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5 Steps to Start a Philanthropic Effort

I was recently working on the budget for a festival organization and it hit me. The income projections for the next year vary depending on factors that are not in our control. Beverage sales, merchandise sales, and entry fees are all dependent upon the marketing of the events, weather, and interest of attendees. Sponsorships can grow, but that also can be variable depending upon the economy and the goals and objectives of certain companies.
Other nonprofits use such income streams as supplementary items and rely upon traditional development and philanthropic efforts – supporting the mission of the organization through donations. This is different than a membership – membership programs benefit the individual. Philanthropic programs benefit society as a whole.
Many festival organizations do not have such philanthropic efforts and it might be a way to build more sustainable dollars and help support the administrative side of the organization. But, how does an organization begin? Below are five steps to start the philanthropic effort.

1. Engage your fans.

The fan or audience base is a great place to start to ask for donations. They know the festival and can appreciate the work that is done each year. In order to build up to asking for donations, the audience needs to be engaged through such means as email blasts and social media outlets. The more they know about the organization and the festival, the better.

2. Determine why you want to raise money.

Audiences today want to know specific goals and objectives. What is the community benefit of the festival and your organization? How does it improve the community? This is not the economic benefit to the city – it is measurable goals and objectives of a program that the festival implements to improve the community. This outreach can include programs in education, youth, safety , environment, history, or arts and culture. People want to solve problems and will give knowing that the money is being used for those efforts.

3. Set infrastructure.

It is great to receive a donation, but what do you do when you receive it? Can you legally accept the gifts – do you have a separate 501-c(3) foundation if you are not one? Do you have software to track gifts? Do you have thank you processes in place? Do you have a database of names, addresses, phone numbers, and emails? Can you accept online gifts? How and by what methods?

This step takes time and thought and money to build the infrastructure so that you can create the program. Without a solid foundation to start, the philanthropic effort will be difficult to manage and maintain. And that can be worst – obtaining gifts and not properly thanking or acknowledging the gift, and not communicating with the donors on how the gift was spent. Take the time and develop a philanthropic giving plan and its associated communications strategy.

4. Set gift acceptance policies.

This can be listed as part of infrastructure, but it is listed separately because it is important. Before accepting gifts, you need to know what type of gift you will accept. Is it cash, checks, or stock? What about planned gifts? The type of gift matters. Some individual want to donate a certain asset in-kind, such as a house or art. One organization I worked with accepted a boat for the first time and as soon as it hit the water, it sank – not the best donation.

5. Get the board involved.

The board should be involved from the beginning – setting the strategy, developing the program areas, and approving the policies and budget to build the philanthropy effort. More importantly, the board needs to be involved and help build the donor listings by providing names and opening doors for you to meet potential donors. The board also needs to be the first group to give to the organization. The community will ask “If the board does not support the organization financially, why should we?” A valid question that has no good answer. Strive to obtain 100% participation by the board.

With these five steps, an organization is ready. But, there is one other important step that should be taken into consideration and really is one that was there the whole time.

6. Ask

Each of the above steps are complete. The infrastructure and programs are set, potential donors are identified, the board has given. Now what? Go and ask for donations. You do not get what you do not ask for. It is important to market the programs and reasons for support and then continually ask. Develop a year-round communications effort to reach out to the donor base with information on program results and asks for the gift.

Building a philanthropic effort requires a plan and the time to build that plan, but can reap rewards for your festival and organization for many years to come. It is one area that is not dependent on factors that might be out of your control like weather. You control your destiny through the implementation and marketing of your philanthropic programs. Like everything else, there are various areas that are interconnected, meaning that all boats rise with the tide. Most importantly, one needs a good foundation (such as a root system for a fig tree) in place.

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