CFA Head of Client Success & Principal Joanne Curry and Operations & Business Manager Kayla Boye hosted a LinkedIn Live discussion about how nonprofit endowments can be leveraged to ensure long-term organizational sustainability. They explored common endowment misconceptions and related their personal experiences working with clients and establishing and managing endowments. As a follow up to that discussion, CFA has compiled six key takeaways and a Guide to Endowments:
Exploring Nonprofit Endowments: Key Takeaways
Involve board and legal expertise. While endowment terms may be written and approved by your board, an attorney should review policies before they are finalized. Once an endowment is established, it is important that your board creates an investment committee to actively track portfolio performance and make decisions about brokerage options.
It takes time and resources to maintain an endowment. If a donor has made a major gift to establish a named endowed fund, your organization must regularly report progress to that donor to ensure continued stewardship. A bank, community foundation, or other partner can also help with endowment management and reporting, typically for a small fee.
Legacy giving is a powerful motivator. Supporting an endowment is one of the most impactful acts of philanthropy; by naming an endowed fund, a donor can ensure their legacy while supporting the organization in perpetuity.
Bundle your endowment effort with another campaign. You can enhance the appeal of an endowment by including it as a component in a capacity building campaign or adding it to a capital campaign to support ongoing maintenance and operations costs of a new building.
There is no time like the present to establish your organization’s endowment. The sooner an endowment is established, the sooner investments can grow.
Endowments can help your organization pursue a transformational vision. An endowment can provide additional annual income that can help free up your organization’s frontline fundraising staff to focus on developing new donor relationships, deepening existing ones, and preparing asks for transformational gifts.
Learn More
If you missed CFA’s webinar on “Exploring Endowments,” click to view a recording:
Considering starting an endowment? Contact CFA today to help envision and implement your endowment fundraising strategy. For more articles related to philanthropy and fundraising, check out CFA’s Insights page.
CFA Chief Operating Officer Liz Jellema led a conversation with guests Rachel Hutchisson, Chair of the Communications Task Force at The Generosity Commission, and Rick Dunham, Founder of Dunham+Company and member of The Giving Institute. The philanthropy experts discussed recent fundraising trends, and what the findings mean for nonprofit organizations trying to raise more money and positively impact their communities.
Takeaways to Address Today’s Fundraising Trends
Mind the Millennials.
Giving by the Millennial age cohort (individuals who are between 27 and 42 years old in 2023) is on the rise, and their attitude about nonprofit organizations is positive. This finding comes from the most recent annual Giving by Generationstudy, conducted by Dunham+Company and published by Giving USA in 2023. The survey found that Millennial households gave 40% more, on average, to nonprofits in 2022 than they did in 2016. Another encouraging fundraising trend was the increase in the share of donors who believe that nonprofits are “doing a good job,” seen especially in the Millennial cohort who reported an 8% increase in confidence in nonprofits.
At the same time, findings from a 2023 study of donors contributing at least $20 in online giving per year revealed that 62% of surveyed donors plan to reduce their 2023 giving from the previous year, citing economic uncertainty and the toll of inflation on their personal finances. When asked how to marry these two findings, Dunham stated, “It portends probably a slower growth rate of Millennial giving, but I’m still encouraged to see how Millennials have really jumped in more significantly as donors.”
The key takeaway about the Millennial mindset is that they are proving to be tomorrow’s dedicated donors. Understand how and how much Millennials are giving at your organization so that you can set a long range strategy for this group and tailor communications and appeals for best results.
Monitor fundraising trends but focus on your own donor data management.
A recent podcast by The Economist, “Give fast, spry young: the new philanthropists,” and a related article, “How a tide of tech money is transforming charity,” explored the idea that every generation has remade philanthropy, and how an up-and-coming cohort of young, wealthy tech entrepreneurs want to “move fast and fix things” by donating to moonshot ideas with expediency and without condition.
The webinar panelists agreed that whiletech entrepreneurs represent an interesting segment of donors, they represent a relatively small percentage of the national donor pool. It is important to understand the interests of your current donors and use data insights to discover opportunities to connect prospective donors to your mission.
Data helps reveal patterns that are happening over time so we can better understand donor behavior, including what motivates donors, and what methods of giving they prefer (such as being able to donate easily on a mobile device). This information helps you determine where to focus your fundraising resources. Nonprofits of all sizes must activate data management to understand what is happening with their own donors and take actions such as upgrading technology so that people can give via digital channels.
Hutchisson explained that these studies help us “look at what’s happening overall, but just because it’s happening overall doesn’t mean it’s happening right in your microcosm. You also have to look at your own data. Look at who’s giving, how they’re giving, the different characteristics, and that just helps you understand the behaviors of your best donors, and behaviors of people who aren’t giving, and sets a little bit of direction for where to look and maybe how to invest.”
Tell donors how their giving directly impacts your mission through storytelling.
Donors want to see results, and they also want to help other people. In a 2020 Hidden Brain podcast called Happiness 2.0: Surprising Sources of Joy, Dr. Elizabeth Dunn of the University of British Columbia shared her finding that people feel a greater joy of giving when they know more about how their dollars are used. Jellema noted, “It seems fairly straightforward and intuitive, but people want to know that they’re making a positive impact and altering the course of life…If you can really hone in on your specific mission and what are you uniquely resourced to address, that will set you apart.”
Hutchisson agreed and said, “We might care about data and plans and vision, but we also want to feel and see that we’re making a difference. We want to belong.” Instead of focusing on the transactional relationship of philanthropy or becoming too internally focused about what the organization is doing, appeal to your donors’ emotional connection with your mission through impact stories. Fundraisers will get better results when they use storytelling to reach various donor mindsets and illustrate outcomes related to giving.
Meet donors where they are with multichannel fundraising and communications.
Donors who engage in multiple channels—from direct mail to social media—give more often and are likely to give again. While organizations must embrace different communications channels, the core message needs to remain consistent, compelling, and – Dunham used the term “symbiotic” – or mutually reinforcing, across all channels. Blackbaud’s 2021 study about online fundraising trends found that donors become confused and frustrated when they receive a communication through one channel (such as direct mail) and then find a different message on the website. Leverage technology to determine which donors are responding to which appeals, and employ straightforward communication to donors via direct mail, text-to-give, and more. Nonprofits must invest in the infrastructure, staff, and training to effectively use these tools and make it easy for people to give.
Learn More
If you missed CFA’s webinar “Inside Today’s Donor Mindset,” click to view a recording:
For more, in-depth articles related to these topics, check out CFA’s Insights page. CFA can help your organization design and implement fundraising campaigns to engage a wider, deeper donor audience, communicate your “big idea,” evaluate your data, and ready your organization for transformational gifts. Contact CFA today for strategic fundraising counsel.
If your organization is considering a capital, endowment, or capacity building campaign and you are not sure if you can inspire and manage the volunteer manpower necessary to carry out the campaign vision, CFA has assembled the following guide on the purpose and fundamentals of effective nonprofit campaign committee management. Read on for best practices to help harness the power of your team to accomplish your philanthropic goals.
What is a Nonprofit Campaign Committee?
A nonprofit campaign committee, also known as a campaign steering committee, is a group of volunteers tasked with fundraising and relationship building for a significant campaign outside of annual fundraising.
Differences between a Campaign Committee vs. Development Committee
A capital campaign is a fundraising effort for a specific project with a defined timeline, and a campaign committee is the volunteer leadership group tasked with the campaign’s launch, progression, and completion. The campaign committee is often formed from members of a campaign feasibility study committee. Members of a campaign committee are not required to be members of the organization’s board of directors.
Development is an ongoing fundraising activity conducted by staff and development committee volunteers that includes annual giving and major gifts. A development committee is a function of the board of directors of the organization.
Purpose of the Campaign Committee
Campaign volunteers bring an external energy and impact perspective to the campaign. Volunteers view the campaign from the community’s lens and are genuinely invested in the campaign’s broader success. By leveraging their personal and business connections, campaign volunteers can open the door to new donors outside of the organization’s core networks and expand the overall reach of the campaign.
Campaign Committee Structure and Membership
Campaign committee members are well-connected donors who are passionate about your organization’s mission and are committed to helping raise dollars for a special effort. Most will have been involved with the organization and have existing relationships with staff and other volunteers. It is important that committee members have experience giving before they ask others for financial support, so they are often some of the most invested donors and volunteers in your organization. A campaign committee also includes staff liaisons, such as the executive director and development director. The number of people on the committee depends on the size and scope of your organization and campaign, but is typically between 10-20 members.
The volunteers who lead the campaign and committee are referred to as the Campaign Chair or Campaign Co-Chairs, and they make key decisions about the campaign and recruit other committee members. Many campaigns also have an Honorary Campaign Chair.
Nonprofit Campaign Committee Member Responsibilities
Serve on the committee throughout the campaign (3+ years).
Make a significant gift to the campaign, based on individual capacity.
Leverage personal and business connections to recruit campaign support.
Engage new and prospective donors by sharing campaign information, hosting small gatherings of friends and business associates or on tours of the nonprofit’s facilities, and introducing prospects to other supporters of the organization.
Follow up with donors and prospects to close the gift.
Thank donors with phone calls and written correspondence as part of ongoing donor stewardship.
Campaign Committee Engagement
Conducting a campaign provides an opportunity for your organization to engage volunteers in different, deeper facets of the organization. Campaign committee participants have an opportunity to actively mold plans and goals for the organization. There are a number of ways to encourage and inspire your committee members through your campaign:
Hold regular full committee meetings (bi-monthly or quarterly) and conduct at least one “one-on-one” meeting between the campaign chair(s), staff, and each committee member.
Provide job descriptions for every committee member as well as the campaign chair(s) and honorary chair(s).
Plan, manage, and track the work of the committee using a moves management system.
Inspire committee members by sharing success stories of who your organization has impacted, how different solicitations unfolded, and examples of staff and volunteer achievements.
Share campaign progress updates at committee meetings, over email, and on internal dashboards to keep volunteers engaged and enthusiastic about the goals and progress.
Campaign Committee Best Practices
Pause to consider each prospect and where they are in the donor cultivation cycle; don’t rush to make an ask with every prospect simply because you are in campaign mode.
Ask each committee member to make a personal “stretch” financial gift to the campaign before they ask others to give. Gifts will vary in size based on each individual’s capacity, but the most important metric is that every committee member makes a gift. When 100% of the committee participates in giving to the effort, it sends a strong message to other potential funders that they are seriously committed to the campaign.
When Outside Expertise Can Help
A campaign consultant is a partner to your staff and committee volunteers who helps set the campaign strategy and provides nonprofit fundraising training on how to cultivate, solicit, and close leadership gifts in a campaign.
Experienced fundraising consultants can bring fresh perspectives to share with the nonprofit campaign committee as they have seen what works in other campaign fundraising engagements. Consultants can also provide the systems needed to track progress and ensure every campaign committee member is confident in asking others to support the campaign.
CFA has assembled a guide on donor communications to help you achieve better engagement with one of your organization’s most important audiences: your donors. Below you will find basic concepts and key steps toward implementing donor communications along with best practices to help your organization elevate its fundraising.
What are Donor Communications?
Donor communications refer to content designed to activate and cultivate connections between your organization’s mission and the people who have the inclination to support it. Donor communications include direct mail appeals, philanthropic news, and social media campaigns and are a consistent component of the fundraising and development function of any nonprofit organization.
Donors deserve gratitude for their contributions to your organization and regular updates to keep them apprised of progress toward mission delivery and the organization’s vision for the future. Prospective donors identified as having an inclination to give require ongoing engagement to increase the likelihood of a donation.
Distinction between Donor and Nonprofit Communications
Donor communications are an integral part of your overall nonprofit communications strategy. Nonprofit communications and donor communications strategies reinforce each other but are distinct. Nonprofit communications, or nonprofit public relations, are designed to reach and respond to everyone, while donor communications focus on engaging supporters and prospective donors.
When and Why to Use Donor Communications
Long-lasting donor relationships are the foundation for a nonprofit’s growth, which is why donor communications must focus on engaging donors and reaching prospects. Donor communications are a year-round initiative that is equally critical during times of success, crisis, and business as usual. CFA has found that organizations need to engage with their prospects anywhere from 10-24times before it is time to ask for a financial commitment. These numbers are a general rule and illustrate the necessity of a comprehensive donor communications strategy. Forbes Nonprofit Council recommends engaging seven times with a donor before making the ask.
Components of a Donor Communications Strategy
The expected outcomes of donor communications include acquisition of new donors, funding for annual and special campaigns, and donor retention. A donor communications strategy is built upon an organization’s fiscal development goals and annual fundraising timeline, and key components of the strategy include data analytics, staffing and expertise, and correlation with the overall brand of the nonprofit.
Donor Data and Segmentation
To increase donor engagement and retention, nonprofits must understand and appreciate their target audience and personalize their communications approach using donor data strategies. Your organization’s development team can leverage data by segmenting donors into two or more distinct groups based on giving history and donor inclination scores. Segmentation allows for the creation of more tailored communications.
Customer relationship management (CRM), also known as donor management software, is an invaluable tool for managing donor and prospect relationships. A CRM application, or donor management software, can help your development team keep track of where donors and prospects fall within your Donor Cultivation Cycle to determine what type of communication is best to approach them and at what time.
Staff and Resources
Creating compelling appeals, managing a schedule of donor communications delivery, and designing digital and printed content requires time and expertise. It is important for an organization to plan annual and capital campaign budgets that leverage writers with storytelling expertise, visionary designers, direct mail and digital platforms, and fundraising advisors.
Coordination with Brand Identity
Brand recognition is important for several reasons, and chief among them is fundraising. When an appeal arrives at a potential donor’s doorstep or email inbox, they will be more likely to read it and contribute if the brand is known to them. Using similar content and graphics across all channels will reinforce the organization’s message and brand identity, which will increase the likelihood of a donor’s commitment.
Four Types of Donor Communications
There are four types of communication that can make up your donor communications strategy to increase donor engagement:
Acknowledgment – Acknowledgment messages are not only important for providing donors with the appropriate tax information, but also in expressing gratitude. Read more about donor acknowledgment as part of ongoing stewardship here.
Informational – Regular updates are imperative to donor engagement and retention. Examples of informational donor communications include annual reports, newsletters, videos, and emails that highlight donors, volunteers, and beneficiaries and illustrate how philanthropic gifts drive social impact.
Persuasive/The Appeal – Strong fundraising appeals have a clear ask for support with a specific dollar amount or percentage increase request. Examples include sharing a campaign case for support with prospects in face-to-face meetings, direct mail solicitations with enclosed pledge forms, email messages with links to online donation forms, and social media posts with quick and easy ways to give. Follow-up messages reminding people to give are also an appropriate part of persuasive donor communications.
Feedback – Communications is a two-way street. Organizations must be open to receiving as well as distributing information. Examples include surveys (electronic or hard copy forms), stakeholder interviews (such as those used for strategic planning and feasibility studies), social media engagement, and face-to-face conversations.
Donor Communications Methods
Direct Outreach – Face-to-face meetings and video calls are the most effective way to communicate with top donors and prospects, and direct phone calls are a great alternative.
Print – Printed materials are impactful and direct mail remains an effective way to raise dollars. Many people enjoy a brochure to hold in their hands and read, especially creatively designed materials that dovetail with digital efforts.
Digital – Nonprofits must have a strong website with compelling messaging and a clear call to action to make a donation and all digital communications should lead back to this giving page. Email, digital presentations (such as PowerPoints), social media (such as Instagram, Twitter, Facebook, and LinkedIn), and digital tools (text-to-give) are examples of digital channels.
Multichannel – Using a multichannel approach that employs more than one donor communications method is proven to have a higher success rate than using a single channel. According to Nonprofits Source, marketing campaigns that used direct mail along with one or more digital media tools experienced a 118% increase in response rate compared to those that only used direct mail.
Donor Communications Plan and Timeline
Four to six months ahead of a new fiscal year, set out a plan for donor communications that clearly states the timeline, budget, tasks, and staff member responsibilities. Plan steps for each donor segment including a calendar for which segments to approach with which communication method. Your organization’s development and public relations must collaborate to maximize brand identity and audience engagement.
Measuring Donor Communications
Tracking donor engagement will allow you to measure the return on investment of donor communications. Recording gift amounts, event attendance, and volunteer participation, along with measuring open rates, click-through rates, or conversions to gifts, informs how to segment your donor and prospect data and provides insights for the development team to assign “inclination scores” to each donor. Tracking and inclination scores are very useful for determining which types of communication resonate with each donor or prospect and what strategies to implement in future appeals to increase return on investment.
Donor Communications Best Practices
Personalization – Marketers have found that adding personalized elements to communications resonate with donors and result in deeper engagement and higher return on investment. People are more likely to answer a call, letter, or digital communication when it arrives with their name on it and references how their contribution can or has helped your organization deliver on its mission and fundraising goals. In fact, one study found that 92% of marketers also believe that their prospects and customers expect a personalized experience.
Storytelling – People are more likely to read and respond to content that focuses on a single individual who can benefit from their generosity. Deborah Small, Professor at the University of Pennsylvania, found that people are more likely to give to help one individual rather than an overall cause or statistic.
Testimonials – Leverage powerful supporters and experts to encourage donors and prospects to follow their lead in supporting the cause. Testimonials from major donors, influencers, politicians, and community leaders are an extra stamp of approval.
How Outside Expertise Can Help
At CFA, we partner with you and your organization to maximize data and communications strategies and uncover the insights that elevate fundraising. We help create messaging that resonates and reflects the vision for annual, major gifts, and capital campaigns and can walk you through the best ways to pitch your prospects. We also develop case for support materials, website language, digital presentations, and more as part of our clients’ donor communications strategy.
