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Fundraising Foundations

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Colleges and universities have been operating special fundraising foundations for over a century. Their purpose is simple . . . to secure grants and charitable contributions.

What is a special fundraising foundation?

A special fundraising foundation is a separately incorporated nonprofit entity.  It is governed by a board of directors appointed by the affiliated nonprofit organization. Charitable contributions come from those members of the community who recognize the importance of the parent organization's mission. Potential donors include alumn or patients and their families, vendors of goods and services to the parent organization, local business and industry, organization staff and board,and many members of the general public.

What can funds collected by special fundraising foundations be used for?

Funds raised by a special fundraising foundation can be used for any purpose its board of directors believes will enhance the quality of the parent organization's mission.  These funds are unrestricted (unless otherwise specified by the grantor or donor).

What is involved in the creation of a special fundraising foundation?

RJMA brings together all the necessary pieces in the creation of an special fundraising foundation. These pieces include the necessary governing board resolutions, preparation of by-laws, preparing the certificate of incorporation,and filing the necessary applications with the Internal Revenue Service.

Once the special fundraising foundation is formed, what happens next?

It begins raising money! It does this by following a basic fundraising strategy that includes one or more of the following components:

* Annual Giving
* Special Events
* Major Gift Solicitation
* Endowment Building
* Grants Development

Robert J. Miller & Associates, Inc. provides this strategy in an easy-to-implement format. Each component is designed to meet the specific needs and characteristics of the community served by the special fundraising foundation.

Must we hire additional staff to operate the special fundraising foundation?

No. A special fundraising foundations is a volunteer driven entity. As it grows, however, the foundation board may elect to hire a full-or part-time administrator as the volume of its activities increase.

How much money can we anticipate raising through the special fundraising foundation?

Annual giving programs typically generate $50 per donor per year. Thus, a modest donor list of 1,000 persons will produce $50,000 each year. This amount typically increases as donors are added to the list. Successful special events typically net $30,000.

Hosting four special events yearly will produce $120,000 in revenues.

Major gifts vary widely depending upon the distribution of wealth in the community. Five major gifts of $10,000 each will add another $50,000 to total annual foundation receipts.

Endowments are money-producing engines that increase as the size of the endowments themselves increases. A $1 million endowment invested at eight percent yields $80,000 annually.

Grants also vary depending upon the type and nature of grant supportable projects administered by the special fundraising foundation.  Four approved grants of $40,000 each adds another $160,000 to the special fundraising annual totals.

How much does it cost to set up a special fundraising foundation?

Costs fall into several categories. They include:

Legal and filing fees for the certificate of
incorporation. These are typically less
than $1,000.

Preparation of the 501(c)(3) application. This is approximately $900.

Consultation fees for by-laws and operating procedures development. Approximate charge: $1,500.

Design of the charitable giving strategy to be used by the special fundraising foundation. Approximate charge: $3,900.

Robert J. Miller & Associates, Inc. provides a wide range of special fundraising foundation development services, from basic consultation to total planning and formation.

Why should we consider forming a special fundraising foundation?

America is in the midst of the greatest transfer of wealth between generations than ever before in its history. Today’s older Americans are the first wealthy generation following the Great Depression. This generation is now passing its wealth to sons and daughters who are members of an even MORE wealthy generation. Many in this generation do not need this inheritance to live. Instead, they invest it or donate it . . . or both. Given the powerful tax incentives for charitable donations, many of these dollars are being donated to nonprofit organizations that ASK for them.

What about school districts?  Is there a place for special fundraising foundations in school districts?

Frankly, public school districts - by themselves - are not appealing to donors simply because they are supported by local tax levies and state aid. Children, on the other hand, do have strong donor appeal. Thus, special fundraising foundations, formed in the name of children, to benefit children, are powerful magnets of donor support.

Considering the fact that the only real difference between a college/university and a public school district is the age of the student, K-12 schools can enjoy the same remarkable financial benefits from special fundraising foundations as those enjoyed by their post-secondary counterparts.