Creating Diverse, Sustainable Funding Streams
By Jay W. Vogt
September 11, 2010 Many nonprofits seek diverse, sustainable funding streams, but arent sure how to achieve them. Here is how one organization reduced its reliance on government contracts while increasing donations and revenues.
The organization Catholic Charities of Fort Worth, Texas, (CCFW) reduced its reliance on government contracts from 65% to 55% of revenues (the national benchmark for their peers is 67%), while increasing donations from individuals and corporations from 3% to 16% (the national benchmark for their peers is 11%), all while growing in size from $9 million to $14 million, over eight years.
In effect, it kept their public contracts as a base and grew by attracting unrestricted operating gifts. Sound good? Yet during four of these years, it also raised $16.6 million for a new building without doing a feasibility study or using a capital campaign consultant.
Catholic Charities serves 110,000 people annually, one of every 15 people in Tarrant County, through 43 programs. Like many nonprofits, it meets a huge need, and has a great story to tell. Every two weeks it welcomes an average of 16 or 17 community members to a free one-hour lunch and tourCC101at which it shares its mission, and services, in compelling stories. The development staff briefly calls each participant afterward to listen and learn.
So many people have been moved to volunteer by these tours that CCFW has hired four volunteer coordinators to meet the demand, currently at over 2,000 annually, with about 400 fully engaged regulars. Many people who volunteer, and many who just love CCFWs missionto provide services to those in needalso want to make a donation.
Once a year CCFW hosts a free one-hour Creating Hope Fundraising Luncheon at which it makes a compelling presentation of the communitys need, and the difference its work makes in the lives of those whom it serves. Between 600 and 700 people attend each year. Although only half of the attendees make a donation of any size, this event, and associated individual solicitations, still raises about $1 million in gifts and pledges each year.
Every year about forty people make five-year pledges of $1,000, $10,000, or $25,000 in annual operating support. Next years goal for membership in the five-year Giving Society is 200 households. Major gifts solicitations and a single gala complete CCFWs development effort. Individual solicitation has become so effective that the agency plans to transition the luncheon into a solicitation-free, feel-good event.
CCFW learned all these strategiespoint of entry tours, donor cultivation, and free one-hour ask eventsin the Five-Year Sustainable Funding Program of the Benevon method. The average participant in this program, which costs $20,000 a year, raises $202,000 in the first year, $1.5 million in gifts and pledges by year three, and $3.5 million cumulatively by year five.
In year three of working with the Benevon model, CCFW decided to launch a capital campaign to raise $7 million for a new building. Capital campaign consultants said they werent ready, and urged a feasibility study. The board and staff disagreed, and went ahead anyway.
We knew our donors, said Heather Reynolds, president and CEO. The agency set a $13.5 million campaign goal, on the advice of the architects, and then raised $16.6 million in less than four years.
Like many nonprofits, CCFW added the Benevon fundraising method to an existing portfolio of development initiatives. In 2002, those initiatives essentially broke even. Now, Reynolds adds, There is no development program separate from Benevon, and it generates over $2 million per year. Her advice to others embarking on the program is to budget for a development associate to staff the effort as part of your investment, as there will be a lot of new donors to cultivate.
Jay W Vogt is president of Peoplesworth and author of
Recharge Your Team: The Grounded Visioning Approach. Contact him at firstname.lastname@example.org.
Posted: September 2010