Nonprofit Fundraising

Wouldn't it be nice if as a nonprofit, we didn't have to worry as much about fundraising? If everyone believed in your mission and donated regularly, so you wouldn't have to put on so many fundraisers that require so much work. That would be nice, but the reality is that as a nonprofit you can never go away from fundraising, no matter what your income streams are. Since this is the reality for nonprofits, we should at least have policies set around the acceptance of these gifts, as well as determining who is responsible for raising the funds for an organization.

Responsibility
There are varying views of who is responsible for the fundraising for a nonprofit organization, many will argue that it is the Executive Director's responsibility, arguing that this is why a board hires a director. Others believe it is the boards responsibility to raise funds. The board does have a fiduciary responsibility to the organization that it serves. Therefore there is some liability for individuals who join a board. The problem with choosing between these two options is that it diminishes the partnership that is required between a board of directors and its executive. If one party has  more responsibility, the more likely their will be a power shift to this individual party. I suggest that the easy way to divide fundraising responsibilities for an organization and continue to work together, is to have the board develop the fundraising strategies and the director alongside the board chair carry out these efforts.

Donation Policy
One thing that is often forgotten about in nonprofit fundraising is the understanding of what to do when a donation is received. The struggle to determine who is responsible for the fundraising efforts typically overshadows the most important aspect of fundraising. This is, what do you do when you receive a gift. Before you decide who is responsible for fundraising, you should have created a donation acceptance policy. A donation acceptance policy allows anyone who is soliciting donations understand what is an allowable contribution by the organization. I am sure this may confuse a lot of people, however in the nonprofit world donations do not always come in the form of money. Sometimes land and vehicles will be donated as well as other non-monetary items, these items are considered in-kind donations (non-monetary donations, i.e equipment, services, land, etc.).

One reason it is necessary to have a donation acceptance policy is that all donations are not created equal. Every donation is a great jester, this does not mean every donation can be accepted. The most tempting of donations that would seem like an easy yes, but must be analyzed extensively, is land or building donations. It is extremely tempting for a nonprofit that is just starting to accept a building or land without inspecting the property before accepting it. This is not to say that you should not accept the property, just that it is wise to due a thorough investigation of the property. Many times land and buildings are donated to a nonprofit because they are not able to be used or sold without extensive work. The most common problem with land is that there are code issues or utilities are not present, other times it might be in a flood zone. Again, not every donation has an asterisk but it is your responsibility to remove any doubt.

Another item that should go into the donation acceptance policy is how monies should be used. There are individual donors that prefer that their donation go to a specific program or area of the organization. Your acceptance policy probably will not say anything specifically to this situation, however it should state how donations should be processed and documented. Processing and documenting the donation will allow your organization to track the dollars and ensure they are used properly. It might also be wise to treat earmarked donations as a grant, tracking expenditures of the donation as well as outcomes.

Another item that should be included in a donation acceptance policy is, what you should do after you have received a donation. The answer to this question is to acknowledge that donor. This process can be slightly in-depth with several stages of acknowledgement or you can simply send a thank you letter. It is essential that you send a thank you within the first 48 hours of receiving a donation (for a smaller organization, maximum one week). This stage will often times determine if you will have each donor in the future. No matter who an organization deems responsible for the fundraising efforts of an organization. It is both the executive director and the boards responsibility to ensure that their is a donation acceptance policy.

Knowing what to do with a donation is only part of fundraising, you also need a plan to determine how you will collect the fundraising goal. Nonprofits often times get into situations where they are fundraising simply to pay the bills. When fundraising is done in this manner board members can become exhausted. This type of fundraising also tends to stray away from the mission and focus only on financials. A strong fundraising plan can prevent this from occurring.

Fundraising is necessary for nonprofits to survive, a focused fundraising effort will provide board members with an understanding of what needs to be raised and how it should be done. However, it is also very important to understand what needs to be done with donations as they are received. A donation acceptance policy should be created before any fundraising takes place, this will help protect not only the organization but the donor as well.