Development Planning from Scratch – Corporate and Foundation versus Individual Donors

Posted by on Oct 4, 2016 in Development Audit, Donor Cultivation, Featured, Foundations, Plans and Budgets, Uncategorized | 1 comment

Development Planning from Scratch – Corporate and Foundation versus Individual Donors

In July of this year, I started a series of posts about Development Planning. Among other points I’ve made on the subject is an admonition not to confuse donor segments with activities. I’ve been building an imaginary spreadsheet for the plan with donor segments as the rows and activities as the columns.

In other words, for your planning spreadsheet, you would NOT want your rows to look like this:

Board Members

Individual Donors

Corporate Donors

Foundations

Annual Appeal

Silent Auction

Rather, you will want the Annual Appeal and the Silent Auction to be columns. In this way, each row is a SOURCE or SEGMENT, and each column is a CAMPAIGN or ACTIVITY. Following a single row across the columns, you can see what each donor segment will likely experience during the year. Following a single column down the rows, you’ll be able to see which donors will be included in that specific activity.

So what happens when a board member’s company sponsors the annual gala as part of his or her annual financial commitment? Or what happens when individual donors give through their family foundations (or donor advised funds) to the annual appeal, or when the foundation is a company foundation? Which row should you use? Which column?

At some point, it’s up to you. As long as you’re consistent, you’ll be fine. As long as each donor is only assigned to one line!

Here are the rules I have used:

  • A gift directed by a board member is a board gift regardless of whether s/he gives it from their company, their family foundation, their donor advised fund, or any other mechanism.
  • A gift directed by an individual from a foundation or business entity is an individual gift if an individual is the determining decision-maker. In other words, if there is not a group decision-making process, by Trustees or employees for example. This is important, because you cultivate that gift as if they were an individual, not a company or foundation.
  • A gift from a foundation is a corporate gift if the foundation was established by the company and it gives away a percentage of the company’s earnings each year. This is important for two reasons – such institutions will be considering bang-for-the-buck in their decision-making (what do you give them in return?), and these gifts can often be both unrestricted and renewable. I’ve heard from more than one source that if you can just get “in the queue” that the gift will keep coming for years.
  • I consider foundation grants much more in the classic sense. I expect to start with a Letter-of-Intent, work through a grant officer that I get to know, write the grant for a restricted purpose where on-going funding is not implied even when the request is multi-year in nature, and so on.

So go back to my first hypothetical:

The board member who makes a gift from his company to sponsor the annual gala will be solicited for that sponsorship as part of the board solicitation campaign (See Board Campaign Mechanics). This is true even if all the other sponsors aren’t solicited until much later in the year. His/her company will be recognized as a corporate sponsor of the event on event signage and so on. But his gift will show up in the ROW for Board, not corporate.

 

The planning idea behind segmenting is that you identify separate groups for separate consideration such that they are then removed completely from the larger prospect group. This is an important consideration because it forces you to plan in a way that is donor-centric instead of organization-centric.

So far, I’ve pulled out Board Members, Top100 Donors, and Annual Giving Leaders. Next week, we’ll pull out Corporate Donors for a closer look.

 

Cheers,

-da

 

Photo by Grandon Harris.

* * * * *

 

LEST I BE MISUNDERSTOOD

Strategic fundraising plans start with the funding needed to accomplish the mission, or at least that part of it that will be implemented within the context of the Strategic Plan. If the current fundraising activities are not projected to meet the needs of the Strategic Plan, then they are, by definition, insufficient. You’re going to need to look at something else – a new strategy, an additional or replacement event, growing your base support, starting a major donor program – something! And because starting some of these things doesn’t always bear fruit in the first year, you’re going to have to plan farther out than the next 12 months.

Annual fundraising plans start with a projection of what you had in place last year and what is likely to change in the next 12 months. If the annual fundraising plan projection is not sufficient to meet the needs of the program, the program will need to lower its sights a bit. It is suicide to just arbitrarily add enough money into the fundraising goal to meet the needs of the program and just trust that it will work itself out!

 

* * * * *

The Development Planning Sequence so far:

The BIG Picture

Segmenting

Soliciting the Board

Cultivating the Board

Cultivating Top 100 Donors

Annual Giving Leaders

* * * * *

 

Fundraiser’s Almanac
Here’s what I’ve been thinking about for October. What are YOU thinking about?

 

Donor Appreciation Events

For a significant number of organizations, donors giving at least $1,000 as their membership gift account for less than 10% of the donor base and more than 60% of the operations funding. Time to say THANK YOU! Time to get the most out of your appreciation events!

 

Getting that First Fall Appeal Letter to the Post Office

Mailing this early means that you can get a reminder letter out before Thanksgiving, and if you are inclined to send out a third letter, you will still have time to drop it before Christmas. BUT, If you will be mailing after October 20 or so, know that your results will be somewhat affected by the election mail. Mailings dropped after November 15 will have better results that mailings dropped between October 20 and the election.

 

Acknowledging Non-Cash Donations

I am NOT a tax advisor, and I am NOT an attorney. However, with that critical disclaimer:

Acknowledge any gift with a sincere statement of appreciation for what was actually given. For example,

  • Thank you very much for your gift of $35.
  • Thank you very much for your gift of 25 shares of XYZ stock.
  • Thank you very much for donating your 4-wheel-drive truck.
  • Thank you very much for volunteering to help us with the mailing last Saturday.
  • Thank you for donating a homemade meal for 6-8 people for the auction.

 

Taking Stock and Beginning to Plan for Next Year

Given what you know right now about what foundations, corporations, and individuals have committed, and what you know right now about what requests are still out there, and what you know right now about the requests you will yet write before 12/31, can you still project meeting your fundraising goals and getting to each of the budget numbers? If not, where will each number end up? If you wait until December 20th to figure out that you’re going to be short – it’s too late. Forewarned is forearmed.

 

One Comment

  1. Thank you for clearly explaining the difference between campaigns and donor prospects from a development planning perspective. Keeping the visual of rows v columns in mind helps a lot!