I. Introduction

Almost every organization has its own definition of fundraising. To one it might be selling tickets for a charity ball; to another it’s convincing board members to write a bigger check for the annual fund. In far too many organizations— including churches— fundraising is something everyone expects someone else to do.

As most of us know, raising money isn’t easy, even in the best of times and for the worthiest of causes. People simply don’t like or want to do it. It is considered, in far too many circumstances, a necessary evil.

There is, however, an alternative view for those who choose to see it. A charitable gift of any kind is tangible evidence a person supports a program, project, or cause. The contribution is the catalyst for both good deeds and goodwill. It often brings joy to many individuals and groups. Participating in that process, which matches organizational needs with the donor’s philanthropic goals, can and should be rewarding. In many instances, it is the culmination of thoughtful and carefully planned collaboration

Changing one’s attitude about fundraising begins with a basic understanding of the principles and concepts professionals use when managing a campaign. For the most part, the same rules apply to annual pledge or giving programs, capital campaigns, or the solicitation of a planned gift. Although professional fundraising has been around only about 100 years, the essentials are well established and widely practiced. These include procedures for evaluating giving potential, building a strong case for support, securing strong leadership, and asking for the gift.

The following information is oriented toward people with little experience in fundraising. It presents basic information and describes many contemporary practices. In addition, and perhaps most importantly, it describes the conditions necessary for a successful capital campaign. You will become more comfortable and consequently, more effective, if you understand these and other standard professional practices.

II. Fundraising and Development Defined

The terms “fundraising” and “development” often are used as synonyms, but they are not the same. Fundraising, in its broadest sense, includes just about everything that brings in money. In that context it ranges from selling cookies at $2.00 per dozen to soliciting a multi-million dollar bequest. However, most organizations distinguish between earned revenue, like that from bake sales, and contributed support. Earned revenue refers to any program or activity that has a fee or generates sales, e.g., the annual pancake dinner or those cookies at $2.00 per dozen. Contributed support denotes pledges, gifts of cash, and other charitable donations like grants and bequests. Generating contributed support is the principle goal of most fundraising professionals.

The word, “development,” as it relates to contributions, has a much broader meaning. It suggests a thoughtful and systematic process for identifying, cultivating, soliciting, and recognizing donors. In addition, an effective development program should promote increasingly larger gifts from existing contributors while constantly expanding the prospective donor base.

Stated differently, fundraising can be defined as the mechanics of generating money for your church, regardless of the method. A successful development program requires the congregation's active participation in the church and its programs. Implicit in the development process is the assumption that charitable gifts directly correlate to the donor’s commitment to the organization.

For the purposes of this article, what distinguishes “fundraising” from “development” is the goal. With bake sales and similar programs, the money is the goal. In a development program, money is a measure of success as well as the reward for securing commitment to your church.

III. An Introduction to Development

In the not-for-profit community, typically only very large institutions have sophisticated development programs. Smaller churches rarely have the expertise, staff, time, or money to accomplish more than a few special events, conduct an annual pledge drive, and maybe solicit a few bequests. Still, a little extra knowledge, planning, and a commitment to long-term success can go a long way. With those tools and sufficient determination, almost every church can realize substantial increases in annual giving while securing the capital gifts and bequests that assure long-term financial health.

A Very Brief History of Fundraising

Fundraising of some sort probably goes back forever. Patronage always has been important to the arts, and many social welfare programs have relied on wealthy individuals, philanthropic groups, and other organizations for support. Churches in particular always have depended on the generosity of individuals.

The philanthropic tradition in the United States is rooted in the unique generosity of Americans. Other countries don't even approach the levels of charitable giving or volunteerism found in this country. Since our colonial period, private individuals have been essential to the founding of churches, schools, hospitals, libraries, and many other institutions and organizations.

Although the Carnegies, Morgans, Rockefellers, and others were conspicuously generous, charitable giving is a fundamental characteristic at all levels of American society. Modern fundraising practices began to evolve in the early twentieth century when the "campaign method," with specified goals and time frames, developed as a way to end the problems associated with paid solicitors and the seemingly endless requests by charitable groups.

World War I saw the emergence of corporate and foundation giving. Colleges and universities began systematic fundraising in the 1920s. During World War II many fundraisers turned their attention to war relief efforts and in the 50s, foundations and federal agencies established patterns of massive gifts to not-for-profits. The first multi-million dollar campaigns were launched in the 1960s and by the late 1980s we saw the first campaign for more than one billion dollars.

Today, the development profession is rapidly changing. The demand for knowledgeable personnel vastly exceeds the supply. Virtually all not-for-profits, including churches, are looking for people with development experience. The shortage of competent personnel undoubtedly will continue into the next century, although many formal education programs are now available. However, until recently very few programs taught the development process and the inter-relationships that exist among the different types of fundraising techniques.

Jargon and Euphemisms

Like all professional fields, development has its own jargon and euphemisms. The word development itself has euphemistic beginnings, presumably to overcome the negative connotations of fundraising. It didn’t become widely used as descriptive of the field or process until after World War II. Potential donors, or prospects, are people who are likely to support a given program or cause. Cultivation refers to the process of increasing prospects’ knowledge, involvement, and financial commitment to the organization's programs.

Planned giving has its own vocabulary. Planned gifts refers to contributions that are timed to generate special financial benefits to the donor, usually a tax saving. Deferred giving means that the organization receives the contribution at a later date, most often following the donor's death.

Solicitation, in its fundraising context, describes the request for a contribution and the solicitor is the person asking for the gift. The Case statement, or case for support, is the written document that describes the organization's need for funds. A campaign is any organized program to raise money.

What Development Is

A development program is a professionally conceived and managed effort to secure contributed funds on behalf of a charitable organization. The word "professionally" does not necessarily mean the use of paid consultants or experienced development personnel, although in many cases that may be desirable. In this sense, "professional" refers to high standards of conduct by all people involved in the development effort.

As mentioned above, development goes far beyond the process of generating contributed support. It is a means for involving otherwise unconcerned people in the organization's mission, its programs, and the ways it benefits society. This is an important philosophical distinction from fundraising, since it shifts the emphasis from asking for money to seeking commitment. Viewed from this perspective, the contribution is not the goal. It becomes the reward for successfully involving someone with the organization.

This can make the development process, especially solicitation, much easier for both volunteer and church staff. Comfort with solicitations evolves slowly and deliberately. One becomes more comfortable with the solicitation process after seeing the benefits accruing to both donors and the congregation. To most effective solicitors, the amount of the gifts isn’t nearly as rewarding as the donor’s enthusiasm or the tangible benefits the church will receive as a result of the contribution.

Why People Give

Almost all donors, especially those who make large gifts, support causes because they believe that their contribution will in some way improve the overall welfare of society. There are a host of other reasons that may affect the decision to support a project, including special recognition, tax benefits, and so forth. However, these are usually less important than the desire to do something meaningful and important.

Jerry Panas, a well-known fundraising consultant, wrote an entire book on this subject. In Mega Gifts: Who Gives Them, Who Gets Them, he writes, "It is more likely a combination of feelings, timing, past giving experience, and the motivation and exigency of the moment."2 Later in the book he adds:

There are two other factors that are peripheral, for some even subliminal. There is the great joy. There is also an unrelenting drive to repay, to make good.... Many also spoke about the great satisfaction they felt in being in a position to give. Life is good to them. They have done well. This is their way of saying thank you.3

A principle goal of any development program should be to determine the specific programs or projects that motivate each prospective donor. Virtually all prospects will reveal their interest, especially if the listener is attentive. Listening skills may be the most important fundraising skill. Too many solicitors, through inattention, miss fundamental clues to donors’ interests and motivation.

What Fundraising Can Do

In addition to the obvious financial benefits, there are several reasons why a church should consider a serious development program. When thoughtfully implemented, most fundraising activities should generate enthusiasm throughout the congregation. Capital campaigns, special events, and annual pledge drives each give members an opportunity to express their appreciation and support for the church and to feel part of something important.

Most fundraising programs create a sense of urgency that might otherwise be lacking. Perhaps your church needs new computers, or other significant items. When considered in isolation, these needs may not seem very compelling. However, when appropriately included in a larger project, these items may gain the necessary justification for funding.

Fundraising campaigns, when successfully managed, are a terrific source of publicity and should broaden awareness of your church in the community. The personal calls made during a campaign should be considered an opportunity to tell as many people as possible about the church and its goals. Even unsuccessful solicitations should be seen as positive events, since the conversation will give the person more information about the project or program needing funds. Additionally, many unsuccessful fundraising calls one year lead to contributions the following year.

What Fundraising Is Not

Fundraising programs are not and never can be a panacea for an organization's problems. There is a general tendency to think money solves all problems, but problems in raising money often indicate problems in other areas. A well planned and executed development program can undoubtedly secure more funds than a poorly planned and implemented one, but serious internal issues cannot be solved simply by increasing contributions.

Some people may regard fundraising as begging. A poorly conceived or haphazardly executed activity may have that appearance, but a professionally managed one does not. There is a direct relationship between strong management and successful campaigning. It is widely accepted in the field that donors rarely contribute significant amounts to poorly designed campaigns or ones that do not demonstrate the likelihood for success.

Most of all, fundraising is not a necessary evil. For those who have pursued fundraising with only a modicum of success, it instills pride and provides a great sense of accomplishment. All successful development programs offer many tangible and intangible rewards for effectively demonstrating the program’s or project’s merits.

IV. Types of Fundraising Programs

A meaningful development program uses many different types of fundraising activities. In general, all can be categorized into four major types: special events, annual giving, capital gifts, and planned gifts. Each category requires different skills and expertise, and under ideal conditions, your church will have a balanced mix. Since very few of us operate under ideal circumstances, it’s important to understand the differences as well as the interrelationships when you plan your own program.

The different types of fundraising have a hierarchy, which loosely resembles a pyramid. For most secular organizations, special events are at the bottom. They typically represent the largest group of supporters but with the lowest average contribution. For churches, annual gifts typically comprise the first level. At this stage, giving is higher than it is for special events. Capital giving is next, with a sharp decrease in donors but a big jump in the size of the gifts. This is the category where very large, extraordinary gifts are seen. The top level, planned gifts, may include an entire estate worth multiple millions of dollars. Many endowments begin through the generosity of a single individual or family, almost always the result of a planned gift.

The size of planned gifts make them very alluring, especially to the church that feels it desperately needs an endowment to provide annual operating support. If your church needs annual funds, work on building that area before starting a major planned giving effort. By all means, encourage the congregation to include the church in their estate plans. But put your time and energy into those areas where you are most likely to succeed and have the greatest need.

Special Events

The most familiar form of fundraising is special events. Auctions, balls, raffles, and a host of other activities are used in the smallest and largest organizations, whether religious or secular. Generally managed by volunteers, the contribution always is a part of the ticket or admission price. The special event avoids the anxiety of face-to-face solicitation because a specific benefit is attached to participation in the event.

These events are labor-intensive and often very costly relative to the amount of funds raised. However, they are ideal for many organizations, since they require little professional help. In addition, they can be a good way to get new people involved with the church as participants, volunteers, or both. Unfortunately, many opportunities are lost because the church doesn’t continue the development process. The individuals who regularly support special events are the most likely candidates to increase their annual giving. As a general rule, any church or organization having a special event should keep track of the participants or supporters.

Annual Giving

Annual giving programs— pledge or stewardship drives in churches— typically generate the largest, most regular forms of contributed support. Other not-for-profit organizations use membership programs, donor clubs, and similar activities as common forms of annual giving programs. In those situations, direct mail frequently is used for solicitation. An exception to this is the United Way, which has done an exceptional job in developing a volunteer solicitation organization.

In most churches, annual pledges or gifts are the most important source of support, since they cover general operating expenses. Other institutions find annual giving programs important because their regular contributors are those most likely to make capital or planned gifts. They also provide a pool of talent for board and other volunteer positions. These donors often encourage others to join the organization and, when properly motivated, will regularly increase their annual support. Most churches have been slow to adopt this as a model, but might consider researching the potential benefits of this method.

Capital Campaigns

Capital campaigns generally seek contributions for major projects, especially those requiring "bricks and mortar." These campaigns generate substantially larger gifts than annual campaigns and are the principal business of many fundraising consultants. They require a large volunteer organization and a well organized, systematic approach to fundraising. Face-to-face solicitations, especially for major gifts, are essential to success in capital campaigns.

The prevalent myth regarding capital campaigns is that they hurt annual giving. This just isn't so. When properly managed, capital programs and many special gift campaigns actually increase annual contributions. Many fundraising consultants are suggesting capital campaigns every ten years because of the impact on annual gifts.

Planned Gifts

Planned gifts, which include deferred gifts, describe contributions that meet specific needs, usually tax considerations, of the donor. A gift of appreciated property is almost always a planned gift. As mentioned earlier, deferred gifts are those in which the charitable organization receives the contributed funds at a later date, often following the donor's death.

Planned giving is a very hot topic right now. Specialized giving methods have expanded the range of deferred gifts far beyond the traditional bequest, although that is still the most common form. As with capital campaigns, planned gifts usually require face-to-face solicitations. In addition, a long period of donor cultivation often is necessary to secure a substantial gift.

V. The Importance of Organizational Planning

An effective development program must start from a solid base. All the fundraising expertise in the world has little value without the organizational systems and other conditions necessary for success. The church must have a clear idea of its future, strong leadership at both governing board and clergy levels, and an important story to tell. There must be a plan for raising funds and ways to measure progress. Policies, structures, and operating practices must be in place to assure continuity in the program as people change.

Define (or Refine) the Organization's Mission

The first step to effective fundraising is a well-defined mission statement. The mission drives development efforts in the same fashion that it directs the church's services and programs. In addition, the mission must be clearly stated. Unless you can explain what the church does in language easy to understand, it's unlikely very many people will make a major commitment to your project. In his book, Managing the Nonprofit Organization, Peter Drucker says, "One of our most common mistakes is to make the mission statement into a kind of hero sandwich of good intentions. It has to be simple and clear."4

In many churches, examining and revising a mission statement often occurs when developing a long-range plan. Needless to say, this is a serious undertaking and should not be taken lightly. However, it is possible to clarify an organization's values and priorities without engaging in a lengthy or detailed planning process.

A useful exercise is asking each member of the governing board to write one or two sentences justifying your church's programs, even its existence. Invariably you will receive as many different reasons as you have members. The usefulness of the exercise is getting your most committed people to think about ways to explain your cause to people who are less enthusiastic or involved. If the reasons are compelling, and they should be, then the comments should be summarized and widely distributed.

Establish Organizational Goals and Actions

Yogi Berra once said something like, “You have to be very careful if you don’t know where you’re going because you might not get there.” In my experience, very few churches, even large ones, have a long-range plan with specific goals, strategies, and actions. The lack of a formal plan severely limits an organization’s development efforts for two important reasons. First of all, people want to know where the church is going, how it plans to get there, and what will be accomplished. Most also want ways to measure progress and performance.

The second reason is even more basic. The church’s mission and programs should drive development goals and strategies. Both short-term and long-term needs determine funding priorities, where and how to find major gift prospects, even how much to ask. For example, a long-range plan for growth that includes a building project requires capital gifts. Maintaining the expanded facility usually requires additional operating support plus funding for special projects, new programs, etc.

How will those funds, whether capital, operating, or project support, be acquired? The methods chosen should be dictated by needs identified in the long-range plan. This allows your church to identify prospective donors much more effectively. The alternative method, the “shotgun” approach, rarely leads to substantial gifts.

Secure the Governing Board's Commitment

One other condition must be met before fundraising can be effective. The church's governing or advisory board must be committed to supporting the development program with time, talent, or treasure. The three "T"s have been the cornerstone of sound stewardship for a long time. Board members should be expected to provide financial support to the degree that each is able. In the secular world, it is becoming common to establish minimum financial expectations for new board members. While this may not be practical with religious organizations, those with limited financial capacity should be expected to give time and talent to support fundraising programs. The point is very simple: the governing board must demonstrate leadership in fundraising.

It's always ineffective, definitely inappropriate, and probably unethical to ask someone to support your project without first making your own commitment. It's not uncommon in fundraising for the prospect to ask the solicitor, "What are you doing?" The best response is always some variation of, "I really believe in what XYZ church is doing and I'm giving the most I can. This year I increased my gift by 20 percent." Depending on the circumstances and the relationship of the parties, actual amounts may be discussed. Any hesitation or equivocation on the part of the solicitor invites refusal by the prospect.

V. Planning The Future

This article has covered some of the basic steps necessary for effective fundraising. Now it’s time to plan and implement your own development program. There are many ways to start, but the basics always come first. You will need to clarify organizational goals and objectives, determine fundraising needs, involve key leadership, identify and cultivate prospects, conduct the actual solicitations, and create meaningful recognition systems.

You may want to seek professional assistance with your project or choose to "go it alone." There are many sources of information on fundraising and development to guide you in either direction. Consultants abound and will be glad to help. Like anything else, you will find a wide variety of skills and prices.

For the budget conscious, the National Center for Nonprofit Boards in Washington, D.C., offers several publications. The Foundation Center, based in New York, has branch libraries all over the country. Two periodicals, The Chronicle of Philanthropy and Contributions, both publish resource guides. Fundraising Management is another periodical that you might find useful. Good luck!

Top of Page