Principles of Fundraising, IMHO (Part 2)

Last week, I started my list of 11 principles of fundraising. These are from the final lecture I give to students when I teach a class in fundraising — the very least I hope they remember as they enter the nonprofit workforce. Each principle is something I learned (sometimes the hard way) from three decades of trial and error, and reading or listening to the advice of people more experienced than I was.

For those of you hoping for a cheat sheet before the big exam (just kidding!), here are the first 4:

• Principle 1: You are NOT the target audience. So figure out who is.
• Principle 2: You have to spend money to raise money.
• Principle 3: You have to ask to receive.
• Principle 4: Use multiple fundraising tools for balance.

Being a person who likes precision, I am still trying to come up with a 12th principle before next week (feel free to offer suggestions in the comment box below), but meanwhile, here are the next four.

Principle 5: Good programs need good fundraising. Good fundraising needs good programs.
Your nonprofit is going to have a hard time fulfilling your mission — no matter what that is — without funding. Money makes things happen, and enough money means programs can grow and do even more good.

But it's very hard to raise money when you have mediocre (or worse) programs. Without success stories to point to and impact to demonstrate, you're asking people to invest in a dream. And while that may work for a while, eventually donors expect to see some return on their investment — lives changed, trees planted, schools improving or whatever it is your mission promises to deliver.

It's hard to separate programs and fundraising; each one grows stronger when the other one succeeds.

Principle 6: Don't mix your messages. When asking for a gift, leave it at that.
Let's face it — most of us will take the easiest alternative offered. Sign a petition or give a gift? Glad to sign. Send in a gift or pray? You'll get lots of prayer. Consider a charitable gift annuity or make a donation? You'll have plenty of donors considering (for about 30 seconds).

This is not to say that you don't do all of the above (see Principle 7). But it's never an either/or — it's a "do both." For example, "Once you've signed your petition, please return it with your most generous gift to help us …" "And as you send your gift of $35, $50 or even more if you can, please pray for the children who will receive food because of your generosity …"

Principle 7: Ask your donors for three things throughout the year: A gift. Referrals. A bequest.
Donors are a wonderful source of financial support (of course), but they also have family and friends who may also be interested in supporting your cause. Invite your donors to provide referral names, and tell them how you will treat the names they send. But don't do this in your direct mail. Instead, include a request for referrals in other mail such as receipts, newsletters, etc., or in e-mails or on your website.

Added to this, have a plan for asking donors to remember your organization in their wills. Again, newsletters are a great place to do this, as are annual reports, event programs, and other online and offline communications. Giving USA estimated that 95 percent of all planned gifts are bequests. And a 2010 article by Tony Martignetti for GuideStar included this timeless reminder: "If you have resources to promote only one planned gift, make it bequests. They are the bedrock of every program and it is perfectly respectable to stop digging when you hit bedrock."

Principle 8: A nonprofit is not a business. But if you don't run it like a business, you will go out of business.
Yes, nonprofits are about doing good, championing causes, changing the world. But like any business, they require people, record-keeping, decision-making and planning. Every nonprofit organization needs to remember that regardless of its great cause, sloppy bookkeeping, ineffective staff, and an inability to make good choices and establish wise strategies will lead to failure.

It may not happen today, and it may not be a huge scandal that brings the IRS to your doorstep. But sloppy management eventually will drive away high-quality, productive employees, wise donors and effective board members.

Next week, I'll finish off my list of principles of fundraising. And who knows, maybe that elusive 12th one will turn up.