Last month, we dove headfirst into the world of restricted gifts — outlining their effects on nonprofits across the globe and demonstrating the proper way to account for and manage them during times of increased gift volume. In this issue, we'll delve deeper into the topic by arguing for the opportunity — rather than the burden — restricted gifts present for your organization. We've also included easy-to-implement recipes for great stewardship, complements of our friends at Canadian Fundraiser eNews. Print them out and post them at your office and make sure to forward them to a friend — this is an issue you can't afford to miss! You are receiving this email because you are subscribed to Fundraising Well, a monthly newsletter about fundraising effectively in today's world. Subscription information is located at the bottom of this newsletter.
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Editor's Note|
Accountability — the ability to show donors and key stakeholders that proper and responsible management of funds is taking place — is a formal, and critical, part of good stewardship. Many organizations are excellent stewards of funds; they keep costs low, analyzing and repeating what works so that every dollar goes far. But these same organizations may not take the time to be accountable because donors haven’t demanded they do so. Sharing with donors how their money is spent is usually on the list of things an organization would like to be able to do, but it is often less of a priority than cultivating new donors. This is unfortunate, since the demonstration of good accountability to donors who have already given often generates a repeat gift. In this respect, restricted gifts may be a blessing in disguise. Back in school, if we knew the teacher wasn’t going to grade our homework, many of us gave in to the temptation to give it less than our best effort. Then, when it was time for the pop quiz, was it any surprise that we weren’t prepared? When a donor restricts a gift, he is giving fair warning that your organization is going to be getting a “report card.” But he is also implying that if you do well, you’ll be rewarded. Restricted gifts should be looked upon as your motivation for accountability, as well as a framework for your communication with donors. When a gift is unrestricted, reporting on its use can be difficult, especially if your organization supports a variety of programs. First you’ll need to proactively discover which program your donor feels most connected to. Then you’ll need to find a way to show your donor how his gift may have impacted that program. This process is informal and time-consuming, with a great margin for error, leaving little wonder as to why it rarely happens. With restricted gifts, on the other hand, the donor makes it quite clear to you what he cares about most. Now it’s up to you to let him know how his donation made a difference in that area! Of course, reporting back can be the most complex step in the process. In fact, one reason for the lack of focus on good accountability could be the lack of the infrastructure needed to support it. To formally report on how restricted gifts are spent, it is necessary that fundraising and financial systems share information. When properly integrated, these systems can work together to provide a compelling picture of the life of a donation. Sharing this story with your donor can be one of the most profound correspondences you’ll ever have. Many organizations have already recognized this. The American Red Cross has embraced donors’ desire to restrict gifts as an opportunity to provide great service and inspire loyalty. As part its commitment to accountability and stewardship, the organization notifies the public when the fundraising goals for a particular disaster have been met. Since the tsunami, the organization has kept the public informed about the amount of funds raised and will gladly share specific information with donors about how their funds are being used to provide relief. In fact, as part of recognizing the opportunity these gifts present, an American Red Cross spokesman recently told The Chicago Tribune that the organization has “made it easier for people to designate their gifts solely for tsunami relief.” Regardless of whether you view restrictions as a blessing or a burden, the fact remains that gift designations are going to continue to gain popularity as more and more organizations fulfill their donors’ demands to see how gifts are spent. If it’s not already in place, now may be the time for your organization to invest in an infrastructure that allows you to use restricted gifts as a chance to strengthen ties between you and your donors, showing them the impact each donated dollar makes on your mission.
There are countless good causes to elicit a donor’s consideration. And as these causes multiply, donors become increasingly selective about who is to receive their dollars. When seeking financial support, you must be able to articulate the role you play in attempting to make the world a better place, your competence in managing your resources, and your ability to respect the generosity of your donors. The manner in which you fulfill your stewardship responsibilities will greatly determine how successful you are at fulfilling your mission. That said, here are some stewardship responsibilities for both development professionals and the organizations they work for. A Development Professional’s Recipe for Great Stewardship
A Nonprofit Organization’s Recipe for Great Stewardship
“The most critical aspect of fundraising,” according to Peter E. Bjerland, vice President of development for Lutherwood Child and Family Foundation, “is the manner in which relationships are developed and maintained. In that regard, trust is the key ingredient. If you want to be trusted with philanthropic dollars, you must show that you are worthy and your agency respectable. A steward is entrusted with the responsibility of managing resources. Your donors, agency, and community will recognize the manner in which you fulfill that duty.” Reprinted with permission from CanadianFundRaiser eNEWS. Canadian FundRaiser eNEWS is a complimentary eLetter that has been providing news, how-to information and analysis of the Canadian nonprofit and fundraising sector twice monthly for 15 years. To subscribe, send an email to info@hilborn.com with “Subscribe” in the subject line. To search the last five years of issues, go to www.canadianfundraiser.com.
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Want to strengthen your relationship with donors and volunteers? Give them "Living a Life of Significance," 101 inspirational quotations celebrating life, philanthropy, and volunteerism. Great for the holidays! Visit www.designsforgiving.com.
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In the aftermath of the tsunami, thanks to record-setting donations and intense mainstream media attention, the perpetually hot topics of stewardship and accountability have become even more popular than ever. In particular, demonstrating a higher level of accountability through the management of restricted gifts has received a lot of attention. Many nonprofits feel that restricted gifts may not be worth the trouble, but most progressive institutions recognize that these gifts aren’t all bad! Besides the fact that restricted gifts are still gifts — helping you fulfill your mission in a time of need — they also provide a great opportunity for building relationships with repeat donors and fostering trust in new donors. It has been proven again and again that showing how gifts are spent helps donors appreciate what their money is doing for the cause and makes them comfortable giving more!
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