Resource Guide for Synagogue Fundraising

Introduction

This paper is intended to aid synagogues in the planning and conceptualization of their fundraising efforts. Successful synagogues need a clear plan for their financial resource development and need to create realizable goals and doable strategies to attain those goals. Successful synagogues do not always look for flashy new ideas to raise money, but are not afraid of employing time-tested techniques which have served synagogues well in the past. This paper briefly covers the basic areas of synagogue fundraising: annual appeals, capital campaigns, endowment funds and planned giving. At the end of the paper are lists of resources which may be helpful.

The Annual Appeal

Most synagogues conduct an annual appeal, generally around Kol Nidre. Many synagogues make the mistake of waiting until the evening of Kol Nidre to conduct the actual fundraising. Truly successful campaigns require the following:

1. Needs assessment of annual operational needs
2. Realistic goal setting
3. Analysis of prior campaigns showing giving trends
4. Creation of appropriate giving levels
5. Donor recognition
6. Rating of prospects
7. In Person, phone and mail solicitation
8. Appropriate follow up and thank yous

The most effective solicitation is in person. Ratings should be done in such a way as to identify the top tier of potential givers, who should be met with in person and solicited for their gifts prior to the Kol Nidre appeal. Phoning should be used for the second tier of prospects and mail solicitations should be used for the remainder of the congregation. Donors will only give substantially if they are adequately recognized. There should be appropriate public donor recognition, such as an annual donor wall, visibly displayed in the synagogue. Synagogues should not underestimate the importance of annual giving. It is the most effective means of developing a culture of giving within the synagogue which can then be translated to other campaigns. It can also produce substantial annual income to supplement the programs and operations of the synagogue.

Capital Campaigns

Capital Campaigns can be created for either building expansion or for the creation of endowment funds. The secret to a successful capital campaign is in the planning. The steps of a successful capital campaign are as follows:

Running a capital campaign for building expansion and for the creation of endowment funds are very similar. Both require the following: Strict adherence to the necessary steps and a willingness to invest in the fundraising process. If possible a professional fundraising consultant should be engaged for this process. There is no substitute for professional assistance and oftentimes an outside resource is better able to objectively identify problem areas.

As in all fundraising, adhering to a timetable is critical. Events and major milestones in the campaign should be mapped out ahead of time, although they may be adjusted later if necessary. Special attention should be paid to the end date of the campaign, which should allow enough extra time, but not too much time, for the campaign to reach its goal.

One potential obstacle is the negative impact of conducting a capital campaign on the annual giving cycle. Special care and attention should be given to the timing of the capital campaign, so that it will have the least amount of impact on the annual appeal, and on the way in which the gift is solicited.

If the synagogue is not careful in the solicitation process, then the annual appeal is at risk. In some cases, it may be advantageous and appropriate to structure the capital campaign as a "double ask". Before individuals are asked to make a commitment to the capital campaign, they should be encouraged to make their annual pledge. This may not work for all prospects, but it can certainly be effective for many.

Planned Giving

Planned giving has become extremely popular over the last several decades with many non-profits. Synagogues are no exception. Planned giving is not a type of campaign, but denotes how a gift is structured. There are different kinds of planned giving vehicles, including the most common, bequests, as well as different forms of trusts, life insurance and charitable gift annuities. Planned gifts are often a good way for donors, who do not have cash or other assets readily available, to make a significant contribution to the synagogue. While some planned giving vehicles are relatively simple to draw up, such as a bequest in a will, there are others which are far more complicated. Before a synagogue should attempt to offer planned giving options to its community, a good deal of preparation work needs to be done.

One mistake many institutions make in offering planned giving to their members is to begin the process without a well thought out plan. The best way to market planned giving is to structure it in the form of a campaign, in which the synagogue devotes publicity and solicits its membership within a specified time frame. For example, a good way to launch a planned giving effort might be to institute a campaign for bequests, with the goal to commit a percentage of the congregation to make bequests to the synagogue. If possible, a dollar goal should be established. Recognition should be given to those who make bequests, not only to "lock in" their intended gifts, but to also encourage others to participate. A donor list showing those who have formally made provisions to the synagogue in their wills can be publicized in much the same way as annual and capital campaign. Keep in mind that planned gifts often take longer to secure than outright gifts. After an initial campaign to publicized the effort and create a sense of momentum, the synagogue will need to devote a considerable amount of effort and patience discussing the different array of planned giving vehicles with interested congregants. Solicitors should have a general knowledge of all types of planned giving vehicles, but when negotiations become serious, attorneys experienced in nonprofit work should be engaged to make final arrangements.

A Note About Endowment Funds

Endowment funds are a good way for donors to provide funding for specific services and programs in perpetuity. A donor will often make a gift of cash or stock to the synagogue, which then becomes the asset of the synagogue. The assets are invested, and the interest is used to fund specific programs or services. A written contract is drawn up between the synagogue and the donor to define the nature of the fund and includes restrictions which go along with their use. Most often, a donor will specify the use of the fund, such as for Early Childhood Education, A Scholar in Residence Program, etc., but this need not always be the case.

Synagogues which aggressively soli cit endowment funds often have millions of dollars invested whose interest is used to provide a diverse array of programs on an annual basis. The synagogue must keep a careful accounting of each endowment fund as well as the interest generated by each fund and make sure that the monies are applied correctly. A sloppily managed endowment fund is an easy way to anger donors.

Fundraising consultants are essential to the success of most large, one-time campaigns. Even if the synagogue employs a full or part-time professional, a fundraising consultant can bring an outside objectivity that can be helpful in spotting and dealing with difficult issues associated with a campaign.

Fundraising consultants can be found in every geographic area, and there are many who have broad experience in synagogue or other nonprofit fundraising. Consultants can help with all aspects of a campaign, including: strategic planning, needs assessment, feasibility studies, ratings and solicitation assignments, solicitor training, and donor recognition. Fundraising consultants can also be helpful in the solicitation process itself, and are often willing to accompany volunteers on their major gift solicitations.

A good way to find a reputable consultant in your area is to check with other nonprofit organizations, especially other synagogues, in your area. Invite consultants in for interviews, where their ideas about process and fundraising techniques can be compared. Often speaking with a consultant as part of an interview can lead to new ideas for the campaign.

Notes About Solicitation

Solicitation is a relatively simple process but there are a few steps which distinguish good solicitations from ineffective ones. The following are important ingredients in an effective solicitation:

1. Good publicity regarding the campaign and its needs
2. A relationship between the solicitor and prospect
3. Information about the prospect’s interests and turn-offs
4. A willingness to "listen" rather than "sell"
5. Willingness to accommodate the donor’s needs
6. A specific "ask for" figure
7. Appropriate recognition for the gift

The most effective solicitations are those conducted in person. If possible, two solicitors should meet with a prospect, because two solicitors can compliment each other’s styles and also give each other more confidence during the solicitation process. It also gives more "legitimacy" and seriousness to the meeting. A good pair-up for solicitations is a professional along with a volunteer. The most common obstacle to good solicitations is the fear (on the part of the solicitor) of rejection. Solicitors should not take rejection personally, but should realize that not every solicitation will end successfully. Some prospects will just be difficult or will not give to the campaign, no matter what. This experience should not be allow to derail the entire campaign. All in all, the successes will outweigh the failures.

USCJ Presidents Listserve

A good resource for every congregation affiliated with United Synagogue is the USCJ President’s Listserve. The President’s Listserve can be an excellent forum for queries about fundraising or for recommendations regarding consultants or other resources. Synagogues which have had a successful experience in fundraising are usually very willing to share those experiences with other congregations. To join the USCJ President’s Listserve, any current, past or incoming president and in special instances a presidential designee can send an email message to: listserv@uscj.org. Enter any subject and the message should read: subscribe presidents followed by your first and last name.

Seminars and Associations

A number of organizations exist which serve to provide support and resources for those in the development business. An excellent resource is the National Society for Fundraising Executives (NSFRE), which has local chapters in major metropolitan areas. The NSFRE will often schedule seminars and workshops on a regular basis, but they will also be able to refer to workshops and seminars sponsored by other organizations.

Many metropolitan areas also have a nonprofit center, which often schedules workshops for fundraising. Call your local United Way or Jewish Federation for information about such resources in your area.

Books

1. Revitalizing Your Board of Directors, by James M. Hardy, Ph.D. Emerson & Church, Publishers Phone: (508) 359-0019
2. Fundraising Realities Every Board Member Must Face, by David Lansdowne Emerson & Church, Publishers Phone: (508) 359-0019
3. Start at Square One: Starting and Managing the Planned Gift Program, by Lynda S. Moerschbaecher Precept Press 160 East Illinois Street Chicago, IL 60611

Catalogs of Fundraising Materials

The following offer fundraising resource materials:

1. Nonprofit Board Resource Catalog (National Center for Nonprofit Board) - Books on Board Development, Strategic Planning and Fundraising. Phone: (800) 883-6262.
2. Jossey-Bass Publishers - Books on Board Development, Leadership Development, Grant Writing and Fundraising. Phone (800) 956-7739.
3. The Complete Professionals Library - Many books on Fundraising, Planned Giving, Board Development and Grant Writing. Phone: (508) 359-0019.
4. Robert F. Sharp & Company, Inc - Good materials for Planned Giving and Estates Planning. Phone (800) 238-3253.
5. Catalog of Fundraising and Nonprofit Development Resources - Fundraising Resources and Grant Guides produced by the Foundation Center. Phone: (800) 424-9836.
6. Donor Recognition and Special Events, Sales Guides International - Phone: (800) 352-9899 Catalog of promotional products.
7. W&E Baum - Donor Walls, Presentation materials and awards. Phone: (800) 922-7377.
8. Successories - Catalog of promotional items for donor recognition and events. Phone: (800) 535-2773.
9. Successful Events - Custom products for events. Phone: (800) 896-9221.
10. Donor Wall - Complete program designed for synagogue annual appeal and recognition. Phone: (877) DONORWALL.

Appendix A: 10 Planned Giving Vehicles - A Glossary of Terms

1. BEQUEST - One of the most common planned gifts. A nonprofit organization is bequeathed a gift in a donor's will. The gift may be designated as (a) percentage of the donor's estate; (b) specific dollar amount or description of property; (c) residual of the donor's estate or (d) contingent upon a certain event happening. Estate taxes are reduced by the value of the gift to the nonprofit
2. OUTRIGHT GIFT - Cash, securities, real estate, personal property, etc. the title of which is legally transferred to a qualified nonprofit organization. In most cases, income deductions allowed for the full fair market value and capital gains taxes are avoided, reducing the cost of the gift to the donor.
3. LIFE INSURANCE POLICIES - A relatively inexpensive way for a donor to leave a significant gift to a nonprofit organization. A new policy may be taken out on the life of a younger donor to "create" a major, deferred gift to a charity with the cost of the premium being a small fraction of the face value of the policy. Donors may also have existing policies, which are no longer needed for their original purposes (to assure a child's education). With a change of policy ownership and beneficiary to the nonprofit, the donor can contribute the premium amount to the charity and the policy's face value can be maintained, or, if the donor chooses not to continue payments, the cash value or "paid up insurance" value can be significant. Donors' tax deductions are equal to their cash/replacement value or premiums paid, depending on the type of policy.
4. CHARITABLE REMAINDER UNITRUST - The donor receives a variable income from the gift for the rest of his or her life. The income to the donor is based on a specified percent of the trust principal, revalued each year, reflecting any increases in the value of the trust's assets. More than one person may receive income. The trust assets become the property of the nonprofit upon the donor's death, or, in a pre-established time period. Additional contributions can be- made to the trust Income tax deductions for the donor are based on present value of remainder interest going to the nonprofit.
5. CHARITABLE REMAINDER ANNUITY TRUST - Similar to the Unitrust, except that (a) the donor receives a fixed income from the gift for the rest of his or her life, (b) the income amount is based on the original value of the trust's assets and (c) additional contributions cannot be made. (Must be no more than 5% probability that trust corpus runs dry before trust terminates.)
6. LIFE ESTATE - A donor deeds his or her personal residential property to a nonprofit organization. While the donor is still Living, he or she has a legal interest in the life estate with full rights to live there or to rent or sell those rights. The donor receives an immediate income tax deduction for the present value of the remainder interest of the residence.
7. POOLED INCOME FUND - Contributions from several donors are placed in a common trust fund for investment and management. Each donor has a pro rata share interest of the pooled fund and receives his or her share of the total net ordinary income earned. When the donor dies his or her share becomes the property of the nonprofit. Income tax deduction is based on current value of remainder interest going to the nonprofit.
8. CHARITABLE GIFT ANNUITY - A donor's gift is not placed in trust but becomes the property of the nonprofit immediately. In exchange, the nonprofit promises to pay a fixed income to the donor for the rest of his or her life. A portion of the income is not taxable, but considered a return of principal. An income tax deduction is allowed for the difference between the gift value and the amount required to fund the annuity (actuarial value). There is a maximum of two income beneficiaries.
9. DEFERRED GIFT ANNUITY - A donor makes a gift now and receives an immediate income tax deduction. At a later date - usually retirement - the donor begins receiving income. Because the principal compounds between the date of gift and the first date when the donor receives income, the amount of income can be significant, and at a much greater rate than that of the standard charitable gift annuity.
10. CHARITABLE LEAD TRUST - A nonprofit organization receives income payments from the trust for a given number of years. At the end of the trust term, the assets of the trust are returned to the owner or his or her designee. This allows the transfer of assets to children while greatly reducing gift taxes.