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Build donor base, focus on major contributors
For hospices, the largess of their community can mean the difference between meeting its annual obligations or swallowing a loss at the end of the year. While hospices depend heavily on fundraising, not all of them are schooled in the art of raising money.
And with the shrinking availability of government funds, hospices face increased competition from other nonprofit organizations in their communities, raising the need for a well-thought-out fundraising strategy that not only addresses a hospice’s current obligations, but positions it for continued community support.
"Any nonprofit wants to be able to control their fate," says Dee Vandeventer, MA, president and partner of Mathis, Earnest & Vandeventer, a Cedar Falls, IA-based public relations firm that consults with hospices on fundraising. "Whenever you have just one source of revenue — namely Medicare — that can be cause for some sleepless nights."
Aside from the need to raise additional money to decrease an organization’s dependence on Medicare, the need for charitable donations is heightened when you look at the laundry list of things that Medicare doesn’t pay for — bereavement care, volunteer and community outreach programs, to name a few.
At Cedar Valley Hospice, the development team faces similar challenges each year and recently committed to building a $1.5 million residential facility, adding to its need for community-raised money.
"What I’ve noticed over the years has been more and more competition for charitable money," says Terri Walker, co-director of development for Cedar Valley Hospice in Waterloo, IA. "Our need for charitable dollars are increasing, but at the same time dollars available are falling."
The fundraising pyramid
Like any successful project, hospice fundraising needs to start with a plan and a core of people — volunteers and staff — who will put the plan in motion. Then set a goal. For hospice, that goal might include the cost of all non-reimbursed services, including community programs that help spread the hospice message. Vandeventer advises that hospices follow these steps:
• Build a fundraising pyramid.
The base of the pyramid represents the core of donations, the smaller contributions made by individuals. The tip of the pyramid accounts for the smaller number of higher contributions. Those who do not have an established base of contributors will have to focus on the base of pyramid and increase the number of entry-level donors who will hopefully become higher-level contributors in the future.
Hospices who have a strong base of donors can focus on moving those donors closer to the top of the pyramid by building on their past support and asking for a higher amount.
The trick to meeting your fundraising goal is to decide what amount constitutes major, medium, and small gifts and how many gifts you need at each level of the pyramid. For example, if you need to raise $300,000 and decide that $5,000 or more is a major gift, $1,000 is a medium gift, and $50 is a small gift, you need:
— At least $100,000 from major gifts or 20 people or organizations donating $5,000 each;
— $100,000 in medium gifts, or 100 people or organizations giving $1,000 each;
— $10,000 in small gifts, or 2,000 people or organizations donating $50 each.
Hospices should strive to build a donor base so that it can focus on developing the top half of the pyramid where they can get the greatest return for their effort. "Too often, organizations are spending more time on their low givers," Vandeventer says.
• Build a fundraising team.
You want to create a network of people — volunteers and staff — who will join you in asking or money, each of whom can build their own network of givers. The more people and institutions that you get involved in asking for money, the easier it will be to reach your goal.
• Build a prospective list of potential donors.
Fundraising is a grass-roots effort. The easiest place to start is the family, friends, and business contacts of each fundraising team member. Each member should think about where their personal contacts fit into the fundraising pyramid — major, medium, or small contributors. They should also look at their contacts’ abilities to not only make a contribution, but the contacts’ abilities to raise money from their own relationships.
When Cedar Valley Hospice committed to building residential facility, its fundraising team built a list of potential donors that included current donors, past donors, civic groups, and businesses.
Once a list is put together, a hospice is ready to ask for money. There are five basic ways for groups to raise money:
1. Personal solicitations.
2. Fundraising events.
3. Sales of goods and services.
4. Requests for donations from corporations or foundations.
5. Planned gifts.
Because fundraising can be an overwhelming task, some experts suggest starting out simple. Instead of launching fundraising efforts with an event, use the simple approach of personal solicitation.
But many hospices have already established events and perhaps rely more on their events to raise money than on personal solicitations. While simple, personal solicitations can be a powerful form of fundraising for hospices.
Cedar Valley Hospice relied mostly on its two events — a bike ride and Christmas tree campaign — to raise money to meet its annual obligations. But when it needed to raise $1.5 million for its residential facility last year, it found it had no choice but go directly to potential donors.
"The experts have always said face-to-face fundraising is the way to go," says Walker. "We were surprised by the response we received."
With Vandeventer consulting Cedar Valley Hospice, the organization raised $1.5 million in seven months, with 90% of its donations being $2,000 or more.
After determining the amount a potential donor was able to give, Cedar Valley Hospice fundraisers asked for that amount, rather than starting at a lower figure then trying to work their way up. Contrary to what many inexperienced fundraisers think, seeking a lower amount you ask for will not significantly increase the number of people who give. It will simply reduce the average contribution and total funds raised.
Because of the personal solicitation success, Cedar Valley Hospice is now considering integrating into its annual fundraising efforts, along with its events and mail campaign, says Jodi Deery, co-director of development at Cedar Valley Hospice.