NFP Consulting Resources, Inc.

2012-01-12T07:28:00.001-08:00

Table of Contents
Scroll down for articles of interest to nonprofit leaders and professionals:

My Journey to Publishing

Great New Resource

How Are You Handling Risk

Major Gift Prospecting and Prioritization

Succession Planning Tips for Volunteer Leadership

Nonprofits and PEO's

How to Develop a Strong Fundraising Board

Why Your Organization Needs A Gift Acceptance Policy

Click "Older Posts" at bottom to see the following additional articles:

Before You Start A Fundraising Campaign

Ten Fundraising Axioms: Simplified

Fundraising Return on Investment

Best Kept Secret

Collaboration: Saving Operating Costs in a Tough Economy

Ten Tips for Nonprofit Major Gift Solicitors

A Marketing Approach for Planned Gifts

Professional Development Through Peer Engagemet

Nonprofit Lexicon

My Journey to Publishing

2012-01-12T07:19:00.000-08:00

I’m one of those “old” pros who just a few short years ago thought social media, and blogs were only for young people who wanted to socialize with their friends. For most of my career, I have been a nonprofit professional, working with large organizations as fundraising counsel for their major gift, capital and endowment campaigns. One day, while visiting my then 35 year old daughter and my son in law, I was told about the marketing value of blogs for professionals. I had been involved with CharityChannel.com and had participated on their list-serves but had not been exposed to blogs or social media. I was curious and asked them to give me more information. After about ½ hour of instruction, I was set up with a Google Blog. (www.nfpconsulting.blogspot.com)

Over the course of my career I had, from time to time, written short professional articles and decided to post some of them on the blog and with CharityChannel. I even created a few new postings over the ensuing 2-3 months. My son-in-law suggested that I use social media to “drive business to my blog” which was also linked to my business web site.

I went to Facebook, Linkedin and Twitter and set up accounts which I primarily used to notify “friends and colleagues” when I posted a new item on my blog. Over time I learned about the value of viral marketing. It did not take long before I began to get comments about my articles and requests for their use with other organizations. Within a few months, I received requests from a University to use one of the articles in their newsletter as well as from several national nonprofit associations and organizations.

I also posted several of my articles from the blog on CharityChannel which resulted in great feedback and requests to reprint the articles. Through CharityChannel, I established a relationship with its Founder and CEO, Steve Nill. He was very encouraging and graciously posted more of my articles on their web site.

It was not only a boost to my career to be published, but it was also an ego trip. I began to establish a national reputation as a thought leader in my profession. I set up a Google alert for my name and low and behold, many of the articles I had written came up on sites of other organizations which had reprinted my articles as resources for their own constituencies.

Soon after, Steve Nill and I had discussions about doing a book that would include the best articles from CharityChannel. He asked if I would put it together. CharityChannel had just set up CharityChannel Press and had already published its first books. I told him I was not familiar with putting a book together or working with a publisher, nor did I think I had the time that would be necessary. He said he might be able to get me a co-editor who had a lot of book editing experience. I told him I would consider it. He introduced me by phone to Linda Lysakowski. After talking to her, I was convinced that she had the professional knowledge, and editing skills, that the book was a great idea and working with her would help tremendously.

I was in Florida. She was in Las Vegas. We became email and phone buddies, spending lots of time thinking through what we wanted to do and how we would do it. We spent 2 years on the project. During that time we only had one face to face meeting. Contributors were selected from around the globe (Canada, Great Britain, Australia and the United States). With the help and professional generosity of many of our colleagues, we presented “You and Your Nonprofit” to CharityChannel Press for publication.

It came out in June of 2011 and has received a lot of attention not only within the nonprofit sector (professional, academic and volunteer community) but also for the two of us and the 40 plus contributing authors.

My desire to share my knowledge with others, as others have for me throughout my career, gave me encouragement and recognition. Most recently I made a presentation, to the faculty, students and community partners at the college from which I graduated. (Virginia Commonwealth University School of Social Work). That was another special time for me to be able to talk about the content in the book and engage with those attending on other topics related to future trends within the nonprofit sector.

Who would have guessed that a ½ hour of instruction, the use of social media and a blog would lead to the publication of a significant book on nonprofit management, leadership and fundraising.

Think about how similar activities could catapult your professional career…………

Great new resource now available

2011-07-27T12:26:00.000-07:00

Want to learn more about nonprofit leadership, management and fundraising?

Involvement with nonprofits, either as a volunteer, professional or donor, can be a very gratifying and life enriching experience. In organizations that are not well run, those experiences can be negative and stressful. Nonprofits are a special type of corporation. While they do not make money for stockholders or owners, they have to be run effectively and efficiently if they want to accomplish their mission, provide a community benefit, expand and retain staff and volunteers. Yes, while they are unique, they ARE businesses that require proper leadership, governance, operations and support.

If you are involved in nonprofits, or want to get involved…..either as a volunteer, leader or professional….a new book is now available that is just for you! “You and Your Nonprofit”, published by CharityChannel Press is a collection of short articles with practical advice from people who have been in the trenches. It is more than a “how to” book. Each article has been written with the goal of providing tools that can be easily adapted for use in your nonprofit. Over 50 contributing authors from the U.S., Canada, England and Australia have participated in this publication. All are seasoned professionals and nonprofit leaders who have learned their craft over many years “in the trenches” as well as from participation in professional educational programs. A unique aspect of the book is the ability to connect with each of the authors and establish a dialogue with them directly. Each article has a special email address through which authors can be contacted by readers.

The goal of the book is to focus on readers who are relatively new to the nonprofit sector. The editors asked authors to write for readers (professionals, leaders and volunteers) who have been in the field for less than ten years. They wanted readers to find the articles not only informative and interesting, but also practical examples of best practices. They wanted readers to be able to take ideas and suggestions from the articles and be able to implement them within their own organizations.

The editors wanted to create a book that would be more than just an anthology of essays, but, rather, a series of articles written by professionals who have real life experience and have been in the trenches of nonprofit work. They did not expect the book to be an all-inclusive book on nonprofit leadership, management and fundraising, However, they believe that the business of nonprofit management, leadership and fundraising is constantly improving because people like the authors (and hopefully the readers) are willing to challenge conventional wisdom and think outside of the box. They have succeeded.

Robert Carter, CFRE, Board Chair Elect of the Association of Fundraising Professionals, Board Member with the Center for Philanthropy at Indiana University and Principal with Of Counsel Philanthropy made the following comments as part of his foreword to the book:

“I have just read the book I needed when I made the decision to try the business of fundraising decades ago. This book is loaded with excellent advice and counsel as to “why & why not” and “what” and “how to.” Fundraisers, volunteers, CEOs, and all who care about this sector’s capacity to meet the needs and seize opportunities to benefit our communities, nation and world should have this collection on their desks for handy reference and guidance. This is surely the book I wish I had decades ago.”

Readers will learn about planning issues in articles about governance, fundraising, administration and marketing. They will learn about leadership and other topics in many of the articles. The authors want readers to enjoy learning about nonprofit management, leadership and fundraising and in the process learn ways to add value to their own work as people who are, or will be, engaged in the nonprofit sector.

“You and Your Nonpofit”, has been nominated for the 21st Annual Terry McAdam Book Award of the Alliance for Nonprofit Mangagement and has been recommended by Charity Navigator and the Association of Fundraising Professionals.

“You and Your Nonprofit” can be purchased at http://charitychannel.com/charitychannel-press/bookstore/productid/127/catreferrer/1420 or at your favorite bookstore.

How Well Are You Handling Risk Management

2010-06-24T09:23:00.000-07:00

How well are you handling “Risk” in your nonprofit organization?

By
Norman Olshansky, President: NFP Consulting Resources, Inc.

Over the past few years, increasing attention has been given to potential liability, mismanagement and ethical practices within the nonprofit sector. Whether as a result of the Sorbanes-Oxley Act of 2002 or more recent high profile ponzi schemes and fraud cases, boards and executives of nonprofit organizations have begun to put more focus on risk management.

A formal definition of risk management is: “the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities”.

When was the last time your organization conducted a serious risk management process?

While many of the prime areas of risk are related to finances, personal injury liability, and unforeseen disasters, there are many other areas of nonprofit operations and governance which can create risk for an organization.

The following are a few of the more common areas of risk which can be assessed and addressed:

1. Availability of Information for Decision Making
2. Billing and Collections
3. Business Expenses
4. Business interruption
5. Cash Management
6. Continuity/Disaster
7. Contract compliance
8. Copyright infringement
9. Corporate Governance
10. Data Security
11. Donor/member records
12. Donor/member recognition and benefits
13. Emergency preparedness
14. Facility Management
15. Financial Reporting
16. Fraud & Ethical Behavior
17. Fund Raising
18. Gift Acceptance
19. Harm to clients
20. Human Resources
21. Insurance/Risk
22. Investment policies
23. IT Infrastructure
24. Litigation Risk
25. Misfeasance/Malfeasance
26. Malpractice
27. Operational Quality Performance
28. Personnel/Volunteer Behavior
29. Regulatory Compliance
30. Related Party Transactions
31. Special Events
32. Storm damage
33. Subcontractor Utilization
34. Succession Planning
35. Tax Exempt Status
36. Transportation
37. Unrelated Business Income
38. Use of intellectual property

As you can see from the partial list above, there are many areas of potential concern. In most cases, it would be cost prohibitive and next to impossible to attempt to eliminate all risks in a nonprofit. However, depending on the type of organization and its operating issues, there are usually several high priority potential problem areas which should be addressed. The cost of prevention is usually a fraction of the cost of correction after the fact. Typically, discussions related to risk management are first initiated by financial advisors and/or auditors. However, the scope of their concern if often limited to financial issues.

There are risk management tools that can be used as part of a nonprofit organization’s annual audit process. The assessment is typically a comprehensive problem solving process that starts with an analysis of needs, prioritization of areas of concern, a recommendation on how to address those concerns and measurement of progress. Progress is only possible if the starting point is identified correctly and candidly. Nonprofits are asked to provide data for the baseline assessment - the more accurate the data, the greater the prospect of substantial improvement.

The assessment is administered again annually in order to assess impact. The assessment should be conducted by an external assessor which is why doing so, as part of an annual audit, is advantageous. By comparing year to year results, nonprofits can observe their progress and continually reduce the extent of risk in their organization.

Most auditors will address issues such as separation of duties related to bookkeeping and accounting, or documentation which is required in personnel files. However, a more thorough risk assessment will also include a review many other potential areas of concern.

Consider some of the following questions:
When was the last time you looked at your facilities to determine if they are safe and secure, if data is protected, how to minimize damage in a storm or to determine if computers or other electronics are located under sprinkler systems. Does your organization have a published plan that is reviewed annually with staff and volunteers related to procedures should there be a natural disaster, bomb threat, or fire? Who is responsible for what when an emergency occurs? What type of reporting takes place when someone incurs a work related injury or has an accident on your property? What have you done to minimize risk associated with activities which could result in litigation against your organization? Is there clutter or areas of storage that are potential fire hazards? What have you done to educate your leadership, staff and volunteers regarding ways to avoid potential ethical or conflict of interest concerns?

Have you addressed the potential “Mack Truck” problem? This is when you have a key employee, volunteer or vendor who you rely on so much that if they were hit by a truck and were unable to continue their involvement, your operations could be significantly impacted. Do you cross train staff? Are you prepared for the “Mack Truck” incident that takes away the one person who knows everything about your accounting, computer systems or service delivery? What insurance do you need? (liability, business interruption, property, automobile, travel, health, equipment or other potential losses, etc.) These are some of the issues that should be evaluated as part of your risk management assessment.

The time to be concerned and take action around risk management is before you have the problem. As the saying goes, “An ounce of prevention……….

Major Gift Prospecting and Prioritization

2010-02-13T09:29:00.000-08:00

By Norman Olshansky

One of the most important activities a nonprofit needs to undertake prior to initiating a major gifts campaign is the identification and prioritization of prospects. Some organizations spend a lot of money, time and human resources on prospect mining and research. Others try to identify pockets of wealth in their community and then determine what is the best way to contact and solicit those individuals.

For many organizations, I recommend the following simple and inexpensive technique to identify and prioritize major gift prospects.

The Task Group

The first step is to put together a group of individuals who are already committed to the organization and who have good relationships in the community. When recruited they are told that they are being asked to attend a single meeting to identify names of individuals in the community who could be helpful to the nonprofit. The group can be composed of the organization’s board, donors, volunteers, members, or a combination of individuals from all of these groups. In addition, if a fundraising committee or major gifts committee has already been established, they should also be encouraged to participate. I prefer to have no less than 8 people or more than 30 participate in the focus group meeting, which typically takes about one to one in a half hours. It is helpful to have a diverse group from the various geographic areas served by the nonprofit. You should also try to include individuals who have good connections to high net worth individuals through their volunteer, business and/or social relationships.

Brainstorming

At the meeting, participants are asked to identify any individual they know who is charitable and is capable of making a major gift of $25,000 (or whatever level is established by the organization as a major gift) The goal of brainstorming is to identify major donors so the larger the threshold the better. If too low, you will end up with so many names that it will be hard to prioritize. The emphasis of this exercise is to identify individuals (not corporations) who have major gift potential and will be cultivated and solicited face to face. This includes individuals who utilize private foundations or donor advised funds for their charitable giving. This exercise should not be used for identification of prospects to be solicited by direct mail or for targeting donors who can be solicited by phone or contribute by attending events

The facilitator then encourages people to call out names which are written on flip charts or on a large white board that can easily be read by all.

Once everyone has shared names that came to mind during the brainstorming (hopefully, at least 50 names), the facilitator hands out paper and pencils to all participants.

The Nominal Group Technique

Next the facilitator gives the following instructions. “Take a few minutes to look at all of the names on the brainstorming list and write down on your paper the three to five names which best meet the following criteria.

A. They have a history of being philanthropic
B. They have a history of making gifts at our major gifts level
C. They are likely to have an interest in our mission
D. They are accessible. You or others you know in our organization can get a meeting with them or invite them to visit with us.

After adequate time is given for participants to write down their three names, the facilitator goes around the room and asks each person to say aloud the three names. The facilitator puts a hash mark next to those names on the master brainstorming list. When a name is mentioned by more than one participant, additional hash marks are made each time that name is mentioned. Once everyone has announced their three names, the facilitator counts the cumulative hash marks for each name on the master list and circles the top 10 names that were mentioned the most. If it is difficult to narrow it down to 10 names, circle more than ten and initiate another round where participants now write down two of the circled names which they feel best meet the priority characteristics. Then continue the process of narrowing down the names based upon number of times mentioned. Ultimately, the facilitator’s goal is to narrow it down to no more than ten names.

(The nominal group technique can also be used to help with prioritization of any other type of brainstorming activity. The beauty of the process is that it involves all of the participants and provides a way to quickly measure and prioritize responses.)

Fact Finding

The last stage of the process is to ask for input from participants on each of the top ten prospects identified. The facilitator or someone else should take copious notes from the comments shared by the group on each of the ten prospects in response to the following questions.

A. Who in our organization knows this person and could be our key contact to invite them to learn more about what we do?

B. What other organizations are they involved with and what are their major philanthropic interests?

C. Do you know how much they have given to other charities?

D. Do they make their philanthropic gifts directly, through a foundation, donor advised fund, etc.

E. Is there anything you know about them that could help our staff or fundraising committee to engage them with us?

F. Do you personally know, have a relationship with, and have access to anyone who knows the individual and has a close relationship to him/her?

G. Is there anything you know that might lower the priority level of this prospect?

Follow up

In addition to thanking participants, the information learned should be conveyed in detail to staff and volunteers involved in major gift fundraising. Hopefully, your fundraising leadership and staff participate as well and use the session to identify additional volunteers, who attended the session, who can assist the committee going forward with prospect research, cultivation, and solicitation. The top ten names should be among the first prospects targeted as part of the major gifts initiative. After the initial priority names have been assigned and solicited, other names on the brainstorming list should also be approached in the order of the priority established, taking into consideration your ability to access and engage each prospect.

A similar process can be used to identify and prioritize corporate prospects. However, the type of individuals you will want in the Task Group may be different from those you select to focus on individual donor prospects.

Tips on Volunteer Leadership Succession for Nonprofits

2010-02-02T13:36:00.000-08:00

By Norman Olshansky

Leadership succession planning in nonprofit organizations is a critical and high stakes endeavor. Too often nonprofit organizations struggle to fill vacant top leadership positions. The consequences of poor succession planning can be devastating.

Every organization has a unique culture and history. When there is a lack of succession planning, organizations find it difficult to fill positions and often recruit individuals to serve in key roles who have minimal experience, few leadership skills or history with the organization. Problems often develop when new leaders are asked to take on major leadership roles without significant prior involvement within the organization. Relationships can become problematic between new leaders, key staff and past leaders.

This article focuses on the Volunteer President/Chair of the Board position. (Chair) Even the most extraordinary nonprofit President/CEO/Executive Director (ED) cannot achieve the organization’s fullest potential without a good board chair. All major leadership positions (Officers, Committee Chairs such as Development, Planning, Marketing, Finance, Program, etc.) are similarly impacted. The following are recommendations I often make as a consultant to nonprofit organizations related to succession planning:

1. Bylaws

The bylaws of the nonprofit should be clear regarding the organization’s leadership structure, process for nominations, elections, and responsibilities of leadership.

2. Job Descriptions

Nonprofits should have a clear and realistic job description for each leadership position that outlines the duties, responsibilities and expectations for each position.

3. Governance/Nominating Committee

A governance/nominating committee should be tasked with the responsibility to identify potential candidates for leadership positions, interview those candidates, review roles and responsibilities with the candidates and obtain their permission to submit their names for consideration for leadership positions within the nonprofit. This committee should obtain input from leadership and staff in order to determine the type of skills, experience and leadership that is most needed to address the current and future needs of the organization. Determining where the current gaps are and how to develop existing leadership in addition to determining who to recruit, should also be part of the charge of the governance/nominating committee. While being considered, the candidates should be provided with an opportunity to meet with existing leadership and key staff to learn more about the expectations of the position.

More on this process can be found at http://nfpconsulting.blogspot.com See article titled “How to Develop a Strong Fundraising Board”

4. Performance Tracking

The ability of the governance/nominating committee to be successful will be greatly enhanced if the nonprofit has a system in place to track the involvement, relationships and performance of volunteers and supporters. The more information made available to the committee, the better they can identify and recruit the best potential candidates.

5. Orientation

Once the positions are filled, there should be a formal orientation process and where possible, the assignment of a seasoned veteran leader to act as a mentor for each new leader.

6. Chair/ED Consultation Input

Both the current Board Chair and ED should be consulted for input throughout the process and play a major role in the orientation of new leadership.

7. Chair/ED Working Relationship

After the election and preferably before the new term begins, the new Chair and ED should meet privately and discuss how they can best work together. This is a time to review in more depth any special needs or suggestions either has related to their working relationship, style, frequency of meetings, best ways to communicate, immediate priorities, etc. This meeting is an important start to the development of the lay/professional partnership between the new Chair and ED.

8. V.P./President Elect

I often recommend when each new Board Chair is identified, that a V.P. be identified as the individual to be groomed to be the next Board Chair. Often the by-laws identify one position on the Executive Committee as President Elect which accomplishes the same goal. During the course of the Board Chair’s term of office, the individual being groomed (the President Elect), becomes a key player on the Exec Committee and Board, acts in the absence of the Board Chair and is encouraged to attend as many key meetings as possible related to planning, problem solving, community affairs, etc. The time they serve next to the Board Chair provides an opportunity for in-depth mentoring, education and hopefully, a smoother and easier transition upon moving up to the Chairmanship. During the time being mentored a determination can be made of the strengths of the next Chair and what areas of knowledge or leadership he/she will need to further develop prior to beginning their term as Chair.

9. Past Chair

The outgoing Board Chair is often overlooked as part of succession planning. Many organizations keep the outgoing chair on the Executive committee and board for one additional term in an official “Past Chair” position. Past Chairs who so desire, can be a tremendous asset to the organization following their time in the leadership position. However, there can be problems if the transition is not handled well. The extent of involvement of the past chair is usually determined by the new Chair. Often the new Chair wants to establish their own identity and will want the past chair to play more of a behind the scenes role. Other new Chairs seek out and encourage past chairs to play a more active role.

10. Past Chair Transition

The transition out of the Chair position can be a difficult time for the individual. In most cases they have been heavily involved with the organization for many years and it has become a major part of their lives. I have seen outgoing chairs struggle with the sudden loss of intimate involvement with the organization. They miss the frequent contact and counsel with the staff and other leadership. They miss being the “go to” person or visible leader for the organization. How an organization handles those leaving a key position is just as critical as how new leaders are handled. It’s an important aspect of an organization’s overall volunteer human resource and stewardship process. Often the ED is the person who has the closest relationship with the outgoing Chair and needs to be actively involved in the transition and stewardship process.

11. Recognition and Stewardship

All outgoing leaders need to be recognized for their contributions to the organization and be part of an ongoing stewardship program.

When a nonprofit utilizes a well planned and implemented leadership succession process it sets the course toward future success.

Norman Olshansky, President of NFP Consulting Resources, has over 30 years of professional and executive level leadership and consulting within both the not for profit and for profit sectors. He is a past board member of the Association of Fundraising Professionals Southwest Florida Chapter, is an AFP mentor, and presenter at AFP seminars. His clients have included both large and small service, health, cultural and faith based organizations ranging from local and national home health care companies, to hospitals and health care systems...from community centers to national membership organizations...from military and law enforcement agencies to botanical gardens...from public school systems to State Universities...from human relations organizations to faith based social service and religious entities throughout the U.S., Canada and Israel.

Mr. Olshansky has received national recognition for his articles on nonprofit leadership, fundraising and management as well as for his work in human service and executive leadership. He has been a frequent lecturer at several Universities, is a national book reviewer and instructor for CharityChannel.com, and is active as a volunteer in several civic, religious and professional organizations. Additional articles written by Mr. Olshansky can be found at http://nfpconsulting.blogspot.com .

Nonprofits and PEO's

2010-01-05T10:25:00.000-08:00

Nonprofits and Professional Employer Organizations (PEO)

Norman Olshansky: President
NFP Consulting Resources, Inc.

If you are a leader or an executive with a nonprofit organization and are unfamiliar with PEO’s, you may want to check them out.

Personnel costs are usually among the largest expense items for nonprofit organizations. While fundraising and revenue enhancement activities are the primary keys to sustainability, nonprofits also need to constantly address areas related to cost containment. In order to preserve programs and services, personnel benefits are often the first areas to be cut. Before you make those cuts, check out the potential savings offered through the use of a PEO.

You may have heard about PEO's in the past when they were known as employee leasing companies. PEO’s are not a temp firm, a staffing agency, or placement agency. You retain full control over your employees while the PEO handles payroll, payroll taxes, workers comp, benefit management, retirement services, government compliance, and liability management. You pay them a fee, provide them with your payroll information and they handle the rest.

PEO’s provides a service that allows your organization to outsource many of your human resource functions. Their size enables them to offer a package of benefits for your employees at a much lower cost than you and/or your employees may currently be paying. There is an economy of scale that they can provide that few nonprofits can match on their own. Simply stated, when you engage a PEO, they take over the administrative and compliance components of your human resources. Nonprofits can compete with national associations and Fortune 500 companies for the benefits needed to recruit and retain quality employees.

PEO’s provide you with employee handbooks, give guidance on employee policies and work with you to make sure you are in compliance with all local, state and federal fair labor, ADA and employment regulations. PEO’s offer many choices of packages to offer your employees.

I have found that you need to have at least 8-10 employees for the direct cost saving benefits to be significant. In addition to the cost savings, use of a PEO frees up your existing staff, who handle payroll and HR, from many of their regular duties and provides you with an additional level of expertise and guidance on HR issues.

How to Develop a Strong Fundraising Board

2009-12-26T13:04:00.000-08:00

By Norman Olshansky: President
NFP Consulting Resources, Inc.

How can nonprofit organizations increase revenues? This is one of the most frequent issues that I am asked to address as part of my consulting practice.

Most nonprofits depend upon private philanthropy (in addition to user fees, memberships, grants, earned income, ticket sales, etc.) to support their operation. According to the AAFRC Trust for Philanthropy, 78.3% of all charitable contributions come from individuals. So if the largest portion of philanthropy comes from private, (individual) sources, what is the best way to seek out those funds?

There are many axioms related to fundraising. A few are:

You don’t get if you don’t ask
Connect to passions, hearts and minds before you connect to wallets
The quality of a gift is directly related to the quality of the relationship between the solicitor and prospect.
Fundraising is both an art and a science. Success requires both.
Most worthwhile endeavors, including fundraising, start with a clear vision/plan and require lots of planning, preparation, hard work, engagement of leadership and strategic execution.
You can never thank a donor, volunteer or staff member too often. They are the keys to your success.

There is a direct relationship between fundraising success and the quality of volunteer and professional organizational leadership. Better leadership equals better success.

Nonprofit boards are usually populated by individuals who are committed to the mission of the organization. Many have come up through the ranks as volunteers within the organization. Others are on the board based upon their professional expertise in the areas related to the organization’s service, operations or administration. All too often, however, boards are lacking in members who have the characteristics necessary to obtain significant private philanthropic support from individuals. In addition, staff members are often ill prepared to be successful fundraisers, especially in the area of major gifts.

Staff members need to be trained, mentored and encouraged to engage in those activities that will contribute to fundraising success. New hires should be selected, in part, on their ability to provide professional leadership to the fundraising process.

When a board does not have sufficient members who have major gift fundraising experience, access to wealth in the community, and the ability themselves to be philanthropic leaders for the organization, steps should be taken to make needed changes/additions. The goal should be to bring onto the board and fundraising committee(s) individuals who have a positive passion for the organization’s mission, are known and respected leaders in the community, have the ability to inspire others, can recruit additional leadership, are able to make a major gift to the organization and can open doors to other major donors. The organization should be among their top philanthropic priority during the length of their service on the board or fundraising committee. Many organizations are at a loss on how to recruit board members with the above characteristics.

When a nonprofit does not have a strong board and needs to bring on new people, the following are a few steps to consider which have been successfully implemented by nonprofit organizations.

A. Put together a 3-5 member nominating committee drawn from your most prominent board members, current supporters and past chairs.

B. Have them, with staff input, develop a job description for leadership which includes expectations for participation, attendance, philanthropy and committee involvement. Establish what will be the length of service. Identify your expectations of time commitment, including time needed for the review of minutes and other materials in preparation for meetings.

C. Review prospect lists developed by the organization, as well as other input from leadership and staff, for names of individuals who would be ideal to involve in your leadership. Think high and boldly. Look at names of philanthropists and other leadership who have been successful with other organizations. Prioritize prime candidates with whom you have or can obtain access.

D. Cultivate your top choices through invitations to visit your organization and/or participate in small group briefings about its work. Provide a quality experience for the prospective leader when they visit/tour your operations.

E. Based upon their desire to learn about your organization and their reactions to cultivation activities, approach the key leadership prospects to obtain their willingness to have their names put into nomination for a board or key committee position. Show them an expanded list of people who are being considered. This will demonstrate to them the quality of people with whom you will be talking. Tell them that you are interviewing many people on the list to determine if their names should be put into nomination. Ask what they know and what their feelings are, about the mission and work of your organization following their visits and involvement in the cultivation briefings. After you answer any questions they have, show them the job description for leadership and ask if they would be willing to be considered, among others, for submission to the nominating committee. Emphasize that only a few of the people submitted, will be asked if they can be nominated for a slate to be presented to the existing board/membership. Ask for their bio’s, list of nonprofit board and leadership experience, and professional accomplishments. The purpose of this strategy is to build status for participation.

F. Avoid any indication of existing weakness or need to upgrade leadership.
Make sure that the people talking to them are the select group that was recruited for the nominating committee. In addition you may want to involve your key professional from your organization (Executive Director, CEO, etc.) in the prospect meetings.

Recruiting the right people into leadership, who have demonstrated fundraising success in the past, in addition to training and mentoring existing leadership and staff in the art and science of fundraising will give your organization a tremendous return on investment.

(For more information on board development and nonprofit fundraising, go to http://www.nfpconsulting.com/ )

Gift Acceptance

2009-12-15T13:00:00.000-08:00

Why does your nonprofit organization need a gift acceptance policy?

Norman Olshansky: President
NFP Consulting Resources, Inc.

Decisions related to acceptance of out of the ordinary donations and pledges can be among the most challenging issues nonprofit professionals and leaders have to address, related to fundraising.

Have you experienced any of the following issues?

How do you deal with a donation from someone who is well known and of “ill repute” in the community who has made their fortune from being a slumlord and now is offering you a lead gift to your capital campaign with the proviso that the building be named after him?

How do you avoid accepting a gift of real property that may cost you more in the long run than it is worth due to zoning, structural concerns, carrying expenses, legal or tax issues?

What “strings” attached to gifts related to its use, recognition, investment, etc. are you willing to accept?

What type of assets are you willing to accept? (collectibles, art, autos, boats, jewelry, privately held stock, real estate, etc.)

Are you willing to accept life insurance policies which may require future premium payments?

Are you willing to accept “split interest” gifts?

Do you sell all stock donations immediately, hold them as investments or make decisions on a case by case basis? What guidance is given to those making day to day decisions?

Who in your organization can make a decision not to accept a gift?

How do you recognize testamentary gifts, especially those which may not materialize due to the terms of the gift? What about a testamentary gift where the donor or his/her family is able to change the beneficiary or amounts at a future date?

When there is a need to make an “exception” what process is used to authorize a decision which may not be covered clearly by established policy or practice?

These and similar issues occur more frequently than one might expect as part of the ongoing fundraising and development efforts of nonprofits. The type and frequency of these issues may vary from one nonprofit to another, but all nonprofits engaged in fundraising need to address gift acceptance.

If you do not have a policy in place to establish guidelines, practices and procedures for your staff and volunteers, you are leaving yourself vulnerable to problems, potential conflict with donors and liability to your organization.

There are many sample policies online which can be of assistance to you if you do not already have an established policy. If you do have one, it should be reviewed to make sure it covers conditions that could impact your organization. Review of policies and input from legal counsel can be most helpful.

The CEO/Executive Director should also seek input from fundraising staff and volunteers. The CEO/Executive Director should then engage the Board Chairman for input so that a policy, or revisions to the existing policy, can be taken to the Board of Directors for review and approval.

Do not wait until you have to deal with issues related to a specific gift before you develop gift acceptance policies! Make sure you have an established gift acceptance policy and committee to which staff and/or volunteers can bring unique concerns which need to be addressed. By planning, thinking and acting smart, you can minimize, if not avoid, many of the problems other nonprofits have faced in the past.

Before you start a fundraising campaign

2009-11-30T08:31:00.000-08:00

The Pre-Campaign Planning Study
By Norman Olshansky: President
NFP Consulting Resources, Inc.

All too often, nonprofit organizations jump into fundraising campaigns without proper preparation and without a well thought out campaign plan. Initial volunteer passion and enthusiasm frequently results in a “ready-fire-aim” mentality. To achieve goals and “hit your targets”, it is critical to take time to properly “aim” before initiating your campaign. Whether you are getting ready to plan your next annual campaign, special event, capital or endowment initiative, there are several critical aspects of any fundraising initiative which should be addressed in order to develop a useful and realistic campaign plan. Answers to the following questions can help provide important information you will need to begin the planning process.

Do you have a compelling case for support?
Why are funds needed? What will be accomplished with gifts to the campaign? How will it improve your organization? Will it provide better service delivery, more clients served, better return on investment, improved facilities, opportunities for expansion, improved quality, etc.?

How much do you need to accomplish your goals?
What is your campaign goal? What are the components that contribute to the costs? Have you taken into account all of the projected expenses related to the project? (Staff costs, operations, administration, overhead, fundraising, marketing, events, recognition, reserves for uncollectible pledges, and if applicable, finance costs, capital costs, business interruption expenses, capital reserves, etc.)

Have you identified leadership?
Is your Board fully behind the campaign? Will they personally participate as donors and solicitors on behalf of the campaign? The key to success will be your volunteer and staff leadership. Do you have the right people in place to achieve your goals? Will they have sufficient time to devote to the effort? If you do not have the right leadership, what are your plans to identify and recruit additional leadership and/or staff?

Will you be able to engage and obtain support from your existing donors?
Do they know about your plans? Are they supportive of your case for support? How can you engage, cultivate them and create enthusiasm for your project? Have you identified new potential donors? If not, what are your plans to identify and cultivate new prospects?

What are the internal factors that could impact your success?
Do you have internal systems, staff and back office supports that will be required? Is your database current and able to support your efforts? Do you have the initial capital and cash flow to support your efforts? What have you learned from your previous fundraising activities? What are mistakes that have been made in the past that need to be avoided in the future and what needs to be done to improve on past fundraising efforts?

What are the external factors that could impact your success?
What has been the experience of other nonprofits who have initiated similar campaigns? Are there other competing campaigns underway or about to begin that could negatively impact your efforts? What is the image of your organization in the community? What are potential issues that could derail your efforts?

Do you have a sufficient prospect base to achieve your goals?
Based upon your goal, how many prospects will you need at each level of giving to produce the results needed? What is your prospect base? Have you developed a gift chart/pyramid that reflects your goal? What percentage of your campaign will need to come from leadership gifts? Do you have a sufficient number of prospects to reach your goal?

What are the key policy and procedural decisions which need to be addressed early in the planning process, such as:
A. Governance and Committee Structure
B: Engagement, coordination and involvement of fundraising plans with
construction, finance/budgeting, and marketing
C. Recognition of donors and volunteers
D. Decision Making Process-Authority and Accountability
E. Gift acceptance
F. Methods of giving
G. Length of payout
H. Reporting and Accountability
I. Pledge/gift documentation, acknowledgement, billing, and receipting
J. Acknowledgement of in kind donations
K. Staff assignments and accountability

Have you evaluated and prioritized your plans based on the best return on investment of your organization's time and resources, both human and financial?

Fundraising is both art and science. Success requires both.

There are definite processes, sequential steps, ethics, legal guidelines, tax laws, accounting and other requirements that need to be followed to achieve success. This is the science of fundraising. Just, if not more important, is the art of fundraising which focuses on relationships, personality, leadership, engagement and follow through.

Fundraising Axioms: Simplified

2009-09-20T11:46:00.000-07:00

10 Basic Fundraising Axioms: Simplified

Yes, science, technology and skill sets are necessary to be successful as a fundraiser for nonprofit organizations. However, there are also several very basic axioms which, if followed, will greatly increase your success.

You don’t get - if you don’t ask

Being good at providing services and programs does not automatically bring in contributions. It’s relatively easy to identify prospects who care about your mission, have great capacity and are knowledgeable about your organization. However, they are not going to become donors until they are asked. Asking can be in many forms. For major gifts, a personal “face to face” request to a prospect, to consider a suggested gift amount, provides the best return on investment. However, grants, group meetings with a general request for donations, events and direct mail, can also be utilized as a method to make an ask.

Connect to hearts and minds before you connect to wallets

People are not going to make significant contributions to an organization that is of no interest and about which they have no personal connection or feelings. The ability to secure a gift and the size of the gift will be enhanced if the donor is educated about the organization, “feels” the importance of what is being accomplished and has a relationship (directly or indirectly) with the organization, solicitor, project or program. Cultivation of those relationships provides added value to the donor and organization.

Fundraising is both art and science. Success requires both.

There are definite processes, sequential steps, ethics, legal guidelines, tax laws, accounting and other requirements that need to be followed to be successful within a nonprofit engaged in fundraising. This is the science of fundraising. Just, if not more important, is the art of fundraising which focuses on relationships, personality, leadership, engagement and follow through.

The 80/20 rule is now 90/10 and applies to fundraising.

80% to 90% of funds raised typically comes from 10%-20% of donors. Most nonprofits obtain the largest share of their philanthropic income from major gift donors. Time spent on major gift solicitation provides the greatest return on investment of nonprofit resources both human and financial.

The quality of a gift is directly related to the quality of the relationship between the solicitor and prospect

Major prospects deserve personal attention. People give to people. Your relationship to the prospect has a direct impact on their gift. The more they know and trust the solicitor, the more comfortable they will be making a major gift. They need to know that they are getting accurate, current and reliable information about the organization and the impact of their giving. They also will be more comfortable knowing that the solicitor, with whom they have a relationship, is likely to be more familiar with their background, interests and abilities than would a stranger.

Avoid the ready, fire, aim temptation

Too often the desire - need to raise funds creates a sense of urgency which translates into volunteers and staff wanting to get started and solicit as many people as they can, as broadly and quickly as possible. Fundraising without a plan, organization, and discipline is an invitation to failure. There needs to be proper organization, leadership, communications, marketing, budgeting, back office systems and a well defined case for support. A campaign fundraising plan is critical and should be integrated within the overall business plan of the nonprofit. Fundraising should be conducted sequentially (top down and inside out). Initially the campaign should focus on the largest potential gifts and existing leadership of the organization. Events, group meetings and mass appeals should not be utilized until major gift solicitations have been addressed.

Leadership sets the example.

Before making their commitments, many major donors, corporations and foundations want to know that the leadership of the organization has demonstrated its fiduciary responsibilities, not only through stewardship of funds and budgets but also as donors. Early in any fundraising effort, Boards and leadership within the organization should be asked to participate as donors, to the best of their abilities. Full participation is as important, if not more so, than the total dollars raised from leadership.

You can never thank a donor, volunteer or staff member too often. They are your keys to success.

Whether it be stewardship, public recognition, ongoing communication, personal thank yous, gifts, member benefits, etc………the more you are in touch with donors, volunteers and staff in a way that demonstrates your appreciation, the more likely they will be there for you when you need them in the future.

Donors expect and deserve a good return on their charitable gifts/investments

Treat your donors as if they were major stockholders. They deserve to know how their investments in your organization are working and if the funds they have donated have accomplished the purposes for which they were given. The more you can demonstrate a good return on their investment, the more likely they will contribute in the future, and be a positive advocate for your organization in the community you serve.

Don’t do anything that you wouldn’t want to read about on the front page of the newspaper.

Nonprofits must conduct themselves ethically and appropriately if they are to maintain the trust and confidence of their supporters and those they serve. When faced with difficult decisions, nonprofits should take the moral high ground and work diligently to ensure that a culture is established that promotes ethical behavior at every level within the organization. Challenges will occur. Whether related to gift acceptance issues, donor requests for special treatment, financial management, reporting, disclosures, personality conflicts or other issues, every nonprofit will have to confront delicate and potentially controversial problems. How problems and challenges are addressed is a true test an organization’s strength and effectiveness.

Fundraising Return on Investment

2009-08-24T14:45:00.000-07:00

By Norman Olshansky: President NFP Consulting Resources, Inc.

You are an executive or key volunteer leader of a nonprofit who has been in your position less than a year. You know the honeymoon is over. One of the many issues you want to address is the concern that so much of your fundraising time, energy and resources are spent planning fundraising events. It seems like the mission of your agency has shifted, and staff as well as volunteers spend more time planning parties than delivering service.

Fundraising events can and do play an important role in many not for profits. However, too many organizations do not fully understand how to maximize their fundraising efforts.

This may seem like blasphemy to some, but events should primarily be utilized to attract new donors, cultivate existing donors and volunteers, say thank you to your donors, volunteers and staff, or to provide community education. For most organizations, events (with a few notable exceptions) should not be undertaken if they are expected to provide a good financial return on the organization’s investment of time and resources to produce the event.

According to the AAFRC Trust for Philanthropy, 78.3% of all charitable contributions come from individuals. It is also well known that 80%-90% of all funds raised from those individuals are from the top 10% of donors. In other words, major giving is where it’s at. This is not to preclude the importance of broad based memberships and giving at all levels, but rather to focus your fundraising energies on the best return on investment (ROI) of time, staff, volunteers, and other resources, facilities, etc.

Fundraising Costs and Return on Investment – National Averages

Direct mail to general lists
(non donors) Cost 115% ROI 15%
Special Events Cost 50% ROI 50%
Planned Giving Cost 25% ROI 75%
Direct mail
(prior donors) Cost 20% ROI 80%
Foundations/Corporations Cost 20% ROI 80%
Major Gifts Cost 5-10% ROI 90-95%

National Average,
all methods: Cost 20% ROI 80%
(Based on: James Greenfield, Fund Raising: Evaluating and Managing the Fund Development Process)

The chart indicates that you would need to spend $1.15 in order to raise $1.00 through direct mailings to general lists. To solicit major gifts, you would spend 5 to 10 cents to raise $1.00.

When calculating ROI, keep in mind the indirect costs associated with fundraising. For example staff costs are not just for those who are directly involved with fundraising. Other staff and administration typically are involved as well, albeit to a lesser extent. The costs associated with staff and volunteer time, facility usage, overhead expenses, as well as out of pocket direct costs should all be factored into determining ROI.

From an ROI perspective, it costs less and produces more income to raise major gifts than to use other methods of fundraising. While a variety of methods should be used in each organization, all too often, nonprofits tend to utilize, to a disproportionate degree, those methods which produce the lower returns, (events and direct mail) rather than those that are more effective (major gifts).

Special events can build excitement, engage people, provide enjoyable opportunities for volunteers but they typically cost too much to produce to justify the amount of money they raise. As a result, most organizations are reducing the number of events they hold and are putting more emphasis on major gifts and planned giving.

Using the return on investment approach to analyze fundraising performance is an excellent way to engage leadership and staff on how best to plan your future fundraising activities. You will find that Board members who have for-profit business experience will likely better understand such an approach to planning and resource allocation.

Best Kept Secret

2009-07-21T14:19:00.000-07:00

Best Kept Secret in the Nonprofit Sector
Norman Olshansky: President
NFP Consulting Resources, Inc.

It seems strange to me that one of the best resources for nonprofit leaders and professionals, has such a low profile.

This resource was founded in 1992 by an individual who saw a need for nonprofit leaders and professionals to “connect, share and discuss pertinent challenges and issues”.

Even though over 100,000 people are subscribers today, few in our sector know about it. This resource has listserves, newsletters and courses for those who are interested or involved in nonprofit fundraising, technology, grants, boards, planned giving, foundations, governance, management, legal issues, major gifts, capital campaigns, consulting and more. Do you have an interest in nonprofit public relations, human resources, risk management, events, research, stewardship, accounting, or volunteers? You can connect with thousands of others who want to share ideas, answer questions, and provide support for each other. This is a resource where you will find newcomers and seasoned professionals.

If you are looking for reviews of new books related to philanthropy and nonprofits, they provide that too.

Do you prefer to chat online, communicate by video, or audio? You can do all three through this resource.

Looking for a career in the nonprofit sector? Yes, they have job listings too.

I have been an avid fan and subscriber for years and find it to be an excellent resource for those who are serious about their involvement within the nonprofit sector.

It started and continues today under the leadership of Steve Nill, lawyer, technology guru and nonprofit consultant. I still don’t know how they are able to provide such an extensive service at such a low subscription. They do not advertise broadly which is why you may not have heard about them.

Too good to be true? Not at all. Check out www.CharityChannel.com

Collaboration

2009-05-27T09:20:00.000-07:00

Background:

For many years, funders of charitable organizations have encouraged nonprofits to address more of their time and resources towards:
A. Articulation and implementation of a clear vision and business plan
B. Capacity Building
C. Achieving a better return on investment on their charitable dollars
D. More focus on long term sustainability
E. Avoidance of unnecessary duplication with what is offered by other similar nonprofits
F. Collaboration with other organizations wherever possible
G. Increase Board/Staff Leadership development

Given today’s grim economic environment, poor investment performance and limited resources, funders are even more focused on ways to maximize the impact of their limited resources.

Nonprofits, have already been impacted by the declining economy and know that the conditions are likely to get worse before they get better. They are looking for ways to address flat or declining campaigns, the need to cut costs, increase efficiencies and find new ways to address total financial resource development.

The current environment can be used as a catalyst for funders and nonprofits to work together to address their mutual interests. The following are a few examples of areas of potential collaboration.

Facilities Management
Accounting, Bookkeeping and Auditing
Investing and money management
Fundraising – especially for capital and endowment
Staff and Leadership Development
Purchasing
Energy
Fuel/Transportation
Insurance
Marketing and Public Relations
Human Resources, and staff Recruitment
Safety, Security and Risk Management
Information systems and Technology

Many attempts to bring nonprofits together on collaborative initiatives have failed due to initial lack of trust between and among participants and a feeling that participation could result in a loss of control over their own destinies.

How collaboration is developed is the key to success.

Implementation Process

We recommend the following steps and are available to act as consultant/facilitators/project managers to the process. (Hereafter identified as “professional”)

The initial introductory process becomes critical to the creation of collaborative ventures.

There needs to be a funding organization or group of funding organizations which agrees to be the initiator of the process and take on this project. They need to be a significant player in the community and be respected by the organizations which will eventually be involved. The funding organization(s) provide initial seed money to retain a professional who will be the point person to work with participants. They provide the umbrella of legitimacy, seriousness and importance to the venture. They oversee the work of the professional.
A “professional”needs to be engaged who has experience working on collaborative ventures with nonprofits and is seen by potential participating organizations as highly professional, empathetic to their needs and impartial.
Initially, a group of organizations, which have shared characteristics, should be identified by the facilitating organization with input from the “consultant”. Those similarities could be mission, size, location, relationship to facilitating group and/or type of service provided.
The first group could be seen as a pilot or test group which, if successful, could expand at a future date.
The facilitating organization must be willing to step back and let participants determine if and how they want to proceed.
The “professional” initially meets with recommended organizational Executives individually, to float the general idea that the facilitating organization(s) have proposed to encourage collaboration. Examples of what has been done in other communities is shared and a request is made for them to attend an initial meeting with other agency execs to determine if such an effort makes sense and the best focus area(s) for such a collaboration. It is important that the top professional executive of each organization be the initial contact and participate in the collaborative process with his/her peers from the other organizations. During the initial private meeting, the “professional” answers basic questions about the process and assures the agency director that there will be no requests for commitments from agencies until or unless a plan has been developed by the group that has the approval of each of the participants and their leadership.
An initial group meeting of the organization Executives, who are willing to explore the idea, is convened by the facilitating organization(s) and led by the “professional” with no hidden agendas. Care must be taken that no one organization take over the process or become the “gorilla in the room”.
Patience and time is required to make sure that all questions, concerns and details are addressed and processed with each of the Executives and that they are given the time to review the ideas proposed with their own leadership.
Anything that is proposed must pass the test that it will benefit all participants, will be implemented in a fair manner, that all parties will have a say in the project and that there will be a large enough return on investment on time and resources to warrant going forward.
It is critical that whatever is agreed upon also include the need for all of the participating organizations to have “skin in the game”, including financial and human resources commensurate with their size and abilities.
Ultimately, whatever is agreed to must be formalized in memorandum of understandings between the facilitating organization(s), participating organizations and each other. These agreements will need to be approved by each of the participant boards.

The initial collaboration should be one that is not too complex/complicated and has a high degree of potential for success. Once organizations have participated in a successful collaboration they are more willing to consider ventures that may contain more risk but which also can provide greater reward.

Ten Tips for Soliciting Major Gifts for Your Congregation

2009-05-02T19:44:00.000-07:00

Ten Tips for Soliciting Major Gifts for Your Congregation

By: Norman Olshansky

If your congregation needs significant financial support, beyond weekly offerings and operating revenues, for a capital campaign or other special project, it is time to develop and implement a major gifts campaign.

This article shares tips that can be utilized to train and support leadership, staff, and clergy to become better solicitors of major gifts.

1. Do Your Homework

Make sure you are familiar with the needs, programs, and importance of the project. Review your congregation's "Points of Pride" (major accomplishments), and, if possible, be prepared to share a personal experience that impressed you about the special ministry that your congregation provides.

Gather important information about your prospect. To the best of your ability, together with other leadership and staff, develop a profile of the prospect:

* What are her/his interests?

* What has been their history within the congregation?

* What have they contributed to previously?

* What is the largest gift they have ever given?

* Do they give individually or through their company or family foundation?

* Do they have a donor advised fund with a local Community Foundation? If so, how large is their fund?

* Are they candidates for estate planning and/or deferred gift discussions?

* Who are their key financial advisors?

* Have they recently sold a business or inherited significant resources?

* How is their business doing?

* Do they have a loved one who may be appropriate for memorializing or honoring with a gift?

* Are there other people who can be supportive with the solicitation who have special relationships with the prospect?

* What are the likely concerns the prospects might raise in the solicitation?

* Determine in advance what would be the best setting to conduct the initial meeting.

* Would it be helpful to have clergy or others participate in the solicitation?

* What materials, handouts, or visuals would be helpful to have for the solicitation?

* Finally, establish a "rating" for the individual. How much should you ask them to consider as a gift?

2. Leaders Lead

As a leader of the campaign and congregation, it is important that you make your own gift prior to soliciting others. It will be easier to obtain a quality gift from your prospects if you are comfortable that your gift is also credible and a quality one, based on your own personal circumstances. The ability to share the fact that you made your gift, when you are soliciting, will give the prospect more confidence in your support and leadership.

Prospects will take into consideration what leadership has given in determining their own gifts. Initial gifts will be "yardsticks" for giving by those who follow. Remember that you are representing the congregation, and, therefore, you need to be a good role model in your relationships, communications, and giving.

3. Personalize the Solicitation

Major gift solicitations should not be conducted over the phone. Large gifts are often not closed with one visit. Family members, financial advisors, and/or business partners may need to be involved prior to a decision. Obviously, if you know who the key decision-makers are (if they are not your prospect), they should be included in the solicitation meeting.

A major part of the success of a solicitation is the chemistry of the relationship between the solicitor(s) and prospect, as well as how one is asked. If at all possible, at least two solicitors should participate in the solicitation. It demonstrates to the prospect the importance you have put on their gift, it shows that there are others equally committed to the success of the campaign, and it provides for different perspectives to be heard.

The old saying that two heads are better than one also applies to solicitations. While one person is answering questions or explaining the need, the other person can better observe responses, body language, etc. Evaluating the solicitation and together determining best approaches for follow-up are enhanced with multiple solicitors.

4. The Appointment

The most critical aspect of major gift solicitations is getting the appointment. Be enthusiastic and let the prospect know that you want to share with them some exciting information about the congregation. Note that the project is near and dear to you and that you would like to solicit their advice, involvement, and support. Make sure that you make the appointment at a time and place that is convenient for both the prospect and solicitors.

Also, try to schedule at least 30 to 45 minutes for the initial meeting. Try to avoid an environment where others may overhear conversation or where there will be distractions. If the prospect asks if you are looking for money from them, be candid and enthusiastic, such as, ''Absolutely. I would like to tell you about what's happening with the congregation and have you join me as a supporter this year. But, just as important, we would like to get your input on additional ways we can succeed in our efforts on behalf of our congregation, which is doing such amazing things.''

Make it clear that you will be asking for their support.

5. Engage the Prospect

Do not try to close the gift too quickly. Share the mission, services, potential outcomes, points of pride, and needs of the project and congregation. While informing the prospect of the needs, you are also demonstrating the commitment of leadership. Donors want to be confident that the congregation and the project are being led by knowledgeable and committed leadership. Enthusiasm is contagious, and so is negativity. It's your choice.

6. The Meeting

Take a few minutes to break the ice and to establish a comfortable environment. Introduce yourself and those with you, through your involvement and commitment to the congregation. In a concise manner, share with the prospect what the congregation has accomplished. Refer to the Points of Pride. Emphasize the opportunities for the future based on the new vision and strategic plan for expansion or further development of the congregation. Discuss the importance of their participation, in addition to their financial support. The congregation needs their advice, expertise, identification of new leadership, and introduction to other prospective donors. Once you have shared your enthusiasm about the project and demonstrated the need, it is time to request the gift.

7. The Ask

Using the number that was agreed upon during the rating session (see item #1), the request can be introduced as follows: "We would appreciate if you would consider a gift of $ ___________ to the congregation's campaign." (If there are significant projects/or programs that need to be funded at the level of the request, mention the one or two that you think would appeal to the prospective donor.)

Once you have asked for the gift, it is time to be silent and let the prospect respond with questions or other comments. There is no need ever to apologize for asking for a gift. The individuals you are approaching expect you to ask, have likely been asked before by many other charitable organizations, and have, at times, been solicitors themselves.

8. Questions, Objections, and Dialogue

Answer the questions as best you can, but do not get into a debate. If you are unsure as to how to properly answer a specific question, tell the prospect you will find out the answer and get back to them or have one of the other leaders or staff provide them with the details. (Make sure you or someone on staff follows up promptly.)

If the donor offers a gift significantly lower than what was requested, you can supportively ask if, by spreading the gift over time, could it be more significant, or if it is structured as a deferred gift, with certain tax benefits, would they consider a larger amount? Do not press if they indicate that what they had offered is the limit to what they want to do. Thank them as enthusiastically as possible and ask them to complete the pledge card you have developed for the campaign.
If they indicate that they want some time to think about it and discuss it with others, thank them for their consideration and request a specific time when you can get back to them for a response. Think of yourself as an enthusiastic and committed supporter; you are not "begging." Make sure that you are a good listener as well as a good presenter.

Let your prospect know how important their support is to the congregation and ask them if they can help you to engage others who may also be interested and have financial capacity.

Once the gift is closed, stress the importance of the congregation's need for cash by the end of the year. Thank them and have them complete the pledge card, which should also have information on how and when they will be able to make payments.

9. Follow Up

Make sure that appropriate staff and/or leadership are briefed on your solicitation, any new leads, and that there are follow-up communications thanking the prospect, even if a gift was not made. A handwritten thank-you note, from the individual who initially set up the appointment and/or was the solicitor, in addition to whatever is sent officially by the congregation, is always appreciated. Solicitations should be a positive experience for the prospect. A successful solicitation can set the stage for future involvement. An unsuccessful solicitation can turn off a donor to the campaign, as well as to future potential for support of the congregation.

10. Remember the Basics

There are several axioms that are basic to major gift fundraising:* Connect to your congregants' hearts and minds before you connect to their wallets.

* You don't get if you don't ask.

* Fundraising is both an art and science. Success requires both.

* The quality of a gift is directly related to the quality of the relationship between the solicitor (the person who asks) and the prospect (potential donor).

* Avoid the ready, fire, aim temptation. Planning and patience is very important.

* You can never thank a donor, volunteer or staff member too often. They are your keys to success.

* Donors expect and deserve a good return on their gifts to the congregation. They want to know their gifts are spent wisely and effectively.

* 80-90% of your special campaign will likely come from major gifts (10-20% of the donors).

Keep in mind that people are more likely to contribute to make dreams happen than to solve problems. The more you can connect the donor to the congregation and project mission in their hearts and minds, the more you are likely to connect through their wallets.

Norman Olshansky is president of NFP Consulting Resources, Inc., a full service consulting firm serving the nonprofit sector, www.nfpconsulting.com.

Marketing Planned Gifts

2009-04-01T09:05:00.000-07:00

Norman Olshansky: President
NFP Consulting Resources, Inc.

Nonprofits are facing increased competition for and more challenges related to annual fundraising for operations. Organizations which have strong endowments have been able to weather the storm. Today, every nonprofit organization is looking to develop endowments. Those who have had the most success have demonstrated that endowment fundraising is more about long term relationships and stewardship than advertising and print marketing.

Prime prospects for planned gifts, bequests and legacy giving are not necessarily the “major annual donors”. The best prospects for endowment development are individuals who have a long history with the organization, are over 55 years old and who have reasonable net worth. Many of these prospects are living off of unearned income, have concerns about their ability to provide for themselves long term and or other family members. Their net worth may primarily be in property or assets which do not produce income. They are usually individuals who have been small or moderate long term contributors to the organization.

Many organizations are not in a position to have full time professional planned giving staff. However, volunteers can be very effective in opening doors for planned giving which can be followed up by financial advisors or others. Many small organizations are collaborating with community foundations or other nonprofits to share professional resources related to planned giving.

With or without professional staff, the following marketing strategy has proven very successful and can be modified for organizations depending on size and scope of service.

Create a giving club for long term donors. It can be called Org ABC Heroes, Golden Givers, Org. ABC Angels, etc. Note that club members will be invited to a recognition event each year (regardless of how much they give each year). A donor of $25 each year will be recognized as much as a donor of $25,000 each year. The most honored donors will be those who have given the longest. A special program that highlights the history and current involvement of the organization can be part of each event.

Identify those donors to your organization who have been contributors for more than 20 years. (fewer years if your your organization has not been in operation that long) If you do not have good records of historical giving, let all donors self identify for membership in the club. To be a member, they must meet the threshold (number of years) of giving.

Promote the club in your newsletter and annual reports. In each edition of your newsletter show a photo of a club member or couple with a brief caption/quote as to why they have been a supporter for so long.

To obtain the photo and quote, have a planned giving staff person or volunteer solicitor be the one who interviews the individual(s) for the newsletter. Get the prospect to tell you their unique story of involvement and caring for the organization, how the got involved and why they have been such committed long term supporters. At the conclusion of the interview, comment on how impressed you are with their commitment and caring. Either have them give you a photo to use or have one taken.

Ask if they have ever considered making a legacy gift to the organization that will serve as a gift in perpetuity. Typically, they will respond that they are not wealthy and don’t have the ability to make such a gift.

The staff person should respond as follows:
“If you were in a position to make a legacy gift, and had the resources, would you want to make a legacy gift in perpetuity to the ABC Organization?”

In most cases (not all) the answer would be that they would if they could, but they can’t. That opens the door for the interviewer to respond as follows:

“If we could show you a way that would enable you to make a legacy gift, without any cash out of your pocket and the possibility to receive income for the rest of your life greater than you are earning from some of your investments, would you be interested in learning more?

In most cases, long term supporters will be curious as to what you are suggesting and will be willing to learn more.

If the interviewer is a planned giving professional they can continue the
conversation. If it’s a volunteer, they should ask if it’s ok to have one of the
organization’s advisors to set up a time to share with the prospect some of the
ways they can make a legacy gift and also receive income and significant tax
advantages.

The next step would be to determine what are the primary assets of the prospect
(residence, collectibles, life insurance, other appreciated assets, etc). In addition, a
determination should be made regarding investments in low performing
instruments. (money market funds, CD’s, bonds, etc.) With that information, the
professional/advisor can suggest some of the techniques that would best fit for
that individual. (Gift annuities, trusts, life insurance, bequests, etc.)

It is important to encourage the prospect to engage their own financial advisors to
make sure what is being discussed is appropriate based on more detailed
knowledge of their unique financial situation and needs.

The professional/advisor should offer to contact the prospects financial advisor
once the prospect has had a chance to initiate the discussion with him/her.

Follow up is important. The photo and caption should be used regardless of
response from the prospect regarding legacy giving. Timely follow up to provide
information and initiate discussions with advisors is critical.

My experience working with organizations which have used this strategy has indicated that at least 2 out of 10 prospect contacts/interviews of club members result in some form of planned gift.

Recognition and ongoing stewardship of all gifts is an important component of any planned giving program. Relationships make the difference.

Professional Development Through Peer Engagement

2009-03-03T19:14:00.000-08:00

Professional Development Through Peer Engagement
Nonprofit Professional Development:
Stretch Your Strategic Capabilities through Peer Engagement
By Norman Olshansky: President
NFP Consulting Resources, Inc.

A true professional is always looking for ways to improve their practice, to be more effective and to keep abreast of new trends which could affect their work. Nonprofit professional work can often be lonely, with few opportunities to exchange ideas with others who have similar backgrounds and responsibilities. While there are many online networks and professional associations, they are usually accessed from a “distance” and opportunities to attend conferences and seminars, for face to face exchanges are often limited due to distance and cost.

Some have found mentors with whom they can truly let their hair down and confidentially discuss the issues and challenges they face professionally and personally as part of their nonprofit work. Unfortunately, too few are able to engage in such a relationship.

For many years I have been intrigued by The Executive Committee (TEC) groups within the for profit world. TEC has been around since 1957. Its successor organization is Vistage International. (http://www.vistage.com/)

Groups of CEO’s or other similarly employed corporate executives are assigned a facilitator/coach who meets with the group monthly for a full day and with each individual member of the group in between group meetings for a two hour session. The facilitator/coach is also available by phone and email for support. Groups also participate in multiple workshops during the year with expert Vistage resource speakers.

Needless to say, the program is expensive. They charge about $12,000/year per participant. Wouldn’t it be helpful if we created a similar model for the nonprofit sector, (but less involved and expensive). Why couldn’t a local Nonprofit Executive Group, Fundraising, CFO, Grantwriting, Marketing or other focus group of professionals be formed in your city or region. Individuals who participate should be serious about wanting to learn and grow and be willing/able to take the time necessary to participate.

Each group should be no larger than 8-10 individuals. While we may not need to be as time intensive as the TEC groups, participants should make the commitment of time and engagement a high priority, if it is to be successful. The participants learn from each other in addition to the input from the coach/facilitator. Speakers can be brought into the group meetings periodically to focus on areas the group wants to address. The group members bond with each other and are in touch with each other between meetings for additional supports and help with problem solving.

The participants determine what needs to be discussed, what skills and resources can be shared and what topics should be covered. Topics often go beyond best practice exchanges, skill development and/or knowledge subjects. The groups can be helpful with each other on issues related to personnel, interpersonal relations, time management, supervision, self motivation and so much more. Sessions can cover any or all aspects of nonprofit leadership and management based upon the needs of the participants. Ground rules for participation need to be developed and enforced related to attendance, who can participate, doing homework, confidentiality and financial commitment.

Ideally the group should hire a facilitator/consultant to provide leadership, organize sessions and guest speakers. The ideal facilitator/consultant could also act as a coach, be in touch with participants between meetings and enhance the quality of participation based on their own expertise and reputation within the nonprofit community. The cost of the facilitator/consultant could be shared by the participants.

Given the value of such groups, local foundations/funders may see this as a tremendous opportunity to promote capacity building and professional leadership development.

Whether it be though ongoing mentoring, coaching or “TEC” style experiences, professional development needs to be a high priority for all of us involved professionally within the nonprofit sector.

Nonprofit Lexicon

2009-03-03T18:53:00.000-08:00

My work as a nonprofit consultant and fundraiser has enabled me to work with a wide range of individuals and organizations from the very sophisticated to the neophite. Frequently I will work with people (volunteers and professionals)who are not familiar with some of the nonprofit management and fundraising language which I use. I decided several years ago to create a lexicon of nonprofit terms which I could share with my clients and those with whom I worked. I didn't want to produce a dictionary but rather, explanations that could be easily shared and understood.

In an effort to improve on my initial lexicon, I have posted it here so that readers can make suggestions for additions, changes, clarifications etc. Your input will be greatly appreciated. Comments can be sent directly to NFPConsultingResources@gmail.com

Norman Olshansky’s Nonprofit Fundraising Lexicon

501(c)(3): Organizations which qualify with the U.S. Department of the Treasury (IRS)that are nonprofit entities to which contributions are tax deductible to the extent permitted by law.

501(c)(4): Organizations which qualify with the U.S. Department of the Treasury (IRS)that are community or fraternal organizations that are not solely charitable.

80/20 Rule: 80% of dollars raised are obtained from 20% of all donors who contribute. For capital, endowment and major gift campaigns the relationship is often 90/10.

990/Form: An Internal Revenue Service form that public charities must file each year to prove compliance with tax laws.

Advanced Leadership Gift Phase of Capital Campaign:(Quiet Phase) Initial effort of campaign directed at the top prospects-those capable of giving major gifts in the 5, 6, and 7figure category. This is a targeted phase of the campaign and does not involve mass solicitations. The campaign is focused on face-to-face solicitations of the top 100 prospects

AGI (Adjusted Gross Income): includes income from salary and wages, investments and capital gains.

ASK: The request for a contribution or pledge. Most effective ask is when adequate research has been conducted on the prospect and a specific amount is presented for the prospect to consider. See article on major gift solicitation at http://nfpconsulting.blogspot.com

Assets: The amount of capital or principal money, stocks, bonds, real estate or other resources controlled by a person, association, corporation or foundation. Generally, in the case of foundations, assets are invested and the income is used to make grants.

Bequest: A gift of assets made at death by an individual through a will or trust.

Campaign Division: Group of volunteers who have been assigned to a targeted area or group of donors during the general Campaign, i.e. employee division, business division, physicians, neighborhood, etc.

Capital Campaign: A substantial fundraising effort intended to provide for major organizational needs, such as buildings, endowments or other major expenses.

Case Statement: What the campaign is all about....Features, benefits, Why, When, What, How

Charitable Lead Trust: This trust provides an income stream to a charity for a specified period of time. At the end of that period, trust assets are distributed to non charitable beneficiaries such as children or grandchildren. The donor is able to make gifts of assets to his/her heirs at favorable gift tax rates and remove assets from his/her estate while benefiting his/her favorite charity.

Charitable Remainder Trust: This trust provides an income stream to non charitable beneficiaries for a period of time. These beneficiaries can include the donor, his/her spouse, and/or their children. At the end of that period, the trust assets are distributed to a charity. The donor receives an immediate tax deduction, removes assets from his/her estate (thus eliminating estate taxes on those assets) and often increases the income stream produced by those assets while ultimately benefiting his/her favorite charity.

Community Foundation: A tax-exempt public organization serving a specific geographic area which raises funds, provides grants to nonprofit organizations and enables residents of that area to establish funds for charitable giving without the costs of establishing separate private foundations.

Corporate Foundation: A private philanthropic organization set up and funded by a corporation.

Corporation: A company or business which makes their contribution from their annual budget/revenues

Deferred Gift: A gift which is part of estate planning, trusts, annuities, bequest, etc. that is designated to the campaign but will not be available for use until after a set number of years or upon the donor’s death. Also known as a Planned Gift.

Designated Funds: A fund that is typically created to ensure that support will be provided to one or more specific charitable activities named by the donor. Designated funds often are endowed in perpetuity with the income used to support the organizations on an ongoing basis.

Donor: An individual or organization that makes a pledge, grant or contribution to the nonprofit.

Donor Advised Funds: A flexible tool for charitable giving, operating much like a personal or family foundation. Donors can contribute to their fund when it is most convenient and then recommend gifts over time to nonprofit organizations of their choice. The donor selects a fund name and investment strategy and then makes grants to organizations committed to the causes he or she cares about. Donors sometimes involve their children and grandchildren to share in a family tradition of giving. Typically donor advised funds are administered by Community Foundations. Also known as Philanthropic Funds.

Endowment: Money donated with the intention that it be invested to generate income for philanthropic purposes. The donor may require that the principal remain intact for a specific period of time or in perpetuity.

Field of Interest Funds: Donors can support an area of charitable interest, defined broadly (such as education) or narrowly (such as advanced vocal music training). Donors also can select a defined geographic area or specific community to benefit from their named fund. A donor would then establish a process to make gifts to organizations or projects doing work in this area. The donor can stay involved, appoint an advisory committee or leave the work to agency staff.

Foundation: A not for profit organization which is set up by individual, family, community or business for the purpose of distributing charitable gifts

General Campaign: Following the Advanced Leadership Gift Phase of a capital campaign, a broader campaign will take place, which goes out to specific constituencies (employees, doctors, businesses, geographic areas, Foundations, etc.) and then to the general public

Gift: Payment of cash, real property, irrevocable trusts, etc.

Gift Chart/Pyramid: Chart which shows how many prospects and closed gifts are needed at each level of giving to achieve a fundraising goal

Grant: An amount of money given to an organization or person in order to perform charitable exempt activities.

Grantee: The recipient of a grant. (Also known as the grant recipient or beneficiary.)

Grant Monitoring: Continuing evaluation of the progress of the programs funded by a donor in order to determine if the terms and conditions of the grant are being met and if the objectives of the grant are
being achieved.

In-kind Contribution: A contribution of equipment, supplies or other tangible resource as distinguished from monetary contribution. Some organizations also may donate the use of space or staff time as an in-kind contribution.

Letter of Intent: Signed, written document which details the level of gift, payment schedule, intentions, conditions, naming preferences, etc. of the donor

Leverage: A method of grant making designed to attract additional funding. Leverage occurs when an amount of money is given with the express purpose of attracting larger funding from other sources or of providing the organization with the tools it needs to raise other kinds of funds. Sometimes known as the "multiplier effect".

Life Income Plans: Planned gift arrangements offer a current income stream and a current tax deduction to the donor in exchange for an irrevocable commitment to a charitable purpose or purposes at some later date. The result may be an increase in current expendable income for a donor.

Major Gifts: Individual, Corporate or Foundation pledges and contributions of $????? and up which are paid off within agreed upon timeline. (Amount of gift varies from organization to organization based upon giving history and size of campaign goal.)

Mission Statement: A mission statement reflects an organization's core values and reason(s) for existing. It should capture what an organization does, why it does it, how it does it and for whom it does it. A mission statement broadly addresses the current and future purpose(s) of the organization.

Naming/Dedicatory Opportunity: Those physical buildings, rooms, structures, endowments, programs, etc. which have been assigned a dollar value which can be so identified with donors who contribute an amount equal to the designation. In addition to overall recognition, those who contribute for specific naming opportunities may have a plaque or other forms of recognition adjacent to their selection indicating the name of the donor and/or if it is a memorial or honorial gift

Planned Gift: See deferred gift above

Pledge: An amount that the donor agrees to contribute over a period of time or by a certain date

Principal: The dollar value of an asset. When used in relation to an endowment, it means the sum of the dollar values of all gifts to the endowment using the dollar value of each gift on the day the gift was completed.

Private Foundation: A 501(c)(3) organization that is originally funded from one source, that derives revenue from its earnings on investments and that makes grants to other charitable organizations as opposed to administering its own programs.

Prospect: An individual, Foundation, or Corporation who is identified as having capacity and
assigned for a solicitation

Rating: The dollar amount that is determined by the solicitor, leadership, and staff to be presented to the prospect for their consideration

Receipt: An official requirement for charities to acknowledge, with the amount, all gifts over $250 from any donor within the calendar year. Most charities provide a written acknowledgment for all gifts

Restricted Funds: Monies that must be used for a specific purpose or in a specific way by the recipient

RFP: An acronym for Request for Proposal. When the government or other organizations issue a new contract or grant program, it sends out RFPs to individuals, agencies or organizations that might be qualified to participate. The RFP lists project specifications and application procedures. While a few foundations occasionally use RFPs in specific fields, most prefer to consider proposals that are initiated by applicants or their own leadership.

ROI: Return on Investment - The value of effort when taking into account the time and cost of planning and producing the activity. For example:
Fundraising Costs and Return on Investment – National Averages

Method Cost Return on Investment
Direct mail to general lists (non donors) 115% -15%
Special Events 50% 50%
Planned Giving 25% 75%
Direct mail to prior donors 20% 80%
Foundations/Corporations 20% 80%
Major Gifts 5-10% 90-95%

National Average, all methods: 20% 80%

(Based on: James Greenfield, Fund-Raising: Evaluating and Managing the Fund
Development Process) See article “Fundraising Return on Investment” at http://nfpconsulting.blogspot.com

Site Visit: The donor or grantor's visit to the physical location of a grantee to meet with the grantee's staff, directors and/or clients. Often the grantor conducts an informal evaluation during this time.

Solicitation: The process (meeting) which takes place between the solicitor and the prospect at which time the request for support is made

Solicitor: The person who is assigned to ask someone to support the campaign

Steering Committee: The group of volunteer leaders who have been selected to oversee the overall Campaign

Stock Power Form: A form that transfers authority for transactions involving a stock from one party to another.

Suspect: An individual, Foundation, or Corporation who is identified as having capacity

Tax Exemption: IRS provides tax deductions for valid gifts to nonprofit organizations. Donors may not take deductions for gifts where they receive a benefit from the charity. For example, monies paid for a cruise or paid for a purchase at a charity auction would not be deductible even if the check for the cruise were made out to the charity. Monies paid “over” the fair market value are deductible.

Trust: A legal device used to set aside assets of one individual for the benefit of one or more persons or organizations.

Unrestricted Funds: Funds that allow the nonprofit to determine where grants will do the most good. Unrestricted funds offer maximum flexibility to react to changing needs in the community.

Venture Philanthropy: A model for charitable giving that arose in the 1990s, based on venture capitalism in the business world. The funder "invests" not just money but energy and expertise in the nonprofits they support. Generally, donors track their donations just as venture capitalists follow their investments with nonprofits asked to provide evidence of results and impact on a regular basis. Venture philanthropy is often associated with "new wealth" individuals and high tech entrepreneurs.