Streetsmart Financial Basics for Nonprofit Managers

Chapter 19To Raise More Money, Think Cows

Many people think that the secret to successful fund-raising can be found in charity balls, with men in tuxedos and their trophy wives in strapless gowns. Wrong. The real secret to successful fund-raising can be found on the farm—the dairy farm.

We usually think of fund-raising in a very non-profit-centered way. The unspoken message goes something like this: Because we're doing such good work, you should give us money. It's puffed up with lots of words and bright smiles, of course, but underneath it all that's what we are really saying.

The problem with this approach is that it only gets half of the equation right. Yes, we are doing good work. That should be a given, because it's how the emotional connection gets made with donors. The IRS uses this connection as part of its test for the acceptability of tax-favored treatment for certain gifts. They call it donative intent, which must be present or else the whole gift might be seen as a shameless tax dodge.

Some development people stop right there. This is unfortunate, because the real power comes from linking donative intent with smart financial decisions. That's where the cows come in.

In economic terms, cows are fairly unique. Not only do they produce value during their lifetimes (milk), they produce it upon their death (beef). So a single cow has two inherent sources of value. If you think of donors' financial assets as being like cows, it will help you to understand how you can manage ...