Do you know how much it costs your organization to process a gift and thank the donor?

As we know, the Better Business Bureau recommends that an organization not spend more than $.25 for every dollar raised. Tracking overall development costs as a percent of the amount raised is not difficult. When reporting it to your board or donors, however, be prepared to account for the fact that start-up costs, as well as certain development activities, do not pay off immediately — but they are necessary. For example, the cost of acquiring a new donor is higher than the cost of arranging a planned gift, but planned gifts do not usually arrive out of the blue from people who have never before donated.

Most organizations are aware of the high costs associated with direct mail and special events, but have you looked at the costs associated with how your organization processes gifts? When I have asked this question I get a variety of responses. I have heard $17.00, $25.00, or more often, “I don’t know.” I’ve even heard, “I don’t want to know.”

Why would someone NOT want to know how much it costs to process a gift? Well, then they would have to evaluate whether they could afford to keep doing things the same way, or consider making changes. Oh no, not c-c-c-change. Sounds serious.

How much could it cost to receive a gift?

Let’s say the gift is in the form of a check. First, the mail must be picked up and sorted, then opened and read. Someone must decide how to account for it – is it tracked against a campaign goal? Is it a restricted gift, or a memorial that requires notifying the family of the deceased? Is it a matching gift from a donor’s company, and if so, how do you make sure both the employee and the employer are given appropriate credit without counting the gift twice?

Once all that is determined, the development staff must enter the gift in the donor database, along with any other pertinent information to ensure that the donor’s wishes are honored. From here, the development officer or executive must compose or personalize a thank-you letter, print, sign, and mail it.

Then the check goes to the bookkeeper or whomever tracks and accounts for the organization’s revenue, along with information about how this particular gift is to be credited and used. Then the check goes to the bank.

Hopefully, part of processing the check includes a plan for notifying others involved in soliciting the gift so the donor is appropriately recognized, including protecting the donor’s anonymity, if that was requested. Considering the cost of staff time, that could easily cost your organization $20.00 to process a gift.

Perhaps you shortcut the process to keep costs down? What is the point at which the “shortcut” could cost the organization more later by losing a donor or failing to comply with all the ways the IRS wants to see gifts documented?

So, it if costs $20, what does your organization do when a donors makes a gift of $5? Do you invest $15 to process it the same way? What determines who signs the letter or makes a thank-you call? Is it the amount or other criteria? How consistent and timely is your organization in making sure donors are appropriately thanked?

If you identify opportunities for improving your process, what is the cost and benefit of changing?

Now that you have read all my questions, I bet you are hoping for an answer, or at least a recommendation. Well, I don’t mean to tease, but I do not think one answer or recommendation would fit all organizations. I ask these questions hoping they will stimulate discussions among INDC members. Perhaps this would be a good topic for a mentoring session or the INDC Website message board. Who has measured this cost and what can we learn from each other? That’s what INDC is all about. I welcome your comments.

PJ Watters, President

Inland Northwest Development Council

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January 28, 2004

Noon – 2:00

Rockwood Retirement Communities

2903 E. 25^th Avenue

http://www.mapquest.com

In the community center

Topic:  Annual Giving ~ the Bread and Butter of Your Organization

Speaker

Karen Rotko-Wynn, CFRE

Vice President

Pacific Northwest Regional Manager

The Alford Group, Inc.

Prior to joining the Alford Group Karen served as the Director of Development and capital campaign for the Seattle Symphony from 1996-2001, where she worked to facilitate the completion of the largest arts capital campaign in the state of Washington.  The Seattle Symphony capital campaign brought in over $159 million. 

Prior to moving back to Seattle Karen spent three years in New York as the Director of Corporate Relations and Sponsorships at the prestigious Carnegie Hall.

Karen has over twenty years experience in nonprofit management and currently serves as President of the Washington State Chapter of the Association of Fundraising Professionals and is a Certified Fundraising Executive.

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Did you know that Morningstar Boys' Ranch has an equine therapy program? This is just one of the interesting things learned on Tuesday, November 18th, the first Mentorship Mixer at the Kress Gallery. About 20 members attending learned about each other and our organizations. There are aspects to our programs that we all take for granted and when we share, we all benefit. The more we know about each other and our missions, the stronger we are as an organization. The stronger we are as an organization, the more effective we are as the non-profit community in Spokane.

After the Mixer, I heard about some success stories from the members who attended. Some members followed up with each other to learn more about topics of interest they have in common. Everyone who took the time to meet walked away with a better understanding of who we are as individuals involved in very worthwhile programs. Won't you join us on January 28th?  Feel free to call Julie Banks, Mentorship Chair, at 747-6822 with suggestions or questions. 

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Spokane Matters encourages any and all non-profits, service organizations and businesses to participate in this worthy event. If you would like to become a sponsor, there are a variety of sponsorship levels and benefits for your business. If you are interested in having a Krewe of up to 8 people, the cost is $600. This includes an ample supply of beaded necklaces adorning your logo, buffet tickets; drink tickets and an opportunity to win a variety of prizes.

Please visit us at www.spokanematters.com

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January 28       Membership Meeting

                        Topic: Annual Giving

Rockwood Retirement Center

Noon – 2 p.m. followed by a tour

February 25     Executive Meeting

March 24         Membership Meeting

Topic: How To Upgrade Donors

                        Women’s & Children’s Free Restaurant

                        Noon – 2 p.m., followed by a tour.

April 28           Executive Meeting

May 26           Membership Meeting

                       Topic: Planned Giving – the Ultimate Gift

                       Deaconess Health & Education Center

                       Noon – 2 p.m., preceded by a Mentoring Workshop - TBA

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By Joe Albert

Associated Dean, School of Professional Studies, Gonzaga University

Many of you reading this are strong supporters of the nonprofit community, and give in a variety of ways to keep these organizations alive and healthy. You also may find that serving nonprofit organizations is complex and challenging—and you’re right. “About 10 years ago, people involved in nonprofits needed about half the information required of them today in order to be effective,” says Mike Forness, executive director of Spokane’s Ronald McDonald House Charities.

The health of nonprofit organizations rests on several factors, including strong leadership from the director, a quality service or product, and a board that understands its role and executes it effectively. Fortunately, thanks to a collaborative effort between Foundation Northwest, Gonzaga University, and United Way of Spokane County, leadership training for nonprofit organizations has been available in this area since 1999. The initial workshop series for non-profit directors covered topics such as planning, resource development, volunteer management, and board governance. It was offered three times between 1999 and 2002, and resulted in the training of nearly 100 agency executives.

Positive responses from participants in the director-training program, and the addition of Leadership Spokane to the collaborative effort, resulted in the establishment in 2002 of the Nonprofit Leadership Institute (NPL), which identifies leadership needs in the nonprofit community. The NPL members developed a new training program that targets nonprofit board members in order to extend services to the nonprofit community.

Linda Finney, director of Leadership Spokane, notes that, “Graduates of Leadership Spokane go on to serve as board members in the nonprofit community.  Additional training in the how-to’s of board service helps them become effective right away.  And, a trained Board is much more credible to potential funders.” The challenges of being a nonprofit board member are complex and frequently overwhelming, says Vic Forni, president of United Way of Spokane County. “Financial, personnel, and strategic challenges confront board members on a regular basis,” he says. Peter Jackson, president of Foundation Northwest, adds, “During these challenging economic times, nonprofit board members face tough decisions and have to more with less. Decisions around mission, direction, and resources are facing boards regularly.”

The NPL started the new board development workshop series this fall to address the need for improving the quality of participation by nonprofit board members. The eight-session program is offered at Gonzaga University and covers issues such as roles and responsibilities of board members, board-staff relations, program evaluation, finance issues, resource development, and ethical dilemmas. About thirty participants are attending all of the sessions in the fall series, and a spring series is being developed to accommodate the same number.

The series that’s running currently has received high praise from participants.

E. Corkey Braune, who has served on nonprofit boards for more than 25 years and now is on the Morning Star Boys' Ranch board, says, “I wish every single member of our board could make the time to participate in this program, and I believe it is absolutely essential for anyone aspiring to board leadership. In this day and age when things seem to go faster and faster, and people have only minimal time to learn and grow, series like the workshop make it possible for persons serving on nonprofit boards to increase their service and the value of their service to their respective organizations.”

Ryan Petrik says participating in the workshops have made him realize “how many resources are available to benefit nonprofits. Attendance in this series will strengthen many nonprofits in our community by allowing us to leverage our resources as we strive to help our organizations meet their goals.” Petrik works at Sterling Savings Bank and serves on the board of the Children’s Museum of Spokane.

Another participant, Dr. Norman Charney, of the Inland Northwest Business Coalition on Health, says he discovered how to utilize resources in the community to address issues faced by his organization.

Christine Deviny, of the Spokane Parks Foundation, adds, “I commend (the partners) for taking the lead to provide an avenue to help local foundations to network and collaborate.” 

Angela Ruff, director of continuing education at Gonzaga, says the university was anxious to participate in NPL because of its desire to contribute to the health of the community by strengthening the nonprofit sector. “Directors of nonprofit organizations deserve board members who are educated and prepared to serve the organizations well,” she says.

Mary Anne Brown, of Shooting Star West, says she’s “thoroughly enjoying all these classes; they are providing me with guidance, direction, and purpose, especially with roles and responsibilities and board relationships. What I’m learning is beginning to smooth the speed bumps of board challenges.” 

Bonnie Zahara, of the Spokane Parks Board suggests that many who serve on nonprofit boards don’t adequately understand two key elements – finances and consensus building. “I have found there is always more to learn, and gaining a deeper understanding leads to more effectiveness,” she says.   

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