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Basics of Non Profit Fundraising in 12 minutes!

Basics of Non Profit Fundraising in 12 minutes!


>>PETER HELLER: What we’re going to do today
is a little sort of art and geometry project from grade school called the geometry of fundraising
and I’m going to try to fit all of fundraising campaigns and strategies into 15 minutes,
kind of like that two minute Shakespeare, if you’ve ever heard of that. [laughter]
>>PETER HELLER: The concepts that we’re going to go over I think will be useful whether
they’re new to you or you’ve been through many different fundraising classes and that
sort of stuff, it’s a good way to encapsulate the big to little the way fundraising works.
>>PETER HELLER: I’d like everybody to, if they have their paper, to draw at the top
three basic shapes. We’re going to draw a triangle, a circle, and a rectangle.
>>PETER HELLER: These are our basic geometric shapes that we’re going to use these to
understand how a campaign (and when I say campaign I don’t mean a big effort to raise
millions of dollars for a building), but, you can use the same concepts if you’re
thinking how much to raise over a single year for an annual fund or for your operating.
>>PETER HELLER: First the triangle. We’re also going to draw two other triangles — one
right side up and one on its head. The triangle here on the left is donors and triangle one
on the right is dollars. And I’m just going to do a little more drawing and I’m going
to put a line here on this triangle and this one is number 20% and this one will get 80%.
>>PETER HELLER: Now this is a very standard mathematical equation that probably most of
you know, which says that 20% of our donors give us 80% of our money. When we say donors
I’m talking about individuals, corporations and foundations. We’ll put government money
and earned income outside of that picture.>>PETER HELLER: So what does this relationship
mean? It means that if we want to make our budget every year or reach our goal for the
campaigns we need to make sure we know who the 20% of people are, and by people, I mean
foundations, corporations and individuals. We better make sure that we have relationships
with those folks. This is true if you go back to your office and take a look at how much
money you raised last year and who gave it. I’m very sure that in almost every organization,
whether you’re a 50,000 nonprofit or a 50 million nonprofit, you’re going to find
this relationship. It happens all the time.>>PETER HELLER: The other interesting thing
about this is that down here [points to bottom of triangle] is where typically for years,
people did direct mail campaigns, telethons, and all that kind of stuff. This money and
those relationships and activities are really important. You can’t run a nonprofit effectively
most of the time without them. But if you focus your effort down here you’re never
going to get what you need to run your operation, which is the 80% of the money. So a lot of
time, for instance I’ll meet with a potential client and they’re going to say, “Okay,
we need to raise ‘X’ amount of money and we’re going to send a letter to everyone
we know and ask them to give $1,000.”>>PETER HELLER: The $1,000 might be a lot
for some of your organizations, but interesting thing it’s never going to get you to here
[points to top of triangle] and when you send out that letter and you get the money back,
it’s going to come in in a distribution where some people will give $2000, some will
give $50,000, or $50, etc. It’s coming in this kind of distribution you need to do things
to figure out who these people are.>>PETER HELLER: One other interesting thing
before we move on to the next geometric shape, is today a lot of this work is in online giving,
social media that kind of thing and it’s very exciting and very cool, you’ve got
to do it. I advise people to do it but you’re making a mistake if you think it’s going
to get you to here and social media and online giving took a big jump forward with Obama’s
2008 campaign with a lot of attention on a grass roots effort and an amazing thing that
he and his staff were able to do however shortly after the 2008 campaign a report came out
analyzing his giving, turns out that the majority gifts were either people giving multiple times
through the internet so that their total giving was above 25 or 200 dollars or people giving
significantly more and in fact the reported number show that Obama actually received 80%
more money from large donors, those giving 1000 or more total than from small donors.
That’s not very widely known.>>PETER HELLER: Circle, those of you who are
drawing please draw two circles. Circle on the left is called your network and the circle
on the right is US giving. So also the network you want to draw small concentric circles,
those aren’t very concentric but you get the idea. These are actually points that the
previous speakers referred to. You need to figure out like right here in the beginning
in the center, that’s your staff, your board, your closest friends. So in order to raise
money effectively first of all you have to have your center of your circle, your nucleus
of your network and over time you have to figure out how to use those people to effectively
connect to those people who are somewhat further out in your network. This whole thing right
here is kind of like the key to a lot of successful fundraising. You know you don’t have time
in detail. It’s really if you can figure out how to do that effectively, you’ve done
a big part of the job. So you need to know who these people are, figure out that 20%
there. And then sometimes you have people who are, if this is your circle, got people
here on the periphery who are, kind of the outfield, sometimes there are people who are
out of bounds and your job is really, who can I use in my network to reach these individuals
and frankly sometimes I’ll sit down with nonprofit leaders and they’ll say, well
I want to get to Bill Gates and for some reason he’s still kind of like a mythical theory
even though he’s got a foundation now, everybody somehow wants to get money from Bill Gates,
like a personal check. Occasionally somebody will say yeah I actually know so and so, then
it’s ok, but otherwise it’s really for most of you he’s in outer space.
>>PETER HELLER: Ok, so US giving, this was referred to by Hildy also let’s put a little
line there so we have a pie and this here is 75% of the pie. This represents the individual
giving in the United States. This doesn’t change very much year to year in terms of
percentages so 75% of the money that is donated to charity in the US comes from individual
donors, the other 25% or so comes from foundations, corporations and requests which actually if
you include the request it makes individual giving significantly more. So the total amount
that is given each year is roughly 300 billion dollars plus or minus. So that is a lot of
money that comes from individuals. My point here is that many, many nonprofits focus on
government money, corporate money, foundation money, earned income. Really, really important,
great money if you can get it. If you’re not figuring out how to maximize your individual
donations, figuring out what your network is, you’re missing out on a lot of potential
money you can get and you will probably have a hard time maximizing the 20% of the people.
>>PETER HELLER: Now looks like I have a few minutes left, I’m sure everybody’s wondering
what’s the rectangle. I didn’t put it on here for two reasons. One I don’t have
enough room but the other is on the back of the geometry page there are two gift tables
that are sample and a lot of you are probably also familiar with gift tables. A gift table
is a very, very elegant way to put the metrics of how you do fundraising into a simple rectangular
chart and what it does is shows us both, the people that the number of gifts that you need
and then the number of prospects you need to get those gifts at various dollar levels
to reach your goal. I put two samples here, one is a 500,000 campaign and one is a 5 million
dollar campaign. And it could be an annual fundraising effort or a multi-year effort
and what happens is it takes some time to study this chart; you can put some specificity
around this deal. If I need 25 people to reach this 80% of my dollar goals, do I have those
25 people already in my network, do I know who I can go to or am I going to have to spend
two months, a year on how to figure out how to use this network to reach those people.
Very elegant tool, we use it a lot in the fundraising campaign world and help nonprofit
strategizing. So I think that’s pretty much what I wanted to cover, to go over. I just
wanted to show you. I brought my business card which I’m sure is really hard to see
from the back so I blew it up a little bit but not very much and it kind of refers to
Bill Gates so if you can see, and if not these are on the table out there and it has my contact
info. This is the infinity symbol and these are little dollars bills shooting out so my
logo is infinite money in green of course. I’m optimistic and it relates to Bill Gates
because he said once “I have infinite money”, meaning that I have more money than I could
ever personally spend. So may all of our nonprofits aspire to that.

  • Dear Peter J Heller =),

    I would love to express my gratitude to you for sharing this video with us. I enjoyed learning from it. I hope you have a terrific day, mate!!!

    Raymond

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  • I enjoyed your video very much. By the way, can you recommend a good resource to get a template of the gift table?

  • Excellent video!!! These are concepts and approaches that are universally applicable to charities of all sizes and scopes.

  • Thank you so much for this video! I am trying to figure out all the moving pieces regarding starting up my non-profit (Humble Harvest) and this was beyond extremely helpful. I often find that it's impossible to dig deeper into unknown fields of information without first having a crash course understanding of the bigger picture. This was exactly the start that I needed to learning about fundraising.

    I also wanted to say that you inspired and encouraged me. I realized through your vastly distilled explanation of a large complex machine with many moving parts that I am not worried about being able to raise funds anymore. You showed me the fundamental HOW and WHY, and I realize now that my natural talents to schmooze with anyone and really connect with people will take me a VERY long way in raising money. Thank you so much for that much needed boost.

    I look forward to watching and reading more of your content.

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  • Excellent video. I always preferred approaching individual donors rather than large corporations or foundations. Now, I have even more reason to do so given 75% of donations come from individuals. Thanks for this video.

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