CFRE Exam: Securing the Gift

charitable lead trust

(high intent immediate impact): Established by a donor transferring assets to trust that provides income to a nonprofit organization for a period of years. At the end of that, the trust assets revert either to the donor or someone else the donor designates.

Bequest

(high intent, future impact): The provision made in a donors will through which charitable organization receives cash and/or other assets at the time of the donors death

Charitable Remainder Trust

(high intent, future impact): Used by donors to transfer assets to a trust, which then goes to the charitable organization after the death of the last beneficiary. The donor retains a fixed or variable income for life.

Charitable Gift Annuity

(high intent, future impact): a legal contract between the donor and charitable organization through which the donor exchanges cash, stocks or other assets for an agreed-upon income for life

life insurance policy

(high intent, future impact: a) transfer of ownership if an existing policy to the organization b) purchase of a contract by the donor, in which the institution is named the beneficiary or owner

What is constituent readiness?

-Does our organization have a stable and positive reputation? -Is there a core of ready and accessible volunteers? -Is there an adequate number of prospects able to make major gifts? -Do we have a developed marketing and communication plan for ongoing awareness, information and cultivation? -Did we complete a completed feasibility study?

What are the components of a case statement?

-Organization's objectives, services -how fundraising supports organization -how the organization will remain "significantly" productive" -Difference the donor's support will do -What the organization will do to to improve/change

What are the 10 steps to start a planned giving program

-board and staff commit to a concept -committee is appointed to study the potential of the program to make recommendation -board adopts plan and begins simply (ie a bequest program) -board approved budget and recognizes it is an investment that will take time to reap benefits -training programs are established and carried out for board and staff -identification of prospects -add appropriate subcommittees to development committee -preparation of marketing plan including production of supporting materials, special events or estate planning seminars -start a mail cultivation program -creation of efficient office management procedures for gift processing.

What are some of the advantages of planned giving to the organization?

-establishes a long term relationship with the donor -encourages donor to think about gifts of assets -often provides future funds -enhances opportunities for charitable requests

What does gift data and reports help development office do?

-increase understanding of fundraising performance and help us prepare and justify budgets - quantify the return on investment (ROI) of its' fundraising activities.

Who are most likely donors to make a planned gift?

-most planned giving prospects are current donors, so target people who already have a relationship with the org. -not necessarily just donors who have given large gifts, giving from assets or estates allows those with less liquid income to make a substantial investment with less immediate ramifications than a outright gift

What takes place during the pre-campaign internal audit?

-organizational planning: consensus about mission within the org, program plans in place for 5-10 years and long-range funding implications for those plans -board leadership: process for board nomination and recruitment, involvement in planning, involvement in fundraising -administration and finance: there is a management understanding of development process, there are budget and financial projections, revenue and expense trends for the past five years -development operations: what is the staff size and experience, are there procedures for establishing goals and measuring progress, record keeping, gift receipting, prospect management, donor cultivation, supporting materials -Donor base: donor base, constituent base, giving trends as compared to other organizations -volunteer structure and involvement: -public and donor relations: what is the image and visibility in the community

How does it impact the annual fund?

-sets the stage for increased annual giving -capital campaign can absorb the annual fund - the "double ask"

What happens after the institutional case is created?

-smaller case statements evolve --some for unrestricted support, some for capital campaigns and major gifts, some for special needs or planned giving. --segmented for a variety of constituent groups - major donors, regular donors, etc. -serves as the basis for websites, brochures, foundation proposals, appeal letters, press releases, newsletter articles, speeches and all communications.

Once the campaign readiness questions have been answered, the feasibility study conducted and the internal audit completed, what are the six decisions that have to be made before starting a campaign?

1 Make clear and agreed upon policies about how campaign will be run, how funds will be spent, and how gifts will be counted 2 Clearly define roles for staff, board and volunteers 3 Define communications plan 4 Define budget and duration of the campaign 5 Determine guidelines for types of gifts accepted 6 Establish recognition methods

Three things to do when writing a case statement?

1 Secure feedback systematically and via a checklist and focus groups to: Create ownership among volunteers and potential major donors. Test the market and revise based on input 2 Use key employees and volunteers to create a formal basis for case material review and revision. 3 Segment: Adapt the case to constituent groups, and test different draft options, to further define the way the case can be used effectively based on constituent motivations. Specialize the case to fit specific constituent groups, listen to what matters to them, this helps you better understand the audience for which it is written.

What does a Feasibility study do (7)?

1 tests the concepts of the campaign, gathers data for the plan, and is preceded by an institutional plan. 2 asks a range of donors for input, but not the whole pool so campaign can maintain secrecy before being officially announced 3 Tests the case and the climate for giving 4 determines availability volunteer leadership 5 determines the availability of prospective donors with the ability and interest to support the proposed campaign 6 determines realistic goal 7 aids in the development of a gift range table to drive specific targets for amounts and number of gifts

pooled income fund (high intent, future impact)

A common trust to which many donors make contributions, and retain for themselves a pro rata share of the funds earnings each year. As each beneficiary dies the value of the fund attributed to that death is severed and paid to the organization. It is similar to a mutual fund

What is the definition of a case statement?

A written version of the case for a specific constituency or campaign, derived from the organization's case

What is the purpose of the annual fund?

Acquire donors - Renew donor support annually - Cultivate donors to higher giving levels - Build donor loyalty - Identify & involve leaders - Identify major gift prospects donor acquisition, donor renewal, donor upgrade.

life estate contract

Agreement established by donors transferring a deed of real property to a charitable organization while reserving for themselves and/or someone else the right to live on or use the property for life. Charitable deductions for life estate contracts are limited to properties that are either personal residences or farms.

What is a capital campaign?

An intensive organized fundraising effort to secure philanthropic gifts for specific capital needs or major projects executed within a specific time. Usually over one or more years

When determining best giving method what should planned giving officers ask?

Are you looking for income? Now or in the future? Are you looking to pass an asset onto an heir?

What are the five steps for a "model solicitation" when asking for a gift?

Build rapport - relaxed chit-chat State the case for support - focus on organization strength and how it will serve needs Encourage involvement- ask open ended questions summarize benefits and close - watch for signs of acceptance of case statement Be quiet Respond appropriately - confirm timing a gift. if no then find out why. if maybe - follow up.

Who should be in charge of major gift solicitation?

CEO and a volunteer

Why is donor prospect research and cultivation helpful in getting the gift?

Donor research and prospect helps you ask right person asking the right individual for the right gift, at the right time, for the right amount for the right reason

What are the benefits of planned gifts to donors?

Increases opportunity to give and receive a current income tax deduction income tax deductions provides a source of fixed or variable income and retirement income reduction of capital gains tax potential for increased income asset-management some allow donor to pass asset to an heir (e.g. A charitable lead trust)

Why is annual fund important to major gifts?

Individuals are unlikely to make a significant gift to a organization if it is new to him/her.

What are two areas of readiness that organizations have to evaluate to be in a capital campaign?

Institutional and Constituent readiness

On what things are case statements evaluated?

It has emotional and rational appeal. It shows proof that plan will work. Clear and concise. Uses graphs and charts Reader oriented Donor focused. Well-designed

How do ethics and marketing co-inside?

Marketing materials should be honest and not compromise values.

Where should the ideas of the case statement come from?

Mission Statement and Strategic Plan

What are the five main uses of creating a case statement?

Obtaining consensus Recruiting volunteer leadership. Testing the market. Telling the story. Creating fundraising materials.

What is institutional readiness?

Organizational readiness is measured by: -Is our organization reputable and credible? -Is the case urgent and compelling? -Is our board and leadership ready and able to solicit for funds? -Do we have a solid prospect database? Have we done the research? Have they established interest? -Are there the administrative mechanisms in place? must have necessary admin mechanisms in place to track gifts and interactions (e.g database, systems)development systems -Have we conducted a feasibility study? What does it say?

What are the two types of planned gifts?

Outright or current (high intent immediate impact)-Complete transfer or realized gift of cash or stock as part of an estate plan Deferred- Testamentary giving or life income arrangements to be realized in the future

What are good ways to market in a capital campaign?

Personal contacts, face to face - most important because the closest to your organization give the most Public relations - once campaign goes public press releases, news conferences and staged events can be used to market to general public

Why is it important to market planned giving?

Planned giving usually involves transferring assets, this is a difficult decision for donor to make therefore it is important for the planned giving officer to use a repertoire of activities to keep donors educated about giving opportunities

What are the four steps of a capital campaign?

Planning, Cultivating, Solicitation, Pledge Fulfillment

What are the different sections of a grant proposal?

Proposal summary Problem (needs) statement - talks about request for funding Project goals and objectives Methodology - how the project will be conducted Evaluation - how the project will be measured against objectives budget

What are the three components of the case?

Purpose: show organization mission/purpose, shows how new programs benefit, shows organization impact on the community Content: outlines key information about org like mission, goals, governance budget, staff competence facilities, etc. Focus: unrestricted support, restricted gifts for operations and/or restricted gifts for special needs

What are major gift strategies when asking for a gift?

Research to find out who is ready Match donor needs to giving opportunities strong case/case statement personal contact appropriate follow up appropriate acknowledgement and recognition

What are different gift decision making types?

Spontaneous, responsive and deliberately

What are the 9 things that should be included in a development operational plan?

Statement of purpose Strategic and financial goals Policies related to goal Budgeting for fundraising activities Entities responsible for activities Cultivation and solicitation strategies Indicators of success Monitoring and processing systems Timetable - plans usually cover same period as the strategic plan and is typically renewed at least annually.

What do major donors what to know before making a major gift?

Strength of organization know you have committed volunteers you have donations from 100% of the board Whether the person asking for funds is also a donor Vehicles for giving

What happens in the Planning phase of a capital campaign?

The development phase where a statement of preliminary goals and a plan of action is established. -prospect screening is important part of this phase and allows a gift chat to be created- typically done in two phases 1. staff conducts prospect research then 2. volunteers (board and peer affinity groups) as a group rank prospects and divide them into proposed giving levels (e.g $100k vs. $10k) based on research and their personal knowledge about the donor - this determines the sequence for cultivation and solicitation -specific timetable for the campaign must be created to set out volunteer expectations and drive campaign forward

What happens in the solicitation phase of a capital campaign?

This is when volunteers and staff ask for contributions. includes asking for gifts from corporations and foundations as well. Higher gift solicitations are made first.

Why is it important to have a fundraising program plan?

To measure results against the goals and action plans.

Who should be involved in creating the case statement?

Volunteers and staff

How do the CEO and volunteers partner together to raise major gifts?

Volunteers commit gifts first and they help with solicitation CEO is chief fundraising officer, is responsible for how funds are used, is the key spokesperson

What kind of questions do donors ask when making a donation?

Who is asking? For how much? why me? for what purpose? Why now?

Should a donor be aware before a meeting that a major gift will be asked for?

YES.

When do you announce the public part of a campaign?

after you secure 50% of goal before public announcement of campaign begin PR and media relations

What are the best uses of electronic solicitation in annual giving?

best integrated with other approaches become more popular with social media

What are the best uses of giving clubs in annual giving?

best used to upgrade donors at the top of the low end of annual giving provides incentive recognition to move donors to higher levels each level provides customized donor recognition

Why is marketing segmentation important?

better targets messages to specific constituent groups.

What is the role of the board in capital campaigns?

determines if the need for funds is justified determines if a campaign is needed the board is required to make their gifts first and set the standards and pace must be willing to participate in solicitations and act as a peer leader through gifts and actions

How should organizations market planned giving and why?

direct mail : allows education in a cost effective way - it should outline benefits to the donor and allow donor to indicate further interest newsletters : allow you to highlight donors who have already chosen to make a planned gift while providing info about the opportunities will clinics and estate-planning seminars: gives donors benefit of expert advice, allows prospects to be easily identified by attendance educating the professional community: share with people who work in accounting/law knowledge about planned giving options and give them ability to share info with clients.

donor advised funds

donors give cash, stock or other assets to a community foundation, the donor claims an immediate charitable deduction, the money is invested while the donor determines what charities to contribute to

How long does pledge fulfillment usually take?

generally takes 3-5 years to collect all funds pledged

What do capital campaigns usually raise money for?

generally used to secure funding for facility construction, renovations, equipment purchases, endowment development, special programs and scholarships

What are the best uses of monthly giving in annual giving?

inexpensive and efficient way to collect annual donations

What happens in the cultivating phase of a capital campaign? How long does it take?

interested prospective contributors are developed through exposure, this involves major marketing and relationship building - this is the longest phase and can take from 18 months to several years - volunteers play a major role as advocates during this phase - once campaign is announced, media relations begin use all the groundwork laid in planning to show momentum (announce major gifts, highlight public endorsements, share press release of the volunteer campaign team)

What are the best uses of mail solicitation in annual giving?

least effective way to gain new donors effective for renewals package should include letter, response form and return envelope

What are the best uses of special events in annual giving?

main purpose of special events should be public awareness secondary purpose is to cultivate prospects and donors should not be seen as a major fundraising initiative

What is the role of a planned giving officer in helping donors choose what kind of planned gift to make?

planned giving officers should NOT give advice, that's the job of accountants and attorneys, they instead should just provide the options available.

What are some of the benefits of capital campaigns?

they allow donors to become familiar with specific needs of org -"think big" about the impact they can have push annual giving build volunteer leadership enables multi year pledges grows donor base secures funds for major endeavors increases visibility and credibility Builds development staff skills strengthens partnership with board and the administration unites constituency in a common cause

Why do volunteers make the best solicitors?

they can relate to the donor and testifying to their experience as a donor.

What is the rule of thirds gift table?

top 10 gifts account for 1/3 of campaign total, next 100 gifts account for another 1/3 of the total. everyone else contributes the next 1/3. This varies per campaign and organization.

What are the best uses of telephone solicitation in annual giving?

used to acquire, renew and/or upgrade donors effective when combined with other methods good idea to pilot test with small group before implementing

Who is interviewed in the feasibility study?

volunteer leadership and major prospective donors.