FundRaiser Blog

Dear Kim,  

I chair the board of a small religious organization.  Each employee has to raise a certain amount toward their salary and this amount is set by the board, as are the salaries. Recently it came to my attention that one employee is receiving additional support from a board member who provides a designated gift for that individual’s support. I was caught off guard to find that this individual is making more money than we knew and that a particular board member is providing it.  This seems like money laundering to me. The board member is making a financial gift to a family, and running it through the non-profit so that it can be tax deductible. Is there an IRS rule, or a piece of governance that would prevent this sort of thing from happening? 

So, how do you know from within an organization when and if you should hire a development director? The answer is simple, and it starts with knowing the costs of running the organization as it carries out its mission as set out in the its long-range strategic plan. It continues with the development of a fund-raising plan.

The short answer is sooner rather than later! If a non-profit organization is beginning to ask whether it needs a professional development director, it probably should have hired one months, even years ago.

The biggest mistake non-profits make in hiring their first development director is waiting until the board, executive director, and other key personnel have arrived at a consensus that one is needed NOW. An organization that waits until it is necessary to hire a development director has waited too long.

You start the process of becoming a fund-raiser for an organization when you first become involved with the organization. That’s when you begin to acquire knowledge about an organization, and acquisition of knowledge is the first step in preparing to raise money. To sell any product, it is important to know just what the product is and what it does. It makes no difference whether you are a waitress explaining the intricacies of the specials of the day, a computer salesperson pitching the new improved model, or a solicitor in a fund-raising campaign.

If you are the person running a campaign, you must make sure your solicitors have access to information about what the organization is, what it does, and why money is needed in the furtherance of what goals. If you are the person asking for the money, think about how you would go about making your request without that information. Yes, you will on occasion find people who will give because you ask rather than give to the cause, but that is the exception and –this can’t be said often enough—you cannot rely on the exception to support your organization.

Generally, the first step in asking prospects to make a donation is to send them a letter. This is true no matter the type of campaign or potential size of gift. In the small-gifts division of an annual campaign the letter may be the only step, although I would recommend having it followed up by a telephone call, if at all possible. Even in door-to-door solicitations, a letter should be sent first announcing the date of, reason for, and, in most cases, the suggested amount of the request. In the case of larger gifts, the letter announces that a solicitor will be calling for an appointment. We refer to this kind of letter as the proposal letter because it proposes that the prospect become a donor to an organization.

Proposal letters are usually signed either by the solicitor or by the campaign chair. In the case of the latter, the status and power of the chair are lent to what is essentially a request of the prospect to meet with a solicitor. If signed by the chair, you can also be sure the letters all went out by a specific time. This also forces solicitors to act by the time the letter says they will be calling for an appointment. However, not every solicitor will be able to make the initial calls in the same time frame. One or more solicitors may be out of town when the letter hits. Consequently, there is less likelihood of being in error as to when solicitors will be calling if the timing of proposal letters is left in the hands of the solicitors.

Dear Kim,

I am the executive director of a small environmental justice organization focused on organizing a community to stand up to a large and highly polluting CAFO (Concentrated Animal Feeding Operation.) We have recently had some victories but need to keep pushing. One of our board members comes from quite a wealthy family and he has been very generous himself plus raised a lot of money from family and friends. But recently we needed an extra $10,000 very quickly so I went to him and he said he couldn’t give anything right now. I didn’t say anything but I was really upset. The man has more money than all of us put together! I need to get him to change his mind. How can I do that?

Dear Kim,

I am the director of a membership nonprofit and our board is thinking about changing us to a non-member organization to help us refocus our efforts to serve our clientele, clean up organizationally and become more streamlined and efficient. Would this be a mistake and how tough is it to do this? What is the real question we should be asking ourselves to help determine whether we should be a non-member or member nonprofit? —Members Only