Theology of Fundraising PDF

# Theology of Fundraising Experience in Christian fundraising has shown that there is disagreement on the correct Biblical model that should be used in fundraising and in fact whether fundraising should be carried out at all. Statements are often made at seminars that there are two extremes: not to...

# Theology of Fundraising Experience in Christian fundraising has shown that there is disagreement on the correct Biblical model that should be used in fundraising and in fact whether fundraising should be carried out at all. Statements are often made at seminars that there are two extremes: not to ask and manipulation. The Bible contains examples of fundraising. In the Old Testament, God told Aaron that the Levites should be funded by the tithes received from the people (Numbers 18). In the New Testament Paul asked Christians to give to their brothers in need (2 Corinthians 8-9). And in 2 Corinthians 9:6-15, Paul discusses the concept of giving. This specific scripture is divided into two parts: it explains what giving does for the giver and what giving does for others. In each of these cases four items are identified. 2 Corinthians 9:6-11 maintains that what the donor gives determines what the donor gets, donations reflect the heart of the donor (giving without compulsion or complaining) and that proper Biblical giving makes the donor dependent on God and giving enables the giver to give more (verse 10, 11). 2 Corinthians 9:12-15 identifies that giving supplies the needs of God's people (first part of verse 12), it promotes the glory of God (second part of verse 12); proves the givers' faith and obedience (verse 13) and motivates love and prayer for the giver (verse 14). The church, as it is described in Acts, encompasses all aspects of ministry. Today, however, many of these aspects (eg: taking care of the handicapped, widows and orphans) have been taken over by parachurch bodies or the government. Many missionary NGOs are also parachurch organizations and most of their activities lie outside of the local church. Nevertheless, these parachurch organizations should be considered part of the body of Christ. It is my view that Christians should first give for the needs of their own local church and then to parachurch organizations. Given the decline of Christianity in South Africa, it can be assumed that from secular people and nominal Christians there is a strong possibility that the church will only receive a token tithe if it receives one at all. Parachurch organisations therefore have an advantage - they are able to raise funds from these individuals. Donors should hear the message that everything they possess belongs to God and has been entrusted to them. Christian fundraising is part of Christian ministry. ## Above all, Christian fundraising must be professional. Christian organizations represent the Kingdom of God. Dr Kohl, in his thesis _Fundraising principles for maintaining continuous giving to Christian Humanitarian Ministries_ states it aptly: "Since Christian fundraising is part of Christian ministry - pointing to and actually practising Kingdom values - professionalism is needed. Counting the cost, developing plans, using the proper resources, setting objectives, making the right decisions and evaluating results is the basis for modern management techniques, which are needed for responsible Christian fundraising and stewardship." ## The Problem Over the past ten years, 87% of charitable giving in the United States went to religious causes. In South Africa this situation was similar. In many South African Christian NGOs there is a lack of professionalism. Planning of expenditure - how money raised will be used in the field for the work being done - is usually excellent. Planning for the income side of the budget (for one year or more), on the other hand, is almost non-existent. This planning should include deciding what business an organisation is in, what is needed, the objectives, how the money is to be raised, the expenses involved in raising funds as well as doing the work of the NGO. Furthermore, South African Christian organisations seldom ask directly for money. Rather, in every letter and newsletter they mention their pressing financial needs. Prayer is important and is part of a Christian organisation. But prayer alone is not enough. It is also Biblically correct to openly ask for funds. ## The Solution Fundraising is demanding and challenging. It is a process that should be followed step-by-step. Almost every organisation's staff or volunteers, no matter how small the NGO, can put together a sound fundraising plan and carry it through to its conclusion, with reasonable chances of success. ## The Fundraising Cycle To help the fundraiser and staff understand how fundraising should be done, a fundraising cycle exists in the interests of understanding the elements of fundraising. This cycle should form the basis of planning for fundraising, especially if it has never been attempted before. It can be used by any NGO, no matter how large or small, and helps people to visualise the processes to be followed to make fundraising a success. All aspects of this cycle's points, except the use of volunteers, are discussed in detail. The book _Making Volunteering Work_ (ISBN 0-9583948-7-3) by Michele Williams is highly recommended and is the only book on volunteerism focussing on the local NGO sector. ### The fundraising cycle points In the following diagram, planning points are shown as rectangles, action points as triangles and strategic points as oblong circles. | - | - | | --- | --- | | **1. Planning point:** Examine the case | **13. Action point:** Solicit gifts | | **2. Planning point:** Analyse markets | **12. Action point:** Activate volunteers | | **3. Planning point:** Prepare needs statement | **11. Planning point:** Prepare communication | | **4. Planning point:** Define objectives | **10. Planning point:** Prepare fundraising plan | | **5. Action point:** Volunteers | **9. Planning point:** Identify potential giving | | **6. Planning/Action point:** Validate needs statement | **8. Planning point:** Select fundraising | | **7. Planning point:** Evaluate gift markets | | **Strategic point:** Renew gift | ## Step 1. Planning point: examine the case An organisation comes into being due to a need within a community. Without a need or a cause there is no reason for an NGO to exist. In order for an organisation to serve a cause effectively, it needs a case statement. Such a case statement clarifies an organisation's position and objectives and extracts are used in verbal and written communication with donors and potential donors. It contains all the reasons and arguments as to why anyone should support the organisation. A case statement, despite its somewhat confusing title, is usually more than one document and is most often in fact a collection of documents. A case statement is not a funding proposal but rather forms an in-depth basis from which a fundraising proposal and other documents can be written. Questions that should to be answered at this stage include: - Why does the organisation exist? - What does the organisation offer to meet these needs? - Who should support the organisation? - Why should an individual support the organisation? ## Step 2. Planning point: analyse market requirements Organisations that base their work on the needs of the community are often assured of continuing gift support. An organisation can have the best cause possible, but if its supporters do not know about the project or consider it unimportant, fundraising success will be minimal. Feedback on these issues is important. Questions to be answered include: - Is the cause sound? - Are the projects reasonable? - Are the financial needs reasonable and can they be met by the organisation's supporters? Only after the staff or volunteers in an organisation have assessed the needs of the community and looked at its attitude towards these needs being met, can it move to the next steps in preparation for fundraising. ## Step 3. Planning point: prepare needs statement After an organization's needs have been assessed, these should be prepared in draft form for review by individuals involved in the NGO. Everybody, from board members to hands-on volunteers, must be involved in validating the needs statement. If they are involved in the planning process, they tend to be dedicated and supportive givers and workers. A validated needs statement is then translated into programme plans, which are in turn broken down into action steps. These plans are then expressed in financial terms - a budget. ## Step 4. Planning point: define objectives Before a programme plan can be implemented, it is necessary to determine goals and objectives. Goals tell one where the project should be. Objectives are the measurable stages of a project and show how the goals will be achieved. In establishing a hierarchy of objectives, the planner will move from a general goal, for example "evangelism work", to specific objectives, such as talking to a specific number of people within a defined period. This is linked to project budgeting and to fundraising activities. ## Step 5. Action point: involve volunteers Funds can be raised in different ways such as special events and direct mail. Some organisations make use of volunteers for these activities. If these people are to be enthusiastic in their work, they should be involved in the planning process. ## Step 6. Planning and action point: validate needs statement Volunteers and other people involved with an organisation should be given the opportunity to accept, reject or modify the needs statement. Only then will they be committed and supportive of the NGO. ## Step 7. Planning point: evaluate gift markets (sources) Once the needs statement has been prepared and the financial goals decided, it is important to determine which potential gift sources should be approached. These include individuals, foundations and trusts, corporations and government agencies. Individual donors represent approximately 85% of the giving force in America. Trusts and corporates make up the remainder. The situation in South Africa is similar. Broad-spectrum fundraising promotes a good healthy financial situation within an organisation. It makes an NGO resilient. If only a specific source of funding is pursued and problems develop with that source (such as government subsidies), an organisation might face grave financial difficulties. Government, large companies and trusts will seldom support missionary organisations. Therefore, individuals are usually the largest source of funding for Christian NGOs. The fundraiser, when evaluating a potential or existing source of money, should consider the following: "Is there an ability to give, or a history of giving to organisations with similar programmes?" This will help him or her decide which potential sources could be approached with a reasonable possibility of success. ## Step 8. Planning point: select fundraising vehicle Selecting the fundraising methods is as important as selecting the source. Each fundraising method has its own function and impact. These methods include annual funding, direct mail, special events, capital campaigns and planned giving. The fundraiser should analyse the performance records of the previous three years according to gift sources and fundraising techniques (such as direct mail and gifts' purposes). In this way, strengths and weaknesses can be identified and planning can be carried out accordingly. ## Step 9. Planning point: identify potential giving sources Potential donors can be found within every target market. These potential donors should be evaluated in terms of giving ability, interest in an organisation and accessibility. By doing this, the market is refined and prospect files are built, which lead to greater fundraising effectiveness. Research on potential donors is vital if an NGO is to survive in the competitive world of fundraising. An organisation that fails to focus its fundraising efforts on the best possible audience will tend to waste money and time. Papillon Press publishes extensive donor directories featuring local corporate, trust and foreign mission donors as well as UK/Europe and USA trusts and foundation funders. The Northern Donor Directory and The South African Donor Directory can be ordered directly. Telephone 021-790 0412, e-mail critchie @icon.co.za or visit www.papillonpress.co.za. Directories can be updated via this website. - Past: those who knew, funded and supported the NGO in the past - Active present: those who know, fund and support the NGO - Inactive present: dormant, inactive contacts and passive role players - Future: all categories of people who should and might support the NGO Sorting donors and prospective donors into the above categories will aid in the research process. This research method entails dividing donors into four categories: - Active present: those donors who are actively supporting an organisation - Inactive present: those who are inactive (not funding) - Past donors: those who funded the NGO in the past, but are not doing so currently - Future donors: those who should and might support the organisation in the future ## Step 10. Planning point: prepare needs statement After an organization's needs have been assessed, these should be prepared in draft form for review by individuals involved in the NGO. Everybody, from board members to hands-on volunteers, must be involved in validating the needs statement. If they are involved in the planning process, they tend to be dedicated and supportive givers and workers. A validated needs statement is then translated into programme plans, which are in turn broken down into action steps. These plans are then expressed in financial terms - a budget. ## Step 11. Planning point: prepare communication plan The case for financial support must now be communicated to people who are in a position to make a donation. Creative communication is a two-way instrument and transmits an NGO's needs, goals and objectives. It must also be designed to receive feedback and answer questions about the organisation. The communication must create a true understanding of an organisation in such a way that people will want to become involved, wish to share will be eager to help. ## Step 12. Action point: activate the volunteer force It should be borne in mind that people give to people with causes and not to organisations. The most effective way to bring a new donor on board is through face-to-face solicitation, where a dedicated volunteer who is committed to the cause, asks another to support the NGO. Volunteers can also be used in the work that an organisation does in tasks such as manning telephones during a mission drive or helping in a soup kitchen. Many donors prefer not to give money but rather to donate their time to benefit an organisation. This source should be nurtured, as it is an invaluable asset. ## Step 13. Action point: solicit or ask for the gift For fundraising to be effective, someone must ask someone for a donation. If this is not done, even planning well will not bring any money in to the NGO. Receiving a donation is often seen as the end of the process. This is not so. Apart from the fact that the donor should be thanked immediately, it is the beginning of a continuing and important relationship with the donor. As steward of the gifts received from donors, it is the responsibility of an organisation's staff to regularly report back on how the money was used. Sound business practices include accountability and transparency. ## Step 14. Strategic point: renew the gift Just as a gift must be renewed, so must planning be renewed through regular, critical evaluation in order to determine if, indeed, the cause is being responsive to the changing needs of the target groups. ## Fundamental Organisational Issues The first step in the planning process should be to determine where an organisation is at present. Examining the NGO's identity and present position will provide information that is important in deciding where it is going. Areas examined usually include personnel, the projects, services rendered, the operations and physical facilities. - What business is the organisation in? - What business would the organisation like to be in? ## The SWOT Analysis The next step in the planning process is the SWOT analysis. It is a technique widely used in business and examines an organisation's strengths (S), weaknesses (W), opportunities (O) and threats (T). In this approach, both the internal and external environments are examined. Fundraising success depends on an organisation's ability to adapt to its surrounding conditions but there is also risk involved. If NGOs that respond to changing needs dramatically alter their value systems, their future is at risk. They cannot and should not become fully responsive to the market in order to enhance their fundraising. This is especially true of religious, and in this case Christian, organisations. They should remain in harmony with the Christian values and mission upon which they were founded. It should be borne in mind that a SWOT analysis cannot be expected to deliver consensus on all issues. The process is utilised precisely to raise different viewpoints and generate ideas. The SWOT analysis is rather a tool for examining an organisation's internal structure and operations and its positioning in the environment. Issues discovered can then be given to planning groups to deal with immediately or can be set aside to be handled later. For the fundraising department it is important to know where an organisation's strengths and opportunities lie. This information can be used to improve the chances of fundraising success. ### Strengths The first step in the process is to identify an organisation's strengths. Discussion should be as specific as possible (eg: not "the office is a strength" but "the staff in the office are a strength as they are hardworking, well trained and loyal"). ### Weaknesses Organisational weaknesses can be identified simultaneously with the analysis of strengths. This process, however, can become threatening and can have negative consequences. If something is seen as a weakness, it can offend the person who feels responsible for it. It is imperative, however, that everyone feels sufficiently free to express his or her opinions honestly. It is therefore important that participants are as specific and objective as possible in discussing issues. Examples of weaknesses might be "high staff turnover", "difficulties in responding to change" or "the vehicles used for the mission work are unreliable". ### Opportunities These exist in many areas. Identifying them allows the NGO staff to plan ahead confidently. Some opportunities can be utilised immediately while others take more time. Examples of opportunities might be: "Bibles that were not available in certain languages are now available", "countries that were closed to missionwork have opened up" or "areas where missionwork is being done, are growing". ### Threats They are generally extemal, and relate to circumstances that may be harmful to the NGO. Threats might include "a decline in the economy results in a drop in donations" or the "changing of demographics affects work being done by the organisation". Threats such as these can have major consequences for an NGO if its staff and board remain unaware of them and are therefore unprepared to deal with them. ## Environmental Scanning and Forecasting Environmental scanning is a continuous process of looking at the world outside an organisation. It analyses external data, and identifies opportunities for and threats to an NGO. Environmental scanning probably happens informally within many organisations but should be formalised. It has nothing to do with green issues! - Economic conditions - Legal changes - Political environment - Technological - Social - Demographic - Competition ## Organisational Identity Issues Once an NGO and its environment have been scrutinised, the planners should summarise their findings. It is then time to develop specific, written statements of an organisation's identity, which should help define it to staff, stakeholders, donors and the public. This will include a mission statement, a philosophy statement and the identification of stakeholders, which will be important for successful fundraising. ### The Mission Statement The first document to be drawn up must be the mission statement. Its purpose is to capture the essence of an organisation. The mission statement must be unique to the NGO. It must distinguish the organisation from all others and is critical for planning. A good mission statement should also: - Encompass the services and programmes of an NGO in a way that is broad enough to be inclusive but narrow enough to be meaningful. - Be short, no more than a few paragraphs. - Be appealing and may be useful for marketing, fundraising and creating public awareness. - Indicate what line of business the NGO is in. It is not necessary to list all products and services, only to identify the general range of services rendered. - State the geographic market served. - Have an ongoing nature. It should last for at least four to five years without major changes. - Tell how an organisation differs from others in the same field. - Be consistent with the mission in all the divisions of the NGO. - Be understandable. It should be written to express, not impress. ### Examples of mission statements: - Christian Seaman's Organisation: At all times, in recognition of God's command to spread the Gospel among people, to make the Word of God available to all people who are involved in nautical activities or harbours. - United Bible Societies: The world fellowship of national Bible Societies joins together, as the United Bible Societies (UBS), for consultation, mutual support and action in their common task of: achieving the widest possible, effective and meaningful distribution of the Holy Scriptures and of helping people interact with the Word of God. - Jan Kriel Institute: Empowers children with special learning needs and epilepsy to become independent citizens of the country who loves the Lord. ## Organisational values and Philosophy A well-defined philosophy statement should back up the mission statement. The philosophy statement defines the fundamental beliefs behind the existence of the organisation. This should unite the staff as well as the stakeholders and give a clear message to the outside world. In a Christian organisation, its Christian beliefs will clearly be identified. ### Examples: - Christian Seaman's Organisation: The organisation is interdenominational and all work shall take place within the guidelines of the formularies of the Holy Trinity. - United Bible Societies: Their common task should be done: in languages and media which meet the needs of people worldwide, In translations that are faithful to the Scripture texts in their original languages, and which communicate the biblical message, at prices people can afford. The Bible Societies seek to carry out their task in partnership and co-operation with all Christian churches and with church-related organisations. ## Identification of stakeholders It is important to know who has an organisation's welfare at heart. When staff and volunteers identify their stakeholders, they know whom they serve and who will support them financially. These people must be thoroughly understood, as they are the reason the NGO exists. If it cannot meet their needs, it will cease to exist. ## Goal Development Issues emanating from the internal and external scanning of an organisation should be translated into goals and objectives. These should be made on an organisational level as well as within the different divisions. It is crucial to an NGO's success to have clearly defined goals since: - Many goals are value-laden. People's values differ and everyone has a different view of how a value-laden goal should be accomplished. - Goals may often be deliberately vague, such as "to carry out missionwork". The thinking is that this makes an NGO more likely to secure the support of diverse donors and is less likely to invite close scrutiny and debate. This thinking is invalid as, without clear goals and objectives, an organisation's board and managers have no way of measuring their progress or effectiveness. Goals are statements that describe broad abstract conditions. They define the desired destination of an organisation. Examples could be: "the organisation wishes to evangelise 3000 people within two years" or "the organisation wants to canvass 200 new donors this year". A clearly written goal will be specific and must include time frames. ## Organisational goals The organisational goals should state the priorities for the entire organisation for the period covered by the plan. They should give direction for divisional goals as well as relate to the mission of an NGO. Usually an organisation's team should write only three to five organisational goals during each planning period. These goals can be revised during the planning period but once they are fixed, they should not be changed readily. Organisational goals are important as they: - Help set priorities - Focus efforts - Aim resources at a few important targets - Play an important role in communication. They communicate to outsiders as well as to those inside - Help managers set individual objectives and priorities - Are proactive. They help the staff and board take action when faced with challenges. ## Divisional goals The development of divisional goals must correlate with an organisation's overall goals. These goals help those in authority to manage more efficiently, to develop guidelines for operations and to measure performance. ## Fundraising goals and plans As donations come from outside an organisation, not everything in fundraising can be controlled by the NGO and income is subject to conditions of the economy, regulatory changes and the whims of donors. It requires long-term commitment to build a stable donor base. Long-term planning might include the development of an annual giving programme, giving programmes for specific projects or a programme to promote bequests. Within the framework of long-term planning, goals should be set for donations received. It is not always possible to determine how many donations will be received but it is possible to place expectations on funds received, based on the history of giving to an organisation. Setting goals makes it is easier to measure the success or otherwise of plans. ## Developing and writing objectives In order for the strategic plan to become a reality, it must be made operational. It deals with three basic questions: Who? will do What? by When? Objectives flow from the goals and must be consistent with the mission. The following are criteria for good objectives. ## Objectives Objectives are statements that describe specific, desired results and actual actions for achieving those results. An example of one objective for the above goal could be: "five teams comprising two persons each will visit the hospitals in Cape Town to do evangelistic work". ## Organisational goals The organisational goals should state the priorities for the entire organisation for the period covered by the plan. They should give direction for divisional goals as well as relate to the mission of an NGO. Usually an organisation's team should write only three to five organisational goals during each planning period. These goals can be revised during the planning period but once they are fixed, they should not be changed readily. Organisational goals are important as they: - Help set priorities - Focus efforts - Aim resources at a few important targets - Play an important role in communication. They communicate to outsiders as well as to those inside - Help managers set individual objectives and priorities - Are proactive. They help the staff and board take action when faced with challenges. ## Divisional goals The development of divisional goals must correlate with an organisation's overall goals. These goals help those in authority to manage more efficiently, to develop guidelines for operations and to measure performance. ## Fundraising goals and plans As donations come from outside an organisation, not everything in fundraising can be controlled by the NGO and income is subject to conditions of the economy, regulatory changes and the whims of donors. It requires long-term commitment to build a stable donor base. Long-term planning might include the development of an annual giving programme, giving programmes for specific projects or a programme to promote bequests. Within the framework of long-term planning, goals should be set for donations received. It is not always possible to determine how many donations will be received but it is possible to place expectations on funds received, based on the history of giving to an organisation. Setting goals makes it is easier to measure the success or otherwise of plans. ## Developing and writing objectives In order for the strategic plan to become a reality, it must be made operational. It deals with three basic questions: Who? will do What? by When? Objectives flow from the goals and must be consistent with the mission. The following are criteria for good objectives. ## Objectives Objectives are statements that describe specific, desired results and actual actions for achieving those results. An example of one objective for the above goal could be: "five teams comprising two persons each will visit the hospitals in Cape Town to do evangelistic work". ## The Strategic Planning Process Management if it is to have credibility throughout the organisation. The planning process should be adapted to fit each organisation. For example, methods used in a large organisation will not necessarily work for a small one. The following diagram lays out the processes to be followed in the planning process. 1. Where is the organisation now? 2. Where does the organisation want to be? 3. SWOT analysis 4. Mission and Philosophy Statement 5. Stakeholders and member analysis 6. Organisational goals and objectives 7. Divisional goals and objectives 8. Action steps 9. Budget 10. Tracking and measuring ↓ Corrective action ## The Process Before discussing the process of strategic planning, consensus must be reached as to who should do the planning. Strategic planning should start at the most senior level, as decisions that will be taken will have a major impact on the direction of the organisation. Planning remains the responsibility of the Chief Executive Officer (CEO). However, the Board of Trustees, staff and other stakeholders must also be involved. People are more committed to a strategic plan if they were involved in designing it. They should also know that the plan has the full backing of top ## Budgeting Phases There are three phases in the budgeting process: preparation, comparison and reaction. ### Budget Preparation A budget cannot be prepared until an organisation's policies and plans have been finalised. Without clearly stated goals and objectives, people are unable to make useful estimates for the future. In the long-term, board members, volunteers and staff should examine an NGO's primary community service and determine whether this need will still be present in five years time. In the short-term, an organisation should establish basic policies in areas such as wages and salaries, level of employment, level and type of service and capital expenditures. The budget(s) of an NGO will give a clear indication to the fundraising department of what funds are needed and for which projects. An example might be that: "a vehicle is needed for the new missionary worker who is to be appointed. The cost involved would be R95 000". The fundraising department should budget for this in addition to other funds needed. ### Budget Comparison This phase involves comparing actual results with those anticipated. Motthly, as well as year-to-date comparisons, should be done as fluctuations on a monthly basis tend to level out over the course of a year. This comparison should be done on a regular basis or it will not serve its function as a control mechanism. With a history of giving, the fundraising department can have comparative figures available to measure the progress of fundraising and compare this with anticipated and actual results. ### Reaction Phase If the budget is to be meaningful, there should be several possible responses to differences between actual and anticipated results. Those in decision making positions within an organisation can, for example, decide to continue on the course or they could change procedures. If, for example, there is a difference in budgeted and actual income, the fundraising department staff should decide how this could be rectified. ## The two most commonly used methods of drawing up budgets are: 1. **Incremental Budgeting** This is "add-on" budgeting. The budget for the previous fiscal year is taken as is and a new portion is added to it for the coming financial year. The new portion can be determined in several ways. For example, by adding an inflation factor or adding the total cost of new projects to the previous year's budget. It is a common method of budgeting due to its simplicity. The disadvantages of incremental budgeting are that an NGO's board and staff accept the previous year's figures as a given and do not review whether money should be spent in the same manner again in the new year. 2. **Zero-based Budgeting** This is a more complicated method as it builds the budget from zero and uses the objectives laid down in the planning for the budget year. ## Types of budgets The most important budgets within a non-profit organisation are the revenue, expense, and cash budgets. Once an organisation has established its budget, it should be used in budgeting for programmes. ### Revenue budget A revenue or income budget is a summary of all the income plans for a given period, expressed in measurable terms. It should be prepared annually and then be subdivided into monthly or quarterly periods for purposes of comparison. There are two methods of preparing a revenue budget. This budget could either be the starting point, and act as the foundation for periodic planning, or it could be prepared after expenses have been budgeted for. In the latter case, revenue is then obtained in an effort to cover the expenses, but this could create problems. The incentive to keep expenses down is lessened as it is presumed that the expenses will be covered. In forecasting the income of an organisation, the history of previous giving is examined and is based on internal and external factors that might influence these projections. When forecasting revenue, it must be remembered that there are different kinds of giving: regular gifts which are received on a weekly or monthly basis, seasonal gifts such as donor club fees and random gifts which include grants or bequests. Other considerations such as a new service, pricing of services delivered and the capacity of an organisation, should be factored in. ### Expense budget The expense budget answers the question: "where does the money go?" and concentrates on operating, administrative, fundraising and other expenses. Four different categories are important. Once the behaviour (variable, fixed, mixed and step) of an expense has been identified, the amount to be budgeted can be determined. - Variable expenses mean that a cost moves in direct response to a certain activity. If the activity increases, the cost will also increase, and vice versa. For example: more teams doing evangelism work, therefore mean that more Bibles and other literature will be needed, more mail shots for fundraising purposes are planned, therefore more money will be needed to cover the costs. - Fixed expenses are costs that are not influenced by changes in activity. These costs arise from the possession of (for example) property and equipment. The level of activity will not influence insurance on these items or rent paid for their use. These expenses are the easiest to budget for and control but are the most difficult to reduce or eliminate. - Mixed expenses are a combination of variable and fixed costs. A good example of a mixed expense is utility costs. Utility costs, especially electricity, include a fixed demand charge as well as a minimum charge for usage, regardless of activity level. Additional costs then vary with usage beyond a certain level. - Step expenses are fixed costs that can be changed by administrative decisions. For example, it might be decided that no resources will be allocated to a specific use or that a staff member may be dismissed with no replacement planned. In the final budget, all expenses are accounted for and should convey to everyone in an organisation what the guidelines for expenses are. ### Cash budget A cash budget is a tool, in the form of a statement, which contains an estimate of all outgoing and incoming amounts during a particular future period. The budget answers the important question as to whether an organisation has sufficient funds (cash) available to ensure its continuity. A balance should be created between a shortage of cash on the one hand and an abundance of cash on the other. The cash budget can be drawn up on a monthly, weekly or even daily basis but, in an organisation with a reasonably stable cash flow, monthly cash budgets are sufficient. The best place to start looking for sources of cash is the revenue budget. This budget can be used to identify cash inputs such as donations (weekly, monthly or annually) and investment income. Financial activities are another source of cash. An NGO may, for example, be able to establish a line of credit with a bank or it might realise additional sources of cash by selling assets. In analysing the uses of cash, the expense budget should be the starting point, as it identifies the cash needs of an NGO. The fundraising department is one of the departments that should be part of this process. Everything from salaries and equipment, to stationery must be budgeted for. Another important use of cash is capital expenditure during the planning period as well as the repayment of a debt. ### Other budgets A variety of other budgets may also be prepared. Some may be prepared for external parties. For example, budgets should be included in fundraising proposals. Special project budgets are also part of the planning process. These budgets focus on specific events planned by the fundraising department. They establish a clear signal as to how much money will be spent and the potential income. ## Performance Measurement It cannot be expected of fundraising staff to thank donors within 24-hours if they do not have the necessary computer equipment. ### Corrective action systems are most effective if they are: - **Timely** - they should bring performance back on track before the problem escalates - **Future-oriented** - they should concentrate on the future, not the past - **Positive** - they should bring about positive change, not punishment - **Preventative** - they should prevent the problem from recurring. ## Planning the Public Relations Programme The _Glossary of Fundraising Terms_ defines public relations as, "The practice of developing the reciprocal understanding and goodwill of an organisation, opinion leaders and the general public" and publicity as, "Any event or communication, through established media or otherwise, free or paid, solicited or not, that attracts attention to an organisation." There are two recognised types of programmes - remedial and planned. In the first programme, public relations staff spend their time putting out fires caused by the damaging communication that can happen when there is no planning. A planned programme is based on facts, has goals and objectives and is sufficiently flexible to change if necessary. The public relations department should be closely linked to the fundraising department. Both work with an organisation's publics, the one creates awareness while the other raises funds from those publics. It is difficult to raise funds from the public if they are not aware of an organisation and its work. Few people will donate to an NGO that they have not heard of before. ## The PR planning process The public relations planning process involves four basic steps: - Fact-finding - Planning - Communication - Evaluation ### Fact-finding Two categories of facts are needed: facts about an organisation itself and facts about the public with whom it wishes to communicate. Facts about an organisation include its history, programmes, planning, budgets everything that is determined during the strategic planning process as well as the opinion held by both the public and an NGO's members. ### Planning The first step in the planning process is to establish objectives, which should coincide with the overall objectives of an organisation, including those of the fundraising department. If the fundraising department, for example, is planning a special event, an awareness campaign is needed if it is to be a success. This should be planned with the fundraising department staff. In deciding on the objectives, the needs of the publics are paramount and should encompass the service provided to the public, the resources available and what the staff thinks of the objectives. A plan should include: - A summary of the facts revealed by research - A statement of the planning stages - Analysis of the competitive factors affecting the programme - A statement of priorities, timetables and media for carrying out the PR campaign - A description and analysis of the publics - A description of the methods of campaign implementation - An outline of the organisation and its personnel requirements - A list of examples of subject matter (articles, news releases) - A prepared budget. ### Communication PR personnel should select the key publics to be reached and the type of information to be transmitted to them. They should also have a good working knowledge of the mass media available and must be able to communicate within their own