Seek Outside Sources For Funds

When I worked for a Diocesan schools’ office, and people asked what I did there, I told them, “Marketing and Development for Catholic Schools.” Their reply – “Oh, so you’re in charge of the fundraising,” which, in turn, caused a heavy sigh on my part. One person carried the conversation a little further, asking, “Why do our schools do so much fundraising? There has to be another way to raise funds.”

Sure – there are LOTS of ways to “raise funds!”

The two most obvious is for a faith-based school to raise tuition, or ask a supporting parish or church for additional funding. However, parents and guardians are usually making a large sacrifice to send their children to the school in the first place, and many pastors have a difficult time trying to balance just their budget. Asking parents or guardians for more tuition can result in their ultimate “no” – that is, withdrawal of their child. Asking a pastor for additional funds can result in his ultimate “no” – closure of the school.

For those who realize the difference between fundraising and development (and both of those things are fund raising activities – note the importance of the space between the two words), what about those other sources of income that development efforts are supposed to be able to tap into? Non-profit organizations can approach corporations, prominent philanthropists and foundations as sources of new revenues, which is where development efforts need to focus, right?

Well…not exactly. Remember that development is all about cultivating relationships and engaging people in the mission of your school. Once a relationship is established, and engagement has taken place, then the “ask” can generate substantial and sustainable sources of revenue. That said, here’s where the funds come from:

Statistics from 2006 through 2012 from The Case Foundation show revenues of non-profit institutions were received primarily from individuals – even during difficult economic times. About 17 years ago, 75% of all gifts were from individuals. Three years later, after the Great Recession of 2008, that number increased to about 80%, and about eleven years ago (in 2011), it was approaching 90%. It should be noted that many non-profit organizations group foundations and corporations together – and that’s not necessarily a great practice. Many foundations are begun by individuals. Further, many do not accept solicitations from outside organizations for funds. Foundation boards of directors will hear about the great work an organization is doing, then invite that organization to make a request for funds. Sometimes, unsolicited gifts come from funds and foundations that want to remain anonymous. Why do they want to do that? It’s to avoid other organizations approaching them for funds.

If we then consider that foundations and bequests should be grouped with the individual side of the scale, in 2021, 96% of funds came from this side, while only 4% came from corporations (Source: https://www.philanthropyroundtable.org/giving-usa-report-shows-2021-charitable-giving-strong-but-did-not-keep-pace-with-inflation/, accessed 7/25/2022). This is why an annual appeal to alumni and other individuals engaged in your school’s mission is a critical component to your school’s development efforts.

The complete breakdown shakes out like this in 2021:

Individuals – 76%

Bequests – 9%

Foundations – 19%

Corporations – 4%

Foundations provide a sizable amount of gifts to non-profits – but 2 things are necessary: a worthwhile project in mind which a foundation or group of foundations can support, and a track record of successes – both programmatically and financially. Foundations want to fund projects to improve a child’s educational experience, or provide lead gifts in order to encourage individuals to give to capital initiatives. The majority of foundations will not fund operational costs, and will definitely not fund anything if your budget shows an operating deficit.

Bequests comprise a percentage of non-profit income, and although they’re usually in the form of major gifts from individuals, you need to be sure you have the expertise or access to a professional who can structure the gift to provide a maximum benefit to the donor while providing both short and long term income opportunities to your school. These funds are usually used as lead gifts for capital initiatives, or as an addition to the principal amount of an endowment fund. Rarely are these funds used to cover operational expenses.

However, since grants from corporations only provide about 4 percent of all revenues to non-profit institutions, then why expend all that energy, time and persistence, right? After all, corporations are large organizations, and to get to the decision-maker can be very difficult. Even though these funds can sometimes be used for operational costs, a lot of work can generate an insignificant amount of revenue because there are so many organizations asking for help from these corporations, so why bother – right?

Wrong.

The danger is that we have a tendency to group corporations and businesses together in the same category. Corporations can be large entities, run by boards. You might be able to garner a gift from a corporation if you know someone on the board, and they are able to convince the rest of the board members of your schools’ excellence and service. Businesses, on the other hand, are usually run by a small number of individuals, perhaps a “mom and pop” company, or even a sole proprietor. Since small businesses are the most rapidly growing segment of the modern economy, it is imperative to engage the small business owners within your school community. Why? They’re individuals.

It does take time, however, to establish a relationship. If only there was a way to identify businesses that were already affiliated with the school or parish. Well, there is!

Next week, when you participate in the Mass on Sunday, or attend a Christian church worship service, be sure to pick up a bulletin. Look on the back of it and you’ll probably find advertisements from businesses who want to engage parishioners in their mission. You can contact them to further engage them by describing the opportunities that exist within your school. If several churches or parishes support your school, then visit a new one every week for your next crop of “leads.” These businesses wish to remain a vital part of the community, as does your school, so why not see if you can work together to achieve that goal.

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