April: You Must Ask For Gifts (Which May Upset Others That Do Likewise)

Perhaps your school has started a development core team, and the members have networked with other schools to find out what successful development efforts are in place there. Through your research, you’ve decided that there are three main items you’d like to focus on – an annual fund (to which alumni and members of the community can contribute), a special event (maybe a dinner/dance or a concert) and a golf outing. One of your people on the core team is an avid golfer, and, after having attended many golf outings, would love the opportunity to put one together using all the successful things she’s experienced over the years.

In the greater scheme of things, the golf outing can be considered a fundraiser, as can the dinner/dance or concert, since someone has to do something (buy a ticket, or send in a registration fee) in order for the organization to raise funds from the net proceeds. “Real” sustainable development dollars come from monetary gifts people want to give because they feel compelled to be engaged with the organization. One development professional calls it “meaningful involvement,” and in that spirit, there is some kind of relationship that has to develop between the donor and the organization, and not simply a relationship between individuals not involved with the organization who have some kind of relationship to individuals who currently support the organization. Connecting individuals who support the organization with those who aren’t yet engaged with it is just step one. The real goal is to translate that personal relationship between two individuals to a relationship between the one not currently involved with the organization and the organization itself. Events such as a dinner and a golf outing are great “first steps” to meaningful development efforts at your school, but after the event, the work has just begun.

You must remember that other schools might have special events and golf outings too. Other non-profit organizations in your local community might have special events and golf outings.  Special causes might put together a special event and a golf outing.   What does this mean?  Your organization will be stepping on toes, since participants and potential donors may have to choose between your golf outing and the events other organizations are hosting. While it’s good news for you when they choose yours, the other organizations will feel threatened; if they choose the other event to attend or support, then you may feel discouraged.  Of course, there are those businesses that won’t sponsor anything, because once they choose an organization whose mission is aligned with their “heartsets” (and not just mindsets), other organizations will be soliciting them, and they’ll politely refuse.  Of course, there are other businesses that just won’t support anything, because if they give to one organization, other organizations will be soliciting them, and they would rather support nothing rather than supporting every worthwhile cause.

Last month’s article spoke about the non-threatening nature of fundraising (since “everyone” fundraises) and the threatening nature of development (since it has the potential to bring in significant dollars from individuals and organizations engaged in the mission of the organization). Since a donor’s contribution amount may be limited, choosing your school as a gift recipient may mean that other organizations may not receive as large a portion of funding as they did in previous years. Some overarching or “parent” organization also may not allow a smaller, affiliated organization to solicit contributions unless their “prospective donors” are reviewed by the larger parent group.  While this can be a legitimate exercise to avoid sending mixed signals to these prospective donors, I’ve also worked for organizations that used this “review” process to build the parent organization’s potential donor list, making the smaller organization do work from which they will not benefit.

However, even though the larger organization may be successful in securing the gift, it is still the donor’s prerogative to direct the contribution to the affiliated organization rather than the overarching organization. A gift cannot be forced; if it is, it is not a gift, since gifts are freely given. It is up to the donor to decide where his or her contribution will be directed. The more a potential donor is engaged with the mission of an organization, the more likely it is for the donor to direct their gift to that organization’s efforts.  I like to refer to these “gifts” that are controlled by organizational policy instead of being donor-directed as “contributions.”  Since the beginning of wisdom is to call things by their right names, this can be considered to be the difference between a “gift” and a “contribution.”

Want a concrete example?  A dinner is held to fund a special project or campaign.  The invitation says “$1,000 a plate.”  That would be a contribution since the participant has to meet a specified minimum.  The contribution may not be fully tax-deductible, but this qualifies as a “fund raising” dinner rather than an act of development.  Once again, those who attend the dinner may subsequently make “gifts” to the organization or campaign as their means allows.  Those gifts must be cultivated.  The dinner plants the seed, and the attendees need to be nurtured, pruned, and manured to ensure a fertile environment for sustainable support.

If other organizations are threatened by your efforts, it may be because the donors and potential donors are more aligned with your organization, its purpose and its results, as well as its processes. In reality, the other organizations, or the overarching/parent organization, must do more to deepen their relationship with their donors. Unfortunately in our litigious society, it’s quicker and easier for them to threaten your organization with potential sanctions, actions and litigation than it is to create meaningful, lasting and strong relationships. The sad thing is that if legal action takes place, then funds don’t go to support the organization’s work, and instead go toward legal fees.

Remember, the more successful you are, the more that other people and organizations will try to “knock you down.” You will always have challenges. As my mother taught me, “Little kids, little problems; bigger kids, bigger problems.” The same goes for non-profits that begin to act as real non-profits rather than just “li’l fundraising organizations.”

One more thing to remember: The Federal Government, as well as all state Governments, are scrutinizing non-profits more than ever before. If you think that you can reduce tuition for those families that work in the cafeteria, know that their tuition reduction may be considered taxable income. Further, if fundraising dollars directly benefit the families that sell them (that is, if your school charges a “Development fee,” and families can “work it off” by selling a certain amount of candy or cookie dough), that may also be considered to be taxable income to that family. I know – you implemented that fee because some parents just don’t want to participate in the fundraiser. But that doesn’t matter to the IRS. It’s also another reason to move toward development and a sustainable advancement program than to continue to rely on fundraising.

Maybe fundraising isn’t easy after all.

How does your organization increase potential donor engagement? That’s the topic of next month’s article.

© Michael V. Ziemski, SchoolAdvancement, 2011-2017