As non-profit professionals, I know we are always trying to avoid making serious “fundraising mistakes.” There are definitely some issues that everyone raising money for any cause should be aware of before asking anyone for funds.

Guidestar has an excellent article posted on their site called  The 20 Biggest Fundraising Mistakes, Part I which covers the first 10 on the list. I don’t know what order these are really supposed to be in, but the very first one on the list may just be the #1 biggest mistake in my opinion: Thinking Your Organization Will Attract Support Simply Because It’s a Good Cause.

Just because you have a good cause—one of thousands, really—doesn’t mean money will wend its way to you…Keep in mind, always, that people give in order to get. They don’t simply want to give away their money; they want to feel they’re investing it and getting something in return.

Luckily the belief that people will donate “because it’s a good cause” stems from a very positive place – that you passionately believe in the cause. It’s easy to develop such tunnel vision when working for a non profit. But as with so many things in life we have to look at things from other people’s perspective.

In addition to this Guidestar list, Sandy Rees also has a relevant report called “10 Deadly Fundraising Mistakes and How to Avoid Them.” It’s a great report that addresses a lot of foundational reasons that non profits have trouble with fundraising. Plus the best part is that she shows you how to remedy such situations or avoid them altogether!

You can request your free copy of this report here: 10 Deadly Fundraising Mistakes and How to Avoid Them

Discount cards are one of the best fundraisers that can be used by a wide variety of groups. A discount card is a custom printed plastic card that volunteers sell to residents in the local community, normally for $10. The cards have coupon type offers with unlimited use for a specific time period, usually one year.

High Profit Potential

The discount card program offers so many advantages as a fundraiser. First and foremost, this fundraiser has a very high profit potential compared to other fundraisers. Discount card companies vary but most offer anywhere from 50 to 90% profit.

At the highest profit percentage, your group sells a card for $10 and retains $9. Your group and those who purchase cards will know that the majority of the funds will go directly to help the cause.

Strong Appeal to Buyers

Discount cards are easy to sell because they offer such great value to the consumer. Last year I bought a discount card for my local area. While not all of the offers on the card appealed to me, there was one that I really liked – “Free Dessert with Purchase of Two Entrees” at Johnny Carino’s Italian restaurant. Since that is one of my favorite restaurants and they feature one of my favorite desserts – Cannoli – I jumped on this deal! I’ve probably used the card there at least 6 or 7 times in the past year which did save me money (and gave me an excuse to have dessert!)

It’s likely that your buyers will find the offers on the back of the discount card to be worthwhile for saving them money too. When you use custom discount cards the offers all apply to your local area. You can recruit local businesses and not just chain outlets which are offered on stock cards. This definitely increases the value of the cards for your buyers

Custom discount cards appeal to businesses too because they give them an economical way to promote their products or services. They will likely attract new customers and future repeat business because of the card.

Easy to Deliver

Not to be forgotten is the fact that discount cards are easy to carry when you are selling them. They easily fit into a pocket or purse – unlike other products that can be heavy, cumbersome or perishable. Since you collect money at the same time that the card is sold, you don’t have to return to the customer again to deliver the product. This makes selling them easier and quicker than pre-order programs.

Recommended Discount Card Provider

FastTrack Fundraising offers custom discount cards at up to 90% profit. Your group can customize the front and back of the card entirely.

There’s no initial investment and no additional fees. In fact, with there is no minimum order either. The cost of the card depends on the quantity of cards purchased – anywhere from $3 to less than $1 per card. Even at the entry level a profit of $7 per card is still very good.

A Discount Card Fundraiser benefits everybody:

• Businesses like them because they bring in more customers.
• Supporters like them because they save money.
• Fundraising groups like them because they are highly profitable at up to $9 per card, customizable, and easy to sell.

Request a free fundraising information and samples now

Friday I received an interesting question by email. I thought other nonprofits may be in a similiar situation and would benefit from this Q&A and/or have some feedback to add.

Hi, Sandra,

Recently, there has been an explosion of discussion among nonprofits in our local area around soliciting clients for a donation who are recipients of social services that are offered free of charge from their respective nonprofit.

My question to you is – is it best practices and ethical to solicit a client for a donation, regardless of the type of service they have received from the respective nonprofit?

Just to clarify, when I refer to the word “solicit”, I mean even something as simple as leaving them a remittance envelope or letter, offering them the opportunity to support the nonprofit with no expectations.

I work for a local aging agency and some of our programs are based upon income level and need.  Since we have a federal obligation to deliver some of our services free of charge or on a sliding fee scale, there is hesitancy by some staff members, questioning the ethical nature of our intent to solicit.

In addition, there is another agency in the area that offers services to those with mental health issues.  Soliciting clients with mental health or addictions issues is  perceived as taking advantage of their situation.

There are others as well, but, again, there seems to be a general concern about this issue.

Any advice or input you can provide would be most appreciative!  Thank you in advance.

Ken Grunke

Ken,

In general I have to agree that there is an ethical issue with charging low-income clients for services that the nonprofit was created to provide for free.  There would be certain instances where charging a small fee would be appropriate, for example, a GED prep or other class or meals at a reduced price.

If the motivation for asking for money from clients is because funds are low, this may be barking up the wrong tree.  What would the total funds raised be from a group that does not have the capacity to give?  If charging a small fee helps clients feel like they have a stake in the services they receive from the nonprofit then that is a different motivation all together.

Charging for usual services would be a major shift in the way the nonprofit operates.  So it would have to be something that the board, staff and stakeholders all agree is appropriate and right for the organization.

What do you think?  Add your comments below:

Last week’s post on Fundraising on Facebook from Ethan Austin has attracted some attention.  It was listed in the Top 10 Technology and Social Media Resources for Nonprofits from Connecting Up Australia.  Check out the other 9 resources included on that list.

Here’s a roundup of other recent articles focused on the latest online fundraising trends:

NonProfit Email Marketing: Is Your Organization Ready for an Email Monthly Giving Campaign? from Pamela Grow. This post includes an interview with the director of monthly giving for Best Friends Animal Society.

Social Media & Grantmaking VI: A Member’s Perspective On Twitter from Northern California Grantmakers blog. How the Quixote Foundation is using Twitter.

Social Media Case Study: Facebook plus integrated marketing helps raise $950,000 from Marketing Experiments

Join the Online Fundraising Technology Conversation by Philip King, Fundraising Success Magazine

The Keys to Fundraising on foursquare by Allyson Kapin, posted on Network for Good. This latest social media site focuses on location. Maybe this will get your attention: “I recently did an advocacy, awareness and fundraising campaign called #100X100 using foursquare that raised $25,000 in 24 hours and prompted more than 800 supporters to call their Congressmen,” said Rosenberg.

Case study: Online tools help increase offline (and online) giving by Andy Robinson, from Mal Warwick’s July Newsletter.  Connecting online and offline is important!

3 Surefire Ways to Use Twitter To Promote Your Organization by Julie Stofer, another great article on Network for Good.

Finally, here’s a good reminder from John Haydon to connect with supporters via social media on their terms not yours.

If you think all nonprofit communications have to be serious, think again. Kudos to the San Francisco SPCA for creatively jumping on a hot topic while promoting their mission.

Warning: watching this video may cause abrupt laughter, inability to stop singing this song and warm fuzzies.

The Johnson & Johnson Community Health Care Program announces a grant funding opportunity for nonprofit, community based health care organizations.

The strategic intent of the program is to focus on promoting wellness and healthy lifestyle choices to prevent and reduce the impact of chronic diseases.

To be eligible nonprofits must be implementing evidence-based, community education programs that promote wellness and healthy lifestyle choices to prevent and reduce the impact of obesity in children 6-12 years of age.  Successful applicants will receive a $200,000 grant to fund activities over a 2-1/2 year period. 

A total of eight grants will be awarded in the fall of 2010 to nonprofit, community-based health care organizations in these six locations: Bronx, NY, Hamilton County, OH, Long Beach, CA, Philadelphia, PA, Shelby County, TN and Wayne County, MI.

Application submission deadline is June 7, 2010. For details on the application process and the J&J CHC Program go to this website or e-mail jandj@jhsph.edu

via the DMA Nonprofit Federation Careers e-Bulletin

If you have an auction on the horizon start getting prepared now.  The Secrets of the Charity Auction Experts teleseminar series provides solid advice from seasoned fundraisers and auctioneers.

According to the Association of Fundraising Professionals (AFP) 2009 State of Fundraising Survey, only “43 percent of charities raised more money in 2009 than in 2008, marking it the worst year for charitable fundraising in a decade.”

The survey states that declines were consistent regardless of cause. However, several of the food banks that I have talked to actually did well last year.

In 2009 food banks across the country had to step up to fill increased needs cause by the recession. Thankfully, many of them had a strong donor base in place that recognized the need and were willing maintain funding.

Canned food drives continue to be successful

Canned food drives are an ongoing effort for food banks and pantries. They provide a way for supporters to give something tangible and they can feel good knowing that they literally provided food to help those in need.

Deborah Talbot, Development Coordinator at Bread of the Mighty Food Bank in Gainesville, Florida said that food donations in 2009 were way ahead of the previous year. In a special drive the week before Thanksgiving they took in over 8,000 pounds in 2 days. “The Gainesville community historically has been very good about responding to publicity about the needs of their neighbors, and we’ve had exceptional local media coverage this year, too.”

The food bank proactively solicited groups to help. “At the beginning of October we sent out a letter to all groups/individuals who conducted food drives for us during the past year (including through the 2008 holidays) asking them to consider doing so again over the holidays.”

Direct mail is a strategy that Bread of the Mighty uses wisely.  In fact, one of their thank you letters is even included as a sample in the book 7 Essential Steps to Raising Money by Mail.

Talbot continues, “We’ve had a 28% response with repeat food drivers. From October to December we had 164 food drives, with 88 repeats from the past year. From the 200 letters we sent out October 1, we had a 44% response. I was amazed and thrilled. We had a 15% increase by weight in the amount of food received through food drives.”

Direct mail appeals prior to holiday season

Sandy Rees, with whom I co-authored the above mentioned book, has worked with food banks for several years. “The holiday season is prime fundraising time for food banks, particularly Thanksgiving. Most TV and radio stations will help promote fundraising or foodraising campaigns, especially if you get them on board early enough.”

Rees notes that the most important thing is to tie the amount you’re asking for to a meal. For example “your gift of $5.00 will provide a Thanksgiving basket for a family in need.”  Food banks can raise money with a Thanksgiving theme from early October to late November.  Just be sure to word the appeal appropriately, whether the donation will go to a restricted fund just for holiday meals or goes toward a general fund.

Year-long follow up with supporters

Talbot sees direct mail as an ongoing project. “The other things we’ve done more diligently is to follow up with donors (financial & food) throughout the year. This is my third holiday season with the food bank and the consistency with me coordinating food drives & acting as a food drive point of contact has improved partnership relationships with the various offices and groups.”

This year Bread of the Mighty prepared an annual report for the first time.  They included information about how holiday giving went and the impact it had. “This went out with our 2009 tax receipt letters, which we sent to everyone who gave us finances (no matter how little or how much) during the year. It will also go out with every thank you letter and other reasonably appropriate piece of correspondence until the next one is prepared for April. Time will tell on the effectiveness.”

Capital campaigns fund long term goals

The Wichita Falls Area Food Bank in Wichita Falls, Texas was successful with a capital campaign in 2009. Executive Director Mary Stengel emphasized that the dedication of board members and volunteers early on made a big difference.

“We had a capital campaign chairperson and co-chairs. Each co-chair had 5 captains and each of them had 5 volunteers.  We went to our database and identified donors who gave at least $500 in the last 3 years.  Then each of these teams got a list of people they would call on.”

In addition to one-on-one personal asks, the board and staff looked to foundations for grants. By the time the public phase of the campaign kicked off in October, they already had $660,000 pledged toward the goal of nearly 1 million.

When asked about how they were able to be so successful Stengel replied, “People knew how bad the economy was and the impact the food bank has on the community and the hungry people we serve. People recognize the needs growing from agencies in the 12 counties that we reach. We would never be able to grow or meet the increased need without increased warehouse space.”

Optimism for the future

Working through partner agencies and the national Feeding America network, food banks continue to do great work to serve those in need during economic tough times.  Continuing to build relationships with supporters and demonstrating effectiveness on mission will continue to help them, and other nonprofits, stay funded for years to come.

Awhile back I got a great question by email about the tax benefits for charitable giving:

Are you aware of any data or where one might find data, on comparing how much people donate when tax deduction is and isn’t available….that is, data that would quantify the impact tax incentives have on giving?

~ Jane Bowers

A research study from the Urban Institute examines the impact of tax credits (which is different from tax deductions) using data from 1998-2000: Charitable Tax Credits Boon or Bust for Nonprofits?

The most recent data available from the Arizona Department of Revenue show that the tax credit seems to have added some new money to the nonprofit sector, although the downtrend in the economy confounds the picture . In 1998, 2,856 filers claimed $475,438 in tax credits. One year later, the numbers increased (6,712 filers claimed $1,161,162 in tax credits).

For the wealthy, tax benefits seem to be a significant factor in giving. This quote comes from a Portfolio.com article, Tax-Avoidance Trifecta:

For high-income taxpayers seeking to shelter income, philanthropy can be the gift that keeps on giving. Instead of writing checks, though, savvy investors are signing over appreciated securities.

In my experience the majority of donors, those not in high income brackets, give to causes they believe in and tax benefits are secondary. Telling someone that a donation is tax deductible doesn’t go very far in convincing them to make a donation.  Most charities offer this benefit so never think that this alone will convince someone.

Many 501c4 organizations, such as those that participate in lobbying activities, do not offer tax benefits to donors and they still manage to raise money for their causes.

What do you think about tax benefits for charitable giving? Do you know of other research papers on this topic? Post a comment below.

Jason Dick, who writes A Small Change blog, is hosting this month’s Nonprofit Blog Carnival. Usually everyone writes on a particular theme.  This time though the topic was open.

I submitted my last post, 6 Reasons NOT to Start a New Nonprofit Organization.

Here are a few of my favorites:

How Anyone Can Be a Superstar Fundraiser from Joe with The Fundraising Authority

7 Things Board Members Can Do To Raise More Money at Social Velocity

Wake-up Call: Your Supporters Expect More with Kayta’s Nonprofit Marketing Blog

You Have to Connect to Convince from Nancy at Getting Attention

Are You Asking Enough by Sandy Rees at Get Fully Funded

Fundraising Through Engaged Staff with The Good Life

What’s Paula Deen Got To Do With Your Nonprofit Marketing with Pamela’s Grantwriting Blog

The entire list can be viewed at Jason’s site here: March Nonprofit Blog Carnival.