Catholic School Development Foundation, (CSDF), will be a nonprofit operating foundation whose sole purpose it to provide guidance and support in the areas of development and fundraising to Catholic elementary or secondary schools. By definition, an operating foundation is “An organization that uses its resources to conduct research or provide a direct service.” (Foundation Directory, 1995, p. vi.)
Although most foundations depend on large endowments, the foundation concept behind it relies instead on a ‘#8220’living endowment. This refers specifically to the sisters, brothers, and priests who have educated multiple generations of immigrant families, while still living in poverty. Historically, our Catholic schools have had no financial endowment; rather they flourished at very low cost to families because of extremely low overhead–thanks to their living endowment.
However, CSDF consultants can be operated via a living endowment. This does not mean they must be religious. Nor does it mean that CSDF employees live a life of poverty. In fact, compensation is just as good as that offered by for-profit firms. Understanding the costs and fees associated with for-profit consulting is key to understanding how this is possible.
For-profit companies charge $15,000 per month to campaign work. This is a standard industry fee. About one third of this amount goes directly to the consultants who do the work. Another third covers overhead (primarily training costs as well as the cost of making presentations in other parts of the country for new work). The owner of the company makes a third of the profit. This standard income/expense structure creates a problem for the “for-profit” and an opportunity for the “not-for-profit.”
The problem with conventional firms is that many young consultants look at the monthly fees and see their paychecks and decide to take on the job. Consequently, established national companies face constant turnover, recruiting and training costs and a chronic lack experience in the workers who actually do it. They have also created an explosion of regional competition. Over the past ten decades, there has been an explosion in the number of development consulting companies. Many have no other employees than the owner. The business card may state “John Doe & Associates” but rarely are there associates.
The third of the fees normally considered profit offers the chance for the not-forprofit. What if those profits were not used to purchase a beach house for a business owner but instead were put into a cash reserve to help Catholic schools that cannot afford the development counsel. While Jesuit High School may easily afford high monthly fees, St. Ann’s Indian School cannot. By setting aside the “profits” from one client, CSDF could afford to send a consultant to St Ann’s. In doing so, CSDF consultants will be the new living endowment serving those schools least able to afford development counsel.
1.1 Objectives
- In Year 1, there were two clients, four in Year 2, and seven in Year 3. From here on, growth is possible much faster.
- Sales are steadily growing from Year 1 to Year 3.
- Break even in three years consecutively as CSDF establishes itself and its reputation. Generate earnings in year four allowing us to begin gratis consulting projects.
1.2 Mission
Catholic School Development Foundation was established to provide guidance to America’s Catholic elementary school and high schools.
- We are specialists and not generalists because we have our eyes on one goal.
- We are free from profit pressures and take the long-term perspective of building lasting relationships with our supporters.
- We will always work in the long-term interests of our clients. If you’re not ready for a campaign we will let you know. Then we’ll do everything we can to get ready.
- We are not fundraising consultants. We have a holistic approach to the financial well-being and sustainability of the school.
- Our primary function as consultants is very similar to that a teacher. In our case, we teach by ‘doing.’ This implies, of course, a partnership between teacher and student.
1.3 Keys to Success
Here are the keys to success
- Ability to attract and RETAIN qualified personnel.
- Perception in the marketplace as a specialist serving Catholic schools.
- Establishing trust and promoting their cause as a nonprofit.
A consulting firm’s capital is what walks out of the doors every evening at five. Only the experience of the employees in the firm is the real equity. They are the key to the firm’s ability to attract future business.
It is not easy to retain skilled people. There has been a boom in the number of consulting firms that provide consulting and fundraising services to non-profits since the 1980s. Many independent consultants have been trained by large national firms. The organization that discovers how to attract and retain qualified people will ultimately win the day. This is the most important factor in success.
It is tempting to start your own business once you have some experience. The answer lies in the nature and structure of an undeveloped industry: fundraising consulting is the most ‘low entry barriers’ business.
- There are no requirements for education.
- There are no requirements for a professional degree.
- There are no licensing requirements. Licensing is not required for anyone who does a ten dollars haircut. But a consultant leading a $10 million campaign–putting an organization at great risk–requires none.
- In the end, relationships are more important than knowledge and experience when it comes to getting work. Since so few Board members are experienced in major gift fundraising, they find it difficult to tell the difference between good salesmen or professionals.
- One successful campaign can launch a career in consulting, especially if it was a well-known prep school.
- Finally, the costs of office and start-up are minimal. A home office is enough since clients don’t visit the firm. A professional voice mail system can create the illusion of a bigger, more established company. Many small businesses started by one man for less than $5,000.
In short, it is very easy to set up an independent business. But if an organization is going to grow, it must retain qualified personnel. This will require that consultants are more likely to stay than to go. This is the key issue that we will be discussing later.
