Big Picture Financial Planning for Nonprofits (part 4 of a series)

Big Picture Financial Planning for Nonprofits (part 4 of a series)

by Tom Wilson Major Gifts Guru

In the previous posts we discussed the keys to financial success for nonprofit organizations – a balanced budget, a 5% contingency, no debt, and 3 to 6 months of cash reserves. I noted that some donors find these factors reassuring and are very willing to give. If we’re asking donors to make investments in our organizations, we need to be a safe and vibrant place in which to invest.

But, is this enough of a case statement for a major gifts officer?

Not yet.

In helping organizations to get these financial elements in place, FAS would offer technical assistance to management. And, most importantly, they provided a major challenge grant to help motivate donors to help. Ideally they wanted to put up 1/3 of the capital needed, help the organization find a lead gift donor to put up another 1/3, and then go to the community for the balance of stabilization funds.

This challenge component is a key.

Those of you that have heard me speak about endowment fundraising have heard my great diversionary tactic – if all else fails, have a challenge gift to motivate donors.

The lead donor loves to make the challenge and other donors like to earn the money so they step forward. The purposes of what the funds will be spent on are not hidden, but secondary to the thermometer effect of reaching the challenge goal.

So is this all there is about financial stabilization fundraising?

To read the rest of the series, please see below:

Permanent Link: Big Picture Financial Planning for Nonprofits (part 4 of a series)

http://majorgiftsguru.com/2009/04/big-picture-financial-planning-for_22.html

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