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Fund-raising basics for behavioral health nonprofits

June 22, 2009
by Nelson W. Burns
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They include an annual appeal, event fund-raising, and planned-giving program

I often am asked in my consultation and college teaching roles what should be the fundamental fund-raising activities for nonprofits. While fund-raising is hardly a new phenomenon to the nonprofit world, it is interesting to note that many behavioral healthcare nonprofits do not employ fundamental fund-raising practices and don’t understand the basics.

Generally, three fundamental strategies should be employed in providing a fund-raising program in any behavioral healthcare nonprofit:

• Annual appeal
• Event fund-raising
• Planned-giving program

Many other strategies can be added to this basic list. I will not address grant writing, which often is included in resource development departments, because it can involve the commitment of a new service with little discretionary use of funds.

Annual appeal
An annual appeal strategy includes the establishment of a systemic process of asking the prospect to donate once or twice per year to the nonprofit. This strategy’s fundamental purpose is to achieve new donors and to raise enough revenue to support operational expenses. Annual appeals generally involve a mail, telephone, e-mail, and Web page request for a donation. These types of donations can be small, under $100, yet are extremely valuable to support the donor through other successful fund-raising strategies.

Event fund-raising
While most nonprofits operate some kind of event, many times they are not organized to raise serious money and are confused with social or publicity events. Fund-raising events can accomplish many important goals, but fund-raising is paramount. A successful fund-raising event includes a consistent, scheduled social interaction, an increase in new donors, an expanded database of prospects, and a net gain of at least $10,000. It can take up to three years of holding events to reach these goals; however, event fund-raising usually is the most expensive strategy to raise donated dollars and must be adjusted or changed to meet its outcomes.

Planned-giving programs
Planned-giving is an effective but long-term strategy to raise money for a nonprofit. The planned-giving program can include estate planning, wills, and other tax-reduction methodologies that might be helpful to the donor and nonprofit. The overall goal of this strategy is for the nonprofit to receive estate gifts or donations from wills. A planned- giving program often includes an educational program about, for example, mental illnesses and addictions, and at the same time potential donors learn the importance of estate dollars to the nonprofit and how they can leave a legacy to improve the community.

Final thoughts
All fund-raising activities should be inclusive of the public, the nonprofit’s employees, and board members. Behavioral healthcare providers can use successful fund-raising strategies to raise independent dollars and effectively educate the general public about mental illnesses and addictions.

Nelson W. Burns has been the President and CEO of Coleman Professional Services since 1985. Coleman serves five counties in Northeast Ohio, has 440 employees, and has a $20 M annual budget. For FY 08, Coleman received 5% of its gross revenue from fund-raising. He is an adjunct professor at Kent State University, teaching master’s level Web courses in philanthropy and board governance for nonprofits. He is on the advisory board of the KSU Healthcare Executive MBA program, and he blogs about fund-raising at www.behavioral.net.

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