Philanthropic Fundraising

by Mackenzie Brunson

Definition

Philanthropy can be described as charity, helping someone, giving to someone or a cause, or doing good. Philanthropy is not simply helping someone you know; philanthropy is also helping an unknown person. There are many ways to be philanthropic. A few ways are giving food to a food bank, volunteering at an animal shelter, or donating money to an abused-children's center. To be philanthropic, you must give of yourself without requiring something in return.

Fundraisers are the professional staff at nonprofits that collect money for many different causes. Some of those causes are caring for people with terminal illnesses, providing food for the homeless, safe shelters and spaces for the LGBTQ+ community, or the purchasing of books for a school library.

Organizations that have philanthropic purposes do not use the collected money for the gain of their own workers. They are called not-for-profit organizations because the money they collect goes to the stated cause or mission of the organization and are not collect for profit. Employees of nonprofits do receive pay for their work, but they do not raise money for the purpose of making extra profit.

Highlights

Philanthropic fundraising is an integral part of any charity or nonprofit. Fundraising is also considered a profession. It is a career for many people in the nonprofit field. Often this work is called development or advancement. Many people in a nonprofit may be involved in the fundraising/development process. They include:

• executive director,
• development director,
• board of directors,
• advisory council,
• other paid development staff,
• paid staff in nondevelopment roles,
• other volunteers, and
• outside consultants. (Bray 2005)

The bulk of dollars that nonprofits receive comes from earned income (theater ticket sales, paid research at colleges, animal adoption fees, etc.) or government grants and contracts. Philanthropic fundraising is still an important source for most nonprofits as not all nonprofits receive government grants or have a way to earn income through their work. (Anheier 2014) Philanthropic fundraising through private donations accounted for $427.1 billion to charity in 2018. The majority (68%) of donations comes from individuals. Foundations donate 18%, bequest gifts (gifts from a person’s estate after death) account for 9%, and corporations and businesses account for 5%. (GivingUSA 2019)

Historic Roots

Philanthropic fundraising has existed for many thousands of years. In classical Greece and Rome, citizens raised money to build huge amphitheaters, provide feasts for all citizens, and have Olympic-style games. Fundraising can also be seen in religions across the globe. In Islam, Buddhism, Christianity, Judaism and Confucianism money was raised to build places of worship and care for the poor.

In 1601, the Statute of Charitable Uses was promulgated in England by Elizabeth I. It resumed the Roman practice of assistance and included reference to support for the elderly, poor, help for the sick and injured, money for schools and education, as well as help for orphans. (Dove 2001)

In early America, as the wealthy saw need for aid in the new colonies, philanthropy gave the new nation a support system that allowed it to believe it was strong and independent. (Schaupp 2019) Charles Sumner Ward and Frank L. Pierce helped to make fundraising more professional in the United States in the early 1900s through their work raising funds for the YMCA in Washington, D.C. Around the same time, Bishop William Lawrence of Harvard University began using letters to ask alumni to give back to their alma mater. (Schaupp 2019)

After World War II, fundraising began to ramp up and people began to not trust fundraisers as a profession. The need for a professional organization to create rules and ethical standards for fundraisers arose. The National Society of Fund Raisers (NSFR) was created in the 1960s to provide educational resources and standards for the budding profession. New ways to fundraise developed in the following years, including the use of telethons and door-to-door asking, and reaching donors from various socioeconomic backgrounds. Soon, vocational training for the fundraising profession increased, high-tech methods, and scientific solutions were on the rise. (Schaupp 2019)

Today, philanthropic fundraising is an established career path with professional associations that provide research that are guided by ethical principles. The Association of Fundraising Professionals is an example of such an association.

Importance

Fundraising provides money to improve the quality of life for many people. It allows organizations to operate that otherwise would not be able to afford to. Fundraising ensures that nonprofit organizations will continue to exist in the United States and make it a more diversified and humanitarian place to live.

In 2018, Americans gave $427.71 billion to philanthropic causes (Giving USA, 2018). Fundraisers are one factor that instigate this large amount of annual giving. If people are so generous in their giving, why do we need fundraisers? The number one reason people give is because they were asked to give. With adult donors, fundraisers are often those who ask for the gift. Without fundraisers asking people to donate money to worthy causes, many social service, arts, humanities, and educational agencies would not be able to provide their services and support. (Tempel 2016)

Function and Ties to the Philanthropic Sector

Asking someone for money seems simple enough. However, fundraising can be complicated. Philanthropic fundraisers are not simply asking for money. They are influencers in the field of philanthropy. They build rapport and relationships with donors. They are asking people to support a mission that the potential donor feels is important. Fundraisers must utilize many different methods of fundraising, such as:

• asking individuals to give,
• seeking foundation and corporate grants,
• hosting special events, and
• applying for government or foundation grants.

Fundraisers must also understand what motivates donors and what values they share with the nonprofit. Fundraisers assure donors that their money will be well-spent and used for the cause intended. Good fundraisers work at nonprofit organizations that they truly believe in and make personal contributions to, as well as asking others to do the same. (Ross 2009)

How can a fundraiser do all these things? Fundraisers must begin by creating a plan or strategy. They must forecast how much money needs to be raised (based on what they are raising the money for), who they can anticipate will give (past donors of their organization or people who give to similar agencies, foundations, etc.), and how they will ask people to give (using letters, telephone calls, personal visits or planning a special event). Fundraisers must have a concise plan that shows donors exactly how the money will be spent. Donors expect fundraisers to be accountable for the money that is raised. (Dove 2001)

It is also important to examine who fundraisers are. Fundraisers come from every sector of society. They are women and men of all ethnic, racial and religious backgrounds who support a variety of causes. Some fundraisers did not study philanthropy in school, while others may have earned a Masters or Professional degree. The typical fundraiser has a bachelor degree or graduate degree. Today, most fundraisers hired by not-for-profit organizations have been trained as professional fundraisers. (Tempel 2016)

Professional fundraisers are people who have studied philanthropy and understand the importance of giving. They have studied the best methods for asking for donations as well as the appropriate people to ask. Studying philanthropy does not give fundraisers secret knowledge of exactly who will give to what cause, but it does teach the fundraisers effective methods for determining giving patterns and other valuable tools. There are also many organizations, such as Association of Fundraising Professionals (AFP), which provide expertise in the fundraising field.

Professional fundraisers typically work at not-for-profit organizations and are called development officers or directors since they develop the resources that the organizations will use to operate and ensure their futures. Professional fundraisers are not always staff members. Instead they may be volunteers who donate their time to help the organization raise money.

Volunteer fundraisers can raise money for a school event or drive. Selling candy bars, selling Girl Scout cookies, or collecting donations for a book drive are all examples of fundraising conducted in great part by volunteers. A fundraising cause may be to buy more books for the library, renovate the school, or raise money for a sport or activity. Many fundraisers are volunteers. Other ways to help an organization raise money include simple tasks such as helping mail letters to potential donors or selling tickets to a special event.

Key Terms and Ideas

• A case for support is the rationale for fundraising. It is the argument used for why nonprofits are deserving of funding.
• Foundations are charitable grantmaking organizations that fundraisers ask for money.
• Generational difference in giving is an important aspect for fundraisers to pay attention to. Millennials give differently than Baby Boomers. To attract the most gifts from each generation it is important for fundraisers to understand the differences between each generation.
• Major gifts are those gifts that are transformational to the nonprofit. They are larger than an average sized gift and take more effort from the fundraiser to secure.
• Capital campaigns are large-scale fundraising efforts that typically take place over several years. They typically provide funds to build a new building or add on to or upgrade an existing building. They can also be used to fund large technological advances of a nonprofit.
• Philanthropy, charity and nonprofit are words used sometimes interchangeably to describe the work being done for the public good.
• Planned giving is thoughtful and focused planning for the future. The gifts made through planned giving include bequests, beneficiary designations, charitable gift annuities, and charitable trusts. They are typically given to the nonprofit after the death of a donor.Solicitation is the asking for money for a nonprofit.

Important People Related to the Topic

• Eugene R. Tempel is one of the leading scholars on philanthropy. He is Founding Dean Emeritus of the Indiana University Lilly Family School of Philanthropy and a Professor of Philanthropic Studies. He has authored and coauthored several books including: Achieving Excellence in Fundraising.
• Kay Sprinkle Grace is a renowned fundraising consultant with a bachelor’s and master’s degree from Stanford University. In 2013, she was awarded the Henry A. Rosso Medal for Lifetime Achievement in Ethical Fund Raising by the Lilly Family School of Philanthropy at Indiana University. She has authored several books including Beyond Fund Raising, High Impact Philanthropy, Over Goal!, and Fund Raising Mistakes That Bedevil All Boards.
• Penelope Burk has over forty years of experience in not-for-profit management, fundraising, and research. She has authored several books including Donor-Centered Fundraising and Donor-Centered Leadership.

Websites with Resources about Philanthropic Fundraising

• Association for Fundraising Professionals: https://www.afponline.org/
• Fundraising tools and resources from the National Council of Nonprofis: https://www.councilofnonprofits.org/tools-resources-categories/fundraising
• Network for Good’s Nonprofit Fundraising Resource Library: https://www.networkforgood.com/non-profit-fundraising-resources/
• Resources and tools from the Chronicle of Philanthropy: https://www.philanthropy.com/resources

Reflection Questions

• Thinking about your own charitable giving, what types of fundraising activities have you been involved with?
• Why is philanthropic fundraising important to your community?
• What are the types of philanthropic activities do nonprofits need to fund in order to make your community a great place to live?

Bibliography

• Anheier, Helmut K. (2014). Nonprofit Organizations. Theory, management, policy. 2ndEdition. New York: Routledge.
• Bray, Ilona. (2005). Effective Fundraising for Nonprofits. Real-World Strategies That Work. Berkley, CA: NOLO.
• Dove, Kent E. (2001). Conducting A Successful Fundraising Program. San Francisco, CA: Wiley & Sons.
• Giving USA: The Annual Report on Philanthropy for the Year 2018 (2019). Chicago: Giving USA Foundation.
• Payton, Robert L., Michael P. Moody. (2008) Understanding Philanthropy. It’s Meaning and Mission. Bloomington, IN: Indiana University Press.
• Ross, Bernard, Clare Segal. (2009). The Influential Fundraiser. San Francisco: Wiley.
• Schaupp, Jennifer. The of Roots of Fundraising: How We Got Here. Accessed 4 November 2019. https://topnonprofits.com/roots-fundraising-got/
• Tempel, Eugene R., Timothy L. Seiler, Dwight F. Burlingame. (2016). Achieving Excellence in Fundraising. 4th Edition. Hoboken, NJ: Wiley & Sons.
   

This briefing paper was authored by a student taking a philanthropic studies course in 2019 at The Lilly School of Philanthropy