Excerpt: Strategic Fund Development, Part 1

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Simone P. Joyaux, ACFRE is recognized internationally as an expert in fund development, board and organizational development, strategic planning, and management. She is the founder and director of Joyaux Associates. Visit her website here.

For the past eight months or so, Simone Joyaux has been writing the third edition of her first book, Strategic Fund Development. The book will be released in spring 2011 by John Wiley & Sons, Inc. Her next two columns will feature modified excerpts from the book’s first chapter.

Building Profitable Relationships That Last

Defining philanthropy

“Philanthropy is the act of individual citizens and local institutions contributing money or goods, along with their time and skills, to promote the well-being of others and the betterment of the community in which they live and work. Philanthropy can be expressed in informal and spontaneous ways or it can also be expressed in formal, organized ways whereby citizens give contributions to local organizations, which in turn use the funds to support projects that improve the quality of life.”

So says the European Foundation Centre in Brussels. A darn good definition.

Years ago when speaking in Mexico City, I heard philanthropist Don Manuel Arango Arias talk about philanthropy as “freeing the talent of the citizenry.”

That goes well with my favorite definition of philanthropy, coined by Robert L. Payton, philanthropy is “voluntary action for the common good”. I always attributed this definition to Robert L. Payton, the first professor of philanthropics and first director of the Center on Philanthropy at IUPUI.

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But it turns out that Bob’s actual statement is “voluntary action for the public good.”Maybe I heard Bob say “voluntary action for the common good.” Or maybe I took Bob’s statement and changed “public good” to “common good.” No matter. I keep using the phrase “voluntary action for the common good” to define philanthropy.

Philanthropy is not defined by wealth. Everyone can give. Many choose to give. And hopefully, organizations value all donors and respect all gifts.

As Alfre Woodard says in the preface to Robin Hood Was Right, one of the best books you’ll ever read: “Giving isn’t a posture reserved for the rich or powerful. It is the responsibility and privilege of every man, woman, and child to participate in the task of building more just and humane societies.”

The concept of justice—too often excluded from philanthropy—broadens our horizons. The common good demands our attention. Woodard continues, “Charity is good, but supporting and creating social change are about power. Power can infuse lives with purpose and dignity. That opens up the possibility of joy. The life of the giver, as well as that of the receiver, is transformed.”

While the word “philanthropy” comes from the Greek, the philanthropic tradition is neither a Western invention nor a Western dominance. Think about Islam’s Zakat. Think about Confucianism and Buddhism. Imagine the earliest societies working together to help each other.

What is fund development?

In his book Achieving Excellence in Fundraising, Hank Rosso described fundraising as the servant of philanthropy. I don’t much like the term “fundraising.” I prefer “fund development,” which seems more strategic and encompassing.

What’s most important is that philanthropy and fund development belong together. Fund development helps engage people in philanthropy. Do your staff and board members understand this partnership? Do your staff colleagues and board members honor fund development as much as they honor philanthropy?

When I combine philanthropy and development, here’s my definition: Philanthropy means voluntary action for the common good, freeing the talents of the citizenry. Fund development is the essential partner of philanthropy. Fund development makes philanthropy possible by bringing together a particular cause and donors and prospects who are willing to invest in the cause.

Why do definitions matter?

We need commonly-accepted vocabulary to talk about things. We need to know what each other means when discussing issues.

Some more basic definitions and distinctions

Constituent: Someone who relates to or cares about your organization. Can be an individual, business, service organization, mosque, etc.

Stakeholder: Not so different from a constituent. Someone who has a direct interest in your organization or your cause.

Stakeholders are actually interested in the decisions that your organization makes. Do you think your organization understands that? What would happen if your organization actually reported on the decisions it makes?

What would happen if your stakeholders actually watched your organization make decisions? Would your organization perform better if stakeholders were watching how the sausage really got made?

Predisposed: An individual, business, or some other entity whose interests and actions suggest a possible inclination or susceptibility towards your organization’s cause / mission.

“Suspect” is common fundraising terminology. But who wants to hear anyone referred to in such a pejorative manner? So I’ve “invented” this alternative term. In The AFP Fundraising Dictionary, suspect is defined as “a possible source of support whose philanthropic interests appear to match those of a particular organization but whose linkages, giving ability, and interests have not yet been confirmed.”

Prospect: An individual, business, or some other entity that has demonstrated an interest in your cause / organization. The individual has raised his / her hand by buying your services or asking to join the mailing list or . . . In some manner, in some way, the individual, business or entity has raised its hand signaling interest in your cause and your organization.

Think of a prospect as a constituent who has moved along the constituency development continuum and is now considered qualified to receive a request of some sort. For example, a request to join your board or to give a financial contribution.

The Visual Thesaurus uses the phrase “the possibility of future success,” also defined as somebody or something with potential.

Donor: Here comes our favorite definition, right? Donor. An individual, business, or some other entity that has given a gift of time or money or service to your organization. (So when this book refers to “people,” I mean individuals, foundations, corporations, civic groups, whatever.)

A donor of time is usually called a volunteer. But remember, a volunteer is a donor. Donors may be called contributors and investors, too.

And just a little p.s. What’s a customer? Someone who uses or pays for goods or services. Watch the little diagram at the Visual Thesaurus shift. Follow the other words for customer, for example: client, consumer, patron, user, subscriber, frequenter, business relation.