be done will eventually require a full time position and then multiple people. At each step of the way you have to be careful to find the right person for a carefully defined position. When this staff resource is present it still needs the support and guidance of the director and help of the Board if it is to be most effective.

Two Suggestions

While these future prospects may seem daunting, two suggestions may help. One is to start small but start. You may not be able to start with a full time development staff, but begin with a part time person or even a volunteer. The second suggestion is to get some help to put together a plan that fits your organization. Copying a success story of some other organization, which is quite different from yours, may not be the most appropriate way to proceed. Find a colleague, a mentor or a consultant that understand your organization and its constituency and has the depth of experience to help you develop a plan that is uniquely yours. I wish you well as you think about responding to your financial development (in reality, stewardship) challenges.