Advice & Education

Categories Advice & Education

NFP Good Giving Forum Q&A

NFP Good Giving Forum Q&A

The Good Giving Forum, held on the 3rd September 2013, was designed for WA small-medium not for profit organisations; The forum provided informative and practical presentations from fundraisers, individual donors, foundations and grant-makers. The aim was to learn about good governance, accountability, and to hear donors tips for making 'the big ask'; to inspire NFP organisations to engage with potential and existing donors to help them understand and support their cause. For more information about the forum, including links to videos and reference material click here

 

Disclaimer

The following questions were raised at the recent Good Giving Forum. Answers provided below are generalised; as it is difficult to provide more specific information without more detail about the organisation involved. Responses are to be considered a general guide only (developed at the time of the forum). Readers should seek their own legal advice about ATO and regulatory matters given the ongoing changes in the sector and government regulation.

Good Giving Forum - Questions and Answers

Click on a question, to reveal the answer. 

Topics

Fundraising / Grant Seeking

Donors want to support specific projects, so how can an organisation get funding for basic running costs (e.g. water, electricity, materials, rent etc.)?

Some donors are more understanding of the challenges of running an organisation as well as the needs of specific project funding. Often it is people that have been donating over many years and have higher level of engagement with not-for-profits that have a greater understanding of those needs.

Donors may be concerned about the long term sustainability of your organisation and its need for operational funding and may feel that operational funding should be provided by government sources. In these cases, be prepared with clear answers for their questions.
In some cases, you may be able to build operational costs into project funding requests and help donors to understand that projects are not possible without ongoing operational support and that they go hand in hand.

Consider the types of fundraising you have in place. Some types of fundraising are better for securing operational costs and organisational sustainability whereas others are better for project funding. This will vary depending on the type and size of your organisation, your organisational history, your pool of volunteers and donors and how many people you help each year.

When NFPs approach corporates for funds, how do they persuade them to donate (on group or substantially) rather than convince them of merits of sponsorship which may be weak?

Be aware that many large corporates have different pockets of funding across their organisation and do your research to find out who and which part of the organisation to approach. Find out what other organisations they have supported in the past and what size of donations they have made. Work out when their financial year is, don't assume that it is July to June, and consider when is the best time of the year to approach them for this year's funds or next year's funds. If you are not sure, ask them.

If you can, try to find a relevant person in the organisation that can advise you on how to work your way through their processes, what's their timing and who are the decision makers.

Be clear about what you need and what community outcomes you will achieve with their funding. Try to explain how your community outcomes match with their corporate objectives. Look at their strategic plans and annual reports so that you know what is important to them and match your language to theirs in your written proposals. If they talk about "corporate social responsibility" and "key performance indicators" in their documents, use the same words in yours while still talking about the things that are important to your organisation.

Finally, be prepared for change at the corporate organisation. It is great to develop long-term, strong working relationships with key people in corporates that understand what your organisation is working to achieve but having multi-level relationships helps you to cope with the inevitable change of staff in the corporates that you work with.

How do organisations find out about donors who support projects overseas?

More philanthropists are now moving into support overseas as they understand the potential global impact of issues and support. Some of our most generous WA philanthropists are good examples of this. They are likely however, to be concerned about how to donate funds to an organisation that can demonstrate the impact and outcomes of any support overseas.

Research is an important part of your planning. Start to build up a picture of people and organisations that support your organisation's area of interest. Look at their websites and collect information from media stories about overseas funding. Organisations such as Philanthropy Australia, provide some information on philanthropic organisations and their particular areas of interest and they may be a good place to start. Look at other organisations like yours, here and overseas, and find out what type of individuals and organisations support them.

How do NFPs get wealthy people to attend a fundraising event; That is, what is the best way to communicate mission/purpose and invitation to them?

If you are determined to run a fundraising event, start your planning at least a year in advance to ensure that you develop a list of appropriate people to invite and let them the know the date of your event well in advance. Many large and successful fundraising organisations now hold a launch for their event 3-6 months in advance to get their event into the media and onto guests' calendars.

Consider whether one of your high profile supporters or patrons might be prepared to "host" the event by being named on the invitation or writing a letter to accompany your invitation. Get professional advice on designing your invitation and be quite clear about the message you want to get across on your materials. Work to attract a media partner for your event and be clear about which type of media is most relevant to your potential audience for the event. They may assist to promote the event and encourage ticket sales and provide other support such as a media personality to MC your event.

Be clear about whether you expect to raise funds from ticket sales or from fundraising activities during the event and make sure that you understand the taxation implications of ticket sales and fundraising activities and whether they are eligible donations. The ATO's website provides useful advice and examples.

A note of caution, there are over 100 large fundraising events in Perth alone each year and it is hard to cut through and be successful in such a crowded market. Do consider if a fundraising event is the best way for you to raise funds and consider carefully if you have the right group of volunteers working with you to help make such an event a financial success. Learn from your colleagues in other organisations that run successful events and pay attention to media stories that highlight their high profile guests and their fundraising activities on the night.

What fundraising tips are there for NGOs that do not have DGR status? Are there any Sponsors/Corporate Agencies that support NGOs without DGR status?

Most donors will be looking for DGR organisations to support however, businesses that are considering sponsorship support may be less concerned. They will be interested in how you can help them achieve their business outcomes, which may be varied and may coincide with what you want to achieve. This could include promotion of them as an organisation that supports the community in which they operate which means that they will be looking for maximum acknowledgment and recognition of their support. Your proposals to them should clearly list how they will be acknowledged and how your work will help them achieve their goals. Be aware that large businesses may have different pockets of funding for community support and you need to research and find the right part of the business to approach for funding. For sponsorships support that may be the marketing or PR department of the business. Do your research to find out what they want to achieve - look at their annual reports and websites - what are their current issues and objectives?

If you wish to secure philanthropic funds and have no hope of achieving DGR status, consider partnering with a DGR organisation that works in a similar field to you. There are several large DGR organisations that work with smaller organisation to receive funds on their behalf and then go on to partnering more formally with those organisations. Ensure that you have very clear expectations of each organisation's role in such an arrangement and make sure that you have an agreement in writing about any funding that you receive.

What materials are needed to prepare for submitting a grant application?

Grant applications vary but most organisations provide very clear guidance on what they require to even consider an application. This will typically include information on your organisation's registration and legal status. You may be asked to provide your most recent annual report and audited financial statements and details of your board or governing body.

Be prepared to provide brief and detailed information on your organisation's objectives, achievements and goals and understand that your application should be tailored to the organisation to which you are applying and to the particular project for which you are seeking support. Some organisations allow you to provide additional materials which might include letters of support from your clients or people who have been helped by your organisation or from other donors and supporters who can add credibility to your application.

How do organisations design a fundraising strategy that strikes the balance between meeting corporate and government interests plus those of constituents?

There is no short answer to this question. Developing a successful long term fundraising strategy should be part of the overall business planning of your organisation. What are your long term goals? What do you want to achieve for your organisation and for the community? How can you ensure the viability and success of your organisation and where does fundraising fit into that mix?

If you have a clear understanding of your organisation's plans, you can consider the mix of fundraising strategies including how activities such as bequests, direct marketing, annual appeals, major gifts, and online strategies fit into those plans. Each of these have different impacts in terms of expenditure and outcomes and will work differently with your various stakeholder groups.

How can a non-funded agency that is not supported by other large agencies access any form of funding without spending their meagre resources on marketing and applications?

Look carefully at your group of volunteers and board members and develop a strategy to attract a volunteer or board member who works in PR or marketing who may be able to assist in developing marketing or materials or writing applications for your organisation. Most marketing and PR firms have a number of pro-bono clients that they assist and often they are influenced by the passion of the supporters of the cause or by a personal connection with that cause.

Try to harness the strengths of your volunteers - you may find that some of them have skills that you have not yet tapped into particularly those that have retired from full time paid work.

Children, Youth and Animals are popular causes. How does an organisation encourage givers to support a less appealing cause? (e.g. increasing the wellbeing of old people)

Donors are becoming very sophisticated in determining who or what they wish to support and organisations need to match that sophistication. Many causes that once found it hard to gain support are now achieving success by being very clear in all of their communications about the problems that they address and how community support is helping them to solve or attack those problems. We hear all the time in the media about our ageing population and potential donors hear those messages too and are becoming more aware of how issues of ageing may impact them and their loved ones in future years. As a result, we are now seeing more WA philanthropists providing support in these areas.

Be clear and able to explain what support you need, how it fits into your long term plans and what it will help you to achieve. If you secure $50,000 of support, exactly what will you do with it? Will it furnish an extra room for respite care, provide an extra care worker for 6 months or allow the purchase of a piece of vital equipment?

Ensure that the people that you assist, and their family members, know about your organisation and understand that you can achieve even more with additional support. They are the people most likely to provide support, often at surprising levels. Include simple messages about bequests and donations in your promotional and administrative materials, including newsletters, and in signage in the places where you interact with your clients or patients. Make it easy for people to support your organisation and have someone on your team that can deal quickly with calls for information. There have been many examples of organisations that have not returned calls from people asking for information about donations or bequests or who have been slow to respond.

Learn from other similar organisations here and overseas. Look at their websites and promotional materials. What are they doing to attract support and what types of people and organisations are supporting their work?

How does an organisation or charity make contact with a PAF if they have no website and are not part of their networking circle?

Become aware of those organisations that have lists of PAFs and some contact details for them. Philanthropy Australia have some information but if PAFs do not wish to receive unsolicited contact then respect that wish.

Continue to do your research and collect information from the media about PAFs and other donors when you hear about donations. Set up systems for collecting and using information about donors so that you develop a clearer picture about who might support your organisation.

Is it possible to get a continuous grant without applying annually given that mission and purpose are the same year upon year?

It depends on the granting organisation and that should be clear when you first apply. If it's not clear in their grant materials, ask them in advance and if possible apply for multi-year funding. Some will provide ongoing funding as long as you meet annual milestones or KPIs and some will provide multi-year funding once you have worked with them for a year or two and developed a level of credibility, trust and understanding. Regardless, ensure that you communicate with them regularly so that they understand that their grants are well used and are achieving the objectives that you and they wish to achieve.

What’s the major difference between asking for donations or sponsorship if you’re talking to a business?

If you are an ATO registered Deductible Gift Recipient organisation (DGR), donations to you from businesses may be tax deductible and should not provide any material benefit back to the donor. Sponsorships are considered business transactions and generally attract GST. If you are entering a sponsorship arrangement with a business, ensure that you have a clear written agreement with them that states what funding they will provide and when and what benefits you will provide in return. Detail the level of financial support plus the GST in case GST rates change in the future e.g. $50,000 (+ GST) rather than $55,000 (inc GST).

Sponsorship is generally more about what you can provide to the business rather than what you can provide to the community.

How does a PAF or Foundation decide whether to support an organisation or not?

PAFs, and most other Foundations, are likely to consider first if you are legally eligible to receive funding from them. Are you registered with the Australian Taxation Office as a Deductible Gift Recipient (DGR) and do you meet any other legal criteria? They will then consider if you meet their objectives and work in the areas that they wish to support.

The person(s) that establish a PAF (the donor) decide what organisations or causes are supported. Should the donor be deceased, then the future trustees will either continue to execute the wishes of the founding donor or potentially have the flexibility to change direction and support different organisations over time.

Worthy causes such as cancer research and child medical research attract widespread support. What recommendations are there for an organisation in a less “sexy” or understood field, such as the disability sector?

Many organisations working in fields that have been less understood and supported in the past, such as disability services and research, are now receiving support from philanthropists and businesses. Their success depends on their ability to demonstrate clearly how significant the problem is for the community and how their organisation is helping to solve the problem and provide positive outcomes for those involved. Learn from those organisations that are achieving funding success in related fields here and overseas. What types of people and organisations are supporting them and how are they demonstrating outcomes with the funding?

What is the “best” first step in establishing a relationship with a PAF in a first meeting? (e.g. what is the most important information about an NFP/Charity that a PAF would like to know initially?)

Any organisation or person that is talking with your organisation about possible support will want to know firstly if you are meeting a community need - is there a real need for the service that you provide or work that you do? They are also likely to ask about your DGR status - are you registered with the Australian Taxation Organisation as a Deductible Gift Recipient organisation?

What are the recommended first steps in starting a fundraising campaign?

Developing a successful long term fundraising strategy should be part of the overall business planning of your organisation. What are your long term goals? What do you want to achieve for your organisation and for the community? How can you ensure the viability and success of your organisation and where does fundraising fit into that mix?

If you have a clear understanding of your organisation's plans, you can consider the mix of fundraising strategies including how activities such as bequests, direct marketing, annual appeals, capital campaigns, major gifts, and online strategies fit into those plans. Each of these have different impacts in terms of expenditure and outcomes and will work differently with your various stakeholder groups.

If you are planning a specific fundraising campaign, the steps and timing will depend on the type of campaign or strategy you have in mind, the strength and resources of your organisation and the pool of current and potential donors for your particular project or cause.
It isn't possible to be more specific without an understanding of the type of campaign you have in mind.

Private companies receive hundreds of requests a month for support, how does a submission get past first base?

Whether you are talking to a Foundation, individual donor or corporate, it is always better to talk to someone face to face or on the phone before you develop a written proposal. Most people and organisations will not want you to waste your time, or theirs, applying if you don't meet their criteria or if you are applying at the wrong time of the year for the wrong amount of funds.

Do your research and find out whatever you can about the organisation you are approaching. What are they interested in? What have they supported in the past and for how much? When do they accept applications? Who makes the decisions? Who is on their board? Do you have any mutual connections?

Try to talk with a colleague in an organisation related to yours that may have received funding from them in the past. What did they learn? Why do they think they were successful? Most people working in fundraising are generous in sharing advice and assistance.
If you are preparing a written submission, provide exactly that they ask for in the format and order that they ask for it. If they don't provide much guidance explain a few key points as clearly and briefly as possible:

  • what community problem are you tackling?
  • what is the solution to the community problem?
  • why is your organisation the right one to help tackle the problem?
  • what help you need from them and how it would be used
  • provide a strong conclusion and your contact details

Use simple, clear images where possible and aim your language at the reader rather than an expert in the field. Include quotes and messages of support from current supporters and people who benefit from your work.

How long or short should a funding/grant request be and how much detail and financial information is required up front?

This depends entirely on what the granting/funding organisation requires. Do your research on that organisation before you submit your request. What do they ask for in the way of materials and information? What other organisations have they funded in the last two years and what size of grants have they given? Some provide very specific lists of requirements and ask you to fill in application forms with word limits. If you are not sure what they want, ask them. If you are allowed to attach additional materials consider including your most recent Annual Report and audited financial statements.

If you can, ask one of your colleagues at an organisation that has received funding, how they achieved their grant and if they can give you any advice. Most people involved in fundraising are generous in sharing success and advice as they understand that if we all approach fundraising ethically and effectively, donors are likely to give more in the future.

How do you create an attractive submission requesting sponsorship or donation?

Be aware of the difference in submissions for donations and sponsorships. Donation submissions should show clearly how you will help to achieve outcomes for the community whereas sponsorship submissions should focus more on how you will help the business achieve their outcomes.

In each instance, keep it simple and clear and use images where possible. Don't include technical language unless you know that it is relevant to the person who is reading it and ensure that you finish with a strong conclusion and the relevant contact details so that they can call you if they have any questions.

Be creative where you can and when it is appropriate. Include messages of support or quotes from your clients or those that have benefited from your work or from others that already support you.

Learn from others - collect samples of all sorts of materials that catch your eye and that you feel get the message across.

Many grant making organisation do not prefer to meet grant seekers in person and refer you to their website. How do you meet key people outside events?

Respect the organisation's process and way of working. If they receive many requests for support, it may not be possible for them to meet with all of them particularly if they run their organisation as a family or group of interested volunteer board members without a lot of administrative support.

Start with their website and do some research on who is connected with their organisations. Do you have a volunteer, board member or existing supporter that might be able to introduce you to a key person at the organisation. If not, use the process that they have put in place and if you are not successful in the first instance, ask for feedback and do not give up. Send them information about your objectives and achievements a few times a year so that they develop awareness of your organisation and they may be more interested in your application the next time you apply.

Individual Donors / Grant Makers

How does an individual become a member of Impact 100?

We have a website: www.impact100wa.org.au with a page called Donate/Join where individuals follow a link to make a credit card payment and immediately receive their tax deductible receipt.

How do organisations find out about donors who support projects overseas?

Read the newspapers, take note of who is at the functions related to organisations that work in the arena. Philanthropy Australia have a ‘registry’ of their members that have PAFs and are trying to keep it up to date as well as making connections that they feel might be beneficial. Check the ATO list of PAFs (many are named in the income tax law) and look to see if they have websites stating what they are interested in. There is no official directory.

What are the structures and vehicles for giving and what types of charities or organisations can the different vehicles give to?

At a personal level, there are two common structures. These are 1) a Private Ancillary Fund (PAF) or 2) a Public Ancillary Fund (PuAF). It depends on the financial resources of the donor and desired level of involvement with the day to day administration of the structure that will generally dictate which structure is most appropriate. Only organisations with a Deductible Gift Recipient (DGR) tax status can benefit from a PAF or PuAF.

PAFs can only give their money to organisations that have Deductible Gift Recipient (DGR) Item 1 status, which indicates that they are a ‘doing’ not-for-profit organisation – rather than a ‘giving’ organisation (such as a PAF itself which is DGR Item 2 or community foundations). Foundations created through other means generally have more leeway. Impact100 WA can only give to DGR Item 1.

Are PAFs privately funded organisations or do they link into Government Funding?

PAFs are privately funded but those putting their money into them receive a tax deduction. At least 5% of the corpus must be donated to DGRs per year.

What do donors usually want in return for their investment?

It really depends on the donors but most will want to see some sort of difference made. In terms of recognition, some will want to fly below the radar and do their gifting anonymously while others want recognition of their support, either in kind (eg invitations to events etc) or through media and advertising.

Government

Where perceived inconsistencies between the Government’s partnership policies and the reality of dealing with many different departments, what process can be followed to address any concerns and to achieve Partnership Forum aspirations?

The Delivering Community Services in Partnership Policy contains agreed shared and reciprocated behaviours and principles to guide and encourage partnership between the public and NFP sector. These behaviours and principles, combined with the introduction of standardised contracting practices, will assist with providing a consistent experience for the NFP sector. Department of Finance Funding and Contracting Services (FaCS) unit can also be contacted for information and assistance.

How can NFPs become less reliant on Government funds?

To build and maintain robust and sustainable business models, diversification of funding streams is critical. This includes:

  • increasing the maturity of service delivery costing models where fundraising and philanthropic activities are not utilised to cross subsidise service delivery aspects;
  • whole of life costings; and
  • activity based costing analysis applied to operational areas within an NFP to understand the operational capital required for sustainability over time.

NFPs should seek to explore opportunities to:

  • expand funding streams, such as commercial operations where profit can be gained and reinvested into the ‘’mission” strategic service areas/functions of organisations where government does not currently purchase or fund services/activities;
  • increase their ability to respond to government services available through tender processes;
  • improve creative and innovative fundraising streams and philanthropic operations using social media and giving circles; and
  • consider commercial investment streams.

Given the WA Governments announced cuts to services what support can we reasonably expect from the government in the future? What priority will be given to NFP funding?

The State Government remains committed to supporting the not-for-profit sector through collaborative approaches such as the Delivering Community Services in Partnership Policy and the Partnership Forum. This genuine and sustainable partnership will continue to benefit the community and lead to more effective services for Western Australians. In this regard, the rollout of $604 million Sustainable Funding and Contracting Initiative is continuing. The second tranche of this funding is being applied to contracts as the contracting reforms are consolidated.

Does DCSP support the delivery of educational outcomes?

The Delivering Community Services in Partnership Policy supports delivery of an identified community need leading to community services outcomes that focus on meeting the needs of individuals at the heart of relationship between the government and the NFP Sectors.
The DCSP Policy defines a Community Service as;“Community Services mean those services of a nature intended to address physical or social disadvantage and/or that promote the health and wellbeing of individuals, families and communities. Examples of Community Services include:

  • services which contribute to the building of capacity within the community to respond positively to an identified need;
  • services required to address disadvantage for which a collaborative approach is required with the community;
  • services that encourage the involvement of volunteers, increased business or community support or the personal empowerment of recipients of the service; or
  • services which contribute to the ability of people to live and participate in the community.”

http://www.finance.wa.gov.au/cms/uploadedFiles/Government_Procurement/Policies/dcspp.pdf?n=1765