CSR 5013 Module 2 Fundraising Strategy Example

Turning 90,000 Café Customers Into Donors: A Three-Year Fundraising Strategy for a Boise Job Training Nonprofit

Student Name

American College of Education

CSR5013: Corporate Social Responsibility: Maximizing Resources

Module 2 Assignment

Instructor Name

May 19, 2028

Introduction

The first paper in this course mapped the resources of Treasure Valley Kitchen Works, the culinary training charity at the center of this case, and found a $3.2 million budget resting heavily on café sales and a state contract, with contributed income of about $1.2 million from foundations, individuals, companies and events. Its directors aim to reach 200 trainees annually within three years, a target that requires about $1.4 million more each year. This paper sets a contributed income goal for that growth and plans how to reach it over three years, drawing on research about why people give and how donors stay.

Setting a Realistic Goal

Of the $1.4 million needed, about $350,000 can come from evening catering and added café sales, according to the finance director's estimate, leaving $1.05 million in new contributed income. That nearly doubles current contributions, so the goal is phased: $250,000 more in the first year, $650,000 by the second and $1.05 million by the third. The phasing reflects the organization's history, in which contributions grew about 6 percent a year with no development plan. A goal that requires faster growth must be supported by specific changes, which the sections below set out stream by stream.

Why People Give

Bekkers and Wiepking (2011) reviewed more than 500 studies and identified eight mechanisms that drive giving, including awareness of need, being asked, the costs and benefits of giving, reputation, psychological benefits, values and the perceived efficacy of the gift. Two of these explain the organization's weak donor numbers. Café customers are aware of the mission but are almost never asked. And donors receive little evidence of efficacy, even though the organization documents 64 percent job retention a year after graduation. The strategy is built around asking more people and showing them that their gifts work.

Acquisition Through the Café

About 90,000 customer visits a year pass through the café, and the resource map found that fewer than 2 percent of donors first came through it. The strategy introduces three low-cost asks. Each receipt will offer a round-up donation, a table card will tell one graduate's story with a code for monthly giving, and catering clients will receive a thank-you note with an invitation to tour the kitchen. Tours, held monthly, will introduce visitors to trainees and staff. The goal is 450 new donors in the first year at an acquisition cost of about $40 each, mostly staff time and printing.

Retention Before Growth

New donors are of little value if most leave after one gift, and the organization's retention rate of 44 percent means it loses more than half each year. Sargeant (2001) found that donors who perceive better service quality and stronger engagement with the cause are more loyal, and that many lapse because they feel unappreciated or unsure their gift made a difference. The strategy therefore adds a thank-you call within 48 hours for every first gift, a short quarterly impact report with graduate stories and outcome figures and an annual open kitchen night for donors. The target is retention of 55 percent by the third year.

Monthly Giving

Monthly donors give more over time and retain better than single-gift donors because the gift continues unless they stop it. The organization's monthly program produces only 9 percent of individual income. The strategy names the program, sets a starting amount of $25 a month, the cost of one trainee's knife kit over a year, and makes it the default ask at the café and in follow-up emails. The goal is 300 monthly donors by the end of the third year, producing about $110,000 a year.

A Matching Gift Campaign

Once a year, the organization will run a two-week spring campaign in which a group of major donors and a corporate partner match gifts. Karlan and List (2007) found in a large field experiment that announcing a matching grant increased both the response rate and the revenue per letter, although larger match ratios did not raise giving further than a one-to-one match. The campaign will therefore use a simple one-to-one match of up to $75,000, publicized through the café, email and local media, with a goal of $150,000 including the match.

Foundations: Leading With Outcomes

Foundation income of $520,000 comes mostly from four local funders. The strategy adds regional and national foundations that fund workforce development and reentry, using the outcome data as the core of each proposal. A part-time grant writer will prepare twelve new proposals a year, prioritizing multiyear general operating support. Given typical success rates for new applicants, the strategy assumes three new grants averaging $60,000 by the second year, adding $180,000, and two more by the third year.

Corporate Support: A Better Offer

Corporate gifts of $170,000 are mostly gala sponsorships. The strategy replaces single sponsorships with partnership packages that combine a gift, employee volunteering as mock interviewers, a hiring commitment and catering purchases. Companies in hospitality, health care food service and construction, which need reliable entry-level staff, are the first targets. The goal is eight partners giving $25,000 or more each by the third year, adding about $130,000 beyond current corporate income. Partnerships are developed further in the fourth module.

Staffing and Costs

The organization has one development director and a part-time events coordinator. The strategy adds a donor relations coordinator in the first year and a part-time grant writer, together costing about $105,000 a year. Printing, donor software and events add about $35,000. Total fundraising cost rises to about $290,000 a year by the third year against contributed income of about $2.25 million, a cost of roughly 13 cents per dollar raised, within the range considered efficient for organizations of this size.

Targets by Year

The plan sets yearly targets for each stream. In the first year: 450 new donors, 100 monthly donors, a $100,000 matching campaign and two new foundation grants. In the second year: retention of 50 percent, 200 monthly donors, a $125,000 campaign and five corporate partners. In the third year: retention of 55 percent, 300 monthly donors, a $150,000 campaign, eight partners and $1.05 million in new contributed income. The development director will report progress against these targets to the board each quarter.

What Could Go Wrong

Three risks could slow the strategy. Café staff may feel uncomfortable asking customers for gifts, so asks will be built into receipts and table cards rather than spoken requests, and staff will be trained to answer questions without pressure. A downturn could cut individual giving in the second year, which would make the monthly program and foundation grants more important. And new donors gained through round-ups give small amounts, so the strategy depends on converting some of them to monthly giving. Each risk will be reviewed at the quarterly board report.

Conclusion

Treasure Valley Kitchen Works can raise about $1.05 million more each year by asking the audience it already serves, keeping the donors it gains and showing them the results it already measures. The strategy combines café-based acquisition, relationship fundraising for retention, a monthly giving program, a one-to-one matching campaign, outcome-based foundation proposals and stronger corporate partnerships, with costs and yearly targets. The next paper examines donor-advised funds and major gifts, which can accelerate the strategy's later years.

References

Bekkers, R., & Wiepking, P. (2011). A literature review of empirical studies of philanthropy: Eight mechanisms that drive charitable giving. Nonprofit and Voluntary Sector Quarterly, 40(5), 924-973. https://doi.org/10.1177/0899764010380927

Karlan, D., & List, J. A. (2007). Does price matter in charitable giving? Evidence from a large-scale natural field experiment. American Economic Review, 97(5), 1774-1793. https://doi.org/10.1257/aer.97.5.1774

Sargeant, A. (2001). Relationship fundraising: How to keep donors loyal. Nonprofit Management and Leadership, 12(2), 177-192. https://doi.org/10.1002/nml.12204