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Dollars for Scholars Fundraising Guidebook Section One: Introduction

Section One: Introduction

F undraising is a topic of interest and concern to all nonprofit


organizations because their very existence depends on the
financial support of the communities they serve. With the
What motivates people
number of nonprofit organizations growing exponentially in to give money and how
recent years, raising money effectively and efficiently is a can organizations
popular topic for books, seminars, workshops and conversa-
tion. People are spending big money and investing their time position themselves as
and energy learning about this important topic. Is fundraising worthy of philanthropic
really that difficult? Is it a science or an art? What motivates
people to give money and how can organizations position
consideration?
themselves as worthy of philanthropic support?

We will attempt to answer these and many other questions in this Fundraising Guidebook—
especially as it relates to Dollars for Scholars. We also hope to pass along some very practical
information and ideas that will help your chapter achieve better results in fundraising. The goal of
every Dollars for Scholars Chapter is to award more scholarships to community students and that
takes money—plain and simple.

The topics addressed in the Guidebook are based upon a voluntary survey conducted among
chapters in 2003-04, conversations and input from regional executive directors and Scholarship
America staff, and from my own personal experience as a development professional and consult-
ant.

I continue to be deeply touched by the passion and commitment of Dollars for Scholars volunteers I
meet both in my own region and across the nation. Dollars for Scholars is positively impacting the
lives of students, helping them achieve a postsecondary degree and, for many, changing the course
of their lives. Achieving a degree beyond a high school diploma dramatically affects lifetime in-
come and can result in a better career, lifestyle and a more educated and contributing citizen. Our
country has long recognized the value of an education, but
for many students, education beyond high school seems
unattainable. We are helping. We are making a
difference. Every dollar that a chapter can raise is
for the most wonderful cause in the world—our
youth and their future.

What’s so special about Dollars for Scholars?

Should fundraising be approached in a different manner for Dollars for Scholars chapters than it is
for the American Red Cross, the children’s museum or the hospital? Are Dollars for Scholars
chapters capable of raising significant contributions from their communities?

Although Dollars for Scholars is certainly unique in many ways, the basic principles that apply to
fundraising are the same for all organizations.

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Section One: Introduction Dollars for Scholars Fundraising Guidebook

Fundraising at its most basic is this: one person asking another person to contribute to a
worthy cause.

All fundraising methods and all fundraising tools boil down to this concept. The variations occur
in the method of asking and in the personal relationships of those involved. My personal experi-
ence confirms that the more we stick to this fundamental concept, the more effective and easier
fundraising becomes.

The survey conducted among chapters revealed some surprises. Most of our chapters are raising a
lot less on an annual basis than I had expected. Of the chapters responding to the survey, 55%
said that they raise $10,000 or less annually through fundraising efforts. I must say that I was not
only surprised, but a little disappointed. Many of our chapters are well-established in their com-
munities, have a successful track record of awarding scholarships and have the capacity to raise a
lot more money.

The second surprise was that the #1


concern of Dollars for Scholars chapters
“...the cost per dollar raised for Dollars
responding to the survey was the recruit- for Scholars chapters over the past few
ment and retention of volunteers to
fundraise. This problem is not unique to years has averaged at less than 5¢ and
our chapters, but because almost all chap- in many individual cases even less than
ters are 100% volunteer-managed and led,
it is a particularly crucial issue and con- that. That is an astounding return on
cern. A volunteer section has been added
to this guidebook based upon the impor-
investment for donors and a record that
tance of this topic to our chapters. would be envied by many nonprofits in
Don’t be intimidated by the idea of asking the United States when 15-25¢ is
for money. Yes—it takes time and effort, considered ‘good.’”
but you already have all it takes to be the
very best fundraiser in the world—you
believe in the mission of your organization, you can tell wonderful stories of the positive impact of
the scholarships you give, you have already made your own personal investment of time and
money, and your chapter has one of the best track records of any organization in your community
for efficient fundraising—the cost per dollar raised for Dollars for Scholars chapters over the past
few years has averaged at less than 5¢ and in many individual cases even less than that. That is an
astounding return on investment for donors and a record that would be envied by many nonprofits
in the United States when 15-25¢ is considered “good.”

Scholarship America and Dollars for Scholars chapters in fiscal year 2003 distributed nearly
$143,000,000 to more than 31,000 students. This is an impressive record and one in which we can
take great pride. But the reality is that with escalating tuition and fees, there is an ever increasing
and critical need for more financial assistance for students. We must take a hard look at our cur-
rent methods of fundraising and consider what can be done to move us into the future. It will take
courage and commitment on all levels, but if we keep our goals—our youth—in sight, there is
nearly unlimited potential to raise money and to dramatically alter the course of our future and
that of tens of thousands of students each year.

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Dollars for Scholars Fundraising Guidebook Section One: Introduction

History of Fundraising

The ancient Greeks were the first to describe what we call “philanthropy”—from phileo meaning
love and anthropos meaning mankind—“love of mankind.” As early as 350 B.C., Aristotle said that
to give money is the combination of the right person, the right extent at the right time with the right
motive in the right way. He was right on target! The Old and New Testaments of the Bible are full
of references to care of orphans, strangers, widows and the poor. In fact, the philanthropic tradi-
tion can be found in all of the major religions of the world—Judaism, Christianity, Islam,
Buddhism, and Confucianism.

But the full development of philanthropy is really an American tradition and has come to be under-
stood as “voluntary actions for the benefit of others” and includes not only contributing our
treasure, but also our time through volunteer service. Philan-
thropy has become such a part of our culture and such big
business, that there are now governmental regulations and Scholarship America has
scrutiny beyond what we would have imagined a few years distributed more than $1 billion
ago. At the turn of the 20th century, giving was estimated to be to nearly one million students
$500,000,000. In 1960, it was slightly over $11,000,000,000.
In Giving USA 2004, a report released annually by the AAFRC making it the nation’s largest
Trust for Philanthropy, giving in 2003 is reported to have private sector scholarship and
reached nearly $241,000,000,000! There are over 1.4 million educational support organiza-
registered charities in the United States and still growing.
tion in the United States.
Andrew Carnegie, one of America’s most well-known philan-
thropists, felt that people of wealth had a moral obligation to administer their wealth during their
own lifetimes. Carnegie and John D. Rockefeller are considered the fathers of modern philan-
thropy. They began some of the first philanthropic foundations that specialized in giving money
away.

Philanthropy in the United States has grown by great leaps in recent years. Nearly every non-
profit, college and university, hospital and private school has a professional development staff,
specializing in the art of identifying, cultivating and soliciting gifts from institutions and individu-
als.

It is in this environment that Dollars for Scholars operates in communities around the U.S. In
essence, our chapters, completely run by volunteers, must “compete” with professional develop-
ment staffs and methods in their communities. Can it be done? Absolutely and with great success!
The methods employed by professionals are the same that can be used by volunteers, and some-
times with even greater effectiveness.

Scholarship America has been repeatedly rated as a top education charity by such highly-esteemed
publications as the Wall Street Journal’s Smart Money. Largely through the volunteer efforts of
thousands of Dollars for Scholars volunteers around the country, Scholarship America has distrib-
uted more than $1 billion to nearly one million students making it the nation’s largest private sector
scholarship and educational support organization in the U.S.

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Dollars for Scholars chapters awarded almost $29 million in 2004 to nearly 35,000 students. Dol-
lars for Scholars has become an important charity for many communities, directly impacting the
lives of students by helping them reach their goals of a higher education.

Your efforts as a volunteer are extremely important to the youth of today and tomorrow. Thank
you!

Nancy Frick, CFRE


Indiana Dollars for Scholars
Executive Director

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Dollars for Scholars Fundraising Guidebook Section Two: Fundraising 101 - The Basics

Section Two: Fundraising 101 - The Basics


The Elements of Fundraising: The Donor, the Solicitor, the Cause.

The Donor

W ho in your community could be a potential donor to your Dollars for Scholars chapter?
Is it the philanthropist who just gave a million dollars to the symphony? Or is it a retired
teacher who drives a 1990 Honda Civic? It could be either one! The best prospect may not be the
person who drives a fancy car and lives in a big house. It could be your next door neighbor.

Identifying Your Circle of Friends

A good way to begin thinking about who your potential donors are is to imagine a large circle with
many concentric circles within it. The circle represents your universe of potential donors. Put your
board in the innermost and smallest circle because they represent the group of individuals most
knowledgeable and most intimately familiar with your chapter. (see illustration)

Board

Working outward from the middle, begin to fill in the names of groups of people who are your
constituents, putting those most familiar with your Dollars for Scholars chapter closest to the inner
circle and working outward to the outer edge. (see illustration below)

Board

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W ho are your potential donors? Some of the groups below might be filled into your
concentric circles:

· Past Board Members · Service Organizations


· Past Volunteers · Retired Teachers and Administrators
· Donors · College Faculty
· Past Donors · Community Foundation
· Scholarship Recipients · Retirees
· School Administrators · PTO/PTA
· Parents · Other schools/parents within school district
· Businesses/Corporations · Coaches
· Churches · Bus drivers, cooks, custodians

Your circle may be very large and you may have many inner circles. Once you have filled in your
circle of friends, it will provide a guide for fundraising. Start with those in the center and work
outward when you are prioritizing whom to solicit and when.

Scholarship Recipients Work from the inside out -


Parents those nearest to the
“heart” of the organization
Teachers
out to those most remote

Past Board

Board

Donors and volunteers are


constantly moving in and
out of your universe. How
can you introduce more
people to your chapter and
draw them closer to your
center?

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Dollars for Scholars Fundraising Guidebook Section Two: Fundraising 101 - The Basics

Please use this page to fill in your own circles with potential donor groups.

Board

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Section Two: Fundraising 101 - The Basics Dollars for Scholars Fundraising Guidebook

Defining your community

When deciding who might be the best prospective donors, look first for three things: Linkage,
Ability and Interest*. The best prospects will have all three.

Linkage: Linkage means that the prospect has some type of relationship with your chapter. This
linkage could range from weak to strong. You may have a strong linkage with an individual who
has served on your board, or an individual whose child has received a scholarship from your
chapter. You may have a weak linkage with an individual who you only assume cares about your
chapter because he happens to live in your community.

Linkages can also be developed through relationships with individuals close to your chapter. For
example, the bank president may be identified as a good prospect but may not know a lot about
Dollars for Scholars. However, she is the best friend of someone on your board and respects that
board member’s opinion so a linkage is created.

Once you have determined that an individual might be a good prospect for a contribution, you
need to determine what linkages he has to Dollars for Scholars and what relationships are already
in place to enable a natural contact. For example, do your chapter volunteers have:

w Social relationships with the prospect?


w Business connections with the prospect?
w Parental connections with the prospect?
w Memberships in the same associations as the prospect?
w Serve as volunteers for other organizations with the prospect?
w Know family members or mutual friends of your prospect?

4Rate linkage 1-2-3 (1 weak, 2 average, 3 strong)

Ability: Does the prospect have the financial capacity to make a contribution to your chapter?
There are some easy ways to develop an idea of an individual’s capacity to give a significant gift to
your chapter such as prior contributions, contributions to other causes and the prospect’s profes-
sion or family wealth. You will need to determine what you feel is “significant” for your chapter.

4Rate ability 1-2-3 (1 low, 2 average, 3 strong)

Interest: Has the prospect demonstrated that she is interested in scholarships or educational
causes? Has she:

w Ever served as a volunteer or board member of your chapter?


w Received a scholarship at one time in her life?
w Had any close friends or family members receive a scholarship?
w Made contributions to other scholarship programs or educational causes recently or in the
past?

4Rate interest 1-2-3 (1 low, 2 average, 3 high)

*Source: The Fund Raising School, Indiana University Center on Philanthropy, Indianapolis, IN
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Dollars for Scholars Fundraising Guidebook Section Two: Fundraising 101 - The Basics

Prospects with a total rating of 9 (3 in each category) are your best prospects, 8 your next best and
so on down to 3 which would be your least likely prospect.

ing
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Betty Bucks 2 3 3 8 2
Bob Rockefeller 3 3 3 9 1
Ted Tapped 3 1 3 7 3
Sue Grinch 1 3 1 5 5
Ned Nasty 2 3 1 6 4

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Section Two: Fundraising 101 - The Basics Dollars for Scholars Fundraising Guidebook

How to Identify Prospective Donors in Your Community:

· Review annual reports and/or newsletter listings from other charities in your community.
Many times these are available upon request or online. Especially helpful are donors to
organizations with causes related to Dollars for Scholars such as education foundations,
community foundations, private schools and colleges/universities. Ask members of your
board to collect these reports/listings for you and begin compiling a list of potential donors.
Also check the prospect’s alma mater to determine if he/she has contributed and at what
level.

· Review your own donor records. Who has given at


least three times in the past five years? These indi-
viduals or businesses might be ripe for upgrading
their gift to a new level. They have already demon-
strated an interest and commitment to Dollars for
Scholars.

· Review your alumni lists if you are a school-based-


chapter. You might be amazed to find some very
successful alumni with a capacity to contribute a
generous gift who already have a natural affiliation
with your chapter.

· Hold small group prospect screening sessions. Invite community leaders to attend a one-
hour meeting to help you brainstorm potential donors. Sometimes these busy people are
happy to help with such a short term project. Stress that the information is confidential and
ask not only for names, but the level at which they feel these individuals might contribute.
A side benefit is that these individuals are themselves becoming involved in your mission
and you have a great opportunity to share what you do with them while they, in turn, can
feel good about helping you.

· Identify individuals in your community who serve on other boards. These community
leaders often serve on numerous boards at one time and have the opportunity to know who
the donors are in your community. Ask if you could have a short one-on-one or small
group interview with them to help you identify potential donors to your chapter.

· Invite community leaders to serve on your board. There are always a group of people in
each community who are known as the philanthropic leaders. Besides being donor pros-
pects themselves, they have knowledge of potential donors and access to them. Begin
cultivating some of these leaders to support your Dollars for Scholars chapter by asking
them to do short term tasks for you, asking for their advice, requesting their professional
opinion, etc. As you get to know them better, invite them to consider joining your board.
Some professionals to consider: attorney, banker, community foundation executive, school
board member, newspaper editor, local radio or TV executive, stockbroker, funeral director,
fundraising professional, physician, dentist, clergy, school administrator, financial aid
director from a local college, insurance agent, chamber of commerce officer, etc.

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· Review lists that are available to the public or directories that members of your board
have access to such as: Chamber of Commerce members, country club or other social
organization membership directories, attorney listings, school directories, Who’s Who
directories, fraternity or sorority directories, church directories, fraternal organizations like
Kiwanis, Rotary, etc.

Categories of Donors

Current Donors
Individuals, businesses, corporations or foundations who have given to your chapter in the past
fiscal year or within the past 12 months. For example, anyone who contributed last fiscal year or
this fiscal year is considered to be a current donor. Current donors should be solicited 2 to 3 times
per year or until they contribute. Current donors should be given a second chance to give in a
fiscal year toward the end of the calendar year. Many donors will consider two gifts (or even
more!) in one year if you ask them.

Lapsed Donors
Individuals, businesses, corporations and/or foundations who gave to your chapter within the past
two years but who have not yet given in this fiscal year. This group is a good target group for
solicitations. Many people have good intentions of contributing but lose their solicitation or simply
forget. Some even think they have donated and don’t realize that they have lapsed. You just need
to remind them through a personal visit, phone call or letter!

Long Lapsed Donors


Individuals, businesses, corporations and/or foundations that have contributed to your chapter
more than two years ago but haven’t given since. Although the more time that lapses between
gifts, the harder it is to re-acquire a donor, these donors have at least demonstrated that they are
interested in your chapter and are worth contacting at least once during the year. If after several
tries, you still don’t receive a response, begin to treat them as non-donors.

Non-Donors
Individuals, businesses, corporations and/or foundations that have never contributed to your
chapter. Acquiring new donors is very challenging but you should make it a goal to do at least one
donor acquisition effort each year. Mailings will have a generally poor return—in the range of 1-
3%. Phone calls are better if you can use student and/or volunteer callers. You can also acquire
new donors at special events held during the year—anyone who donates to attend one of your
special events is a prospective donor. Because a large percentage of donors lapse each year, it is
very important to strategically try to bring in new donors.

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What Motivates Prospective Donors to Become Donors?

Finding out what motivates donors to make philanthropic contributions is usually inspiring and it
is fun to ask donors why they support your chapter. But you will never know for sure what moti-
vates them unless you ask. You are likely to hear very inspirational and touching reasons. Based
on research, we can, however, generalize about why most people contribute to an organization.

This is important because the goal of effective fundraising is to determine what motivates an indi-
vidual and then to match his/her motivations and interests to what you, as a chapter, need.

In general, people contribute to an organization because:

· They believe in its mission. This is the #1 reason that people make contributions to an
organization. Your job is to find people who believe in youth, education and scholarships in
particular.

· Someone has asked them! Although this may seem incredibly simple, it is amazingly true!
Unless someone reaches out to ask for a gift, even the best intentioned prospective donor
will probably not give. They may assume that you don’t need their support if you don’t ask.
So ask—the worst that can happen is that they will say “no” and generally even then they
are willing to leave the door open for future consideration.

· They have an association with the cause or organization. In Dollars for Scholars’ case, this
could be an individual who is currently, or was in the past, involved as a chapter volunteer.
It might be an individual who received a scholarship that helped her/him attend college.
This works in your favor even if you weren’t the organization that provided the scholarship.
Past scholarship recipients know very personally of the positive impact of scholarships.
There are also individuals who may have a family member or close friend who is a scholar-
ship recipient.

· To “give back” for a benefit or blessing that they have received. This motivation applies to
past scholarship recipients. Prospects may also feel that contributing back to the commu-
nity through scholarships is an effective way to give back a little of the success and wealth
that they have achieved. Altruism is a strong motivator for many people.

· To belong—to a successful organization, a solution to a cause, a group of people, etc.


Everyone wants to believe that they are contributing to a worthy cause and institution. You
must portray in your fundraising the positive results of what you do, the impact of your
scholarships, etc. and not come across as “needy.” Donors will respond more positively to
your reports of achievements and impacts.

· Guilt. For some individuals, guilt is a motivator. It could be guilt over their inability to
serve as a volunteer (lack of time), guilt over not being able to attend a special event, or guilt
that they are more privileged than others in society.

· Tax deduction. Although surprisingly low on the list of motivations to give, for some donors
it is important to receive a tax benefit, especially if they are considering a large contribution.
You should make it known on all of your solicitations that you are a 501(c)(3) organization
and that contributions to you are tax deductible.

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· Involvement with peers. People like to be associated with others they know and respect.
When someone asks you to make a contribution or to support a cause that you know and
respect, it is difficult to say “no.” Peer pressure can work in your favor. When possible, it is
best to assign people to contact friends and business associates for solicitations.

· Recognition. Most people like to be recognized for their contributions. It is very motivating
to some to have their name appear on a list or on a plaque. Be sure to recognize your
donors in both private and public ways. Of course you should send a thank you letter, but
also include them in your newsletters, on your awards program, in a newspaper ad, etc. It
demonstrates to the community that you have widespread support and serves as a motiva-
tion for others to get their name on the list! However, if a donor asks that his/her
contribution be anonymous, you must respect that request.

· To Ensure the Future. People want to ensure that others will have the same or more oppor-
tunities than they did. This is especially true of education. Many older adults especially
appreciate the value of an education. They want to enable others to have opportunities in
life that higher education provides.

· To Positively Effect the Lives of Others. Every donor wants to feel that his/her contribu-
tion has made a difference in someone else’s life. Dollars for Scholars has a great
opportunity to demonstrate that scholarships really do make a difference through the stories
and successes of scholarship recipients. Be sure to share your stories!

It is important for you to define what motivates your prospective donors and then to appeal to
their interests!

Reasons People Fail to Give

· Solicited infrequently or poorly


· Don’t feel their gift made a difference
· Don’t feel wanted or needed
· Received no direct, personalized appeal by someone who really
cares about the organization
· No one asked them to give again, to consider giving more or to help
find others to give
· Past contribution went unacknowledged

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Who Should Solicit Gifts?

The best approach with the most successful results are solicitations that are carefully planned and
very personal. The best solicitors are individuals who personally know the prospect. These indi-
viduals can gain the attention of the prospect, open the door for an appointment and will have
their phone calls returned.

Potential Solicitors for your Chapter:

· Board Members—Current board members are the most logical solicitors because they know
all of the activities of the chapters and have firsthand experience of the impact of scholar-
ships that have been awarded. They are generally passionate and enthusiastic about the
chapter and the most knowledgeable and genuine.

· Past Board Members—Helping to raise money for the chapter provides a great opportunity
for past board members to stay involved and contribute to the chapter in a meaningful way.
Asking past board members to serve on the Fundraising Committee and make phone calls
or write letters to people that they know is very effective.

· Students—Students are the beneficiaries of your efforts and can help you raise money that
will potentially benefit them. Some chapters use the National Honor Society or other school
groups with students who are required to earn service points. The most common use of
students, and a very effective one, is having them make solicitation calls during a
“phonathon.” You can make a calling effort fun and exciting by serving food, decorating
the room with balloons and awarding prizes for various categories such as “most dollars
raised,” “most calls completed,” etc. Ask local merchants to donate food and prizes such as
movie gift certificates, clothing gift certificates, gift baskets, etc. Holding the phonathon on
a Sunday afternoon or several evenings after school, allows students to participate without
interfering with sports and studying. Don’t forget to thank the students with a t-shirt or
other memento and acknowledge their efforts with a poster or banner to post at the school
announcing their success.

· Parents—Parents can be effective solicitors too. They have a vested interest in your success.
Ask parents to help with mailings or to make phone calls.

· Faculty and administrators—Teachers want to see students succeed and they appreciate
the value of scholarships. They can participate by running a faculty campaign (some school
districts allow Dollars for Scholars donations by payroll deduction), by allowing Hat Days
or Dress Down Days or helping with fundraising activities such as booths at school events.

· Community leaders—Invite community leaders who want to help to serve on your


Fundraising Committee. They could be involved with just one specific event if their time is
limited, or can be more active as full committee members helping with planning and solici-
tations.

· Retirees—Many retired persons are still young in age and at heart. You can involve them
in supporting the chapter through fundraising in many ways—phonathons, processing
mailings, making contacts with businesses/corporations, using their personal connections,
etc.

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How Are Gifts Solicited?

Ladder of Effectiveness

The more personal the fundraising effort, the larger the gift and the greater the success. There are
always exceptions to the rule—like the individual who sends a $5,000 contribution online!—but in
general the list below remains relevant.

T he “Ladder of Effectiveness” - Least and Most Effective Methods of Fundraising


Face - to - Face
p
i
v
e

Personal Phone Call


t
c
e
f
f
E

Personal Letter
t
s
o
M

Volunteer Phonathon (by students, parents, board members)

D i r e c t M a i l (mass mailing: “Dear Friend”)


Telemarketing (professional firm)

Special Events
Internet

There are two basic types of solicitations—personal and impersonal. The dividing line between the
two is sometimes blurred, but we’ll use the following:

Impersonal Methods of Solicitation

· Internet—Having your own website with an option to make an


online contribution or sending e-mail solicitations and newsletters to
donors and/or prospects.

· Special Events—Holding a fundraising event such as a golf tourna-


ment, auction, dinner dance or basketball toss at half time. Special
events are effective at raising community awareness and engaging volunteers but are not
generally the best method of raising significant dollars when the costs of time and event
expenses are considered.

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· Telemarketing—Telephone solicitations conducted by a professional organization. These


companies must be registered fundraising organizations and abide by federal and state
regulations regarding phone solicitations. They are required to identify themselves as paid
telemarketers working on behalf of a nonprofit organization. The best telemarketing firms
work on a fee basis and not on percentages of solicitations.

Personal Methods of Solicitation

· Volunteer Phonathon—Telephone solicitations conducted by student and/or adult volun-


teers. Solicitations conducted by volunteers for nonprofit organizations are exempt from the
Do-Not-Call list call restrictions. It is important to identify yourself as a volunteer as quickly
as possible during a Phonathon to diffuse any concerns that the call is
being conducted by professional telemarketers.

· Personal Letter—Letters written from one individual to another on


behalf of a nonprofit organization. The most effective letters are written
between individuals with personal relationships. These letters should
use an individual’s familiar name (“Betsy” vs. “Elizabeth”) and are
hand-signed by the writer. Adding a personal handwritten note is also
effective. Even if the writer and recipient do not personally know each
other, the tone of the letter should be personal and warm.

· Personal Phone Call—Phone calls between a volunteer solicitor and a potential donor. As
with the personal letter, the most effective calls will be between individuals with personal
relationships.

· Face-to-Face—Meetings between individuals to solicit support for a nonprofit organization.


It is recommended to have two solicitors calling on an individual or couple to ask for a gift
to support a cause. This is the recommended means of solicitation for the most generous
contributions. Face-to-face solicitation is most effective when the prospect has been culti-
vated and/or involved with the organization over a period of time, knows individuals
involved with the organization, understands the cause and has personally experienced the
value and impact that her gift will have on the community.

The rule of thumb is that the more personal the solicitation, the more successful and more gener-
ous the gift.

A different strategy should be used for various categories of donors and prospects—i.e. the same
approach is not effective for all donors. Donors want to feel that you know who they are, that you
recognize their past support and that they are important to you. With a direct mail campaign for
example, you should differentiate the text of the letter for each audience:

n Appeal for acquiring a new donor—highlight the benefits the gift will provide to the donor
and to the community and demonstrate that Dollars for Scholars is a solution to a commu-
nity need/problem

n Appeal for a donor who gave their first gift last year—recognize that they are a new donor
and demonstrate appreciation for their support, acknowledge successes, reporting on how
their gift positively impacted scholarships awarded last year.

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n Appeal for a donor who has contributed for 3 or more years—recognize their long-term
commitment and generosity, demonstrate your successes thanks to their support, invite
them to upgrade their contribution to a new level

n Appeal for a major gift—more personalized and best done in person

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Section Two: Fundraising 101 - The Basics Dollars for Scholars Fundraising Guidebook

Types of Gifts

* Cash

* Credit Card
There may be an option for your chapter to process credit card contribu-
tions at a reasonable fee through a local bank. Many local banks offer
reduced rates to nonprofit organizations and you may be able to arrange
temporary credit card processing for a special event such as an auction or
phonathon. Scholarship America provides credit card processing services
to Dollars for Scholars chapters as well. Call 800-248-8080 to inquire about
procedures and to obtain a credit card contribution form. A processing fee
of 3% will be charged and a check mailed to your chapter.

Another option for credit card processing is to register your chapter with
www.networkforgood.org. After registration, you can link your website directly to the
“Donate Now” button on their website. Network for good charges a percentage service fee
(around 3%) for processing gifts and will deposit the gift directly into your account.

* Securities
Donors may wish to transfer gifts of stock to your chapter, especially if they are highly-
appreciated and a tax liability to the donor. You can make arrangements for the transfer
with a local stock broker or bank. It is a good idea to have a broker relationship already in
place so that the donor’s stock gift can be graciously received and quickly processed when
such an opportunity arises. Sometimes brokers will waive their fees for a charitable contri-
bution. Chapters should have a policy to sell the securities upon receipt so that the chapter
is not liable for potential loss of value due to stock market fluctuations.

* Property
There are Dollars for Scholars chapters who have received a farm, home and other property
as a gift in a bequest. Your chapter is advised to contact your regional office and/or Schol-
arship America should you receive such a gift. The vast majority of property gifts are fine
and can greatly benefit your chapter. However, your board may choose to decline a gift
based on an inspection of the property. For example, you would not want to accept
property that has been contaminated by chemicals and would require extensive and expen-
sive clean-up.

* In-Kind Gifts
These are gifts of services or property such as printing that a business or individual may
wish to contribute to your chapter. The chapter is not obligated to place a value on the
contribution for the donor, but must simply state the nature and description of the service or
property in the acknowledgement letter.

* Estate/Planned Gifts
Contributions designated for the chapter in the estate plans of the donor. See Planned
Giving Section.

2-14
Dollars for Scholars Fundraising Guidebook Section Two: Fundraising 101 - The Basics

Types of Fundraising

There are three kinds of fundraising. Many organizations do all three at one time.

Type of Fundraising Raises $$ For Source of Income

Annual Giving Current Programs Current Income


Capital/Endowment Campaigns Buildings & Endowments Assets
Planned Giving Endowments Estate

Annual Giving Programs

Annual fundraising campaigns run on an annual basis and have an annual goal to meet. The goal
is developed based on the program expenses and operations budgeted by the organization. For
most Dollars for Scholars chapters, expenses include scholarships or other educational programs
sponsored by the chapter such as teacher grants and student incentive and recognition programs,
as well as seed money for special events, awards programs, postage, printing and other fundraising
expenses.

Renewing donors
The first goal of an annual giving program is to renew donors from the previous year. Because it is
expensive and difficult to acquire new donors, chapters should work very hard to retain the donors
they have. Some organizations lose as many as one third of their donor base each year. Over time,
many of your donors will develop other priorities and become interested in other causes, may feel
that their contributions are more valued elsewhere, might have financial setbacks that cause them
to reduce or stop their contributions, or will simply lose interest in your chapter. Therefore it is
imperative to keep in close touch with your donors and to make them feel that you both know
them and value their support.

Upgrading donors
Are you continuing to ask your donors for the same gift each year? A $10 gift in 1970 is not nearly
so meaningful in 2005. Donors understand that you have increased expenses and that you want to
expand your impact, so ask them to increase their support as well. It is human nature to respond
to what is asked—if you ask me for $25, I will probably give you $25 even though I could and
probably would have given much more. Ask donors to consider upgrading their last gift and
provide them with several suggestions of gift amounts. For example, for a donor who has given
$25 for the past several solicitations, ask him to consider increasing to $35 or $50 this time. If you
are writing a letter, put all three amounts ($25, $35, $50) in the body of your letter. If you are
calling on the phone, ask for an increased gift and mention the amount.

Acquiring Donors
Because your chapter will lose donors over time, you should plan for a solicitation effort each year
to acquire new donors. Donor acquisition is typically very expensive because it has a low rate of
return, especially when it is done by mail. Maximize your return by making your approach to
prospective donors as personal as possible. It is very easy to throw a letter away from an organiza-

2-15
Section Two: Fundraising 101 - The Basics Dollars for Scholars Fundraising Guidebook

tion you don’t know or care about. It is less easy to tell someone that you know and respect “no”
when they ask you to consider supporting Dollars for Scholars.

Solicitation methods for annual contributions most often include a combination of mailings, phon-
ing efforts, special events and personal solicitations.

2-16
Dollars for Scholars Fundraising Guidebook Section Three: Direct Mail

Section Three: Direct Mail

T he most important thing to remember about direct mail—


sending letters to current, lapsed or prospective donors—
is to put mailings on your calendar and then do it! You will
get a response from a mail solicitation if you just get the
letters out the door. Sometimes sending letters is very labor
intensive, so recruit volunteers to help you.

Each direct mail solicitation should include:

n Personalized letter from one individual to another with a specific suggested gift amount(s)
in the body of the letter “Dear Steve” vs. “Dear Sir” and “Would you consider a gift of $25, $50
or even $100 this year?” (see samples)
n Personal hand-signed signature—blue ink is best
n Personalized note to donors/prospects from whom you’re requesting a larger contribution:
“Thanks for considering a gift this year Mary!” or “I hope you’ll join me in making a contribution
this year John! Scholarships are so important to our students.”
n Optional - Hand-addressed envelope—this may be totally impractical if you are sending a
large number of letters, but if you can recruit volunteers to hand-address letters, research
has shown that you will receive a better response. A handwritten envelope will stand out
in the stack of mail and helps ensure that your letter gets opened—the first hurdle of direct
mail!

The response from current and recently lapsed donors will be far higher than it is for longer lapsed
or non-donors. A good response from a non-donor mailing is considered to be in the 3-5% range,
many times it is 1-2%. Current donor response should be in the range of 75-90%, recently lapsed in
the 50-70% range.

It is a good idea to track your mailings to determine whether or not they have been effective. Cal-
culate how many letters you send out in each mailing, and then how many respond in each
category, the average gift amount, etc. If you are not getting a good response, then evaluate how
you can improve your letter or mailing. Including a brochure, list of donors, a copy of an article
about your chapter in the newspaper, list of scholarship recipients, etc. in your mailing may help
boost your response, as long as the supplemental material supports the theme or topic of your
letter.

To whom should you send a solicitation letter?

Almost everyone in your database should receive a fundraising letter with the exception of indi-
viduals that you have identified for more personal solicitation efforts. Not everyone however will
respond to your letter. Some people will intend to respond but never do so. Some will toss your
letter in the wastebasket without even opening it. You will receive the peak response in the 3
weeks following the mailing of your letter.

The more regularly you contact people, the more likely they are to give. So if you are just starting
out mailing letters, you should continue with mailing letters and newsletters, anticipating that your
response will increase over time. There is a fundraising axiom that says you should mail letters to a
group of donors or prospects until you aren’t making more money than you spent to produce them.
Mailing letters these days is costly, especially if you are not going to bulk mail them. So do keep an

3-1
Section Three: Direct Mail Dollars for Scholars Fundraising Guidebook

eye on your percentage response. You should be coming out on the winning end after you calcu-
late your expenses. If you are not, try to evaluate what could be wrong—is it your audience or
your letter package? If it is the audience, consider reducing the quantity or eliminating that group
from future mailings. If you think it is your letters, change them to be
more readable, more attractive and/or more compelling.

Elements of a direct mail package

p Carrier envelope—usually a #10 envelope, although you may in-


crease your response by using an unusual size or shape. You may
also boost response by printing an urgent message on the outside of
the envelope (as long as it is sincere) or by using a different color
envelope than you usually do.

p Response envelope—usually #9—preprinted with your chapter name and the


mailing address of your fundraising chair or treasurer—whoever will be pro-
cessing gifts and acknowledgements. This size envelope fits neatly inside a #10 envelope. It
is best to select an envelope that you don’t have to fold to fit in your carrier envelope. This
can be a plain one-color envelope or you may wish to print a “flap” envelope that allows
you to collect the donor information directly on the large envelope flap. A flap envelope
will eliminate the need to print response slips and can also be used inside your newsletter

p Response card/slip—it is very important to include a response device! It can be a card


printed on cardstock or simply a slip of paper. Consider printing 3-up on an 8 ½ x 11 page.
This size fits nicely into your carrier envelope and also in the #9 return envelope.

p Insert—brochure, list of scholarship recipients, recent newspaper article about the chapter,
list of donors to date—an insert is optional but can strengthen your letter as long as it com-
pliments your message and doesn’t distract from it.

p Live stamp vs. a meter postage—there are bulk stamps if you are sending your letters bulk to
save money, but use a stamp. It looks more personal and less business-like.

Why do people respond to a direct mail appeal1 ?

n Because you ask them


n Because they have money available to give away
n Because they are in the habit of sending money by mail
n Because they support organizations like Dollars for Scholars
n Because their gifts will make a difference
n Because they believe their gift will accomplish something right now
n Because you recognize them for their gifts
n Because you enable them to do something about a critical problem
n Because you give them the opportunity to belong
n Because you help them preserve their world view by validating cherished values and beliefs
n Because you allow them to relieve their guilt about an ethical, political or personal trans-
gression (real or imagined)
n Because you give them tax benefits
n Because they feel it is their duty
n Because they believe it’s a blessing to do so

1
Source Twenty-Three Reasons People Respond to Your Fundraising Appeals by Mal Warwick. Warwick, Mal, How to Write
3-2 Successful Fundraising Letters. Berkeley, CA: Berkeley Press, 1994.
Dollars for Scholars Fundraising Guidebook Section Three: Direct Mail

Direct Mail Letter Writing Tips:

r Include an “ask” for a specific amount(s). You are much more likely to get the gift that you
are hoping for if you ask for it. An appeal for a general “gift” with no specific dollar
amount is weak and doesn’t give your prospect any idea of what you need or hope he’ll
consider. Be specific and tell your prospect what it is that you want from him.

r Thank current or lapsed donors for their last gift—“Thank you for your last gift of $50. Your
support helped us award 35 scholarships last year!” Your donors want to think that you know
them so when you acknowledge their past support, it is impressive. It also reminds the
donor of what he gave last time and can serve as leverage for getting the donor to increase
the gift this time.

r Keep paragraphs short—no more than 5 lines/paragraph and some of them even shorter.
Vary the length of paragraphs to create visual appeal. Short one or two sentence para-
graphs with strong statements are very powerful and draw the reader into your letter. It is
also important not to have your letter be too text heavy. If it looks hard to read, it is less
likely to be read at all and you have lost your audience before you have a chance to begin.

r Make the letters as personal as possible—use preferred


names—“Dear Libby” vs. “Dear Elizabeth.” As mentioned
above, you want your readers to feel that this is a letter
from someone who knows them. It is a strong tip-off that
you don’t know them when their letter is addressed to
“Dear Robert” as opposed to “Dear Bob” if Bob is the name
by which they are commonly known. It is difficult to guess
about the familiar name of individuals that you really don’t
know, so it is probably more appropriate to go by the
information that you have in those cases. But if you can
find out the familiar name, it really strengthens the impact
of your letter.

r Stick to one signature on the letter. Again—the most personal letters are those from one
person to another. When you add multiples of two or more signers, it weakens the person-
alization of your appeal.

r Write like you speak—make the tone conversational. The best letters are warm, sincere and
personable in tone. You don’t have to use fancy language to talk with your readers—in fact
you shouldn’t! After you have written a draft of your letter, read it out loud. If it sounds
stilted and formal, then rewrite it using more conversational language.

r Tell stories. Appeal to the heart of the donor. Put a “face” on your fundraising. Donors
love to hear about the students that their gift will touch, so include real life examples (only
use first names) of scholarship recipients telling how your scholarship impacted their lives.
Try success stories of past recipients—a “where are they now” approach. You might even
consider drafting a letter to be “signed” by a past recipient. The recipient doesn’t actually
have to write the letter, but you could ask her if you could tell her story and use her signa-
ture.

3-3
Section Three: Direct Mail Dollars for Scholars Fundraising Guidebook

r Have a sense of urgency—give your prospect a reason to take action NOW. Otherwise, it
may go toward the back of the bill basket and potentially be forgotten. Including a deadline
to work toward or a goal to meet adds a sense of urgency to your letter and will increase
your response.

r Keep it simple—you don’t have to tell everything about your chapter in one letter. Focus on
one theme or message and repeat the message in the letter several times. For example, your
chapter may, in addition to awarding scholarships, also provide grants to teachers or schol-
arships for elementary students to attend science camp. You don’t have to tell the entire
story of your chapter in one letter. Decide which program to focus your letter on this time
and then write about that program. If you feel it is important for your prospects to know
more about you, include a simple brochure with your letter or just briefly mention your
other programs in your letter.

r Write the letter as if it were a personal letter between the writer and the recipient. The use
of “you” and “I” makes it more personal. After you have drafted your letter, go back and
count the number of times you used personal pronouns. If you don’t have a large number
(10+), you probably aren’t being personal enough.

There are many ways to construct a good fundraising letter, but the structure below may be helpful
to follow when you sit down to write. You can also share successful letters with other chapters in
your area. They aren’t writing to the same audience that you are, so it is perfectly acceptable to
adapt a letter for your community and chapter. Keep copies of good letters that you receive in the
mail from other organizations. You may get a few good ideas regarding structure or phrasing used
in other letters.

Structure of Good Fundraising Letters2

1. The Hook (Get the reader’s attention.)

2. The Ask (Ask for the gift early in the text of the letter.)

3. Restate the Problem, Opportunity or Challenges (Include


facts, statistics or stories to convince the reader to be con-
cerned about the problem of access to postsecondary
education, financial aid, etc.)

4. Introduce the Solution or Remedy (Scholarships!)

5. Juxtapose the Problem and Solution with Dollars for Scholars (Tell how Dollars for
Scholars effectively addresses the problem in your community.)

6. Have Tie-Down Requests Throughout. (Repeat the Ask several times.)

7. Stress the Urgency for Action. (If there is no urgency, your letter may be disregarded or
put aside to be mailed later and potentially forgotten.)

2
Source: Making the Mail Work (Better) for You, Eleanor T. Cicerchi, CFRE. Weisman, Carol. Secrets of Successful
3-4 Fundraising—The Best from the Non-Profit Pros. St. Louis, MO: F.E. Robbins & Sons Press, 2000.
Dollars for Scholars Fundraising Guidebook Section Three: Direct Mail

8. Spell out the Consequences for Inaction. (Students won’t have opportunities, low
number of scholarships awarded, etc.)

9. Repeat the Financial Need.

10. The P.S. (Give an additional reason to send a contribution and create a sense of urgency
to give NOW.)

When should you send direct mail letters?

Statistics show that certain times of the year are better for mailing solicitation letters than others,
but your mailing schedule should reflect your own chapter’s schedule and be determined by when
you need most to raise money.

If possible, you should mail at least two fundraising appeals a year, three is even better. Don’t
worry that you are over-mailing. If you look at your own seasonal mail, you will note that you
receive multiple requests from charities you support each year. You don’t give to them all but you
do give. Your first letter may arrive at a bad time but your second letter may arrive at the perfect
time. You have no way of knowing the circumstances in your donors’ lives, so give them several
opportunities to support you.

If a donor responds to your first mailing, you may want to consider removing him from the second
mailing, or if she responds to the second mailing, consider removing her from the third. However,
research shows that at least 15% of your donors will respond to an appeal for a second gift in the
same year, so don’t be afraid to ask again. Just remember to acknowledge and thank the donor for
his first gift and give him a reason to consider contributing again.

It is suggested that you mail:

l In the early fall—late August or September


l Year end—November or by the first week of December
l In the early spring—February or March

If you are conducting a phonathon, you’ll want to keep the phonathon dates in mind and not do a
mailing at that same time of year to the same group of people.

3-5
Section Three: Direct Mail Dollars for Scholars Fundraising Guidebook

Le tter
ple
Sam

Date

Dear Bob,

If you could send a deserving student to college, would you?

Of course you would!

And you can help do just that by sending a gift of $25 or more to Centerville High School
Dollars for Scholars. Centerville High School Dollars for Scholars’ mission is to provide financial
assistance through scholarships to as many Centerville graduating seniors as possible.

Last year only 64% of Centerville students went on to postsecondary school after gradua-
tion. The #1 reason preventing those who didn’t was lack of financial resources. Tuition costs at
state institutions in Indiana rose a whopping 14% last year—one of the largest increases in the
nation. Achieving a postsecondary degree is becoming out of reach for too many.

Scholarships make a difference for our students and their families. Not only do they
provide financial assistance, they also encourage students and help them understand that the
community believes in them and their potential.

Centerville High School Dollars for Scholars was founded in 1983 by community citizens
just like you who knew that the attainment of a college degree can make the difference in nearly
every aspect of an individual’s life—career, lifetime income, family, and community involvement.

209 students are projected to graduate from Centerville High School this year. Which ones
will not have the advantage of a postsecondary education? All are deserving of our encourage-
ment and support.

With your help, we can expand the number of scholarships we’ll award this year from 50 to
75. Please don’t delay in sending your tax-deductible contribution to Dollars for Scholars!

Thank you for your consideration and continued interest in education in Centerville,

Sincerely,
Brad Jones, President

P.S. A gift of $25, $35 or even $50 will help Dollars for Scholars award more scholarships to
more Centerville High School students this year! We’d like to include your name on our list of 2005
donors, so please send your gift today!

3-6
Dollars for Scholars Fundraising Guidebook Section Three: Direct Mail

Le tter
ple
Sam

Date

Dear Sue,

Chances are, you grew up believing that education is important.

I know that I did.

And Centerville High School Dollars for Scholars believes that education is more important
now than ever before.

Statistics show that students with a postsecondary education have a better lifestyle, earn
more lifetime income and contribute more to their communities as good citizens.

They have more opportunities too. They aren’t trapped by their lack of education.

Dollars for Scholars helps Centerville graduating seniors each year by awarding scholar-
ships. Our scholarships provide financial assistance for college or technical school and also convey
a message that the community cares about its students.

By supporting Centerville High School Dollars for Scholars, you can help make a difference
for students and families in our community. A gift of $25 or more will help us increase the scholar-
ships we can award this year.

There is nothing more exciting than the future for our youth.

There is nothing more rewarding than helping them get there.

Please send your gift of $25, $35, $50 or more to Dollars for Scholars today.

Let our students know that you believe in them.

With high hopes for the future,

Brenda Cain, President


Centerville High School Dollars for Scholars

P.S. Help more students in Centerville reach their dreams of an education beyond high school.
Your tax deductible contribution to Dollars for Scholars today will bring a brighter tomorrow for our
kids!

3-7
Section Three: Direct Mail Dollars for Scholars Fundraising Guidebook

Sample Response Slip

Include a response card or slip and a return envelope with your fundraising letters! Make it easy for your
prospect to respond.

• Include a return address on your donation slip even though you are sending a return enve-
lope—sometimes envelopes become lost.
• Ask for information that you need including an e-mail address.
• Only include a credit card option if you have made arrangements with your bank, Scholar-
ship America or another entity to take credit card gifts.
• Include instructions for writing checks—i.e. how to make the check payable.

Yes! I want to support Centerville High School students!

q Here is my tax deductible gift of $_______ to support scholarships for Centerville students.
q Check enclosed. (make payable to Centerville High School Dollars for Scholars)
q Charge my credit card. Card #_____________________________________________
Expiration Date_______________________________________
Signature __________________________________________

Name _____________________________________________________________________

Address ___________________________________________________________________

_________________________________________________________________________

Phone________________________ E-mail_______________________________________

Thank you for your support. Please consider remembering Dollars for Scholars in your will.

Centerville High School Dollars for Scholars · P.O. Box 671 · Centerville, IN 47555

3-8
Dollars for Scholars Fundraising Guidebook Section Three: Direct Mail

Sample Response Slip

Thank you for your support!

q Board Circle $1,000 Name _________________________________


q Benefactor $ 500 Address _______________________________
q Contributor $ 250 _____________________________________
q Family $ 100 Phone _________________________________
q Friend Up to $99 E-mail _________________________________

Payment Method:

q Check (please make payable to Centerville High School Dollars for Scholars)
q Credit Card Credit Card #________________________________________
Expiration Date_______________________________________
Signature___________________________________________
q Pledge Pledge to be paid by ___________________
q Matching Gift My gift will be matched by my employer. (form enclosed)

Thank you for your support!

q I’d like information about including Dollars for Scholars in my will.

Centerville High School Dollars for Scholars · P.O. Box 617 · Centerville, IN 47555

3-9
Section Three: Direct Mail Dollars for Scholars Fundraising Guidebook

Flap Envelope Sample

on
P ortiwhen
ap ee p)
side Fl would selope fla
u
In at yo he env
(Wh open t
you

Expanding access to higher education for Centerville students


Special Recognition is given to contributors at the following levels:
$100+ Diploma Level
$250+ Scholars Level
$500+ Mortarboard Level
$1000+ Leadership Circle

This is the actual opening into the envelope


Centerville High School Dollars for Scholars Annual Contribution
Gift Information
___Enclosed is my tax-deductible gift of $______.
___Check enclosed. (Please make payable to Centerville High School Dollars for Scholars.)
___Charge my credit card. (VISA or MasterCard.) Bo
Name on card_____________________________________________ (Ac ttom
Card Number___________________________ Exp. Date__________ the tually Port
back prin ion
Signature_________________________________________________ of th ted o
e en n
___I wish to make a pledge of $________ to be paid by ____________. (fiscal year ends 6/30) velo
pe)
___Please charge $____ to my credit card __monthly __quarterly.
___I prefer to pay my pledge by check. Please send a reminder ___monthly ___quarterly.
___I have enclosed a corporate matching gift form from my/my spouse’s employer.
Donor Information
Your Name_____________________________________________________________________________
Address________________________________________________________________________________
Street City State Zipcode
Phone(_____)__________________________ E-mail___________________________________________
Thank you for supporting Centerville High School Dollars for Scholars!

Important! Be sure to print your return address on the front of your flap envelope.

3-10
Dollars for Scholars Fundraising Guidebook Section Four: Volunteer/Student Phonathon

Section Three: Volunteer/Student Phonathon

Organizing a Volunteer/Student Phonathon

C alling your donors and prospects is a very efficient method of


raising funds for your chapter. Phonathons were rated as the
most highly effective method of raising money by Dollars for Schol-
ars chapters responding to the survey. Some chapters reported
raising more than $20,000 per phonathon!

It takes time to organize a phonathon but the efforts are worth it.
Consider appointing a group of volunteers just to implement the
phonathon. It is wise to start planning several months in advance. If
you’ve never held a phonathon, you will probably be amazed by the
positive response. Yes—there are people who don’t like being called, but you
won’t know that until you try. The percentages of people who will ask to be taken off of your
calling list are actually very small. Most people are responsive to volunteer callers and are espe-
cially receptive to causes that impact their own communities.

What You’ll Need:

Phone List
w Residential phone list—this list should contain phone numbers for each resident in your
school district. This may be available from your local phone company and/or chamber of
commerce.

w Alumni list—you may want to consider calling high school alumni who graduated at least
5+ years ago. Many of these people will not live in the community but may want to give
back to the high school from which they graduated. Calling classes that have upcoming
class reunions may be especially effective.

Good Timing—Timing is important to the success of your phonathon. Pick a time of year that best
fits your community. Many chapters choose to plan their phonathon between sports seasons
because it is less busy in the community. Try to avoid having your fundraiser at the same time as
other big community fundraisers, and also avoid right before or after the holiday season. Good
times to call are when many people are at home—in the evenings Monday-Thursday and on Sun-
day afternoons and evenings.

Location—It is ideal when you can use the high school library/media center because it is conve-
nient and because the school name shows up on Caller ID, adding legitimacy to your effort.
Additional phone lines and phones may have to be brought in. Other possible locations are a real
estate office, bank, local business or corporate office that would be available on a weekend or
during the evenings. If you live in a community with a college or university, check to see if they
have a phone bank for their own student calling efforts. If so, they may be willing to let you use
the facilities when they aren’t being used by the college.

4-1
Section Four: Volunteer/Student Phonathon Dollars for Scholars Fundraising Guidebook

Volunteers—You will need both students and adults


· Callers—Many chapters use National Honor Society students or service clubs. Calling
generally qualifies for service points or volunteer hours. Some chapters require students to
call to be eligible for scholarships. Calling may also be done by
adult volunteers such as board members, parents, alumni from
the high school or community volunteers.
· Administrative Volunteers—Tasks for these volunteers include
addressing envelopes, mailing pre-call letters, training and super-
vising student callers, collecting pledge cards throughout the
calling evening so you are able to mail the reminder within the next
24-48 hrs, and providing snacks and incentive prizes.

Fact sheet of information—A fact sheet should be prepared for callers


regarding the local chapter and the high school—number of students,
number of scholarships awarded by the chapter, how scholarship recipi-
ents are selected, various scholarships available through the chapter, etc. This provides an easy
reference for your callers to talk about in their conversations or to refer to if they are asked a spe-
cific question.

Calling sheets or cards—The sheet/card provides information on each individual/family/business


to be contacted and should include:
n name/address/phone
n past giving history including most recent gift and date
n total cumulative contributions
n familiar first name(s) if they are known
n amount of contribution the solicitor should suggest—it is important to predetermine
this for the callers as they will not know what is appropriate. You can review the
calling sheets in advance and just write in the “ask” amount at the top of the sheets.
n space for the caller to record call results and comments
n any notes from previous phonathons

Food/snacks—Very important for student callers especially! Depending on the timing of your
phonathon and school schedules, sometimes it is appropriate to provide dinner before the training
and calling begins.
- Soft drinks - Cups/napkins/paper plates
- Ice - Candy/chips/pretzels/cookies, etc
- Pizza/salad/breadsticks

Prizes—Gift certificates ranging from $10-$25 are very appropriate prizes. Tailor them for your
callers. For students, gift certificates from places such as The Gap, Best Buy, Blockbuster, J Crew,
Target, movie passes, and pizza are good incentives. For adult callers you may want to try gift
certificates to local restaurants, Starbucks, Hobby Lobby, Einstein Bros. Bagels, Target, lawn and
garden shops, bookstores, etc. If you can get these donated, that is great, but they are also legiti-
mate expenses of a phonathon.

Award prizes for each calling session in the following categories:


-most calls completed (this means the caller has spoken with the individual and
completed the call, even if it was a “no”)
-most pledges received (regardless of dollar amount)
-most dollars raised

4-2
Dollars for Scholars Fundraising Guidebook Section Four: Volunteer/Student Phonathon

If you can, consider t-shirts with your chapter name for all of your callers as a thank you! There
may be a t-shirt vendor who would be willing to provide these for you.

Goal chart—Use poster board and make a thermometer or something that “grows” that you can
fill in with marker as you reach increments up to your dollar goal. Your callers can visibly see (and
be inspired by!) progress during the calling.

Balloons—Use Mylar balloons (they will last through several calling sessions) to designate where
the callers should sit. This provides a festive atmosphere and helps avoid callers escaping into
unauthorized areas or retiring to small offices where you can’t monitor them.

Pledge forms—The caller will fill the form out immediately after the pledge has been received and
should note the results of the call including their own name or initials and date of the call, amount
pledged (if any), any corrections to address information, any notable comments made by the pros-
pect/donor, the familiar name of the prospect/donor if they learned this, etc. This information
should then be entered into the chapter’s database.

#10 envelopes & #9 envelopes and stamps—The #10 envelope should be hand-addressed and
mailed with the completed pledge card and #9 envelope so that the donor can conveniently fulfill
his pledge. If finances allow, you will get an even better return if you place a stamp on the #9
return envelope.

Notepaper—Ask your callers to please take time to write a short note of appreciation to send with
the pledge card. This will increase your percentage return although you should anticipate at least
85% of your pledges being fulfilled. Make sure that the notes are personal and refer to something
in the phone conversation.

Training Information—Prepare a folder of information for each caller that


includes a list of board members, number of scholarships awarded in
chapter history and last year, number of students who have received
scholarships, application deadline, fundraising events held, brief
chapter history and:
Script
How to Handle Common Objections
Fact Sheet—number of scholarships awarded, etc.
Time Zone Map—copy from phone book (if calling alumni
out of state)

Music—Use a CD player to play music in the background

Noisemakers—For callers to blow, clank, etc. when they receive a pledge—yes this is corny, but it
works and inspires the other callers.

“In” boxes labeled Pledges, Considerings, No’s, Not Reached, and Bad Phone Number—to pro-
vide an organized way for your callers to turn in their calling sheets. You can use box lids or
trays—they don’t have to be fancy.

4-3
Section Four: Volunteer/Student Phonathon Dollars for Scholars Fundraising Guidebook

Publicity for Phonathon

Generating local publicity before your phonathon may boost your response. There are several
different ways you can notify the community that you’ll be calling them for their support:

-Newspaper article/ad before the phonathon—ask a local merchant to sponsor an ad

-Posters placed in schools and local stores and businesses in the community

-Pre-call letter or postcard (see example). The letter can include a return envelope so a
pledge can be mailed to the chapter. If they mail it in before the Phonathon, they can be
crossed off the calling list.

-Ad in student newspaper—more parents than students read it—or PTA announcement

4-4
Dollars for Scholars Fundraising Guidebook Section Four: Volunteer/Student Phonathon

Training

Practice—Having the callers practice what they are going to say will be helpful in reducing any
anxiety about making the calls. Have students/callers pair up and go over the script.

Hint: The call should sound conversational and not fake. Do not read the script word for word.
Have the callers jot notes in the margins or re-write a sentence so it sounds natural to them.

Phone Etiquette—Remind the callers of phonathon etiquette: always ask the caller if he or she has
a moment to take the call. If it is not a good time for the call, ask for a better time to call back.
Voices will sound more pleasant if callers smile when speaking, and they should always wait for
the donor to hang up first. If the caller is a student, they should address the prospect as Mr., Mrs.,
Dr., etc. as a matter of respect.

How to Complete the Pledge Card—Review the calling sheet and pledge card with the callers.
The caller can record notes on the pledge sheet such as CB for “callback” and NA for “not
available/no answer”. After the pledge is recorded, instruct them to ask the prospect/donor if
the address and phone information is still current.

If the donor is uncertain if he or she can contribute this year, mark CON for “considering”
and send a pledge/contribution card without a specified gift amount. They should be
thanked in the accompanying note for considering a contribution.

If the donor is willing to donate but does not know how much, mark it UNSPE for “un-
specified.” A pledge card will still be sent but without a specific gift amount.

If the prospect says “no,” mark it REF for “refused.” Ask the callers to write the reason for
the refusal if one is indicated by the prospect.

If the donor makes a pledge but does not want you to mail the pledge card, mark the “do not
send pledge card” option. (For example, they may say they’ll save you the postage or they
have an envelope and will send it.)

The caller should write a brief personal thank you in the space provided at the bottom of the
pledge card or on a separate piece of notepaper such as “Thank you for your gift,” “Your
gift makes a difference,” or “We appreciate your support”, etc… and sign their name
(Sarah ’07 or Bob Nelson ’60, for example).

4-5
Section Four: Volunteer/Student Phonathon Dollars for Scholars Fundraising Guidebook

Training Information

· Prepare a folder of information for each caller. Spend 15 minutes at the beginning of the
calling training the callers as a large group.

· Explain what the chapter does (even though you think they already know) and ask them to
share stories they know about people who have received a scholarship. Let them discuss
the value of scholarships.

· Give them information on the chapter such as the number of scholarships that have been
awarded in the chapter’s history, the number awarded last year, the total dollars awarded,
etc.

· Explain the fundraising goal for the phonathon and any prizes that you’ll be awarding.

· Explain the process for completing pledge forms and recording information on call sheets.

· Review the script

· Discuss what name to use—students should address adults as Mr., Mrs., Dr., etc.

· Discuss how to handle objections and prepare the callers that they may potentially call
someone who isn’t happy about being called, thinks that they are exempt from calls because
of the Do-Not-Call-list, etc. They should not take this personally but follow the instructions
on the How to Handle Objections Sheet.

· Review a sample calling sheet and how to use it.

· Instruct callers not to ask for a gift less than the previous gift. For example, if your goal is
to upgrade a $50 donor to $75 and the donor declines the opportunity to contribute $75, ask
for $50 vs. asking for $37.50 which is half of the original ask, but is less than last year’s gift!
Default to the “Last Gift” or “Half of the First Ask Amount” whichever is greater.

· Explain how to use the phones—i.e. do you need to dial “9” to get an outside line, which
lines to use and how to make long distance calls. (You may want to provide long distance
calling cards although it is far less expensive if you can just pay the facility for long distance
calls made during your calling sessions.)

4-6
Dollars for Scholars Fundraising Guidebook Section Four: Volunteer/Student Phonathon

Dollars for Scholars Phonathon


How to Handle Objections

I t would be unusual if there were not some angry or poten-


tially rude responses to your solicitation calls. There won’t
be many, but a few are to be expected during a phonathon. It’s
hard not to take it personally, but don’t!

n Listen. Allow the prospect to say whatever she wishes to


say without interruption.

n Acknowledge the objection. Restate what she has told you so that she knows you have
heard her concerns.

n Determine the concerns and what you can do to address them. If don’t know what to do,
ask one of the chapter board members at your phonathon to help. You may have to say
that you will have a board member return their call within 24 hours.

n Educate if you can—correct erroneous concerns or misperceptions if you are knowl-


edgable, but always be courteous.

n Don’t argue.

n Respond back with complete information. Don’t be defensive.

n Thank him for sharing his concerns. Many times all it takes is letting the prospect know
that his concerns have been heard to resolve the issue.

n After concern/issue is resolved, follow up with a note (and ask that a phone call from a
board member be made, if appropriate).

Note regarding the Do-Not-Call Lists. Volunteers calling for nonprofit organizations are exempt
from the Do-Not-Call List. If someone objects or doesn’t understand this, explain that you
are volunteering your time to raise money for scholarships for the high school and that you
hope he might be willing to take the call.

4-7
Section Four: Volunteer/Student Phonathon Dollars for Scholars Fundraising Guidebook

Sample Phonathon Script for Non Donors


Hello, may I please speak to _________________?

Hello ________. My name is ____________. I’m a student at Centerville High School. I’m volun-
teering to help the Centerville High School Dollars for Scholars Chapter contact Centerville alumni
tonight. I’m hoping you might have just a few minutes to speak with me this evening about our
scholarship program. (wait for confirmation that they have time)

Great!

We’re having a great year at Centerville High School! (list accomplishments, facts, significant events
below)

Such as:
· We’re undefeated in football so far this year. Next week we play North Central.
· We had 5 National Merit finalists this year.
· The chess team won the state championship.
· More than 500 students will graduate this spring and many will depend on financial aid in
order to go to college.

As you may already know, 75% of all Centerville high school students have post-secondary educa-
tion plans while the cost has increased 500% in the past 25 years. Gifts to Centerville Dollars for
Scholars are unique because it’s our own community supporting local students in their efforts to
pay for college. The money raised directly benefits Centerville High School students. In fact, last
year we were able to award scholarships to _____ students, so…

I’m hoping that as a community member you will honor the upcoming graduates, and help make
their continuing education more affordable by making a donation of ($50*) to Dollars for Scholars
tonight. Can we count on your support at this level?

*If a prospect has never given, you’ll have to base your first ask on your best guess of what they can do. It
is fun to tie the ask amount to something significant—the number of students who received scholarships
last year, the number of students you hope to award scholarships to this year, the high school’s age, the
score of a rival football game, etc.

(WAIT FOR RESPONSE!!!!)

If no. . .

I understand. Would a smaller gift of $** (last gift or 1/2 of first ask) be a more comfortable
amount?

4-8
Dollars for Scholars Fundraising Guidebook Section Four: Volunteer/Student Phonathon

If yes . . .

That’s great! Thank you so much!

I will send you a pledge form and return envelope tomorrow. (May I please confirm your ad-
dress?)

Thank you again!

Caller Should Immediately:

n Fill out the pledge form including the donor’s name, and pledged amount (if no firm pledge
amount was indicated, leave that space empty).
n Make any needed corrections to the address and add any new information.
n Write a short personal note that will be mailed to the donor with the pledge form.
n Record any personal information or comments on the calling sheet.
n Record the call results on the calling sheet (pledged amount, will consider, decline) along
with the date and your name.

4-9
Section Four: Volunteer/Student Phonathon Dollars for Scholars Fundraising Guidebook

Sample Phonathon Script for Previous Donors


Hello, may I please speak to _________________?

Hello ________. My name is ____________. I’m a student at Centerville High School. I’m volun-
teering to help the Centerville High School Dollars for Scholars Chapter contact Centerville alumni
tonight. I’m hoping you might have just a few minutes to speak with me this evening about our
scholarship program. (wait for confirmation that they have time)

Great!

First I want to thank you very much for your previous support of Centerville High School Dollars
for Scholars. Our success is because of donors like you who really care about education and stu-
dents in our community.

We’re having a great year at Centerville High School! (list accomplishments, facts, significant events
below)

· We’re undefeated in football so far this year. Next week we play North Central.
· We had 5 National Merit finalists this year.
· The chess team won the state championship.
· More than 500 students will graduate this spring and many will depend on financial aid in
order to go to college.

As you may already know, 75% of all Centerville High School students have post-secondary educa-
tion plans while the cost has increased 500% in the past 25 years. Gifts to Centerville Dollars for
Scholars are unique because it’s alumni and the community supporting local students in their
efforts to pay for college. The money raised directly benefits Centerville High School students. In
fact, last year we were able to award scholarships to _____ students, so…

I’m calling tonight to see if you’d consider a gift to the Centerville Dollars for Scholars Chapter this
year. Your last gift was $50 if you’d like to match that, or since the high school is celebrating its
88th year, we are also asking if you could consider a gift of $88 this year. (The ask amount is based on
past giving. You always want to try to “upgrade” a previous donor if possible. You can use fun associa-
tions to get donors to consider a gift amount that equals something meaningful to the community—the
number of students who received scholarships last year, the number you hope to award this year or in the
future, the high school’s age, the score of a rival football game, etc.)

(WAIT FOR RESPONSE!!!!)

If no. . .

I understand. Would a smaller gift of $** (last gift or 1/2 of first ask—whichever is greater) be a
more comfortable amount?

4-10
Dollars for Scholars Fundraising Guidebook Section Four: Volunteer/Student Phonathon

If yes . . .

That’s great! Thank you so much!

I will send you a pledge form and return envelope tomorrow. (May I please confirm your address.)

Thank you again!

Caller Should Immediately:

n Fill out the pledge form including the donor’s name and pledged amount (if no firm pledge
amount was indicated, leave that space empty).
n Make any needed corrections to the address and add any new information.
n Write a short personal note that will be mailed to the donor with the pledge form.
n Record any personal information or comments on the calling sheet.
n Record the call results on the calling sheet (pledged amount, considering, decline) along
with the date and your name.

4-11
Section Four: Volunteer/Student Phonathon Dollars for Scholars Fundraising Guidebook

Sample Phonathon Script for Parent Non Donors


Hello, may I please speak to _________________?

Hello ________. My name is ____________. I’m a student at Centerville High School. I’m volun-
teering to help the Centerville High School Dollars for Scholars Chapter contact Centerville
community parents tonight. I’m hoping you might have just a few minutes to speak with me this
evening about our scholarship program. (wait for confirmation that they have time)

Great!

As a parent, I’m sure you are already aware of the impact a Dollars for Scholars scholarship has on
students. The Centerville High School Dollars for Scholars Chapter was able to award ____ schol-
arships last year with the support of parents and community donors like you.

As you may already know, 75% of all Centerville High School students have post-secondary educa-
tion plans while the cost has increased 500% in the past 25 years. Gifts to Centerville Dollars for
Scholars are unique because it’s our local community supporting local students in their efforts to
pay for college. The money raised goes directly to Centerville High School students. In fact, last
year we were able to award scholarships to _____ students, so…

We’re calling all Centerville High School parents during our phonathon to ask for their support this
year with a tax-deductible contribution to provide scholarships to Centerville High School students.
Could you consider a gift of $88 this year to celebrate the high school’s 88th year? (You can use a
number of fun associations to get donors to consider a specific “stretch” gift by having the suggested gift
equal something meaningful to the community—the number of students who received scholarships last
year, the number you hope to award this year or in the future, the high school’s age, the score of a rival
football game, etc.)

(WAIT FOR RESPONSE!!!!)

If no. . .
I understand. Not everyone can consider that amount. Would a smaller gift of $** (last gift of 1/2
of first ask—whichever is greater) be a more comfortable amount?

If yes . . .

That’s great! Thank you so much!

I will send you a pledge form and return envelope tomorrow. (May I please confirm your ad-
dress?)

Thank you again!

4-12
Dollars for Scholars Fundraising Guidebook Section Four: Volunteer/Student Phonathon

Caller Should Immediately:

n Fill out the pledge form including the donor’s name, and pledged amount (if no firm pledge
amount was indicated, leave that space empty).
n Make any needed corrections to the address and add any new information.
n Write a short personal note that will be mailed to the donor with the pledge form.
n Record any personal information or comments on the calling sheet.
n Record the call results on the calling sheet (pledged and amount, considering, decline) along
with the date and your name.

4-13
Section Four: Volunteer/Student Phonathon Dollars for Scholars Fundraising Guidebook

Sample Pre-Call Letter (send only to those who have not donated to a phonathon effort
in the past. It is not necessary to send a letter to those who have previously donated to a
phoning effort.)

Date

Dear Bob,

Did you know the cost of a post-secondary education has increased by 500% in the past 25 years?

There is good news though. As a Centerville community member (OR Centerville High School
graduate) you can make a difference. The Centerville High School Dollars for Scholars Chapter
will be conducting a Phonathon on (date). Our goal is to raise $(dollar amount).

· Your donation is a unique opportunity to support students in your very own com-
munity. The money raised in the 2005 Phonathon will directly benefit Centerville
High School graduating seniors.

· Your gift to Centerville High School Dollars for Scholars provides you an opportu-
nity to recognize deserving Centerville High School seniors for their successful
high school career. You can help send them off to postsecondary education with
the extra confidence of knowing their community supports them.

Student callers will be contacting you (date) during the Dollars for Scholars Phonathon Week. If
you wish to send a donation prior to (date) please mail it in the enclosed envelope and your name
will be removed from the calling list.

Thank you for supporting the students in our community.

Sincerely,

Centerville High School Dollars for Scholars President

4-14
Dollars for Scholars Fundraising Guidebook Section Four: Volunteer/Student Phonathon

Sample Pre-Call Postcard

An alternative to the pre-call letter is a pre-call postcard which will be less expensive to produce and mail.

We’ll Soon Be
Calling On You . . .
...to support scholarships for (name of high
school) students!

In an effort to raise scholarship funds for our students, the (name of chapter) Dollars
for Scholars will be holding a student phonathon. Please respond generously with a
tax-deductible contribution when you are called the week of (date)!

Last year the (name of chapter) Dollars for Scholars awarded ** scholarships to **
students. Our goal is to dramatically increase those numbers for this year.

Thank you for your support and consideration!

4-15
Section Four: Volunteer/Student Phonathon Dollars for Scholars Fundraising Guidebook

Tips for Successful Phone Solicitations


· Make your own commitment first—pledge or gift

· Make a personal connection if you are calling a business for example and know someone who
works there, have met or dealt with in the past, used their product, etc., mention it at the
beginning of the call. When phoning an individual, don’t hesitate to mention anything that you
know both you and the prospect share in common.

· Smile while you are speaking. It sounds silly but your voice will sound more pleasant to the
potential donor.

· Let the prospect hang up first. This is important. When you finish thanking the donor for
his/her time and pledge, wait until you’ve heard the donor disconnect. If you hang up first,
you may cause the donor to question your sincerity.

· Psyche up—review in your mind why you volunteer for Dollars for Scholars
· You are calling on behalf of a wonderful cause asking others to invest as you have
· Many students will benefit from your efforts
· A “no” is not personal

· Set the stage


· Eliminate distractions (phone calls, drop-ins, TV etc.)
· Review the script and contact information, especially
benefits (such as name on a plaque, etc.) for that level,
before calling

· Get over the hump—the first call is the hardest! Just Do


It!

· Call with someone else if possible—either from the same location or by sharing phone lines.
Calling with others adds encouragement, motivation, group sharing and a little competition to
your efforts.

· Post an inspiration—photos of student recipients, a student thank you note, etc.—where you
can see it.

· Most people can give at least a small gift—even a small gift makes a difference. Be apprecia-
tive of every contribution.

· Be persistent—don’t give up at the first “no.” Reduce the amount of your first ask and remind
them that everyone’s participation is important.

4-16
Dollars for Scholars Fundraising Guidebook Section Four: Volunteer/Student Phonathon

Sample Phonathon Calling Information Form and Pledge Card

Name_______________________________________________ Giving History (include years and past support/year)


Address_____________________________________
Phone______________________________________________

Pledge Information
Amount Pledged $_________ Date of Pledge _________________________________
____ Do not send a pledge card, the donor will mail it. Name of Caller _________________________________
____ Is considering a gift of $ _________ Notes:
____ Said would give but amount unknown
____ Refused reason given:

-------------------------------------------------------------------------- cut and mail -------------------------------------------------------------------------

Donor Name _________________________________


Address _____________________________________
_____________________________________________
Phone ________________ Email _________________
Chapter Address
Your name as you wish it to appear in Donor Listings
___________________________________________
Personal thank you note, Amount Pledged $ _____ (caller writes in)
signed by the caller Amount Paid $ _____
Thank you for your donation to (chapter name)!

Please make checks payable to __________________


Your gift is tax deductible. We would appreciate
payment by (fill in date).

Chapter Donation Levels (Optional)


$1,000+ Platinum Level
$500+ Gold Level
$250+ Silver Level
$100+ Bronze Level
$88 Anniversary Level

4-17
Section Four: Volunteer/Student Phonathon Dollars for Scholars Fundraising Guidebook

What should you do with the people you don’t reach during the phonathon?

You should send a letter to all of those that you tried to call during the phonathon but could never
reach. You can use the same letter (of course following the principles of good direct mail letters!)
for the entire group and merge the data and letters together immediately following your
phonathon. You have created a community “buzz” so take advantage of it! Don’t forget to add a
personal signature and note such as “Sorry we couldn’t reach you during our phonathon—hope you’ll
consider a gift to Dollars for Scholars this year.”

Phonathon Calculation Formula*

· # of Callers x 10 Calls/Hour x # of Phonathon Hours/Night = # of Calls/Night


(Most callers can make 10 calls/night. You’ll need approximately double the number of
calling sheets than the number you actually hope to reach to accommodate busy signals,
answering machines, voice mails and disconnected numbers. Therefore, if you think that
you will be able to reach 300 prospects during your evening phonathon, you’ll need to have
at least 600 prospects and prepare calling sheets for them.)

· # of Calls/Night x .50 = # of Calls Completed/Night


(Callers will only be able to reach and actually speak with half of the number of prospects
they call.)

· # of Calls Completed/Night x .50 = # of Pledges/Night


(Half of the callers they reach will actually pledge—this is conservative. The number of
pledges may be quite a bit higher in your community.)

· # of Pledges/Night x Anticipated Average Pledge = $ Raised/Night


(If you are calling to renew previous donors or to upgrade existing donors, you will have a
much higher average pledge than if you are calling individuals who have never contributed
to your chapter.)

· $ Raised/Night x # of Phonathon Nights = $ Goal

Example:

10 Callers x 10 Calls/Hour x 3 Hours = 300 Calls/Night


300 Calls Attempted x .50 = 150 Prospects Actually Reached
150 Calls x .50 = 75 Prospects Who Pledge
75 x $25 Average Pledge = $1875/Night
$1875/Night x 3 Nights = $5625 Goal

*This is a conservative formula but a good one to use when setting realistic goals for a phonathon.
An average gift for a group of nondonors may be in the range of $20-$35. An average gift for a
group of existing or lapsed donors may be in the range of $35-$100 or more.

4-18
Dollars for Scholars Fundraising Guidebook Section Five: Special Events

Section Five: Special Events

W e found in the survey that special events were the most common
form of Dollars for Scholars Chapter fundraising, although
probably not the most effective. However, special events accomplish
much more than raising money. They also raise awareness in the
community and provide a wonderful and fun way to involve
volunteers. Suggestions for special events are included in the
Appendix of this Guidebook.

Benefits of Special Events

♦ Cultivates donors/broadens donor base


♦ Builds community
♦ Raises money
♦ Provides leadership training and development opportunities
♦ Creates opportunities for public exposure/name identification for the chapter
♦ Positioning—puts organization “on the map” as key provider of scholarships in the
community
♦ Trains board members for fundraising
♦ Recruits volunteers and future board members
♦ Expands networking
♦ Brings your mission to your audience

Special Event Ideas

Many specific special event ideas are included in the Appendix of this Guidebook. Most special
events fall into one of the categories below:

§ Meal events—usually lunches or dinners


§ Dances
§ Sales—special events that sell an item such as books, bakes sales, rummage sales, etc.
§ Auctions—silent or live. Auctions are often combined with meal events. Auctions are
based on securing donated goods and services.
§ Walk/Run events—these have become very popular in recent years and have the advantage
of not only raising money but creating public awareness
§ Phonathons—adult or student volunteer phonathons
§ Fashion Shows
§ Sporting Events/Outings—golf is the most popular but also tennis, basketball events, etc.
§ Raffles—often combined with another event

5-1
Section Five: Special Events Dollars for Scholars Fundraising Guidebook

Before Considering a Special Event—Define your goals. If you know what you want to ac-
complish, you’ll feel much more successful in the end. Answer the following questions:

l What is the event expected to do for the chapter—raise funds or public awareness?

l What type of event is best? Does it fit with the mission and our community?

l Do we have adequate volunteers?

l Do we have the financial resources?

l What is the competition doing? Is this event too similar to other events or will the timing of
this event compete with other events in the community?

5-2
Dollars for Scholars Fundraising Guidebook Section Five: Special Events

Are You Ready for a Special Event—Determining Your Readiness3

When considering a special event, review these questions with your board and/or fundraising
committee to determine your readiness.

s Is the board committed to meeting the dollar goal of the event? Even though another
committee may be planning and implementing your event, the board must be support-
ive.

s Is the event important enough to attract the attention of those you are trying to reach?

s Can you identify a small group of committed volunteers willing to undertake the
project? (It doesn’t have to be the board!)

s Do you have a database from which to invite participation?

s Can you justify the time, effort and cost involved?

s Do you have an idea that is interesting and different to get and hold the attention of the
audience?

s Will the event create a desire in people to respond in some way—join, volunteer, finan-
cially contribute?

s Can publicity be generated through newspapers, radio and TV?

s Do you know enough about special events in your community to have a sense of what is
appealing?

s Do you have an event to commemorate—anniversary, historic occasion, new board?

s Are similar events already being done in the community?

s Is the event appropriate for your chapter?

3
Adapted from Fundraising Basics, A Complete Guide, Ciconte & Jacob. Gaithersburg, Maryland: Aspen Publishers, 1997 5-3
Section Five: Special Events Dollars for Scholars Fundraising Guidebook

Organizing a Special Events Committee

Steering Committee
Sets direction, selects theme and date,
develops list of tasks and timeline, develops budget

Advertising Program Operations


Sells advertising for Develops program Contracts site,
programs, places ads content, prints menus, AV

Tickets Promotion Publicity


Sells & distributes Promotes event Press, media

Decorations Entertainment Finance


Around a theme Hires, arrangements Collects funds

Clean Up Printing Solicitation


Trash Posters, tickets, etc. Corporate/business

Auction Event
Plans & solicits Corresponding event, i.e. Walk

Honorary Host/Hostesses
Honorary Committee
Brings credibility to event and
guarantees their attendance

5-4
Dollars for Scholars Fundraising Guidebook Section Five: Special Events

Planning a Special Event

Select a Location
a Low or no cost
a Location is a draw all by itself
a A place unique and unusual
a Is electricity needed and is it available?
a Are phone lines needed (for credit card processing) and are they available?
a Are there enough bathrooms?
a Is the location easily accessible?
a Is there sufficient parking available?

Develop a Budget
w Start at the end (how much you’d like to make) and work backward (to the budget)
w Start with the ideal and cut if needed
w Attach a cost to every item even if it is to be donated
w Share the budget with subcommittees & monitor
w Have an invoice approval procedure and provide a form to be okayed by chairs

Acquire Sponsors
n Get as much as possible donated as in-kind contributions
n Create sponsorship levels with benefits (a table at the event, signage, etc.)
n Provide meaningful recognition
n Provide many levels of donation opportunities ($250, $500, $1,000, etc.)
n Use the board for contacts
n Treat your sponsors like gold—host a sponsor preview event, provide special
seating, etc.

Food and Drink Considerations


· What kind of food is appropriate and how will it affect ticket prices?
· Will there be an open bar or cash bar?
· Can you accommodate attendees with special diets?

Recognize your Volunteers and Donors—A special event provides a perfect way to thank and
acknowledge your volunteers and donors. Give them a special nametag or sticker on their
nametag, provide special seating, tie a balloon to their chair, etc. Thank them from the podium.

5-5
Section Five: Special Events Dollars for Scholars Fundraising Guidebook

Marketing the Special Event

Media
- Radio PSAs 2-3 weeks before the event, 15, 30, 45, and 60 seconds with Who, What,
Where, When and Why + Organizational Fact Sheet
- Develop TV and radio media kits, ask to be included on talk shows
- Deliver media kits in person—include a “perk” to gain their attention (cookies,
t-shirts, etc.)
- Appearances on talk shows

Print
- Press releases
- Take photos during preparation to use in newspaper
- Ask corporations to include an announcement and information in their corporate
newsletter and e-mails. Ask if they would include promotional information with
monthly invoices to customers.
- Post flyers, posters
- Banners, billboards
- Save the date postcard
- Invitation
- Business cards with event information (good for volunteers)

Other
- E-mails
- Website
- Train your volunteers
- Attend service club meetings

Don’t Forget . . .
- Know media/print deadlines
- Include Dollars for Scholars name & logo, address, phone, fax, website, and
contact name
- Use your mission statement
- Include programs and services provided to the community by the chapter

5-6
Dollars for Scholars Fundraising Guidebook Section Five: Special Events

Press Releases for the Special Event

p Type the name of the contact person, address, phone, FAX, e-mail and website in the
upper corner.

p Type the release date. Usually use FOR IMMEDIATE RELEASE.

p Center the headline at the top of the page in capital letters.

p Begin the first paragraph with your city and state. Tell who, what, where, when, why
and how.

p Add other basic details in second paragraph.

p Last paragraph is a standard description of the Dollars for Scholars chapter (Dollars for
Scholars is part of a national network of grassroots scholarship foundations that raise money
from communities to support community students. The *** Chapter was founded in 19** and
last year awarded nearly 50 scholarships and $35,000 to Anytown students.)

p Be concise!

p Double space with wide margins.

p If the release is more than one page, type MORE at the bottom of the first page.

p Center END at the end of the release.

p Staple multiple pages.

p Proofread!

p Direct it to your media contact.

p Deliver with an event memento like a t-shirt, cookies, etc.

5-7
Section Five: Special Events Dollars for Scholars Fundraising Guidebook

Sam
ple
Pres
FOR IMMEDIATE RELEASE s Re
leas
Martha Marketing, Centerville High School Dollars for Scholars
e
123 W. Main Street
Centerville, IN 47555
765-555-1212
765-555-1313 (fax)
Marthamarketing@yahoo.com

CENTERVILLE HIGH SCHOOL DOLLARS for SCHOLARS


HOSTS SUCCESSFUL FUNDRAISING EVENT

CENTERVILLE — The board of directors of Centerville Dollars for Scholars has announced the

results of their recent Casino Night fundraising event:

n $15,000 raised through ticket sales and an auction event to support Centerville High School

scholarships.

n Governor Jones served as host and master of ceremonies.

n 300 guests attended including community and business leaders.

n Student speakers and student produced video were highlights of the event.

The Centerville High School Dollars for Scholars chapter hosted another successful Casino Night

on Saturday, May 5 at the Holiday Inn. The event raises scholarship money for local Centerville

students. The chapter had a goal of increasing the size of scholarship awards this year partly

through proceeds from the Casino Night event.

“Scholarships provide critical financial assistance for students in Centerville and throughout

Indiana. I’m proud of the accomplishments of Centerville High School Dollars for Scholars and

impressed by the number of students they assist through scholarships each year. It was an honor

MORE

5-8
Dollars for Scholars Fundraising Guidebook Section Five: Special Events

CENTERVILLE HIGH SCHOOL DOLLARS for SCHOLARS - continued

to meet the Dollars for Scholars volunteers and students of Centerville High School,” Governor

Jones said.

Centerville Dollars for Scholars was founded in 1985 to expand access to postsecondary education

for Centerville High School students. During the past ten years, Centerville High School Dollars for

Scholars achieved the following results:

· Awarded more than $250,000 in scholarships to Centerville High School students.

· Increased the number of scholarships awarded last year from ten to over fifty.

· Provided financial support for Centerville teachers through teacher grants.

· Increased community awareness of the financial needs of students and rising costs of

postsecondary education.

· Hosted its fifth Casino Night.

END

5-9
Section Five: Special Events Dollars for Scholars Fundraising Guidebook

Special Event Timeline Planning

Develop a schedule and timeline for your event! It will make your volunteers feel more comfortable
that your event has been well-planned.

S pecial Event Timeline Planning


10-12 months ....................... Present idea to board for approval

10-12 months ....................... Develop preliminary budget

10-12 months ....................... Recruit Committee Chairs

10-12 months ....................... Invite Honorary Committee

10-12 months ....................... Establish meeting dates

10-12 months ....................... Secure site and date

10-12 months ....................... Begin soliciting sponsors

9-10 months ......................... Secure caterer, decor, AV, etc.

9 months .............................. Establish theme

9 months .............................. Finalize budget

8 months .............................. Arrange entertainment

6-9 months ........................... Identify and invite special guests

4-5 months ........................... Send Save the Date notices

3-4 months ........................... Develop invitation, program, place cards, etc.

2 months .............................. Mail invitations

2-3 weeks ............................. Mail press releases

2 weeks ................................ Get guest list from sponsors

2 weeks ................................ Confirm with volunteers

1 week .................................. Script event

5-10
Dollars for Scholars Fundraising Guidebook Section Five: Special Events

Special Event Rules (and Other No Fun Stuff)

Quid pro quo contribution (event tickets sold in excess of $75)—Subtract actual event cost from
ticket price to determine what is tax-deductible. For example, if you are charging $80 for a ticket to an
event and the cost of the food, drinks and favor equals $40, then $40 of the ticket is tax deductible to the
purchaser. The tax deductible amount must be printed on the invitation/reservation form.

Raffle license—Regulations regarding who can sell and buy tickets, taxes due, reporting proce-
dures, drawing, etc. Check with your secretary of state’s or your local city auditor’s office. Most
states require you to acquire a license for a raffle event.

Acknowledgements to donors $250+/single donation are required by the IRS and should be mailed
as soon after the event as possible to the donor. You must put this phrase in the body of the letter or
in a PS: Please note that no goods or services were provided in consideration of this contribution.

Auction purchases—Tax-deductible only if the price paid is in excess of the value. For example if a
camera is purchased at auction for $350 and the value listed is $300, then only $50 of the purchase is tax-
deductible. If items are listed as “priceless,” because they have no tangible value, then there is no tax deduction.
“Priceless” items include items such as the opportunity to play golf with a celebrity, a chance for a student to
be Principal for a Day, etc.

Insurance—You will need to purchase an insurance rider for the event. Contact a local insurance
company, your regional office or Scholarship America for details.

Permits—You may need a permit to hold your event, especially if you are holding it in an uncon-
ventional location, needing to block off streets, etc. Check with your city administration or police
department.

Security/Medical—Depending on the type of event, you may want to consider hiring security or
checking with the location to see if security is provided. You may also want to consider an ambu-
lance service if you are holding a sporting event where it is possible there might be an injury.

5-11
Section Five: Special Events Dollars for Scholars Fundraising Guidebook

Invitations—What to Include You’re


(including the obvious and often overlooked) Invited!
n Time of the event including a.m. or p.m.
n Location of the event including the full address
n Compelling description of the purpose/goal of the event
or cause it supports
n Name of any special guests or honorees
n Price (note different levels—i.e. individual ticket prices, table prices, etc.)
n RSVP deadline date
n Reservation/response card
n Return envelope for reservation card
n Contact name, phone # and e-mail for questions
n Website address
n Opportunity to contribute even if can’t attend
n Opportunity to volunteer at the event or on the board/committee
n Check writing instructions (payable to)
n IRS tax deductibility information (see Quid Pro Quo information)
n Names of volunteer chairs and committee
n Names of honorary chairs and committee
n Attire expected
n Send out far more invitations than you need people to attend—you won’t get 100%
response!
n Note whether tickets will be mailed in advance or will be available at the door

After the Event: It isn’t over yet . . .

n Send out a press release after the event


n Conduct an event evaluation—as soon as possible after the event while everything is fresh
in the minds of your committee
n Appreciation/thank you party for your volunteers
n Thank you letters to sponsors, celebrities, volunteers
n Acknowledgement letters to your donors, ticket purchasers, etc.
n Thank you ad in local paper
n Make recommendations for next year
n Compile notebooks for next year
n Compile/clean database for this event—add new donors, auction purchasers, everyone
who attended the event to your database, remove addresses for returned invitations, etc.

5-12
Dollars for Scholars Fundraising Guidebook Section Five: Special Events

Top Ten Secrets Of Successful Special Events

j Enthusiastic support of the board and volunteers

k Terrific volunteer leadership

l Careful planning

m Getting everything (or as much as possible) underwritten

n Location, location, location

o Timing, timing, timing

p Assume nothing—details, details!

q Go beyond the ordinary

r Be flexible

s Have fun!

How to Add Some Spark to a Traditional Event

t Add a theme

t Celebrate an historic date or historic figure

t Celebrate an anniversary

t Piggyback additional events—auction, style show, kids event, run/walk

t Bring the mission of your chapter into the event—add student performances, student
produced video, student testimony, past scholarship or program recipient testimony

t Combine with another event or organization in your community

When should you drop an event?

You should consider changing an event from an old one to a new one when revenues and
interest decline.

5-13
Section Five: Special Events Dollars for Scholars Fundraising Guidebook

How to handle community competition

In every community across America, there are multiple (sometimes hundreds!) of fundraising
events occurring each year. Just because there is competition for community support does not
mean that there isn’t room for another successful event. The community will support good events
for good causes.

n Evaluate the competition. Divide the events in your community into time of year—fall,
winter, spring and summer. You could develop a grid something like the one below:

C ommunity Fundraisers by Season

Fall Events Winter Events Spring Events Summer Events


PTO Carnival Holiday Ball Penrod Art Fair Canoe Race
Donkey Basketball Casino Night Celebrity Tennis Arthritis Walk
Homecoming Bowl-a-thon Red Cross Auction
Girls Inc. Luncheon Dogs for Dollars Mini Marathon
Hoosier Heroes Walk for the Cure
Antiques Show Riley Plant Sale
Pancake Breakfast
Volleyball Tourney
Masquerade Ball

You will also need to take into account such ongoing events as basketball tournaments, graduation,
vacations, etc. In the above example, it is apparent that a better time for a new event might be in
the winter or summer months.

n The next step would be to organize an event that is unique to the community or that has an unusual
twist. Search on the web for new ideas or call other Dollars for Scholars chapters, call your
regional office, or contact friends/relatives in other communities and ask what events have
been successful in their areas You may be able to adapt a special event that has already proven
to be successful somewhere else. Review the ideas that are part of this Guidebook and check
the Scholarship America website (www.ScholarshipAmerica.org) for additional projects that
have been implemented by other Dollars for Scholars chapters.

n Invite special events leaders in your community to become involved with your project. These indi-
viduals do not have to be currently involved with your chapter. In every community there are
people who are well-known for planning, organizing and staging special events—they are
volunteer special event whizzes. They know how to do it well and bring along others whom
they have worked with in the past and who may now become involved in Dollars for Scholars.

5-14
Dollars for Scholars Fundraising Guidebook Section Five: Special Events

n Approach a volunteer organization like the Junior League, Tri Kappa, etc.—an organization com-
posed of volunteers who do community volunteer work as their mission. You may have to go
through an application process, but it could be worth your time. These organizations have a
track record of success and can bring the people, knowledge and leadership to your project that
will make a difference. Involvement with such an organization also increases community
awareness—new people become involved in what you do and your project is promoted to their
membership and beyond. You in turn are providing a service/fundraising project that helps
that organization fulfill its mission.

n Approach an already-successful event in the community and ask if you could become involved. It
could be that other organizations would welcome the volunteers and participants that you offer
in exchange for a share of funds raised, or there may be an additional aspect of an existing
fundraiser such as an auction, dinner, etc. that you could organize and run that would en-
hance what they already do. Organizations with a similar or complementary mission will be
more open to your invitation.

5-15
Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

Section Six: Major Gifts

M ajor gifts can be defined by a dollar amount ($5,000-$10,000+ is often used) or by the signifi-
cance of a particular level of gift upon an organization. A Dollars for Scholars chapter that is
new to the community may consider a $1,000 gift “major.” A more established chapter may feel
that gifts of $10,000 or $25,000 qualify as “major.”

In general though, major gifts require a different


strategy, more planning and greater personalizing of
the approach than other gifts. For all organizations a
“major” gift is meaningful and will have a significant
impact.

Although it is not unheard of to receive a very generous gift in response to a mailed fundraising
appeal, it is relatively rare. A major gift requires a major effort. But major gift fundraising is really
the true secret of successful fundraising for any organization. The effort is worth it. Big gifts allow
you to present larger scholarships and have a greater impact upon the students in your commu-
nity. Major gifts also help build credibility within the community and inspire additional donors to
also consider major gifts to your chapter.

Dollars for Scholars chapters are just as worthy (maybe more so!) of major gift support as the
hospital, the museum or the university in your community. Dollars for Scholars has an incredible
track record of success and the cost-per-dollar raised is far lower than any other nonprofit organi-
zation in your community because chapters are volunteer managed and driven, and because
operating expenses are very minimal. Most chapters can boast that $.95 or more of every dollar
contributed to the chapter is used to benefit the students, either through direct scholarships or
through the building of a scholarship endowment fund. That is a fact worth bragging about!

6-1
Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

It helps to understand the Art of Asking4 as it relates to your Dollars for Scholars
chapter:

1. People want to have a positive effect on other lives. (You offer this—Dollars for Scholars
scholarships can change the lives of student recipients.)

2. Giving is a highly personal decision.

3. Individuals don’t give unless they’re asked.

4. Donors don’t make large donations unless they’re asked to consider large donations.

5. People give to opportunities. (focus on the opportunities you provide to students)

6. It’s true that people give to people. (so leverage your personal connections)

7. The actual decision to make a gift is rarely made on the first ask. (It may in actuality take
several visits.)

8. Recruiting prospective donors as volunteers and board members for your chapter is critical
to securing major gifts because volunteers are 75% more likely to give than someone who
has not volunteered.

9. Involve wife and husband, as well as adult children when appropriate, in the cultivation
and solicitation process.

10. The best person to ask for the gift is the one known to be the most respected by the donor.

11. The most important factor in asking is the enthusiasm and passion the solicitor brings to the
activity. This person must believe in the cause and be able to articulate the vision. (Dollars
for Scholars board members are ideal!)

4
Source: Schroder, Mike. Soliciting (Major) Gifts That Make an Impact. Weisman, Carol, Secrets of Successful Fundraising.
6-2 St. Louis, MO: F.E. Robbins and Sons Press, 2000.
Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

The first task is to get your board “over the hump” in terms of building their confidence
and in making them feel that soliciting major gifts is both doable and achievable.
Here are some steps to help you:

n Set a reasonable and modest goal initially. For example, establish that your goal is to per-
sonally solicit 5 individuals in the community for a major gift in the next 12 months.

B
n Invite a development professional or a volunteer who
is known to be successful in raising money in your
community to a Dollars for Scholars meeting to ex- enjamin Franklin was a
plain how major gift fundraising works and to give pioneer in many ways, even
examples of success. fundraising! He determined that the
focus of fundraising should be on
n Identify prospects in your community who have an people and he ingeniously divided
interest in scholarships or education and who have the his potential donors (prospects) into
capacity to consider a major gift. Refer to the concen- three categories. A man ahead of his
tric circle exercise in Section Two of this book. time once again!

n Identify individuals on your board who know these “In the first place, I advice you to
prospects or identify individuals who have access to apply to all those who you know will
them. Build a relationship web. give something; next to those of
whom you are uncertain whether they
n Brainstorm how you might let your prospects know will give anything or not, and show
about Dollars for Scholars. Could you or someone them the list of those who have given;
who knows the prospect invite her/him to coffee or and lastly, do not neglect those who
lunch to hear about the chapter? Could you ask the you are sure will give nothing; for in
prospect to speak at a chapter event or to students some of them you may be mis-
about volunteerism or on a topic about which the taken.”5
prospect has professional expertise? Could you make
an appointment to solicit his/her opinion about some-
thing?

n Do your homework. Try to discover as much as you can about the prospect, his/her inter-
ests, family, career, education, volunteer work and donation history with other
organizations. This will help you determine the level of interest the prospect may have in
scholarships or youth and at what level you might expect a contribution.

n Once your prospect has been identified and cultivated, identify which Dollars for Scholars
volunteers or parents know the prospect best. If no close personal relationship exists among
your inner circle, identify someone that the prospect knows about or would have particular
respect for that you could ask to help you gain access to the prospect.

n Make sure that the volunteer solicitors (teams of two are best) have been well prepared for
the call. Assemble the appropriate materials to be left behind with the prospect. The volun-
teers should decide who will take which role and ultimately who will ask for the gift.

n Call for an appointment.

5
Franklin, Benjamin. The Autobiography of Benjamin Franklin ed. Leonard W. Larabee. Yale University Press, 1964 from
Burke, Penelope. Donor Centered Fundraising. Chicago, IL: Cygnus Applied Research, Inc., 2004. 6-3
Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

n Proceed through the solicitation steps and ask for the gift. Consider allowing a major gift to
be pledged and paid over a 3+ year period.

n If the prospect is reluctant, ask to schedule a follow-up appointment. After the call, deter-
mine together what could have gone better.

6-4
Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

Identifying Prospective Major Gift Donors

Who is a major gift prospect? He could live next door. She might be a prominent philanthropist.
He might be a business owner, a retired teacher or a maintenance worker. The term “major gift
prospect” conjures up people of wealth and influence in the minds of most of us, but that may not
necessarily be the case. Many people who appear to live quite modestly may also have the capabil-
ity of making a major contribution to Dollars for Scholars.

When identifying major gift prospects, look for individuals who have the linkage to Dollars for
Scholars—maybe they attended your chapter’s high school, received a scholarship that enabled
them to go to college, know someone on your board, have a child or relative who received one of
your scholarships; the ability to make a major gift—check lists of donors in annual reports, news-
letters or on the websites of other organizations; and have demonstrated an interest in education
and scholarships—either through financial contributions or service on the boards of such organiza-
tions and institutions.

When preparing a list of major gift prospects who may have linkage, ability and interest, be
sure to include:

n Donors who have contributed consistently or over long periods of time to your chapter.
Even relatively small gifts given every year may indicate a major gift prospect.

n Individuals, foundations or corporations who have contributed major gifts to other youth-
serving or education institutions/organizations in the community—review annual reports
and donors listings.

n Individuals of wealth who received or have family members who received a scholarship.

n Individuals of wealth who have demonstrated an interest in scholarships and/or education


in your community by serving on a board or another volunteer capacity.

n Parents of students.

n Past Dollars for Scholars board members or volunteers.

n Alumni of your chapter’s high school(s).

n Business and professional leaders.

n Local philanthropists.

n Retired business and/or community leaders.

n The family of a recently deceased individual who might want to establish an endowed
memorial scholarship fund.

n Leaders in higher education and educators.

6-5
Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

The Seven Faces of Philanthropy6 , a book written as a result of research among major gift donors,
identified seven types of donors. It may be helpful to study this list to determine which category of
philanthropist best describes your prospective major donor to help you understand his/her motiva-
tions for making a major gift contribution to your chapter.

The Communitarians: Doing Good Makes Sense This category makes up the largest type of
donors. They give because it makes good sense to give. They are typically business owners who
volunteer because it is good for business and develops helpful relationships within the community.
They also want to help their own communities by supporting local charities. (26%)

The Devout: Doing Good is God’s Will They are motivated to support charities for religious
reasons. They believe that it is God’s will and purpose for them to help others. They are usually
members of local churches and give primarily to religious institutions. (21%)

The Investor: Doing Good is Good Business They are affluent individuals who give both be-
cause the charity is a good cause and because there are tax and estate benefits. They may
contribute to a wide range of nonprofits and favor umbrella organizations like community founda-
tions. (15%)

The Socialite: Doing Good is Fun They favor special events as an appealing way to contribute to
the community, socialize with others and have a good time. They often support several organiza-
tions at one time and are part of a social network. They like opportunities to create new
fundraisers and events. Typical charities of interest include arts and education. (11%)

The Altruist: Doing Good Feels Right These donors are often viewed as selfless donors. They
give out of generosity and empathy to urgent causes. Sometimes they will request to be anony-
mous. They believe it is a moral imperative to give as human beings. Charities are most often
social causes. (9%)

The Repayer: Doing Good in Return Repayers have usually been recipients or constituents in
the past. They have usually benefited from the charity or cause in a personal way and contribute
out of feelings or loyalty or obligation. Typical charities are medical and education. (10%)

The Dynast: Doing Good is a Family Tradition These donors have usually inherited wealth and
giving is a family tradition. They are expected to carry on the family traditions and do. Dynasts
may give through both personal wealth and a family foundation. (8%)

6
Source: Prince, Russ Alan and Karen Maru File, The Seven Faces of Philanthropy. San Francisco, CA: Jossey-Bass
6-6 Publishers, 1994.
Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

Prospect Cultivation

Once you have identified a prospect and you are certain that he has the ability and linkage, but
you are not sure of his level of interest, then spending some time cultivating the prospect is a good
investment of time.

The more personal the approach, the better the results you will have. Cultivation activities can be
very simple—the goal is to inform about and involve the prospect in your Dollars for Scholars
chapter. Be strategic and intentional for the best results. Identify your prospect and then develop a
simple plan to cultivate his interest.

Below are some easy ways to cultivate the interest of a prospective major donor:

1. Include your major gift prospects on your newsletter mailing list.

2. Invite him to an awards ceremony, donor recognition event or special event.

3. Ask the prospect to host a special event or meeting.

4. Ask her to serve as a volunteer on your awards committee, other committee or task force.

5. Solicit him for advice concerning his area of professional or volunteer expertise—finance,
legal, publicity, marketing, fundraising, etc.

6. Invite her to be a guest or speaker at an event or board meeting.

7. Invite major gift prospects to participate in a survey about education, scholarships or even
your chapter.

8. Take the prospect to breakfast or lunch and talk to her about your chapter.

9. Make an appointment to visit prospects to talk about scholarships, community need and
how your chapter is meeting that need. Take a student with you.

10. Invite him to serve on your board, your advisory council or as an adviser to your chapter.

11. Ask her to serve as an MC/Host at an Awards Night or special event.

12. Solicit the prospect for a financial contribution.

Each Dollars for Scholars Chapter has a great product to “sell.” Most people have a clear under-
standing of what a scholarship is and what it accomplishes. Having this ready understanding of
your cause and mission is tremendously helpful. Many people have themselves received a scholar-
ship or financial assistance that impacted their own lives.

Supporting a Dollars for Scholars chapter is a wonderful way for donors to support their own
communities, and the facts that your chapter is managed and governed by local volunteers and
that the funds stay on a local level, are also very appealing.

6-7
Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

The best method of cultivation is to develop a simple cultivation plan for each identified prospec-
tive major donor. Starting with a group of 5-10 prospects per chapter is manageable and not too
intimidating to your volunteers when you are first trying major gift fundraising.

Taking the time to cultivate the interest of a prospective donor is time well invested and is usually
not difficult. You may ascertain during your efforts that a prospect is simply not interested in
scholarships or your chapter. If so, then move on to the next prospect. You haven’t done any
damage and have had the opportunity to inform another citizen of the good work that you do.
Identifying prospective donors is like sifting for gold—not everyone will turn out to be a gold
nugget!

6-8
Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

Sample Prospect Assignment Sheet

Prospect Cultivation Assignment

Prospect Name

Prospect Information:
Include contact information here such as home and business addresses, occupation and place of
business, home and business phone numbers and e-mail. Also include donation history, involve-
ment with the chapter and other known information.

Why your assignment is critical:


An important component of fundraising is the cultivation of prospects and the stewardship of
donors. Our Dollars for Scholars chapter needs to develop personal relationships with as many
donors/prospects as possible so that we can determine what their interests are and how we can
match those interests to our needs as an organization. Getting to know a donor or prospect is the
first step and a very rewarding exercise.

Meeting donors/prospects gives you an opportunity to tell them what Dollars for Scholars does
and to learn about their personal lives and what impact education has had on them. If we’re good
listeners, we hear about their interests and find ways to involve them in our work (committees, task
forces, special projects, surveys, focus groups, board, etc.).

Over time a relationship of trust and friendship is formed. That friendship, coupled with involve-
ment in the chapter, will bring the donor/prospect to the center of our organization—right where
we want him/her! It may then be time to approach the prospect for a major contribution to a
special or ongoing project that we have determined may spark his/her interest and passion.

We are blessed to have a very supportive community. Many individuals and businesses have
supported our chapter over a number of years. It’s time to take them to the next level!

You have been assigned one prospect to cultivate.

Here is your first assignment:

By December 30th:

· Make a face-to-face contact with your prospect.


Here are some ideas:
- Ask if you could stop by to drop off a little “thank you” gift from the chapter: an
inexpensive holiday ornament, poinsettia, plant, homemade cookies, etc.
- Ask for a short appointment to get the prospect’s input on what the chapter is
doing, new direction, programs, etc.
- Take the prospect to breakfast, lunch or dinner as a “thank you” from the chapter
- Invite the prospect to attend a play, event, etc.
- Be creative!
6-9
Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

· As soon as you leave the appointment, while details are still fresh in your mind, make notes
of your visit. Record information that you learned about family, interests, interest in educa-
tion and/or scholarships, birthday information—whatever you have discovered.

· Report the completion of your assignment to the Fundraising Chair.

· Begin developing your own next assignment or work with the Fundraising Chair to do so.
Set a deadline date and goal.

· Send your prospect a thank you note following the visit.

When you feel that your prospect might be ready to consider a major or planned gift, someone
from the Fundraising Committee or board will be available to accompany you on the call.

Have fun and good luck!!

6-10
Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

How Much to Ask

It is sometimes uncomfortable to determine how much to ask a prospect to contribute and it is


generally true that volunteers often set their sights too low. Reviewing the prospect’s past giving to
the chapter along with contributions to other organizations may help you. Realizing that there is
really no accurate mathematical formula to measure reasonable gift size, there are several tradi-
tional “rules of thumb” that may be helpful in expanding your chapter’s horizons regarding giving.

Rule of Ten
There is a school of thought that suggests donors are capable of giving a major gift at least ten times
the level of their annual gift. This rule might apply for a large endowment or planned gift. Thus,
an appropriate “ask” for an individual who has been contributing $1,000 annually to your chapter
might be $10,000 (over 3-5 years).

Income Formula for Major Gifts7

Income Level Assets Accumulated Gift Rating

Less than $100,000 Less than $1,000,000 $10,000-$25,000


$100,000-$250,000 $1-2.5 million $50,000-$100,000
$100,000-$500,000 $2.5-5 million $100,000-$250,000
$500,000-$1,000,000 $5-7.5 million $250,000-$500,000
$1,000,000 or less $7.5-10 million $500,000-$1,000,000
$2,000,000 or less $10-20 million $1-2.5 million
$2,500,000 or less $20-25 million $2.5-5 million

What do you need?

Determine your fundraising goal. Then you can build a gift table. Generally 60% of your gift
should come from 10% of your donors, 20% from 20% of your donors and the remaining 20% from
70% of your donors. Use the formula in the sample tables on the following pages.

Remember that capacity doesn’t equal interest. It takes work to determine a prospect’s level of
interest!

7
Source: Dove, Kent, Conducting a Successful Fundraising Program. San Francisco, CA: Jossey-Bass, 2001.
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Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

Sample Gift Table for $100,000 Fundraising Goal

Gift Range # of Gifts $/Range $ to Goal % to Goal

$5,000 2 $10,000 $10,000 10%


$2,500 4 $10,000 $20,000 20%
$1,250 16 $20,000 $40,000 40%
$ 625 32 $20,000 $60,000 60%

10% of Donors 60% of Goal

$ 300 48 $14,400 $74,400 74%


$ 110 60 $ 6,600 $80,000 80%

20% of Donors 20% of Goal

under $110 378 $20,000 $100,000 100%

70% of Donors 20% of Goal

Sample Gift Table for $60,000 Fundraising Goal

Gift Range # of Gifts $/Range $ to Goal % to Goal

$3,000 2 $6,000 $6,000 10%


$1,500 4 $6,000 $12,000 20%
$ 750 12 $9,000 $21,000 35%
$ 500 18 $9,000 $30,000 50%
$ 250 24 $6,000 $36,000 60%

10% of Donors 60% of Goal

$ 100 120 $12,000 $48,000 80%

20% of Donors 20% of Goal

under $100 400 $12,000 $60,000 100%

70% of Donors 20% of Goal

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Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

Sample Gift Table for $50,000 Fundraising Goal

Gift Range # of Gifts $/Range $ to Goal % to Goal

$2,500 2 $5,000 $ 5,000 10%


$1,250 4 $5,000 $10,000 20%
$ 625 12 $7,500 $17,500 35%
$ 425 18 $7,650 $25,150 50%
$ 200 24 $4,800 $30,000 60%

10% of Donors 60% of Goal

$ 100 100 $10,000 $40,000 80%

20% of Donors 20% of Goal

under $100 355 $10,000 $50,000 100%

70% of Donors 20% of Goal

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Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

Solicitation

Once you’ve gained the interest of your prospect through your cultivation efforts and determined
that she is indeed interested in students and education, particularly scholarships, it is time to solicit
her financial support.

Step One: Planning

The best solicitations are those that occur in person, especially if you are asking for a gift that will
be significant to both you and the donor. You should take time to prepare your materials and
thoughts before calling to schedule a visit with a prospect.

With your board or fundraising committee, identify the best 5-10 current, past or prospective
donors for personal contact. These should be individuals/businesses that you have previously
identified as having an interest in your chapter, in education, youth and/or scholarships and that
you have taken some initial steps to cultivate.

Have a realistic goal in mind—either a financial fundraising goal, a specific scholarship goal such
as increasing scholarships by a percentage, or increasing the number of scholarships to be
awarded. Have a specified date(s) in mind for the solicitation to occur, train the volunteers and
plan a celebration to thank and recognize all of the volunteers, even if they were not initially suc-
cessful in obtaining a gift.

Practical Application: Ask your board or fundraising committee to commit to a specific week or day
in which each of them (in pairs) will make a solicitation call on an individual that you have identi-
fied as interested in the activities of your chapter.

This could be:

n an individual or business that has been a past contributor but who you think could
give a more significant contribution

n an individual or business who has never given you a gift but who you think has the
capacity and interest to do so

n a current donor that you would like to ask to consider a larger gift to your chapter
this year

The goal of your solicitation could be to:

n increase current or past annual support

n sponsor a scholarship

n establish an endowed scholarship

n consider leaving your chapter in his/her estate plans

n consider a gift to kick off an endowment campaign

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Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

Step Two: Training

Volunteer solicitors will feel much better about asking others to become involved if they feel men-
tally prepared. You can use the planning form on the next page to prepare yourself or your board
for a face-to-face solicitation. You may also wish to consider inviting a development professional,
your regional staff or a volunteer fundraiser from another organization to conduct a training.

Practical Application: As part of your face-to-face solicitation exercise, invite your team to a short
training/kick-off meeting. Have them complete the Solicitation Preparation Planning Form as part
of your meeting. Ask them to share their answers. You will find that their answers are inspiring
and encouraging for the entire group. It is also an opportunity for each volunteer to verbalize his
or her own commitment to scholarships and the chapter.

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Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

Dollars for Scholars


Solicitation Preparation Planning Form

Name of prospect__________________________ Name of volunteer_________________________

List a few reasons why you volunteer for Dollars for Scholars.

List the most compelling aspects of awarding a scholarship in our community.

List the primary ways our scholarships serve the community.

Summarize one story about a scholarship recipient that you may wish to share with the prospect.

List 3 reasons the prospect might wish to support the chapter.

What size gift do you plan to ask the prospect to consider?

What would that gift help to accomplish for students, the chapter and the community?

How might the prospect be recognized for the gift?

What board members have the closest ties to the individual? Which two should form the solicita-
tion team? Who of the two should make the actual ask?

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Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

Step Three: Assign the Team

Solicit a prospect in teams of two people. It is much easier and more comfortable to carry on a
three-way conversation than a two-way one. The Team should arrange a time to get together to
review the call, ask amount, proposed project for funding and to make assignments as to roles in
the call. It is ideal to have at least one individual on the team who has a personal relationship with
the prospective donor.

When the Team gets together, they should:

n Think through any objections to ask that the prospect might have and then think
through the appropriate response

n Decide who will lead the conversation, including the ask

n Develop some signals to let each other know if one of you is talking too much, get-
ting off subject, etc.

n Review the solicitation

n Review the materials and the benefits/recognition associated with the giving level(s)

n Rehearse the solicitation

Step Four: Schedule the Appointment

You do not need to hide the reason for your appointment. State that you are calling to schedule an
appointment to discuss his potential involvement in helping the students in the community. Tell
him that you have exciting information to share and materials to deliver, and that you are available
to call at his home or office at a mutually convenient time. (Avoid meeting in restaurants or public
places—you need privacy.) For many individuals, home may be best and it will probably be appro-
priate to call on the couple if the prospect is married. Allow an hour for the appointment.

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Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

Step Five: Preparing Materials

Each soliciting team should have some basic materials to leave with the prospect when they visit.
You can prepare a simple folder with the following materials:

w Recent chapter newsletters

w Chapter brochure

w Brief description of the purpose of the solicitation. If you are starting an endowment
fund for example, include information about the fund, the purpose of the fund, how
scholarships will be used, the financial goal that will need to be reached before
scholarships will be awarded, criteria for the future scholarships, etc.

w List of board members with contact information

w Names of the solicitors with contact information

w Copies of newspaper articles about the chapter, student recipients, etc.

w List of scholarship recipients or a copy of the most recent awards program

w Copies of thank you letters from students

w Pledge card and return envelope

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Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

Step Six: The Solicitation

A solicitation call can be divided into parts. One or both of the team members can take responsibil-
ity for a particular segment.

· Opening

-Establish warmth and rapport.


-State purpose of visit (I/we are here to…).
-Describe the financial needs of students and families and the opportunity to impact
the need through scholarships.
-State what is needed to carry out your plan to address this need.

· Involvement

Explore the prospect’s relationship to the need (perhaps she received a scholar-
ship, had a relative who received a scholarship, etc.) or chapter.

Potential good questions:

Do you know about the work of Dollars for Scholars?

What experiences have you had with scholarships?

Are you familiar with the scholarship/education needs of students today?


What do you think are the most important issues about financial assistance
for students and families?

How do you think the community will benefit by providing


scholarships to students?

Summarize your understanding of what the prospect has said, the


important issues regarding financial assistance to students, etc. and then say,
“Is this correct?”

Would you like to hear how Dollars for Scholars plans to meet
the needs of students and families in our community through scholarships?

· Proposal Presentation

Address the prospect by name.

Share the proposal.

Present facts about the project and how it meets need(s), how it will be
used, criteria, etc.

Tell how students will be impacted by the scholarships or a story of a current/past


student or recipient who would benefit from the scholarship.

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Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

· The Close

Restate the prospect’s interests and comments and note how scholarships will benefit
students and the community.

Ask the prospect to consider becoming involved with the mission of Dollars for
Scholars by pledging a generous gift (see sample questions below).

Cite the importance of community support for students and the psychological value
his gift will provide to the community and volunteers.

Re-establish areas of agreement and re-adjust your approach to handle objections.

Find areas of disagreement and convert them to agreement.

Continue your process as long as rapport has been maintained and you have some-
thing new to add.

Get the donor to sign the pledge card! Do not leave the pledge card with the pros-
pect. If she needs more time, needs to consult with a family member and/or
attorney or financial planner, think about it, etc.—schedule a follow-up meeting in a
few weeks.

· If there is a “no” or an objection . . .

Don’t take it personally. A “no” may really mean “not now.” Try to schedule
another appointment to resolve objections. Thank the prospect for the meeting.

The following countering questions may be helpful:

If you can’t give $***, then would you consider $*** (lower amount)?

Are you willing to reconsider?

Can I return next week to talk about some other possibilities?

Under what circumstances might you consider making a gift?

Will anything change your mind about Dollars for Scholars?

Would you consider sharing the names of 3 friends/associates we can ap-


proach for a donation?

Before you make your final decision, may I/we suggest….”

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Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

· After the Close

Ask if there are any questions.

Express appreciation for his/her time and gift.


Give reassurance regarding the project and its benefits.

Don’t overstay your welcome. Keep within the time limits you promised when you
made the appointment.

Step Seven: Follow-Up

Make sure that the volunteers know they should notify the Fundraising Committee of the results of
the call.

Send at least one thank you letter as soon as possible following receipt of the gift. One letter should
be the more official donor acknowledgment that can be used for tax purposes but that also ex-
presses sincere appreciation. Additional informal thank you notes can also be sent by board
members and the fundraising committee as well as the solicitor(s) of the gift.

A follow up thank you call from the president of the Dollars for Scholars board is an additional
nice touch. Every expression of appreciation impresses the donor!

Make the donor a member of your chapter family —add the donor to your database, list of donors,
etc. and be sure to send copies of newsletters, invite her to awards presentations, copy him on student
letters, etc. Stewardship of a donor’s contribution goes well beyond the initial thank you and contin-
ues the relationship built with the donor through cultivation efforts. Donors whose gifts have been
well stewarded are many times more likely to make a repeat gift to Dollars for Scholars.

Good Solicitation Questions8

· “Given your previous support to Dollars for Scholars, I am hoping that you’ll join me in
helping meet our goal. We would be most grateful if you would consider a gift in the range
of $**** payable over * years.”

· “We have described why we think Dollars for Scholars needs and deserves your support.
We have answered your concerns. Can you think of a reason why you shouldn’t honor our
request for a gift in the range of $*****?”

· “We have invested our own personal resources of time and treasure in supporting students
in our community. We have set a goal of reaching our goal by *******. As a business person,
I know you understand the urgency of completing the project on time and of the immediate
benefit to the students in the community and the chapter. Can we count on you today for
your gift of $***** or more?”

· “You are one of the most influential people in our community. Your involvement in Dollars
for Scholars will inspire others to follow your example. We anticipate that many of your
friends and colleagues will want to invest once you have made your gift. Can we count on
you to contribute a gift of $***?”
8
Adapted from Take the Fear Out of Asking for Major Gifts, James A. Donovan. Orlando, FL: Donovan Management, Inc., 1993. 6-21
Section Six: Major Gifts Dollars for Scholars Fundraising Guidebook

A Word of Encouragement

The most effective fundraising is face-to-face and it is also the most rewarding.

* More than 85% of the nearly $241 billion in gifts in the United States in 2003 came from
individual donors vs. corporations and foundations—individual donors are where you
should direct your most intense fundraising efforts.

* The reason so many people have not become major donors is because they haven’t been
asked.

* Your best prospects for major gifts are already supporting Dollars for Scholars or an organi-
zation with a similar mission. They aren’t hard to find.

* Most people don’t give major gifts for tax purposes—they give because they want to help
others and make a difference in the lives of others. A tax deduction is a side benefit but
rarely the primary motivation of the gift.

Tips for Successful Solicitation

· Be a good listener.

· Be yourself.

· Ask for a gift in a specific range and make sure that it is enough.

· Remain positive.

· Do your homework.

· Tailor each presentation to the interests of the prospect.

· Anticipate objections.

· Drop names of the prospect’s peers who have already given.

· Know when to be quiet.

· Leave with a written proposal and material.

· Empathize—use “I feel, I found, I felt.”

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Dollars for Scholars Fundraising Guidebook Section Six: Major Gifts

However, Avoid These . . .

w Leaving a solicitation call without asking for the gift.

w Not asking questions of the prospect. The more you ask, the more you’ll know about the
prospect and his/her motivations and interests.

w Not asking for enough. Let the donor (not you!) decide if the range of gifts is too high. They
will tell you if it is and you can suggest a lower amount.

w Being inflexible. The donor may have different ideas about how he wants his gift used than
you do or how it will be paid. Remember, it is the donor’s gift and his interests should be
respected.

w Talking too much. Ask leading questions, be interested, but know when to be quiet!

w Not listening to the donor. Many times donors will relay important information in their
conversation with you and give you clues about their interests. Focus your attention on the
donor, listen carefully and attentively, and be sincere and genuine.

w Not cultivating the prospect prior to the solicitation. Without knowledge of the prospect’s
history, interests and relationship to the chapter, you are extremely handicapped and the
prospect will not be mentally prepared for your call. If you do acquire a gift, it will be far
smaller than it would have been had you spent some time cultivating the donor.

w Not training your solicitors. Your volunteers need to feel comfortable with the solicitation
process, be armed with appropriate information and material and feel that they are part of
an organized effort. Training can be conducted on an individual basis, but group trainings
are fun and more interactive.

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Dollars for Scholars Fundraising Guidebook Section Seven: Planned Giving

Section Seven: Planned Giving—The Ultimate Gifts

What is a planned gift?

P lanned gifts are gifts generally given from the estate of a donor and require advance planning.
The most common type of planned gift is a bequest gift to charity in a will—more than 90% of
planned gifts given to nonprofits in the United States are given in a will vs. a trust or annuity.

The first recorded planned gift was recorded in 1321 when Sir William de Lillebone gave his lands
at Bransbury, Barton Stacey to the monks. In return, he received payment worth 10 pounds annu-
ally. He also gave a gift to the church for which the monks agreed to say masses for his soul.

Planned gifts are often referred to as the “ultimate gift” because they are usually the largest and
most significant gift that the individual has given. Planned gifts generally require the assistance of
an attorney or estate planner. More complicated planned gifts such as a charitable trust require
professional expertise and will take more time and planning.

Many planned gifts are designated for endowment programs. In the case of Dollars for Scholars,
planned gifts could establish an operating endowment for the chapter or a scholarship endowment
to benefit community students. The donor can specify the criteria for an endowed scholarship
fund with the approval of the Dollars for Scholars board.

A research study conducted recently predicted that more than $41


trillion in wealth will be transferred from one generation to the next
over the next 50 years, with $6-$25 trillion of that wealth given to
charity. Dollars for Scholars chapters should position themselves to
take advantage of this historical opportunity. Planned gifts can have a
powerful impact upon students in your community and help ensure the
future of your Dollars for Scholars chapter.

Your chapter does not have to be an expert in planned giving to benefit from them. There are
many Dollars for Scholars chapters who have already received bequest gifts—some of them quite
significant. They may have done nothing to secure these gifts other than make their presence
known within the community. Think how many more gifts could be realized with a marketing
effort!

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Section Seven: Planned Giving Dollars for Scholars Fundraising Guidebook

Benefits of Planned Giving to Donors

· Donors can give a much larger contribution to an organization than they are able to do in
their lifetime

· Tax benefits to the donor and/or the estate

· Donor can designate how they want the gift to be used, specify criteria, etc.

· Recognition for the donor during his/her lifetime even though the gift will not be received
until donor is deceased

· Establishment of a permanent memorial fund to honor the donor or a designated individual


or family

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Dollars for Scholars Fundraising Guidebook Section Seven: Planned Giving

Who are Potential Dollars for Scholars Planned Gift Donors?

n Donors who have contributed gifts to your chapter for 5 or more years, even if they are
relatively modest gifts

n Donors who have contributed gifts of $100+/year within the past two years

n Donors 50+ years of age

n Current or past board members or volunteers

n Alumni from your community high school(s)

n Current or retired teachers, or school administrators from your community school(s)

n Higher education professionals

n Individuals who have received scholarships or individuals whose family members have
received scholarships

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Section Seven: Planned Giving Dollars for Scholars Fundraising Guidebook

Planned Giving Methods

Remember that most planned gifts are received through a bequest in a donor’s will. However, you
should be aware of some of the more common planned giving opportunities.

Bargain Sale
Donor sells property to a charity at less than the property’s fair market value. For example, a
donor may sell a piece of land that has been valued by an appraiser at $250,000 to a charity for
$100,000. The $150,000 difference between the true value and the sale represents a charitable
contribution.

Bequest
The most common form of planned gift. A bequest is a provision in the last will and testament
where a gift or property is transferred from an estate to a charitable organization.

Charitable Bequest
Donor designates a percentage of her estate (“25% of my estate”), a percentage of the residuary of
her estate after other commitments are fulfilled in the will (“50% of the residuary of my estate”), or
an outright gift (“$100,000”) of a specified amount to a charity in her will. The donor may also
designate how the gift will be used in the bequest. A charitable gift through a will generally quali-
fies for unlimited estate tax charitable deduction.

Charitable Gift Annuity


Donor makes a gift to a charity in return for a contract or agreement from the charity to pay the
donor, or someone designated by the donor, an annual fixed amount for life. This is a very effec-
tive planned gift especially for donors living on a limited fixed income. Most Dollars for Scholars
chapters would not be in a position to administer their own gift annuities program.

Charitable Lead Trust


Donor establishes a trust that pays an annual income to a charity for a designated period of time
after which the assets of the trust pass to individuals designated by the donor—generally heirs of
the donor.

Charitable Remainder Trust


A trust established by the donor that creates a remainder interest for one or more charitable organi-
zations. A fixed dollar amount, based on a percentage of the value of the trust at its establishment,
is paid annually to the donor and/or spouse during their lifetime. At the demise of the donor and
spouse (if both are beneficiaries), the charity(ies) receives the balance of the trust.

Charitable Remainder Unitrust


A trust established by a donor similar to the charitable remainder trust where payments to the
donor and/or the spouse are a fixed percentage of the fair market value (determined annually) of
the assets of the trust. The donor may make additional contributions to the charitable remainder
unitrust. At the demise of the donor and spouse (if both are beneficiaries), the charity(ies) receives
the balance of the trust.

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Dollars for Scholars Fundraising Guidebook Section Seven: Planned Giving

Insurance
A charity may be designated as the beneficiary of a life insurance policy. To qualify for a tax
deduction, the donor must designate the charity as both the owner of the policy and beneficiary of
the policy.

Retirement Fund
Donors may name a charity as the beneficiary or one of the beneficiaries of a retirement fund, IRA
or 401(k).

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Section Seven: Planned Giving Dollars for Scholars Fundraising Guidebook

Marketing Planned Giving

Planned gifts are cultivated in much the same way as major gifts. National statistics indicate that
only 25% of planned gift donors notify the organization that they have added the charity to their
estate plans. It is very possible that you are already in the estate plans of individuals in your com-
munity.

The key to planned gift promotion is to be consistent and persistent in getting the message out to
the community that Dollars for Scholars is a good beneficiary of estate gifts. The chapter must
work to create community awareness that will help people associate the idea of planned gifts with
your Dollars for Scholars chapter. Many people think about including a charity in their will for 7-
10 years before actually taking action, so it is important to give your message over and over again
so that you remain part of the donor’s thinking process when the time comes.

Included in this section are some simple strategies to promote including your chapter in the estate
plans of your donors. The least complicated and most common form of planned gifts is through
bequests in wills, so chapters may want to concentrate efforts on this method of planned giving,
although promoting gifts of insurance and retirement funds can also be beneficial.

Keep in mind that it may be years and years before you realize the results of your marketing efforts.
However, know that your chapter will benefit in the future and that what you do now will pay off
in terms of very significant gifts in the years to come. These gifts could impact hundreds and even
thousands of students from your community in the future and ensure the longevity of your chap-
ter.

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Dollars for Scholars Fundraising Guidebook Section Seven: Planned Giving

Simple strategies to promote estate gifts for your chapter:

* Include a short planned giving article or information box in every issue of your chapter
newsletter. An “article” can be a box that says something as simple as “Remember
Centerville High School Dollars for Scholars in Your Will!” or “Give the Gift that Keeps on
Giving! Have you considered including Centerville High School Dollars for Scholars in your will?
For more information, please contact . . . ”

* Include a planned giving reminder in the PS of your annual appeal

* Include a check box on your solicitation cards that allows donors to indicate that they will
consider an estate gift or have already included your chapter in their estate plans:

n I will consider including the Centerville High School Dollars for Scholars in my will or as a
beneficiary of a retirement fund.

n I have already included Centerville High School Dollars for Scholars in my will.

n I have made Centerville High School Dollars for Scholars a beneficiary of a retirement
fund.

* Ask a local bank or financial planner to host a planned giving seminar for you and send an
invitation to your donors to attend and bring friends. Banks and planners are more than
willing to do this because it is an opportunity to advertise their services. As part of the
presentation, include ways that prospects/donors can include Dollars for Scholars or other
charities in their estate plans and the benefits of doing so.

* If you receive a planned gift or are notified that someone has included your chapter in their
estate plans, ask if you could do a feature article about them for your newsletter. People are
inspired by the actions of others and may get motivated to do the same.

* Send a letter out to the individuals who have been consistent and/or generous donors
asking them to consider including the chapter in their estate plans.

* Ask a donor directly to consider including the chapter in his estate plans. A personal visit
bringing a donor up to date on chapter activities and asking him to consider a planned gift
to benefit your chapter can be very effective.

* Establish a planned giving society for your chapter and list donors who have notified you
that they have included the chapter in their estate plans as members. During the first two
years of the establishment of the society, you can promote “charter” memberships. Of
course if a donor wishes to remain anonymous, you should honor their request. The society
can be called a generic name such as the Heritage Club or could be named in honor or
memory of a significant donor, a founding member of the chapter, a prominent educator,
etc. such as the George O. Wilson Society.

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Section Seven: Planned Giving Dollars for Scholars Fundraising Guidebook

Planned Giving Resources

u Planned giving professional—Invite an estate planning attorney, a planned giving


officer or fundraising professional specializing in planned giving, to serve on your
chapter’s board. They can provide assistance in planning, help work with your pros-
pects and write articles for your newsletters as a volunteer.

u Community foundations—Many counties have a community foundation that may


provide planned giving information and resources available to you, potentially even a
planned giving professional. Establishing an endowment fund through your commu-
nity foundation can have many benefits and appeals to community donors. In
exchange you can take advantage of their investment opportunities and have access
to their planned giving expertise and resources.

u National Committee on Planned Giving—An association of planned giving profession-


als that has local chapters around the U.S. Check their website or your phone directory
for information. Your local chapter may be helpful in finding a professional to serve as
a volunteer on your board or to chair a planned giving committee—www.ncpg.org.
The NCPG also has a program that can be established in your community called Leave a
Legacy which is an initiative to raise public awareness about leaving bequest gifts to
charity in wills and estates. Each local program is provided with marketing materials,
print ads, radio PSAs, brochures, etc.

u A local college or university—Nearly all institutions of higher education have made


significant investments in planned giving staff. Contact them to see what kind of sup-
port or counsel they might provide, on a voluntary basis, for your chapter.

Bequest Language Samples

Prospective donors may contact you to inquire about the language that should be used in a bequest
to benefit your chapter. The language below can be provided, or you can refer them to their own
attorney. It is even a good idea to include sample language in your newsletter in an article or
information box.

-I hereby give, devise, and bequeath to Centerville High School Dollars for Scholars the sum of
$________.

-I hereby give, devise, and bequeath to Centerville High School Dollars for Scholars the property
described as _________________________________________.

-I hereby give, devise, and bequeath to Centerville High School Dollars for Scholars the rest, remainder
and residue of my estate.

-I hereby give, devise and bequeath to Centerville High School Dollars for Scholars __% of the rest,
remainder and resident of my estate.

-If any or all of the above named beneficiaries do not survive me, then I hereby give the share that
otherwise would be theirs to the Centerville High School Dollars for Scholars.

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Dollars for Scholars Fundraising Guidebook Section Seven: Planned Giving

-I hereby give and bequeath 1,200 shares of General Electric stock to the Centerville High School
Dollars for Scholars Chapter.

-I hereby give, bequeath and devise my residuary estate as follows: 10% to the American Cancer
Society, 25% to the First United Methodist Church, 25% to Notre Dame University and 40% to
Centerville High School Dollars for Scholars.

Designation Language

-It is my desire and instruction that this bequest to Centerville High School Dollars for Scholars
be used to create a scholarship endowment to benefit students and alumni of Centerville High
School.

-It is my desire and instruction that this bequest to Centerville High School Dollars for Scholars
be used to create a scholarship endowment to benefit students and alumni of Centerville High
School. I further desire that said scholarships be presented as the “Wilson Family Scholarships”
and that students attending postsecondary institutions in the state of Indiana receive first priority.

7-9
Section Seven: Planned Giving Dollars for Scholars Fundraising Guidebook

Sample Articles

Highly-Appreciated Support!
If you:
For example: Jack is the owner of
stock now worth $50,000 for which
❖ Have stocks that have he paid $2,500 years ago. This year,
Jack expects higher income taxes
appreciated or bonds that because of a salary bonus. He de-
have matured; cides that this is a good time to
contribute half of his appreciated
stock to the Dollars for Scholars
❖ Would like to avoid capital chapter to establish a scholarship
endowment fund, avoiding capi-
gains tax or spare your heirs
tal gains on that half. His $25,000
estate tax; charitable deduction helps offset
his income tax liability while pro-
viding a significant gift to the
❖ Want to make a gift to chapter that will have a lifelong
Centerville High School Dollars impact on students from his com-
munity. He will also realize the
for Scholars without a cash impact of his contribution as he
outlay this year, meets student recipients and has
the opportunity to personally
present scholarships at chapter
Then a gift of securities may be awards ceremonies.
just the right year-end gift for you!
You may also gift stock and bonds to Centerville
High School Dollars for Scholars in your will.
Please contact ******** at ********* for instructions
or to answer your questions.

Be a Heritage Club Charter Member!


Did you know that you could be a charter member
of our Heritage Club by making the Centerville
High School Dollars for Scholars Chapter the sole
beneficiary (or one of the beneficiaries) of the life
insurance policy provided by your employer? Con-
tact your Human Resources Department and request
a change of beneficiary form. Your gift could leave a
lasting legacy and have a lifelong impact on students
in our community!
7-10
Dollars for Scholars Fundraising Guidebook Section Seven: Planned Giving

B e Immortal—Leave a Legacy
to our Community!
Did you know that you can establish
For example: During a meeting with
their financial planner, Bill and Jane
a permanent scholarship endowment
Winters are shocked to learn that most of
the value of their qualified retirement
plan balances, including IRAs andthrough the Centerville High School
employee pension plans, can’t pass to
Dollars for Scholars Chapter? In-
their children without substantial
taxation. In fact, their family could lose
cluding a gift of cash or property in
as much as 80% to income and estate
taxes. Since the Winters had several IRAs
your will, making the chapter a ben-
and had already planned to remember
the Dollars for Scholars chapter in their
eficiary of a retirement fund or
estate plans, they decided to designate
the chapter as the beneficiary of two of
insurance policy, or a contribution of
their IRAs. Their gift will establish a
scholarship endowment and the William
appreciated securities could save you
and Jane Winters Scholarships will be
presented annually to students pursuing
or your estate taxes and establish a
professional degrees in medicine or
pharmacy.
lasting legacy to you or a loved one.
Contact **** for more information.

Join the
George O. Wilson
Society!
Did you know that you could join the George
O. Wilson Society by making Centerville High
School Dollars for Scholars the beneficiary (or
one of the beneficiaries) of an IRA or 401(k)?
Many of us have several IRAs or 401(k)s
resulting from previous employments.
Your gift could leave a lasting legacy
and have a life-long impact on
students in our community!

7-11
Section Seven: Planned Giving Dollars for Scholars Fundraising Guidebook

Sample Articles

A Gift That Keeps on Giving . . .


Phil and Brenda have been contributing generously each year to the Centerville High School
Dollars for Scholars Chapter to support scholarships for graduating seniors from Centerville High
School. The Chapter appreciates their gifts and has come to depend
on this annual support to award these scholarships. Phil and
A solution is a bequest
Brenda would like to continue their support even after their deaths.
in their wills to establish Impossible? Not at all!
a permanent endowment
fund to benefit Centerville A solution is a bequest in their wills to establish a permanent endowment
High School Dollars for fund to benefit Centerville High School Dollars for Scholars. The fund
Scholars will annually generate gifts to be used as scholarships awarded by
the Chapter. Through this planned gift, Phil and Brenda know that
their support will continue in perpetuity to provide scholarships for deserving Centerville High
School students.

If you’d like to consider planning for an endowment gift in your will, please contact ******* at
***********.

The Gift of Life (Insurance)

A simple and generous way to plan for a gift to support Centerville High School Dollars
for Scholars and receive income and estate tax benefits, is to consider contributing a
new or old life insurance policy naming Centerville High School Dollars for Scholars as the
owner and beneficiary.

Life Insurance Gift Options include:

n Contributing a policy that was purchased by (or for) you many years ago.
n Naming Centerville High School Dollars for Scholars as the beneficiary of a life
insurance policy provided by your employer.
n Gifting an existing or new policy and naming Centerville High School Dollars for
Scholars as both owner and beneficiary.

Donors who notify Centerville High School Dollars for Scholars of a planned gift such as life
insurance or a bequest in their will, are honored as charter members of the Heritage Club.
Member names appear on the donor plaque in the lobby of the high school and in published
listings.

If you’d like to find out more information about a gift of life insurance, please contact
*******, at ***********.

7-12
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

Section Eight: Corporate and Foundation Fundraising

Corporate Fundraising

L ocal businesses and corporations are an excellent source of philan-


thropic support for your chapter. In 2003, corporations provided $13.5
billion (5.6% of total US giving) in contributions to nonprofit organiza-
tions in the United States. Gaining corporate support continues to be a
challenge, however, as many locally-owned companies are acquired
by larger corporations with headquarters in another city and often
in another state or even country.

Why do corporations give to charities?

n To market the corporate name.


n To be a good citizen.
n To ensure that their employees have a good community to live in.
n To recruit and retain employees.

A Dollars for Scholars chapter has an advantage over some charities in that it can provide a great
return on a corporate philanthropic investment. Businesses and corporations benefit from their
support because Dollars for Scholars provides:

s Local community recognition and visibility—builds a positive image for the company as a
good corporate citizen

s Opportunity to increase local sales—the community likes to support a company that invests
in the community

s Tax deduction

s Way to reward employees—this may especially be true if Dollars for Scholars board mem-
bers are employees of the company

s Matching of company interests and cause

s Direct positive impact upon the community

s Support for education

s Support for youth

s Marketing opportunity—i.e. the company gains recognition from their support to the
chapter

s Puts a “face” on their philanthropy—supporting Dollars for Scholars may allow the com-
pany an opportunity to personally meet scholarship recipients, to make local scholarship
presentations and to track the success and progress of students

s Volunteer opportunities for company employees

8-1
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

Which businesses and corporations should be solicited?

As many as possible! But it is probably wise to narrow your focus to your best prospects first. To
do this, call together a group of business leaders for a prospecting session. Invite a bank manager,
a local foundation board member, a corporate leader, an executive director of a local nonprofit, a
small business owner, a generous donor and others who are considered to be leaders in your com-
munity. Ask them to generate lists of prospective business donors, identify the contact individual
and then to prioritize the list. You can suggest that they bring various directories with them for the
meeting so that they can also include addresses and phone numbers on their lists. Be sure to keep
the meeting focused, provide refreshments and express appreciation.

Include businesses such as hotels, retail stores, restaurants, major catalog vendors in your area,
agribusinesses, financial service companies, production plants, manufacturers, marketing/pr firms
and small businesses on your lists.

Ways corporations can contribute to a Dollars for Scholars chapter:

· Cash gifts
· Non cash or in-kind gifts
· Corporate foundation contributions
· Matching gifts

Who makes the decision regarding corporate contributions?

In many cases it is the CEO and/or board of directors of the company. Having one or more of
these individuals advocating for your chapter can give you a tremendous boost. Sometimes corpo-
rations form philanthropic committees which have the power to at least recommend community
contributions. Larger corporations may have an individual on staff whose job it is to maintain
community relations and this individual may also have significant influence regarding corporate
giving decisions.

Many businesses contribute money through multiple sources such as a marketing budget, a com-
munity relations budget, a philanthropy budget or even their own foundation. The steps to solicit a
corporate gift are very similar to approaching an individual for a contribution.

8-2
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

Corporate Solicitation Steps:

Step One
Review lists of businesses and corporations located in your community or those that do business
within your community. Prioritize the lists into A, B, and C groups.

A) Top prospects—have shown an interest in scholarships and/or education, have some


connection with Dollars for Scholars, have employees who are involved with or know about
Dollars for Scholars, have the capacity to give a significant gift to the chapter.

B) Potential prospects—have demonstrated some interest in education and/or youth, may


be familiar with Dollars for Scholars, no personal connections among employees.

C) Unknown prospects—know little about the company, no connection with the commu-
nity, not known to be supporters of educational causes, no known connections to Dollars
for Scholars board/volunteers.

Step Two
Conduct research. Much information can be gleaned from a company’s website including the
executive officers, board of directors, mission, product information, assets, corporate giving pro-
gram, contact information, etc. Suggestions for internet research are included in the Glossary
section of this book.

Working first with your “A Group” of prospects, complete the prospect grid.

Information needed for prospects

-Name of Company
-Address of Company (may need both local and corporate)
-Contact Name and Title
-Phone # of Contact
-E-mail of Contact
-Product or Services—manufactured or provided by the company
-Interests—what other charities the company supports, their mission, etc.
-$ Capacity—An Example would be High ($5,000+), Medium ($1,000+), Low ($250+)
-DFS Connections—list any board connections, if DFS volunteers are employees or if
employees’ children have received scholarships, etc.
-Process—State the process for solicitation of funds or for submitting a grant request

8-3
Prospect Grid

8-4
Company Address Contact Phone E-mail Product/ Interests $ Capacity DFS Process
Name Services Connect
Dollars for Scholars Fundraising Guidebook
Section Eight: Corporate/Foundation Fundraising
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

Step Three
Make a connection with the contact individual—the more personal the better. A phone call or
face-to-face visit will always be more effective than a letter. During the conversation, explain the
mission of the chapter and the specific scholarship or project and describe how the company and
community can mutually benefit from the company’s support of Dollars for Scholars. You should
also take this opportunity to explain the benefits the company will receive from their support such
as recognition, personal presentation of the scholarships, sponsorship of an event, etc. Ask about
the process to apply for corporate support and any assistance that could be provided regarding
your request. Don’t forget to send a thank you note following your conversation—whether in
person or on the phone.

Step Four
If you know the CEO, a high ranking employee, a director on the board, or any employee of the
company, make a personal contact explaining your request and asking for their support. Compa-
nies will tend to support organizations in which their employees are involved. Officers and
executives often have significant influence over philanthropic decisions.

Step Five
Follow the recommended process to apply for corporate support. This may involve completing an
online application, submitting a grant or simply sending a letter of request. If there is a deadline for
consideration, make sure you submit your request on time. Follow instructions—don’t submit a 20
page proposal if a 2 page one is specified. Always accompany your materials with samples of
awards programs, list of current board members, sample student thank you letter, photos, newslet-
ters, etc.

Step Six
Follow up. It does not hurt to call to confirm that your request was received, or to ask if your
request is under consideration. It demonstrates that you are sincerely interested and are willing to
take the initiative to inquire.

Step Seven
Send a thank you letter, even if your request is denied. It is important to express appreciation for
their consideration and demonstrates that you are sincerely interested in the company’s support. If
you did not receive the contribution, inquire if you may reapply, or if there was something specific
that disqualified you from consideration. You may simply have applied at the wrong time or
misdirected your request.

Step Eight
Report back to the company on the use of their contribution. If a scholarship is being presented,
invite a representative of the company to attend the awards ceremony to present the scholarship.
Take a photograph and send a copy to the company or present them with a plaque. The more
recognition and appreciation the company receives from you, the more likely they are to repeat
their support the following year.

8-5
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

In-Kind and Other Corporate Contributions

If you discover that a cash gift is not feasible, try to find other ways that the company can be
involved with the chapter such as providing volunteers for an event or on a committee. Corpora-
tions are sometimes looking for a cause or event that will provide an opportunity for employee
bonding as well as a way to contribute to the community.

An in-kind contribution of products or services is another option for businesses and corporations to
support you other than cash. In-kind contribution ideas:

n Use of a corporate facility for a meeting or event

n Use of corporate equipment such as audio visual or computer

n Donation of used corporate equipment such as computers and copiers

n Providing office supplies to the chapter

n Providing space and telephone lines for a volunteer or student phonathon

n Allowing the chapter to use a corporate mailing list

n Encouraging employees to participate in a chapter event

n Sponsoring a corporate team for a chapter event

n Offer matching support for employee contributions to the chapter

n Including the chapter in a newspaper ad, etc.

n Professional expertise for your board (investments, marketing, fundraising, etc.)

n Catering for a meeting or event

n Graphic design and layout for your newsletter or brochure

n Providing the services of an intern or consultant

n Printing a fundraising letter, newsletter, invitation or brochure

n Mailing chapter letters, newsletters, invitations, etc.

Often these smaller steps of involvement will eventually lead to a gift of cash, as well as providing
the company a way to learn more about the chapter, its activities and volunteers. This builds
confidence and trust—both important ingredients for successful corporate fundraising.

8-6
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

If you do receive in-kind contributions, make sure that you list the corporation as a contributor.
This can include labor the corporation has provided for you. Listing in-kind donors in your donor
appreciation lists will impress other organizations and donors and give deserved recognition to the
corporation.

Potential resources for acquiring in-kind or product donations are Gifts in Kind International
www.giftsinkind.org, and Discover Total Resources: A Guide for Nonprofits free at
www.mellon.com/communityaffairs/guide.

8-7
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

Foundation Fundraising

Nearly 11% of contributions in 2003 came from foundations. There are many types of founda-
tions—from large foundations such as the W.K. Kellogg Foundation, Ford Foundation, Bill &
Melinda Gates Foundation and the Lilly Endowment, to small family foundations located right in
your community. Foundations can be divided into four types9 :

1. Independent foundation—supports social, educational, religious or other charitable activi-


ties. Most are locally based and were established by a large endowment gift(s).

2. Operating foundation—conducts research or provides a service. Doesn’t usually provide


outside grants.

3. Corporate foundation—established by a corporation to provide contributions for the com-


munities in which its entities are located and/or to support causes closely related to its
corporate product or field of service.

4. Community foundation—supported by donors from the community to make grants for


social, educational, religious or other charitable purposes in the community.

The approach to foundations is very similar to that taken with corporations and individuals. The
key is to reach the individuals who make decisions about the foundation or individuals who could
help to influence decisions.

Foundations, with the exception of local foundations, may not be good prospects for most Dollars
for Scholars chapters. Because Dollars for Scholars are very localized organizations and concen-
trate on specific communities, a foundation with a wider mission will not be a good match. In
addition, there are other considerations:

* Competition. Only 10-15% of grant proposals are actually funded and some of those only
after several submissions.

* Time. Many foundations take 3-6 months to make decisions regarding grant requests.

* Not renewable. Although there are exceptions, most foundation grants are not renewable
or renewable only for a short time. Foundations are interested in touching many organiza-
tions and may have policies against multiple grants to a single organization. Foundations
are also uncomfortable when they perceive that an organization is becoming dependent
upon their support.

* Time and expertise. Grantwriting takes time and it is helpful if the grantwriter has some
experience. Most Dollars for Scholars chapters do not have access to such expertise.

These negatives being considered, there are good reasons to at least consider approaching founda-
tions, especially those based in your own community or those who have demonstrated an interest
in your community.

9
8-8 Robinson, Andy. Grassroots Grants. Berkely, CA: Chardon Press, 1996.
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

Foundations exist to give money away to support the community and you can make a strong case
that Dollars for Scholars has a meaningful and significant impact upon students in your area.
Foundation grants also tend to be much larger than typical individual gifts (generally $5,000+), so
they may be worth the effort.

Most foundations will require a formal grant request but this shouldn’t scare you off. Grants are
not complicated and most foundations will offer you a specific format to follow. Several now
require or offer online applications from which they do initial screening.

8-9
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

Why Foundations Give

· They are impressed with the mission and activities of the prospective organization.

· The organization has been recommended by one of the board members or a friend and/or
family member of a board member.

· They are impressed with the volunteer leaders of the prospective organization. Foundations
will review your board list to determine any personal connections and to make a judgment
on the caliber of volunteers.

· The prospective organization’s mission matches their interests and criteria. Look for foun-
dations whose interest areas include access to postsecondary education, education, youth
and/or scholarships.

· The grant request is easily understood and the impact of the project is meaningful.

8-10
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

Soliciting a Foundation

Step One
Make a list of foundations in your community and research foundations online or at your local
library. Your research will reveal the specific criteria for consideration and the focus area of the
foundation. Foundations with a focus on youth, education and specifically scholarships are a good
match for Dollars for Scholars.

Step Two
Conduct additional research once you have prioritized your list. You can go to www.guidestar.com
and pull up the Form 990 for any charitable foundation. The 990 will list important information
including listings of board members, total assets of the foundation, a list of organizations that re-
ceived contributions from the foundation the previous filing year and more. You will need to register
to access the information, but there is no charge to use the website.

Also check to see if the foundation has its own website. If so, you will probably find helpful infor-
mation and may even be able to apply for a grant online or at least download an application. Look
for deadline dates, listings of board members, the mission/focus of the foundation, eligibility re-
quirements and listings of past grant recipients.

Step Three
If possible, make a personal connection with the foundation—either a staff member if they have
one, or one of the board members involved in decision making. As with corporations and individu-
als, having a relationship with an individual involved with the foundation can make all the
difference. Some ideas for making personal connections with grantmakers:

- Visit the foundation office.


- Attend any events held by the grantmaker or an event at which grantmakers will be in
attendance such as a conference or workshop.
- Invite a foundation board member to attend your awards ceremony or special event. Make
sure he/she meets a student scholarship recipient!
- Include the foundation on your mailing list to receive your newsletter, invitations, etc.

If a get-acquainted personal visit or phone call isn’t possible, then send an initial letter of inquiry
and accompany it with information and material about the chapter, scholarship recipients, etc. If
you are able to make a face-to-face or phone contact, send a thank you note following your conver-
sation.

Step Four
If you know a board member or someone who knows a board member, ask them to make a per-
sonal contact explaining your request and asking for their support. Foundations often receive
many requests and it adds credibility to your request if someone known and trusted can advocate
for you. Board members especially often have significant influence over philanthropic decisions.

Step Five
Submit your grant request following the recommended format. If a short application is requested,
honor that request. You can usually submit additional information such as board listings, awards
program, lists of scholarship recipients, results of fundraising, etc. if it has not already been re-

8-11
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

quested. Be sure that you make the deadline. Some foundations only consider requests quarterly
or even annually and you don’t want to miss the window of opportunity.

Other grantwriting tips:

p Don’t be too text heavy and leave lots of white space.

p Insert photos of awards events and/or student recipients.

p Use 12 point or larger type.

p Break up the page with bold text, underlinings, headers, bullets, lists, etc.

p Submit the proposal on 8 1/2 x 11 paper. Your proposal will probably be


copied for board members so don’t make it difficult!

p Don’t staple. (see above)

p Attach a cover sheet that includes your name, the contact person, address,
phone, e-mail, budget, amount requested and an executive summary of
your request.

p Include information on your chapter’s history such as the number of scholarships


awarded, total dollars awarded, when your chapter was chartered, other significant
accomplishments.

p Include information that demonstrates the need for scholarships in your commu-
nity—you can gather information from the school administration or your state
department of education on graduation rates, financial needs, etc. and conduct
simple online research regarding education statistics in your state. Contact your
library’s research department and ask them for statistics and recent research con-
ducted on education, postsecondary education, financial need, etc.

p Describe the impact that your scholarships or program will have on the community.
Include your goals and how you intend to implement them.

p Include a budget and a financial statement.

p Include attachments such as a list of your board members, current brochure and
newsletter, any newspaper articles about your chapter, testimonials from student
recipients or appreciative donors.

p Send a cover letter that is warm and personal. Also restate how much you are
requesting and briefly describe the mission of your chapter.

Step Six
Follow up. A short inquiry phone call to confirm receipt of your grant request will not hurt you
and will demonstrate that you are sincerely interested in their support. It may also provide an
opportunity to answer a question or provide additional information.

8-12
Dollars for Scholars Fundraising Guidebook Section Eight: Corporate/Foundation Fundraising

Step Seven
Send a thank you letter, even if your grant request is denied. Just because your request was denied
this time does not mean that it will be next time. In many cases, it will take several requests before
a grant is received. Each grant request is an opportunity to better inform the foundation of what
you do and the positive impact that you have on the community.

Step Eight
Report back to the foundation on the use of their contribution. If a scholarship is being presented,
invite a foundation board member to attend the awards ceremony to present the scholarship. A
sincere demonstration of appreciation will not be lost on the foundation. Be sure to include them in
your listings of donors. If you are required to file a grant report by the foundation, don’t miss the
deadline!

United Way/United Fund Campaigns

It is possible that your chapter may qualify for United Way/United Fund
campaign contributions through a donor designation program. If so, this is
an option that you should promote to your community, especially regarding
workplace campaigns. However be aware that there is usually a percentage
of the gift that will be kept by the agency and not be reflected in the gift you
receive. There may also be a significant time lapse before you actually receive
the money.

Contact your local agency to determine the process for including Dollars for Scholars in the desig-
nation list and to inquire about their policies and procedures.

8-13
Dollars for Scholars Fundraising Guidebook Section Nine: Donor Acknowledgement

Section Nine: Donor Acknowledgement


Recognizing and Retaining Donors

R ecognizing donors is good stewardship and a primary obligation of all nonprofits. All donors
want to be appreciated for their contribution and be made to feel that their gifts make a differ-
ence. Even a small gift shows support and works together with other contributions to accomplish
your mission. Donors who are promptly acknowledged and thanked are much more likely to
contribute again when asked.

Acknowledging Donors

An acknowledgement for a contribution should be mailed as quickly as possible following the


receipt of the donation. Some charities aspire to a 48 hour turn-around. While that isn’t possible
for some organizations, it demonstrates the priority that acknowledging donors should take for a
Dollars for Scholars chapter. Sending a thank you within a week or less is a
worthy goal.

Written Acknowledgements

Although the IRS only requires you to acknowledge single contributions


of $250 or more, all gifts should be acknowledged with a written thank
you as a matter of good stewardship. Thank you letters/notes may be
typed or handwritten. The acknowledgement should be dated and the
amount of the gift stated in the body of the letter. You can send a statement,
but a letter is much preferred because it is more personal. (see samples) You may
want to send more than one acknowledgement for a gift if it is significant for your chapter. An
official letter of acknowledgement can be sent by the Treasurer and another note of appreciation
sent by the President and/or the chair of your fundraising committee for example.

Acknowledging Contributions of $250 or more

The IRS requires that charities provide a written acknowledgement of all single contributions of
$250 or more. The letter must state whether the donor received anything in return for her/his
contribution other than a “token” gift. (Note: The cost value of the token gift cannot exceed $8.30
for 2005. This valuation increases slightly each year. If you are concerned, check www.irs.gov for
the current rate). If so, then the value of that gift item must be deducted from the contribution. If
nothing, or an item of less value than $8.30 (or the current rate), was received by the donor in
exchange for the contribution, then a statement must be included in the acknowledgement letter
such as: Please note that no goods or services were exchanged in consideration for this contribution. The
statement can be in the body of the letter or in the P.S.

Acknowledging Quid Pro Quo Contributions

When a donor makes a contribution to a charity and receives goods and services in return, this is
called quid pro quo. This applies most frequently to the purchase of a ticket to a special event.
Whenever the donor’s payment is more than $75, the chapter must include a statement on the
invitation to the event and in the acknowledgement letter noting the deductible amount of the
payment. For example, if someone gives a charity $100 and receives a $60 concert ticket, the

9-1
Section Nine: Donor Acknowledgement Dollars for Scholars Fundraising Guidebook

charitable portion of the payment is $40. The charity must disclose to the donor on the invitation
and on the acknowledgement that only $40 of the $100 gift is tax deductible. There are hefty fines
for charities that fail to do this—$10 per contribution not to exceed $5,000 per fundraising event or
mailing.

Acknowledging Contributions of Property

If a donor contributes property or a service to your chapter, the amount of the contribution is the
fair market value of that property or service. For example, if a coach provides free tennis lessons to
students, the fair market value might be $35/lesson or whatever the coach might normally charge
for the service. If he provides 5 lessons, then his contribution is $175. If a donor contributes a gift
basket for an auction, the fair market value might be $60. The chapter does not have to put a cash
value on the item/service in the acknowledgement letter —valuing the contribution is up to the
donor. But you must describe the item or service in your acknowledgment letter. (See sample)

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Dollars for Scholars Fundraising Guidebook Section Nine: Donor Acknowledgement

Recognizing Donors

All donors want to be appreciated. Most donors like to be recognized as well, although there are
occasional exceptions. Generally donors like to have their names included in a donor list, on a
plaque or noted at an event.

The Rule of Seven is a fundraising philosophy that you should thank donors 7 times for their gift to
insure that they repeat and upgrade their gift the next time you solicit them. Chapters may not be
able to do this for all donors, but for special donors, this is a good goal.

Besides an acknowledgement, there are many ways that you can honor and cultivate your donors.

34 Ways to Honor and Cultivate Your Donors


-Personal visits to say “thank you” -Photograph of the donor at an event
-Mementos such as flowers, cookies, etc. -Recognition at a cocktail party
-Thank you letter from a student -Donor listing on your website
-Recognition at celebrations -Gift of student artwork
-Newsletters -Lapel pin
-Plaques -Brick Thank
You!
-Dedication event -Listing in annual report
-PSAs -Plant a tree in honor
-Newspaper ad -Donor listings
-Media releases -Thank you phone call
-Naming a scholarship in honor -Donor wall in high school
-Donor tiles -Awards ceremonies
-E-mails -Pairing students and donors at events
-Video of awards program -Donor breakfast
-Donor legacy book -Preview party/event invitation
-Thank-you-thon—like a phonathon but -Send cards on special occasions
call only to thank donors and tell them -Singing telegrams (use student groups)
good news about scholarships awarded -Invite donors to serve on board/committee

9-3
Section Nine: Donor Acknowledgement Dollars for Scholars Fundraising Guidebook

Ackn S a m p l e
owle
d
Lett gment
er
Date

Full Name of Donor(s)


Street Address
Apartment or Suite
City, State Zipcode

Dear First or Familiar Name(s),

Thank you very much for your recent generous gift of $100* to Centerville High
School Dollars for Scholars! We are thrilled! Your contribution will help fulfill our
mission to expand access to postsecondary education through scholarships for students in the
Centerville community.

Centerville High School Dollars for Scholars has ambitious goals this year. With
your help, we hope to expand our scholarships from 50 to 75 and our average award
from $750 to $1,000! There has been an increase of 25% in the number of students
applying for scholarships over the past few years, so we know that there is growing
financial need in our community. We are eager to help as many families this year as we
can.

We are honored to have your support. Thank you for making a difference in the
lives of students in Centerville!

Sincerely,

Chapter President Name


President

*Please note that no goods or services were provided in consideration of this contribution.
You may wish to retain this letter for tax purposes.

9-4
Dollars for Scholars Fundraising Guidebook Section Nine: Donor Acknowledgement

Ph
Ackn o n a t h o
owle n
dgm
Lett ent
er
Date

Full Name of Donor(s)


Street Address
Apt. or Suite
City, State Zipcode

Dear Familiar Name(s),

Thank you so much for your generous contribution of $200* to the Phonathon to
benefit Centerville High School Dollars for Scholars! You are a shining star in our
community—words aren’t enough to thank you for this gift!

Centerville High School Dollars for Scholars has ambitious goals this year. With
your help, we hope to expand our scholarships from 50 to 75 and our average award
from $750 to $1,000! There has been an increase of 25% in the number of students
applying for scholarships over the past few years, so we know that there is growing
financial need in our community. We are eager to help as many families this year as we
can.

Thank you again for your gift and your continued interest in our efforts. The
students and community will benefit from your support.

Sincerely,

Chapter President Name


President

*Please note that no goods or services were provided in consideration of this contribution. This
letter should be retained for tax purposes.

9-5
Section Nine: Donor Acknowledgement Dollars for Scholars Fundraising Guidebook

Qu
Ackn id Pro Q
owle uo
dgm
Lett ent
er
Date

Name of Donor(s)
Street Address
Suite or Apartment
City, State Zipcode

Dear Familiar Name(s),

Thank you for attending our Centerville Antiques Show Dinner and Auction
Event. I am pleased to let you know that we raised more than $25,000 at that event!
Proceeds will be used to support scholarships for Centerville students this year as well as
to build an endowment fund for the future.

As we learned from the student presenters at the Dinner, there is a growing need
for financial assistance for the students from our community. Every scholarship that
Centerville High School Dollars for Scholars can provide helps relieve the tremendous
financial burden of a postsecondary education.

Thank you again for your continued interest and support.

Sincerely,

Chapter President Name


President

*Please note that $40 of your $75 ticket is a contribution and considered tax deductible accord-
ing to IRS regulations. Please retain this acknowledgement letter for tax purposes.

9-6
Dollars for Scholars Fundraising Guidebook Section Ten: Leadership for Fundraising

Section Ten: Leadership for Fundraising—Finding and Keeping Good Volunteers

Volunteers as Fundraisers

P rofessional fundraisers are a relatively recent phenomena. In the


not too distant past, volunteers did all of the fundraising for
nonprofit organizations in the United States and they were very
successful. Although today most nonprofit organizations retain devel-
opment staff, volunteers remain the most important component in
effective fundraising.

Volunteers bring the passion and commitment that is essential to


inspire the community to contribute to a great cause. They have the vision and have personally
experienced the impact of the organization’s programs. They also lend credibility to fundraising—
the dedication and selflessness of volunteers raising funds on behalf of a worthy institution or
mission is without question.

What Kinds of Board Members Make Good Fundraisers?

The answer is any board member who is willing. Board members do not have to have a fundraising
background or even prior experience in fundraising. As long as they have a passion for Dollars for
Scholars and a willingness to ask others to become involved with the chapter through a financial
contribution, they can make excellent fundraisers.

When recruiting board members, it is very important to have a diversified board. For example, a
board composed entirely of high school parents may not thrive in the future. As their students
begin to graduate, these parents lose interest. Your board should be representative of the commu-
nity to provide longevity to the chapter and to access as many community resources as you can.
The more people and personal/professional connections that board members have, the easier it is
to fundraise.

Four groups of individuals are especially beneficial as board members for effective fundraising:

1. Individuals who are top executives or professional managers of corporations and businesses
within your community

2. Individuals who have inherited wealth and are active in the community

3. Individuals who are newly wealthy and newly powerful in the community

4. Individuals who are admired and respected within the community

10-1
Section Ten: Leadership for Fundraising Dollars for Scholars Fundraising Guidebook

When a Dollars for Scholars Chapter Board is Failing

A board that is losing members or having difficulty recruiting new members has internal problems.
The chapter needs to look at its current policies and activities to determine why their board isn’t
active and thriving.

s Are chapter meetings held just to have a meeting? Be sure that your meetings are called
only when there is real board business to conduct. No one likes to feel that their time is
wasted in meetings. If you feel you are meeting too often, consider reducing the number of
board meetings.

s Do you have term limits? People don’t want to commit to volunteer work that never ends!
Amend your bylaws instituting term limits for board members—3 year terms are recom-
mended with the possibility of serving 2 consecutive terms. Likewise consider instituting
officer term limits—1 year terms are recommended with a maximum of 2 terms per any one
office. A regular rotation of officers and board members keeps your board invigorated and
energetic.

s Are the board meetings too long? You should have a goal of meetings lasting 1-1.5 hours
maximum unless there is an unusual task. Keep your meetings short and to the point.

s Are your meetings held on a consistent day/time? It is helpful to have an established day
of the month and time. This lessens confusion and establishes a regular routine of meetings.
However, don’t feel that you have to have a meeting just because one is scheduled—it is OK
to cancel a meeting. Everyone will appreciate that you valued their time enough not to
waste it.

s Could announcements and updates be accomplished via e-mail? This is an easy and
efficient way to keep in touch with board members in between board meetings. Be sure that
all board members have access to e-mail so that everyone is included. Bear in mind, that
you should not conduct serious chapter business via e-mail. Decisions needing a vote
require that all board members have an opportunity to voice their views—in person or
schedule a conference call meeting.

s Do you inform the board of the agenda prior to the meeting, and is an agenda prepared
for the meeting? (see sample)

s Is the board asked to discuss issues that should be better left to committees (i.e. the color
of napkins for the luncheon), or just don’t need to be discussed by the entire board?
Asking the board to submit agenda items/reports in advance of the meeting may help curb
unnecessary discussion.

s Do board members feel valued and appreciated? If volunteers aren’t asked to accomplish
meaningful tasks, feel that their opinion isn’t valued, or that their skills and talents aren’t
being used on the board, they will quickly feel discouraged and make the Dollars for Schol-
ars board a low priority. Give board members important work to accomplish. Express
appreciation for work done and recognize accomplishments of board members at every
meeting.

10-2
Dollars for Scholars Fundraising Guidebook Section Ten: Leadership for Fundraising

s Do board members understand what is expected of them? If you do not already have
one, consider instituting a board member expectation statement. The statement should be
reviewed and signed annually by each board member. This is a handy tool when recruiting
new board members and reminds existing ones of what is required of them. (see sample)

s Are your board meetings energetic and fun? Part of the motivation for joining a board is
camaraderie, making new friends and developing relationships. Are you allowing time for
social interaction or planning a few social events during the year. A sense of humor is
important too!

s Are you educating the board? Board service is an opportunity to develop skills and knowl-
edge as well as serve the community. Bring in interesting speakers like scholarship
recipients to make a short presentation, educators to talk about challenges for students, a
financial aid director from a local college, etc.

10-3
Section Ten: Leadership for Fundraising Dollars for Scholars Fundraising Guidebook

Dollars for Scholars


Sample Board Member Expectation Statement
General Expectations

1. Support the mission, purposes, goals, policies, and programs of ***** Dollars for Scholars.
2. Suggest possible nominees to the board who are men and women of achievement from our
community who can make significant contributions to the work of the board and the
progress of the chapter.
3. Serve actively on committees as requested by the president.
4. Attend activities and events sponsored by the chapter whenever possible.

Meetings

1. Prepare for and participate in board and committee meetings, including appropriate organi-
zational activities.
2. Ask timely and substantive questions at board and committee meetings consistent with
personal conscience and convictions, while supporting the majority decision on issues
decided by the board.
3. Maintain confidentiality of the board’s meetings.
4. Suggest agenda items periodically for board and committee meetings to ensure that signifi-
cant policy-related matters are addressed.

Avoiding Conflicts

1. Serve the chapter as a whole rather than any special interest group or constituency.
2. Avoid even the appearance of a conflict of interest that might embarrass the board and
disclose any possible conflicts to the board in a timely fashion.
3. Never accept (or offer) favors or gifts from (or to) anyone who does business with the orga-
nization.

Fiduciary Responsibility

1. Exercise prudence with the board in the control and transfer of funds.
2. Faithfully read and understand the chapter’s financial statements and otherwise help the
board fulfill its fiduciary responsibility.

Fundraising

1. Make an annual gift to the chapter according to personal means and with the realization of
the leadership role the board must play in fund development.
2. Assist in the identification of prospective donors and be willing to use your personal influ-
ence to assist in making contacts and solicitations.
3. Participate actively in all chapter fundraising special events, programs, and activities.

_____________________________________ ________________________
Signature Date

10-4
Dollars for Scholars Fundraising Guidebook Section Ten: Leadership for Fundraising

Sample Meeting Agenda


Centerville High School Dollars for Scholars
March 21, 2005

I. Welcome & Introduction of New Board Member (James) 4:30

II. Approval of Minutes (Shirley) 4:35

III. Treasurer’s Report (Josh) 4:40

III. Committee Reports 4:45


· Fundraising Committee—Auction Report (5 minutes)
· Awards Committee—Timeline (15 minutes)
· Academic Support Committee—Teacher Grants (5 minutes)
· Publicity Committee—Radio Promotion (5 minutes)

IV. Old Business 5:15

V. New Business
· Community Foundation request (James) 5:20
· Prospective new board members (Barbara) 5:40

VI. Reminder of next meeting: May 16, 4:30

VII. Adjourn 5:55

Reminder to get your spring flower orders in to Sarah by the next board meeting!

10-5
Section Ten: Leadership for Fundraising Dollars for Scholars Fundraising Guidebook

Recruiting New Board Members

What if your chapter just doesn’t have the right mix of volunteers to be effective in fundraising?
Perhaps you have too many parents and not enough business leaders. Maybe you have too many
educators. Or maybe you just need to expand the board to help you be more effective in raising
money. The right board members will also personally contribute more money to your chapter—
90% of charity volunteers contribute to the charities for which they volunteer.

Recruit new board members who are:

· Respected in the community


· Door-openers and able to influence others
· Visible
· Involved as volunteers for causes in the community
· Able to attract other top leaders

The worksheet on the next page may help you think more strategically about the kinds of individu-
als you’d like to be represented on your board. Consider conducting a self evaluation of your
current board and think about what additional board members you’d like to recruit in the future.

You can use the profile tool to evaluate your current board as well as to develop a prospect list for
new board members. You can adapt the categories in this grid to your own community, but the
following sample categories may be helpful.

10-6
Dollars for Scholars Fundraising Guidebook Section Ten: Leadership for Fundraising

Board h it
e
it W
h
Profile Sm
a
ry
m
Ji M

Profession
Banking/Finance ✓
Business/Corporate
Clergy
Development
Education
Law
Marketing
Media/Newspaper
Medical ✓
Mortician
Parent
Retiree
School Board
Service Club
Student

Ethnicity
Asian
African American ✓
Caucasian ✓
Hispanic/Latino
Native American
Other
Demographics
Female ✓
Male ✓
Under 35
36-50 years ✓
51-65 years ✓
Over 66 years
Other Community
Involvement
Kiwanis ✓
Civic Theatre ✓

Year Joined Board


‘00 ‘01
Chapter Donor ✓ ✓
Term Ends
2005 ✓
2006 ✓
2007
2008

10-7
Section Ten: Leadership for Fundraising Dollars for Scholars Fundraising Guidebook

Dollars for Scholars If you feel that your board


Board Member Prospect Worksheet is becoming dangerously
Use this form to list names of prospective board members in each category. You need to make small, losing its energy, or
practical adjustments that reflect your community. You may also find individuals who fulfill more not as effective in raising
than one category. If you are filling vacancies on an existing board, prioritize which categories are money, consider making
most important in the immediate future. Then make assignments to contact the prospects in adjustments now before it
priority order inviting them to come to an interest meeting and/ or to serve on the board. is too late. Contact your
regional office for
additional ideas and
A. Parents (High School, Middle School, Elementary) (2-3) suggestions or to request
1. _______________________ 2. _______________________ 3. _______________________ assistance in organizing
an interest meeting for
4. _______________________ 5. _______________________ 6. _______________________
prospective board
7. _______________________ 8. _______________________ members.
B. Student Leaders (Each High School Class; different families from above parent(s)) (2-3)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
C. Business and Civic Leaders (Government, Chamber of Commerce, Law, Industry Representatives) (3-5)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
5. _______________________ 6. _______________________ 7. _______________________ 8. _______________________
D. Finance (Banker, Stockbroker, Accountant, Insurance Professional, Financial Planner) (1)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
E. Media/Marketing (Newspaper Publisher/Editor, Radio or TV Station, Web Design) (1)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
F. Small Business/Self Employed Business (1)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
G. Health/Medical (Physician, Dentist, Pharmacist, Hospital Administrator) (1)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
H. Religious Community (Clergy, Youth Director) (1)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
I. Funeral Director (1)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
J. School Board Member/Administrator (Principal, Superintendent) (1)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
K. Educators (Counselors, Coaches, Staff Members) (2-3)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
5. _______________________ 6. _______________________ 7. _______________________ 8. _______________________
L. Retirees (Retired Teachers, Senior Citizen Group Representative, etc.) (1-3)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
M. Service Club/Youth-Serving Organization Representatives (Kiwanis, Lions, Rotary, etc.) (1)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
N. Postsecondary Education Institution Representatives (1)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
O. Nonprofit Organizations (Development Professionals, Foundation Representatives, Family Foundations, etc.) (1-2)
1. _______________________ 2. _______________________ 3. _______________________ 4. _______________________
10-8
Dollars for Scholars Fundraising Guidebook Section Ten: Leadership for Fundraising

The Board’s Role in Fundraising

Although many board members don’t like to hear this—”the buck stops with the board” when it
comes to fundraising. Even though there is a fundraising committee, the board is ultimately re-
sponsible for chapter finances including raising money.

Does everyone on the board have to go out and ask for money? Absolutely not! There are many
ways board members can help solicit funds from the community. Below are some options for
board involvement in fundraising:

* Contribute generously

* Write personal thank you notes to donors

* Go on a solicitation call with another board member

* Call donors to thank them for their gifts

* Identify 10 good prospects for cultivation

* Increase your annual gift each year

* Bring a mailing list(s) to share

* Participate in a phonathon

* Write notes to lapsed donors

* Secure an appointment with a potential corporate sponsor/donor

* Host a cultivation event in your home/club

* Add the chapter to your estate plans

10-9
Section Ten: Leadership for Fundraising Dollars for Scholars Fundraising Guidebook

What Causes Volunteers Anxiety About Fundraising?

Many volunteers say that they are uncomfortable asking for money. They are fearful of many
things:
n Fear of failure
n Fear of embarrassment
n Fear of being asked a difficult question
n Fear of rejection
n Fear of upsetting the prospect

These are fears that are generally unfounded and can be overcome. Here are some ideas to help
your board overcome their fundraising fears:

n Spend some time at a board meeting asking each board member to share the reasons he/she
is involved with Dollars for Scholars—why it is important, what are the benefits it provides,
etc. You will get some truly inspirational answers! This exercise helps board members
articulate their own passions about Dollars for Scholars and helps reinforce that they are
working for a wonderful cause.

n If you don’t ask, you’ll never know if you might have been successful! And a prospect who
hasn’t been asked, hasn’t been given an opportunity to help young people in the commu-
nity. Make sure that the volunteers know that “failures” are OK. Not everyone who is
invited to participate by giving a contribution will be able or willing to do so. Sometimes it
is just a matter of timing. However, even a “no” can result in a gift later. Talking with a
prospect gives you an opportunity to share the mission of the chapter and inform the com-
munity of the difference that scholarships are making in the lives of youth. By asking
someone to participate, you are offering them an opportunity to share in a wonderful
mission.

n If a prospect asks a volunteer a difficult question that the volunteer doesn’t know how to
answer, a reassurance that an answer will be provided within 24 hours will go a long way
toward building credibility. Every volunteer can’t know everything and that is OK!

n Most prospects are flattered to be asked to invest in a good cause even if they choose not to
contribute. Your visit says that you cared enough about the prospect to give her your
personal attention. The prospect will be respectful of your commitment to the chapter and
that can’t help but be impressive!

n Make solicitation calls in pairs. It is much more comfortable to have conversation with a
group of three. Volunteers can also remind each other of points to make and play off of one
another’s conversation during the meeting. It is also helpful to have more than one view-
point—sometimes another person will pick up on subtle signs or information that you might
miss.

n Practice solicitations in advance. It may feel corny at first, but it really does help to run
through your routine ahead of time.

10-10
Dollars for Scholars Fundraising Guidebook Section Ten: Leadership for Fundraising

n Invite a professional development person or an accomplished/experienced fundraising


volunteer from your community to come and speak with your board to give pointers and
tips on fundraising. They can share interesting stories and encourage your board with their
successes. Also ask them to share a failure—not every solicitation will end in a gift!

n Provide materials for the volunteers to use when making solicitation calls. They don’t have
to be fancy, but a folder with a copy of your newsletter, an awards night program, a bro-
chure and a pledge card are really helpful and can help direct the conversation.

n When making assignments for solicitation calls, give a specific timeframe. Volunteers will
appreciate being held accountable and most of us are deadline driven. Even the best inten-
tioned volunteer gets busy and distracted.

n Share stories—stories of successes and failures will provide the opportunity for group learn-
ing and sometimes humor. You can learn from each other.

n Reward, thank and recognize your volunteers—even if they didn’t all have success.

10-11
Section Ten: Leadership for Fundraising Dollars for Scholars Fundraising Guidebook

Motivating Volunteers to Fundraise

No one is born with the natural desire and instinct to solicit money—it is a learned talent and is
developed out of passion and commitment to a good cause. Many volunteers who are successful at
raising money will tell you that they didn’t start out feeling very comfortable about the task. First
there must be a motivation to go out of your “comfort zone.”

Good Cause
The primary motivation to raise money is a good cause. There are many worthy organiza-
tions with inspiring missions. Dollars for Scholars volunteers are motivated to raise money
because they know that a postsecondary education is very important to the young people in
their community and that the scholarships they provide really do have a positive impact on
students.

Need
Combine a good cause with a great need and you have a winner! Volunteers are motivated
when they feel that funding is really needed and will have a positive impact. It would not
be difficult to pull impressive statistics from your state and even your community demon-
strating the financial needs of students who want to achieve a postsecondary education.
Dollars for Scholars is doing something about that need!

Knowledge
The more your Dollars for Scholars volunteers know about scholarships and community
students, the better they will feel about sharing this information with others. Make sure
that your volunteers have opportunities to interact with students, to help with awards
selections and presentations and to become knowledgeable about your community’s par-
ticular challenges in getting more students to higher education. Consult with guidance
counselors and invite them to make a presentation to your board.

Training
Even though volunteers may know that scholarships are a good cause and understand that
there are great financial needs, you must make them feel comfortable articulating this
information to others. Arm them with facts, figures and stories. Most volunteers are willing
to assist with fundraising, even in making phone calls and face-to-face solicitations, if they
are trained and prepared. Ask your regional office and local community foundation for
assistance. Invite successful volunteer fundraisers, development staff of a local nonprofit or
university, or call your local Association of Fundraising Professionals chapter, Junior League
or United Way to make a presentation to your board about fundraising.

Personal Commitment
All volunteers will be more effective at fundraising if they have made their own financial
commitment to Dollars for Scholars. Ask your board for 100% personal participation in
giving each year to the chapter and ask them to give something that will be viewed by
others as “significant.” Contributing to a good cause draws volunteers closer to the organi-
zation and its mission, and is certainly impressive to prospective donors.

10-12
Dollars for Scholars Fundraising Guidebook Section Eleven: Marketing for Fundraising

Section Eleven: Marketing for Fundraising


Creating Community Awareness

W hen most Dollars for Scholars chapters talk about public relations and marketing, they are
really looking for ways to create awareness about the chapter within the community. The
goal in raising awareness is to increase support, primarily through fundraising.

For fundraising purposes, marketing can be defined as efforts to match constituent interests with
organizational needs. In the case of Dollars for Scholars, this means finding individuals, corpora-
tions/foundations and organizations within your community that have an interest in education
and students, and creating opportunities to demonstrate to them that Dollars for Scholars is an
effective organization that promotes access to higher education and encourages and assists stu-
dents to achieve their educational goals. The greater the awareness of the name “Dollars for
Scholars” in your community, the easier raising money will be.

How then can chapters raise the community’s awareness about the importance of scholarships and
do it in a cost effective manner? If you are lucky enough to have someone on your board with a
marketing background, or a local marketing professional who is willing to help you, please ask for
their advice and assistance. If not, you may want to consider some low-cost suggestions.

1
First—identify your target audiences. Although ultimately it would be ideal to have everyone in
the community fully-informed about Dollars for Scholars, start with focusing your efforts on who
you think are your most productive audiences—those who have already demonstrated an interest
in the chapter or in education and/or who have a ready-made affiliation with the chapter and/or
scholarships. Suggestions might be: high school alumni, parents, educators, service organizations
(especially scholarship providers), business leaders, foundations and corporations, etc.

2
Second—brainstorm effective methods of communication for each group—a blanket approach will
reduce your response. For example, in the case of alumni you may wish to place an “ad” or infor-
mation about Dollars for Scholars on the high school’s website or alumni network, add alumni to
your newsletter mailing list, make a presentation at class reunion gatherings, mail alumni a solicita-
tion letter, etc.

3
Third—prioritize both your target groups and your marketing efforts. Start with what you think
will be your most successful groups using what you think will be your most successful methods.
You may also have to prioritize based on your budget and other available resources.

4
Fourth—implement strategies!

11-1
Section Eleven: Marketing for Fundraising Dollars for Scholars Fundraising Guidebook

Taking Advantage of Low Cost Opportunities

u Talk with local businesses about including Dollars for Scholars promotions in their regular
ads. Many businesses buy ad packages from newspapers and may be willing to either give
you one of their paid ads or include an information box or promotion about Dollars for
Scholars in one of their regular ads. This might be particularly effective immediately prior
to a special event or phonathon. (example: “Tom Lewis Ford Encourages You to Support
Dollars for Scholars!”)

u Ask local radio and/or TV stations if you can be featured as a guest on a talk show. Sched-
uling before a special event, during National Scholarship Month (May), or prior to a chapter
special event or activity will help bring a sense of urgency to your participation. Talk shows
are generally interested in promoting community events. Bring a student scholarship recipi-
ent or past scholarship recipient from the community with you for added human interest.

u Inquire if a local TV station would help you with a public service announcement. They may
be able to secure a sponsor for you or even help you with a PSA production.

u Volunteer to join your Speakers Bureau to give presentations to civic organizations and talk
about scholarships, the status of financial aid and Dollars for Scholars. There is an informa-
tional DVD available from your regional office or Scholarship America that can be shown
as part of your presentation, and you can conduct research to gather current statistics about
the status of financial aid and costs of two and four-year postsecondary institutions in your
area.

u Give a presentation about Dollars for Scholars at PTO meetings—elementary through high
school.

u Check with your United Way to see if they are having a community fair or other opportu-
nity to set up an information booth at an organized event.

u Become friends with someone from your local newspaper staff. It is very helpful to have a
relationship with someone on the “inside.” Send them press releases but also forward
interesting and compelling stories of students who have received or will receive a Dollars for
Scholars scholarship, or stories about donors who have made a significant commitment to
Dollars for Scholars.

u Develop a simple Dollars for Scholars brochure for your chapter. There will be many op-
portunities to hand out or mail a brochure to prospective supporters.

u Invite local funeral directors to a group meeting, or meet with them individually. Many
times they are asked by families about local opportunities for memorial contributions during
funeral planning for loved ones. If the funeral home staff is informed about your chapter
and has a supply of your brochures and donation envelopes, they will promote your chap-
ter as an option for consideration. Do the same with local attorneys and financial planners
so that they can be informed that Dollars for Scholars is a viable charity for their clients’
charitable giving when drawing up wills and developing estate plans.

u Place “ads” in the high school newspaper. The newspaper is often read thoroughly by
parents and administrators—both target audiences for your chapter.

11-2
Dollars for Scholars Fundraising Guidebook Section Eleven: Marketing for Fundraising

Chapter Newsletters

Your chapter can benefit by communicating regularly with your donors and prospects. The more
they know about you, the more likely they are to contribute. The newsletter doesn’t have to be
fancy, but you do want to make it as attractive and inviting to read as possible. You can also save
money on postage by sending an e-newsletter.

Effective newsletters:

l Have plenty of white space. If the text looks too heavy on a page, people won’t bother to
read it. Keep sentences and paragraphs short and don’t crowd newsletter items and articles
together.

l Have variety. Add text boxes, sidebars, interesting headings and photos and vary fonts and
type sizes.

l Have short vs. long articles. If you want people to read your newsletter, keep things short
and to the point. People don’t read long articles—enough said!

l Have plenty of photographs. Photos help break up the text and put a “face” on what you
do as well as add human interest to your articles! Don’t forget to add a caption underneath
each photo.

l Acknowledge donors and volunteers. Include “thank you” lists of donors to your chapter
and a list of your chapter board members. Thank volunteers who have helped with special
events or activities. Feature stories on volunteers and donors.

l Include news about trends in education, news from other publications about educational
issues, forecasts on education, etc. You can access interesting articles and pieces of informa-
tion from your regional office’s or Scholarship America’s website, or conduct internet
searches for articles and information about local trends.

l Educate the readers. Have information in each issue about your chapter—your mission,
you achievements and your successes. Don’t worry about being repetitive from issue to
issue. You need to keep telling your story.

l Provide data and statistics about financial need in your community, the number of students
going on to higher education, current costs of attending college, etc. This helps make your
case that what you do is important and that you are having an impact on the community.

l Feature people. People like to read about other people. Include stories about students,
educators, donors, volunteers, past scholarship recipients, etc. Do follow-up stories on past
scholarship recipients or an interview with a prominent community leader who received a
scholarship, even if it wasn’t a Dollars for Scholars scholarship.

l Inform about events. Tell your public about upcoming phonathons, awards presentations,
fundraising events, etc. Include information on the results in the next issue.

l Entertain. Include boxes with education trivia, inspiring quotes about scholarships or
education, cartoons, unusual news, etc.

11-3
Section Eleven: Marketing for Fundraising Dollars for Scholars Fundraising Guidebook

l Include a donation option. Put a donation envelope in the middle of your newsletters—a
“cut out” donation form in the newsletter is not very effective. You may not receive a
strong response at first, but as you include an envelope routinely, you’ll be surprised at the
number of contributions that result from your newsletter. Flap envelopes are the most
effective for newsletters.

l Invite involvement. Consider advertising opportunities for people to become involved with
your chapter.

l Use a tagline or theme such as “Centerville High School Dollars for Scholars—promoting
access to higher education in our community” or “Centerville High School Dollars for
Scholars—every student deserves an education.” Use the tagline on everything you print
and distribute, including your newsletter.

l Include contact information. Be sure that your newsletter includes a return address and a
contact name, address, phone number and e-mail address. If someone has a question or
wants to respond to something you have featured in the newsletter, don’t make it difficult
to find you!

l Are attractive. If you can use a color along with black, that will increase reader interest. It
is pretty cost effective to use two colors on the outside pages and just black and white on the
inside.

l Are mailed - Just do it! Assembling a newsletter is an effort, but you will not reap the
results if you don’t get it done. Find someone who would be willing to take on the task and
make that their sole responsibility. If possible, produce a printed as well as an e-mail ver-
sion of the newsletter. Post a copy of your newsletter on your website.

11-4
Dollars for Scholars Fundraising Guidebook Section Eleven: Marketing for Fundraising

Website

Each year the number of individuals accessing the web grows by an astounding rate. It is increas-
ingly important for your chapter to have a presence on the internet—what used to be an option is
now a necessity. There may be someone in your chapter who has the capability to create a website
for you, or you might consider asking your local high school computer applications class to take
this on as a project. You will still need to find a volunteer who will keep the website up to date.

If you already have a website, be sure to include your web


address on all of your materials. Have a link from the high
school’s website to yours and vice versa. Ask your regional
office to include your web address in their chapter informa-
tion section on their website. You could ask the same of your
community foundation or other scholarship resources in your
community or state.

If you don’t have a website, start first by securing a domain name. There are
many, many domain name providers including domains.com, register.com,
networksolutions.com and godaddy.com. Purchasing a domain name is very inexpensive. You
may want to register as both a .org and a .com to be more accessible and to avoid the confusion of
someone else using your name. You should select a domain name that is easy to remember. Do-
mains ending in .org are reserved for nonprofit organizations like Dollars for Scholars!

Once you have selected your name, you will need to secure a hosting site. It is possible that a local
school or business will host your website - check with them first. However, you can use the ser-
vices of one of a number of hosts including IPowerWeb, Startlogic, Jumpline and Ifinology—visit
www.IPowerWeb.com, etc.

The last step is to design your website. That is where your local high school, technical school or
university may be willing to take on your website as a project. You may also be successful in
advertising for, or otherwise recruiting, an experienced volunteer.

For website content ideas, conduct a search on the internet and check out nonprofit organizations
or other Dollars for Scholars chapter websites.

Here are some things to be sure that your website includes:

· Contact information. Don’t make it difficult for someone to make contact with your chap-
ter! Decide who in the chapter will serve as the point of contact—it should be someone who
regularly checks his/her e-mail. List the contact’s name, e-mail address (with link) and
phone number.

· The names and professional titles of your board members. Showing that you have commu-
nity support and involvement increases your credibility to prospective supporters.

· An advertisement of the scholarships you have available, the deadline dates, any require-
ments and the mailing address. Include a downloadable scholarship application. Some
chapters have even developed online applications whereby students can apply directly
online. This is a very appealing option to web-savvy students.

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Section Eleven: Marketing for Fundraising Dollars for Scholars Fundraising Guidebook

· Photos of your awards night, fundraising events, students at a phonathon, etc. (Be sure you
have releases to use photos. Release form samples are available from
www.ScholarshipAmerica.org in the Members Only/Chapters Only section.)

· Your mission or tagline prominently.

· History of your chapter.

· Listing of scholarship recipients and awards presented.

· Statistics of the number of scholarships you have awarded in the past, the total dollars
awarded, etc.

· How to provide financial support for your chapter.

n Remember to state that gifts to your chapter are tax-deductible.


n Include a downloadable donation form—be sure it has the mailing address and
instructions for check writing.
n List ways that donors can contribute including memorial/
honor contributions, gifts of securities, checks, credit cards,
through a bequest, etc.
n Most chapters don’t have the sophistication or resources to take
online contributions, but there are inexpensive resources.
Network for Good offers nonprofits the opportunity to take
online contributions for your chapter—you can even add a
“Donate Now” button on your website that links donors
directly to the Network for Good option to make a contribution.
They will process credit card gifts and send you a monthly check.
A small fee (3% of the gift) is charged per donation, but that may be
less expensive than you would pay on your own. Contact
www.networkforgood.org for more information and to register. Several Dollars for
Scholars chapters are already using this service so visit the site to see how it works.
Another option for credit card contributions is available through Scholarship America.
Contact Scholarship America for more information: 800-248-8080.

n List a person to contact for questions regarding donations with an e-mail address.

· A list of your donors (unless someone has requested to be anonymous of course). This is an
additional opportunity to provide recognition and appreciation for your supporters.

· Advertisements of chapter special events. Include dates, cost, location and instructions on how
to participate.

· Recognition of your donors and volunteers. Include a section called “Volunteer of the Month”
or “Donor of the Month” and a short article and photo about their service to the community
and involvement with your chapter.

· Please don’t forget to notify your regional office and Scholarship America Headquarters
about your website so that you can be linked to theirs!

11-6
Dollars for Scholars Fundraising Guidebook Section Eleven: Marketing for Fundraising

E-newsletters

A very inexpensive communication option is sending e-mail updates or e-newsletters to your


contributors, prospects and volunteers. Just be sure that you have something important to commu-
nicate. People are becoming more sensitive to e-mail overload and spam. They will appreciate you
keeping e-mail messages short and to-the-point. Most of the same rules apply to e-newsletters as
they do to regular newsletter, but some key points to remember:

· Keep the e-mail short


· Develop an attractive masthead using your official Dollars for Scholars logo (available
through your regional office or Scholarship America) and use it for each issue
· Use color
· At the top of the e-newsletter, list the contents of the newsletter
· Send e-newsletters on a regular basis but no more frequently than once a month unless you
have urgent news to communicate.
· Keep articles short—one paragraph preferably
· Bold title and important information
· Provide links for more information
· Have an option to opt out of receiving the newsletter at the bottom.
· Include contact information if you are asking for a response.
· List important upcoming dates to promote events.
· Tell people your good news—scholarships awarded, fundraising goals met, event successes,
etc.

11-7
Dollars for Scholars Fundraising Guidebook Section Twelve: Record Keeping/Data Management

Section Twelve: Record Keeping/Data Management

A s a 501(c)(3) organization, your chapter is required by Scholarship


America and the IRS to maintain accurate records of your income
and expenses including scholarship awards.

In addition, there are other reasons to maintain accurate records. There


are many Dollars for Scholars chapters that regret not keeping data about
their donors, volunteers and scholarship recipients over the years, but it is
never too late to start—in fact it is imperative that you do start!

What kinds of data are important to collect and keep in a database?

Names, addresses, phone number and e-mails of:

w Donors past and present (also keep record of contribution amounts and dates)
w Prospective donors
w Scholarship recipients past and present (name of scholarship(s) received and dates)
w Scholarship recipient families past and present (name of student receiving scholarship(s)
and dates)
w Volunteers past and present (dates of service and offices held)
w Businesses and corporations (include contact name)
w Foundations (include contact name)
w Parents past and present (includes name(s) of students and graduation years)
w Civic and service organizations (include contact names)
w School board past and present (dates of service)
w School administrators past and present
w Faculty past and present

Data Management

There are several low-cost options for managing your data. A recent
survey indicated that chapters are using anything from card files to
Access or Excel, both of which are readily available as part of a Microsoft
Office package.

It is highly recommended that you have some type of computer software to manage your database
so that you can use it to merge solicitation letters and acknowledgements, produce reports, etc.
You should recruit one person on your board who will be dedicated to the management and up-
dating of the database. An option to consider is fundraising and database management software
developed specifically for Dollars for Scholars chapters called Donor Tracker.

Donor Tracker was developed by New England Dollars for Scholars and is being used successfully
by many Dollars for Scholars chapters across the nation. Technological support is currently pro-
vided through Scholarship America. Donor Tracker is relatively inexpensive ($200 at the time of
the writing of this Guidebook), utilizes Microsoft Access and runs on a Windows operating system
(95, 98, NT, 2000, ME or XP).

12-1
Section Twelve: Record Keeping/Data Management Dollars for Scholars Fundraising Guidebook

A workbook and sample documents are included with the purchase of the software. For more
information about Donor Tracker contact New England Dollars for Scholars at 800-335-4360 or
nedollars@aol.com.

Processing Donations

From your donation card or envelope, record important informa-


tion about the donor. More information may also be provided on
the check itself, or even on the return envelope, such as the name
of the spouse and phone number. Capture as much information as
you can because it helps you to be more personal with your donors.

Record the date that the gift was received, the method of payment (if a check, record the check
number) and the amount of the contribution. Note if the contribution was designated for a specific
fund and/or if it was a memorial or honor donation.

Make copies of all checks before they are deposited. This will enable you to look up a donation if
there should ever be a question.

Retain gift records for at least 4 years.

Retaining Chapter Records

Your chapter should maintain accurate expense and income records. It is suggested that you keep
copies of donation checks and transactions, paid bills and invoices, deposit slips, canceled checks,
award checks to students and scholarship applications of recipients, documentation for educa-
tional grants to teachers or other programs, etc. to support your chapter financial records.

The following items should be retained permanently in a safe place:

· Chapter bylaws and amendments


· Chartering documents
· Chapter meeting minutes
· Year-end financial statements

Retain these records for at least 4 years:

· Bank statements, canceled checks, invoices, scholarship/grant documentation


· Copies of your scholarship application and the brochure or other promotional information
about scholarships distributed by the chapter
· Record of the criteria for scholarship selection and eligibility, a description of the scholarship
selection process and committee members
· Listing of scholarship/grant recipients
· Monthly or quarterly financial statements
· Rosters of board members
· Chapter correspondence
· Chapter newsletters
· Programs from awards celebrations and fundraising events

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Dollars for Scholars Fundraising Guidebook Section Twelve: Record Keeping/Data Management

It is not required but is good business to retain these records:

· Names and addresses of donors


· Names and addresses of prospective donors
· Names and addresses of scholarship/grant recipients and parents
· History of chapter activities
· Running history of chapter scholarship award recipients and amounts

12-3
Dollars for Scholars Fundraising Guidebook Section Thirteen: Legal and Ethical Issues

Section Thirteen: Legal and Ethical Issues in Fundraising*

IRS Considerations

D ollars for Scholars individual chapters are subordi-


nate organizations of Scholarship America which is a
501(c)(3) organization—a tax-exempt charitable organiza-
tion described in section 501(c)(3) of the Internal Revenue Code. Scholarship
America’s EIN (employer identification number) is your chapter’s EIN number. Scholarship
America annually files a Form 990 on behalf of itself and its chapters.

The 501(c)(3) organizational status carries with it significant benefits and responsibilities. Because
most Dollars for Scholars chapters are organized under the “umbrella” of Scholarship America’s
501(c)(3)—exceptions would be foundations that are affiliates and are already 501(c)(3) organiza-
tions—it is unlikely that you would be contacted directly by the IRS. You should not initiate contact
with the IRS. If you are contacted by the IRS, you should alert Scholarship America
immediately at 800-248-8080.

It is very important for your chapter to maintain appropriate records and to follow IRS require-
ments and guidelines. Failing to do so could jeopardize the 501(c)(3) status which provides tax
exemption and allows you to receive charitable contributions so that you can offer your donors tax
deductibility for their gifts.

According to the IRS, chapters must:

n Maintain the records noted in Section Eleven.


n File your annual Scholarship America financial reports on time and accurately. This is
imperative so that the Scholarship America group 990 can be filed. Failure to report on
time can jeopardize your chapter’s status with Scholarship America. A spreadsheet pro-
gram is provided with the Chapter Guidebook and is also available on the Dollars for
Scholars website in the Members Only section. The spreadsheet makes it easy to maintain
accurate financial records and to report the required information.
n Send donors a written acknowledgement for any single contribution of $250 or more (It is
actually good practice to send an acknowledgement and heartfelt thank you to all donors
for all gifts!)
n Provide a written disclosure to a donor who makes a payment in excess of $75 partly as a
contribution and partly for goods and services provided by the organization.

Raffles

Each state has different requirements related to charities conducting raffles so you should check
with your secretary of state’s or your local city auditor’s office (visit your state government’s
website) regarding specifics. Most states require charities to acquire a license prior to conducting a
raffle event and you may have to wait many weeks or even months for approval. State laws may
restrict the age of the individuals who can sell raffle tickets (usually 18) and may require specific
wording on raffle tickets or in the program of your fundraising event.

Purchases of raffle tickets are not tax deductible. This includes 50/50 raffle tickets—raffle win-
nings that are split between a charity and an individual winner. Raffle winnings are also
fully-taxable for the winner who will have to file a Form 1040 (available at www.irs.gov). For
*Information contained in this section is not intended to represent a legal opinion. For specific concerns or questions, 13-1
it is best to consult with Scholarship America or a local attorney.
Section Thirteen: Legal and Ethical Issues Dollars for Scholars Fundraising Guidebook

example, if an individual wins $250 at raffle held at a fundraising event, he/she must claim the
$250 as income. If the item that has been won is not cash, the winner must claim the fair market
value of the item(s) as taxable income.

Be cautious when considering raffles where a local business agrees to let you have an item such as
a car or house at their cost (not free and clear) so that you can raffle it off as a fundraiser. Often
you will not sell enough raffle tickets to cover the cost or raise enough money beyond the cost to
make all the promotion expenses truly worthwhile for your organization. For example, if a car
dealership offers to give you a car that normally sells for $25,000 at their cost of $21,000, you must
sell at least $21,000 in raffle tickets just to break even, without considering any related expenses
such as ticket printing, posters, etc. It is possible that you may be successful in raising money from
a car raffle, but you must notify purchasers with a statement in your advertisements and tickets
that the raffle will be cancelled if not enough tickets are sold. Needless to say, it is possible that
neither you nor the car dealership will get the positive PR you had anticipated if you have to cancel
the raffle after tickets have been sold.

Quid Pro Quo Contributions

Contributions to a charity in which a donor receives goods and services in return are called quid pro
quo. The most common form of quid pro quo for Dollars for Scholars chapters is when a donor
purchases a ticket to a special event. Whenever the donor’s payment is more than $75, the chapter
must include a statement on the invitation to the event and in the acknowledgement notifying the
donor of the deductible amount of the payment.

For example, if a donor gives a charity $150 for himself and spouse to attend an event held by your
chapter and receives a meal and favor valued at $50/person ($100 for the couple), the charitable
portion of the payment is $50. The charity must disclose to the donor on the invitation and in the
acknowledgement that only $50 of the $150 gift is tax deductible. There are hefty fines for charities
that fail to do this—$10 per contribution not to exceed $5,000 per fundraising event or mailing. See
Section Six for a sample quid pro quo acknowledgement letter.

The IRS expects a charity to make a good faith effort to estimate the fair market value of goods or
services it provided to the donors.

Contributions of Property and/or Services

A contribution of property or a service is deductible at the fair market value of that property or
service. For example, if a printer agrees to print invitations for your auction event, the fair market
value might be $500 or whatever the printer would normally charge. If a donor contributes a gift
basket for an auction, the fair market value might be $60. The chapter does not have to value the
item/service in the acknowledgement—that is up to the donor. But you must describe the item or
service in your acknowledgment letter to them. (see Section Nine for a sample)

Contributions of Charitable Deduction Property

If your chapter receives a charitable contribution of property and sells the property within 2 years,
the chapter must file a Form 8282 (available at www.irs.gov). You are not required to file a Form
8282 if the property is valued at $500 or less, or if the property was distributed for charitable
purposes. For example, if you sold the property and used it to establish an endowment or scholar-
ship fund, or distributed the funds for scholarships, you would not be required to file a Form 8282.
13-2
Dollars for Scholars Fundraising Guidebook Section Thirteen: Legal and Ethical Issues

Ethics

Scholarship America and its affiliate organizations honor the Association of Fundraising Profes-
sionals (AFP) Donor Bill of Rights which states that Dollars for Scholars must act in an ethical
manner towards donors and prospective donors, and work in the best interests of the donor in our
fundraising efforts. Specifically, a chapter should not take advantage of a donor who is unable to
make prudent decisions about contributions or allow a donor to make a donation that would put
the donor at financial risk.

The Donor Bill of Rights10


Philanthropy is based on voluntary action for the common good. It is a tradition of giving and
sharing that is primary to the quality of life. To ensure that philanthropy merits the respect and
trust of the general public, and that donors and prospective donors can have full confidence in the
nonprofit organizations and causes they are asked to support, we declare that all donors have
these rights:

I. To be informed of the organization’s mission, of the way the organization intends to use
donated resources, and of its capacity to use donations effectively for their intended purposes.

II. To be informed of the identity of those serving on the organization’s governing board, and to
expect the board to exercise prudent judgment in its stewardship responsibilities.

III. To have access to the organization’s most recent financial statements.

IV. To be assured their gifts will be used for the purposes for which they were given.

V. To receive appropriate acknowledgement and recognition.

VI. To be assured that information about their donation is handled with respect and with confi-
dentiality to the extent provided by law.

VII. To expect that all relationships with individuals representing organizations of interest to the
donor will be professional in nature.

VIII. To be informed whether those seeking donations are volunteers, employees of the organiza-
tion or hired solicitors.

IX. To have the opportunity for their names to be deleted from mailing lists that an organization
may intend to share.

X. To feel free to ask questions when making a donation and to receive prompt, truthful and
forthright answers.

10
Source: Association of Fundraising Professionals. www.afpnet.net
13-3
Section Thirteen: Legal and Ethical Issues Dollars for Scholars Fundraising Guidebook

Donor Privacy
Donor records and information must be held in confidence within the chapter’s circle of board
members or volunteer solicitors. It may be appropriate to restrict information even further in
specific situations.

In the course of conducting donor research, you may uncover private information that would not
be appropriate to share beyond the intimate circle of volunteer solicitors. Most chapters however
only have access to records and information that is available to the public.

Donor privacy considerations do not normally restrict you from sharing the names of donors with
the public when printing acknowledgement/thank you lists of donors and contributors, unless a
donor has requested that his/her name either be listed as “anonymous” or not included in pub-
lished donor listings. Many donors in fact are highly motivated to have their names included in
such published lists. If you are concerned or uncertain about a particular donor’s wishes, it is best
to ask directly. You can also include a check-off box on your donation return slip that allows
donors the option of removing their name from published listings.

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Dollars for Scholars Fundraising Guidebook Section Thirteen: Legal and Ethical Issues

Below is a set of Model Gift Acceptance Policies. Your board should carefully review them to
determine if they meet your chapter’s needs. You may wish to have a local attorney review
and revise them prior to adoption. Your chapter may edit or make additions to this model as
appropriate.

Dollars for Scholars


Model Gift Acceptance Policies

In order to protect the interests of the Centerville High School Dollars for Scholars chapter and the
persons and other entities who support its programs, these policies are designed to assure that all
gifts to, or for the use of, the Centerville High School Dollars for Scholars chapter are structured to
provide maximum benefits to both parties.

This document will focus on both current and deferred gifts, with special emphasis on various
types of deferred gifts of non-cash property.

The goal is to encourage funding of the Centerville High School Dollars for Scholars chapter with-
out encumbering the organization with gifts which may prove to generate more cost than benefit,
or which are restricted in a manner which is not in keeping with the goals of the chapter.

To optimize funding from individuals and other entities, the chapter must be capable of responding
quickly, and in the affirmative where possible, to all gifts offered by prospective donors. It is under-
stood that except where stated otherwise, these policies are intended as guidelines, and that
flexibility must be maintained since some gift situations can be complex, and decisions made only
after careful consideration of a number of interrelated factors. Therefore, these policies will in some
instances require that the merits of a particular gift be considered by the board of directors and a
final decision be made only by that body.

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Section Thirteen: Legal and Ethical Issues Dollars for Scholars Fundraising Guidebook

I. OUTRIGHT GIFTS

A. Cash

1. Gifts in the form of cash and checks shall be accepted regardless of amount unless, as in
the case of all gifts, there is a question as to whether the donor has sufficient title to the
assets or is mentally incompetent to legally transfer the funds as a gift to the Centerville
High School Dollars for Scholars chapter.

2. All checks must be made payable to Centerville High School Dollars for Scholars and
shall in no event be made payable to an agent or volunteer for the credit of the chapter.

B. Publicly-Traded Securities

1. Securities which are traded on the New York or American Stock Exchanges shall be
accepted by the chapter. It may be anticipated that securities will be immediately sold by the
chapter. In no event shall a volunteer working on behalf of the chapter commit to a donor
that a particular security will be held by the chapter unless authorized to do so by an officer
of the board of the chapter.

C. Closely-Held Securities

1. Non-publicly traded securities may only be accepted after approval of the board of direc-
tors.

2. Such securities may be subsequently disposed of only with the approval of the board of
directors.

D. Real Property

1. No gift of real estate shall be accepted without prior written approval of the board of
directors.

2. No gift of real estate shall be accepted without first being appraised by a party chosen by
the board of directors who shall have no business or other relationship to the donor.

3. In general, residential real estate located within the United States, with a value estimated
by the donor or other at $25,000 or greater will be accepted, unless the board shall deter-
mine for some reason that the property is not suitable for acceptance as a gift.

4. In general, residential real estate located outside United States will not be accepted as a
gift unless it appears to have value in excess of $100,000 and there is reason to believe it is
highly marketable. The board may make exceptions to this policy if conditions warrant.

5. No commercial real estate shall be accepted by anyone on behalf of Centerville Dollars for
Scholars without prior approval of the board of directors.

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Dollars for Scholars Fundraising Guidebook Section Thirteen: Legal and Ethical Issues

6. Special attention shall be given to the receipt of real estate encumbered by a mortgage, as
the ownership of such property may give rise to unrelated business income for the chapter,
and disqualification of certain split interest gifts unless handled in a proper manner.

E. Tangible Personal Property

1. Jewelry, artwork, collections, and other personal property shall not be accepted unless the
chapter shall have reason to believe the property has a value in excess of $5,000. Such prop-
erty can only be accepted by the board or such other person or persons authorized to do so
by the board of directors.

2. No personal property shall be accepted by the chapter unless there is reason to believe the
property can be quickly disposed of. No personal property shall be accepted that obligates
the chapter to ownership of it in perpetuity. No perishable property or property which will
require special facilities or security to properly safeguard will be accepted without prior
approval of the board of directors.

3. Notwithstanding the foregoing, if there is reason to believe personal property has a value
of $5,000 or more, it may only be accepted after receipt and review by the board of directors
or those empowered to act on its behalf, or an appraisal qualified under terms of the Inter-
nal Revenue Code governing gifts of property of this type.

4. Only the board of directors or persons authorized by the board to do so may represent to
a donor that property will or will not be held by the Centerville High School Dollars for
Scholars for a requisite period of time or for purposes related to its tax-exempt status. Do-
nors should be notified at the time of receipt of a gift that the chapter will, as a matter of
policy, cooperate fully in all matters related to IRS investigations of non-cash charitable
gifts.

F. Other Property

1. Other property of any description including mortgages, notes, copyrights, royalties,


easements, whether real or personal, shall only be accepted by action of the board of direc-
tors or persons duly acting on its behalf.

II. DEFERRED GIFTS

A. Bequests

1. Gifts through wills (bequests) shall be actively encouraged by Centerville High School
Dollars for Scholars.

2. In the event of inquiry by a prospective legator, representations as to the future accept-


ability of property proposed to be left to the chapter in a will or other deferred gift shall only
be made in accordance with the terms and provisions of paragraphs I (A-F) of this docu-
ment.

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Section Thirteen: Legal and Ethical Issues Dollars for Scholars Fundraising Guidebook

B. Charitable Remainder Trusts

1. In general, the Centerville High School Dollars for Scholars chapter will not serve as sole
trustee of a charitable remainder trust for the benefit of the chapter. This policy may only be
waived by a written resolution of the board of directors.

2. The fees for management of a charitable remainder trust will only be paid by the chapter
upon approval of the board of directors.

3. No representations shall be made by a volunteer or other persons acting on behalf of the


chapter as to the manner in which charitable remainder trust assets will be managed or
invested by a corporate fiduciary.

C. Life Estate Gifts

1. Donors shall generally not be encouraged to make gifts of real property to the Centerville
High School Dollars for Scholars chapter under which they maintain a life interest in the
property.

2. This policy is based on the fact that such transfers are often not in the best interest of the
donor involved and there is potential for negative publicity for the chapter should a donor
have a need to sell the property to generate funds, only to find that a relatively small portion
of the proceeds would be available to the donor as owner of the life estate.

3. Such gifts may be accepted by approval of the board of directors in situations where the
asset involved appears to be a minor portion of the donor’s wealth, and the board is satis-
fied that there has been full disclosure to the donor of the possible future ramifications of the
transaction.

F. Gifts of Life Insurance

1. The Centerville High School Dollars for Scholars chapter will encourage donors to name
the chapter to receive all or a portion of the benefits of life insurance policies which they
have purchased on their lives.

2. The board will not, however, as a matter of course agree to accept gifts from donors for
the purpose of purchasing life insurance on the donor’s life.

3. No insurance products may be endorsed for use in funding gifts to the chapter without
board approval.

4. In no event shall lists of the chapter’s donors be furnished to anyone for the purpose of
marketing life insurance for the benefit of donors and/or the chapter. This policy is based
on the fact that this practice represents a potential conflict of interest, may cause donor
relations problems, and may subject the chapter to state insurance regulation should the
activity be construed as involvement in the marketing of life insurance.

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Dollars for Scholars Fundraising Guidebook Section Thirteen: Legal and Ethical Issues

III. PAYMENT OF FEES RELATED TO GIFTS

A. Finder’s Fees or Commissions

1. In general, the Centerville High School Dollars for Scholars chapter will pay no fee to any
person as consideration for directing a gift to the chapter. It is understood that such fees
may or may not be legal and that in the case of irrevocable deferred gifts which involve
management of assets, the payment of such fee may subject the chapter and the board of
directors to federal and state security regulation.

B. Professional Fees

1. The Centerville High School Dollars for Scholars chapter will pay reasonable fees for
professional services in connection with the completion of a gift to the chapter. Such fees
will be paid only with prior written approval of the board of directors.

2. Such fees will be paid only following discussion with and approval by the donor.

3. Fees shall be reasonable, and directly related to the completion of a gift. They shall be
limited to appraisal fees by persons who are competent and qualified to appraise the prop-
erty involved and who have no conflict of interest, legal fees for the preparation of
documents, accounting fees incident to the transaction, and fees of “fee for service” finan-
cial planners. In the case of financial planners, such persons must have in writing that they
are compensated only through fees for services rendered and that they are not compensated
for the sale of products to clients. This distinction is vital in avoiding the payment of com-
missions, which could be construed as triggering securities regulation.

4. In the case of legal, accounting and other professional fees, an attempt shall be made by
the board of directors to ascertain the reasonableness of these fees prior to payment. An
hourly breakdown of time should be requested. In cases, which appear excessive, the sum-
mary of fees shall be submitted to the board for review and approval prior to payment.

5. In cases where the persons receiving fees were initially employed by the donor and the
chapter is asked to pay fees involved, the donor shall be notified that the payment of such
fees may result in taxable income to the donor in the amount of the fees paid.

6. In situations where advisors retained by the chapter prepare documents or render advice
in any form to the chapter and/or a donor to the chapter, it shall be disclosed to the donor
that the professional involved is in the employ of the chapter and is not acting on behalf of
the donor and that any documents or other advice rendered in the course of the relationship
between the chapter and the donor should be reviewed by counsel for the donor prior to
completion of the gift.

13-9
Section Thirteen: Legal and Ethical Issues Dollars for Scholars Fundraising Guidebook

IV. RESTRICTIONS

A. Endowment Restrictions

1. No restrictions on how gifts may be used by the Centerville High School Dollars for
Scholars chapter will be honored without prior approval of the board of directors in the
case of current gifts, or subsequent approval by the board in the case of gifts received by
will, or other gift which is effective at death and which has not been previously approved
by the board.

2. A permanent endowment may be established with a minimum gift of $10,000.

13-10
CHAPTER ENDOWED SCHOLARSHIP PROGRAM
FACT SHEET
WHAT IS IT? An endow ed scholarship program is a tax-deductible contribution to a Dollars for
Scholars chapter for the purpose of using only the earnings from the principal of the contribution
for the purpose of distributing scholarship aw ards or funding other chapter approved programs.

CAN THE DONOR DEFINE THE USE OF THESE CONTRIBUTED FUNDS? Yes. The local chapter
accepts restricted contributions for any purpose fitting w ithin the mission of that chapter. In fact,
special provisions are included w ithin the endow ment agreement that allow the Donor to w ork w ith
the local chapter to establish his or her scholarship program and necessary future program
changes.

CAN ENDOWED SCHOLARSHIP PROGRAMS BE ESTABLISHED THROUGH A WILL? Yes.


There are many methods used for the establishment of endow ed scholarship programs; a w ill is
only one of them. The local chapter has the flexibility to w ork w ith the financial needs of all Donors
in the establishment of an endow ed scholarship program on a current or deferred basis.

CAN DONORS EVER RECEIVE THEIR CONTRIBUTION BACK? No. By law , any endow ed
contribution to a Dollars for Scholars chapter is irrevocable. This law allow s all contributions to the
local chapter to be tax deductible.

WHAT HAPPENS IF THE PURPOSE OF THE ENDOWED CONTRIBUTION CEASES TO EXIST? All
of the local chapter's Endow ed Scholarship Agreements contain a special provision called a
"Sunset Clause." This clause w ithin the endow ment agreement details w hat will happen if the
purpose of the scholarship ceases to exist or if, for some reason, the local chapter ceases to
exist.

CAN ADDITIONAL CONTRIBUTIONS TO THE ENDOWMENT BE MADE? Yes. Any future


contributions to the endow ment w ill be tax-deductible by the donor and the earnings legally
restricted according to the terms of the endow ment agreement.

DO EARNINGS FROM THE ENDOWMENT NEED TO BE SPENT IMMEDIATELY? No. It is


permis sible to build the principal of the endow ment to a specified level prior to spending the
earnings for the scholarship program.

HOW DOES THE LOCAL CHAPTER INVEST THE FUNDS? All local chapter investments are
controlled by the Governing Board of the local Dollars for Scholars chapter. Generally, all
endowed scholarship funds are invested in conservative, interest-bearing securities such as U.S.
Treasury Securities. The local chapter has an investment policy established by their Governing
Board w hich is available to potential donors.

ARE THE FUNDS PROTECTED FROM A CHAPTER'S CREDITORS? Yes. By establishing an


endowment w ith a Dollars for Scholars chapter, all funds are protected from creditors.

HOW DOES THE PROCESS OF ESTABLISHING AN ENDOWED SCHOLARSHIP PROGRAM


BEGIN? A potential donor need only contact their chapter representative. The local chapter has all
forms necessary to complete the establishment of the endow ed program.

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AGREEMENT TO ESTABLISH
AN ENDOWED S CHOLARSHIP P ROGRAM

w ith

(Chapter)

Purpose: To establish an endow ed scholarship program for (Donor) as outlined in the


attached Restric tions of Endow ment.

Agreement: (Donor) hereby agrees to transfer to (Chapter), the sum of $ for the
purpose of establishing the (the “Program”) in
accordance w ith the terms and conditions herein contained.

1. (Chapter) shall establish initial assets, as w ell as any future contributions to the Program,
as an identifiable endow ed scholarship fund within the accounting records of (Chapter).

2. (Chapter) shall invest all assets of the Program in a prudent manner. Investments shall be
made in accordance w ith policies established by the (Chapter’s) Governing Board.

3. (Chapter) shall manage the Program and distribute the annual income of the Program as
scholarships substantially in accordance w ith the Restrictions of Endow ment.

4. (Chapter) shall provide an annual report to the “Donor” including income, contributions,
distributions, and asset balance of the Program.

5. In the event the Program and stated purpose of the contribution ceases to exist, all funds
w ill be transferred to the (Chapter’s) general scholarship fund, or to some other similar
program of an appropriate nonprofit entity exempt from tax as an organization described in
Section 501(c)(3) of the Code, as solely determined by (Chapter) (in consultation w ith the
Donor). In no event shall any monies of the Program be returned to the Donor.

6. In the event (Chapter) ceases operations or otherw ise determines that it is unw illing to
continue management of the Program, all funds w ill be distributed to another organization
substantially similar in purposes and function as the (Chapter) provided that such new ly
designated organization is exempt from tax as an organiz ation described in Section
501(c)(3) of the Code and comparable provisions of state law as solely determined by
(Chapter) (in consultation w ith the Donor).

7. The investment and management of the assets of the Program w ill not violate any of the
provis ions of the (Chapter) governing instruments or any contract or other agreement w ith
any third party.

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Agreement to Establish an
Endowed Scholarship Program

Page 2

8. The representations, w arranties, covenants, and other information provided by the


(Chapter) to the Donor herein do not either omit a material fact or contain any statement
w hich is false or misleading in any material respect.

9. This agreement may not be assigned or transferred by (Chapter).

10. All notices, requests, or other communications w hich may be or are required to be given by
either the (Chapter) or the Donor to the other hereunder shall be in w riting and shall be
deemed sufficiently given, made, or delivered on the date the same is sent by United States
mail, postage prepaid, addressed to the parties as hereinbelow provided. Receipt of a
party of any such communic ation shall be deemed sufficiently effected on the date actually
receiv ed by the receiving party. For purposes hereof, each party’s mailing address shall
be as follow s:

Donor:

Chapter:

Either party may notify the other of such other address to which such notices, requests,
or other communications shall be sent.

(Date) (Donor)

(Date) (Chapter)

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RESTRICTIONS TO THE (DONOR) ENDOWMENT
It is agreed the interest earned on the principal of the (Donor) Endowment shall be used for the
following purposes.

* Example: Scholarships appropriate in amount and purpose as determined by the (Chapter).

* Example: Twenty-five percent (25%) of annual earnings shall be invested in the principal of
the endowment.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

These restrictions shall remain in effect until (Chapter), in collaboration with the (Donor),
determines specific changes are necessary.

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LONG-TERM INVESTMENT POLICY

ENDOWED FUNDS

All funds invested by a Dollars for Scholars® chapter are controlled by the
governing board of the chapter. The governing board may delegate the
responsibility to a committee of the board, such as an endowment or investment
committee, but the responsibility for the investing of funds for a local chapter
ultimately remains with the governing board.

All funds contributed to endowed scholarship programs are invested in safe


interest-bearing securities that generally have some form of principal guarantee.

Typical investment instruments are as follows:

1. Bank and commercial money market accounts


2. Certificates of Deposit
3. Corporate bonds with an “A” rating or better

Investments of a chapter are reviewed regularly by the Chapter Governing Board


or its designated committee.

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ENDOWED SCHOLARSHIP WILL PROVISION

SAMPLE

I give and bequeath the sum of $ , together with property described as


follows:

to (chapter name), a nonprofit (corporation, association) with its corporate


headquarters now located at (chapter address). The bequeathed funds shall be held
by (chapter name), or its successors, and shall be knows as the
Endowment. This property may be invested, sold, or reinvested with other
funds of (chapter name) as it deems appropriate. Income from this property is to be
used exclusively for (program description). The scholarships shall be used for
postsecondary education purposes. The governing body of (chapter name) shall set
the standards and qualifications in awarding the scholarships. In no event is any
portion of the principal of the funds to be expended for any purpose.

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MEMORANDUM

DATE: March 1, 1999

TO: Scholarship America Staff and Dollars for Scholars Chapters

FROM: Fred Vogel, CPA, Executive Vice President, Scholarship America

RE: Donor Directed Funds

Recently, I have had conversations with Scholarship America staff indicating an


increasing desire by donors to direct funds given to Dollars for Scholars Chapters or
the foundation itself to related parties, either relatives or friends, under the premise of
a scholarship and/or for the attainment of a benefit namely a Collegiate Partner match
or a charitable contribution. This activity is unethical and illegal. Scholarship America
neither condones nor allows any staff member, volunteer or chapter to enter into
donor transactions where the transfer of the asset ownership isn’t complete at the
date of the gift and doesn’t comply with all appropriate laws. Let me give you an
example.

A chapter receives $1,000 from an individual and the individual directs the chapter to
award these funds to a named individual. What’s wrong with this?

First, Internal Revenue Code Section 170(f)(3) states, “A taxpayer is denied a


charitable deduction for gifts to a charity. . . where less than the taxpayers entire
interest in the property is contributed.” In this example the donor retained the right to
direct the funds to a named individual and that denies the donor a charitable gift under
the law. To the extent the chapter indicates these funds are a charitable gift
deductible by the donor, the chapter is in violation of IRS code section 170.

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Memorandum

Page 2

Second, Internal Revenue Code section 117 defines scholarships and their
characteristics. Regulation 117-6(c)(3) states “However, a scholarship or fellowship
grant does not include any amount provided by an individual to aid a relative, friend, or
other individual . . . if the grantor is motivated by family or philanthropic
considerations.”

Code Section 117 and the regulations clearly state that a chapter accepting donor
directed funds to a specific individual is not giving a scholarship to a recipient. If it is
not a scholarship then it is a taxable distribution to the recipient. If that award is not
reported to the appropriate governments the chapter is again in trouble.

Dollars for Scholars chapters and Collegiate Partners of Scholarship America


operated under a specific agreement that all awards from Dollars for Scholars
chapters are scholarships. To the extent an award from a chapter is not a
scholarship and a Collegiate Partner would treat that student aid differently under our
agreement is a violation of our Collegiate Partner agreements.

As you can see a number of laws and agreements are broken when Scholarship
America staff, volunteers, and Dollars for Scholars chapters accept donor directed
funds. In this example the individuals involved, the Dollars for Scholars chapter, and
Scholarship America as a nonprofit foundation would face serious problems if we
were involved in these kinds of activity. Sometimes you just have to say no to a donor.

I hope the enclosed regulations and this memo clearly indicates the law and
Scholarship America’s position on this issue.

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U.S. MASTER TAX GUIDE – NON-BUSINESS – CHARITABLE CONTRIBUTIONS
1643. Use of Property – Partial Interest. Generally, a taxpayer is denied a charitable
deduction for gifts to charity of the rent-free use of property and other non-trust gifts where
less than the taxpayer’s entire interest in the property is contributed, except in the following
cases: (1) a contribution of an undivided portion of a taxpayer’s entire interest in property – for
example, a one-fourth interest in property; (2) a contribution of a remainder interest in a personal
residence or farm; (3) a qualified conservation contribution; and (4) a charitable deduction would
have been allowed had the interest been transferred in trust (Code Sec. 170(1)(3) Reg. §
1.170A-7). 153 See ¶ 538 and ¶ 1070.

TAXATION, BUDGET AND ACCOUNTING TEXT


§ 1.117.6 Qualified Scholarships.
(a) Outline of provisions. This outline lists the paragraphs contained in §1.117.6.
(b) Exclusion of qualified scholarships.
(c) Definitions.
(1) Qualified scholarship.
(2) Qualified tuition and related expenses.
(3) Scholarship or fellowship grant.
(i) In general.
(ii) Items not considered as scholarships or fellowship grants.
(4) Candidate for a degree.
(5) Educational organization.
(6) Examples.
(d) Inclusion of qualified scholarships and qualified tuition reductions representing payment
for services.
(1) In general.
(2) Payment for services.
(3) Determination of amount of scholarship or fellowship grant representing payment
for services.
(4) Characterization of scholarship or fellowship grants representing payment for
services for purposes of the reporting and withholding requirements.
(5) Examples.
(e) Recordkeeping requirements.
(f) Effective date.
(1) In general.
(2) When a scholarship or fellowship is granted.
(3) Scholarships or fellowships granted before August 17, 1986.
(i) In general.
(ii) Amounts received in subsequent academic periods that were not initially
described as fixed cash amounts or readily determinable amounts.
(iii) Examples.
(4) Expenditures incurred before January 1, 1987.
(g) Reporting and withholding requirements.
(h) Characterization of scholarship or fellowship grants exceeding amounts permitted to be
excluded from gross income for purposes of the standard deduction and filing
requirements for dependents.

(b) Exclusion of qualified scholarships – (1) Gross income does not include any amount
received as a qualified scholarship by an individual who is a candidate for a degree at
an educational organization described in section 170(b)(1)(A)(ii), subject to the rules set
forth in paragraph (d) of this section. Generally, any amount of a scholarship or
fellowship grant that is not excludable under section 117 is includable in the gross
income of the recipient for the taxable year in which such amount is received,
notwithstanding the provisions of section 102 (relating to exclusion from gross income
of gifts). However, see section 127 and the regulations thereunder for rules permitting
an exclusion from gross income for certain educational assistance payments. See also

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section 162 and the regulations thereunder for the deductibility as a trade or business
expense of the educational expenses of an individual who is not a candidate for a
degree.

(2) If the amount of a scholarship or fellowship grant eligible to be excluded as a qualified


scholarship under this paragraph cannot be determined when the grant is received
because expenditures for qualified tuition and related expenses have not yet been
incurred, then that portion of any amount received as a scholarship or fellowship grant
that is not used for qualified tuition and related expenses within the academic period to
which the scholarship or fellowship grant applies must be included in the gross income
of the recipient for the taxable year in which such academic period ends.
(c) Definitions – (1) Qualified scholarship. For purposes of this section, a qualified
scholarship is any amount received by an individual as a scholarship or fellowship grant
(as defined in paragraph (c)(3) of this section), to the extent the individual establishes
that, in accordance with the conditions of the grant, such amount was used for qualified
tuition and related expenses (as defined in paragraph (c)(2) of this section). To be
considered a qualified scholarship, the terms of the scholarship or fellowship grant need
not expressly require that the amounts received be used for tuition and related
expenses. However, to the extent that the terms of the grant specify that any portion of
the grant cannot be used for tuition and related expenses or designate any portion of
the grant for purposes other than tuition and related expenses (such as for room and
board, or for a meal allowance), such amounts are not amounts received as a qualified
scholarship. See paragraph (e) of this section for rules relating to recordkeeping
requirements for establishing amounts used for qualified tuition and related expenses.
(2) Qualified tuition and related expenses. For purposes of this section. qualified tuition
and related expenses are:
(i) Tuition and fees required for the enrollment or attendance of a student at an
educational organization described in section 170(b)(1)(A)(ii); and
(ii)Fees, books, supplies, and equipment required for courses of instruction at such an
educational organization.
In order to be treated as related expenses under this section, the fees, books, supplies, and
equipment must be required of all students in the particular course of instruction. Incidental
expenses are not considered related expenses. Incidental expenses include expenses incurred
for room and board, travel, research, clerical help, and equipment and other expenses that are
not required for either enrollment or attendance at an educational organization, or in a course of
instruction at such educational organization. See paragraph (c)(6). Example (1) this section.
(3) Scholarship or fellowship grant – (i) In general. Generally a scholarship or fellowship
grant is a cash amount paid or allow to, or for the benefit of, an individual to aid such
individual in the pursuit of study or research. A scholarship or fellowship grant also
may be in the form of a reduction in the amount owed by the recipient to an educational
organization for tuition, room and board, or any other fee. A scholarship or fellowship
grant may be funded by a governmental agency, college or university, charitable
organization, business, or any other source. To be considered a scholarship or
fellowship grant for purposes of this section, any amount received need not be formally
designated as a scholarship. For example an “allowance” is treated as a scholarship if
it meets the definition set forth in this paragraph. However, a scholarship or fellowship
grant does not include any amount provided by an individual to aid a relative, friend, or
other individual in the pursuit of study or research if the grantor is motivated by family or
philanthropic considerations.

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