How does fundraising work?

Technology can be a very useful tool for a fundraiser to become more donor-centric. It is really important to have some means of capturing detailed information about your donors centrally. If you sell tickets to events it is also very important that this information is held in one central database so that anyone who has any contact (either at box office, marketing or fundraising) can quickly see the details and any special requirements of a donor.

Don't be alarmed smaller companies! This doesn't have to cost the earth though it is useful to have some basic computing skills. You can build basic databases in Excel and Access which can be effective as long as they are kept up-to-date and only one copy is shared by all the users.

Alternatively there are some great open source customer relationship management (CRM) systems, such as Sugar  - http://www.sugarcrm.com/ - which have simple to use online applications. They may not be perfectly suited to arts companies but Open Source means that it is free (if you pay for hosting the software on a server) and can bereconfigured (at a cost) to your more specific needs.

I agree - it can be extremely disheartening. But there will inevitably be some nos. I find that while you can rarely turn a no into a yes immediately, by calling back and asking if there were any specific reasons you didn't get the grant, or achieve the sponsorship, you gain information that can contribute to a revision of your proposal or of future applications. You can also reduce the nos by making calls to grant makers in advance to check their criteria  - and although they cannot tell you what to ask for, or whether you will be successful - you often gain information that assists you put a better application together than you might otherwise have done.

As for keeping going when you get a no - there's nothing like the necessity to achieve a funding target to act as a motivator to pick yourself up, re-research new opportunities and reconfigure your proposal or application to the needs of an alternative funder or sponsor.

I was interested in your comment “Yep, getting ‘no’ sure comes with the territory. But …If you never ask the question, the answer is always no.”

 A just-released Ministry for Culture and Heritage report on giving and sponsorship found that, of those respondents that did not receive any cash or non-cash support from individuals, 78 percent had not sought it.  87 percent of those without corporate support had not sought it.

 Across all 480 respondents, just 3 percent, or $9.9 million, of the $383.2 million in gifts, grants and sponsorships received by cultural organisations came from individuals.  Six percent, or $22.6 million, came from companies. The rest came from central and local government, and from the Lottery Grants Board, trusts and foundations.

 In terms of obtaining corporate support and/or support from individuals, I would be interested in your views on some of the concerns expressed by respondents.

Corporate support

Comments made by respondents reveal many didn’t know how to obtain corporate support, or that they considered seeking corporate support only if other sources of support were at risk:

• We may need to source the corporate area more in the future, as the district council may pull the plug in a year.

Respondents also considered corporate support to be mostly limited to mainstream cultural organisations that appealed to large numbers of people:

• Corporates are looking for “big-bang” high-profile (televised) sponsorship targets at least cost, and we struggle to make further in-roads into this area, even at very small sums. We have expended considerable money developing and printing tailored sponsorship proposals that address the brand and sales needs of the company, to no avail.

Individual support

In terms of support from individuals, respondents commented that they were unsure how to source this type of support, and they thought New Zealand cultural organisations may be too reticent to make a direct approach:

• We have not been successful in this area. I think New Zealand cultural organisations are reluctant to approach individuals. It isn’t in our psyche to do so and the tradition of philanthropy that apparently exists in the USA isn’t strongly rooted here. So mostly it just doesn’t happen.
• How do we (delicately) encourage individuals to consider a legacy to an organisation such as ours?

Respondents said some cultural organisations were better able than others to raise support from individuals, and doubted the potential or sustainability of this source for their particular organisation:

• Individuals need a considerable amount of nurturing, and this is very time-consuming. We need to send out information on a regular basis by letter as well as email. Since we already send two notices a month about events, it is a fine balance not to overdo the contact and be a nag.

Respondents considered actual or potential support from individuals was most likely to come from a small number of significant donors and most likely to be focused on a significant project, such as a capital project:

• We are working with a pro bono fundraiser who has recommended a campaign in this area, which our board will kick off soon. We will target donors that are likely to give substantial amounts.
• In our town we don’t have many people of great wealth who are prepared to be generous with their money.
• We just live in hope of someone becoming our benefactor.

For more information and comments on corporate support, see pp 22-24 of the report overview, or pp 99-144 of the full report. For more information and comments on support from individuals, see pp 25-26 of the report overview, or pp 145-174 of the full report. 

Ingrid Kamstra, Policy Group, Ministry for Culture and Heritage

In terms of waiting “in hope for that mysterious, omnipresent benefactor”, the Ministry’s survey shows that many cultural organisations may not even be fully geared up to attract a wealthy benefactor, let alone attract a variety of less wealthy individuals to support their organisation and its cultural activities.

For example, only 53 percent of the 480 cultural organisations that responded to the Ministry’s survey had “donee status” with IRD. Without donee status, individuals or companies can’t claim tax relief on donations to that cultural organisation.

Unless an organisation has donee status, they also can’t participate in IRD’s payroll giving scheme, which enables company employees to donate through regular, automatic deductions from their before-tax pay.

It was interesting to read the comments from Anna Connell, Partnerships Manager, Auckland Theatre Company (under the What is the difference between sponsorship and philanthropy discussion thread). Her view was that payroll giving could sit well with the generations who automate their bills and rent and already interact with their favourite charities and art forms online. 

But Anna also notes other people have expressed doubt about whether it's appropriate to ask people to give via their payroll to an arts organisation, and that some people think it’s tacky.

The Ministry’s report notes that, across all respondents, the largest type of support that came from individuals in 2007/08 was in the form of memberships or friends’ schemes (this made up 43 of the total support from individuals).

Less than 1 percent of the total support from individuals was from payroll giving.  (37 percent was cash donations, 14 percent legacies/bequests, and 5 percent non-cash donations).

Organisations that have membership/friends schemes already have a rich database of potential payroll givers. The challenge, however, may be to identify the current or former members/friends who are most likely to be the kind that automates their accounts and interacts comfortably online. 

Or perhaps it’s just about identifying the ones that are actually employed or are employers - as once a deduction is set up with an employer, the payments to the cultural organisation are ongoing and made each pay at the stipulated amount, until the donor tells their employer to stop. 

Another challenge may be how to increase the overall level of payroll giving to cultural organisations - but without eating into other types of support that these organisations currently get from individuals.

So, for example, if cultural organisations do use their membership or friends’ databases to tap into potential payroll givers, how can they do that in such a way that maintains their membership/friends' support levels ... AND increases their payroll giving levels … BUT without alienating actual or potential supporters that may think payroll giving is tacky  - or inappropriate for an arts organisation?

So, it’s back perhaps to the “how best to ask” issue, particularly if you are asking people who already support you in another way and who may feel alienated by an organisation that asks them to give still more … which could run the risk that they may stop supporting you at all?

By the way, the Charities Commission is currently hosting 12 regional forums that will include further information on payroll giving. The forums will provide national and regional statistics for the "charitable sector", and information on the Commission’s education and monitoring programmes. Staff from the Office for the Community and Voluntary Sector (the OCVS) will also attend, to discuss payroll giving and answer any questions. 

In conjunction with OCVS, IRD and CNZ, the Ministry is preparing a guide for cultural organisations on payroll giving.  We are also considering holding forums specifically for cultural organisations, focusing on payroll giving and other tax and charitable giving incentives.  We'll let you know as soon as things are finalised.

Meanwhile, check out the Payroll Giving info on the OCVS website ... and also the Generosity Hub's payroll giving website.

Ingrid Kamstra, Policy Group, Ministry for Culture and Heritage