Articles From the June 1994 Unification News
Introduction to Fundraising
by Tom Froehlich
Compiled from required reading sources and class notes for the Development Director Certificate Program at the College of Professional Studies, University of San Francisco
Every not-for-profit organization has to fundraise. Fundraising is an interesting and quite complex art form. Its central force is people. The not-for-profit organization must involve itself with people on a constant and continuing basis if it is to justify its existence or, perhaps more important, ensure its future. As such, fundraising requires development and cultivation of a continuency (people) and is therefore an ideal tool for witnessing.
Philanthropy has become a serious business throughout the world- nowhere more so than in the United States. Fundraising programs are becoming central to the operations of educational, medical, research, service, social, and religious organizations and institutions.
The American people, as individuals, foudnations, and corporations, are responding to human and societal needs, giving more money to charitable causes today than at any other time in their history. By the mid-1980s more than 230 million Americans gave over $70 billion to charitable causes in one year. It is interesting to note that in 1981, approximately one-third of individual charitable donations came from households with income below $20,000. A 1993 estimate puts the amount of total philanthropic giving for 1992 to $124 billion. Here it is interesting to note that 81.9% of that money has been donated by living individuals, 6.6% came from bequests, 4.8% from corporations and 6.7% from foundations. All this may very well indicate that Americans are committed to preserving private philanthropy and that they are clearly a giving people in good and in bad times. However, most of the contributions given by individuals come from discretionary or disposable accounts. Nowadays people are not necessarily lowering their standard of living to be able to make these contributions.
Private philanthropy has been an expression of the American spirit since the early colonial period and is one of the most durable factors of American life. In his writings, Alexis de Tocqueville commented on the uniqueness of the American habits of private generosity. He was impresed by the willingness of the people to give their own funds for social improvements. He observed in his diary that, when Americans saw the need for a school or a hospital or a church or a cultural service, a few local citizens formed an "association" to meet the need, provide the leaders, and then support it.
The first settlers who came to America from England had lived through the years during which private gifts of English merchants and bankers had saved England from social dissolution. Upon their arrival in America, they and the Dutch settlers continued that pattern, building churches, schools, and colleges with their own money. Harvard University in Massachusetts is an example of how Americans contributed generously to provide their children with educational opportunities. Religious denominations soon became eager to build schools and colleges. Most private and many public educational institutions can trace their founding to denominational giving.
Systematic solicitation of the general public began in the early 1900s. Philanthropic giving was still the exclusive reserve of a selected group of America's wealthiest citizens. The "campaign method" of raising money by the YMCA movement changed all that. The campaigns grew out of the concern of many that they were spending too much time beggin for money. The solution was the campaign, staged with fixed goals and time limits, enabling the money-raising chore to be completed quickly. The campaign also introduced the sense-of-urgency factor. The American Red Cross campaigns established additional trends during World War I. Corporate philanthropy emerged, and foundation giving, spurred by the generosity of Andrew Carnegie and John D. Rockefeller, added impetus to fundraising programs.
During the past 50 years, the sector has grown at an astounding rate. In 1946, IRS reports were filed by just under 100,000 tax-exempt organizatons. By 1963, that number had risen to between 400,000 and 500,000 groups and since that time, the number has doubled. It is believed that there are now well over 1 million not-for-profit organizations registered in this country. About 98.5 million Americans volunteer for 15.7 billion hours every year.
Organizations of the independent sector came into existence for the purpose of responding to some facet of human or societal need. Through voluntary action, not-for-profit organizations offer services that government and private industry cannot or fail to provide. The United States has increasingly relied on not-for-profit organizations to provide needed public benefits, such as delivering services funded by tax moneys; representing the public interest to both government and business; attending to arts, culture, education, and other enrichment activities; and providing opportunities for self-help, charitable pursuits, and improvements in the quality of life. In recent years the call for philanthropic services has become even more pressing. This independent, not-for-profit sector embodies the American tradition of encouraging any person or group to take the initiative to speak, act, or organize for the public good.
Through the procession of the centuries, the thesis has been established that people want and have a need to give. They will give when they can be assured that these causes can demonstrate their worthiness and accountability in using the gift funds that they receive. However, recent trends indicate that people do not give to organizations anymore. They give to causes and results, or better, they give to people with causes and results. Most people who do not give say that this is because they have not been asked to give.
Ethical fundraising is the enabler, the activator of gift making. It must also be the conscience to the process. Responsible fundraising is that act and the tool that helps provide both individuals and organizations with the vision and opportunities to act on their impulses and interests and to meet the needs of their communities. Fundraising is at its best when it strives to match the needs of the not-for-profit organization with the contributor's need and desire to give.
Fundraising has many parts, each an essential element of the whole. Packaged together tightly, these elements project the total organization into the marketplace, where it can be judged for its relevance on the basis of the appropriateness of its case, the urgency of its needs, the effectiveness of the programs that will respond to these needs, and the quality of its governance and management.
Basic to all of this are the fundraising methods, or the "vehicles" as they are referred to in professional jargon. The basic methods are:
* the Annual Fund, which is a multi-faceted, year-round effort to meet the not-for-profit organization's general income needs;
* Direct Mail, which is concerned with acquiring contributors;
* Grantsmanship, which is the organized solicitation of every type of foundation;
* the Special Gift, or the solicitation of special-purpose gifts or "the big gift";
* the Capital Campaign, which raises funds-often over a set period of several years-to help meet the capital or asset-building needs of the organization;
* Endowments & Planned Giving, which accept gifts to underwrite the perpetuation of the organization from investment holdings, estates, bequests, wills, etc.
Relevant for most "Unification" not-for-profit organizations at this time might be the Annual Fund, Direct Mail, Grantsmanship and the Special Gift. The primary objectives of these vehicles should be the following:
* to get the gift, to get it repeated, and to get it upgraded;
* to build and develop a base of donors, and through this process to establish habits and patterns of giving;
* to raise annual unrestricted and restricted money;
* to inform, involve, and bond the continuency to the organization;
* to use the donor base as a vital source of information to idenitfy potential large donors;
* to promote giving habits that encourage the contributor to make capital and planned gifts; and
* to remain fully accountable to the constituency through annual reports.
Fundraising for all these worthwhile causes is the job of trained professionals working with dedicated volunteers who also have some experience in the art. Fundraising volunteers must be aware that gift making is based on a voluntary exchange. The reasons for making a gift are manifold. Such a reason might be societal recognition, the satisfcation of supporting a worthy cause, a feeling of importance, a feling of making a difference in resolving a problem, a sense of belonging, or a sense of "ownership" in a program dedicated to serving the public good. Giving is a privilege, not a nuisance or a burden. Stewardship nourishes the belief that people draw a creative energy, a sense of self-worth, a capacity to function productively from sources beyond themselves. As Unificationists we know that unselfish giving is essential for anyone and any country wanting to have that spiritual experience.
Rosso, Henry A., Achieving Excellence in Fund Raising, San Francisco: Jossey-Bass, 1991.
Burlingame, Dwight F. and Hulse, Lamont J., editors, Taking Fundraising Seriously, San Francisco: Jossey-Bass, 1991.
Broce, Thomas E., Fund Raising, Norman: University of Oklahoma Press, second ed., 1986.
Mixer, Joseph R., Principles of Professional Fundraising, San Francisco: Jossey-Bass, 1993.
Seltzer, Michael, Securing your Organization's Future, New York: The Foundation Center, 1987.
I especially recommend Rosso and Seltzer for anyone involved in starting or managing a not-for-profit organization.
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