By DonorSearch

14-Step Guide for Getting Started with a Capital Campaign

So, your organization needs to raise a significant amount of money for a particular project. This might be a long-awaited renovation for your organization’s headquarters or perhaps another big-ticket project that can’t be covered by your annual fundraising efforts alone. After examining all fundraising routes, you’ve determined that a capital campaign is the right way to go. Before you dive straight into fundraising, there are a number of steps that you have to take to properly plan your capital campaign. To get your capital campaign off the ground, you should: Assemble a capital campaign committee.


By donorsearch

[Guest Post] Retaining Major Gift Donors

This blog focuses on the world of prospect research and various related fundraising topics. To diversify our subject matter, we like to feature the work of our friends and colleagues in the community. Join me in welcoming Vicki Shelton, Senior Director of BNY Mellon Wealth Management, Seattle, Washington and please enjoy this post on retaining major gift donors.


By Vicki Shelton, Senior Director, BNY Mellon Wealth Management, Seattle, Wa. In 2015, charitable giving increased for the fourth consecutive year, as reported in the 2015 Fundraising Effectiveness Project (FEP) Survey Report. The FEP, developed by the Association of Fundraising Professionals (AFP) and the Urban Institute, measures gains and losses in gift amounts, as well as in the number of donors among participating charitable organizations. Alarmingly, among the organizations surveyed, for every 100 new donors, 102 existing donors left the charity without making a gift. In fact, for every year since 2004, more donors left than gave new dollars to organizations suggesting that the emphasis of charities is on gaining new donors, rather than building relationships with major donors to encourage repeat giving. Most nonprofits are effective in raising new dollars from new donors; though it may not stem from outstanding fundraising efforts. Rather, economic conditions over recent years may have more to do with prompting donors to reach for their wallets. Looking at 2014 fundraising drivers, the financial markets experienced double-digit returns in that year, employment increased, and at the same time, energy prices fell. These movements improved consumer confidence, which more likely led to increased giving. However, as markets move and consumer sentiments fluctuate, nonprofits will need to deploy a more rigorous approach to fundraising – balancing efforts to win new donors with donor retention. While most boards and foundations dedicate time to developing relationships with major donors through meaningful connections, merely spending time with major donors is no longer enough. Savvy donors want to understand an organization’s strategic plans, with well-developed business objectives, for a clear view of a nonprofit’s goals. Reduced government funding and other traditional grant-making resources demand that organizations sharpen their focus on major-donor capacity for future growth. Nonprofits seeking new or repeat gifts from major donors will need to adopt a specific strategy and approach to donor interaction. Often, nonprofits use the same approach across their donor base – direct solicitation or a written request. One wealthy philanthropist recently explained: “Every time I attend a nonprofit event, I feel as if I have a dollar sign tattooed on my forehead. I am approached almost instantly by someone from the organization wanting me to make a large donation.” Most wealthy donors are put off by direct solicitations at events or outright through a phone call, and require a thoughtful and strategic approach for continued future gifts. Nonprofits are getting smarter about building relationships and strategic plans with major donors for continued gifts. However, many nonprofits say they are all vying for the same dollars as their competitors. Nonprofits that succeed in their fundraising efforts recognize what this level of donor expects.

To delve into this rigorous approach, this article is divided into four key sections:

  1. Attracting and Retaining Major Donors
  2. Research Highlights
  3. The Major Donor Experience
  4. Honor and Engage Your Donors

Attracting and Retaining Major Donors

There are four ways to better attract and retain major donors: 1. Share the big picture: From Atlas of Giving’s 2014 report, “most people like to support winning causes.” Board members and staff need to share with donors not only how the nonprofit makes the world a better place but the metrics to back up those claims. 2. Internal collaboration: A unified fundraising effort between the board and staff reduces duplication of effort and avoids confusing the donor about whom to contact at the organization. As a donor mentioned, “It is annoying to receive a direct mail letter while at the same time in my mailbox I am invited to purchase a table for an upcoming Gala. And then, I will get a call from a staffer asking for a gift. Can’t they coordinate their efforts, so I don’t feel harassed?” 3. Discuss special projects: Major donors have often built their wealth by being entrepreneurial in their careers. They want to hear about the overall strategic plans for the organization, but may relate well to special projects that resonate with them for a variety of reasons. Some may be pleased to be involved in a project reserved for a “small club” of other significant donors, such as major funders of a new university building or a specialized hospital wing. Others may desire acknowledgement through naming rights. 4. Collaborate with other donors and nonprofits with similar missions: Paul Lagasse writes in his article A New Perspective, “There is enough evidence out there showing that the old model of being able to focus on your own little corner of the world without understanding everything else that’s going on just doesn’t work anymore.” In recent years, grants given by the Bill and Melinda Gates Foundation to community foundations were provided so each community foundation worked together with their region’s nonprofits on initiatives that crossed over many aspects of the local community. One community foundation in the Pacific Northwest focused on homelessness, addressing the impact on the community for stresses around education, safety, drug and alcohol abuse. Another community foundation worked on child trafficking, its impact on the community, and resources to children and families being affected. As organizations focus on “relationship equity” or making meaningful connections with major donors, a good place to start is to take the AFP Fundraising Fitness Test. Another resource is the Leaky Bucket assessment (, which measures nine key business practices that contribute to or detract from the effectiveness, efficiency, and productivity of fundraising efforts. Nonprofits should conduct a careful analysis of how their fundraisers focus on major gifts: That is, to determine how much effort is spent on “busy work” vs. identifying, cultivating, soliciting, and stewarding major donors. Linda Lysakowski’s article Spending Enough on Fundraising? notes that ‘face time’ with donors is paramount to receiving large gifts. By developing a relationship with a major donor there is evidence to suggest that when asked, 60% of those donors that are engaged in person will make a gift. It’s important to keep in mind that 95% of your gifts will come from 5% of your donors. As previously mentioned, major donors make gifts because they resonate with the mission, purpose and activities of the nonprofit organization. While it is true that major donors will typically make a gift if there is a recurring ‘ask’, subsequent gifts are rarely made if there is not a strategic plan around the gift that has been discussed over time with the donor.


Research Highlights

Without continued, coordinated connections with your major donors, the trend downward for repeated gifts will continue. The Science of Philanthropy Initiative (SPI) co-founder John List and the University of Chicago studied the giving pattern of donors for more than ten years. The research highlights several key donor issues: 1. Giving Produces Happiness: Many studies highlight that giving makes people feel good. In a study of solicitation for charitable gifts that Alaskans could make from the Permanent Fund Dividend they receive from mineral royalties, they made choices based on one of two solicitations, either supporting a message of “Make Alaska Better” or “Warm Your Heart.” Gifts for the “Warm Your Heart” were 55% higher than those for “Make Alaska Better.” It is key to share with your major donors how others felt in making gifts. 2. Recognize Your Donors (unless they want anonymity): In a study by Anya Samek, an SPI co-founder, the two reasons major donors give is to “seek prestige” or “avoid shame.”


By DonorSearch

[Guest Post] Cast a Wider Net in Your Prospect Identification

This blog focuses on the world of prospect research and various related fundraising topics. To diversify our subject matter, we like to feature the work of our friends and colleagues in the community. Join me in welcoming Jeff Stein and Allison Keech Sanka of Planned Giving Marketing and please enjoy their post on planned giving.

Cast a Wider Net in Your Prospect Identification

There are more big fish in your small pond than you may think (or than you’ve been led to believe).


By DonorSearch

The 3-Step Guide to Handling a Prospect Researcher Staff Transition

Article written by Sarah Tedesco, Executive Vice President at DonorSearch. Heraclitus said it best when he stated, “Change is the only constant.” Although it is not always welcome, the sooner we accept and embrace change, the better our lives are. That platitude, though easier to take in theory than practice, certainly applies to the way that organizations handle staff transitions. Nonprofits and educational institutions, just like any other type of employer, have to deal with important staff members leaving and the ramifications of those exits. Putting plans in place to handle and account for the transition of employees, especially senior staffers and leaders, is critical to the ongoing success of an organization. Staff turnover is inevitable. Transitional success is a matter of preparing for and adjusting to the change. For a nonprofit, one of the most valuable roles within the organization is that of the prospect researcher. When it is time to transition to a new researcher, you’ll want to be ready to make the process as smooth as possible.

The best approach to handling a prospect researcher staff transition follows three steps.

These steps cover the entire cycle of the transition. Step one should occur before the prospect researcher leaves the position, step two will happen as the transition is occurring, and step three is to be performed once the turnover is complete.

Step 1: Implement Standards and Systems

This is a preemptive step. It is helpful in general and especially useful when your organization is experiencing change. Standards and systems make a position transferable. Prospect research is an extensive process. On any given day, your current prospect researcher could be:
  • Putting together prospect profiles.
  • Ranking prospects according to giving affinity and capacity.
  • Determining the right ask amount for a certain donor.
  • Assisting the fundraisers with solicitation strategies.
  • And much more.


By DonorSearch

[Guest Post] Fundraising Compliance and the Impact on Giving

This blog focuses on the world of prospect research and various related fundraising topics. To diversify our subject matter, we like to feature the work of our friends and colleagues in the community. Join me in welcoming James Gilmer of Harbor Compliance and please enjoy this post on fundraising compliance.

Fundraising Compliance and the Impact on Giving

Fundraising and active donor engagement are critical to your nonprofit’s success. Many nonprofit leaders believe that simply being recognized as tax-exempt under IRC Section 501(c)(3) allows their charity to fundraise freely. However, fundraising (or “charitable solicitation”) is highly regulated at the state level. Failure to comply with the rules and requirements of state authorities can lead to steep financial penalties, loss of personal liability of the officers and directors, and a loss of credibility with your donors. Proper registration and compliance directly impacts your ability to fundraise for major gifts. Consider this the “other side” of prospect research. While you are determining their giving capacity, donors will research your organization before they give. If you are not registered, or noncompliant, you risk losing a big opportunity. This post will serve as an introduction to fundraising registration and demonstrate its potential impact on current and future gifts to your organization.

What is Charitable Solicitation Registration?

Charitable solicitation registration, also known as “fundraising registration,” registers your charity with the state (usually the Attorney General’s Office), and allows your charity to solicit funds in that state. Currently, forty states and the District of Columbia generally require nonprofits to register, and to renew the registration annually or biennially. By registering, you keep the state informed of your operations, financial information, leadership, and fundraising activities. The purpose is to protect the citizens of that state from unregulated or illegitimate organizations. Each state has differing application requirements and filing fees. You can expect to submit information on the organization’s leadership, activities, and financials, as well as any corporate records. You can also expect to appoint a registered agent, and obtain a Certificate of Authority in several states. You will then file annually or biennially in most states in order to keep your registration active. Review your state’s registration and renewal requirements using this Fundraising Compliance Guide.

Why Register, and How Compliance Impacts Giving

Currently, forty-four states have laws surrounding charitable solicitation. Of those states, forty and the District of Columbia have a registration requirement. With few exceptions, your charity must register before it solicits funds, regardless of whether funds are actually received. That’s right, before you even ask for a donation. The IRS also wants to know. On your IRS 990 return, you disclose all the states in which you fundraise and in which you have registered. Most importantly, don’t believe for a second that while you are researching prospective donors, that they are not researching you, too. It’s a fact that donors who have made major gifts in the past are more likely to give again. Experienced donors and foundations use the state’s registry of charities to search for your nonprofit before they give, especially if they have never given to you before. If your organization is not registered, or is noncompliant, you lose credibility with those donors, and potentially lose the sale as well. By staying compliant, you demonstrate your organization’s credibility and reassure donors that they are making the right choice.

When Does My Organization Need to Register?

According to state requirements, your nonprofit should generally register before it asks for donations, including online. In reality, many nonprofit leaders are unaware of having to register for charitable solicitation. If you have already been sending solicitations, or receiving contributions from a state, consider registering there as early as possible. State law is one motivator, but your organization’s bottom line is another one. Given what you now know about donor behavior, are you losing out on gifts because your nonprofit is not fully compliant? Are your donors demanding, either directly or indirectly, that you register? For many organizations, the value of compliance, through added contributions and avoidance of state penalties, outweighs the cost of registration. By the way, if your organization fundraises online with a “Donate Now” button or on crowdfunding platforms, you are technically soliciting funds in every state. This means your nonprofit must comply with applicable registration requirements nationwide.

Staying Compliant

Once you have registered and become compliant, the last thing you want to do is fall out of good standing with state charitable solicitation authorities. Even if your charity operates and solicits donations in just a few states, tracking due dates and filing registration renewals on time is important, as one lapse can lead to penalties and fines. For larger organizations, tracking nationwide renewals can be a huge drain on staff time and organizational resources. If your nonprofit is using substantial resources managing registrations, remember that there are service companies, attorneys, and other professionals who specialize in this work, reduce the time you spend, and help you stay the course. The reward for all your hard work is two-fold. First, by registering your nonprofit, you help stay in compliance with state and IRS requirements. You’ll also avoid state fines and penalties that may arise if your nonprofit is found to be noncompliant. Even greater, your nonprofit will have the freedom to solicit funds in any state where you are registered, and will give your donors the complete confidence to support your mission.     Author Bio: James Gilmer is a compliance specialist for Harbor Compliance, which establishes 501(c) nonprofits and helps them stay compliant. Harbor Compliance assists charities in every state and several countries abroad. James serves on the Board for two nonprofits in Lancaster, Pennsylvania.
Timeline for a Capital Campaign: 3 Fundamental Stages
14-Step Guide for Getting Started with a Capital Campaign
[Guest Post] Retaining Major Gift Donors
Major Gift Officer Job Description [Free Template]
The Ultimate Guide to Getting a Major Gift Program Started
[Guest Post] Cast a Wider Net in Your Prospect Identification
The 3-Step Guide to Handling a Prospect Researcher Staff Transition
[Guest Post] Fundraising Compliance and the Impact on Giving