Sunday, April 19, 2009

What Are Leadership Donations?

There are various kinds of leadership donations. They are each very helpful not in just raising larger amounts at one time, in and of the leader donation, but also helpful in raising others' donations. This is why these are referred to as leadership donations.

One kind of leadership donation is given by a nonprofit's board of directors or board of trustees. Often it is the case that anyone who joins the board must either raise or give, themselves, some specific amount, each year. Usually, this required amount is beyond or outside of any fundraising they do for annual fundraising events or major donor fundraising. These kinds of donations weather some economic difficulties better than others because typically, board members' level of dedication to an organization and its mission-based work, is high.

For example, perhaps you and I work for The Cloud Conservancy and work in the fundraising department. Each year, one of the various different fundraising methods that The Cloud Conservancy (TCC) includes in its fundraising or development plan is the board's leadership donations. TCC requires anyone who sits on the board to either raise or contribute, themselves, (or a combination of the two) $5,000 each year. Each board member's progress in their $5,000 annual contribution raised or donated is something that you and I, working in the fundraising department, monitor and report on throughout the year. We have 13 board members, at TCC, and that means that we have $65,000 in income built into the fiscal budget, year in and year out. It's built in, because the board is of course the nonprofit's leadership.

Getting to my point in the opening paragraph, more comes from board raised/contributed annual donations than just the amount that they raise. Our example organization has $65,000 in income, as a line item in its annual operating budget, because its 13 board members are expected to raise, contribute, or a combination of the two $5,000, beyond all other fundraising methods used, each year. The level of commitment, confidence, internal buy-in, and credibility that board contributions demonstrate are powerful when used in fundraising, outside of the nonprofit. In the budget of any program, project, or expense that the board contributions are directed to, annually, must include the portion of the board contributions that will be spent on that program in the "Income" section. If, for example, we are applying for grants for this particular program, we will include this program's budget in the grant proposal, and the grant donor will see in the budget that the organization isn't just asking them for a grant, it's asking the grant donor to contribute along with the organization's leadership's own contributions. When a nonprofit indicates to any potential donor (grant donor, major donor, potential sponsor, etc.) that the nonprofit's own leadership is so vested and confident that they are contributing, too, it gives the organization and the project (and the potential successful outcome of the organization's mission work and the project goals) credibility. Especially in a difficult economy, like ours' today, credibility is a major asset when fundraising. Make sure, if your organization requires leadership contributions from its board, that donors (especially potential donors asked to give in larger amounts) are made aware of your board's dedication and leadership in their own giving.

Another kind of leadership donation, which is similar to the board contribution, is a leadership donation when a nonprofit is conducting any one particular fundraiser and a donor gives to the fundraiser in a large amount. Let's say, for example, that while working at TCC we hold a college scholarship fundraiser, annually, called College for Cloud Lovers. The annual event that we use to raise money for the scholarship fund is a friendly matching funds 'competition'. [Leadership donations can come out of any kind of fundraising method - it is not limited to matching funds or matching funds competitions). We send letters to our donors, release press releases via various kinds of local media, notify people via our website and newsletter, and our organization's leaders (board and executive director) are talking with people face to face asking them to contribute with single larger donations which they then ask a colleague or friend to match (the amount) by a certain day (maybe six months away). So, let's say that we've begun this year's campaign and we have a contribution from Blue Skies Corporation of $5,000 and they asked their colleagues (and friendly competitors) Big Skies Guys to match their contribution and also give $5,000 to TCC, and Big Skies did! So, we've already raised $10,000 in matching contributions! Now, these were both leaders, in the community, because this year they were the first to contribute in larger amounts. Since we started we've had individual donors, local people, families, and small business also contributing and challenging their friends to match their contributions. From individual donors, for this campaign, we've already raised $8,000. This is all equally as appreciated, donation by donation that comes in, too. But, the exceptionally larger amounts that Blue Skies Corp. and Big Skies Guys gave were leaders in the community to give at that increment. Similar to the credibility that a larger contribution from the board brings to a nonprofit, when entities outside of the nonprofit give in larger, one time; large donations in response to fundraising campaigns give the nonprofit credibility because the donation indicates community buy-in, but community buy-in from one local donor brings the nonprofit the opportunity to leverage the leadership donation. Once a donor steps up and says 'here' s a large contribution', in effect, 'because we know that this organization's work is really needed in the community and we think that this is the organization to do the best work on this issue' - you and I should be making sure that all of the other potential donors in our community know about their leadership, that we value it, and that this is the kind of community buy-in our scholarship (program) and organization has. Again...this is credibility.

Leadership donations are truly specifically leaders' tools in our nonprofits' communities. Leadership donations do not come from a vacuum. Marketing a nonprofit's successes, achievements, having credentialed accomplished people involved, and the need in the community that the organization is serving, and serving very well is a way to make it easier for potential donors to learn about your agency, consider giving, but, most importantly, then decided to give. Who wouldn't invest (with their contribution) in an organization that local major donors believe in, also? Leadership donations are powerful for the organization, beyond the amount given.

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