The Four Types of Fundraising
No model is perfect, and there are substantial differences between individual items in these four categories. But the similarities are enough to justify the grouping:
This category includes:
These groups are rational and organized in the way they give away their money, and they expect you to be equally organized in the way you ask. Present briefs, plans, budgets and annual reports. Work with influential people to open doors.
The hardest part is deciding which grantors are best to apply to. It will take a few people a lot of hard, behind-the-scenes work, but if it pays off it can provide large sums of money.
Speed of results: Six months or more may elapse from initial contact to actual donation. This is a bureaucratic system.
Return On Investment (ROI) for dollars per hour worked: high. Not a lot of labour is required, but it must be of high quality. Staff usually write the grant proposals, though volunteers could do more.
ROI dollars per dollar spent: high. Little cash investment is required.
Spend 80% of the effort on: behind-the-scenes research. The hardest part is deciding which funders are most worth the effort, and what would excite them.
Increase income by: having volunteers with contacts inside funding groups. Friends, employees, club members and other personal connections lift you from the slush pile. Personal presentations by volunteers help, even if they have no contacts.
Hidden benefit: gain credibility. Other funders are impressed by groups that have already received grants.
Hidden curse: short-term grants are most common. Funding seldom lasts more than three to five years. Frequently, it is only enough for a few months to build a demonstration project. Rarely can you count on ongoing core funding.
Special Events and Product Sales
Special events and product sales include thousands of different ideas. They all boil down to give donors something for their money. There are more similarities than differences between selling tickets to events and selling cookbooks, buttons, calendars or chocolate bars.
Speed of results: at least three to six months of advance planning are required to have an overnight success. Results improve with each repetition. It is very similar to starting a business. Would you open a restaurant for one night? Jump into the show-biz world of concert promotion for one night? Profits can be slim.
ROI dollars per hour worked: low. This is labour-intensive. Many hours of volunteer time are needed. Too often staff find themselves drawn in as well.
ROI dollars per dollar: low to medium. Profits can be slim. Groups lose money, despite countless hours of hard work by many volunteers. Special events and product sales also tend to require a lot of money upfront. Events typically cost 50% of the money raised unless the expenses are covered by sponsors and in-kind donations.
Increase income by: holding fantasy auctions, and by charging high prices for Gold and Platinum admission tickets. Some of your supporters may be prepared to spend far more than you would imagine, if you make it exciting.
Spend 80% of the effort on: ticket sales. It doesn't matter how good the event is, if no one comes. Focus on events where you don't have to put on a show (a `stay-at-home') or someone else puts on the show (a preview).
Hidden benefit: Events can educate people, gain you publicity and find you new supporters. In addition, people who are uncomfortable asking for donations often find it easier to sell something.
Hidden curse: The net returns after hard work can be very discouraging. Another problem is that donors in this setting often put on their `careful consumer' hats. If you asked for $25 as an outright gift they might give it, but offer a dinner worth $10 for $15 and they may counter that they could get a hamburger for $2.50.
Direct marketing includes:
All of these are ways to reach large numbers of people and ask for relatively small donations from each.
Speed of results: One to two years or more may be required to build up a significant donor base. Acquiring a donor list is the first step. After that you can build results from the house list of proven donors. Any mailing takes eight to ten weeks to get out, and another three months before all the income is in.
ROI dollars per hour worked: high. A week's work is enough to get a campaign rolling. Staff or consultants look after the mechanics. Volunteers can personalize letters to friends and handle receipts and thank-you letters.
ROI dollars per dollar: low at first, growing to medium. Direct marketing can be very expensive to start up, but can return larger sums of money year after year. Costs are always a significant proportion of income.
Increase income by: telephoning current and past donors. Reply rates can be five times better than mail, and average donations two or three times higher.
Spend 80% of the effort on: choosing the right lists. The right package going to the wrong person is a waste.
Hidden benefit: donors who will be `upgraded' to larger amounts in the future. Monthly donors, gift clubs, and major gifts come from people who start with a $15 or $25 donation.
Hidden curse: 25% of donors disappear because they move. To replace each one who lapses, you need to ask 50 to 100 new prospects.
Major Individual Donors
This category includes:
This is possibly the most efficient way to raise money at low cost. It is also one of the scariest. People need training before they're sent out to do this. The old saying is 80% of your money should come from 20% of your donors. This is the way to get those important larger donations from special friends. The biggest gifts come from personal, face-to-face discussions, not through letters or phone calls.
Speed of results: very fast. Although careful preparation and research are advisable, the first requests can be done almost immediately.
ROI dollars per hour worked: very high. This is possibly the most efficient way to raise money at low cost. Little staff time is required.
ROI dollars per dollar: very high. Almost no expenditure is required. Printed material is not essential.
Increase income by: concentrating on people who know the work you do very well and could give large amounts. Old friends may surprise you with generous gifts if they are asked. New friends take longer to win over.
Spend 80% of the effort on: role-playing. Practice how you will talk with donors before going to them.
Hidden benefit: People you never imagined could give large gifts will overwhelm you with generosity. They will be very happy to finally have a chance to give more. Eventually they may leave large amounts in their wills.
Hidden curse: Untrained volunteers may not believe it works.
More Than Money
Good fundraising provides an opportunity to gain more than just funds. In fact, if money is all you raise, your campaign may not truly be a success in the long term. Here is a sampling of possibilities in three categories. How many can you build into a fundraising campaign?
Cold Cash (once you spend it, it's gone!)[ ] cash
[ ] cheques
[ ] money-orders
[ ] credit card donations
[ ] in-kind donations of goods and services
[ ] post-dated donations
[ ] pledges
[ ] monthly electronic fund transfers
[ ] payroll deduction plans
[ ] bequests
[ ] life insurance
[ ] annuities
[ ] endowment funds
Warm Fuzzies (the good feelings that open doors tomorrow)[ ] publicity
[ ] image
[ ] contact with people
[ ] credibility
[ ] education
[ ] motivation
[ ] increased commitment
[ ] good community relations
[ ] partnership with an institutional donor
Hot Flashes (enhanced ability to raise more in the long run)[ ] names and addresses of new donors to ask again and upgrade
[ ] new volunteers
[ ] tested ideas worth repeating
[ ] leadership training
[ ] re-invigorated volunteers and staff
[ ] diversified sources of funding
What an idea for a special event!
Too many organizations waste creative energy trying to come up with new ideas that may or may not work. You get no extra marks in fundraising for originality, only for productivity. While ideas do get worn out from overuse, consider borrowing a tried-and-true event like one of the following:
Hold an auction in addition to other activities at a special event.
Why? It allows those who are capable of giving extra a chance to do so. While ticket prices are set for the level most people can afford, there are always a generous few who would give more if you made it appealing. Auctions are an easy way for people to give exactly as much or as little as they want.
All the prizes should be donated, of course! If you pay for a prize you run the risk of losing money. At the very least, you drive your costs up. There are so many wonderful things companies and individuals will give you free for an auction.
Sentimental prizes are usually better than merchandise. Bids for merchandise tend to stop just below the real market value. The price for non-commercial items has no set limit.
Consider items like Karen Kain's used ballet shoes, which are available free from the National Ballet, and have been auctioned off for $400 and up. Other ideas: Pierre Berton's bow-tie; an autographed hockey stick.
Services also work well. For example, dinner cooked by a volunteer who has a talent in the kitchen, gardening by a green-thumb, a ride in a local brewery's hot air balloon.
Top-up auctions can provide action for everyone. In these, each bidder actually gives the difference between his/her bid and the previous one, before a set, secret time limit expires. Amounts are smaller, but can add up. At the end, the bidding can be furious as each person realizes that for just a dollar or two more they could get the item without paying the full amount.
A good auctioneer is recommended. An auctioneer who knows what s/he's doing can get the prices higher, or read the crowds for signs of fatigue. They can pace the expensive items with the low-cost fun ones. Ask a professional auctioneer to volunteer time, or try a local celebrity who makes a living by talking, such as a radio or TV announcer.
The `Stay at Home' Event
People buy a ticket to a non-event, entitling them to stay home and relax. Since most people buy tickets primarily because a friend asked them, actually holding a complex event may be needless work.
This is especially popular among people who are constantly on the go. It does not work if your supporters love to party.
Explain how much money the group is saving and how much the donor saves (no baby-sitter, parking, gas, rented tuxedo, etc). For an extra benefit, schedule the non-event for a night when an important documentary related to your cause is on television.
Attach a tea-bag (donated, of course) to the ticket and encourage the donors to throw their own tea party.
The Canadian Mental Health Association of St Catharines and District, Ontario, held a stay at home in 1993.
On a page accompanying the invitation, reply card and reply envelope, they wrote:
The reply card read:
[ ] $15 receive CMHA membership and stress reduction tips.
The Catholic Women's Ordination Committee in the USA raised almost $6,000 from 213 donors on a mailing list of 3,800 when they invited people not to attend The First Annual Non-Ordination Followed by a Non-Reception, Not to be held in the Cathedral School Not scheduled to perform: Placido Domingo, The Mormon Tabernacle Choir, Tammy Baker
The reply card said:
Gee thanks, WOC, for letting me stay home. Here's my contribution to ensure that I will be invited not to attend again next year!
The Animal Health Trust of Canada, based in Toronto, tried similar ideas. In 1992 they found that 8.6% of the people they invited responded with an average gift of $33.54.
The Quit-a-thon or Slim-a-thon, or Anything-a-thon
Friends sponsor people to raise money by giving up smoking (a donation for each smokeless day, or even for each cigarette less than usual), or for losing weight.
The Food Fair
Each chef contributes one special dish to a gala buffet. The restaurant gets publicity and the guests get a gourmet treat. Also works with wine (or beer) tastings. Sell tickets as for any other dinner.
Parties and Galas
This category includes events that can justify high admission prices or attract large numbers of people. Examples include: gala dinner-dances, benefit concerts, cruises, major sporting events, and premières of new movies.
The same ideas are often used to produce low-cost variations, with lower ticket prices. Examples include: Community beer halls, church teas, ethnic picnics, and hunger suppers (everyone eats rice and beans).
Nonprofits are constantly trying to tell people about their work. Usually they stage a boring lecture and pass the hat for donations afterwards. But people will pay for the privilege if it's done right. Present lectures on topics of general interest, to make a profit or lure a select crowd that can be won over.
Examples include: a major speaker with a world-wide reputation; a slide show in a church basement; free seminars on estate planning (to attract people who will leave money in their wills to the organization); documentary movies.
How to ensure special events make more money
Techniques can be used in combination to increase the income or decrease the labour. Here are some ways to get more income from almost any type of event.
Get everything FREE
Get in-kind donations for every possible expense. No other technique has produced so dramatic a difference in how much money is netted from special events run by grassroots organizations.
The urge to lower ticket prices is so strong in most volunteers that the revenue barely covers the budgeted expenses. But if, at the same time, the expenses are being reduced by donations of goods and services, a real profit is possible.
Anything you pay for can be had for free (although low-cost items can require so much work that it's cheaper to buy them).
For information on this, see the chapter on in-kind donations.
Build the Mail List
Collect names and addresses of all the people who participate, and find an excuse to re-contact them often.
Anyone who has helped you once is likely to help again. At least they've heard of you, even if it was only a name. Finding supporters is one of the hardest jobs a fundraiser has.
How do you get names? Offer a free draw in combination with the purchase price for the event. Make the prize attractive enough that everyone joins in. Have ticket stubs with a place where donors can write down their names and addresses. Make sure that everyone who buys tickets is included on the mail list even if they don't come to the event.
Once you've found them, make friends of them. Too many groups leave the names they've gathered from a raffle or an event to collect dust in boxes or worse yet they throw them out.
When do you re-contact them?
The Ticket Price Should be Double Your Costs or More
Set a reasonable rate of return on tickets at least twice the cost per person of putting on the event. If you can't keep half the gross returns, the event probably isn't worth doing.
Don't be too shy about high ticket prices. While high prices are certainly not for every group, many nonprofits are too fearful about the upper limits. How high can you go? In Canada, at least two major organizations have charged $1,500 per person for fundraising events. But here's a story that will set most people's teeth grinding.
The US Republican Party held a dinner in 1992. Here is how Rod McQueen described it in the Financial Post (19 April 1992).
Last night's President's Dinner was the most successful fundraiser ever, vacuuming more than US$8 million from corporate bigwigs and other hangers-on
Cheapest ticket was US$1,500, but most firms or groups bought seats by the tableful for as much as US$20,000
If you bought a table, a member of the House of Representatives joined your gang for dinner. Two tables meant an invitation to a reception on Capitol Hill hosted by Minority Leader Robert Dole. And a senator or senior administration official at one of your tables. If your total was US$92,000, a photo with the president that he later autographs. For the top end, a chair at the head table with [then president] George Bush
Multiple Ticket Prices
Groups very often lower the ticket price to accommodate the lowest common denominator. But a few people may be willing to pay more.
Give different levels of participation by charging prices at different levels to reach different markets. To accommodate the people who could not afford a regular price ticket, offer a discount for students / disabled / unemployed / single mothers / senior citizens.
But also offer premium-price tickets for those who would like to give more. Concerts and theatrical productions do this routinely, of course.
Providing special treatment for people who pay more is not essential. It helps, but you may be surprised to find people who will pay more because they are able to, without expecting special treatment. If concerns about elitism are an issue in your group, offer high price tickets with no premium treatment.
If this is not a problem, you may sell more by offering incentives to those at upper level/s, such as preferred seats, receptions, or photos with the guest of honour.
Here's an example:
At the other end of the scale, the same principle was used by eleven-year-old Megan O'Neill to raise funds for the Multiple Sclerosis Society in Sarnia, Ontario in 1986. Here is the story as reported in the Sarnia Observer:
It all follows the old biblical principle: From each according to their ability.
No Show Option
Many people buy tickets with no intention of attending. Encourage them to tell you this when they buy, so you can have accurate estimates for seating and catering. A check-box on the ticket stub or order form could say:
This can also increase sales, since it makes it harder to refuse to buy because I'll be busy that night.
Concentrate on Selling Tickets
The biggest mistake most groups make is over-estimating how many tickets their supporters can sell.
On the average, a ticket seller will sell ten tickets or fewer. A few super-stars will sell many more. Their sales will be counter-balanced by those who take a book of tickets and return them unsold.
To find the total number of tickets you'll sell, count your active volunteers and multiply by ten. Don't expect many strangers to sell tickets for you, unless you have a marvelous relationship with a service club.
Don't over-estimate how many tickets will be sold through the mail, or in booths at malls (unless run by very assertive people), or in ads, or because you got a good story in the media. Most tickets are sold by volunteers asking their friends.
Combine Ideas to Add Income
Look at combinations of ideas. Think of ways to add in more income-producing combinations, within limits of practicality.
A dinner-dance can include an auction. A bar night can include a casino. Wheel-a-thon sponsors can become eligible for raffle prizes.
Put a price tag on everything
Many items can become extra sources of income. For example:
Take souvenir Polaroid photos. For $5 you can have your picture taken with another guest. For $25 you can have your picture taken with the star of the evening. For $50 you can have an embarrassing photo of a friend. For $100 you can have an embarrassing photo of yourself destroyed.
Get the camera and film donated. Get a professional photographer or a very talented amateur to donate time. Include a simple cardboard frame, like a school photo.
Classical concert pianist Anton Kuerti has even auctioned the encores at his benefits! He offers to let the highest bidder decide which composer he will play. Prices can go into the hundreds of dollars for each of three encores.
Bail people out of (and into) jail. Set up a cardboard `jail' at a festival or in a shopping mall. Ask a local celebrity (politicians are good) to be imprisoned on fun charges. Keep it silly: wearing a tie on a holiday; driving a wheelchair without a license, etc. Levy a `fine' or `set bail' at a reasonable figure. Ask friends and supporters to bail him/her out with donations to the group. Other people can contribute to a Keep the Old So 'n' So Locked Up Fund.
On the negative side, groups concerned with prison conditions, such as the John Howard Society or Elizabeth Fry have complained that Jail-and-Bail events make light of a very serious problem, and should be discontinued.
Sell the floral centerpieces at a dinner. Get flowers donated for each table (perhaps permanent silk flowers). Someone will take them home. That person should pay a reasonable price.
Get a Sponsor. Get sponsors to underwrite the costs in part or in full. Not all expenses can be covered with donated goods and services, of course. Rather than cover these out of revenue or put up your risk capital, find a sponsor.
Even when costs aren't the issue, sponsors may want to associate themselves with the right events for a suitable fee. This can result in significant revenue before the first ticket is sold.
Theatres are masters at this, of course. Many sports events, musical concerts and art shows are also sponsored. Grassroots groups can also arrange sponsorship for the right kind of events.
Insurance companies may sponsor a series of public lectures on purchasing disability insurance, which could bring out wealthy people who might become donors. A winery might sponsor a dinner-dance. An auto maker might sponsor a sports event.
Rather than produce your own event, sell tickets for another group's production.
Selling the tickets for an event is hard enough, without all the work of hiring the hall and arranging the entertainers as well. Let someone else do that part. Theatre companies and concert producers are often glad to give a group a substantial discount on tickets that they sell.
Many of the best selling theatrical performances have charity nights. Shows that are not guaranteed to sell out are even more likely to provide you with a block of seats. You end up helping each other, in a win-win situation.
Movie distributors will also let a nonprofit have a gala opening night of a new film as a way of getting extra publicity.
Even restaurant owners have been known to host a banquet at far below cost just before they open a new restaurant or during a slow season. It attracts customers, and gives the staff practice.
You have the extra pleasure of selling tickets to an event people have heard about. They know it will be a first-class professional celebration. They are excited about being among the first let in on a new opening.
This works best if there is a relationship between the cause and the event. A movie about a disabled hero, or a restaurant that is accessible or has braille menus. But it is fine even if there is no connection at all.
Piggy-back further by getting a co-sponsor to handle all the publicity. A radio station or a newspaper might like to be seen to be doing good for the community, especially in combination with a prestigious professional event. A corporation might sign in as a joint presenter, and have their PR people handle the media work. A company that is already sponsoring a theatrical event might be a good bet for a combination like this.
The one thing they can't do for you is sell all the tickets. You can concentrate all your efforts on that.
Print a Program
Print a program to distribute at the event. Whether it is a simple two-page flyer, or a multi-page extravaganza, it serves important purposes. Here are suggestions in order of priority:
Use the program to thank all the donors and volunteers. Seeing their name in print will make people feel appreciated. That's important if you want them to help again.
Get the printing of the program donated. Include at least a line on the back cover thanking the printer for generously donating all the costs. If appropriate, also include an ad for the company that did the printing.
Make the program attractive enough that you can sell it as a souvenir, not just give it away. Rock concerts routinely produce fancy programs that fetch very high prices from fans who have already paid for expensive tickets and all without a charity appeal.
Include information about your work in the program. An exciting article about you can make people understand what you do as never before. Perhaps you can get it written free by a talented journalism student who wants clippings for a portfolio. You can also include ads about various projects you hope people will sponsor. It should make people want to give you money so be sure to include a blank cheque and a postage-paid reply envelope.
Sell ads in the program. Your bigger donors might get free ads. Others may simply want to include an ad that says `congratulations'. Or a local restaurant may want to attract people after the show. A record store may want to let people know they have albums by the entertainer of the evening, or a book store that they have the entertainer's biography.
Be careful with this idea, however. Trying to sell ads can consume a lot of energy for very little rewards. Perhaps you can get the business people from a local service club to look after the ads. They're used to selling. If you're co-sponsored with a radio station or a newspaper, their ad people might help out. If the production quality of the program is also high enough, this should be possible.
Learn from Experience
No matter how experienced you are in running special events, each different type is unique. If you're going to invest the time and money in learning how to do it well, be sure it can be repeated. If you're only going to do it once, be sure it makes a lot of money then and there. Most ideas don't. They improve with age. They become part of the community's traditions. So be sure to follow these rules:
Avoid Single-Shot Ideas
Your first special event is not to make money. It's to make mistakes! The second time is for money. Or to achieve other great results.
The hottest tip of all: build on a winner
There are no marks for originality in fundraising, only for productivity. Don't look for new ideas; improve the best of the past.
Trade ideas with your `competitors'. Ask them what has worked and what hasn't. Everyone wins when you share info.
Start a `Swipe' file and an `Oops!' file
Whenever you see a good idea, tuck it away for future reference. Do the same with bad ideas.
Then, when you have to design a ticket, or a poster or a program, you'll have examples of what you like and dislike.
Before you copy an idea (or avoid it) based on your personal prejudices, contact the group that did it and find out how they fared. The ugliest production may have been a winner financially. The most attractive may have bombed. Find out.
For more information on this topic, see the Guide to Special Events Fundraising by Ken Wyman, available free from the Voluntary Action Program. Contact info for requesting this book can be found in the resource section at the back.
Keep good records
Potlatch Made Illegal in British Columbia
Philanthropy has a long and often ignored history. The potlatch ceremony was a form of community support on the West Coast that pre-dated the arrival of European settlers in North America. In 1893, they were suppressed. Potlatches were as routine as elaborate weddings or corporate Christmas parties are today. This special event was designed not to raise money but to give away food, blankets, and all manner of needed provisions and artful joys.
Here is part of a petition to remove the ban on potlatches, sent by the delegates of the Naas River Indians to Member of Parliament GE Cobould:
We see a contradictory state of affairs adorning your civilization. Churches are numerous; theatres are located in the various sections of the town; and saloons multiply in numbers; all of which are in conformity with your laws. Consequently, we wish to know whether the ministers of the gospel have annihilated the rights of white men in these pleasures leading to heaven and hell exactly in opposite directions. They have kindly forced us out, as we are `not in it'.
In the difference of your wisdom, have we committed any offence against the almighty God or civilized humanity by bestowing on our poor Indian brethren the pleasures of our hearts by donations of charity in token of friendship? If it is a sin against nature or a damage to government, society or otherwise, we will yield with the kindliest of feeling to your imperial mandate.
You have your Christmases, Fourths of July and 24ths of May, all of which you celebrate without interference sine qua non. Money is spent in squanderous profusion with no benefit to the poor of your race.
We go to the entertainments of your theatres and you charge us money for the privilege. We give our dances at which our guests are welcomed by the testimonial of donations, according to our custom the inheritance of our fathers.
If we wish to perform an act moral in its nature, with no injury or damage, and pay for it, no law in equity can divest us of such a right.
We see the Salvation Army parade the streets of your city with music and drums enchanting the town; leading wanderers and helping the poor by making him pay for all he gets
We see in your graveyards the white marble and granite monuments which cost you money in testimony of your grief for the dead. When our people die, we erect a large pole, call our people together, distribute our personal property with them in payment for their sympathy and condolence, comfort to us in the sad hours of our affliction. This is what is called a potlatch this privilege denied us.
It is a chimera that under the British flag, slavery does not exist.
Source: display at the Royal British Columbia Museum
Train new leaders and re-train old ones