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Design Your Program - Budget and Systems

Before you can launch your program, there are certain basic steps to put into place: creating a revenue and expense budget to help you monitor the return on investment, putting sound policies into place, establishing good working habits on record keeping, including an analysis of whether your individual giving software provides the right tools for managing major donor relationships, and making certain that your total development program works cooperatively, rather than at cross purposes.

Topics of Interest
Topics of Interest

Creating a Working Budget

Once you set the goal for how many members you want in each giving level and how much revenue each level will generate, you need to develop an expense budget, also included in the Budget Projection Tool (MS Excel file, 70KB). Some of the expenses that are standard in a major giving program are included in the Budget Checklist (MS Excel file, 20KB).

By estimating both revenue and expenses you can then project the cost of funds raised by each initiative and for the program as a whole.

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Determining ROI

The Budget Projection Tool (MS Excel file, 70KB) provides a step-by-step approach to developing your own budget, from setting revenue goals to calculating expenses, and determines the return on investment (ROI) for your program. In a start-up program, the Cost of Funds (PDF, 16KB) in a major giving program may be in the 30-50% range after one full year, but in time the costs should fall to not more than 15% and even less in large stations — a return on investment of 1:7 or above. Even during its first year, therefore, a major giving program will have a lower cost of funds than many other development activities.

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Adopting Policies

Before beginning a major giving or planned giving program, your station should have two important policies in place:

A gift acceptance policy. This policy establishes what gifts you will accept and whose approval is needed in order to accept them. This may seem to be self-evident. As one general manager put it, "Our policy is to accept whatever is given to us." Some gifts may present more problems than they are worth, however, such as a gift of property with environmental contamination. A well-crafted gift acceptance policy can help your station avoid taking a gift that would cost it time, money, or its reputation. This sample policy (MS Word file, 85KB) will help you get started. Posting a summary of your station's policy on your website could help prevent the uncomfortable situation of turning a gift down. Here's a great example (Website) from KUNC.

A gift use or endowment policy. This reassures donors that when your station accepts a restricted gift, it will abide by the terms of the restrictions, and it establishes policies for dealing with extraordinary unrestricted gifts so that your station makes thoughtful decisions before the need arises. Many stations allocate unrestricted planned gift income to a board-restricted quasi-endowment, which shows potential donors that their gifts will be wisely spent.

Both policies require the approval of your governing board or, in the case of institutional licensees, approval at the appropriate policy-making level.

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Evaluating Software

There is no "perfect" software package. Every station we have surveyed has identified ways to make their software meet their current needs. The key points we have taken from these surveys are:

There were several key points we came away with after these discussions:

  • Information is power. Major giving is only as good as the information we have. We need information about our current, past, and future donors so that we can establish better relationships with them. The software must support relationship building.
  • Have a system, some system. Always use it consistently. If you are a one-person shop, you may be able to set up something that works just for you. If there are others entering and using data, you will need to develop standards and rules about how information is stored. It must be easily accessible to everyone who needs to use it, including the person who answers the phone in membership services.
  • The software system is our institutional memory. Keep it up to date. Given the tenure of most fundraising professionals, it is no longer acceptable to keep information about donors in our heads. We must record it in a systematic way so that others can use it.
  • It must be end-user friendly — easy to use without IT support. Entering information must be as easy as filling out a form. Getting information (a report) out must be even easier.

One database is better than two, Synchronizing separate major giving and membership systems can be a big chore, can require you to enter critical information twice, and inevitably leads to mismatched data and outright mistakes.

Some stations will have no choice but to use some sort of contact management software, since their membership database doesn't store all the needed information. On close examination, however, you may find that the functionality you need already exists on your software, but just hasn't been used. The Software Functionality Checklist (PDF, 97KB) contains a list of functions to look for in a software solution — not meant to be exhaustive.

Don't fall in love with a software system just because it stores everything you think you might need. If you can't generate a report that a committee member can use, the value of the system is greatly decreased.

Many successful development professionals format information taken from their central database in a simple spreadsheet to make it more accessible to management and volunteer leaders!

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Keeping Internal Records

All personnel interacting with prospects and donors must fill out Call Reports (PDF, 60KB) following every visit or phone call, no matter how routine. Records of all donor gifts must be maintained scrupulously, providing documentation of the donor's entire history with the organization.

If records are kept separately from the donor database, they must be kept in a form that is accessible to other authorized individuals in the future. This may mean printing records kept in electronic contact managers and filing them.

Recently, when a major gift officer left a state network, she left no written records. When a general manager departed for another station, he took his electronic database, containing all his donor contact information, with him. In both cases, those responsible for the major giving effort had no record of who they had met with, what had been discussed, and where these prospects were in the cultivation cycle. Cultivation had to begin anew, and the stations may not have made the best impression on their donors.

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Coordinating with Other Development Activities

In public broadcasting, the major giving program exists alongside several other programs in the development department. It is near the top end of the Giving Continuum (PDF, 24KB), and thus relies on programs that exist below it — and provides prospects to those that operate above it.

There is much overlap in the development department: The same donor database is used by all, events (especially on-air) are often implemented with the help of the entire development staff, on-air fundraising is seen or heard by everyone in the community, the lead time needed to develop and mail large campaigns or to plan and implement big events is long, and promotion resources are often scarce. It is very important for development staff to work together to break through the silos that often exist within a busy, complex department.

Unlike many other organizations, public broadcasting has an invaluable asset — a large number of long-time members. Those members who have given multiple additional gifts over the years can be valuable major giving prospects. If you are coming from an organization that has had to find donors from the address books of board and committee members, you are in for a pleasant surprise. The donor/member database is already full of prospects who know quite a bit about your station — both as donors and as viewers.

Some membership managers will see you as the raider — after all, many of them have been nurturing these prospects for years. It is well worth the time and effort to work out a reward program between membership and major giving. Work out a scheme for which officer gets the credit for upgrading a new major donor. At some stations, if a new major donor is generated during an on-air drive, the revenue will be credited to on-air. However, the new major donor is counted in the major donor population immediately. Once the donor is renewed by the major giving officer, the revenue is moved to the major gift budget line. (See Major Gift Allocation Policy (PDF, 9KB) for an example of how this might be handled.)

Other schemes will need to be established if planned giving has a separate revenue line. Maine Public Broadcasting developed a Department-Wide Gift Designation Policy (PDF, 25KB) that covers not only individual gifts, but also underwriting — and emphasizes the important concept of donor intent.

We have also provided an Opportunity Checklist (PDF, 51KB) to help you take advantage of existing resources, while ensuring that your donors aren't overwhelmed with fundraising communications and the cost of funds raised is under control.

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Budget Projection Tool (MS Excel file, 70KB)
Budget Checklist (MS Excel file, 20KB)
Call Reports (PDF, 60KB)
Giving Continuum (PDF, 24KB)
Opportunity Checklist (PDF, 51KB)
Donor Cultivation System (PDF, 79KB)
Gift Acceptance Policy (MS Word file, 85KB)