This article was written by JeeYoung Dobbs. She is no longer with Ostara, but we want to preserve this piece so that you can learn from her and from the work she did while part of the Ostara team. Everyone dwells on the end of a campaign. That sweet moment is made of champagne, Co-Chairs cutting ribbons for new buildings, and applause. It’s a celebration for the people, families, the organization, and community that are stronger thanks to the campaign. You will hear the mantra to begin a campaign with the end in mind. This advice is golden. Equally as important, but often overlooked, is a strong start to the campaign. Many organizations get excited about a great idea and fundraise first, plan later. This leads to half-baked visions, scant prospect lists, and lackluster leadership. Many of these campaigns stall midway or fail altogether. To avoid this fate, I suggest another mantra for your campaign office inspiration wall. Try: By failing to prepare, you are preparing to fail. If you are thinking about launching a campaign soon, here’s a checklist of milestones you will want to complete before you raise your first dollar (caveat: campaigns are messy. Sometimes you raise dollars from your closest supporters before all these pieces are perfectly in place). If your organization can check these boxes, you are in a strong place to start campaign fundraising: Campaign Vision: You have distilled a powerful vision for how the campaign will transform the community. Equally as important, you have articulated how the campaign fits into your overall organizational mission. Campaign Plans: While plenty of details will be in flux, you at least have a general sense of the project scope, timeline, and budget. Site Specific: If your campaign involves acquiring a new property or space, you have a long-term lease, own it, or have firm plans to purchase the property early in the campaign. *Plenty of campaigns launch before they are site-specific, but many of these campaigns take longer than anticipated or stall due to property challenges. Donors often don’t feel comfortable giving or pledging until the plans are firm. Board Leaders: All Board members are prepared to serve as campaign ambassadors and are clear about their campaign role. Donors: You have two or three times the number of prospects you need in order to complete your goal. The campaign will be spent working your way through this long list to determine who has connections, interest, and capacity to invest significant gifts. Core Assets: You are making investments in staffing and systems to support the additional workload and complexity created by a campaign. This could look like adding additional staff, gift policies, enhancing your database procedures, or developing donor stewardship plans.

Grants Accelerator is a regular blog series about leveraging your grants strategy to enhance organizational sustainability. As we roll over the calendar year, everyone is thinking about their fresh start. Some people welcome the New Year by beating pots and pans, jumping into ice cold water, or burning photographs from the past twelve months. At Ostara, we observe another distinct New Year tradition among nonprofits. It’s called “The Annual Grant Budget Freak Out.” This often involves hair pulling and frantic searches on Foundation Center. I feel your pain. I have been that staff member staring at the new annual budget filled with general operating needs and trying to match it to my list of restricted funding prospects. I could get up on my soapbox right here and rant about why there isn’t more general operating funding. I’ll save that for another day. Instead, I’ll sit alongside you as you dig into that annual budget and offer a few tidbits of advice for your 2019 grant strategy. Strategy 1: Make Restricted Grants Work for You by Carving out Flexible Funding.  Most organizations see grants in two categories: restricted and unrestricted. Ideally, a healthy grant portfolio has the full spectrum of funding categories: ____________________________________________________________________________________________Unrestricted        Lightly Restricted       Moderately Restricted       Highly Restricted Unrestricted (General Operating Grants): These are completely unrestricted and may be used for any expense purpose. Lightly Restricted Grants: These are restricted to a broad purpose that may include a program or set of programs, but they likely do not have a specific budget, list of eligible expenses, or metrics to be achieved. Moderately Restricted Grants: These are restricted to a program or project. The program budget may group together all program expenses and program revenue, including grants from multiple funders, giving the organization freedom to use the funds in whatever way they see fit to achieve the project or program goals. Highly Restricted Grants: These are awarded for programs or projects, require budgets with specific line-by-line descriptions of where each of the funder’s dollars will go, and require a complete financial report at the end of the grant period itemizing expenditures. Your sweet spot is in the middle where you can carve out flexible funding from lightly or moderately restricted grants. You can tuck indirect (operating) expenses into the budget by being more purposeful about what you include and how you label it. For example, instead of removing rent from your program budget, think about how that operating expense is critical to a program. You could then relabel it “meeting space for program classes” or whatever makes sense for your particular organization. The share of an Executive Director’s salary for leading a program could become “strategic program oversight.” Be creative and purposeful in your budget development, while also being transparent. Strategy 2: Group your programs under a broader brand. Instead of always developing bright, shiny new programs to attract funding (often restricted), think about how you could put a fresh face on your core programs. Ostara is currently partnering with Vine Maple Place, an organization serving homeless families. They decided to group their housing, financial skills education, employment services, life skills, counseling, and youth programs under one brand called the Stable Families program. This allowed them to attract more sustainable funding for their core programs through general project budgets. While the funding was “program-restricted,” it is restricted to all their programs. This keeps those funds more flexible over the course of the year. Strategy 3: Don’t Itemize Unless It’s Required. Unless a funder specifically asks you to itemize how their dollars will be used, you can usually present a program budget that groups together all expenses and funding sources. Whether funders need to see their dollars tied to specific expenses is a good clarifying question to ask before you submit. It may not be as cathartic as beating pots or jumping into Puget Sound, but liberating yourself from the black and white world of restricted vs. unrestricted funding will open a fuller spectrum of opportunities in 2019 and beyond.

This article was written by Ariel Glassman. She is no longer with Ostara, but we want to preserve this piece so that you can learn from her and from the work she did while part of the Ostara team. 5-4-3-2-1… Here comes year-end giving! Buckle up. It’s time for the meteor shower of gifts you’ll receive by December 31 – and time to plan how you’ll make the most of those gifts in the future. This influx can be the basis of a new booster engine for your fundraising efforts in 2019 and beyond. You don’t have to be a rocket scientist to build this powerful vehicle that can launch you into next year. It doesn’t actually involve aerospace engineering, though a systematic approach helps. This booster is a monthly recurring giving program. Whether you already have a recurring monthly or sustainer giving program in place or you want to launch one, here are seven reasons why it’s worth the effort. Why Monthly Giving is a Worthy Endeavor We know that monthly giving: Has higher annual retention rates (80% for first-time monthly donors compared to 20-25% for one-time gifts)  2016 Fundraising Effectiveness Project Data Is on the rise – nonprofits raised 40% more through monthly giving in 2017 than in 2016 (compared to 19% growth in one-time gifts), and monthly giving’s share of all online revenue rose from 14% to 16%. M&R Benchmarks 2018 Study Results in a greater return on investment and lower cost of acquisition and retention Inspires donors to give 42% more on average than people who give one-time gifts and contribute greater long-term financial value to the organization Network for Good Appeals to a broad range of demographics, including both Millennials and Baby Boomers Strengthens your ability to reliably project fundraising budgets each year Allows you to focus more on stewardship and building relationships with donors than solicitations, which leads to more meaningful partnerships over time Your Monthly Giving Launch Plan Your year-end giving results aren’t just cash in the door – donors who give at yearend are your best prospects for conversion to monthly donors. As you hit your yearend giving stride, make the time to do these three things to plan for the future and position 2019 as the “Year of the Monthly Donor” for your organization: Review your donor database and credit card processing system to make sure they can support automatic monthly giving (otherwise, manual management of monthly giving could eat up too much staff time). The key is to make this easy and convenient for donors, too. Identify your best monthly giving prospects. Analyze your Giving Tuesday donors and regular yearend donors, as well as your loyal donors (who have given consistently in each of the past three years or more). You’re looking for donors who made relatively modest gifts, in the range of $50-$250. You’re going to ask them in January for an amount that seems very achievable, but that would slightly increase their total annual giving. For example, ask your $100 donors to give $10 a month – that would bring them up to $120 annually. That extra 20 percent can really add up over time! Asking again within a month of their most recent gift might sound too soon, but research shows that the best time to ask people to sign up for monthly gifts is close on the heels of their last one-time gift. Steward monthly gifts intentionally and celebrate examples of what monthly giving makes possible in your newsletters and other publications. You may make a big push for monthly giving a few times per year, but you can subtly highlight the opportunity to make greater impact on the mission with convenient monthly gifts all year long. Profiling a monthly donor in your newsletter is a great way to spell out the impact and take advantage of peer influence in convincing people to step up and give monthly. You can apply this methodology any time you receive a large batch of one-time gifts. Excited about the return of GiveBIG in May 2019? Make sure you offer all those one-time donors the chance to become monthly supporters before summer hits.

This article was written by Kari Dasher. She is no longer with Ostara, but we want to preserve this piece so that you can learn from her and from the work she did while part of the Ostara team. If a tornado headed your way, you would likely run in the opposite direction. When I serve as an interim development leader, I willingly run towards the tornado of organizational change with a smile on my face. Call me a storm chaser. You might think I’m crazy, but there is significant opportunity for leadership and organizational transformation amid development leadership transition. As an interim development leader, I arrive in organizations just as a Chief Development Officer or Director of Development is transitioning, or after their role has been vacant for a month or more. Their tenures may have been rocky or successful, short or long. The common denominator is the need for leadership stability and the opportunity to re-envision the organization’s approach to fundraising. My role is to clear the way for a successful permanent hire and to strengthen the fund development team and strategies along the way. To do this, I must enter the “danger zone.”  I listen and speak up when I see people or processes that are not supporting the mission. I help the organization to consider new ways of doing things. While I’m not always popular, organizations are in better places to hire and retain staff and accelerate sustainable fundraising at the end of my interim tenure. Here are seven ways an interim development leader could transform your team and organization during your next staffing transition. Change Agent. Their short-term nature allows interims to be truth tellers in a way permanent staff are not always able to do for fear it may affect their future opportunities. Interims have courageous conversations with Board and staff to highlight challenges and opportunities. These conversations are often uncomfortable and sometimes lead to dramatic, but necessary staffing or structural changes in the pursuit of the organization’s mission. Systems Analyst: An interim brings an experienced outsider’s perspective to the structure of an organization’s fundraising operation. They assess trends, goals and results and make recommendations for how to enhance your resources (people, processes, and plans). Interims collaborate with staff, Board, and volunteers to understand what to keep, discard, and enhance. Strategy Partner: During a staffing transition, there’s potential that a leadership vacuum can leave a development team rudderless. An interim can serve as a strategy and thought partner to the CEO and Board to help guide their thinking about fundraising’s place in organizational strategy. This normalizes the permanent development leader’s place at the strategy table. Coach: With their fundraising knowledge, an interim can come alongside staff and Board with resources and experience to help reveal new ways to approach their work. Collaborator: If fundraising has been siloed in the past, an interim can grow relationships with other departments like programs, finance, and HR. This is a process of listening and understanding each other’s needs. An interim also reinvigorates the development team by removing obstacles in their path and preparing them for new leadership. Planner: An interim can build plans that map the path forward, including financial goals, a case for support, strategies, and tactics. The permanent development director is often relieved they don’t have to start from scratch. Culture Catalyst: An interim can build or strengthen your philanthropic culture by modeling for the staff, Board, and CEO how a sustainable fundraising organization works and their roles in supporting it. They can also demonstrate for staff and Board leaders the link between an organization’s culture and their culture of philanthropy and advocate for strategies and outcomes that will strengthen both over time. This can also be an opportunity to infuse missing elements of diversity and equity into the structures and roles that reinforce the organization’s culture.

Does this sound familiar? Executive Director: “How much do I need to invest in a grants program to raise $100,000?” Board Member: “Should I expect the grantwriter to bring in two times more than we pay them? Five times?” As grantwriters and fundraisers, we spend our days communicating stories and data that prove the impact of programs and organizations. We know to look deeper than the number of people served to convey the full story of an organization’s work. Ironically, the story of our own impact on the organization’s success is often measured in this one-dimensional way. Grantwriters (and fundraisers in general) are often seen as a one-person profit and loss statement: how much are they paid versus how much do they bring in? This is a shortsighted approach to the concept of Return on Investment (ROI). A sustainable grants program is more than the bottom line. Or rather, the bottom line is the relationship. The interactions that lead to strong donor relationships are key to fundraising success, and grants are no exception. Beyond dollars, a comprehensive grants strategy fosters transparent internal systems, builds a culture of philanthropy, and translates visionary ideas into fundable plans for the community.  Sounds good, but how do you translate the value of your grant strategy into metrics that speak to your staff and Board leaders? Ostara has partnered with Cancer Lifeline on grant strategy since 2014. Together, we focus on building relationships with the best prospects and reengaging past funders. Over three years, Cancer Lifeline increased their grant revenue by 40 percent. However, their true success indicators were their first-ever multi-year grant, grants from brand new funders to diversify the portfolio, and several increased gifts from existing funders. Like Cancer Lifeline, you can highlight your worth beyond the simple running tally of dollars raised. Key Success Indicators Start by building a comprehensive picture of your path to sustainability by regularly tracking and sharing these key success indicators for your grants program through tools like Board reports and staff meetings. Engagement Indicators Grant applications approved, pending, denied, and planned (listed over multiple years and separated by fiscal year) Looks Like: # Grants Submitted, # Grants Awarded, # Grants Denied Value: Demonstrates a multi-year picture of the relationships you are building for now and the future Grant Renewals Looks Like: # Renewals from previous year Value: Demonstrates a vote of confidence in your work from previous funders, especially when they increase their previous grant amount Re-Engaged Lapsed Funders Looks Like: # Re-engaged funders from past two years, # Re-engaged funders from 2-5 years ago, etc. Value: Demonstrates your hard work in reviving old relationships (beyond this fiscal year) Reports Submitted Looks Like: # Formal reports submitted, # Informal (i.e. not required) reports submitted Value: Demonstrates the time you invest in stewardship for all funders (not just when reports are required) Cultural Indicators Interactions, including with non-development staff and Board Looks Like: Standing meetings with broader development team, standing meetings with broader staff outside of development, Regular touchpoints with the Board, organization-wide celebration of grant success, organization-wide participation in grant strategy choices Value: Demonstrates the cross-organization collaborations with grant writers helping to drive your grants strategy Financial Indicators Multi-Year Grants Looks Like: # LOIs accepted and invited to full proposal, ability to report and steward over a longer period, potentially through changes in leadership and staff Value: Demonstrates sophisticated internal systems often required to manage relationships with multi-year funders Progress to Goal Looks Like: Determine a grant revenue goal as part of budget cycle that is achievable and supported by all, and update staff and Board leadership on progress at least quarterly Value: Demonstrates progress towards realistic annual goals that map to community needs (not filling budget gaps) and year-over-year comparisons to frame progress over several years Do you want to explore other ways to enhance your grants strategy and organizational sustainability? Join us for our new Grants Accelerator Workshop Series that will help nonprofit leaders and grantwriters solve these common challenges – Seats are filling up fast!

“You have two ears and one mouth for a reason.”—Epictetus My greatest lesson so far as a newly-minted teacher is this: the right question is more important than the right answer. Questions challenge, engage, and stimulate. They are invitations to a deeper understanding of something. I’m wrapping up my first quarter as an adjunct faculty member in Seattle University’s Master of Nonprofit Leadership program. Lucky for me, I am team-teaching with Peter Drury, fundraising expert and Vice President for Mission Advancement at Make-A-Wish Alaska and Washington. One of the thrills of teaching fundraising 101 is rewinding my 25-year career back to the essentials. Peter and I recently role played a donor conversation for Planned Parenthood in front of our class. Our students were particularly interested in what everyone thinks is the key question: will you make a gift? It struck me that this is the least powerful of all the questions for donors. Once you are “making the ask,” you hopefully know everything you need about someone’s values, beliefs, and experiences to make the right ask. The more important questions, the Authentic Questions, are those that lead up to and follow the ask. They promote dialogue and deeper understanding of each other and the organization. So what are these authentic questions?  Here are my favorites, arranged by phase of the donor relationship: Identify: What’s most important to you in your life? At this point, you are starting a conversation with someone you know little-to-nothing about. Maybe they’re at one of your events for the first time or maybe you’re having coffee to introduce them to the organization. This is a good time to cast a wide net to understand who they are and whether their life philosophy could overlap with your organization’s mission. Your goal with this question is to listen for their values, beliefs, and important life experiences and whether they care about your mission. Qualify: How do you spend your most precious resources (time, talent, and treasure)? Once you have a sketch of a potential donor’s life philosophy, then you can explore how they live out those values and beliefs. You can better understand where they work, participate in hobbies, vacation, volunteer, and donate—and why they do these things. How someone spends their money, working hours, and spare time tells you a lot about what matters most to them. Your goal with this question is to listen for interest in learning more about what your organization does and how they can get involved. Cultivate: What’s your greatest hope for our organization? Once you progress to this question, you have determined a potential donor cares about your mission and wants to become more involved. This is a good opportunity to treat them as a partner in your mission. You can demonstrate this by inviting them to dream along with you about a better future for the community. Maybe they want you to grow faster or improve your facilities. Their ideas could reveal how they want to support your mission and the best program, person, timing, and amount for The Ask. Your goal with this question is to listen for ways to align their hopes, talents, and interests with your organization’s funding, volunteer, or leadership opportunities. Steward: How can we share the impact of your gift with you? Listening doesn’t stop after they make a gift. This is the time to pay close attention to how they want to be thanked, recognized, and stewarded. As Penelope Burk has found, you must thank the donor, confirm how their gift was used, and share the impact of the last gift before you ask for the next gift. Many organizations do the first two well, but the third piece is often forgotten. Your goal with this question is to listen for how they want to hear about the difference their gift is making in the organization’s work in the community.  Specifically, listen for how often and in what way they want to hear from you. You can start by asking yourself this: over the course of a relationship with a donor, do you listen more than you speak? Whatever your answer, you can hone your conversational and listening skills by selecting one of the “Authentic Questions” to jump start an upcoming donor conversation. I have found donors appreciate these real questions, and they lead to great conversations. Try it. You never know what you will hear!

Every campaign is a marathon, no matter how quickly the first large gifts come in. I have found that the most important factor in completing the campaign marathon is strong and steady leadership. You need the right team to navigate the ups and downs and to push through the inevitable obstacles that come up.  Campaign leaders are vital to keeping even the strongest and best planned campaign moving forward.  For campaigns that have more inherent challenges, strong leadership is often the only path to success. Now, leadership can come in many flavors, from strategists, to relationship managers, to cheerleaders.  These roles need to seamlessly work together, with thoughtful planning and ongoing communication.  Yet, many times there isn’t the capacity within the organization to plan, execute, and complete a campaign while keeping the day to day wheels of mission-focused activity turning.  So, outside of current development staff (who are most likely spending their time managing the campaign), who are these leaders and how can you find them? Here’s the secret. You already know them. They are your Board members, program staff, volunteers, and community members. Anyone who is passionate about and committed to your mission. A well-run campaign can also become an opportunity for these team members and supporters to step forward and reveal their leadership superpowers.  Your role, whether you’re an Executive Director or Board President or development staff, is to prepare your campaign leaders for greatness. This is the most important thing you can do to ensure campaign success. Your first step is to find people with a powerful mix of talent, commitment, and passion and align them with the key campaign constituencies. Here’s the short version of my playbook for assembling a campaign dream team: Talent Look for a mix of people who can fill the leadership skillset needs of the campaign. Storytellers: This person can share compelling examples of what your organization’s impact looks like in your community. They can put faces on both the challenge and solution. Financial Leaders: This person can help build and explain any budget or cash flow projection. They make it simple for anyone to understand. Project Leaders: This person loves talking about the price per square foot and meeting with architects and city officials. They are credible and passionate advocates for any capital project. Fearless Solicitors: This person likely has a background in sales or community organizing. They are willing to ask anyone for anything in the name of your mission. Board Ambassadors: This person represents the community ownership of any nonprofit. They are uniquely prepared to integrate the larger organizational vision and the campaign vision. The “X Factors” The above profiles are mere skillsets if they are not also coupled with more intangible traits. Above all else, find people in and around your organization that deeply believe in what you are trying to accomplish through the campaign. So, what does this look like in practical terms?  Here are a few clues to who might be ready to step into a leadership role. Commitment: They have been consistently giving, volunteering, or working for your organization for five or more years. Charisma: When they talk about your mission at events, on social media, or one-on-one, people listen and engage. Grit: They have the determination to keep the momentum going when gift acquisition slows down (this will happen) and keep pushing through when inevitable challenges arise.

When I was a nonprofit staff member, I disliked the words “strategic planning.” I feared the process would take forever.  Or that the plan would no longer be relevant by the time we were done. Or we would be too busy to implement it. Or worse, we wouldn’t even look at it. Sound familiar to you? It wasn’t until I went to graduate school that strategic planning came alive for me. I learned to appreciate its purpose. Strategic planning is leaders wrestling with the biggest questions of organizational identity, opportunities, and impact. It’s dynamic, important, and rooted in individual and collective passion for doing good. There’s so much to love here. Now, I have the privilege of facilitating strategic plans with organizations in our region and around the nation. No matter the organization, people love strategic planning when we include these three elements: Element 1: Invite Board and Staff to Collaborate. There’s a perception in the nonprofit world that the Board of Directors develops a strategic plan and the staff implements it.  In reality, a great strategic planning process unites the on-the-ground thinking from staff leaders with the big picture thinking of the board. By including complementary perspectives from Board and staff leaders, the plan can reflect reality at all levels of the organization. Everyone involved is more likely to own what it takes to make the plan happen. Of course, the Board still approves the final plan. Element 2: Look Around at Your Community. If your organization has been heads-down on your program delivery for years, it’s time to push back from your desks. We believe every strategic planning process should include a peer analysis: a comparison of your organization against three or four other nonprofits that work in your field. I have seen clients experience major “Ah ha!” moments by scanning their peers. Some have pleasant moments of affirmation where they see they are the biggest or best in their field. Others have sobering realizations that another organization is better positioned to meet a community need. These epiphanies allow you to define the strategic advantages that truly set you apart from every other organization. Then, you can forge a new path based upon your real (not imagined) strengths. Element 3: Encourage Strategic Thinking. In The Nonprofit Strategy Revolution, David LaPiana makes a good case for the importance of strategic thinking. Writing down a bunch of goals is not what he has in mind. He promotes a process that brings organizational leaders together during “protected time” to think strategically about: 1) Who are we as an organization? 2) What is our current impact? and 3) How can we best increase our impact? At Ostara, our approach to strategic planning reflects LaPiana’s thinking. We create a written plan at the end of the process, but we also strive to leave behind the kind of strategic thinking that will help an organization meet the next big unexpected opportunity or challenge. In the end, a good strategic planning process should be powerful, not painful. Board and staff should have clarity about the most strategic way to meet community needs and a plan to actually make it happen. Perhaps you will also find a newfound love for strategic planning along the way!

This article was written by Kari Dasher. She is no longer with Ostara, but we want to preserve this piece so that you can learn from her and from the work she did while part of the Ostara team. What do you know about the hottest thing to hit giving since the internet? Chances are donors are already asking you about donor-advised funds (DAFs). According to Giving USA 2017: The Annual Report on Charitable Giving, contributions to DAFs almost tripled the overall charitable growth rate in 2016 (up 7.6 percent to $23.27 billion). As the new tax law rolls out this year, I expect the interest in DAFs to grow as people rethink their giving strategies. I regularly hear questions about how to tap into DAF dollars for annual and campaign fundraising.  My response is always to educate yourself and prepare your organization first. When donors choose the DAF route, you go on a journey with them through tax and accounting land. This is why you became a fundraiser, right? We know you don’t have extra hours in the day to pore over trend reports, tax laws, and accounting, rules, so we did your DAF research for you. Here’s your quick guide to DAFs for when you have a donor on the line or a question in your inbox. What is a donor-advised fund (DAF)? Think of a DAF like a charitable-savings account established under the tax umbrella of a public charity (community foundations or philanthropic arms of financial institutions). Donors can contribute to the fund as often as they want and receive immediate, maximum tax deduction.  The donor then becomes the donor-advisor and recommends to the organization managing the DAF which organizations should receive the funds. The organization is not obligated to follow the donor’s advice (although, they most often do). Why do donors choose DAFs? Simplicity: It’s like having a family foundation that handles all record-keeping, disbursements, and tax receipts. Unlike a foundation, there are no start-up costs (although there is often a minimum initial charitable contribution to establish the DAF). Flexibility: You can give and receive the tax benefit today even if you don’t know what organization you ultimately want the gift to benefit. Efficiency: There are no transaction fees, so 100 percent of the gift benefits the nonprofit. The gift is tax-deductible and investment growth in the DAF is tax-free. Privacy: If you don’t want your giving to be public or known to the organization, it’s a good way to stay anonymous. (Source: Pacific Northwest Ballet) What are the challenges with DAFs? Relationships: Counter to the core of fundraising, DAFs can make it difficult to build long-term relationships with donors when anonymous checks arrive (although this is still a happy day). Disbursements: Unlike foundations, there’s no obligation for the sponsoring institution to distribute any of the money from DAFs to nonprofits. Technically, those funds could sit there forever. Academics have analyzed IRS tax data and found that 25 percent of DAF sponsors distributed less than one percent of their assets in a year. That’s a lot of unrealized potential for our nonprofit missions. Why do I need to know about the Pension Protection Act (PPA) of 2006? The PPA (The Pension Protection Act of 2006) stated that the donor-advisor cannot receive more than “incidental benefit” from the recommended grant to the charity. What’s an incidental benefit? If you had given the gift directly to the nonprofit and the benefits would have changed the value of the tax deduction, then it’s off limits. This means if I recommend funds from my DAF benefit the ballet, I cannot receive season tickets to the ballet in exchange for the DAF funds. The donor-advisor can still receive benefits that have no fair market value (like a high-five or a thank you card). How does the Tax Cuts and Jobs Act of 2017 affect DAFs? The new tax law includes higher standard deductions, meaning fewer taxpayers are likely to itemize their 2018 taxes. While we know most donors are not primarily motivated to give because of taxes, some people will lose the tax benefits associated with charitable giving without itemized deductions. I expect people will give, but they may not give as much. Some donors may start lumping gifts (giving more in one year and less in another to surpass the charitable deduction). During “lumping” years, donors may park their funds in their DAF for future use. Donors get immediate tax benefit, but the benefit to nonprofits may not be realized for years. Want to dig deeper into donor-advised funds? Join Kari’s session about the Opportunities and Challenges of Donor-Advised Funds at the AFP Advancement Northwest Forum on June 7. In the meantime, let’s keep this conversation going. We are here to connect.

Grants Accelerator is a regular blog series about leveraging your grants strategy to enhance organizational sustainability. In this installment, Partner and Managing Director Ali Marcus explores the misconceptions of multi-year grants. Multi-year funding is often treated like the holy grail of the fundraising world. Everyone wants it, but few organizations can include it in their budgets year after year. Like the lottery, the promise of significant sums of money breeds mythical expectations about how to win it, keep it, and rely on it for stability. Through working with 70+ clients over the past ten years, I’ve seen these expectations cripple grant pursuits. I want to highlight some key myths, and reveal the hidden, true opportunities that a multi-year grants strategy brings to your fundraising and organizational goals. Myth #1: Multi-year funding is the primary grants strategy that our organization should pursue. Truth: Multi-year funding belongs within a bigger, more diverse grants strategy. I speak to Executive Directors, Development Directors, and Board members all the time who say “we are only or primarily interested in multiyear funding.” This makes sense from the perspective of the organization’s need for stable funding for programs and operations, but it doesn’t reflect how funders operate.  The reality is most foundations don’t make many multi-year grants. It’s worth pursuing multi-year opportunities, but they must be balanced with a larger focus on single-year grants that are more available. Hidden Opportunity! Think of multi-year grants like you think of bequest gifts. They are a windfall to your budget in those years, but they should not be used to forecast future grants potential. Instead, use those years that you do have the funding to invest more time in cultivating other foundation relationships to help you accelerate out of your multi-year grant when it ends. It’s also a good time to set appropriate expectations with your Board about the role of current and future multi-year funding opportunities. Myth #2: Multi-year funding represents a long-term commitment from the foundation. Truth: Multi-year grants are rarely renewed (at least immediately). Like everything in fundraising, multiyear grants are all about relationships. Often, a foundation will test a single year grant – sometimes for several years in a row, even – to gauge the potential of the organization. If the relationship and results are strong, it could lead to an invitation to apply for multi-year funding. This is where an organization can be lulled into a false sense of security after several consecutive years of consistent funding. Yet, despite the strength of the relationship, multi-year grants are rarely a renewable source of funding. In fact, I find that foundations are more likely to renew a single year gift, because they are usually smaller and lower risk. Foundations change their priorities often (most as frequently as every three-to-five years), which can complicate renewing multi-year funding if it doesn’t fit into the new strategy. Hidden Opportunity! Even if you know multi-year funding is hard to secure and keep, there are good reasons to invest in these funder relationships. Through the multi-year application process, your organization becomes more visible to program officers and the foundation trustees. This opens up potential for single year or discretionary grants even if they decline the multi-year proposal.  If your organization does secure a multi-year grant, the reporting and stewardship relationship is a good opportunity to educate the funder about your work. The program officer may have your organization in mind for future funding strategies, even if they decide not to immediately renew the funding relationship. Myth #3: Every organization should pursue multi-year funding. Truth: Multi-year grants often require more time, resources, and systems to apply for and manage. Not every organization is prepared to pursue multi-year funding. Single year grants are usually easier to access than multi-year grants. Foundations see multi-year relationships as higher stakes in their overall funding portfolio, so they spend more time vetting the organization and project. This means longer applications, more in-depth project and evaluation plans, and longer decision-making cycles. Organizations spend more time and staff resources preparing the application and for site visits to win an opportunity that has a lower probability of success. Even after the grant is secured, multi-year funding often requires more sophisticated evaluation and reporting to the funder. This is risky for organizations that don’t already have stable sources of funding and well-defined evaluation and reporting processes. Hidden Opportunity! If your organization has reached a point where you would like to access more sophisticated (and likely larger) funding sources, pursuing a multi-year grant is a great excuse to build your systems and experience. I suggest thinking of any multi-year grant application as a capacity investment rather than a funding source. It will push your board and staff leaders to project your staffing, programming, and growth several years out. This is useful not only for this single grant application, but also to strengthen your vision for other grant applications and conversations with individual and corporate donors. This exercise contributes to your long-term sustainability by connecting the dots between grant seeking, longer term fundraising strategy, and multi-year programming vision. You will be better prepared for all funding opportunities, even if you don’t secure that specific multi-year grant.

This article was written by Ariel Glassman. She is no longer with Ostara, but we want to preserve this piece so that you can learn from her and from the work she did while part of the Ostara team. Behind every great fundraising team is a great development plan. And every great development plan includes strong evaluation, including the right metrics. Staying ahead of the curve in fundraising requires continuous monitoring and improvement. If you don’t measure something, you can’t manage or grow it. Because fundraising looks a little different at every nonprofit, you’ll use a unique set of success indicators to track what’s important to your organization. Still, there are three metrics that apply to most nonprofits’ fundraising work, regardless of size or sector. This trio is the foundation for analyzing your fundraising outcomes and the overall health of your development program. Metric #1: New Donor Retention Rate The percentage of first-time donors who make a second gift. Acquisition and retention are broadly-used indicators of fundraising health. Many organizations track total donor retention as well as the number of new, first-time donors they acquire each year. But, there’s another retention metric worth obsessing over: the new donor retention rate. While a donor’s first gift is the most difficult and expensive gift to obtain, their second gift is the most important. Nationally, more than 3 out of 4 new donors disappear into thin air, never to be seen again. Yet, 60 percent of donors who make a second gift will continue to give. Getting new donors to that critical second gift is the key to growing short-term revenue and increasing the lifetime value of your donor base. This metric can tell you how well your donor stewardship efforts are working. If you don’t see progress year-over-year, it’s time to focus on stewardship. New Donor Retention Rate = (# of Year 1 Donor Households that Gave in Year 2) ÷ (# of Year 1 Donors) Metric #2: Event Donor Conversion Rate The percentage of event donors who convert to or add other giving methods and opportunities. Fundraising events can be expensive, time-consuming, unpredictable, and stressful. They can also spike public interest in your organization and give you an opportunity to woo donors to more reliable and efficient donor engagement and fundraising activities. Many organizations track their event’s return on investment (ROI), cost per dollar raised (CPDR), number of new donors acquired, strict event donor retention rates (how many event donors give again at an event in the future), average gift size, zero-giver rates, and many more. All of these metrics tell us, in one way or another, how well that particular event performed, but they don’t reveal how well your event fulfills its purpose in the grand scheme of your fundraising ecosystem. Enter donor conversation rate. This metric is a strategic indicator of how well your follow-up stewardship and engagement activities drive event donors towards a second gift (the pure retention rate of event donors, also worth tracking) and towards deeper mission engagement. It’s the measure of how well you are leveraging transactional event interactions into actual relationships with your donors –an indicator of the value and meaning you bring to their lives. Event Donor Conversation Rate = (# of Multi-Gift Households Since Event) ÷ (# of Event Households) Metric #3: Number (or Percent) of Loyal Donors How many active donors have given for 5-10+ years Loyalty is one of the key indicators of propensity to give a major gift – right up there with volunteering. It’s also one of the only easily trackable indicators for propensity to make a planned gift. Many nonprofits have experienced the classic bequest scenario – a donor who gives $50 annual gifts for 25 years passes away and leaves a significant gift in their will. This leads staff to ask: who could have seen it coming? While no one can predict a surprise bequest, a loyal donor metric can help you understand how fertile your donor base is for planned giving. If you can identify how many donors meet your loyalty criterion, you can go one step further and identify who they are – which means you can focus specific cultivation steps on them or even send them more information about bequests for your organization. This isn’t just a metric – it’s actionable strategy. Before you can calculate your loyal donor metric, you need to establish what “loyal” means to your organization. For some older organizations, it could be 25 years of giving or more. For younger organizations, perhaps the criterion is a donor who has made gifts in 7 of the last 10 years. Percent of Loyal Households = (# of Loyal Households) ÷ (# of Active Households)

This article was written by Bailey Disher. She is no longer with Ostara, but we want to preserve this piece so that you can learn from her and from the work she did while part of the Ostara team. Here are two fundraising riddles for you: What’s an organization called with a vision and no strategy? A nice idea. What’s an organization called with a strategy and no vision? A nice plan. The real punchline: It doesn’t matter. Organizations need both to go anywhere fast. Think of it this way. If your organization were a car, vision would be the steering wheel. It directs everything in an organization, from programmatic expansion to hiring decisions and your fundraising plan. And strategy would be the engine. It moves the organization forward by thoughtfully focusing people and resources. In my consulting role, I work alongside organizations establishing or expanding their grants program. I see organizations that are clear on their vision for lasting community impact, but lack the time, energy, and resources to develop the strategy for getting there. When it comes time to prepare and submit a grant application, the grantwriter becomes the translator who connects the programs, finance, executive, and development silos, trying to piece together a clear picture of how the organization will accomplish its vision. It takes twice as long to write a grant proposal when the organizational vision and program strategies are not aligned (or even created) in advance. Plus, the final proposal can feel like a Frankenstein of ideas instead of a cohesive story. This is the grantwriting equivalent of running with weights strapped to your legs. There’s a better way. In organizations where vision and strategy are aligned, you can feel the difference. These organizations make proactive decisions about funding opportunities, program implementation, and potential partnerships that are fully aligned with their vision. For our client, Team Read, this difference is clarity. Everyone in the organization knows where they are going and how they will get there. Team Read works with school districts and libraries to pair struggling elementary school readers with trained teen reading coaches for one-on-one tutoring after school and during the summer. Executive Director Maureen Massey helps staff and Board navigate the organization’s growth by serving as the conductor of vision and strategy. As a relatively small organization (annual budget is $800,000 with six staff members), she makes sure programs, finance, and fundraising are moving forward in lockstep with the strategic plan. Ostara partnered with Team Read to develop a grant strategy that has accelerated the organization’s vision. This included intentional conversations to clarify program growth, evaluation, and budget strategies for pilot programs.  The result of these conversations allowed Team Read to proactively lead conversations with funders about strategic growth plans. Foundation partners responded to their long-term vision and growth strategy with multi-year, renewed, and increased funding. Funders are confident Team Read has a big vision and a plan to make it happen. Your Strategy Revolution When your organization is clear on your organizational and programmatic visions, you can take the next step to prioritize grant opportunities that help you reach your goals. You can start your own strategy revolution by convening a group from across all departments in your organization (executive, programs, finance, and fundraising to name a few) to develop answers to these key questions that underpin every strong organizational (and grants) strategy: Why is our solution the best solution for the community (program strategy)? How will we know we are successful (evaluation strategy)? Who do we need to involve to realize our vision (partnership strategy)? What is our long-term plan for funding (funding strategy)? Let’s keep this conversation going. We are looking forward to hearing about your strategy wins and challenges! On August 15, 2018, Brittany Kirk and Bailey Disher will present a grants webinar on “The Grant Nexus: Connecting Development, Finance, and Programs for Higher Impact” in partnership with Washington Nonprofits. Join our mailing list to receive updates about this opportunity! Also, if you’re looking chat with us about crafting your grants strategy, we are here to connect. Thanks!