Joint Fundraising

From WikiAdvocacy

This thread is organized to answer the following question posed in 2014:

Inquirer I have a family in Colorado who offered to have a fundraiser for my organization. They would like to have help from a local charity in Colorado and have this be a joint fundraiser. I looked up the organization and they have filed 990's each year they seem to be doing good work --- it's a family charity to support families who have kids with terminal illnesses. Our major fundraiser is called the "XXXXX" for XX syndrome we have them around the country organized by various families and collect registration and donations through Firstgiving. Firstgiving is not able to have a joint fund-raise and allow the funds to be split automatically.

Do any of you have experience with having a joint fundraiser or know of a way to have the funds split between the two organizations? We'll need to split expenses too.

This thread covers the following topics:

• Join fundraisers

• Splitting funds between two organizations

• Event management System

Responder 1 replied:

We have one annual fundraiser run by a family who designates half of the funds to us and the other half to a local worthy cause. We handle all of the finances and distribution of funds in the end. We had a conversation with our auditor about it many years ago when it started just to be sure there were no issues.

Responder 2 replied:

This is more than you asked for, but it’s our experience with partnering on events.

Our goal with an event partner is to make the back end admin stuff as easy and transparent as possible … with the “hidden" benefit to us that we control (i.e can account for) the funds and we hold the donor contact information for the long term. Event organizers and families can then focus on what they do best … local PR, logistics, local vendor contact, local planning etc. They do not need to learn or know anything about the back end admin. The result is that we are a working partner but we can do it from afar.

1. We split funds in some of our most successful fundraiser events, but only on the following terms. I'll start with events that we split with families and conclude with those that benefit other orgs:

2. We know and trust the family that is benefitting from the event. Partnering with someone you don’t trust is not worth the money.

2.1. We have an Event Overview and Engagement Contract we ask first timer’s to sign that details all of the following, clearly sets expectations, and answers the most common questions that we often use with first time event partners. It’s always nice to have stuff in print up front.

3. The split is agreed up on up front - you’d be amazed how greedy people get when the fundraiser is successful and raises a lot of money

3.1. We now only allow 50/50 splits - 50/50 is probably best for all parties because it keeps everyone motivated and in the same boat working together. We held several events early on where the donor could designate from 0 to 100% to us in 25% increments. The events always averaged out as 50% and frankly were a bear to explain to everyone so we’ve now simplified to a default 50/50 if the event is to be split. Of course we also partner on 100% to us events

3.2. We very clearly state to new event partners that a rising tide float all boats thing where we both benefit more by partnering and splitting the funds:

3.2.1. Access to our event management system (see below) removes nearly all of their administrative burden And we typically buy the event domain name and host a static landing page, so we have a hook for future years (because event names tend to live on) and also so we can get someone up pretty quickly. See for a recent event page. Note that the registration button goes to a MLD Foundation domain page Also note the sponsor plugs at the bottom. This is also database driven so we can instantly add and recognize a new sponsor (good PR with them!) We do encourage and allow the event organizers to take over editing and enhancing the landing page but all registration and payments are redirected to a page only we control.

3.2.2. The ability to engage corporate sponsors that will only write a check to a 501c3

3.2.3. The cachet and credibility with donors and press that there is a non-profit partner benefitting and that this is not a greedy self-centered family usually goes a long way

4. The split is stated clearly on the event registration web page and printed flyers - hype this up …50% of the funds raised goes directly to the XYZ family.

5. A statement follows the split saying only 50% of your donation is tax deductible - we are very clear about this. Funds that go directly to a family are NOT tax deductible. We don’t; make a huge deal about this, but we do not want any confusion and reiterate the same on the tax receipt.

6. The split is calculated after expenses and paid after the event reconciliation is complete … usually a couple of weeks after the event

6.1. We encourage the local family to get as much services donated or discounted as possible to reduce/eliminate expenses

6.2. We encourage they find local (cash, not services) sponsors to cover any remaining expenses

6.3. We ask the event organizers to send us a budget BEFORE the event so we aren’t surprised by expenses at the end of the event

6.4. We also include $1 per donor expense to cover mailing their (color) tax receipt and printing of brochures which we send to every donor

7. And perhaps most important, we handle all of data and money (or as much as possible):

7.1. We have a custom developed online event registration and payment system (databases everything and collects the payments)

7.1.1. Real-time online admin access to the event admin page for the organizer to see how registrations are coming They see the exact $$ we have in hand and we see what they have in hand … transparency builds trust and respect

7.1.2. Tracks t-shirts by size, types of registrations (children, family, adult, run or walk, etc.), other schwag available for purchase

7.1.3. Shows who has donated already and most importantly pledges that have not been fulfilled yet (check coming, pay later, etc). Has a built in automatic online reminder system to make you donation

7.1.4. Has the ability to message one or all participants to send updates (weather, additions, changes, etc), social media share requests, etc.)

7.1.5. Payment is encouraged in real time by PayPal, which is integrated into the system. Each Paypal payment is automatically recorded to the reg record by the server and includes the registration number for debit/tracing after the fact.

7.2. Paper registrations are allowed but:

7.2.1. The local organizer needs to enter all of the information into the event registration system as they receive the paper reg forms

7.2.2. Payments with paper reg from are usually checks ( or a pledge to pay online)

7.2.3. We do no collect credit card info on paper forms - they is a security risk and fraught with problems

7.2.4. Leave plenty of space for a legible email address … this is key to efficient communications, and where necessary, sending a custom link to accept the donation online

7.3. Checks are held by the local organizer until the event ends

7.3.1. We still require an online reg record for check donors … the local organizer is responsible for creating those records

7.3.2. Local organizer records checks as received (we call them pending until we actually get them) so we don’t send out unpaid donation reminders

7.3.3. Checks are sent to us in one big batch at the end of the event.

7.4. Cash is always tricky and discouraged … we tell cash donors that it’s really difficult to track them for their receipt and prefer check or online payment

7.4.1. We simply trust the local organizer with cash

7.4.2. A registration record is still required and created by the local organizer

7.4.3. Cash is noted as received just like a check

7.4.4. Once tracked, cash is subtracted from the local organizer’s expense check (we tell them this at the end to encourage them to account for everything)

7.5. The system generates a report and schwa bag label for when folks check in at the event

7.5.1. If unpaid this is clearly noted and a check, cash or PayPal Here payment is taken right then.

7.5.2. The label specifies what size t-shirts, etc. so the schwa bags can be prepared in advance … speeds on site check in

7.6. On site registration is handled with an iPad/iPhone that logs into a special shortened reg page capturing only name, email, and amount to donate … and then to the online payment page to manually enter the credit card info (if their is time) or a quick switch to the PayPal Here reader for the payment (this is not directly integrated yet so we have some post-event correlation of payment to registration to handle).

8. We do all of the receipting and thank you. Often we include a note that we reprint from the benefiting family in the envelope to the donor along with a couple of MLD brochures (all less than 1 oz).

9. We also retain all of the email addresses for future contact and updates (and next year’s invitations).

9.1. If a family tries to go it on their own the next year we are the ones with the reg details and emails.

9.2. As mentioned, we also own and ultimately control the domain name.

9.3. These, and most importantly a positive successful working relationship, give us some gentle leverage to encourage them to partner with us again next year. But note that we have “set free” events in subsequent years for a variety of (mostly good) reasons.

9.4. And note with families where you build lots of momentum over the years, when the loved one passes away (which happens all too soon with MLD), often the event can live on a year or two longer (or more) with use being the 100% beneficiary.

10. If the event is big enough we will fly to it to increase MLD visibility, answer questions, show support … and to handle onsite registrations (control those funds and contact info), and to support ancillary events like silent auctions. Our event management system handles runs/walks, basic registration, virtual events, silent auctions, and maybe in 2015 golf scrambles. We want to be a very valuable partner.

11. For tax and accounting purposes we record all of the payments to a family (or another organization) as a fundraising expense. We have no problem saying it cost us $10k to raise $10k. If a donor think we have too high an overhead we simply state how the events are organized. You cannot record a family payment resulting from a fundraiser naming them as a grant or program expense – That is a violation of IRS rules.

12. You mentioned splitting with other organizations.

13. Partner only with high calibre organizations that enhance your organization’s reputation

14. We’d use the same guidelines and try to be the people in charge of money and the contact data using our registration system as the hook to put us into that position.

15. Be clear in writing up front about the terms

15.1. Did i say get it in writing? … email is fine, but make sure everyone agrees on the following:

15.2. What the split will be

15.2.1. If we are using our event system and doing all of the back end management, receipting, etc., we’d frankly balk at less than 50% even if there were more than two partners.

15.2.2. We want to posture as being an event partner (headliner) while they are event beneficiaries

15.3. How and when expenses are covered (or not)

15.3.1. define expenses for other orgs … i.e. if they attend will the event cover their travel, etc.

15.4. What information you will or will not share with them afterwards (donor names, amounts, contact info, etc.).

15.4.1. As an event partner we’d probably start by not sharing emails

15.5. Who is in charge of communications to donors

15.5.1. The formal tax receipt needs to come from the org that processes the donation, in our case us. You can include a generic thank you from the other org just like we do with a family letter so everyone gets visibility.

15.6. How you will all be represented with regard to PR (online, onsite, and post-event)

15.6.1. size and placement of logos

15.6.2. who are event partners, who are “just" beneficiaries, etc.

16. If the other org is a 501c3 then of course 100% of the donation is tax deductible to the donor. Even with 100% deductible, I'd still be clear about the split up front in the publicity to the public.

FWIW, our Event Management System has been developed over many years to be optimized for the events and issues encountered by local families organizing a whole variety of different kinds of events. We enhance it with every new event by adding new features, often requested by the local event organizers – we try to never say no. To date, we haven’t opened the system to non-MLD events. That may change in the future but is not the case right now.

Responder 3 replied:

Thanks so much for that information. It was extremely helpful to me. May I ask if the event management program is something that can be purchased or is it something that MLD devised? We do not have much tech support (all volunteers here) but I finally found a volunteer who I think will do a great job. Yay! Anyway, thank you so much. I look forward to hearing more about your event management program, if possible.

Responder 2 replied:

There are two parts to what I described. The first is the process we use for events which you can certainly implement/adapt/change for your organization and events(s). I wrote all of that up in my prior post so you could do exactly that.

The second is the Event Management System that the MLD Foundation developed for our own internal use over the last 7 or 8 years. It consists of two servers with a custom built database driving PHP to the web, an API to connect to PayPal and a lot of scripts that implement the various communication, update, admin, payment processing, and display routines. If I had to guess, we have 400 hours invested in this project (all me). But I should note that most of these hours were in adapting the system to meet the special requests of a particular fundraiser, and we always over invested in those additions so that things would be plug and play for that feature with the next event rather than just band aids that would eventually break. The systems serves the event organizer, the registrants, donors, sponsors, PR, and all of the back end payment processing, pledge reminders, event accounting, thank you/receipting, etc.

The key is that this is not just an IT project … it’s a comprehensive system built to handle everything we needed as a 501c3 organization and that the event organizers needed to manage their events. An IT guy will build to spec so the burden would deb on you to be sure to include the marketing, event organizer empowerment & management tools, sponsor motivation, 501c3 accounting, etc. attributes. I wish I could give you a copy of our spec, but since I wear all of these hats I was able to do the development to meet all of these parallel needs without a spec. Admittedly, for all of its integration and automation, the system is pretty dependent on me to set up and run … that is something I need to continue to refine and document so others can follow in my footsteps.

You can do most of these things in standalone packages with limited or manual connection between them. There are many different race registration packages for example, but they don’t handle schwag, 501c3 receipting, sponsors, full event accounting, etc. And they will not allow integration of silent auction, or allow folks to simply donate but not register to run, or do the special things you need to do with a sponsor. Or you can purchase a variety of donor management systems, but they will not handle event specific functions. And those systems always have a fee, be it one time, per event, or per participant.

I don't write all of this to be feisty … I just want you to know, as you probably do already, that a comprehensive, integrated, and flexible 501c3 event management tool is a very big ask.

No, we don’t sell the system. It was not built with a user interface for that sort of an independent life so I am sure users would get frustrated and as much as I'd like to help the communiyt I don’t want to be in the software support business. And, as I mentioned, to date we have not allowed it to be used by other groups because we just didn’t have the time. It still has a bit of manual overhead in it, for example to match on site PayPal Here payments with auction winner records.

With that said, I am an unpaid volunteer at the MLD Foundation with limited other income so I would be willing to privately (not as a MLD Foundation project) enable the tool to manage an event for you. In doing so we’d have to agree on a fee of some sort to compensate for my time and any customization to support outside users.

If this is of interest, please email me off list, tell me a little about what kind of event you are planning, when you are planning to host it, when registration might open, and what you think a fair fee might be.

Inquirer replied:

Thank you all for your input advise from experience. It has helped me a lot. I am going to go ahead with trying the partnership fundraiser. I also like the advice about handling a fundraiser for a family and splitting the cost and making it transparent as well. Dean, if you would be able to sell your Event Management system, you would make a lot of money. We have been using Constant Contacts' "Event" system for our family conference registration and Firstgiving for our fundraisers and neither of them sound as good as your system. Thank you so much for taking the time to write out all of this great information, it was very helpful.

Responder 4 replied:

Very informative information, thank you for sharing I do have a question though... shared fundraisers for families that go through your accounting isn't considered funneling money? Our charity does hold fundraisers for specific families or create funds for them for this reason. Are you saying this is legal? We'd like to offer our families more help like this but don't want to break any laws or do anything that could even be perceived as dishonest.

Inquirer replied:

The way I understand it is that if the non-profit is splitting the donations with the family, then the donation is not 100% deductible -- only the 50% that is for the non-profit is deductible and the other 50% that goes to the family is a gift to the family (no tax deduction allowed). So if the donor gives $50.00 then you can thank them for sending the $50.00 and let them know $25.00 will be sent to the family and a receipt for their $25.00 donation to the non-profit.

Responder 2 replied:

Yes, this is tricky ground and not a place you want to screw up. If your community is like ours we get asked all the time if a family can "borrow" our 501c3 number for their local fundraiser so donations to the family can be tax deductible. Of course there is no such thing as a 501c3 number and it's against the IRS code to benefit a single family with a tax deductible pass through donation.

Note the key words "tax deductible".

It's not a problem if the donor knows up front that the portion of the funds going directly to the family is not tax deductible. We say so on the event info page, on the reg page and on the tax receipt letter where we say only xx% of the gift (whatever stays with us) and we list the dollar amount is tax deductible. How folks file their tax return is up to them and is not our responsibility. In this case we are just acting as a Non-deductible collection agency of sorts and it's entirely legal. FWIW, the split of funds makes the extra overhead worth our effort.

We do have a MLD Family Compassion Fund that any MLD family an apply to - and gifts to that fund are tax deductible. But the donation and the grant to a family are disconnected events. A donor can restrict a tax deductible gift to the fund but cannot restrict a tax deductible gift to a named family.

This area is of keen interest to us. I just arrived into Philadelphia to attend tomorrow's day long annual non-profit 501c3 legal forum on these and related 501c3 topics. If I learn anything different I'll pass it along here. We want to do everything we can that is legal to help our families.

Responder 3 replied:

I just briefly read your email and I will need to read it through more closely as I am not at all the "techy" type. Lol I'm just replying now to say I haven't forgotten. I will have time over the weekend and reply. Thank you so much for all the information you shared with me. I look forward to discussing this soon.