Messaging for Public Foundations: The Power of Storytelling
March 6, 2008 - How can public foundations use storytelling as a strategy for fundraising? This session discussed ways to craft transformational messages that can serve the organizational development efforts. Gordon Mayer from the Community Media Workshop started the meeting by advocating the power of storytelling and how to best craft our organizations' stories. Lesley Slavitt from Strategic Philanthropy, LLC, discussed her work using messaging; and Kara Fagan, Director of Development at the Chicago Foundation for Women, provided examples of how the Chicago Foundation for Women had incorporated success stories into its messages.

The Public Foundation Fundraisers Network hosted a session on Messaging for Public Foundations: The Power of Storytelling. The session was introduced by Meagan Downey, Emergency Fund, and featured contributions from Gordon Mayer, Community Media Workshop; Lesley Slavitt, Strategic Philanthropy, Ltd.; and Kara Fagan, Chicago Foundation for Women.

Telling compelling stories is a key part of any messaging strategy. Increasingly, newspapers and other news media are moving to a more story-based approach to communication, and generations raised with television and movies often respond well to story-centered messages. For public foundations, using stories as part of their message means finding ways to show how they add value to the funds they receive and how they help their grantee organizations become more effective in the services and advocacy they provide.

When designing a messaging strategy, organizations should think carefully about their target audience and ways in which the organization's activities directly connect to that audience. If organizations can develop stories that demonstrate how the organization can affect individuals' life, listeners are more likely to become involved with that organization's efforts and activities.

The need to use stories ties into two recent trends in the nonprofit sector: a greater focus on advocacy work, and an increased desire for diverse funding bases. Using stories as part of a messaging strategy can help both areas. Stories can put a human face on advocacy issues that help people understand the problem at stake and an organization's efforts to address that problem. If they are targeted carefully, stories can also help involve a broader constituency in an organization's activities.

In crafting a message and selecting a target audience, public foundations often have to be careful of entering into competition with their funders (for donations from individuals) or their grantees (for money from private foundations). Any time there is a limited supply of resources, competition will result, and public foundations have to be especially conscious of that so they can make sure they do not damage important relationships. Public foundations also need to focus on what makes them unique, helping people understand the value they add to any funds they receive. The technical assistance they provide, their knowledge of the sector in which they work, and other elements can be used to show the benefits of making a donation to a public foundation.

In crafting a message about what an organization does, staff members should be careful to know their own organizational limits. Nonprofit organizations are not commercial businesses, and they should not sell themselves as if they are. Recognizing that nonprofits form a distinct sector with its own way of doing business can help staff members shape a message that is geared toward their specific activities and strengths.

Helping board members and others involved with the organization learn to tell their stories can be a powerful way to deliver messages. As these individuals think about why the organization is important to them, they can put into words why their continued involvement matters and illustrate that involvement through the story they choose to tell. Since these stories come from the individual's own interests and involvement, they are often able to deliver a strong message about the organization.

Making a good use of the internet is another way to help communicate an organization's message. Targeted e-mails that deliver messages tailored to certain groups of recipients can help existing donors better understand an organization's activities while also cultivating new donors.

Special Events That Make a Difference
November 02, 2007 - The Public Foundation Fundraisers Network hosted a discussion entitled Special Events That Make a Difference: How to Ensure Your Events Truly Benefit Your Organization. The discussion was introduced by David Gee, The Chicago Bar Foundation, and featured presentations from Kimberly LaBounty, Apex Management & Special Events Inc., and Jim Struthers, McCormick Tribune Foundation.

During the session, participants were able to ask questions about different issues and concerns related to special events, including things to do before, during, and after the event. As the discussion progressed, the following tips and pieces of advice were offered:

• One of the keys to cultivating donors through an event is greeting potential donors at the event and performing effective follow-up afterward. Leaving a personalized thank-you note on the table of sponsors and having board members or officers greet certain individuals can help build a relationship. These conversations can be used to discover the donor's interests, and follow-up contact can help build on their interests while increasing their involvement with the organization.
• Some attendees come to events simply to have fun; it can be helpful to recognize that the cost of attending the event is the only donation they intend to make to an organization, and attempting to perform detailed follow-ups with all attendees can be time-consuming without generating much return. Registering attendees for a raffle and gathering contact information can be effective, and sending brief e-mails about what an organization is doing can be an easy way to bring some of these more casual contacts into deeper involvement with the organization.
• Organizations should find creative ways to get their message across. Program books are often left behind at events, while goodie bags are often picked through and any elements that contain information about an organization may be ignored. Videos that help tell the stories of people touched by an organization, silent slide shows playing on walls during the event communicating a clear message, and entertainers who can work an organization's message into their act are all possible ways of creatively engaging attendees.
• When working with events committees, make sure volunteers know their roles and what is expected of them right from the start to avoid confusion.
• Keeping a written record of what an event needs to work well and what improvements can be made can be very useful to help the planning process each year.
• Silent auctions can be very popular, but if there are too many items it can be overwhelming and discourage bidding. Accepting auction items on consignment can be an easy way to find auction items, but these should be clearly identified so that potential buyers understand where their money is going.
• When planning an event becomes overwhelming, organizations might consider holding "non-events" where they ask previous attendees to simply contribute the money they normally would have spent attending the event. One benefit of this is that these donations, unlike event tickets, are completely tax deductible. Some organizations have found this to be a very effective way of fund raising, as the overhead drops to almost nothing. Some "non-events" that have been held include mailing tea bags to individuals as a way of holding a nationwide tea party and sending popcorn and movie rental coupons to provide a movie night at home for potential donors.
• When looking for corporate sponsors, start with the contacts of your event planning committee. Sometimes listing the contacts your committee has made for you and reporting back on which committee members have provided the most successful referrals can inspire a sense of competition among committee members to provide useful information.
  

Rules and Regulations for Donor Advised Funds
May 24, 2007 - The Public Foundation Fundraisers Network hosted a discussion on Donor-Advised Funds 101: Rules and Regs. The discussion was introduced by Robin Berkson, Donors Forum, and featured contributions from Thomas E. Chomicz, Quarles and Brady LLP, and Jodi Pellettiere, Quarles and Brady LLP.

Donor-advised funds have become an increasingly popular alternative to donors wishing to become active in philanthropy without the administrative paperwork a private foundation requires. The Pension Protection Act of 2006 (PPA) introduced changes into the regulations covering donor-advised funds, and further adjustments are likely after the Treasury Department releases a study on donor-advised funds in August 2007.

The session addressed the following questions:

Q. How does the PPA define donor-advised funds?
A. The PPA contains the first statutory definition of donor-advised funds, saying they must contain three elements: the fund must be separately identified and tracked, it must be owned and controlled by a sponsoring organization, and the donor should provide advice on how the funds are disbursed. The funds cannot be earmarked for a single organization.

Q. What should an agreement to create a donor-advised fund contain?
A. A well-crafted agreement should contain the following elements:

• A detailed listing of the administrative and investments fees charged by the sponsoring organization and how they will be collected;
• A description of the scope of issues on which the donor may offer advice, along with a statement that the donor's advice is not binding upon the sponsoring organization;
• The term of the fund's existence, including provisions for what happens to the funds if the original donor dies or wishes to pass the advisory role to others; and
• A statement saying the funds will only be disbursed for charitable purposes.

Q. What limits did the PPA place on gifts from donor-advised funds to supporting organizations?
A. The PPA divides supporting organizations into three types. Type I organizations are directly controlled by their supported organization; Type II organizations are controlled by the same people that control the supported organization; and Type III organizations have a looser relationship to their supported organization. Donations to Type III organizations that are not functionally integrated with their supported organization cannot be counted as charitable deductions; however, at the moment, the IRS does not have a definition of what "functionally integrated" means.

Q. What limits does the PPA place on contributions from donor-advised funds?
A. Any contributions to individuals (with an exception for scholarships-see below) or contributions not used for charitable purposes are prohibited. For contributions to certain organizations (i.e., non-public charities, private non-operating foundations, Type III supporting organizations that are not functionally integrated, and any supporting organization controlled directly or indirectly by the donor), expenditure responsibility must be conducted, which means the sponsoring organization must issue a grant agreement and must require a final report on the use of the funds.

Penalty taxes may be imposed if donors or donor advisors receive more than an incidental benefit from a contribution (making a donation to an organization where a donor advisor is one of several board members is an example of an incidental benefit). Grants, loans, compensation, and other such payments made from a donor-advised fund to a donor or donor advisor are also subject to penalty taxes.

Q. Can donor-advised funds pay for scholarships?
A. Yes, under the following conditions: the sponsoring organization must appoint a committee to administer the scholarship, and the donor can only give advice as a member of that committee. The committee cannot be controlled by the donor either directly or indirectly, and grants must be awarded on an objective and nondiscriminatory basis that is clearly outlined before the scholarship is given. The design of the scholarship program must conform to existing definitions of scholarship grants.

Q. What filing requirements did the PPA introduce for organizations sponsoring donor-advised funds?
A. On Form 990, sponsoring organizations must list the number of donor-advised funds, their aggregate value, the aggregate grants made from these funds, and the aggregate contributions received. At present, grants and contributions do not need to be broken down by individual funds.

New organizations filing Form 1023 must state if they intend to host donor-advised funds and describe how they would be operated.

Making the Case for Support: Message Development
March 29, 2007 - The Public Foundation Fundraisers Network hosted a session on Making the Case for Support: Message Development for Public Foundations. The discussion was introduced by Barbra Jotzke, Chicago Foundation for Women, and Lisa Montez, McCormick Tribune Foundation, and included contributions from Vicky Shire Dinges, McCormick Tribune Foundation; Leilani Sweeney, McCormick Tribune Foundation; and Antonio Garcia, Firebelly.

A coherent, cohesive message development strategy can help public foundations build support by clearly communicating what they do and showing potential donors the value added by public foundations. Organizations can enhance their communications strategies by making sure their message is understood by all of their employees and volunteers and by presenting the message in clear, plain language. This will help build an appealing, successful public image.

A key part to any messaging strategy is making sure the ideas to be communicated are understood by everyone inside an organization. Educating employees and volunteers about an organization's goals and activities and helping them present consistent messages improves and clarifies external perceptions of an organization. When this understanding is complemented by a communications strategy that uses everything from business cards to brochures to annual reports to build the organization's brand, an organization will take important steps in building a recognizable identity.

Using stories can be a vital part of messaging, as it helps people understand an organization's activities and shows the value of their donation. When donors have to choose which organizations they will give to, showing the value of one organization when compared to others can help build trust with the donor, which can lead to a long relationship with the organization.

Sometimes finding the right story is not easy, as public foundations can be a step or two removed from the direct service stories that are often used to provide concrete examples of the benefits of their activities. Public foundations need to ask themselves what value they offer and come to an understanding of the specific benefits of giving to their organization. It helps if they look at their organization as an outsider would, asking the questions that someone who is not regularly immersed in the organization would ask. Once they understand that perspective and are better able to articulate their organization's value, they can find a way to encapsulate it in a story that explains what they do.

Public foundations do not always have funding for a comprehensive, top-of-the-line messaging strategy. There are more cost-effective alternatives available, however, including the following:

• Working with communications personnel who have experience with non-profit clients and can adapt to a public foundation's specific needs;
• Gradually phasing in a messaging strategy and working on one component at a time instead of overhauling everything in a single year;
• Using pro bono work from design professionals; or
• Having design classes in local colleges take on a re-branding or messaging activity as a class project.

Ethics
April 20, 2005 - The second session of the Public Foundation Fundraisers Network's Rules, Regs, and Ethics series featured discussions led by Barbra Jotzke, Chicago Foundation for Women, and Janice Rodgers, Quarles & Brady LLP.

The focus of this session was ethics; rather than concentrating what might be legal or illegal, the facilitators discussed how to make decisions when there are no immediately clear right or wrong choices, the law provides no guide, yet there are consequences to the decision (for example, possible harm to the foundation's reputation or inefficiencies in using funds controlled by the foundation). Illinois Nonprofit Principles and Best Practices, available from the Donors Forum, was repeatedly mentioned as a valuable resource for helping participants think through ethical issues.

When faced with an ethical dilemma, the speakers recommended taking three steps before making a decision:

• Do research and ask questions: check resources like the law, Illinois Nonprofit Principles and Best Practices, your organization's policies, and guidelines from a professional association such as the Association of Fundraising Professionals; talk to colleagues inside and outside your organization for guidance (it's helpful to have a list of colleagues you might turn to drawn up before a dilemma arises).
• Examine your bias: a fundraising professional might have a bias toward decisions that enhance fundraising possibilities, and talking to people in other parts of the organization about the decision may help offset this bias. The organization also might have safeguards in place that offer protection from individual bias.
• Consider the reality and the perception: contemplate the possible risks and rewards of the decision and ask if you would want to live in a world where everyone makes the decision you are considering. Also reflect on perception-what would your mother think of your decision? How would the decision look if it were reported on the cover of the New York Times? How would your funders and grantees react to your decision?

After a decision is made, a record of the entire deliberative process should be kept on file, both to provide justification should the decision ever come under question and to provide guidance in case a similar decision comes up again.

The speakers emphasized the value of having a written ethics statement for the organization. Some participants mentioned how much easier it is to make decisions at an organization that has clear, written ethical standards.

The group then walked through several sample ethical dilemmas, using the guidelines presented to consider the problems from all angles. During this discussion, the speakers reminded the group that their decisions could reflect upon the nonprofit sector as a whole, which could bring significant consequences; at present, Congress is considering reforming the laws governing nonprofits because of ethically questionable decisions made by a few organizations that tarnished the reputation of the entire sector.

The active participation in the case studies by group members led to the discussion of a wide range of issues concerning public foundations, including: who should and should not use free tickets given to the foundation for an event sponsored by a grantee organization; what issues may arise if people from the fundraising side of the organization take on grantmaking tasks; how best to protect the confidentiality of grantees and donors; and the implications of accepting a donation for a purpose only tangentially related to the organization's mission statement.

Rules and Regs
March 16, 2005 - The March 16 meeting of the Public Foundation Fundraisers Network covered a variety of Rules and Regulations affecting public foundations. Hosted by Susan Pierson, Illinois Bar Foundation, the meeting featured Janice Rodgers, Quarles & Brady LLP, and Beth Engel, Quarles & Brady LLP, as speakers.

The first items discussed were the definitions of public charities and private foundations. Some organizations, such as schools, churches, and hospitals are presumed to be public charities by their nature; others may apply for public charity classification based on their financial support.

Classification as a private foundation comes with limitations on activities, including lobbying and self-dealing (that is, relationships between the foundation and its funders and board members). 501(c)3 organizations are assumed to be private foundations unless they demonstrate they are a public charity by having a diverse funding base. Some circumstances, such as a large, one-time grant, may cause difficulties in demonstrating funding diversity, but such things can often be classified as "unusual grants," which are not included in some of the formulas used to determine if an organization is a public charity.

The next topic was substantiation, that is to say, knowing when and how to provide receipts to donors to preserve the donor's income tax deduction and prevent the charity from suffering penalties. The rules discussed included:

• Substantiation must be provided when a donor contributes $250 or more in cash or property without receiving anything in return. The written acknowledgement of the contribution should include an explicit statement that nothing was received by the donor.
• Substantiation must be provided when a donor contributes $75 or more and the charity provides goods or services in exchange (called a quid pro quo contribution). The written acknowledgement should disclose the value of the goods or services received by the donor and should list how much of their donation counts as a gift and is tax deductible. The value of goods and services provided to the donor should be a good-faith estimate of fair market value, and the letter to the donor should explicitly say this is an estimate.
• Written acknowledgements of contributions should include a description of any items donated to the foundation, but not an estimate of the items' worth.
• Small items given to donors (e.g., coffee mugs, posters) and membership benefits (e.g., preferred parking at museums or discounted admittance to special exhibits) do not need to be disclosed as quid pro quo contributions.

The group reviewed several different situations to determine if substantiation needed to be provided and what it needs to contain, including these examples:

• Tickets to a dinner with a speaker, when the speaker is someone the attendees would pay to see: The value of the dinner as well as the value of hearing the speaker both should be disclosed as goods and services provided to the donors and must be subtracted from the tax-deductible portion of their contribution.
• Tickets to a charitable performance of a symphony: Not tax deductible in most circumstances, as the tickets are received as a quid pro quo contribution. However, if the donor returns the tickets before the event but allows the organization to keep the money used for purchase, their payment can be considered a gift.
• Raffles: Since people are buying a chance to win something, the cost of the ticket cannot be counted as a gift. However, if the tickets would be available for free and some people decide to pay for them anyway, their contribution may be considered a tax-deductible gift.

The speakers next discussed donor-advised funds, noting that the critical word for these funds is "advised." While the donor can give recommendations, the final decision-making power must rest with the foundation. While in the past some foundations have felt that rejecting a few of the donor's recommendations was necessary in order to demonstrate their independence, that is no longer the case. As long as the foundation is conducting due diligence on organizations suggested by the donor, they may follow all of the recommendations if they deem them appropriate.

Advocacy grants were also discussed, particularly restrictions on lobbying and political donations. Foundations need to not only monitor their own activities, but also the activities of their grantees to make sure their uses of the foundation's money do not cross into political campaigning or exceed limits on lobbying.

The group received a list of resources for more information, and particular mention was made of the Donors Forum of Chicago's booklet "Illinois Nonprofit Principles and Best Practices," which, along with ethics, will be discussed in more detail at the group's next meeting.

Staying Inspired: Engaging and Motivating Boards & Volunteers
December 06, 2004 - Marianne Philbin, Foundation & Nonprofit Consulting, led a discussion on engaging public foundation volunteers. Lessons learned:

• Set expectations for the board that include more than attending meetings. Involve the board in event planning; develop a policy for board members' individual donations to the organization; involve the board in networking strategies that serve the organization's fundraising purposes.
• Plan for leadership turnover and structural shifts over time. Identify and refresh expectations.
• Begin orienting board members to personal donations by defining the culture of the organization and making the implicit explicit. Build a comfort level and create a culture where fundraising is seen as fun. Be deliberate about messages and internal attitudes related to the value of involvement in fundraising. Develop conscious strategies; nothing happens by default.
• Recognize efforts, not just outcomes. Intentional cheerleading is motivational. Make the connection that fundraising is at the heart of power to help board members feel they bring power to the organization.
• Institute policies and practices that specify ways to give. Donor fear sets in when there are no specific guidelines for giving. For example:
  o 100 percent board giving (without a specified amount for each gift)
  o 100 percent participation in some way
  o When building the organization's budget, break out board gifts as a separate line item.
  o Characterize board gifts as "board class of the current year" and identify a fundraising chair from that class.
• Give board members job descriptions and goals. Set individual strategies for each board member's involvement. What can you reasonably ask them to do and support them in doing it? Follow up with each board member. Ask board members what's working, what's not working. Ask them what they love. Define career paths for each board member. What do they want to give in time, money, and leadership?
• What support do board members need in order to fundraise? What are knowledge gaps? How can they translate the mission into their own personal stories?
• Create a board development committee chaired by someone in their last term to pass on knowledge in a year-round process.
• Build relationships:
  o Focus on building teams among board members who can work independently of taking direction or assignments.
  o Hold social outings and establish teams across categories for deeper involvement, building a sense of belonging and support.
  o Create opportunities for board members to encourage accountability to each other, to the mission and to the organization through their obligations set by law.

Making the Case for Support
November 04, 2004 - Making the Case for Support
Christine Quinn, Chicago Bar Foundation presented an overview of fundamentals related to creating messages for public foundations. The presentation emphasized how to make messages effective by making them compelling, clear and consistent, and credible.

Marianne Philbin, Foundation & Nonprofit Consulting led a discussion that focused on how to answer donors' questions and engage donors in a public foundation's cause, in the context of the individual charities that the foundation supports. The panel comprised of: Saundra Bishop, Alumni Council, Chicago Foundation for Women; Marguerite H. Griffin, The Northern Trust Company; Susan Mednick, Chair, The Jewish Women's Foundation of Metropolitan Chicago; and Bob Vladem, Chair, Project Exploration served as a sounding board for the group and gave feedback on content of specific messages.

Key lessons:

• Every donor is different. Help each donor understand what the organization's filters are for focusing dollars on charities in order to build trust.
• Make connections for donors with grantees. Emphasize that donors will not lose the connection with grantees by giving to a public foundation.
• Connect donors to other people with the same interests. Recognize the importance of the issue to the donor.
• Remember that donors want their heart touched and want financial questions answered. Public foundations can provide "one stop shopping" for contributions to many grantee organizations.
• Be prepared to answer how you know you are successful.
• Talk about the process used to make grants. Be careful in making comparisons; don't say the public foundation process is "better."
• Remember that donors - individuals and foundations - want recognition in many ways, many times. Personalize acknowledgement letters with handwritten "P.S" notes.
• Identify the quid pro quo. What does the donor want for money and time donated to your organization? How does the community benefit? How will the dollars be used? Identify specific examples of people helped through funding.
• Establish ongoing dialogues with donors. How were funds used? Where are you going now? What are you spearheading or leading now? How will contributions help in the next phase? Ask for another donation in the acknowledgement letter.
• Donors want to feel that their contribution is at the margin of making a difference, not maintenance. Donors want to feel that they are part of an ongoing enterprise and that they can put their mark, their thumbprint, on something to make a difference.
• Provide a measure of excitement to engage donors in what you do. While not all donors can participate in site visits or lunches on critical topics, making them available raises their interest.
• Communicate the culture of the organization through a specific communications strategy and by bringing grantees and donors together. Bring donors to grantee events to demonstrate the service to the community.
• Convene your donors and ask them what works for them in order to increase their contributions or involvement.
• Use optimistic messages. Research has shown that urgency never works. Focus on success, not distress.
  

Back to Public Foundation Fundraisers Network main page.