FYC4410 QUIZAM 3

State Regulations

• 39 states & DC require nonprofits to register with an agency before soliciting from residents • Religious nonprofits are exempt (except in AZ) • Affiliates of national/regional nonprofits are exempt • Regulations vary from state to state • State UBIT reports (in addition to Federal) • State consumer laws protect donors • FL requires annual report • FL Requires annual registration for 'solicitation of contributions'...and also requires registration for 'professional fund raising consultant

Problem Analysis :

• Describe the problem • State what is needed to address problem • Support the description with evidence If problems (or needs) are greater than available resources • Prioritize problems or needs • Provide the rationale - set priorities

Federal regulations on fund raising

• Must benefit the society or a specific group of clients • Must have a mission and dissolution clause Must operate in conformance with federal laws (IRS) • Must be governed in accordance with state laws • Lobbying cannot consist of a "substantial" part • Policies on: conflict of interest, whistleblower, document retention and destruction IRS application for tax exemption (Form 1023)

THE GRANT WRITING PROCESS

1. assess the need 2. access information 3. build support & develop partnership 4. establish a team 5. write the proposal

Cooperative agreement

Similar to a contract but involves substantial interchange between the funder & nonprofit

Fundraising Consultants Cannot

• Actually solicit from individuals • Use his/her personal list of prospects • Guarantee results • Professional associations forbid consultants from charging fees based on % of funds raised

FUND RAISING TOOLS: EQUIPMENT & TECHNOLOGY

• Adequate office space and equipment • Effective telecommunication equipment • Computers and software • Credit card processing capabilities

Major Functions of Fundraising Management

• Analysis • Planning • Budgeting (benefit vs. cost) • Execution • Control • Evaluation • Professional ethics

Filing Requirement & Disclosures

• Annual Return (Form 990 or 990-EZ or 990-N) • UBIT (unrelated business income tax, 990-T) • Payroll taxes • Forms for political organizations • Donor information (for gifts of property) • Report of cash received (more than $10,000) • Disclosure statement to donors (thank you note!) for gifts (>$75) • $10 penalty per failure (up to $5K) 1/4/2016 3 FEDERAL • For contributions over $250, donor can't receive tax deduction without statement • In order for donors to receive a deduction for donation, they cannot receive any goods or services in return • If goods and services are received, then only the contribution MINUS their fair market value is deductible

Contracts:

• Binding agreement • Between a nonprofit & a government agency • To perform a specific function • In exchange of lawful consideration ($$$)

Utilizing social media for fund raising, viral marketing & crowd funding

• By the end of 2013, 73% of all online users connected through social media • It is dynamic • Social media is all about connecting people • It places information in front of online audience • It is easy to access • It provides instant feedback • It is shareable

Fundraising Software

• Capital Campaigns • Integrated Accounting • Special Events • Customized Reports • Donor data management • Gift & pledge processing • Volunteers management • Alumni & students reach • Online donations • Credit card & electronic fund transfer processing • Wealth screening • Social network fundraising • Targeted emails and direct mails

Role of the board in fundraisng

• Clear understanding on roles & responsibilities • Commitment & involvement • Succession planning & nominating process • Affluence & influence Inspiring orientation • Committees (fund raising & finance) • Supporting development officer • Involvement in fund raising events • Annual board self evaluation

HIRING A FUND RAISING CONSULTANT

• Considerations in hiring a fund raising consultant: • Qualifications & experience • Track record • References • Compatibility • Confidence • Belief • Fees • Ethics

FUND RAISING CONSULTANTS

• Consulting : time-limited Consultant is hired when the organization needs.. • Someone with specific skills in fund raising • Help in deciding a course of action in fund raising • Short-term assistance with a task • Someone for a few hours over a course of fund raising cycle • Someone because it is 'in between' fund raising staff

Crowd Funding

• Crowd funding is the online fund raising method of building support for a cause from an online "community" through interactive messages • Exponential growth - $2.7B in 2012 & $5.1B in 2013 • Used extensively by start-up enterprises and individuals in need • Reward-based • It focuses on raising specific amount of money during a specific period for specific project • Strong crowd funding platforms include: Kickstarter, Indiegogo, FundRazr, GoFundMe, etc. • Nonprofits and crowd funding • It can be effective to raise unrestricted annual funds • Not for all nonprofits • Some steps: define audience, understand what inspires, explaining how they can help, ask, show gratitude, ask for other supporters • Crowd funding platforms exclusively developed for nonprofits: StartSomeGood, Causes, etc

Functions of Support Staff

• Data base management & IT support • Gift reports Financial accounting & reporting • Donor relations (donor expectations) • Awareness of fund raising trends • Professional ethics

Discrepancy Needs Assessment Model:

• Describe the ideal, standard, or norm • Describe the actual, current situation • Describe the discrepancy between ideal and actual • State what is needed to address the discrepancy

Techsoup recommendations:

• DonorPerfect Visual & Online editions • TowerCare Technologies DonorPro • eBase • eTapestry • Telosa Exceed! Basic and & Premier • Mission Research GiftWorks • PledgeMaker (Installed and Online) • The Raiser's Edge

Basics of online fund raising

• E-philanthropy helps to reach donors who are beyond other fund raising methods • Online sources & search engines make prospect search much easier • Online tools provide instant communications and multi media content • E-mail solicitations • Webpage based online donations • Mobile devices based donations • Fastest growing method of fund raising • Essentially launched in late 1990s by large nonprofits such as Salvation Army • Aftermath of 9/11 raised $110 million online • In 2008, about $10 B (out of 231B) or about 4% raised through online sources • In 2012, approximately 7% of all funds raised by nonprofits came from online giving • Social media based new strategies continue to propel online giving

STEPS IN WEBSITE BASED FUND RAISING

• Establishing a vibrant website • Determining the donation processing service • Establishing privacy policy and security features for online donations • Linking the giving page to social media • Establishing online donor relationship • Keeping continuous communication through current and relevant content

Typical components of a grant proposal sustainability plan

• Executive Summary: Umbrella statement on the project and the summary of the entire proposal • Statement of Need: Why the project is necessary and how it fits into the grant's/funder's purpose and priorities • Project description: Goals, objectives, strategy, task sequence, outputs & outcomes ie. nuts and bolts of how the project will be implemented • Budget: Financial description of the project both in table (spread sheet) and narrative forms • Organizational information: Organizational capacity of the nonprofit, its primary activities, audiences and services • Conclusion: Summary of the proposal's main points (preferably with an activity matrix) & sustainability plan • Attachments/Appendices 9

Sarbanes-Oxley Act 2002

• Federal law • AKA Public Company Accounting Reform & Investor Protection Act...and SOX! • Enacted in response to major corporate and accounting scandals • Passed to promote greater accountability • 11 titles & sub-sections for corporations • 2 provisions of SOX directly apply to nonprofits Whistle blower protection policies Document destruction policies

Information to investigate before writing a grant proposal

• Funding agency • Purpose & priorities of the grant • Eligibility • Total funds available • # of grants • Budget range • Project duration • Rating factors and extra points • Dates, deadlines & method of submission

Trends in online Giving

• Generic giving web page • Branded giving web page • Portal giving • Social giving

Policies and Procedures

• Gift acceptance & processing • Gift acknowledgement • Prospect research • Internal gift report & communication • Record system & maintenance • Resource material • Office & other physical requirements • Professional ethics

Text-message based fund raising

• Instant donations charged to phone bills (no pledges or credit card/cash transactions) • Proven to be very effective for disaster relief • Revealed its growing power and reach in the aftermath of Haiti earth quake • About $40 M collected within 3 days after the Haiti earth quake ($10 for texting 'HAITI') • Emerging market for professional assistance www.mobileaccord.com www.mobilecause.com www.mgive.com

FUND RAISING TOOLS: SKILLS

• Interpersonal skills • Interest in other people • Ability to relate positively to others • Enjoy interacting with stakeholders • Personable demeanor • Handling multiple tasks • Networking with other fund raiser • Writing abilities • Case statement • Direct mail appeal • E-mail appeal • Online content management • Grant proposal • Press releases

Other Legal Considerations

• Making sure the mission stated in fund raising campaign is consistent with the tax exempt purpose stated in controlling documents • Adopting a 'gift acceptance policy' Schedule M in Form 990 • Properly accounting for and to manage: restricted gifts endowment funds estate gifts Contractual agreements Grant agreements • Special events cannot be used for political purposes (exceptions: PACs) • Raffles are considered gambling • Cannot 'price' raffle tickets (suggested donation) • Cannot cancel the drawing or refuse to give out all prizes advertised • Cannot give cash awards

Major parts & typical components of a grant proposal

• Needs/Problems (why) • Goals and Objectives (what) • Plan of Operation (how) • Resources: Organizational capacity, personnel, and budget (how) • Evaluation • Sustainability

KEY COMPONENTS OF A GREAT NONPROFIT WEBSITE FOR ONLINE GIVING

• Network for Good recommendations • A guessable web address (URL) • Information about the organization (in "about us" page) • Current news about programs/services • Clear, intuitive navigation • Ease of use • A BIG "donate" button • Network for Good recommendations • Icons for social media links • Images and multimedia • A third-party endorsement • A home page with brand, site search option, links, key words and an image with emotional connection to the cause

Regulations for online fund raising

• Nonprofits that raise funds online through websites are ALWAYS required to register in their states of domicile • Charleston Principles (NASCO): registration in a state is required only if.. the nonprofit's 'interactive' website specifically targets residents of the state for contributions, or the nonprofit receives substantial contributions from residents on a repeated or ongoing basis the nonprofit solicits contributions by sending emails to residents • Online fund raising regulations are evolving

FUND RAISING THROUGH MOBILE DEVICES

• Other strategies include year-end fundraising (Humane society text to pet lovers: "24hrs to make your tax-deductible gift to save our animal friends") • Developing the right script & getting the word out (both via text message & social media) • Proper contracts with tech & cell phone companies to process & manage funds • Micro credit card readers for cell phones • Effective for special events and on-the-spot product sale based fund raising

CRITICAL ISSUES IN FUND RAISING MANAGEMENT

• Rapidly changing 'environment' • Demand for more services & limited resources • Balancing today's needs with future goals • Leadership role of the board, management teams • Low tech...low touch (digital divide) • Volunteer motivation • Survival of the fittest (fund raising & growth) • Balancing development functions: fund raising, marketing & community relations

WEBSITES FOR MOBILE DEVICES BASED ONLINE GIVING

• Reach: 85% Americans own cell phone and about half use them to access internet • Numerous other types of mobile devices with online access • Require mobile friendly websites (viewer friendly single column messages on smaller screens) • Need to maintain separate websites • Growing CMS for mobile websites that can be used in conjunction with standard ones

QUALITIES OF GOOD DEVELOPMENT OFFICER

• Recognizes importance of fund raising in sector • Is accessible & open to communication at all levels • Is confident, caring, articulate & influential • Is trust worthy, considerate & respected by all • Inspires others to be creative & optimistic • Acknowledges success & provides constructive criticism • Exemplifies a code of ethics

Protecting donor information

• Releasing personal information regarding donors can result in legal action and loss of exempt status • Making donor protection as part of standard operating procedure in fund raising Password protected computer files Locked file cabinets Donor mailing list NOT given out Not listing anonymous donors - anywhere

Functions of Fundraising Staff

• Strategic assistance in solicitations • Board, ED, employee & volunteer relations • Management of changing annual priorities • Managing stewardship program • Budget preparation & management • Cost-benefit standards & guidelines • Program performance measurement • Office function & operating procedures • Training & shadowing for new staff • Evaluation of staff (means & end

Fundraising Tools: People

• The ED • The Development Director • Board of Directors • Advisory Council • Paid development staff • Paid staff in non-development roles • Volunteers • Consultants and Contractors

Information on Grants.gov

• The single web portal for all federal govt. grants (since 2006) • 26 federal grant making agencies publish more than 1000 grant funding opportunities & application packages on line annually • More than $500 B awards distributed annually Nonprofit needs to be registered (DUNS #) • Electronic submissions • User friendly (????????????????? not yet!) • Easy to track submissions • www.grants.gov

COMMON NONPROFIT WEBSITE MISTAKES

• Too much text • No emotional draw • Small, aimless "donate" button • Too many images • No social sharing • Lack of an email sign-up • Difficult navigation and search function • No contact information

Fundraising Consults can...

• Train & motivate on all aspects of fund raising • Create fund raising plan • Research prospects • Set-up donor & tracking data base • Conduct feasibility studies • Conduct direct mail campaign • Study & recommend structural changes for fund raising • Train the board • Help hire fund raising staff • Organize special events • Develop fund raising component of strategic planning

Viral Marketing

• Viral marketing is a social media strategy for nonprofit supporters to spread a marketing message/picture/video exponentially to gain attention on the cause • Not for all nonprofits • Needs emotional appeal to motivate the spread of the message • Example 1: Kony 2012 • Example 2: ALS Ice bucket challenge • Example 3: #GivingTuesday, national day of giving after the annual shopping season

Web 2.0

• Web 2.0 is the method of using online tools to create and share text, data, audio, video, and images (supporters becoming messengers) • Using Web 2.0 tools can help nonprofits with marketing, fundraising, networking & collaborative partnership • Web 2.0 tools are in wide use and growing at rapid pace • Facebook, Twitter, YouTube, and other blogging, podcasting & social networking sites are examples of Web 2.0 tools

WHAT IS A GRANT?

• a designated source of money • given by a funding entity • to an applicant • to pay for a specific project/program outlined in a proposal • An implicit or explicit agreement • very competitive

The proposal must ...

• be rational • be objective • clearly communicate intended purpose(s) activities and outcomes

The product is the proposal which is a rational description of:

• needs • objectives • methods • resources • anticipated outcomes