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Sunday, July 8, 2018

Fundraising 101

We will come back to JEE and admissions after a day. In the meanwhile, I had written this up a long time ago, and thought of publishing it today.

A few weeks ago, I received an email from an academic institution (in India). One of those bulk emails, asking me to consider giving a small gift for supporting some specific activity. Out of curiosity, I clicked on the link in the email and it took me to a page which described the project in brief, mentioned the goal of fundraising, how much had already been raised from how many donors, various suggested levels of gift (1000, 5000, 10,000, etc.),  and methods of payment (credit card, debit card, etc.). A few months ago, I had been to a similar site by a US university and made a small contribution. But this time, I decided against it.

Just as I was watching this page, a student walked in to my office. I asked him to look at the page, and read all the details. Then assume that he has a lot of money, and that he is passionate about the cause for which money is being raised. Would he donate. His answer was in negative. And he said that even he donates a few coins to the beggar outside a temple, he typically donates to a beggar who already has a few coins in his bowl. If you look at the waiter serving you food in Shatabdi/Rajdhani trains, when they come for tips, they already have a few notes of 10/20/50 rupees in the plate which is meant to indicate both the expectation of the waiter and also inform you that others have already donated. You are not the only one.

It was a drive to raise Rs. Ten Lakhs only and the site said that till now, there have been only one donor who had gifted Rs. 1000 only. So they had achieved 0.1 percent of their goal till then.

Contrast this with an email I received from my alma mater, University of Maryland, about their fundraising campaign a few weeks ago. It is dubbed: Fearless Ideas: The Campaign for Maryland. The 7-year campaign is planning to raise 1.5 billion dollars. But the interesting part was that the campaign had started in 2014 and they have already raised 900 millions so far, and only after they have raised 60% of the goal, are they now going public with their campaign.

I wrote a long email to the person responsible for fund-raising at this academic institution, suggesting what all can be done to make such campaigns more effective, and since I don't see any change in their sites and there was no response, I felt that my writing all this was waste, and I decided to publish this as a blog in the hope that it will not be a waste.

You don't want to tell a potential donor that you have raised only 0.1 percent of the amount so far. It will always raise a doubt, what happens if no other donor gives. Will my money go waste. Even when I give a tiny contribution, I want to know how this will be used, and I want to ensure that it will indeed be used in that fashion. But once I see that 60% funds have been raised, I know the development team is strong, and will be able to raise more, and if there is a minor shortfall, the project scope might be reduced slightly, but my money will largely be used for the purpose I am donating. Hence, if you have a strong project for which you believe there will be many donors, first go to donors privately, get some donations, and start your public campaign with a significant part already covered.

Second, on such a site you are also having some suggested amounts. It is a good idea to have these suggested amounts vary by a multiple of 2 to 3. And maximum number of options are around 5 o 6. A very large multiple means that people who wanted to donate something in the middle will be discouraged. And a small multiple means that your complete range is very small. So someone who does not want to donate in that range will be discouraged. So you could start with Rs 1000 and have other suggestions as 2000, 5000, 10,000, and 20,000. Five suggestions have taken you to a multiple of 20. If you don't know your donors at all, may be you can add another suggestion of 50,000. But anything more than that gives out an impression that you have no clue what to ask for and that is not very professional. Of course, there should always be an option for "Any other amount" that the donor can fill in.

The way these suggested amounts are decided is that the maximum of that should not be very close to the overall goal of the campaign. If you are looking at the overall goal of Rs. 10 lakhs, and the maximum suggested amount is Rs. 5 lakhs, then you really don't understand crowd sourcing. If someone is really passionate about this project and can pay single handedly whatever you are trying to raise, s/he will contact you directly and negotiate with you a bigger project, etc. Won't come through crowd sourcing. And such large sums as expectations deter small donors.

The site stated that the project needs donations because the institution has no money. That is too negative. People don't give money to run your routine programs (some people will, but not many). If you were to give a positive message, what is it that you are already doing, what are your aspirations and then say that institutional funds can do only so much but the vision is so exciting that we want others to share that vision.

One thing that most people find difficult to understand is that money is fungible. So you have a small budget for X, Y and Z. And you want to increase all three. Would you ask for money for additional X, additional y and additional Z. May be, donors don't get excited about X, but are more willing to give for Y and Z. Then just ask for Y and Z. Use your internal funds more for X.

Another thing I found on the website was a statement that if I pay through credit card, I will need to pay 2 percent extra. This is plain stupid. Any fundraising office will have costs. It is not just the cost of payment gateway, but also the cost of website/server/internet, staff salaries, office expenses and so on. When I donate money, I do expect some of that money to pay for the overheads. Why charge me separately for payment gateway but not tell me that part of the money will go for other overheads. You can write a line there saying that if you have an option please donate using debit card since my payment gateway costs are very low. So your donation will go a bit far. But if I want to donate 5000 rupees, don't suddenly tell me at the last minute that my credit card will be charged 5100 rupees while I will get a tax-exemption receipt for only Rs. 5000. In fact, if you are a smart fundraising office, you will divert some of the budget to pay for fundraising office, and tell the donors that all their donation will be used for project without any deduction for overhead expenses (if your budget allows that).

Fundraising is both an art and a science. It is new to Indian academic institutions. I wish there was a community of people working in Indian academic institutions who are involved in fundraising to share best practices. I am sure there are lots of people out there who want to help their alma mater but are not doing so because no one approaches them properly.


Akshay Mathur said...

Thanks a lot for putting this together.
Not just for academic institution fundraising - All the observations and suggestions are true for any crowdsource fundraising.

May times, these web pages are provide by third party websites claiming to be experts but lacking in basic human psychology.

iitmsriram said...

I believe IITM is a bit ahead in this aspect. You should check out our office of Dean of International and Alumni Affairs. Ours is also run by an external agency, but with better inputs form our side, I think.

Dheeraj Sanghi said...

@Sriram, yes IITM has gone ahead so much that in 10 years, it is raising from 10% of IIT Kanpur to 1000% of IIT Kanpur.