The backbone of any successful fundraising operation is an understanding of the cultivation process against which activities and goals can be mapped. This is often referred to as the development, fundraising or donor cultivation cycle. The process has four fundamental phases:
Identification and research. Who will you ask and what will you ask for?
Cultivation. Building relationships, engaging the prospect and preparing to make the ask.
Solicitation. Making the ask.
Stewardship. Recognition and continuing to engage donors.
The phases of the cultivation process are also commonly referred to as the '4Rs'. Development directors suggest that their time is divided among the phases in approximately this way:
Research, about 25 percent of time,
Romance, about 60 percent,
Request, 5 percent, and
Recognition, 10 percent.
Identification and research
This stage is all about gathering and analysing information. It is the underpinning of your fundraising activity. It can be viewed from two angles: projects and supporters.
You need to identify the projects for which you want to raise funds and to develop a thorough understanding of the importance of those projects both to your institution and to its stakeholders. You need to gather detailed information about the projects and assess how they might appeal to donors, as this will inform your cultivation, solicitation and stewardship phases.
You need to identify whom you want to ask for support. Look at the prospects you already know (database analysis, lists of previous donors, etc.) as well as the external donating landscape (e.g., are there any major trusts with interests that match your fundraising projects).
Prospect research and identification is an essential component of the cultivation cycle. It provides fundraisers with the information and tools they need to build relationships with donors. The more you know about a prospect, the easier it is to match the potential donor to the right project, ask her in the appropriate way, increase your chances of a donation and build a longstanding relationship.
Cultivation strategies are based on the information that is gathered in the identification phase. Cultivation refers to the methods you will use to build a relationship with a donor:
How will you make contact?
How will you inform prospects about your projects and build a propensity to give?
Who will do the cultivating?
How will it be achieved and sustained?
Cultivation covers a range of activities from direct mail, telephone and email contact through to events, personal visits and peer-to-peer networking.
In this phase you will make the ‘ask’. There are a number of ways to achieve this – direct mail, telephone fundraising, face-to-face solicitations, peer asking, as part of a legacies campaign or through online communication. This resource provides detailed information on methods of solicitation in the following sections (by type of donor).
As important as asking is your response when the donor says ‘yes’ or ‘no’. You must be prepared to act quickly to accept a gift and thank a donor.
For major gifts, this can be an involved process with a requirement for due diligence and gift agreements, so it is important to have the appropriate mechanisms already in place.
For smaller and regular gifts, it is important to have robust financial systems that can cope with peaks in giving and provide donors with reassurance that their donations are being handled in a professional manner.
If the response is ‘no’, you should a contingency plan where you might be able to turn a ‘no’ into a ‘maybe’ or ‘not now’. Maintaining a channel of communication with a prospect, for example, would allow you to approach him again in the future with other opportunities.
Stewardship is all about maintaining and evolving long-term relationships with donors. Effective stewardship will ensure that the donor knows his or her gift is being valued and put to good use, will appropriately recognize the gift and will ideally engage the donor so that he or she feels even more positive about the institution.
By investing wisely in stewardship activities (see section 7j), you can keep donors engaged in a donating cycle and encourage them toward regular repeat giving and giving in increasing amount, ultimately increasing your overall pool of donors and prospects and boosting your fundraising income.
The stewardship phase should feed back into cultivating the donor for a future ask, although fundraisers should be extremely cautious that stewardship and cultivation phases are not just about preparing to make the ask. These phases are about engaging the prospect/donor in the institution. Donors who only hear from the institution with financial requests disengage quickly.
You can find more on the individual features of the cultivation process and specific types of prospects throughout section 7.
Invest time and resources in research, cultivation and stewardship activities to have the best solicitation response rate.
Remember to record information during every phase using contact reports, the database and prospect management tools.
Prospect research is indispensable for any development office. It identifies who to ask and informs cultivation and solicitation strategies, particularly in the area of major gifts.
Good prospect research:
Identifies the most promising prospects and assesses their capacity and propensity to give to your cause,
Covers both individuals and organisations (trusts, foundation and companies) and
Increases the efficiency of the office and increases the chances of fundraising success.
Prospect research can either be subcontracted to a freelancer or conducted ‘in house’.
Where to Find Information
Prospect researchers are the detectives of the fundraising world, searching out clues about people’s wealth and spotting synergies between prospects and the institution.
You can use a variety of resources to obtain this information, including public records, business and financial publications, Internet databases, media, ‘word of mouth’ and extensive Internet searches.
You will spend a considerable amount of time interrogating the existing data ‘owned’ by the institution to look for prospects with indicators of wealth, such as senior jobs, addresses in expensive areas or a private education. You then use this information as the starting point for detailed research.
In fact, when you’re first starting out, internal sources of information should be good to get you started. You can ask academics, alumni, existing donors and other contacts for names of people they know who might be potential supporters. You can develop a simple form – a ‘who do you know’ template – asking for contact details, any biographical information known, what the person’s relationship is to the institution and why it is they should be considered a potential supporter. If you aim to leave every meeting with academics or notable alumni with three new names, you can very quickly build up a decent list of people to start visiting.
When you are ready for more detailed research, you can find many prospect research resources on prospect research websites, such as the one listed below, which are maintained by prospect researcher Finbar Cullen from Researchplus. Keep returning to these lists (primarily focused on the UK) as they are regularly updated, and use them as the basis for developing your own list of resources. Not all resources are free and your may need to set some budget aside for subscriptions, books and fees.
For information about companies, directors and shareholders
For information about charities, trusts and foundations
The Directory of Grant Making Trusts (www.dsc.org.uk) covers more than 2,500 grant-making trusts.
The Grant-making Trusts CD-ROM (www.dsc.org.uk) compiles the more than 4,000 trusts listed in The Directory of Grant Making Trusts, the three Guides to the Major Trusts, the four Guides to Local Trusts, A Guide to Scottish Trusts and the Welsh Funding Guide.
www.trustfunding.org.uk contains all the same data as the Grant-making Trusts CD-ROM, but it is updated throughout the year. Subscribers receive emails alerts when updates are made.
A Guide to the Major Trusts, volumes 1 and 2 (www.dsc.org.uk), has more detailed entries on some of the trusts listed in The Directory of Grant Making Trusts and other publications mentioned above.
The Welsh Funding Guide (www.dsc.org.uk) is about charitable giving in Wales.
A Guide to Scottish Trusts (www.dsc.org.uk) is about trust giving in Scotland.
A Guide to Local Trusts (www.dsc.org.uk) covers Greater London, South of England, North of England and the Midlands.
Dresdner RCM Top 3000 Charities is a guide to the latest financial results of the top 3,000 charities, available in book and CD formats.
Martin Currie Top 1000 Charities in Scotland is a guide to the top charities in Scotland, available in book and CD formats.
UK Top 10,000 Charities CD-ROM is a database of the UK’s top 10,000 charities with search capacity for analysis of the charity sector.
Hollis Sponsorship & Donations Yearbook details ‘over 1,000 top UK companies which use sponsorship as part of their marketing strategies, or provide donations as part of their corporate citizen policies’.
DSC Guide to UK Company Giving (www.dsc.org.uk) includes details of more than 500 companies in the UK.
The CD-ROM Company Giving Guide (www.dsc.org.uk) includes details of more than 500 companies in the UK.
As the Data Protection Act relates to prospect research, you need to be familiar with its guidance. Remember that the act entitles any prospect to read what information you have stored about that person, so make sure that what you record is evidence based, justifiable and unlikely to offend.
Never rely on hearsay for information. Check that the information you have been given can be independently verified or assigned to a source. Do not misrepresent yourself or your institution in order to obtain information.
How to Record, Present and Use Your Research
You should record your research with as much detail as possible, stating the date it was obtained and the source(s) where it was found. Most prospect databases will have somewhere you can write your notes. If you are using a paper-based system, you might want to develop a template to help you to organise your findings.
Prospect research is only useful if it is presented in a meaningful way to fundraisers. Skilled prospect researchers will use the information they have gathered to develop educated assumptions about a prospect’s propensity and capacity to give. They need to share these assumptions, and the evidence to back them up, with fundraisers in the form of written reports or at prospect meetings on a regular basis.
Research will date quickly, so researchers need to work closely with fundraisers to decide when research should be updated.
The level of detail a prospect researcher presents depends on how the information will be used. A fundraiser about to solicit a major gift will want as much information as possible about the prospect, but an event organiser might only want a few biographical sentences about each guest to share with ‘hosts’.
Presenting prospect research in template forms helps the recipients access the relevant pieces of information quickly.
Determine who will be responsible for prospect research, which prospects will be the priority to research and how you can gather in-house information about prospects, and develop templates for what other detailed external information should be gathered (depending on the type of prospect).
Make sure prospect research is saved in your database or files and updated as appropriate.
Most fundraisers will have at some point come across the concept of the gift pyramid – a graphical representation of where fundraising income comes from.
The major gifts programme focuses on securing high-value gifts from a small number of prospects with the capacity to give at the highest level. Major gifts may be less frequent and require substantial investment in the cultivation and solicitation of the donor, but they are high value and can be transformational for an institution.
Defining Major Gift for Your Institution
The definition of a major gift varies between institutions and is dependent on a number of factors:
Existing levels of philanthropic income,
The current number of donors,
The value of the fundraising targets,
The perceived potential for major gifts after analysis of the prospect pool and
The impact the gift will have on the institution. Major gifts tend to be transformational and directed at high-value projects.
A small organisation, with no history of fundraising and modest pool of prospects, may define £1,000 as a major gift, whereas an established institution with substantial philanthropic income and many high-value fundraising projects may raise the threshold to gifts over £100,000. Whatever level you choose, it should be periodically reviewed.
Who Is in the Programme?
The first task when planning a major gift programme is to examine your prospect pool to determine who can give a major gift. This can be tricky if your information resources are underdeveloped; but with the support of data analysis and prospect research, it should be possible to segment your prospect pool and identify the most promising prospects. Several factors can be assessed to determine which prospects should be included in a major gift programme:
Financial capacity to give,
Warmth of pre-existing relationship with the institution,
Giving history with the institution and
Interest in similar causes.
The number of major gift prospects that can be managed at any one time will be dependent on the capacity of your team. Your pool of major gift prospects should be subjected to scrutiny and further research to prioritise the best prospects and ensure that the major gift fundraising capacity is not overwhelmed.
When examining your prospect pool, keep in mind the Pareto Principle (also known as the 80/20 Rule), which says that 80 percent of your gifts will come from 20 percent of your prospects or donors. Therefore, the majority of your time and resources should be focused on these major gift prospects or donors.
Getting Started: Prospect Identification and Research
Assign a fundraiser to each prospect. For top prospects, you may want to assign a primary and a secondary fundraiser - for example, the vice-chancellor and the director of development.
Then, find out all you can about your prospects and record this information. This is not just about collecting facts but includes researching and analysing these facts, and looking for synergies between the prospect and your institution and for opportunities to strengthen the relationship between the two and links between prospects (as one prospect may be a positive influence on the giving behaviour of another).
Planning Your Cultivation and Engagement Strategies
Each major gift prospect merits an individualised engagement strategy. This is a plan of how you might instigate an initial meeting and draw the prospect closer to the institution. It is likely to evolve as the dynamics of the relationship between the prospect and the institution change over time. The example (shown below) is of a simple engagement strategy, but to implement even this version would take many hours of diligent persistence as you carefully manage situations, entice prospects closer to the institution and tease out areas of mutual interest.
Example Engagement Strategy
Invite Mr and Mrs X to the chancellor’s dinner to see a presentation on the university’s five-year strategy. Ensure that the chancellor introduces Mr and Mrs X to the vice-chancellor who should be briefed to discuss the presentation with them and listen to what areas capture their interest.
Vice-chancellor to invite Mr and Mrs X to campus to see for themselves the implementation of the strategy plan in progress. Design a programme that focuses on their interests such as a tour of the new Engineering Building, lunch with the Dean and the opportunity to meet undergraduates.
Review next steps with Vice-Chancellor and agree follow up action.
Major gift prospects tend to be very busy people, and it can take months to even fix a date for a campus visit. The cultivation of prospects to the point of solicitation can be a long process and may not come to fruition until 18 months to three years after the process begins.
Making ‘the Ask’
If you have done your prospect cultivation properly, your prospect should not be surprised to be asked to donate. It is important that ‘the ask’ is a positive experience for both the ‘asker’ and the prospect and that it is made in-person when you are cultivating a major gift.
Decide who should make ‘the ask’ – the director of development, the institution’s leader, one of the prospect’s peer group, a senior volunteer or perhaps a representative of the project that stands to benefit. It may be appropriate for more than one person to be there, but be careful not to overwhelm the prospect. It should be someone with whom he or she has a positive peer-to-peer relationship. It helps if the ‘asker’ is also a donor.
Be sincere, direct and specific. Name a gift level that you think might be appropriate and say exactly how the gift will be used to support your institution. Touch upon how the gift will be recognised, if you feel it is appropriate.
Make sure you have thought about these scenarios before you enter the meeting and how you deal with them. If you do hear a ‘no’, you might, with further discussion, turn this into a ‘maybe’ or a ‘yes’ to a gift at a lower level. Perhaps you at least will be able to keep the option open to speak to the prospect again in the future about other giving opportunities.
You need to be able to read the situation, think on your feet and respond appropriately. You cannot prepare for every response, but good preparation, discussion around possible scenarios and support from colleagues in advance of ‘the ask’ will all help.
Whatever happens at ‘the ask’, it is important that you continue the relationship with the prospect on a positive footing. If a gift pledge has been made, you should ensure that the pledge is fulfilled.
Continue the dialogue with the donor.
Introduce a gift agreement if necessary to agree how the gift will be made, in what time scale, for what purpose and with what recognition.
Do not forget to say thank you in a way that matches the importance of the gift and meets the expectations of the donor.
If you have come away with a ‘maybe’ or a ‘no’, it would be timely to review the relationship with the prospect and discuss how these might be converted into a ‘yes’ – perhaps by changing the project you are putting forward for support, the gift amount or the timing of ‘the ask’.
Back to the Beginning
There is a risk that you will let this relationship slide now that the fundraising cycle has been completed. The temptation is to turn to fresh prospects at the beginning of the cycle, but this would be a mistake.
Major gift prospects have (we hope) become major gift donors; and with further cultivation, they can be drawn even closer to your organisation and become repeat donors. Their existing gifts need to be carefully stewarded, and donors need to be return to the beginning of the fundraising cycle and introduced to new opportunities to offer their support.
Establishing a Pipeline
Major gift fundraisers need a steady supply of new prospects. These can be found through diligent research and regular examination of prospects who are donating at a lower level or who are not yet donating.
A successful development office will have the infrastructure and skills to move prospects up through the levels of the fundraising pyramid until they fulfill their full potential as donors by reaching the limits of their capacity to give.
Fundraising is a team effort, and fundraisers dealing with lower-level donors need to be moving those donors up the pyramid to the attention of the major gift fundraisers who can increase their levels of engagement and encourage larger and more frequent donations.
Define what a ‘major gift’ is for your institution.
Determine and prioritize your prospect pool, keeping the 80/20 rule in mind.
Individualize the donor cultivation process for each major gift prospect.
Keep major gift donors engaged, and a healthy prospect pool constantly in development.
Once you have made the ask, wait until the prospective donor responds before you speak again.
According to research by the Charity Commission, there are around 8,800 trusts and foundations in the UK and considerably more across the world. They are established either by individuals or by organisations to act as the vehicles for their charitable giving. Many are small and targeted at very specific causes or areas. However, some have huge giving capacity and are able to make transformational, multimillion-pound gifts to an institution.
Raising funds from trusts and foundations is a significant element of any fundraising programme, but it is very competitive and should be approached in a systematic and professional manner. As when raising funds from individuals, this type of fundraising follows the classic cycle of identification, cultivation, solicitation and stewardship.
Identification and Making a Plan
There are many ways to identify trusts and foundations. However, as there are so many, you should have a clear idea of what you are fundraising for so that you can pinpoint those trusts and foundations most likely to support you.
You can subscribe to several commercial online databases of trust and foundation information and buy publications that list their areas of interest, or use free online resources such as the Charity Commission for England and Wales, Guidestar and other sites. Searching the Internet and other media is a useful way to find trusts and foundations that have funded causes similar to your own.
If you are already working with a company (especially a large corporation), it may also have a charitable foundation you can approach. Most larger trusts and foundations will have their own websites detailing their areas of interest and how to apply.
Once you have identified a list of likely trust and foundation funders, you need to plot how these prospects map onto your fundraising projects. Read their application guidelines carefully and match up the characteristics of your fundraising projects with the right trusts and foundations. You might also need to consider your time scales, as some trusts have a long lead-time up to making a funding decision, as the trustees meet infrequently.
Once you have identified your prospective trusts and matched them to suitable projects, you need to find a way to build a relationship with them. Some trusts and foundations have guidelines about how to achieve this. Do some further research about the decision makers within a trust or foundation. Do your senior staff know any of them? Do you know anyone who can broker an introduction?
Whilst it is not always necessary to cultivate a direct relationship with a trust or foundation in this way, it can be helpful if done carefully, and is essential if the trust claims to take a ‘proactive approach’ to grant making. Some foundations may even state that they do not accept unsolicited applications. If the guidelines permit it, you might do something as simple as place a phone call to the trust administrator to discuss a possible application. An early consultation will help you craft the best possible application and introduce your organisation to the trust or foundation as a prospective beneficiary.
Most bigger trusts and foundations will have guidelines for your application. Make sure you read, understand and follow these guidelines.
Bear in mind that most trusts and foundations will have very little administrative support yet hundreds of applications to deal with every year. They have introduced guidelines to assist them in their selection process. If you ignore the guidelines, your application is likely to be rejected.
The solicitation process can take many months, especially if the grant maker has a multi-stage application process and the trustees/decision makers meet only a few times a year.
The more detail, evidence of need and reassurance of your ability to deliver on a project that you can communicate to a trust or foundation, the more likely it will be to fund your project.
Trusts and foundations look for innovation and evidence that a project is fulfilling an identified need, that it is sustainable and that the project leaders are capable of delivering the project goals in a timely fashion. Some trusts and foundations may wish to visit you before they make a decision. This visit is your chance to shine and really convince them that your project is worthwhile.
Many trusts and foundations develop long-term relationships with their beneficiaries and become repeat and escalating donors. To support this relationship, good stewardship is vital.
Keep your donor informed about the project as it develops.
Give regular reports and take every opportunity to speak to the funders in person about the project.
If your project ultimately benefits others, such as students or patients, then gather feedback from these beneficiaries or take opportunities to introduce them directly to the funders so they can understand the difference their funding is making.
Make sure that you manage your funding in a professional manner, maintaining the highest standards in recording and accounting for its expenditure.
Keeping the Momentum Going
New trusts and foundations are formed all the time, and good prospect research will help you to keep track of new funders. Many trusts and foundations deliberately maintain a low public profile as a way of managing the number of applications they receive, so investing time and effort in prospect research will widen your prospect pool.
To maintain momentum, use your database to log information about trusts and foundations, your applications to them and when your windows of opportunity to reapply arise.
You should develop a yearly calendar of activity that, if successful, will help you develop a steady income stream from this kind of funding.
Determine and prioritise the trusts and foundations best aligned with your institution’s priorities and projects. Again, the 80/20 rule can be helpful: Spend the majority of time on the top prospects.
Plan ahead, as most trusts and foundations have long grant cycles – i.e., the majority of your trust and foundation proposals should be submitted during the first half of your fundraising year.
Thoroughly research priorities and guidelines outlined by the trust or foundation.
Find a contact at the trust or foundation, even if you are cold calling to introduce your institution.
Keep donors engaged and be aware of their future cycles/grant opportunities.
Watch out for trusts and foundations that reject repeat applications within a certain timeframe. You do not want to ask a funder for £1,000 now and throw away the opportunity to ask for £100,000 for a different project in a few months' time.
Most institutions have longstanding relationships with the business community through channels such as research sponsorship, graduate recruitment, supply chains, conferencing and consultancy.
It is important to understand the breadth and depth of these relationships so that you can nurture and expand them and use them as the model to form new relationships. Most larger companies support charities, and corporate gifts can be an important source of income for education institutions.
To devise a corporate fundraising strategy, you first need to look internally and understand how your institution already works with businesses.
You might find it useful to talk to your careers office, purchasing/finance office, commercialisation/enterprise office and service providers, such as conferencing or training providers. Find out with whom they work and how those relationships work and explore synergy and opportunities for cross marketing between your own fundraising activities and these other industry focused activities.
Examine your alumni database. For which businesses or organisations do your alumni work and how senior (influential) are they?
You should also understand the particular strengths of your institution from an industry perspective:
Do you offer a business course that a certain industry sector appears to favour?
Do you have expertise in a specialist area that companies will value?
Do you have a track record of providing high-quality students for company placement schemes?
Are you able to offer the best conferencing facilities in your region?
You need to understand the areas of your institution that might appeal to businesses and be able to communicate this in a clear, concise, businesslike manner.
Finally, research the businesses – those within your immediate vicinity, those with have a track record of supporting institutions like your own and those with activities and values that align with your institution.
There is a huge amount of information in the public domain, such as company annual reports and online listing of companies that support charities. You may find you have a large blue chip company on your doorstep that you are not currently working with. Why not? Alternatively, a high percentage of start-up companies might be in your area. Can you tailor a strategy to appeal to this specific sector?
When you are researching and prioritising companies, remember to check your gift acceptance policies. If you are raising funds for a new medical center, for example, you may not be able to accept tobacco company funds.
It’s Not Just About Philanthropic Fundraising
A company will look at your institution and see a single entity. The officers of that company will expect to be approached in a coordinated way and to hear about all the opportunities to work with your institution – not just philanthropic ones. Your cooperation with colleagues working in other areas will be important to your success.
Often a company will begin a relationship with an institution on a business-to-business basis – using the conference facilities or supplying computer equipment. It is the job of the institution to broaden this relationship into other areas, such as encouraging the business to sponsor students and recruit graduates.
Be aware that corporations have a variety of departments that may be able to support you. For example:
Corporate foundations are typically similar to trusts or philanthropic foundations, providing a grant application and process.
The marketing and PR department may lead sponsorship donations.
Community and government relations may sponsor other activities.
Individual business leaders often have their own discretionary budgets.
Navigating these various channels can be challenging, as each corporation is organized differently, and you must be sensitive when enquiring about additional funding sources. Cultivating and stewarding a close relationship with a senior member of the company (especially if he or she is an alum) can be beneficial in mapping out these channels, in understanding how they work together and in having a champion who can broker relationships that best align with your institution’s opportunities – and potentially be a candidate for an advisory board position.
It is also important to make a distinction between sponsorships and philanthropic donations, as they are governed by different financial and legal regulations.
Philanthropic donations are altruistic, and the donor can expect no benefits in return. They are often made by a company foundation that has been created for this purpose.
A company sponsoring something, on the other hand, will expect something in return – such as publicity, event tickets and preferential treatment of some kind.
Here are some examples of how a company might support you. Not all the examples listed fall directly under the heading of fundraising, but they show the potential breadth of the relationship that you can develop.
Sponsorship of students, events, sports teams, staff posts, buildings, labs, teaching rooms, student facilities, equipment, etc.
Donations of equipment, expertise, prizes and services
Ticket purchases for events, such as on-campus concerts and sports matches
As lead donors in a campaign
Access to their own specialist research facilities
Students mentoring, placement and employment
Providing teaching materials, such as case studies
Investment in intellectual property commercialisation
Employee giving schemes
Adopting your ‘cause’ as their charity of the year
Survey the corporate relationships already established with your institution, the business leaders (i.e., potential champions) that are a part of your network and other companies that are located nearby or are known for supporting institutions with priorities and strengths similar to those of your institution.
Prioritise the companies best aligned with your institution’s priorities and projects (again, the 80/20 Rule can be helpful – spending the majority of time on the top prospects). Be cautious of gift acceptance policies with corporations.
Work with other appropriate departments at your institution to create a coordinated approach and cultivation strategy for these top prospects.
Have a clear, succinct (i.e., business language) document that outlines the particular strengths of your institution from an industry perspective and the opportunities for a company to support.
After identifying, cultivating and securing a gift, don’t underestimate the stewardship phase, as corporations respond well to recognition and generally have other avenues of funding that can be explored.
Don’t forget to ask if a company matches employee gifts or charity income raised.
Some larger employers will match charity income raised or donated by their staff, so if you have an alumnus as a donor or raising money for you, ask that person if his or her employer runs such a scheme.
In the UK and many countries around the world, universities have traditionally received a significant amount of their funding from government. Development directors should have an understanding of how government (also called statutory) funding works, how their institutions access it and any future forecasts for this funding (which may also affect philanthropic fundraising goals).
From time to time, governments may ring fence additional funds for special initiatives, which universities can bid for. It may be that much of this type of funding is already monitored and bid for by other areas of your institution, such as the research office. However, the development director is in a great position to identify and broker opportunities to work across departmental boundaries and with external contacts, such as philanthropic supporters, to develop or strengthen bids for government funding.
National lottery funding is also a well-established source of income for many charities and some universities in the UK. Many lottery funds welcome applications from education institutions but can place restrictions around eligibility, depending on the status of the institution. For example, the institution may have to be recognised as having ‘exempt charitable status’.
The guidelines for applying for lottery funding are detailed and freely available. Guidelines may vary between different funds and can depend on who is administering the funding. Development directors should be diligent in researching the potential of lottery funding as an income stream and should keep abreast of information regarding new funds that may offer new opportunities.
It is also worth considering partnership approaches to these types of funding. A university or educational institution may be precluded from being a main applicant in a submission for funding, but it could benefit as a partner in a larger application.
Make sure you have an understanding of how government funding works, how your institutions access it, any future forecasts for this funding and how you can assist with special initiative funding if/when it becomes available.
If lottery funding is available in your country, research the guidelines and determine if this funding stream is an appropriate match for your institution.
Annual fund is a catch-all term for fundraising activities that are designed to stimulate regular giving. It encompasses activities such as telephone campaigns, direct mail, e-appeals, inserts in alumni magazines, adverts and web-based appeals. These activities are important for many reasons, including that they:
Provide income both for specific projects and unrestricted funds,
Establish giving habits and enable patterns of giving to be tracked,
Establish a donor pipeline, enabling the identification of donors with the potential capacity and propensity to give bigger gifts in the future,
Increase donor participation rates,
Help improve and keep data about prospects up to date,
Are a great stewardship tool,
Help reinforce core messages about an institution,
Help identify the enthusiasts who might be leaders or significant volunteers and
Strengthen the bonds between an institution and its prospects.
According to the 2010–2011 Ross-CASE Survey, the 143 institutions that participated in the survey (excluding Oxford and Cambridge, so as not to skew the data because of their large annual fund contributions) raised £21 million from annual fund cash income (up from £17 million in 2009–10). There was a very wide distribution across the higher education sector: 36 universities (25 percent) reported receiving no annual fund cash income; 49 (34 percent) received less than £50,000 in annual fund income; and 15 had annual funds that received £500,000 or more in cash income.
Planning an Annual Fund Strategy
When putting together your annual fund strategy you need to consider two main factors: (1) the volume and quality of your data, and (2) your investment budget. Annual funds are not cheap to run and require substantial investment before returns are seen.
You can obtain benchmarking data on annual funds at comparable institutions from the Ross-CASE Survey, which will provide you with indicative return on investment figures to assist your planning. Most annual funds comprise a combination of activities with a strong emphasis on telephone fundraising, as it tends to offer the best return on investment.
Telephone fundraising gives you a direct link with a prospect, offering a higher chance of success and the flexibility to be able to offer prospects multiple giving options (e.g., someone may dislike the idea of committing to a regular gift but may be interested in leaving a legacy instead). Telephone fundraising is also an opportunity to gather qualitative data on prospects that can be invaluable when identifying major gift prospects.
Telephone fundraising is a tightly managed process. Callers are rigorously trained and given scripts as the basis for their conversation with prospects. Commonly, prospects are alerted in advance, by letter or email, that they will be called.
Callers encourage donors to commit to regular gifts by direct debit or to increase their current giving levels of frequency of giving. During the call they will update the data held on prospects and listen out for indicators that prospects might have the potential to become major gift donors.
Direct Mail, Adverts, Inserts and Web-based Appeals
These methods of fundraising tend to be less effective than telephone fundraising, as they require more effort on the part of the prospect. Typically, fewer than 5 percent of recipients will respond.
However, these methods do help to reinforce the messages of the institution and encourage the momentum of shifting to a culture that is more accepting of fundraising to support higher education.
It costs very little to always carry an appeal on your website, and nothing at all to use your email footers, Facebook pages, Twitter feeds and other e-media to promote appeals. It all helps to reinforce your fundraising messages.
Most important, you should make it easy for people to give. Donors won’t want to fill in long forms that then have to be put in an envelope and posted. Make things easy by introducing ‘text’ mobile phone giving, web-based giving and other shortcuts. Always stress the benefits of any tax or government incentives (e.g., gift aid in the UK) or corporate matching – to maximize the donor’s gift. Always suggest set amounts to guide the donor’s choice.
The Who, When and What of Asking
Many institutions aim to ‘ask’ all their donors at least once a year by whatever the most effective method they have at their disposal.
Whilst some institutions differentiate between major donors and annual fund donors, others do not. The risk in separating out major gift prospects is that they will go ‘unasked’ for long periods of time and lose interest in your institution. Receiving an annual appeal after having made a major gift would offend most major donors, however.
An important success factor in annual funds is the skilled segmentation of your database so people are asked at the right time and asked appropriately and the chances of success are maximised.
The most successful ‘asks’ are those that go to existing donors. They already know and like your institution and will be more like to renew or increase their gift (especially if they have been well-stewarded).
You also need to ask lapsed, occasional and nondonors so you can increase your donor pool and remain sustainable. You might segment your data in a number of ways: age, subject of study, gender, nationality, ‘warmth to institution’ and known capacity to give.
Your decision about when to make your asks should be based on several factors:
Your accounting year. You might want to ask at the beginning of the accounting year so the gifts come in during that year.
Your capacity to deal with the response. You need to ensure that you have sufficient staff and resources in place to cope with a peak in activity.
The time of year. Avoid summer holidays, when people might be away, and months like January, when people have just suffered the expense of the holidays. Many institutions like to call during the autumn term, as it is the start of the academic year, people are returning to school and work after a summer break and are perhaps feeling more positive and energised than at other times of the year.
The availability of suitable fundraising projects.
When considering what to ask people to support, you need to minimise the options available and tailor them to the segment you are approaching. For example, when contacting engineering graduates you might offer them two options - an unrestricted fund to support projects in the engineering faculty or the chance to sponsor engineering scholarships for students from deprived backgrounds – and propose one giving method on the donation form (e.g., direct debit).
The ask should be simple and easy to communicate to prospects: they need to be able to ‘get it’ within a very short space of time. Experience has shown that donors are more likely to give if they have fewer options.
Offering clear giving options is also helpful, especially if they can be related to the project. For example, the successful SendaCow.org charity equates donations to specific items: £10 buys a bag garden, £20 buys four chickens.
How to Know If It Is Working
Successful annual fund managers love numbers. They are great at looking at a multitude of numerical indicators to decide whether a campaign is working and at using these figures to inform future campaigns.
Return on investment weighed against the income generated per alum is an important factor. It might cost £20 to telephone an alumnus, but the return rate per 1,000 calls might be £20,000. Other measurements of success might include:
Number of renewing donors,
Number of lapsed donors renewing,
Number of new donors,
Numbers of legacy pledges or requests for legacy information,
Number of major gift prospects identified,
Number of gift level upgrades,
Number of offers of nonfinancial support (volunteers),
New data obtained (updated addresses, email addresses, mobile phone numbers, etc.) and
Length of phone calls (indicative of interest in and warmth toward the institution).
Carefully consider the budget, strategy, data, target audience, timing, staff capacity to implement and follow-up and expected ROI before launching an annual fund campaign.
Every annual fund is different and needs to be tweaked to reflect the idiosyncrasies of each institution’s prospect pool. The key to success is to know your data and to tailor your campaigns and asking methods.
Most development offices rapidly devise a programme of events to support their work. These can range from exclusive lunches with the vice-chancellor and a small group of high-ranking supporters to events with several hundred guests.
Whichever events you choose to host, there are some important points to consider:
Why I am holding this event?
What aspects of the fundraising cycle will this target – to allow prospects to self select by their attendance (identification), to raise awareness or strengthen a relationship (cultivate), to raise funds (solicitation) or to say thank you (stewardship)? You should never begin to organise an event unless you have a clear idea of what you want it to achieve.
What are the results of a cost-benefit analysis?
Events can be costly. Sometimes costs can be defrayed by charging people to attend (although this can have a negative effect on attendance) or finding event sponsors. Be sure that investing in an event will boost your fundraising and will justify the cost.
Who is the target audience for this event?
With all events, it is useful to have a target audience in mind so that you can tailor the event to the audience’s expectations and needs to ensure its success – and to ensure that you have enough contacts and leads to get this target audience to attend your event. Remember, it may not always be the audience you expect, which is when your database, contact reports, prospect management system and savvy hosts are especially important.
Cutting the Cost
Events can be one of the biggest drains on the development office’s budget, but there are a number of ways to cut the costs:
‘Adopt’ existing events. Most universities already have an events programme of sorts with special lectures, choir performances, sports matches, open days, etc. A clever development office can ‘adopt’ these events and invite prospects and donors along, boosting audience numbers while avoiding the burden of organisation.
Charge an entrance fee. If you are going to charge an entrance fee, the cost should be affordable and reflect the value of the event you are offering. Do not forget to take into account the extra time and administrative costs of processing ticket sales.
Negotiate with your suppliers. If you are regularly holding events on campus, you might be able to negotiate with caterers and other vendors for a discounted rate. Local hotels might be able to offer overnight guests special package details that tie in with your events. University suppliers might be prepared to donate items such as wine or food to support an event.
Find a sponsor. It might be possible to find a sponsor for all or some aspects of your event. You might also find that some high-level supporters (individuals or corporations) are willing to host events on your behalf at their homes, clubs or businesses.
Use your volunteers. Volunteers can be a great source of help when organising an event, especially large-scale events. Make sure you brief them properly and thank them. You might want to consider developing an ‘event information pack’ to assist people who want to organise their own events for peers (e.g., alumni reunions).
Some Tips for a Successful Event
You can find many resources online that will help you organise a professionally run event. These resources include information on events details such as the etiquette of name badges, the importance of parking and other practical issues. Here are some broader tips on how to make your event successful:
Identify your hosts and make sure you have a good ratio of hosts to guests. Brief hosts well on the purpose of the event, their guests and their responsibilities. Make sure you debrief (and thank!) them afterward.
Build strong relationships with the people who will make sure the event is a success – caterers, venue managers, security, parking attendants, etc. Make sure you thank everyone involved after an event so they will continue to do their best to make your future events a success.
Avoid the generic and make an event memorable. Adapt menus, décor and promotional materials to reflect the nature and purpose of your event. For example, a university’s centenary dinner recreated the menu that was first served to celebrate the award of its original charter.
Anticipate problems and have contingency plans in place. What will you do if it rains, someone falls ill or the venue is unavailable at the last minute? Every event should have a risk analysis and mitigation strategy.
Identify significant guests and those who might require extra attention and ensure they are well cared for.
Have an event timetable and make sure everyone sticks to it (but do not be overly rigid) – food should be served on time, speeches should not run over too much, etc.
Have at least one readily available emergency point of contact for guests and organisers alike.
Follow up. Thank your guests for coming, upload souvenir photos to the website, put a report of the event in your newsletter. If the event has generated cultivation leads, then follow them up promptly (e.g., a phone call to get feedback on the event, scheduling an in-person meeting, inviting them to a campus visit, etc.). Debrief with staff and use the experience you gained from one event to make the next one even more successful. Bear in mind that staff members are often so relieved that the event is finished that they underestimate the follow-up activity, where the real success can be generated.
Above all, be endlessly polite, smile and never look like you are panicking!
When developing your calendar of events, ensure that you prioritize events that support your cultivation efforts and help you best reach your development office goals (i.e., events typically focused on your top prospects and donors as the target audience), that there is a clear purpose, plan and follow-up strategy; and that you are leveraging cost-effective measures.
Remember that sometimes less is more. Having a few quality events can often achieve your annual goals more effectively than many unfocused events.
Attendance at a university's annual carol concert organised by the chaplaincy and student volunteers was low, as the event was under-promoted. The university's development office teamed with the chaplaincy, promoting the concert to local donors and alumni and offering an additional drinks reception. The chaplaincy was delighted with the bigger audience and the development office was able to cultivate and steward supporters and alumni by highlighting the cultural opportunities provided by the university.
Legacy fundraising is increasing in many countries around the world. In the UK it has been estimated that income to the charity sector from legacies will be £5.3 billion by 2050.
Many institutions adopt a reactive approach to legacies and passively wait for bequests to be notified before they take any action. However, increasingly institutions are developing proactive legacy programmes to encourage prospects not only to include the institution in their wills but also to inform the institution of that decision through making a ‘pledge’.
Knowing about the value of pledges helps institutions forecast the level of legacy income they might expect in the future.
Legacy fundraising is a medium- to long-term activity, but it requires only modest investment and can reap large dividends. There are several types of legacy gifts, including:
Pecuniary legacies. The deceased leaves a specific amount to the institution.
Residuary legacies. The deceased leaves the residual of his estate to the institution once all the pecuniary legacies have been fulfilled.
Proportional legacies. The deceased leaves a set percentage of her estate to the institution.
Bequests of specific items. The deceased leaves an item, such as a piece of art or a collection of books, to the institution.
Pecuniary legacies and bequests of specific items tend to be easier to obtain, but residuary and proportional legacies tend to be of higher value. Bequests of specific items can also be problematic (e.g., it is great if someone bequests a Van Gogh painting, but you are also left with the responsibility of storing, insuring and transporting it; if you are left a house, there may be a sitting tenant). Having a gift acceptance policy can help with these challenges.
Getting Past the Taboos
Leaving a legacy should be viewed, not as a depressing activity, but rather as a positive opportunity to make a positive impact, both financially and socially.
When discussing legacies with a prospect it is important to be professional and knowledgeable but also empathic and reassuring. You should not approach legacy discussions dressed in black and wearing a sombre expression. What you are asking someone to do is life-affirming and not wholly focused on the difficult topic of his or her demise.
Legacy fundraising is a very people-focused activity. To be successful, legacy fundraisers must develop strong trust-based relationships with their prospects.
Telling People About Legacy Opportunities
There are several ways to inform people about the opportunity to leave a legacy. For example:
Through your website. Have a clear guide to leaving a legacy available as a download or to read online. Make sure the link is from your homepage.
Through articles in your alumni magazine and other publications about how legacies have made a difference and interviews with legacy pledgers about their motivations to leave a legacy.
Through online podcasts and video interviews with legacy pledgers.
Through inserts in mailshots.
Through telephone campaigns (to provide information, not make a request).
During visits and in-person meetings with prospects.
At events, with leaflets and posters.
Through free ‘will clinics’ with legal professionals.
Send out consistent, regular and upfront message about legacies, and use as many communication channels as possible to keep the idea of leaving a legacy at the forefront of every prospect’s mind. The topic of legacies should be communicated in a manner that actively promotes and celebrates legacies as a way of helping people.
Making It Easy
For many prospects, making a will is a daunting prospect. They worry it will be a complicated and expensive process and they do not know where to start.
By developing a legacy information pack, you can guide prospects through this process. You need to make sure that you are up-to-date with any relevant legislation and best practice guidelines and to ensure that your pack reflects this knowledge. Your pack should be written in accessible language and have a systematic guide to leaving a legacy. It should ‘sign post’ prospects to sources of further information and provide them with examples of well-written bequests.
Having expertise within the team is important, as prospects benefit from talking to a well-informed fundraiser. You might also want to develop links with legal professionals who can offer impartial advice to your prospects.
It may be several years before you realise the cash benefit of a legacy. During this time, you have the opportunity to deepen the relationship between your institution and the legator.
With appropriate stewarding, you can ensure that the legator feels good about his or her pledge and encourages others to make pledges. If you keep a legator informed about your institution’s projects, he might even be moved to increase his bequest or make a more immediate financial contribution.
Stewarding should involve regular communications about projects that a legacy might support, paying regular courtesy calls and visits to the legator and informing the legator about changes in the law and financial regulations that might affect her. Some institutions run ‘legacy clubs’ and hold regular events for legacy pledgers.
Have Systems in Place
Ideally, you want your legators to tell you about the legacies they have planned, as it will help you to plan. However, not everyone will choose to do so, and it is difficult to predict when those legacies you do know about will be realised. You need to have systems in place to deal with legacies as they are realised.
It is likely that you will have to deal with bereaved relatives or their representatives who simply want the estate to be settled as soon as possible. It is in everyone’s interests that you can respond quickly when accepting a legacy and complying with the legator’s requests.
Related to legacies are ‘in memoriam’ gifts, which are given in memory of someone – perhaps a colleague, former tutor or alumni peer.
These are very personal appeals and often draw first-time donors to the institution. They require careful management of donor expectations and an open dialogue between the institution and the donor as to how the donation should be spent. If these gifts are poorly managed, the institution can run the risk of holding funds for a statue they did not want or having insufficient funds to meet the ambitious expectations of donors.
It is sensible to channel ‘in memoriam’ gifts into suitable appeal projects (e.g., scholarship programmes) and to have gift recognition policies to define the ways in which the subject of the ‘in memoriam’ gift can be recognised (e.g., a tree planted in a memorial wood, a plaque on a memorial wall or book plates in library books).
Legacy programmes can be extremely beneficial for the institution’s mid- and long-term sustainability, but you need to be thoughtful in how you set them up. Consult with a legal professional and other institutions with successful programmes; partner with your finance and marketing departments; ensure materials are appropriate, policies in place, the appropriate fundraiser is leading the effort and a stewardship plan is in place.
The term stewardship covers the administration of gifts and the overseeing, protection and care of your relationship with a donor to strengthen and preserve that relationship over time.
Stewardship is important, as it ensures that the donor has a positive giving experience that will influence both future giving behaviour and what the donor will say about your institution to other prospective donors.
It is far more likely that an existing donor will give again than that a non-donor will begin giving. Every donation, regardless of its value, should be well stewarded.
Who Is Responsible for Stewardship?
Everyone involved in the fundraising process and in the implementation of projects that have benefited from funds raised and who has benefited directly from funding shares responsibility for stewardship. All must be prepared to participate in stewardship activities.
It is particularly important that senior staff are prepared to spend time with major gift donors, who normally prefer to develop long-term relationships on a peer-to-peer basis rather than simply receive written updates about projects. If an institution has 1,000 donors, it is impossible for a single fundraiser to properly steward everyone and still recruit new donors, so stewardship must be a shared activity.
The Stewardship Process
Stewardship begins during the cultivation phase of fundraising.
During this phase, fundraisers develop an understanding of a prospect’s giving motivations and expectations around stewardship. A good fundraiser will gently manage the expectations of a prospect during the cultivation and solicitation process, both to ensure that they are compatible with the institution’s capacity to deliver and are proportionate to the size of gift.
For example, a modest donor giving £1,000 to support scholarships cannot expect a personal dinner with the vice-chancellor and monthly meetings with the scholarship programme director. However, the donor might expect an invitation to an annual scholarship prize giving, a written note of thanks from one of the scholars and a yearly report on the progress of the funded scholars.
It is important that, at the point of solicitation, both the fundraiser and the prospect have the same understanding of the level of stewardship that is appropriate. For larger gifts, gift acceptance and recognition agreements may be appropriate. For annual fund appeals, the appeal material should state up front the level of stewardship a donor might expect.
You might find it useful to set some internal stewardship guidelines. Start with the basic level of stewardship that donors at the entry level should expect (e.g., gift processed and receipted within five workings days, written thank you within seven working days, annual report via email, etc.). Develop bands of stewardship relating to different levels of giving. Naturally, these guidelines will be flexible, and many major donors will have their own ideas of how they want their relationship with your institution to develop. Having a set of guidelines will help you design appropriate stewardship strategies that you can fulfill with your limited resources.
Things You Can Do to Make a Donor Feel Valued
There are many things you can do to make donors feel valued. With a little imagination these can be adapted to different campaigns and institutions. Here are a few suggestions:
Process gifts efficiently and promptly. It reassures donors about your professional competence and helps donors manage their own personal finances efficiently.
Write thank you letters. These letters should be, not just automatically generated receipt letters, but handwritten letters from the beneficiaries of a project or letters that have been personally signed by a senior member of the institution.
Publicly acknowledge them as donors. Print their names in the alumni magazine, sports and arts programmes. Have their names running along the bottom of the scoreboards at sports matches. Put donor plaques on seat backs and book plates in new library books.
Name things after major donors. Naming opportunities include buildings, events, courses, research programme, staff posts and roads/pathways.
Invite them to events to hear more about your work, meet other donors and the beneficiaries of their generosity.
Take people to see them and update them on the good their donation is doing.
Send reports, updates, photographs and other items about the projects they are supporting. Don’t inundate them, but keep the information relevant and personal.
With your donor’s permission, publicise their generosity in the press or write to their employer to say how grateful you are for your donor’s support and advice.
Develop a special area of your website with project updates that can only be accessed by certain donors.
Remember and recognise events that are special to them, such as birthdays, promotions, weddings, religious/cultural celebrations, etc.
Ask them not just for their money but their expertise, advice and time.
Personalise communications as much as you can, even if it is as simple as attaching a handwritten note to a project report.
Let your donors hear directly from people they have helped, so give them opportunities to interact with students, academic staff and other beneficiaries.
Let Technology Help You
Your communications with donors should be frequent enough to maintain momentum in the relationships. Technology can help you.
For example, you can:
Schedule regular reports to donors that are populated with statistics gathered automatically from projects,
Include regular touch points in your annual calendar,
Set up reminders to contact donors at regular intervals or when special anniversaries are coming up and
Segment your database to generate guest lists for stewardship events.
The more you can automate stewarding tasks, the easier it will be to handle a large volume of donors.
A well-stewarded donor will retain a high level of warmth toward an institution and is more likely to give larger or more frequent gifts and to maintain a relationship with an institution for a long time. Investment in stewardship is an important component of a sustainable fundraising activity.
Determine stewardship guidelines for each giving level, use technology to ensure stewardship is a regular part of fundraising activities and engage others in the stewardship process.
Always remember that stewardship feeds back into the cultivation phase of the fundraising cycle. It is easier to obtain a gift from a current donor than secure a new donor gift. Donors who only hear from the institution with financial solicitations disengage quickly.
Development operations are the activities that hold everything together – data management, gift processing, office procedures and event management. Without strong operations, your development activities will flounder. Achieving strong development operations requires good planning, time management and HR skills.
Plan Your Year
You need to include development operations in your strategic planning so that you can anticipate periods of intense activity and ensure that you have the capacity and resources in place to deal with it.
For example, in the month following a major appeal you may be inundated with gifts (hopefully), queries, changes of address and other contacts, so you need have sufficient capacity to deal with these tasks properly and promptly. When planning your year, take into account the calendar of your institution. There may be pre-existing events that you can leverage, budgeting deadlines, board meetings, and times you will need to avoid making significant requests of leadership and academics, such as examination periods.
If you are just establishing your office, you probably have a relatively small team. It is important that the team members understand one another’s roles and can support one another as required. An alumnus with a simple enquiry about his standing order start date won’t want to hear that the gift processer is on holiday for two weeks and no one can help him. He will expect an answer from whoever picks up the telephone. Cross training is helpful, and regular briefing meetings to share information can be useful.
Have Systems in Place
Establish office systems as soon as possible and encourage staff to comply with them. You will probably need to develop some templates to support these systems, such as contact report forms, event checklists and briefing templates. It is also advisable to establish some basic procedures and expectations – e.g., that the telephone is answered within four rings, emails are responded to within two working days, etc.
You also need to make sure that you are presenting a consistent and strong face to the world. Make sure that email footers are consistent, that the telephone is always answered the same way and that you comply with the institution’s brand guidelines.
Use your database and other technical tools to help you automate your activities as much as possible. Set task reminders, share calendars and discover how to personalise and print mailings directly from your database. Set time aside for regular essential tasks such as weekly financial tasks, monthly bank reconciliations, prospect reviews and updating contact records.
In addition to your fundraising strategy, ensure that you have a thorough calendar of activities, well-defined staff roles, regular communication methods and clear office procedures and systems in place – and that staff members understand and are bought in to these operations.
Please note that the term advancement is often used when talking about fundraising in an educational context. As defined by CASE, the term encompasses alumni relations, communications, fundraising, marketing and allied areas.
Whilst this resource touches on all areas of advancement, its primary focus is on fundraising, or development. The terms development office and development director have been adopted to reflect this approach.
Many institutions have broad-based advancement offices, and the CASE website provides in-depth guidance on the wider aspects of advancement, including alumni relations, communications and marketing.