IFMSA Leadership Training Program

Fundraising Strategies

Step 3: Start Developing

Make a list of potential donors
Build a fundraising pyramid
Create a donor database
Compile appeal documents
Build a follow up strategy
Develop a negotiation strategy

Make a list of potential donors This is a brainstorming process, and the more people involved the better. The most important thing in developing a prospect list is to start close to home. The local organizations, and the organizations you somehow have an association with are the likeliest contributors, and all should be put on your prospect list. Get commitments from your Patron and team of allies to do the same thing with their personal contacts. Go through address lists together with them. Build and work the list of personal contacts first. Think about where these contacts fit in the fundraising pyramid, in terms of their personal ability to make a contribution as well as their ability to raise money from their contacts. Set a timeline for approaching your list of contacts and asking for money. After everyone has inventorised their personal contacts and created a "hard list," widen the net and begin to identify other possibilities such "cold calls" to an organization where you had no previous contact or association. Build a fundraising pyramid People give at varying levels, depending on their capacity and motivations, and most importantly, on how much they are asked to give. If you ask for US$ l0.-, that is what you will get, even from a millionaire. Ask high, you can always come down. In most successful fundraising campaigns, one-third to one-half of income comes from large contributions. Another third come from medium-sized contributions, and the final third from smaller contributions. The trick to meeting your fundraising goal is to decide what amount constitutes major, medium and small contributions, and how many contributions you need at each level of the pyramid. For example, if you need to raise US$ 30,000.- and decide that US$ 500 .- or more is a major contribution, US$ l00.- is a medium contribution, and US$ 50.- is a small contribution, you need: At least US $l0,000.- (l/3) from major contributions or 20 people or organizations donating $500 each; US$l0,000.- in medium contributions, or l00 people or organizations giving US$ l00.- each; and US$ l0,000.- in small contributions, or 200 people or organizations donating US$ 50.- each. As you look a this example you'll see that "working the top of the pyramid" makes a lot of sense. Every major contribution you get means l 0 fewer small contributions you need to ask for. The top of the pyramid is often the least-worked area but it is the most important and should be worked first. You get the biggest payback for your effort. Create a donor database Fundraising is a complex process, requiring a lot of background information about the potential donor to identify the right strategy to approach. Usually underestimated, but essential part of fundraising work is therefore investigation. It is crucial to identify who is a potential donor, when, to what extend, and for what, and update that information. You can start with the "top of the pyramid" to develop a database, as this is a very time consuming process. Donor profiling would redefine all your strategy: It might be also the case in your country that large cash donations from foundations and corporations are almost exclusively given to organizations with tax exempt status. It might take a group six months to a year (or longer) to be certified as tax-exempt organization in the European Community, and time might vary elsewhere. The main prerequisites of applying for such a status are being a non-profit-making organization, offering a public service. If your organization is only dealing with student exchange, setting up an organization that qualifies for tax exempt status might not be a viable option. You should seek for professional advice on the exact prerequisites and process in your country. This is one reason you might want to either redifine your organization's status, or consider working with an existing not-for-profit organization to raise funds for an activity. Instead of donating cash, some organizations could tend to provide books and other printed material, videotapes, stethoscopes, various educational materials. Knowing this would enhance your chances of raising donations from those organizations and companies. Some institutions tend to not sponsor in cash; but they can provide some services for free, or at reducted prices. For instance, some sponsors could agree to take over printing work of some booklets, some airline companies could offer free or reducted fares for flight tickets, some companies could provide free meals or cocktails, or provide conference halls, etc. A good donor profile would enable you to approach these companies with the right sort of request. Some companies will donate at certain parts of the calendar year, or require applications well in advance. For example, the Commission of the European Union, requires a minimum of 6 months to evaluate a project, and if the project is scheduled to commence before the evaluation project ends, the appeal is automatically returned. Other companies or organizations might require appeals through specific forms or formats. Applying for the funds allocated by the Commission of the European Union does not require forms, where as TEMPUS project does, which is also an European Union project. Donor profiling also allows student organizations, which have a high member turnover rate, to inherit fundraising information. The newcomers could refer to the profiles to see at what time they are to apply for funds, what kind of projects are supported and for how much, whom is to contact, and what kind of documentation is necessary. Compile appeal documents A generic appeal should have an introductory letter, a project profile, an itemized budget, list of the beneficiaries (if any), and information on the organizing committee. See the Writing Appeal Documents Section for further information. Build a follow up strategy Set up guidelines how to follow up the appeals you will submit. Keep a record of all correspondence: When was a letter send to a sponsor, what were the enclosures, was a reply received, was the potential donor contacted by phone (how many times, when, with whom, on what, any results?), did the donor ask for further information, was that request honoured (what is sent and when?), was a face-to-face appointment scheduled (when and for when). This is vital when referring to previous correspondence. Usually it is a good idea to call the potential donors about after a week you send the documents. This is proven to increase your chances of a positive response by 50%. Call, and ask if everything is received in good order, do they need further information. Try to make an appointment for a face-to-face negotiation. Record the name of the person you have talked to, time and discussed subjects immediately. If you want repeatingly contributing donors, keep a good record of them, so you will not forget to thank them in your evaluation report, advertisements, etc. Keep them updated, by providing short progress reports, and finally the evaluation report. Develop a negotiation strategy Develop a strategy on how to conduct face-to-face negotiations. See the Face to Face Negotiation Section for further information.