1. Benefits of a giving program
There are many benefits to undertaking a giving program:
- A giving program significantly increases the revenue available to fulfill God’s mission and meet organizational needs, above and beyond day-to-day operations, by providing an intensive process to attract funding that would not remain … without this kind of effort.
- A giving program strengthens the church’s infrastructure, which includes development of staff, lay leaders and other volunteers, commitment to software to manage the giving program, gift acceptance policies, and so on. This stronger infrastructure will leave the diocese or parish in a much better position to do ongoing giving and stewardship.
- A giving program increases public awareness, which will help with the organization’s future visibility, communications and future giving programs.
Alert: while a giving program is underway, the entire diocese or parish may feel the strain of the extra effort required for one to five years, depending on the timing for the program.
2. Why Hire a Consultant?
Embarking on a large giving program is too important and too complex a process to carry out properly without an experienced consultant to design the process for attracting generous gifts and, co-ordinating with staff, to keep the process on track. Perhaps dioceses with a large and trained staff in place can consider “going it alone” without a consultant’s depth of experience and objectivity in managing the giving program process to successfully meet its goals, but that has not been the experience in Canadian churches that have had successful giving programs. Some benefits that consultants bring with them:
- Depth of experience and expertise
- Single-mindedness, persistence, and focus to making the giving program successful
- Focus on ensuring a giving program has a high success rate
- Proven systems, best practices and approaches
3. Association of Fundraising Professionals – Ethical Stance on Consulting Fees and Compensation
This information is taken from the Association for Fundraising Professionals (AFP) – Advancing Philanthropy Publications. Here are some key points:
Non-profit organizations often hire professional consultants to assist in the development and execution of fundraising giving programs. Consultants must adhere to the same code of ethics as other fundraising professionals. That means a non-profit organization can expect to pay a consultant on the basis of his or her experience and the complexity of the assignment, but not a percentage of the total funds raised.
Percentage-based compensation, including commissions, refers to payment that is calculated as a percentage of charitable funds raised. On AFP’s website, the subject is at the top of the list of questions about ethics. Standard 16 of AFP’s Code of Ethical Principles and Standards of Professional Practice explicitly rules out percentage-based compensation. Percentage-based compensation sets up a conflict of interest. For example, consultants, motivated by personal gain, could unduly pressure a donor to make a contribution, without consideration for the donor’s wishes or timetable, and this could considerably damage the relationship between the donor and the church afterwards.
According to AFP, the ethical way to compensate a consultant is either with a salary or with fees based on expertise, experience and the project’s requirements. A church should expect to pay for the level of experience of the consultant. Payments may also be based on agreed-upon milestones reached along the project’s timeline.
AFP states the following. “To be ethical, philanthropic fundraising must be mission-led, institutionally based, volunteer-driven, and professionally supported in an environment free of improper motive, unreasonable reward, or personal gain.” Sounds like good practice for churches!
4. Benchmarks for the average cost per dollar raised
For fundraising programs in the overall charitable sector, the average cost per dollar raised is $0.20 so that 80 cents of every dollar raised goes to charitable purposes/programs.
It should be noted that benchmarking between organizations is not standard, so costs per dollar raised can vary widely. For example, cost per dollar raised may be greater at the beginning of a giving program, since there are additional startup costs. The only way to get a true benchmark is to do a comparison with other churches, recording everything in exactly the same way, keeping in mind that it may be impossible to achieve the same average cost as the organizations you are comparing. Another approach is to develop internal benchmarks that measure your congregation’s or dioceses’ progress year-by-year.
5. Working with Consultants and Managing Accountability and Expectations
According to Charity Village.com, there are seven key factors that should be the hallmark of a competent fundraising consultant:
- A demonstrated capacity to assess organizational readiness for fundraising
- A plan to involve the organization in analysis, planning and decision making
- Specific fundraising experience and a plan to direct the client until the organization is comfortable with the approach
- An approach that will adapt established methodologies for all fundraising strategies to the specific organization in which they work
- Involvement in the early implementation stages of plans they help create and a plan for follow up activities
- Ability to change from a content – to a process orientation as organizational development issues arise
- Respect for the client organization (the diocese or parish)
It is crucial to ensure that you use consultants in the most appropriate way, in the tasks for which they have unique expertise. Use them to:
- Compile and produce a realistic assessment and analysis of your diocesan or parish giving capacity – this is often called a feasibility study.
- Help your church make appropriate choices among methodologies, without imposing their own (“cookie cutter”) plan on you.
- Help your diocese or parish internalize the required course of action so that the Synod, and clergy and lay leaders take ownership of the challenge and responsibility for the choice and its implications.
- Work with your diocese or parish to prepare it internally and externally to conduct a giving program, to provide the short-term on-site staffing required to undertake the program, and to ensure you are in a position to build on the initiative in the future.
To manage the consultant and ensure accountability, the following is recommended:
- Include benchmarks and milestones in the contract.
- Develop a detailed timeline of activities to be accomplished.
- Clearly identify client (diocese or parish) and consultant responsibilities and meetings to involve bishop, clergy and/or lay leaders.
- Include a clear statement of the amount of time that will be spent on the project by each member of the consulting team.
- Ensure that proposals from consultants include all anticipated expenses (housing, rental cars, airfare, mileage, and so on).
- Develop a budget.
6. Elements of a Giving Program Budget including Consulting fees
Giving program expenses are a separate budget and are often funded through the giving program itself with these expenses folded into the overall goal for the giving program. Funding for initial start-up is also required. This amount may need to come from savings or even from a line of credit. Costs are dependent on many factors, such as the size of the giving program, the duration of the giving program, the geographic scope, the amount of time required from a consultant and the existing giving and stewardship structure in place within the diocese or parish.
As a general rule, costs will run somewhere between 5% and 15% of the total giving program goal. The larger the giving program, the lower this percentage will be.
The giving program budget includes the following:
- Personnel – if extra staffing is required.
- Professional services – consultants.
- Marketing, communications and education materials – includes all material needed to promote the giving program – graphic design, photography, printing of brochures, letterhead and envelopes, website design, audio visuals, and so on.
- Support systems – if the organization needs to purchase software or hardware (a database program for receipting and reporting), this item can be a line item in the giving program budget or in the general operating budget, since the system will be used for ongoing annual giving program.
- Supplies – letterhead/envelopes, telephone, office supplies, postage, and so on.
- Travel – mileage, car rental, taxis.
- Hospitality costs – dinner, lunch, catering.
(Adapted from material used in a diocese of the Canadian church)