The elements of building a successful fundraising strategy *Fundraising in context *New Zealand's individual giving market * Strategy options * Critical success factors

1. Introduction to Effective
Fundraising
The elements of building a successful fundraising strategy
Fiona McPhee
February 2016

2. What is effective fundraising?
• Low spend / high return?
• Cost per dollar raised
• Return on Investment
• A program delivering more net each year?
• A sustainable program delivering more net each year?
• Diversification – are you eggs all in one basket?
• So more people need you than you can reach today?

3. Today
•Fundraising in context – big picture sources of
funding
•New Zealand’s individual giving market
•Strategy options
•Couple of critical factors to success

7. What does Effective Fundraising Look Like?
It is hard work
You have to make
choices and set
priorities
Fundraising is an
indistinguishable part of
your organisation, not a
separate function just
generating the money
There is no one-size-fits-
all or magic template

11. Fundraising in context
The big picture
Facts not anecdotes

12. The Big Picture
Overall Fundraising Strategy

13. The Big Picture
Overall Fundraising Strategy
Investments

14. The Big Picture
Overall Fundraising Strategy
Government

15. The Big Picture
Overall Fundraising Strategy
Government
Trusts & foundations

16. The Big Picture
Overall Fundraising Strategy
Government
Trusts & foundations
Consider
Corporate &
Events

17. “Chasing the corporate
dollar”

18. Home of capitalism,
most generous
nation on earth.
1966
0.9% of corporate
profit donated
Rise of the Triple
Bottom Line,
Corporate Social
Responsibility
2012
0.8% of corporate
profit donated
1986
Peaks at 2.1% of
corporate profit
donated
Source: www.slate.com

19. 1
55%
2
3%
3
42%
NZ 2014
1
80%
2
5%
3
15%
USA 2014
Source: Giving USA & Giving New Zealand

20. Gross Income - by year – New Zealand
$0
$40 M
$80 M
$120 M
$160 M
20052005
20062006
20072007
20082008
20092009
20102010
20112011
20122012
20132013
20142014
Income
Individual Organisation

21. The Big Picture
Overall Fundraising Strategy
Government
Trusts & foundations
Consider
Corporate &
Events

22. The Big Picture
Overall Fundraising Strategy
Government
Trusts & foundations
Consider
Corporate &
Events
Consider
Associations,
groups

23. The Big Picture
Overall Fundraising Strategy
Government
Trusts & foundations
Consider
Corporate &
Events
Consider
Associations,
groups
Individuals – Long term growth

24. The Big Picture
Overall Fundraising Strategy
Government
Trusts & foundations
Consider
Corporate &
Events
Consider
Associations,
groups
Individuals – Long term growth
The Giving Constituency

25. Types of Individuals
Occasional
Strong
Relationships
Total
Commitment
• Singular emotional
response
• Other motivation – raffle,
auction, peer-support
• Regular Givers
• Multi touch point
• Longevity giving
• Bequests
• Major Donors

26. The Big Picture
Overall Fundraising Strategy
Government
Trusts & foundations
Consider
Corporate &
Events
Consider
Associations,
groups
Individuals – Long term growth
The Giving Constituency
Bequests /
Legacies
Major Donors Regular Giving

27. The Big Picture
Overall Fundraising Strategy
Government
Trusts & foundations
Consider
Corporate &
Events
Consider
Associations,
groups
Individuals – Long term growth
The Giving Constituency
Bequests /
Legacies
Major Donors Regular Giving
Other areas:
•Lottery
•Merchandise
•Community / Peer-to-Peer

28. The Big Picture

29. Simplified
Overall
Fundraising
Strategy
Government
Individual –
Long term
Growth
Trusts and
Foundations
Corporate

30. Acquisition,
Renewal
and
Retention
Bequests
Major
Gifts
Regular
Gifts
Individual giving is
currently the ONLY
long term solution for
growth

31. New Zealand’s Individual Giving
Market

32. Fundraising
Individual Report 2015
Benchmarking

33. Amnesty International New Zealand | Blind Foundation | CBM New
Zealand | Child Cancer Foundation | Child Fund New Zealand |
Coastguard New Zealand | Fred Hollows Foundation New Zealand |
Greenpeace New Zealand | IHC New Zealand | Life Flight New
Zealand | Mary Potter Hospice | New Zealand Breast Cancer
Foundation | New Zealand Red Cross Society | Oxfam New
Zealand | Plunket | Royal Forest and Bird Society of New Zealand |
SPCA Auckland | St John New Zealand | Starship Foundation | The
Stroke Foundation of NZ | UNICEF New Zealand
2015 Members: New Zealand
33

34. Gross Individual Income - by year
$0
$50 M
$100 M
200520052005200520052005
200620062006200620062006
200720072007200720072007
200820082008200820082008
200920092009200920092009
201020102010201020102010
201120112011201120112011
201220122012201220122012
201320132013201320132013
201420142014201420142014
Income
Bequest Cash Child Sponsorship Regular Gift Event Other

35. New Recruits - by year
0
50 K
100 K
150 K
200720072007200720072007
200820082008200820082008
200920092009200920092009
201020102010201020102010
201120112011201120112011
201220122012201220122012
201320132013201320132013
201420142014201420142014
Recruitment Year
Recruits
Bequest Cash Child Sponsorship Regular Gift Event Other

36. Individual Gross Cash Income - by channel of solicitation
$0
$10 M
$20 M
200520052005200520052005
200620062006200620062006
200720072007200720072007
200820082008200820082008
200920092009200920092009
201020102010201020102010
201120112011201120112011
201220122012201220122012
201320132013201320132013
201420142014201420142014
Income
Direct Mail Face to Face Media Online Other Phone

37. Regular Giving Income - by channel of solicitation
$0
$10 M
$20 M
$30 M
$40 M
200520052005200520052005
200620062006200620062006
200720072007200720072007
200820082008200820082008
200920092009200920092009
201020102010201020102010
201120112011201120112011
201220122012201220122012
201320132013201320132013
201420142014201420142014
Income
Direct Mail Face to Face Media Online Other Phone

38. Average Bequest - by charity (excluding gifts below $1K)
Avg Gift last 5 yrs
$0
$100 K
$200 K
$300 K
AverageBequest

39. Pledged Bequest Rate - by type of support
0%
1%
2%
3%
4%
FacetoFaceCS
FacetoFaceRG
RegularGivers
CashDonors
LoyalF2FDonors
ActiveCashDonors
NonFacetoFaceRG
RG&CashDonors
LoyalActiveCashDonors
LoyalNonF2FDonors
1k+Donors
ConfirmedBequestRate

40. Older is better

41. Major
RG
Cash
Bequest
New Zealand Donor Pyramid
0.2%
0.3%
44.0% (234,784 donors)
55.5% (296,271 donors)
$37,344
$4,800
$240
$81
28%
20%
7%
46%
2014 Income

42. Lots from few v little from many
•Bequests
•Major Donors
•Grants
•BIG events
•Appeals
•Regular giving
•Sponsors
•Lotteries

43. Lots from few v little from many
•Bequests
•Major Donors
•Grants
•BIG events
•Appeals
•Regular giving
•Sponsors
•Lotteries

44. Approaching Strategy

45. The need for growth
What is your fundraising vision?

46. A fundraising vision that answers the
questions
• How many donors do we want?
• Do we want a large number of donors or do we want to focus on larger gifts from fewer
sources?
• What kind of donors do we want?
• Do we want a donor base of individuals?
• Do we want corporate donors?
• Do we want to take funds from the government?
• Are we looking to diversity or to focus our fundraising?
• What do we want our funding source pie chart to look like at the end of five years?
• What donor audiences can we best reach with the channels of communication have we
built?
• Will these channels of communication most effectively carry our message to our target donor audiences?
• What do we want our donors to do for us?
• Just give money?
• Or is there some other way we want them involved in our mission?
• How can we best leverage their support to make real change on our issue?
http://www.frontrangesource.com

47. The need for growth
What is my fundraising vision?
What sort of strategy do I need to achieve my vision?

48. Ten Steps to Fundraising Success
Assess your current
fundraising efforts
Assess the
fundraising strengths
and weaknesses of
your board and staff
Assemble the team
to select the best
fundraising strategy
Weigh the costs and
benefits of the
available strategies
Chose the strategy
that is right for your
mission
Set fundraising goals
that support your
fundraising strategy
Turn fundraising
goals into achievable
objectives
Choose the right
tactics for this
fundraising strategy
and goals
Create a master
calendar and keep on
track
Measure your
progress
Mal Warwick &
Stephen Hitchcock.
www.josseybass.com

49. Growth Audacious goals.
Bold.
Big Impact Resource
intensive
Involvement Voluntary.
Lobbying.
Public participation Staff intensive
Visibility Brand
identification.
Broad public
awareness
Resource
intensive
(usually)
Efficiency Cost-conscious.
Well established
Frugal management Staff and time
intensive
Stability Unchanging
values. Broad $
base
Cash reserves.
Long term view
Resource
intensive

50. How have others grown?

51. Cancer Council NSW Example
1997 - 2007
• Visibility - events
2002 - 2007
• Growth – Regular Giving
2005 -
onwards
• Involvement – Relay for Life, Volunteers, Relationships Extension
2007 –
onwards
• Stability – Major Gifts, Bequests
2012 –
onwards
• Stability – Channel diversification (cash, regular giving, events)
2 year growth 2013 –
2015: 8%
9 year growth: 66%

52. Amnesty Australia Example
• 2008 – strong regular giving program, small occasional pool, tens of
thousands of interactions, monologue not dialogue
• Involvement & Efficiency focused
• 2009 – Seven year vision to inspire over 500,000 people every year
to take action (more people = more activism = more members and
donors = more impact)
• Stability & Involvement focus
• Building engagement through online actions, social media, volunteer groups, donor
care, tied giving
• Cross-sell, Regular Giving, Acquisition, Major Donors, Bequests
• Refining programs
2 year growth 2013 –
2015: 18%
9 year growth: 115%

53. Critical Factor: Your Proposition

54. Your fundraising proposition
1.What the charity does – the services you
provide, the research you do, the teams
helping, the campaigns undertaken
2.Your history and track record
3.Your board, your leader

55. Your fundraising proposition
1.What the charity does – the services you
provide, the research you do, the teams
helping, the campaigns undertaken
2.Your history and track record
3.Your board, your leader

56. Your fundraising proposition
“Your donation makes a
difference. We promise.
Donate today.”

57. Your fundraising proposition
“Your donation makes a
difference. We promise.
Donate today.”

58. Your fundraising proposition
http://www.kaygrace.org/
People give to you because
you meet needs, not
because you have needs
• Are you clear on the needs
you meet?
A gift to your organisation is
a gift through your
organisation to the
community
• You are not the end user of
the gift (its not about you)
Fundraising is not about
money, its about
relationships based on
shared values
• Are you really clear what
your values are?

59. Your fundraising proposition
Answers the question:
Why should I give?

60. Your fundraising proposition
Creative
Audit
Audience
framing
Competitor
review
Stakeholder
consultation
Understand
strengths,
weaknesses
and points of
difference
Creative
workshop(s)
Know what you need
money for – how you
are going to spend it
but more importantly
for what outcome
Its not about huge
numbers or big brand
statements. It's a simple
fact that brings home, in
human terms, your impact
You are offering a
solution to the
problem as the donor
understands it, not as
you do
Focused & emotive

62. Assessing Impact

63. Assessing Impact
What you focus on affects your ability to grow
• Classic measures
• Cost Per Dollar (CPD) / Cost of Fundraising (COF)
• ROI

64. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 2 3 4 5 6 7 8
Series2
Series3
Series1
Cost of fundraising year on year…

65. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 2 3 4 5 6 7 8
Series2
Series3
Series1
Cost of fundraising year on year…
Massive
investment in
acquisition

66. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 2 3 4 5 6 7 8
Series2
Series3
Series1
Cost of fundraising year on year v net

67. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 2 3 4 5 6 7 8
Series2
Series3
Series1
Cost of fundraising year on year v net
Maintained
slight growth in
net – money to
spend on cause

68. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 2 3 4 5 6 7 8
Series2
Series3
Series1
Cost of fundraising year on year v net
Maintaining
acquisition, but
rewards of year
2 acquisition
beginning to
show through

69. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 2 3 4 5 6 7 8
Series2
Series3
Series1
Cost of fundraising year on year v net
Decided to STOP
acquisition for one
year – nearly
$1.5m bonanza for
capital projects
and service
development –
COF plummets

70. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 2 3 4 5 6 7 8
Series2
Series3
Series1
Cost of fundraising year on year v gross

71. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 2 3 4 5 6 7 8
Series2
Series3
Series1
Cost of fundraising year on year v gross
Reduced acquisition leads
to slight decline in gross

72. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 2 3 4 5 6 7 8
Series2
Series3
Series1
Cost of fundraising year on year v net v gross

73. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1 2 3 4 5 6 7 8
Series2
Series3
Series1
Cost of fundraising year on year v net v gross
Growth phase complete – charity
stabilises, but still acquiring more
donors than losing, hovering around
0.4 cost of fundraising

75. Assessing Impact
What you focus on affects your ability to grow
• Classic measures
• Cost Per Dollar
• ROI
• Comparing programs (includes staff costs)
• Overcoming their limitations
• Net return – how much more do you have for your services / program?
• Income per fundraiser

76. Net return is key – example
Monthly
giving

77. Expected Fundraising Return on Investment
Bequest Major
Gifts
Regular
Giving
Grants DM
Renewal
Events Lottery Acquisiti
on
10 10+ 10+
9 9 9
8 8 8 8
7 7 7 7
6 6 6 6 6+
5 5 5 5 5
4 4 4
3 3 3
2 2 2
1 1 1.0
-1 0.5

78. Making it all happen
Make a concrete, measurable plan
Get organisational buy in
Avoid being internally focused
Don’t overestimate your ability
Seek experience & expertise
Review

79. THANK YOU
Fiona McPhee
fiona.mcphee@paretofundraising.co.nz
Twitter: fimcphee
Phone: 021 336 905
Web: www.paretofundraising.co.nz
Experts worth reading: Dan Pallotta, Mal Warwick, Ken Burnett, Kaye Sprinkle Grace, Bill Toliver, Simone
Joyaux, Sean Triner
Excellent resources:
• Showcase of Fundraising Ideas & Innovation http://sofii.org/
• Resource Alliance http://www.resource-alliance.org/
Support in New Zealand
• Grants: Strategic Grants https://www.strategicgrants.co.nz/
• Major Donors & Capital Campaigns: Giving Architects http://www.givingarchitects.com/
• Fundraiser Recruitment: Execucare http://execucare.co.nz/

80. Pareto Fundraising