All Hot Topics
The AFP Resource Center has produced comprehensive "Hot Topic" overviews of key fundraising areas that members have identified as being most in demand. Think a new "Hot Topic" page is needed? Let us know.
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The Annual Fund is a fundraising program that generates gift support for the organization on an annual basis. It is the primary fundraising approach used to broaden support, upgrade levels of giving, and provide operating support for ongoing programs.
A capital campaign is an intensive, organized fundraising effort to secure philanthropic gifts for specific capital needs, executed within a specific time period. It specifically targets buildings, e.g. funds for facilities (bricks and mortar).
The basis of fundraising is the organization’s case for support. It is an internal document whose purpose is to state the cause and all the reasons why prospective donors might want to contribute to its advancement. The case is driven by the mission and strategic plan of the organization.
Many companies recognize the benefit of community involvement as a way to improve their image and identity within the community. Companies may give to their communities by providing in-kind gifts, matching gifts, pro bono services, office or meeting space, and skilled volunteers. Corporate philanthropy takes place through direct monetary gifts to a nonprofit, often made through the corporation's foundation. Companies also may support nonprofits through cause-related marketing or corporate sponsorships.
The AFP Resource Center receives many queries about consulting. Some relate to how and why to hire a consultant; others relate to how to become a consultant. In this Hot Topic paper we will address both. Much of the material herein is from AFP’s Information Exchange paper "Thinking About Becoming a Consultant?" by Linda Lysakowski and AFP’s Ready Reference guide "So You Want to Be a Consultant."
Before an organization starts a fundraising program, certain conditions need to be in place, including leaders that have a clear sense of the organization’s mission and constituency and a vision of the organization’s direction, a continuous planning process for determining how it will achieve its mission and how much it will cost, and the necessary resources to achieve the plan.
The development plan is the organization’s roadmap for fundraising success.
Marketing is an exchange relationship in which the marketer attempts to influence the behavior of the target audience. The central theme of marketing is that the customer or client is at the center of everything the organization does. Direct marketing or direct response is a sub-discipline and type of marketing. It attempts to send its messages directly to consumers through direct mail, email or telemarketing. In the fundraising context, it is a way of contacting large numbers of potential donors, lapsed donors, and current donors with a specific call to action.
Relationships are critical in fundraising. The focus of philanthropy must be relationship-building that is customized to the needs and desires of the donor. Individuals have different motivations for and patterns of giving. The more an organization knows about potential donors' motives and how they like to give, the better positioned it is to make effective solicitations.
Endowments can be established to support the ongoing operating expenses of the organization or for designated purposes such as scholarships, projects, programs, institutes, professorships, or any aspect of its charitable work. Endowments can offer organizational stability in that they can supply revenue in years in which donations are down, or charitable need increases, and they can be a resource for new programs and innovations in prosperous years.
Ethical standards and principles are the foundation for maintaining public trust in our nonprofit organizations. Standards guide professional behavior. Especially in questionable situations, they provide a source of information that can support and assist the development professional in deciding how to act. Ensuring that the organization’s adherence to ethical standards is part of operating principles and communicated to stakeholders gives those stakeholders confidence that their contributions are being given to a worthy organization.
Raising funds to operate your organization and its programs is very likely one of the most important activities for your nonprofit. Fundraising is more than simply “raising dollars.” The role of a professional fundraiser is to raise financial support through: Cultivating and deepening relationships with individuals and interested parties; utilizing effective fundraising practices; and maintaining the highest ethical standards (AFP Code of Ethics and Donor Bill of Rights). Effective fundraisers seek to discover what is important to any potential donor, and tap that need to encourage and support giving. It requires being able to look at the organization’s mission and programs through the eyes of the donor rather than from the perspective of those who run the organization.
Accountability of organizations to their constituencies has become one of the most important aspects of good governance in both the nonprofit and private sectors of our economy. In the charitable sector there is public interest in the effectiveness of organizations and efficiency of raising funds. The media has contributed to this interest through well intended reports to inform the public about fundraising costs. Often these reports are oversimplified and sensationalized, focused more on keeping cost ratios as low as possible (efficiency) rather than on maximizing net revenues to achieve the organization's mission (effectiveness).
Policy, as defined in AFP's Fundraising Dictionary, is "broad and general statements that are guiding principles designed to influence and determine the decisions and actions of an organization."
Major gifts are contributions that make a significant difference to the nonprofit organization to which they are given. The amount considered to be a major gift varies from organization to organization, depending on the organization’s size, age, funding base, and operating budget. For a very small nonprofit, $1,000 might be a major gift. For a large university, a major gift might be $25,000 or more.
Use of the Internet and social media in fundraising is relatively new, and the whole arena is rapidly changing. However, it’s increasingly important to consider these options as a key part of your fundraising strategy. Reaching out to potential donors through these media is less expensive than using traditional telephone and direct mail techniques, and has the potential to generate significant charitable donations.
The focus of philanthropy must be relationship-building that is customized to the needs and desires of the donor. Individuals have different motivations for and patterns of giving. The more you know about potential donors’ motives and how they like to give, the better positioned you are to make effective solicitations.
One of the goals of the AFP Research Council is to identify and make information available on research that impacts fundraising and philanthropy. This Hot Topic contains a list of research reports available through the Internet.
Special events are designed to raise awareness of a cause and help to cultivate relationships with donors and potential donors. Although special events tend to be more costly than other fundraising strategies in terms of return on investment, they are often incorporated into the organization’s overall fundraising planning in order to provide visibility for the organization and to provide opportunities to involve people in the organization’s activities.
Certain nonprofits, including charities, are granted tax concessions because they provide for the public good. These organizations are required by law to provide reports to donors and to the tax authority. This Hot Topic discusses tax reporting questions, including questions related to the annual nonprofit tax return, Unrelated Business Income Tax (UBIT), reporting to donors on deductibility of donations on their tax returns, and other tax-related matters.
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