Domain 3: Relationship Building

Question 1

Philanthropy is always about:

Answer 1

Relationships

Question 2

Giving:

Answer 2

i. Nearly always implies some sort of connection to the organization.
ii. Satisfies one or more personal needs.
iii. May provide some type of return in what the organization will do for them or for someone close to them.

Question 3

Effective fundraisers seek to discover what is important to any potential donor and tap that need to encourage and support giving. It requires:

Answer 3

being able to look at the organization’s mission through the eyes of the donor .

Question 4

How Relationships Support Fundraising

Answer 4

• Add prospects to donor base & develop them into active, regular donors
• supporting other types of contributions
• Engaging stakeholders in the org
• Integrating with research & marketing
• Allowing the org & stakeholders to get to know prospects
• Supporting effective stewardship of funds

Question 5

Steps in Developing a Cultivation Plan:

Answer 5

1. Identify Constituent Groups
2. Undertake prospect research
3. Determine connection, capacity, and capability
4. Determine the best relationship to make the connection
5. Outline a Moves Management Plan
6. Who to involve in developing the plan (Chief DO, community volunteers, organization’s CEO, program leader, board of directors).

Question 6

Individuals Motivations for Giving

Answer 6

i. Give something back.
ii. Express deep emotion (grief/joy).
iii. Help care for others.
iv. Respond to the person asking.
v. Identify with a worthy cause or goal.
vi. Diminish negative feelings (guilt, fear, anger).
vii. Because they’re involved.
viii. Gain tax and/or financial planning benefits.
ix. Gain immortality.

Question 7

Understand Motives for Giving:

Answer 7

• Help target strategies and opportunities, including the case to present a prospect and the type of solicitation method to use.
• Allow appropriate matches of donors with opportunities that are meaningful for them.
• With all the electronic tools available, even the “smallest” donor can be targeted based on identified wealth indicators and the focus of the appeal can be customized based on the demographic profile and areas of interest.

Question 8

Seven key steps to forming relationships with Organizations:

Answer 8

1. Research - Be thorough, but don’t let research become an obstacle to personal contact and cultivation of an organizational source.
2. Inquire / approach / involve - May take many forms depending on the source.
3. Develop Request - Define a project or other funding opportunity that best match the source’s funding objectives and policies with your mission and needs.
4. Solicit - Make “the ask” in a way most appropriate for the source.
5. Follow-through - Follow up on the solicitation to ensure all is in order. Offer more info or to make a personal visit. After the gift is received, keep the funding source appropriately involved in your organization.
6. Report - Some sources will have specific reporting procedures; others will leave it open. Regardless of policy, report to the funder in an honest, thorough, and timely way.
7. Repeat - Never let this process stop. Plan ahead: look for the next step at every step taken.

Question 9

Who to include in developing a cultivation plan

Answer 9

• Chief Development Officer
• CEO
• Board of Directors
• Community volunteers
• Program leader

Question 10

Critcal Balance

Answer 10

Donor needs = Organization needs

Organization needs = community needs

Question 11

Organizational Groundwork prior to relationship building

Answer 11

• Staff and leadership with a clear sense of the org’s mission
• Leadership with a clear vision of org’s directions & knowledge of activities
• planning process that results in comprehensive plans for achieving the mission
• Realistic budgets to support the plans
• Marketing/communications plans for promoting benefit of org

Question 12

Fundraising systems & processes needed for a culture of philanthropy

Answer 12

• Donor-focused research
• Targeted cases, constituents & methods
• Strategic communications
• Stewardship

Question 13

Primary purposes of cultivation

Answer 13

• Adds prospects to donor base
• Allows prospects to be developed into active supporters & regular donors
• Aids in improving relationships with current board, donors, volunteers, etc
• Supports achieving the organization’s mission

Question 14

Cultivation activities provide opportunities to engage…

Answer 14

targeted audiences – potential donors – in a variety of ways.

Question 15

Roles for volunteers in building relationships

Answer 15

• Help identify and cultivate prospects
• Open doors for gift specialists
• Advocate for the organizations programs

Question 16

Benefits of Personal Visits

Answer 16

• Assessing the depth of the commitment
• Understanding the assets a donor has to make the gift
• Determining what the donor is trying to accomplish
• Discovering specific areas of interest

Question 17

Information gathered in a personal visit allows the organization to:

Answer 17

provide future opportunities that will accomplish the donor’s objectives, whatever they may be. Add additional information learned to the donor’s profile.

Question 18

A goal for the organization throughout this process of building relationships is:

Answer 18

being able to show a growing list of donors providing current and future gifts.

Question 19

Key relationship strategies for grants

Answer 19

• Avoid an “us vs them” mentality
• Make a personal contact within the org
• Write a letter of inquiry whether or not required

Question 20

Key Concepts to Optimizing Relationships

Answer 20

• Create a philanthropic fundraising environment within the org, community and constituency
• Balance community needs and organization needs
• Carefully cultivate potential donors after research shows they have capacity and interest
• Engage volunteers and staff in the cultivation process
• Remember that individual solicitation is most effective
• Soliciting organizations still requires effective relationships

Question 21

In relationship building, the critical balance is…

Answer 21

between the organization and its community, based on marketing principles and the exchange of value.

Question 22

The Exchange Principal:

Answer 22

o Products and services are offered…
o That meet someone’s needs, and…
o …compensation (money or other kinds) is offered in return.

Question 23

In fundraising, the exchange principle requires organizations to express their missions in ways that invite donors to participate in programs that extend their values and preserve their interests.

Answer 23

At the same time, that participation is meeting one or more needs of the donor.

Question 24

Change happens:

Answer 24

i. Organizations must continually analyze the competitive marketplace and be able to handle changes and perhaps manage the forces that drive inevitable change.
ii. Government tightens services to people in need = opportunities arise for non-profits.
iii. Non-profit agencies are finding entrepreneurial ways to collaborate with for-profit businesses, creating joint ventures or subcontracting with one another.
iv. The transfer of wealth challenges non-profits to change their fundraising methods – more emphasis will be placed on financial planning and planned gifts.
v. Each generation of donors are different. Conduct new research, then evaluate and update marketing/fundraising strategies.
vi. Change within the organization itself (new tech, personal changes).

Question 25

One constant of change is:

Answer 25

human resistance to it!

Question 26

With an understanding of underlying factors of change…

Answer 26

you can begin to cultivate potential donors.

Question 27

Planning for every activity of the fundraising process – strategic, development, and marketing – must:

Answer 27

focus on the target constituent.

Question 28

Fundraising programs should include a series of ongoing, positive, asking situations that offer donors

Answer 28

repeat opportunities to meet their personal giving objectives.

Question 29

Creating and maintaining a philanthropic environment for fundraising means having the systems and processes in place that will enable fundraising efforts to reach their potential:

Answer 29

i. Donor-focused research
ii. Targeted cases, constituents, methods
iii. Strategic communications
iv. Stewardship

Question 30

The organization’s ongoing philosophy must focus on the value of giving:

Answer 30

Promoting this central philosophy isn’t just about marketing; it’s about letting potential donors know the organization’s dedication to its mission and how their contributions can support the mission.

Question 31

Cultivation and stewardship relate to

Answer 31

building and sustaining relationships.

Question 32

Ongoing cultivation is the basis of:

Answer 32

successful fundraising.

Question 33

Cultivation is:

Answer 33

the process of gradually developing the interest of an important prospective contributor through exposure to institutional activities, people, needs, and plans to the point where a major gift may be considered.

Question 34

Stewardship is:

Answer 34

the tracking and recording of contributions to ensure they are used exactly as the donor intended.

Question 35

The reasons people give are tied directly to:

Answer 35

the building of relationships.

Question 36

Early phases of the organization’s research have identified the organization’s “publics”

Answer 36

those individuals and groups that potentially have interest in and motivation to support the mission. Now it’s time to being cultivating!

Question 37

The most effective way to establish a two-way relationship with a donor is to allow the donor to:

Answer 37

select the time frequency, and method of communications.

Question 38

Clubs & Associations – service clubs, self-help organizations, professional/trade associations, social clubs

Answer 38

Typical motivations:
i. Specific interest of the club/association
ii. Community service
iii. Business/social concerns of members
Strategies for building relationships:
i. Identify potential support in the community.
ii. Join the organization if appropriate, or approach through a member.
iii. Discover ways to educate the group about the cause and why it warrants their support.
iv. Offer appropriate things for the group, e.g. meeting space, speakers, etc.

Question 39

Businesses – neighborhood stores, and businesses, banks, utilities, etc.

Answer 39

Typical motivations:
i. Civic pride
ii. Good citizenship
iii. Good of the community
iv. Benefits to the business
Strategies for building relationships:
i. Nominate local business people for board.
ii. Establish a businessperson’s council.
iii. Seek in-kind support that serves organizational need and then prominently recognize the business and its contribution.
iv. Ask a business to sponsor an aspect of the organization.

Question 40

Corporations – Many types – foundation, direct giving, executive discretionary funds, subsidiary, or local site giving, in-kind gifts such as marketing support, research and development activities, or products needed.

Answer 40

Typical motivations:
i. Good corporate citizenship
ii. Enlightened self-interest
iii. Executive leadership interest
iv. Location
v. Cause-related marketing
vi. Employee interests
Strategies for building relationships:
i. Establish relationships with employees: board & committee members, etc.
ii. Develop compelling reasons for corporate support that tie to corporate mission/vision.
iii. Ensure research is comprehensive and effective.
iv. Write grant proposals.

Question 41

Foundations – several types: private company-sponsored community operating.

Answer 41

Typical motivations:
i. Community support
ii. Sociopolitical concerns
iii. Historical roles (e.g. philanthropic interests of founders)
iv. Seed money for new projects
v. Tax advantages
Strategies for building relationships:
i. Research foundation mission/vision/goals.
ii. Analyze foundation guidelines.

Question 42

Workplace Solicitations (federated campaigns) – bestowing member-agency status on a non-profit, leading to annual allocations; discretionary grants for various venture/community-developed projects; sponsoring donor-option programs allowing individual employees to make on-the-job contributions.

Answer 42

Typical motivations:
i. Demonstrates role as good community partner.
ii. Because of payroll deductions, provides an efficient way for people to make donations with encouragement of supervisors.
Strategies for building relationships:
i. Join the local federation as a member agency.
ii. Apply for discretionary grants.
iii. Seek participation in a federated donor-option program – either as existing one or a new one made up of similar organizations.

Question 43

Government Entities – possibilities at all levels – federal/national, state/provincial, county, local governments, and agencies.

Answer 43

Typical motivations:
i. Need to address pressing social problems.
Strategies for building relationships:
i. Design programs of specific interest to funding agency.
ii. Complete and submit applications thoroughly and in a timely way.
iii. Engage local (to agency) advocates – counsel and other support.
iv. Meet with public officials responsible for funding agency.
v. Be patient – obtaining government support can take time.

Question 44

Religious Organizations – national denominations, religious federated campaigns, local faith communities, grants-makers (primary support), institutions for which support is secondary to their missions.

Answer 44

Typical motivations:
i. Religious reasons
ii. Concern for the public good
iii. Charity/compassion
iv. Extension of ministry
Strategies for building relationships:
i. Make initial connection locally, perhaps through staff and board of organization.
ii. Determine and articulate a connection between needs and religious organization.
iii. Approach targeted congregation/community through clergy or recognized leadership.
iv. If local support not available, inquire about regional or national denomination support; ask for a personal contact to approach.
v. Always respect these sources’ religious motivations for giving.

Question 45

Relationship Strategies for Grants:

Answer 45

i. Applying for a grant isn’t much different from any other type of solicitation when it comes to the relationship aspects – focus on building and sustaining relationships.
ii. Approaching an organization for funding should be viewed as a potential partnership or team working together for a common goal (no us vs. them).
iii. Make a personal contact within the organization and begin to establish a relationship with that person.
iv. Whether or not required, writing a letter of inquiry can save time if the project and funder are not a good fit. Include an outline/summary of the proposed project so the organization can respond appropriately.
v. Once a grant proposal is accepted and funds received, managing the grant becomes a significant relationship issue.

Question 46

Grant funding sources typically lean toward certain types of projects and initiatives that are:

Answer 46

defined by the type of project including its constituency, scale, and geographic impact.

Question 47

Matching Potential Projects (type of project) with Funding Sources:

Answer 47

i. National? Innovative model or target group? = Federal Sources
ii. Local & statewide? Replication of model? = State Sources
iii. Local workforce? Proven methods? = Corporate Sources
iv. Geographic limits? = Family Foundations
v. Specialized? = Special Purpose Foundations
vi. National? Unique Model? = National Foundations
vii. Local? Proven approach? = Community Foundations and Local Donors

Question 48

Retaining donors is supported by building and sustaining relationships…

Answer 48

part of that is gift acknowledgement. It is also recognition that meets the organization’s guidelines AND the donor’s needs.

Question 49

Typical acknowledgement methods:

Answer 49

I. Telephone call (always in combo with written acknowledgement).
II. Postcards
III. Personal letters – most influential if sent to the donor within 2 days.
IV. Gift club acknowledgement
V. Appropriate public recognition (not always prompt; consider combining with a more prompt acknowledgement).
VI. *according to research, the most attractive aspect of donor recognition events for donors is learning more about the charity’s work.

Question 50

There are legal requirements from governmental and regulatory agencies that require written acknowledgement for gifts over certain amounts:

Answer 50

check with government agency!

Question 51

To effectively establish, build, and sustain quality relationships means customizing the donor experience:

Answer 51

donor-centered fundraising!

Question 52

Key Concepts to Remember:

Answer 52

• Create a philanthropic fundraising environment within the organization, its community, and its constituency.
• Balance community needs and organizational needs.
• Carefully cultivate potential donors – new and continuing – after research shows they have the capacity and interest to give.
• Engage volunteers and staff in the cultivation process.
• Individuals, who give for their own reasons, provide the greatest percentage of philanthropic gifts, and that individual solicitation is most effective.
• Soliciting organizations, while different in some ways, still requires effective relationships to be successful.
• Ensuring the future of the organization may rely on its ability to effectively maintain relationships – including proper stewardship of funds that builds donor confidence.

Question 53

Corporate giving over time has evolved.

Answer 53

Companies are more focused on philanthropy that is productive and strategic.

Question 54

Corporate giving as a percentage of profits has gone down in the past 30 years

Answer 54

while cause marketing and sponsorships have gone up.

Question 55

Corporate giving now accounts for 5% of total giving.

Answer 55

Of that total, 1/3 comes from corporate foundations.

Question 56

Companies are most interested in giving to causes that:

Answer 56

 Create a link between the organization and company that is beneficial to the company socially and financially.
 Are measurable, proactive, and focused.

Question 57

Ways in which companies support nonprofits:

Answer 57

 Workplace charitable campaigns.
 Direct gifts of cash.
 In-kind gifts
 Volunteer projects.
 Lending of experts/expertise

Question 58

Motivations for companies to give:

Answer 58

 Improve the quality of life in the community in which they do business and their employees/ customers live
 Improve the competitive environment in which they do business.
 Attracting and keeping employees and customers.
 Improving the quality and skills of their workforce.

Question 59

Methods of corporate funder research:

Answer 59

 Annual reports.
 Corporate citizenship and sustainability reports.
 Volunteer (board member) connections.
 Linkedin.

Question 60

Four Models of Corporate Giving:

Answer 60

 Corporate Productivity Model (Giving because it will help increase profits and boost stock value for shareholders)
 Ethical or Altruistic Model (Giving because the company has an obligation to be a good corporate citizen and exhibit social responsibility).
 Political Model (Giving because it secures, enhances, or protects corporate power and influence with government and community leaders).
 Stakeholder Model (Giving because it is deemed the proper response to the needs of the various stakeholders who have an interest in the company. These include employees and their families, customers, the local community and organizations).
 Understanding the four models will help the fundraising professional prepare the right solicitation plan,
 Multiple models could be in play within the same organization at the same time.

Question 61

Cause Marketing vs. Sponsorships:

Answer 61

 Cause marketing is tied to the purchase of a product with a percentage of the proceeds going towards the nonprofit.
 Sponsorships are not tied to purchasing behavior, but for a flat fee give the company visible marketing access to an event, cause, or activity.

Question 62

Foundation Fundraising:

Answer 62

Foundation funding is often synonymous with proposal writing. However, the grant seeking process is comprehensive, and includes research, planning, and cultivation of relationships with foundation staff and leadership.

Question 63

Foundation giving is second only to individual giving in…

Answer 63

total philanthropic support.

Question 64

There are four types of foundations:

Answer 64

 Independent Foundations: A private foundation that supports tax exempt organizations through grants.
 Corporate Foundations: A foundation that functions like a private foundation, but receives its assets from the company it is associated with and prioritizes funding projects aligned with its business interests.
 Community Foundation: A foundation that both makes and receives gifts and limits its funding to a specific geographic area.
 Operating Foundation: A foundation that seldom makes gifts to other organizations, rather it is directly involved in the mission for which it was formed

Question 65

Donor Advised Funds:

Answer 65

 Allows donors to make irrevocable gifts to a fund.
 Allows donors to make future recommendations about future distribution of those funds.
 Popular with donors who don’t want to create their own foundation but want to have some control/influence on the destination of their grant funds.
 May be located within a community foundation or a public grant making charity.

Question 66

Types of Foundation Support:

Answer 66

 Operations (Unrestricted): Support ongoing operations with no use restrictions.
 Program (Restricted): Support for a specific activity or plan.
 Capital: Support for a building, facility expansion, equipment, or endowment.
 Pilot: Support for a start-up program for a limited time.
 Challenge: Support designed to encourage others to give to a campaign or project by matching the generosity of individual givers.

Question 67

Components of a Comprehensive Communications Plan:

Answer 67

o Determine a goal.
o Identify & profile audience.
o Develop messages.
o Select communications channels.
o Choose actives and materials.
o Implement the plan.
o Evaluate and begin again.

Question 68

Donor Acquisition Strategies:

Answer 68

o Use your donor management system to identify key segments and profile your ‘average’ donor.
o Using these findings, identify unreached groups who have similar characteristics.
o Use a third-party company to perform research on prospective donors.
o Perform targeted outreach based on those findings.

Question 69

Vehicles for donor acquisition include:

Answer 69

 Direct mail
 Telephone solicitation.
 Social media.
 Digital display ads and retargeting.
 Email
 Search Engine Marketing (SEM).

Question 70

Donor Retention Strategies:

Answer 70

o Build a donor-focused approach to stewardship and cultivation.
o Provide excellent customer (donor) service
o Follow-up in a timely manner.
o Communicate consistently.
o Provide evidence of value from the investment the donor has made
o Follow-up with lapsed donors
o Don’t just ask them to give again. Give lapsed donors a platform to express their reasons for not continuing to give.
o Making giving convenient and encourage monthly giving.

Question 71

As a general rule, the best way to cultivate major gifts is

Answer 71

Organize a series of events for prospective donors

Question 72

Securing corporate gifts is most improved by knowing the corporations:

Answer 72

Charitable giving decision makers.

Question 73

When preparing a fund development plan, it is most effective to:

Answer 73

Build the plan in relation to the organization’s strategic plan.

Question 74

In writing to inform constituents about the value of their giving, the organization’s communications should:

Answer 74

Persuasively should how the organization’s mission needs their gifts to succeed.

Question 75

All information gathered on a prospective or current donor should lead towards:

Answer 75

Knowledge and understanding of the the donor’s interests.