CEO CommentaryAdvancement Trends in the Life Community offers you this article to place in an e-blast or newsletter. Feel free to use this as your own, no attribution is necessary for this article:
Our newsletters and online communications often tell you of our latest projects and initiatives at (Name of Organization), and many times we will ask you to join us financially.
Every once in a while however, it is important that we communicate to you exactly how you can support this vital work—and be a key part of our team, from a financial standpoint.
If you would like to give a financial gift, here are three ways you can do so:
OnlineOur financial partners' site is (web address here). Here, you can make a one-time gift or join us as a monthly financial partner.
Write a checkEnclosed with this newsletter is an envelope for your convenience. Place the check in the envelope and if you would like to make yours an ongoing, monthly gift, write "monthly" on the "for" section of the check.
Give a gift of stockYour appreciated stock may be a gift that also brings large tax savings. Call (name) at 000-0000 at our office and she will help you with this type of gift, or call our broker, (name) at (name of brokerage firm and phone number), and she will provide you with our account information.
Our financial partners provide the foundation for the amazing growth we are seeing at (name of organization). Your gifts are making a difference in saving lives, and changing lives; every day.
Note: You may want to add wills, trusts, events and more. These are just three "starter" avenues of giving to be placed in our communications.
by Kirk Walden, Advancement Specialist
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Each month Advancement Trends in the Life Community brings to you a "thank you letter" that you can send to your donors. March's letter is below:
Dear Barney & Betty,
The Apostle Paul makes an interesting statement as he closes out his letter to the Philippians, thanking the church at Philippi for being the only church to make a contribution to his work. In thanking the church, he writes, "Not that I seek the gift itself, but the profit which increases to your account."
A dynamic takes place when we give; a transaction whereby our "account" grows as we give toward those endeavors which honor God. I don't pretend to understand the intricacies of this account of which Paul writes, but we don't have to.
What we do know is that as we give, we see spiritual increase in our lives. We may not be able to see or touch it, but it is real.
So often when we thank you for a gift, I want to point out where your gift is going and how it will assist those we see. This is important, certainly.
Yet, I never want to forget that your gift shows me that you want to grow spiritually, too. So as we say "thank you," I also want to echo Paul's words and seek "the profit which increases to your account."
Thank you. Your gift makes a tremendous difference in this work, and I am just as thrilled to see the treasure you are placing in your "account" grow as well.
Click here to download this thank you letter as a word document.
How many of us have sat down and begun penning ideas for the future of our ministry or organization, dreaming big dreams of what we could do if we just had more funding? I know I have, many times.
I've sketched out additional rooms, even a new building. At other times I scribbled down notes on new initiatives, created a list of new staff members and more.
The challenge for me—and perhaps for you—is in the "getting there" part of the equation. As an executive director, investing millions of hypothetical dollars in the future of our ministry was easy. Finding those funds; well, that was the hard part.
As we launch into 2015, let's throw out a realistic way to at least begin our journey toward a bright, fully funded future for our ministries: An endowment.
We might say, "Endowments are for hospitals, colleges, universities—big organizations. Not for us." We would be quite incorrect.
Endowments are for all of us, and an endowment is a terrific way to build up a funding stream for our basic needs so we can stretch our organizations into new initiatives, new and improved facilities and other places God is leading us.
In short, an endowment is a fund whereby only the interest earned or a pre-determined amount is spent each year for our organization's overall budget or for a specific area of ministry.
C'mon, dream with me for just a second. Let's take off our "realism" hat and ask, "Wouldn't it be nice if our basic budget was funded by an endowment and every dollar raised could go toward something new to better reach and serve those we see?"
Maybe it's just me, but I think this would be great. While I realize that creating an endowment of this size for any ministry would be quite a reach in the realism department, it is possible to start building an endowment today that, over time, could fund a growing portion of our work. And one day, who knows where that might lead?
We will only know how far we can go once we get started. And if we don't already have an endowment, the time to start is always "now."
In this issue of Advancement Trends in the Life Community, let's take a good look at this funding mechanism. As we do, we might find a path to a bright future for our ministry.
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Making the case for an endowment begins with not only knowing what an endowment is, but also understanding what it is not.
For instance, an endowment is not our Rainy Day Fund. Every ministry needs to have some cash on hand for times when giving slows, so that the work goes on and staff is paid. Experts tell us that having 3-6 months of cash on hand—just in case—is a good number.
Also, our endowment is not our savings fund for a future project. If our board of directors is wanting to set aside funds for a new initiative, a building fund, or to invest in a new staff member, this would be separate from an endowment.
With an endowment, we build a principle amount and either withdraw interest earned (some or all—this can be a board decision made annually), or a specific amount (Ex.: "We will withdraw $5,000 per year for budget purposes, unless endowment gifts are under the withdrawal amount.") on a pre-determined basis.
We can be flexible with endowment withdrawals, based on need. Or, we can let the endowment grow for a period of time, with no withdrawals.
Overall, our goal with our endowment is to continue to grow its principle so that more and more of our basic ministry needs are met with these funds.
Endowments can be general (for the overall budget) or specific (an endowment for our medical arm, for instance). We can also have multiple endowments. As an example, should a donor family want clients to receive Bibles, an endowment can be created (a minimum amount for an endowment should be established by the ministry; perhaps $10,000 is a starting point).
With multiple endowments, a donor may ask, "How can I give toward your abstinence program?" and we would be able to respond, "We can direct a portion of your gift toward today's need, and set aside a percentage of your gift in our Abstinence Initiative Endowment." This allows us to be more creative in building our resources; but more important, allows donors to be more involved in where their gifts go and how they are used.
Every ministry needs its Rainy Day Fund, and when new ideas arise, Capital Funds can get us started toward funding these ideas. In addition however, Endowments make sense and as we will see elsewhere in this issue, help us raise more funding.
Endowments are not only a good idea for our ministries as we look to the future, they are also a strong avenue toward attracting donor interest and support today.
First, endowments allow donors to see their gifts (to the endowment) as more permanent. Knowing that a gift is not going into the ministry account only to be spent within days is attractive to certain donors; especially those who can give major gifts.
Second, simply having an endowment tells our financial partners we are in this for the long haul. This long-term outlook gives us more credibility and lends itself to more gifts.
Third, as an endowment begins funding (even small) portions of the organization, we can communicate this to our donors. They are more likely to respond to our future requests because they see their gifts as funding "bigger" aspects of the ministry.
Finally, keep in mind that endowments are a particular niche for—as we mentioned above—certain donors. They are attracted by the concept of saving for the future, and of a "permanent" fund that keeps their gifts mostly intact—giving those gifts longevity.
As an example, when your author became an executive director I noticed we had almost no memorial or honorarium gifts. To spark interest in this type of giving, we created our "Commemorative Fund" whereby all gifts went into an account where only the interest earned would be used for the ministry.
Immediately, after implementing this idea (and the fact that we placed memorial gifts and gifts in honor of the living on our response devices), these gifts soared. Our fund grew into the tens of thousands of dollars over a few years, after receiving just $25 in the year before changing our approach.
An endowment then, is not only a way to fund the future; it can also be an avenue to reach donors in a new—and for many, a more attractive—way.
"We don't have anything like an endowment," I'm told by many pregnancy help organization CEOs. If this is the case, starting at zero means something good: We are starting! From any beginning point, we can build, step-by-step. Here are several ideas:
Start with Commemorative GiftsYou'll find in the article, "Why an Endowment is Attractive to Donors" the idea of taking gifts in memory of a person (or in honor of a living person) and placing them in an account where only the interest is used for advancing the ministry. This is an endowment.
If you are currently using many of your memorial and honorarium gifts as part of the budget, you can take even a percentage of those gifts and place them in the new endowment, so as not to harm your current budget. You might find that these gifts rise when you make the announcement.
Announce your intentions publicly in E-blasts, newsletters and appeal letters. Make sure response devices (in print and on your donor web site) clearly point out where these gifts will go and how they will be used.
As an example, if your ministry receives an average of $250 per month in these gifts, placing them all in an endowment will give you a $3,000 endowment in your first year. It's a start, right?
A percentage of each gift . . .As we look at starting, consider placing a percentage of every gift in your new endowment. At just 2 per cent, a center with a $200,000 income budget will place $4,000 in an endowment in that first year. Again, we have a beginning!
Ask!Why not place one more appeal letter in your yearly development plan and ask specifically for gifts toward a new endowment that one day will fund a large portion of the ministry? Recipients can be reminded that these particular gifts will "keep on giving" for generations to come.
This is a way to not only begin a fledgling endowment; this letter will identify those who are endowment minded and who may be capable of continuing to build your endowment in the future.
The key to starting an endowment is getting started. Even a "small" start is a start.
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Endowments, even "small" ones, can begin providing regular income for your organization. But with interest rates so low, where do we go to find that income?
This is where a financial advisor comes in. The board can choose a financial advisor by asking interested parties to "interview" for handling the endowment funds on behalf of the ministry, or perhaps there is a trusted advisor who will invest the funds for the board on a pro bono basis.
To fulfill its fiduciary responsibility, the board appoints the advisor to make day-to-day decisions and report back to the board regularly, so the board is aware of the account's status. This way the advisor is not constantly asking the board, "Can I move this portion of the fund into cash? May I invest in this particular mutual fund?"
In this scenario, the board sets parameters with the advisor and gives the advisor its capacity for financial risk. Boards are generally risk averse; a good thing. But, "no risk" can mean "no return." A board that balances its concern over immediate risk with an eye to long-term objectives does well. In the end, a ministry is going to be more conservative in its investment risk than many individuals, but will always have a percentage of its funds in stock funds.
Two quick notesFirst, a ministry may want its stock investments to reflect the ministry's views on abortion, not wanting to invest in companies that choose to support the abortion industry. There are mutual funds available with this in mind. Consult with a financial advisor.
Second, a board does not want to weigh itself down with managing individual stocks given by donors. A good policy is to take any individual stock gifts and sell them, turning the stock into cash. From there, the financial advisor (in the case of an endowment) can invest the funds with the overall investment plan in mind.
Each month Advancement Trends in the Life Community brings to you a "thank you letter" that you can send to your donors. February's letter is below:
Dear Joe and Jane,
February means Valentine's Day; a time when many of our young people are desperately "looking for love." Young people want to know they are valued—loved. Yet, we see many who are sold the idea that love somehow must involve intimate physical involvement.
And whether through TV, online, other media or from friends, too often our clients are led to believe that physical involvement is the very definition of love.
When they come in our door however, these valuable young people are offered a life-changing, counter-cultural message they aren't getting on MTV, the most popular web sites or on their IPod.
We want each person who comes our way to know what love truly is, to know that love comes without conditions, and to realize that they can love and be loved, and that waiting for marriage is a concrete, powerful way to show true love.
Your gift makes this possible, and because of your gifts young people are not only hearing this message here, they are responding positively. As we talk with those who come to us, we see more and more that teenagers desperately want to know what the standards should be, and want to believe they can live up to those standards.
Young people want to be loved. But more important, they need to know what love is. Your support is making that happen, and we appreciate you.
Tweet this! When I think of what we call a "Case for Support" I yawn just uttering the words.
When I think of what we call a "Case for Support" I yawn just uttering the words. Couldn't we have come up with a better name for the very document that should convince our friends to join us in a mighty endeavor that could literally change history?
If you are wondering, a Case for Support, by definition, is a document whereby a ministry gives a "case" for why a particular initiative, or the ministry in general, deserves financial backing from a particular person, or the community at large.
But I'm going to be direct here: The terminology is boring.
Consider, if your ministry has a bold initiative that will save lives and change lives forever . . . This initiative—whatever it is—will change the course of history. Really! (And you need to know, I rarely use exclamation points. For this however, I make an exception. So there.)
Sadly, unless we want to recreate fundraising and development terminology, we're stuck with the dry, "Case for Support." What we can do however, is give the document itself some pop, some excitement. When we do, those who are thinking about joining our financial team will notice. We will build stronger relationships, and those we serve will be the ultimate beneficiaries of new financial gifts.
This month's issue then, is about ways we can give this document something extra, and why. In addition, let's look at some new recipients for this document. We might find that the Case for Support (CFS) can make all the difference in an exciting development plan for our ministry.
Our Case for Support can be a huge boost to our development plan, if we maximize its potential for reaching our financial friends in the ministry. Let's take a look at some questions that will help us identify an effective CFS and how it can make a difference for us in 2015:
What is a Case for Support (CFS), and why do we need one?By definition, a CFS is a document outlining the reasons why your ministry is important and lays out a plan for the future and/or a specific initiative which needs funding. In most cases, a CFS contains an individual ask for funding the organization or the initiative.
It is a smart idea for every organization to create a CFS whenever a major new initiative is rolled out ("Major" might mean an initiative with a price tag of $25,000 or more), or each year—as a way of sharing with its supporters the plans for the coming 12 months.
How many pages is a typical CFS?We will look at the key elements in another article ("Core Elements of a Winning CFS"), but this document will likely end up with anywhere from 8-12 pages. Keep in mind, every element needs to be concise. We need plenty of white space in our CFS, to give our friends a chance to glance. We don't want to take them on a literary journey.
Who should receive a copy of our CFS?If our CFS is primarily referencing a major initiative (expanding our medical ministry, renovations, the purchase of a new property, etc.), the CFS goes primarily to those who can give larger gifts (of $500 or more).
If our CFS is designed to put forth our annual plan, we will not only place it in the hands of major supporters, but we should strongly consider sending it to our monthly supporters, too. The cost is just a few dollars to send this to our monthly supporters but, with a strong thank you letter inside the front cover, it is a strong investment in building a long-term relationship (See our "CFS Thank You Letter" in this issue).
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