A common question rises: How much money will make a difference? McCormick et al. answer that $20 per student can have an impact and an extra $20 can produce a change in education. Foundations are involved in three main activities: raising, handling, and redirecting money.

The funds acquired as donations can be unrestricted (the foundation board decides how to use them) or restricted (the donor specifies the way he/she wants the funds to be used), recurring (one can donate on a regular or a predictable basis) or non-recurring (the donation will not be repeated for a long time or at all)(Grace & Wendroff, 2001).

Fundraising activities can range from art projects, athletic events, auctions for students’ services, book and craft fairs to Christmas cards, calendars, yearbooks, school symbols (Clay, Hughes, Seely, and Thayer, 1985). Muro (1995) suggests a new and challenging approach to fundraising:

[…] your first task as a fund raiser is to forget the need approach to soliciting private funds. Your school district is not a problem, and you are not seeking funds to shore up a sagging curriculum or poor athletic field. Your school, and you, as a fundraiser, are the ones who provide solutions to society’s problems. (Muro, 1995, p.51)

Thus, the donation is no longer charity, but an investment.

People who provide support…do not want to contribute to programs and activities that are perceived as problems. In the larger sense, the request for support for a project should be addressed in terms of an opportunity.(Muro, 1995, p.51)

Muro (1995) further suggests that a volunteer who solicits a peer is more likely to be successful than a paid professional person. In this case the solicitor and the prospective donor have a similar financial status, which facilitates the process. Donors need to see the donation as an investment in quality education. He considers face-to-face solicitation more effective than telephone and mail soliciting. Planning is essential to fundraising.

The literature suggests that fundraising should apply the principle of proximity (those closer to the school or the foundation) are more likely to donate (Muro, 1995, McCormick et al., 2001). Thus, we can involve the members of the school staff, administrators, board members, parents, alumni, major donors, and businesses, any of the school district business partners. Outside the school district regional and national corporations can become allies.

The Education Foundation Assistance Team (cited in Clay et al., 1985, p.23) suggests an outline for the fundraising activities:

• choose a campaign chairperson (it is preferable to have someone who is a donor himself/herself, as well as a person known in the community
  
• establish priorities
  
• identify prospective donors
  
• prepare and organize fundraising events (the work will be done by a committee)
  
• design and produce promo materials
  
• design and write letters to major donors
  
• design and write letters to parents
  
• keep records of funds and gifts
  
• give media releases

The foundation must account for the use of funds. An annual audit will assess the way the funds were received and distributed.  The school or the district affiliated with the foundation will present quarterly reports for the funds received. By being held accountable both parties gain credibility in front of the donors and the community.

Grace and Wendroff (2001) identify practices that could improve the relation between the donor and the foundation the former has dealt with. The donor should be given the opportunity to reinvest in a program if both parties consider that program worthwhile. Donors need to be informed on the impact their gift had. Foundations shouldn’t just assume that a donor would not want to be contacted again. The foundation must cultivate the relation with its donors by a frequent relevant feedback. Feedback includes:

• program brochures
  
• donor recognition events
  
• volunteer recognition events
  
• newsletters
  
• websites
  
• program proposals for new funding based on the successful investment of previous funding
  
• board-meeting presentations by program staff who have benefited from the funding (Grace & Wendroff, 2001, p.161)

Warwick (2000) identifies and describes five fundraising strategies: Growth, Involvement, Visibility, Efficiency, and Stability, each characterized by a core attribute: dynamic, rewarding, familiar, resourceful, and enduring. Each strategy has its own representative tactics. Growth is implemented by direct mail acquisition; Involvement requires direct mail membership, telephone fundraising, donor newsletters, and welcome packages; TV/radio, special events, cause-related marketing, publications accomplish Visibility; Efficiency involves planned giving, major gifts, foundations, corporations, monthly giving, workplace giving, government grants; Stability requires endowment, diversified fundraising, and EFT.

The nonprofit organization needs to identify the strategy that is most appropriate for the goals it is trying to accomplish. Warwick (2000) suggests that a nonprofit should evaluate its fundraising program at least once every three years. The evaluation is a good tool in determining if the chosen fundraising strategy has worked or not.

Warwick (2000) identifies three types of fundraising:

• Institutional fundraising; a cost-effective type of fundraising that involves asking for money from charitable foundations, churches, corporations, and other businesses

• Major-donor fundraising; nonprofits asks wealthy individuals for support

• Small-donor fundraising; apparently, it is less efficient than the first two types of fundraising, because it requires a bigger financial effort, as well as more time.

Warwick (2000) argues that nonprofit organizations should consider small-donor fundraising seriously, since almost ninety cents of every dollar raised in the US comes from institutions, not individuals, and about sixty cents of every dollar comes from individuals or families with incomes of 50,000$ and under (p.121)

Fundraising methods vary from foundation to foundation. A common practice for a local school foundation in its early stages is to send solicitation letters to parents (De Luna, 1995, p.6). As the foundation becomes more known, solicitation letters can be addressed to alumni and businesses as well. Other fundraising strategies that worked were social events (formal dinners, golf tournaments, fashion shows, raffles), and “phone-a-thons”. The fundraiser plays a major role in the foundation’s financial success. One organization used its initial funds to hire a professional fundraiser for a year. When soliciting corporation, the foundation specified how they would use the contribution. (De Luna, 1995, p.6).

How foundations spend the money they have raised:

• foundations that raise $10,000 or less spend it on minigrants and scholarships

• $20,000 - 50,000 - curriculum enrichment programs, teacher training, and teacher resources

• over $100,000 funding teaching positions (Merz, C., cited in De Luna)

Types of Donations

The foundations decide what they will do with the money they raise. The Eugene Education Fund offers its donors three ways of directing their gifts (De Luna, 1995, p.8): the Equity Fund (money directed to this fund will assist all the schools in the district), the Development Fund (it supports volunteers involved in fundraising), and the Restricted Fund (it supports schools and programs specified by the donors). The board of a foundation should be open to the donor’s choices.

Resources

Clay, K., Hughes, K.S., Seely, J.G., & Thayer A.N. (1989). Public school foundations: their organization and operation. Arlington, VA: Educational Research Service.

McCormick, D.H., Bauer, D.G., & Ferguson, D.E. (2001). Creating foundations for American schools. Gaithersburg, MA: Aspen Publishers.

Grace, K.S., & Wendroff, A.L. (2001). High impact philanthropy: How donors, boards, and nonprofit organizations can transform communities. New York: John Wiley& Sons, Inc.

Muro, J.J. (1995). Creating and funding educational foundations: A guide for local school districts. Boston: Allyn & Bacon.

Warwick, M. (2000). The five strategies for fundraising success: A mission-based guide to achieving your goals. San Francisco: Jossey-Bass Publishers.

Last Modified - 07/24/2003