Chapter 2What's the Money For?Project orientationYour success in fundraising depends first and foremost on how you answer one deceptively simple question: What is the money for? There are other important factors, such as who you ask, who does the asking, and what techniques you use. But they are secondary, because they depend upon how you answer the first, central question. There are right and wrong answers. Wrong answers focus on internal organizational needs. The Wrong AnswersThe money is:
Very seldom will you be able to get substantial sums of money for core items. In the past, government departments occasionally covered core costs, but these resources are declining or gone. Many programs now restrict themselves to short-term startup grants, if they give for anything other than projects at all. People give to peoplePeople give to people is one of the oldest truisms of fundraising. People do not usually give because the organization itself needs funds. They want to help other people. Your task is to show how their donation will help people. Results have motivational power; monetary figures do not. If the donor knows the potential results of a donation, it changes the nature of the decision-making process in the donor's mind. Instead of Why are they always after me for money?, the donor is more apt to say, Do I want to make a difference or an impact in this way? Donors think about the effect of their donation, not just whether they can afford to give to the organization. Keep track of who benefits from your work. The more detailed statistics you have, the better. Donors are often interested in supporting projects for specific populations such as women, or native people, or youths under 24, or people in northern Saskatchewan. Be prepared to show them how many of each you help (whether through service or advocacy). Here are some specific suggestions for techniques you can use. Help people to understand how your expense budget translates into real people needing help. This will help you as a fundraiser to develop the case statement, which is the quick explanation of why your agency needs the money. Write in terms of people, not large issues
Document positive case studies and past successes Write down testimonials, especially from people you have helped. (Be sure to ask for permission to use them, and change names to protect confidentiality if that is an issue.) Imagine What if our agency didn't exist? Write down your dreams and your wish list (what you could do with more resources). In transforming costs into benefits, you may wonder what to do about administrative costs (eg, providing for staff, office space, computers, etc). Paying for these basic costs does not motivate donors, as you probably already know. The key to resolving this is to apportion a percentage of the administration costs to each program. This is more exciting and motivational, but also more realistic. A program can't operate without rent, and wear and tear on desks and computers. If each project doesn't pay its share of meeting costs, vacation pay and hiring expenses, it will fall between the cracks and end up a burden for all. Marketing the budgetApproach your budget in four steps: Step 1
|
Item |
Amount |
---|---|
Salary |
$ 1,234. |
Rent |
2,345. |
etc |
13,670. |
Total |
$ 17,249. |
Item |
Project #1 |
Project #2 |
Project #3 |
Project #4 |
Project #5 |
Total |
---|---|---|---|---|---|---|
Salary |
$123 |
$271 |
$222 |
$401 |
$216 |
$ 1,234 |
Rent |
$234 |
632 |
325 |
89 |
227 |
2,345 |
Printing |
$891 |
375 |
214 |
5,201 |
33 |
8,910 |
Postage |
$456 |
932 |
1,032 |
66 |
79 |
4,567 |
etc. |
$92 |
43 |
12 |
220 |
43 |
123 |
etc. |
$290 |
200 |
637 |
68 |
5 |
67 |
Admin. |
$456 |
123 |
876 |
987 |
333 |
2,775 |
Total |
$1,724 |
2,365 |
6,127 |
4,606 |
5,118 |
$ 17,249 |
Qty of Services |
46 |
55 |
112 |
476 |
245 |
1,870 |
Unit cost |
$ 37.48 |
45.09 |
12.74 |
73.25 |
31.38 |
$ 9.22 |
Please note: the figures above are only examples. Totals may not add up.
IN: Project-oriented full cost recovery budgets:
Relate costs to a specific number of services: the `unit cost'. If project no 1 transports 146 senior citizens, for example, the unit cost is $1,724 ÷ 146 = $37.50 per senior citizen.
A `bite-size' contribution of $37.50 is realistic to ask of an individual and they can see what a donation will accomplish.
Some grantors still insist on separating administration costs from the projects they fund. Then they provide grants only for the `project' portion.
Fortunately, more and more grantors recognize the value of project accounting.
However, faced with a funder who insists on rigid segregation, it is simplest to comply. He who pays the piper calls the tune!
If the donor funds only the direct costs, remember that this is not the full project cost. The balance of the expenses must be shared by other funders.
Project Ride, for example, was budgeted for $10,000, using True-Cost Accounting. The government, however, called 25% of the budget `overhead', and gave a grant of only $7,500. How do you handle that?
Wrong: Project Ride is 100% government-funded but we have $2,500 left over in administrative costs.
Right: Project Ride is 75% government-funded. The children need another $2,500. Climb on this winning bandwagon with the government.
Put all this information together to help donors understand why they should give. Tell a story. Appeal to the whole person. To do this well, give reasons for the head, heart and wallet.
Your answers will help the donor to concentrate on what results can be achieved with his or her money. Emphasize the ends, not the means. Ask for money to fund specific achievements, not for organizational expenses.
Look at how one of the world's best fundraising organizations explains this. Here's what Unicef wrote in one of its fundraising appeals:
$253 provides a pump for fresh water in a village
Note this is an odd number. If it was rounded out to $250, it would be less believable. You can almost picture them taking your cheque to a hardware store, buying a pump, slapping a few stamps on it and dropping it in a mail box to go on its way to drought-stricken Africa.
$100 provides enough oral rehydration salts to save the lives of a thousand malnourished children.
That's very impressive, very emotional. Look at how many lives can be saved. Much better than discussing the problems of nutrition and sustainable development, or diarrhea and death.
$75 provides enough vaccines to immunize 2,500 children against diphtheria, whooping cough and tetanus.
$44 provides Vitamin A protection against blindness for 1,200 children.
Note the odd number again. And the number of children being helped goes up as the dollars go down.
$20 provides writing pads for 300 schoolchildren.
What a visual image that is. Far more effective than saying school supplies, or support our literacy program.
Even if you aren't Unicef, and you can't pull at quite so many heart-strings, you can (and must) still use the same techniques.
Remember: Don't talk about what you will spend the money on. Talk about what the money will achieve!
While the example that follows is over-simplified to prove a point in limited space, it highlights key methods.
The wrong way: Disability Support Group (a fictitious organization) needs $5,000 for 4 month's salary, $2,000 for postage, $1,500 for printing, and $1,000 for rent, phone bills and other overhead. We are advocates for disabled people concerned with public building accessibility, among other issues.
The right way: A drunk driver hit 19-year-old Judy while she was riding her bicycle. She survived, but she is paralyzed. After therapy, Judy got out of the hospital only to discover a new problem. The office where she had been working was not wheelchair accessible. Neither was her church, or the fitness club where she used to work out. Needless architectural barriers make the tasks of daily life an almost overwhelming challenge in our community for people with limited mobility.
This story has a happy ending. With help from donors like you, our group showed Judy how to get ramps installed, washrooms modified, and other changes so she could get on with her life. Three weeks ago she called to say she got a promotion.
You, too, may be affected by a disability that will restrict your mobility during your life. One person in four will be. Perhaps it could be a stroke, or the infirmities that can come with old age. It may mean years in a wheelchair, or the temporary problem of a simple broken leg in a cast. Over 8 million Canadians are affected today. This project may help all of them, as well as future generations. You can help improve life for other people like Judy who need access to public buildings. Here's the plan: an innovative professional education campaign will cost as little as $20 to reach one of 5,000 influential architects and city planners. Will you give $20 to help people like Judy?
This example, although with many of the characteristics of a good fundraising appeal compressed into far too few words, does serve to illustrate the techniques available.
Caution: There are dangers in this approach.
Use only positive emotions (such as hope) to highlight the excitement of what you are doing, without being exploitive of either the donor or the person being helped.
Concentrate on the essential work you currently must do to survive. Do not seek funding for exciting new projects, at the expense of essential day-to-day work. Too many organizations end up taking on projects they wouldn't otherwise consider, because they hope for surplus income to fund core costs. The surplus is seldom there. Distractions from your original direction may have serious consequences. Be extra careful when new priorities for grants are announced, that the tail doesn't wag the dog.
Be sure each project contributes its full share of overhead costs, so that nothing is left over in the budget. If you have five work projects, be sure that you include time and money for all the indirect costs. These might include coordination meetings, a portion of the computer shared by the projects, bookkeeping, fundraising and time spent planning for the future. Otherwise, the projects will drain your energy.
Budget 10% for contingency costs into each of the projects. Then if one is not fully funded, it shouldn't become a burden on all the others.
Show your `cost per units of service'. Even advocacy organizations should be able to show how many people are helped by a particular piece of work, and break down the costs by person-year (or month or week or day).
The constant challenge is to explain what you want to spend the money on, in terms that make the donor want to give it. Here are additional examples:
Wrong Way |
Right Way |
|
Library |
Start an information centre to help 120 disabled people each month discover how to solve their own problems. (Donors with special interest in women's issues, or native people, or athletics, or law could be asked to sponsor a shelf of books on their favourite topic.) |
|
Secretary |
Provide information in person and on the phone to 40 disabled people a day ($2.40 per person helped), in addition to other duties. |
|
National Conference |
To enable 100 isolated disabled people, each representing 200 others (for a total of 20,000 reached) to share their problems and their solutions with other disabled people on the topic. The cost is $100 per participant per day, and only $2.50 for each person ultimately reached, making it a cost-effective way to help. |
|
Annual board meeting |
[Should be part of the individual project budgets, not a project on its own.] |
|
Purchase office building |
Provide an information centre in a fully accessible building in a consistent and effective manner, not available anywhere else in the community. Will serve 5,000 people per year for 10 years, at an average cost of $10 per person. Equivalent rent for the period would be $600,000, leaving no community asset. |
Service organizations can seem more appealing to a donor, unless advocacy organizations build a good case for the importance of what they do.
It sounds concrete and believable that a donation can buy a wheelchair or fund medical research. But often the promise of helping change the system seems unglamorous or completely impossible.
Donors must be shown clearly how their dollars can help more people more effectively by advocating changes in laws, or reducing discrimination against disabled people, or making self-help a reality.
Here are more quick tips in addition to those above, that may help with this difficult task:
In the context of fundraising, don't try to make yourself look better by pointing out all the flaws in established organizations. This may make donors defensive. Concentrate on giving positive reasons why they should support you, not why they shouldn't support others.
Many organizations are justifiably angry at appeals for donations that have portrayed people as helpless, inferior, or objects of pity. Disabled persons' groups have led this attack on damaging images.
It is never necessary to use this approach to be successful in fundraising.
Many people respond well to appeals for self-help projects. Success stories that emphasize what can be done not what can't bring in good results. This manual is dedicated to the positive approach.
At the other extreme, consumer groups occasionally consider launching campaigns that are purely rational, in direct contrast to the highly emotional appeals they dislike. The approach may be dry, confrontational and angry.
Like the people who build a better mousetrap and expect the world to beat a path to their door, they are usually disappointed by the results. They may become cynical and suspicious of the public's willingness to help genuinely good causes.
Good campaigns recognize that people give with both the heart and the head. Do not expect to be effective if you use an intellectual approach alone. Emotions are a legitimate part of everyone's personality.
Avoid negative pitches that emphasize guilt, pity or fear.
Focus on positive feelings of hope, caring, shared vision and pride in accomplishment.
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Last updated : 1998/10/16 |