Pacific Business News

August 12 , 2005

Fund development is more than asking for the check

by Sally Little

Creating the infrastructure for a nonprofit fund development department requires a financial commitment and support from staff and the board of directors.

Fund development, more commonly known as fundraising, is more than having an annual giving appeal, writing grants or a yearly special event. Fund developers build and sustain relationships with foundations, corporations and individual donors. As a result, major gifts and planned giving become viable sources of revenue for the organization.

Because relationship building requires a consistent message and personal contact over time, a return on investment in fund development may not occur for two to three years.

In addition, a fund development department cannot function in isolation. The director of fund development must be knowledgeable of current programs and aware of new innovative programming that will encourage donors to give to the nonprofit. Fund development must work closely with accounting to insure accurate financial records. All agency communications must include messages that will encourage giving. Finally, the director of fund development will rely on the CEO and the board of directors to identify and develop relationships with donors.

As you design and develop a fund development department, consider the following tips.

* Assess your visibility. Potential donors give to organizations that they know about. To ascertain how visible your nonprofit is, have your board members make 10 phone calls to friends. Ask the board members to ask their friends what they know about your organization. If few people know about you, then your first task is to plan a public relations campaign.

* Determine the availability of volunteers. From a special event as large as the Taste of Honolulu to a small house party for potential donors, volunteers are critical for success. Good planning requires looking beyond your board of directors and staff for volunteers. Ask civic organizations, school groups and community associations whether they are interested in the mission of your nonprofit and if they would consider volunteering at your events.

* Develop a fundraising plan. Acquiring and retaining donors and increasing individual donations will be critical elements of the plan. Your plan should be specific—we will acquire 50 new donors through a direct mail campaign conducted in January 2006. We will retain donors by inviting them to small gatherings at the homes of our board of directors.

* Set realistic revenue goals. Plan for possible losses, and stay focused on the long term. Remember fundraising is relationship building, and it takes time to realize results. You may have to appeal to a potential donor two or three times before they resp ond with a donation. Special events are labor intensive and may not return a profit the first time. The Taste of Honolulu, a very successful and much anticipated fundraiser, lost money during its first two years.

* Purchase a fundraising database. Your database is the heart and soul of your fund development efforts. There are many fundraising software packages available at a variety of prices. Work with a vendor, and clarify your present and future software needs. In addition, purchase the technical support.

Don’t be tempted to buy a database off the shelf and customize it for fundraising. You will end up spending more time customizing the program and you may still not have all the functions you need. An efficient database is a critical tool for any fund development effort.

* Hire a director of fund development. Keep in mind that his/her role is to coordinate and plan the fundraising activities of the nonprofit. Unfortunately, many nonprofits expect the director of fund development to personally raise the monies for the organization. However, a successful fundraiser needs the active participation of the board of directors, other staff and volunteers.

* Join the Association of Fundraising Professionals (AFP). The Aloha Chapter of this professional organization provides training and assistance to nonprofits on fundraising. It advocates for best practices in fund development and will assure your donors that you subscribe to AFP’s code of ethics. (www.afpnet.org.)

Fundraising is an important function for a nonprofit. Not only does it raise needed monies for your organization, it increases your reach and visibility by engaging volunteers and donors. However, it is a long-term commitment and once begun must be continued to reap its benefits.

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