Fundraising, also known as development, is pivotal to any nonprofit enterprise. However, fundraising can be a challenge for soup kitchen founders since they are generally focused on the preparation and service of a nutritious meal. Fundraising is integrally related to marketing and public relations (see Chapter 5). People generally don’t donate to entities with which they are not familiar and to which they are not favorably disposed.
Another reason why people don’t donate is that they are never asked. In asking for support, it is important to convey that your services are meeting basic needs for people living in poverty. You should always make your requests personal and tell prospective donors how their gift will specifically help to alleviate the pain and indignity of hunger. You should also emphasize that you deliver all your services in a fiscally prudent manner.
A Shared Responsibility
The question often arises – who is really responsible for fundraising – board or staff? While it is true that the board has ultimate responsibility for the health of the organization, fundraising is fundamentally a dual responsibility shared with staff and, in practice, most fundraising activities generally fall to staff; while not all board members will be skilled in all aspects of fundraising, involving board members will increase your overall fundraising capacity. To start with, you should make sure you can say that 100% of your board members are donors. It’s not the magnitude of their donation, but the percentage of participation that’s important, and 100% participation is sought by most funders. Board members should be schooled on the delivery of a short presentation on the history and importance of the soup kitchen; this is sometimes referred to as the “elevator speech”.
While fundraising is a shared responsibility, it is important that there is a singular face for the soup kitchen and that face should be the director. He/she should be the prime spokesperson.
As your soup kitchen matures, you should consider creating a board fundraising committee and schedule regular meetings with agenda, assigned action items, and minutes. Realize that having such a committee will invariably require significant staff time.
At some point, it may become important to provide additional staff support for fundraising. Alternative models of fundraising support include hiring a development director or contracting with a fundraising consultant.
You should emphasize stewardship and prudent handling of donations in all your promotional material. An important goal is to keep general, administrative and fundraising expenses to a reasonable level (less than 20%) relative to program services.
There are a number of nonprofit rating agencies such as Charity Navigator and Guidestar that provide data on the percentage of donations that go to direct program support. More and more people are referring to such evaluators. Therefore, you should strive to earn a high (four star) rating and then publicize that fact in all your promotional material.
A Comprehensive Approach to Fundraising
At the outset, your best fundraising prospects are your family, colleagues, co-workers, friends, religious leaders, employers, business associates, neighbors, and high school or college classmates.
Don’t neglect your volunteers as prospects. They have first-hand knowledge of your work. Don’t assume that since they have already given of their time, you can’t ask them for money. Again, the primary reason folks do not donate is they have not been asked.
There are many fundraising strategies – face to face appeal, phone calls, personal letters, special events, and mass direct mail. The direct mail category includes annual appeal letters, new donor letters, and lapsed donor letters.
It is important not to become too dependent on any one fundraising source, be it government, corporate, foundation, a single large individual donor, religious institutions, or events. It is best to have a widely diversified funding base.
Keep in mind that over 80% of all non-governmental funding for nonprofits comes from individual donors. You should work at building, maintaining and reviewing your donor data base on a regular basis. If donor stops giving, you should aggressively try to reactivate them. It is much more cost-effective to reactivate a former donor than it is to secure a brand new donor. You should also ensure that all your volunteers are in the donor data base.
Existing donors are your most valuable resource. They need to be cultivated and communicated with on a regular basis. Although building relationship with individual donors is very time intensive, try to schedule personal visits to all prospective and existing high end donors. Offer them ways to help beyond monetary donations, for example, underwriting a publication, funding a piece of equipment, or underwriting a “lapsed donor” or new acquisition mailing. Invite your donors to do site visits and allow them the opportunity to talk to patrons and volunteers.
Make sure your thank you letters go out in a timely fashion, particularly for end of year donations. Some donors get nervous because they think they need your letter to complete income tax forms (actually only needed for donations above $250 according to 2010 IRS regulations.)
Conducting a construction (capital) or endowment campaign will not necessarily cannibalize your normal fundraising activities. In fact, special initiatives can expand the donor base.
Even if you do everything right, you will lose donors every year. People die or move away, companies go out of business, people and organizations change their priorities, donor fatigue sets in and there are cyclical downturns in the economy. That is why you should undertake new donor acquisition efforts to add to your donor base. To mount a new donor acquisition effort, you need a list of names of potential donors. There are commercial entities known as list houses that can define and target new donor mailings. As your soup kitchen grows, you can also utilize mail shops that perform bulk tasks such as folding, stuffng and mailing. Bear in mind that new donor acquisitions can be costly and that your goal is to cover expenses of the new donor solicitation and build up your donor base.
TIP #1 – You should include a remittance envelope in all your newsletters. The envelope flap should indicate what different levels of giving will provide in terms of meals and other services. You also should put a code on the envelope so you know which appeal the donation came from. As your soup kitchen matures and your donor base grows you should include the option to make donations via credit card or online.
TIP #2 – Don‘t be reluctant to ask existing donors to make multiple annual donations. Existing donors are your best source of additional contributions. They support your organization because they believe in your work, so tell them what else you can do with additional funds.
TIP #3 – Compared to other strategies, fundraising by sponsoring events can be very labor intensive and return on investment small. It is important to determine how much of your time events will consume as well as the hidden time of others. If you do stage an event, provide guests with support opportunities in addition to ticket purchase, such as silent auctions, gift auctions, and raffles.
TIP #4 – State and federal government each have check-off programs for public employees to select amounts to be deducted from each paycheck and donated to a United Way agency or other approved nonprofits. If you are in a community with government offices, you should see whether you meet requirements to be a check-off agency. If you qualify, you should try to develop strong relations with public employee unions to boost donations to your agency.