Parent leaders discuss donor cultivation, annual funds, and more

Identifying and cultivating donors from within and around your school was the principal topic of discussion at PEN's Dec. 5 fundraising seminar. Lisa Wilson, Director of Organizational Learning & Evaluation for the Flintridge Center, led the discussion with over 19 parent leaders from 9 schools participating. Participants also received an update on Annual Funds from Pasadena Educational Foundation Special Projects Director Angela Parris, and touched on the topic of what parent leaders can do to clarify fundraising goals and effectively coordinate fundraising activities within their school communities.

The Donor Cultivation Cycle

Picking up on a theme from PEN's summer fundraising seminar, Lisa Wilson reminded participants that fundraising is about talking to people you know, and giving them an opportunity to support something worthwhile. People bring different strengths to the fundraising process – some people are comfortable "selling" a "product" they believe in; others are good at creating social events; some are gifted at making a direct ask. (See notes from July session for more about these roles.)

Donor Identification – Wilson reiterated the point that "the people who give most of the money non-profits raise are middle class individuals." Highlights of the group discussion about identifying donors:

– Take advantage of opportunities for meeting people and getting to know them. (Examples: parties, plane rides, school events, neighborhood association or community meetings, etc.)

– Create opportunities for members of the community to visit your school: perhaps the Police Department or Neighborhood Association would like to hold one of its public meetings on your campus. If you are organizing a star-gazing or movie night, think about inviting the neighbors.

– Think about whose interests are served by the success of your school: parents and grandparents, of course, but what about neighbors, realtors and other local business people? One school is reaching out to its alumni, asking committed alumni to identify their former classmates and setting up one-on-one conversations.

– Think about what potential supporters' interests are. Parents (and grandparents) have an interest in programs that directly benefit their children, of course. Neighbors without children might support academic programs, but may have a more direct interest in campus beautification or traffic and safety projects. Retired people might be interested in volunteer opportunities. Local business people have an interest in connecting with families.

Cultivating Relationships – Engage prospective donors as you would a friend. Stay in touch, sharing news about what's happening at your school, including success stories and opportunities for getting involved (apart from making a financial contribution). Again, think about the people you are reaching out to; alumni or local business people might be interested in participating in a career day event; some people might welcome opportunities to volunteer on campus; others might not have time during the school day, but would still appreciate the opportunity to get involved with (or simply attend) an evening event. In any case, a request for money should not be the first communication a prospective donor receives.

Think about different modes of communication, including notes in neighborhood association bulletins, e-newsletters and individual email or notes, your website and marquee. Maintaining good will is also a form of communication. (Reminding parents to observe safe drop-off procedures and not to block neighbors' driveways falls under this category. (One private school actually went so far as to leave a poinsettia and a thoughtful note on neighbors' doorsteps at the winter break!)

Asking for Money – Once you have identified who cares about your school and why, you also need to think about what they might be able to give – how much to ask for. Some points to keep in mind:

– You are not asking people for a handout; you are asking them to make an investment, giving them an opportunity to support something that they believe in.

– Some of the best fundraisers are story-tellers, and the best stories incorporate factual information.

– There is a universal case to be made for public education, but the more clear and specific you can be about what you are asking for money for, and what the "return" (or result) will be for that investment, the more effective your pitch will be. This is true whether you are addressing parents, who have a more-or-less immediate interest in the school's success, or local business people who may have only an indirect interest.

Seminar participants paired off to practice asking someone for money to support a specific project. In the following example, note how Jim first presents the idea to Katarina to see what she thinks, and follows up by asking about her own interest in gardening. He also gives her an option of giving time, names a specific amount, but gives her the opportunity to give at a level that she is comfortable with:

Jim: We are thinking about starting a community garden on the corner of our school campus, and I know your house is right across the street.

Katarina: Your school could use a face-lift.

Jim: The kids want to start a garden, and we're looking for volunteer help or a small donation. Do you garden?

Katarina: A little bit.

Jim: Would you have some time to volunteer?

Katarina: No.

Jim: Could you support our project with a monetary donation?

Katarina: Well… how much?

Jim: We're asking for up to $150. Could you give $150?

Katarina: I could do $100.

Another participant commented on his own professional sales experience: "The hard-sell approach is disappearing. I emphasize the benefits and hold off naming the price. Timing is important; if they seem hesitant, I tell them I can call them back in a few months – before they have a chance to say no. The people who eventually buy appreciate my being persistent and polite." Take-away message: remember that you are cultivating a relationship. Stay in touch, but don't nag – don't ask for money every time you have an exchange. Give prospective donors opportunities to become really interested in your school or project, so that when the time is ripe, the ask itself is an opportunity you are giving them to invest in a project they care about.

Stewardship – Your relationship with a donor does not end when they give you money. In addition to acknowledging their gift directly, continue to cultivate the relationship by letting them know how their money was put to use, with what outcomes. Continue to keep them informed about your school and to give them opportunities to be involved to the extent they are interested.

Annual Funds & Working with PEF

Angela Parris introduced the Pasadena Educational Foundation (PEF), which exists to raise funds for the district, support teachers, and provide enrichment programs. PEF's "signature programs" include teacher grants (this year totaling $42,000), Principal for a Day, the middle school robotics program, and summer enrichment courses.

Parris invites interested parent leaders to ask to serve on the Principal for a Day committee that matches business, civic and political leaders to schools. She also offered to share the list of recent Principals for a Day with school leaders, because principals do not always have the time to continue cultivating those relationships.

PEF as Fiduciary Agent for Schools – In addition to its own programs, PEF holds over 125 different funds for various schools. Most of these funds were set up to enable schools to accept donations for specific purposes, such as libraries, technology, or school gardens. Schools are not independent financial entities, so PEF serves as their fiduciary agent. In practice, this means that when a donor wants to write a check to a school, they should make the check out to PEF and designate the school in the memo line. (Parris noted that when PEF receives a large check without designation, staff confirm with the donor whether they wish to contribute to PEF's general fund, or to a specific fund.)

Annual Funds – Annual Funds are a relatively new entity in this District. Sierra Madre, McKinley, and Hamilton were the first schools to establish Annual Funds (AFs). For schools with no (or limited) Title I funding, AFs offered a relatively flexible way to raise money for programs, equipment, and services that Title I funds might pay for at schools serving more low-income families. Because AFs are not purpose-specific, PEF has had to supply guidelines as to how AF spending decisions are made. PEF is now asking the principal and an appointed AF Chair (typically a parent) to sign a contract designating where the funds can be spent.

Service fee for Funds administered by PEF? As more schools establish AFs, the number of checks and credit card charges that have to be processed and the range of allowable expenditures has grown exponentially – and so has PEF's bookkeeping workload. The PEF Board of Directors has voted to start charging a 5% fee to administer funds for schools. 

Seminar participants said that they have been getting mixed messages about when the charge is to start taking effect. Parris explained that individual principals have to sign off on an agreement before it can take effect for a given school. "We don't want to jeopardize schools like Jackson or Cleveland, which are just trying to get AFs off the ground and don't have that many individual donations for PEF to process," Parris noted. It is a much higher priority (from PEF's perspective) to sign the 5% fee agreement with a school like Sierra Madre which may come to PEF with 400 checks and 100 credit card charges following its annual benefit.

Some parent leaders have been advocating for establishing their AFs as independent 501c3 corporations rather than continue to work with PEF and have to pay the 5% fee. Several seminar participants responded that there are costs associated with starting a 501c3, and that there is also greater risk in having volunteers carry the fiduciary responsibility, particularly when the leadership pool (parents) is constantly turning over. PEN Director Nancy Dufford pointed out that 5% is at the lower end of what is standard practice. Other nonprofit fiduciary agents (e.g., the Pasadena Arts Council) charge up to 7%.

The message for PEF was, communicate clearly to everyone the basis for the charge, how and when it takes effect, and that the amount is well within standard practice and still a good deal compared to the alternative.

Other key points from this discussion:

– Schools that do not yet have AFs are being encouraged to set them up. A PayPal "donate" button can go directly on the school's website. Friends and Neighbors Supporting Schools (FANSS), a PEF committee, will be offering support to help schools establish AFs.

– It was suggested that PEF/FANSS develop a handbook and training for AFs.

– Schools with Annual Funds may still have one or more specific-purpose funds. Norma Coombs parent Mike Nowak is working with PEF's bookkeeper to streamline their accounts. If donors wish to give for a specific purpose, an AF representative can discuss with them what they wish to support and what the schools needs are.

Relationship between AF and PTA – Annual Funds have become more popular as schools try to raise more money to compensate for budget cuts. But PTAs also engage in fundraising, and also have been working to fill gaps left by budget cuts. Where fundraising is concerned, how should parent leaders think about the respective roles and the relationship between AF and PTA?

Seminar participants offered these observations:

– PTA funds must be spent on projects that benefit the whole school.

– It is often asserted that PTA cannot pay for staff salaries, and that funds raised by PTA cannot be carried over from one year to the next. In fact, a PTA may elect to "organize or support educational programs" – including those that involve "hiring staff by gifting monies to school districts" – subject to PTA guidelines and insurance limitations." (A PTA can even act in the capacity of employer, though PTA's guidelines discourage this approach, in part because it entails the PTA unit meeting all relevant IRS requirements.) PTA budgets should include some carry-over amount appropriate for costs expected to be incurred at the beginning of the school year; however, "all projects and programs must be voted on and approved by the current year’s membership before any expenditure may be made."

– PTA is allowed to solicit donations for the school's Annual Fund or another purpose-specific school fund, but funds being donated for a specific purpose should not be commingled with PTA funds. That said, the PTA budget can include a gift to the school's AF or other fund, provided it will be used for something that benefits the entire school.

Angela Parris confirmed that most Annual Fund monies go to pay for salaries. This also entails extra bookkeeping work for PEF, which has to work closely with the District in its capacity as employer. 

Working Together – Field PTA President Katarina Voll pointed out that "it's not a competition [between AF and PTA]. It all goes to the children. PTA cannot do everything, we have to work together." Norma Coombs' Mike Nowak agreed that a school's AF Committee needs to meet with the Principal, PTA and other parent leaders to determine the school site's needs and spending priorities.

PEN staff distributed a sample set of fundraising guidelines developed by San Rafael parent leaders in an effort to increase coordination and clarity about the role of different groups in raising and spending money on behalf of their school site. Seminar participants – and any other interested parent leaders – are encouraged to review the San Rafael example in preparation for our next seminar, which will focus on how school site leaders can most effectively work together to prioritize fundraising needs and plan fundraising activities.

*** How do school site leaders coordinate fundraising efforts currently? What strategies have you found effective? We welcome your comments and ideas!