AHP Standards Manual Sneak Peek by AHP

AHP Standards Manual for Reporting and Communicating Effectiveness in Health Care Philanthropy

What Others Are Saying About the AHP Standards Manual Nonprofit leaders and fundraising professionals owe it to those they serve to maintain the highest standards, ensuring they best steward their supporters and the funds entrusted to the organization. I applaud AHP for providing guidance to its members that stands for nothing short of excellence. — Marc Chardon, President & CEO Blackbaud, Inc.

The AHP Standards Manual represents the next logical step in an important and ongoing effort to improve the quality of benchmarking data available to AHP members. — James DeLauro, Ph.D., Principal DeLauro & Assoc Consulting

The process of setting a unified method for reporting outcomes is essential for the field of health care philanthropy. Higher levels of standardization will allow organizations to translate their performances while being transparent and accountable to leaders, donors and the public. This is the most important undertaking AHP has ever done. — Bruce W. Flessner, Principal Bentz Whaley Flessner

Developed in the context of Generally Accepted Accounting Principles and IRS and CRA reporting specifications, AHP has pioneered the effective translation of fundraising performance into a language of valid outcomes-based metrics. — Peter W. Ghiorsi, MBA, FAHP, Chairman & CEO Ghiorsi & Sorrenti Inc

The Association for Healthcare Philanthropy has led the way in advancing new practices in the field. It has been an incubator of ideas. The AHP Standards Manual is only the latest example. The AHP Standards Manual is evidence of an organization leaning forward to benefit philanthropy. Thank you, AHP. — Jerry A. Linzy, Senior Managing Partner Jerold Panas, Linzy & Partners.

The AHP Standards Manual delivers a uniform methodology to evaluate effectiveness and demonstrate efficiency that is compared to established best practices. The best form of results analysis must be based on uniform reporting methods in order to provide a thorough analysis of revenue and expenses that meets public benefit tests with total accountability. — James M. Greenfield, ACFRE, FAHP Author of Fund Raising: Evaluating and Managing the Fund Development Process and Fund-Raising Cost Effectiveness: A Self-Assessment Workbook

With the publication of the AHP Standards Manual, the Association has taken a giant stride toward providing an answer to the question: “How much should we be expected to raise?” The new Manual provides a standardized way to count and report results. Three cheers for AHP’s determination to solve one of our profession’s greatest mysteries. — Frank R. Hall, FAHP Retired, St. Joseph Health System

AHP should be congratulated for tackling this important issue which both informs professionals and enables them to improve fundraising performance; establishing common definitions, and creating a baseline from which to promote growth, transparency and accountability in the arena of health care philanthropy. — Robert Kissane, President CCS

The pursuit of improved effectiveness and efficiency is a core objective of our sector that is shared by institutions, donors, and the general public alike. The AHP Standards Manual is a timely and highly significant guide that will ensure the consistency, transparency and clarity of metrics required to monitor and communicate the performance of health care philanthropy in North America. — Marnie A. Spears, President & CEO KCI

AHP Standards Manual for Reporting and Communicating Effectiveness in Health Care Philanthropy

The Association for Healthcare Philanthropy (AHP) has worked to ensure the accuracy of the information it provides. This manual relies on data obtained from many sources, including data submitted by participants in the AHP Performance Benchmarking Service and the AHP Annual Survey of Giving. However, AHP cannot guarantee the accuracy of the information provided or any analysis based herein in all cases. Furthermore, neither AHP nor any of its programs are in the business of giving legal, clinical, accounting, or other professional advice, and its reports should not be construed as professional advice on any particular set of facts or circumstances. In particular, one should not rely on any legal commentary in this report as a basis for action, or assume that any tactics described herein would be permitted by applicable law. Readers are advised to consult appropriate professionals concerning legal, tax, or accounting issues. Neither AHP nor any of its programs shall be libel for any claims, losses that may arise from any errors or omissions in their work product, whether caused by AHP or any of its programs or sources, or reliance on any graded ranking or recommendation by AHP.

Association for Healthcare Philanthropy 313 Park Avenue, Suite 400 Falls Church, VA 22046 Phone: 703-532-6243 Fax: 703-532-7170 Website: www.ahp.org Email: ahp@ahp.org

Editors William C. McGinly, Ph.D., CAE

Mary Reinders

Cindy Moon-Barna, MLSIS

Kathy L. Renzetti, CAE

Frank Hall, FAHP

Reviewers AHP Health Care Philanthropy Standards Council 2011 – 2012 David L. Flood (Council Chair) President Meridian Health Affiliated Foundations

James F. Normandin President Memorial Medical Center Foundation

Mendal A. Bouknight Vice President of Philanthropy Piedmont Healthcare

Pearl F. Veenema, FAHP President and Chief Executive Officer Hamilton Health Sciences Foundation

Arthur M. Brink, Jr., FAHP, CFP Vice President and Chief Philanthropic Officer Martin Memorial Foundation

Sandra Wilson Vice President and Chief Financial Officer Hamilton Health Sciences Foundation

John J. Gantner Executive Vice President and Chief Financial Officer Meridian Health Cover design: Mary Jane Hickey Interior design: Communicate by Design © Copyright 2012 Association for Healthcare Philanthropy (AHP) Permission to reproduce or transmit in any form or by any means, electronic or mechanical, including photocopying and recording, or by an information storage and retrieval system, must be obtained in writing from the Association for Healthcare Philanthropy at the address above. ISBN-978-0-9853211-0-9

Acknowledgments With more than 30 years of industry practice, AHP thanks those in the health care philanthropy profession for their contribution to this manual by recognizing the importance of industry standards and consistent reporting. AHP would like to acknowledge the AHP Health Care Philanthropy Standards Council; Karl C. Cote; Ian M. Fraser, MBA, FAHP; James M. Greenfield, FAHP, ACFRE; Frank Hall, FAHP; and Mark Larkin, CFRE for their significant contributions to this manual. The industryâ&#x20AC;&#x2122;s continued search for performance excellence in order to make a meaningful impact on the health of local communities continues to be the driving force of this profession and is what made this publication possible.

AHP Standards Manual

Table of Contents Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 How To Use This Manual. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Chapter 1: Defining and Reporting Fundraising Revenue. . . . . . . . . . . . . . . . . . . . . . 3 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Fundraising Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Cash and Production. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Programmatic Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Chapter 2: Defining and Reporting Fundraising Expenses. . . . . . . . . . . . . . . . . . . . 9 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Reporting Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Human Resource Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Expense Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 AHP and Accounting Standards (GAAP). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Expense Budgets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Expense Allocation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Chapter 3: Performance and Activity Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Major/Corporate and Foundation Giving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Planned Giving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Public Support. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Annual Giving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Special Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Constituency Giving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Chapter 4: Dashboard Metrics Defined. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Performance Metrics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Chapter 5: Definitions and Reporting Methodologies. . . . . . . . . . . . . . . . . . . . . . 29 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Gift Types. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Constituency Types. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Giving Programs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Management and Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Variations on Gifts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Donor Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Reporting and Counting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Internal Revenue Service and Canada Revenue Agency. . . . . . . . . . . . . . . . . . . . . 38 Quid Pro Quo Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Corporate Sponsorships. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Special Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

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Life Insurance Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Marketable Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Real and Personal Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Charitable Trusts Administered by Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Planned Gift Pledges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Charitable Remainder Trusts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Charitable Lead Trust (CLT). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Pooled Income Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Life Estates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Bargain Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Gift Types and Reporting Sources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Cash, Checks, and Credit Cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Counting and Reporting Gifts from Various Sources. . . . . . . . . . . . . . . . . . . . . . . . 46 Checks Issued by Other Entities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Supporting Organizations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Donor-advised and Donor-directed Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Reporting Exclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Chapter 6: Using Metrics to Communicate Effectiveness. . . . . . . . . . . . . . . . . . . 49 Finding Comparable Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Program Success Factors-Telling the Story. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Reporting Overall Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Reporting for Human Resource Allocation-Staff Levels and Compensation . . . 55 Reporting Performance by Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 High Level Graphic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 AHP Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Appendix A: Tracking Expenses by Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Appendix B: Sample Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Appendix C: Sample Dashboards, Financial Reports . . . . . . . . . . . . . . . . . . . . . . . 65 Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 AHP Statement of Professional Standards and Conduct. . . . . . . Inside Back Cover

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Foreword The days of treating health care philanthropy as an ad hoc enterprise, a matter of good intentions is in the past. The glitz and glamour of galas and golf tournaments — if it ever really existed — have given way to structured, businesslike approaches to acquiring resources through giving. Through productivity and perseverance, health care development professionals are earning a seat at the decision-making tables of health care institutions, from small rural clinics to the largest of metropolitan facilities and systems. We have witnessed the growth and transformation of this enterprise over the years, working on behalf the Association for Healthcare Philanthropy (AHP) with chief development officers of foundations and nonprofit hospitals worldwide. AHP is a remarkable forum for bringing together those whose interest and expertise in philanthropic support of health care institutions is truly remarkable. It has been our experience that development professionals learn a great deal from their interactions with one another. From multi-million dollar campaigns to annual giving drives or major gift and planned giving programs, the number and variety of charitable undertakings that health care fundraisers have conceived and perfected — or tried and rejected — constitute a rich collection of anecdotal evidence whose value should not be underestimated. However, anecdotal information and common practice are not data. We live in a world where the validity and reliability of measurements are greatly valued. Whether in the sciences, government, industry or business, all those engaged in widespread endeavors are far better able to advance knowledge and society’s greater good when they have reached and communicated agreement about the precise nature of the terms, tools and metrics they employ. This concept may seem elementary to some, but arriving at consensus about the qualitative and quantitative meanings of physical, social and commercial phenomena has often taken a very long time. It is an essential process that facilitates progress even while it continues to evolve. This, then, is the spirit in which the AHP Standards Manual has been produced and the reason for the promulgation of standards by the AHP. It is based on the expertise and rigor that go into AHP’s annual Report on Giving and the AHP Performance Benchmarking Service. Those who have contributed to this major milestone in advancing health care philanthropy deserve our sincere thanks and admiration. William C. McGinly, Ph.D., CAE President and Chief Executive Officer Association for Healthcare Philanthropy

AHP Standards Manual

Introduction Since its founding in 1967, the Association for Healthcare Philanthropy (AHP) has been recognized as the leading resource for professional development, continuing education, and research in health care philanthropy. Members rely on AHP’s network of affiliated experts for guidance on a variety of issues related to fund development. AHP has tracked health care philanthropy performance since 1984 in its annual AHP Report on Giving, which provides high-level data used for projecting trends and selfassessment. In 2003, AHP met the call for the benchmarking of peer results with the creation of standardized reporting through the AHP Performance Benchmarking Service. The service was established to help organizations and development offices track, measure, and compare fundraising results to gain insight on factors that lead to growth and strategies for optimal program management. The AHP Performance Benchmarking Service and the AHP Report on Giving bring a higher level of standardization to the reporting process. Developed by experienced health care philanthropy chief development officers (CDOs) and chief financial officers (CFOs), these tools offer validity and guidance where only rules of thumb previously existed. While benchmarking standards have elevated the practice, they also underscored the need to go further to provide additional detail on standards for tracking and reporting fundraising performance. Throughout the years, AHP has discovered that adherence to its standards and consistent reporting help to:

• • • • • • •

Identify the factors that influence fundraising performance Inform the strategic deployment and investment of vital resources Set reasonable long and short-term goals for philanthropic returns Explore more cost-effective ways to support the financial goals of the organization Maximize overall returns from philanthropic resource investments Educate organizational top executives to elevate philanthropy as a key strategic asset Promote transparency by meeting the information needs of donor-investors

After years of application, results have prompted wide adaptation of AHP standards. Acclimating and adhering to AHP reporting standards has not always been easy. It has, nonetheless, become an essential component of attracting recognition to the fundraising process among member organizations, foundations, and health care philanthropy organizations. The strategic use of standardized reporting and benchmarking data has created a substantial change in the way that organizations view fundraising. There is now widespread recognition of foundations and/or development offices as discreet business units. This perspective is illustrated by the health care organization’s

AHP Standards Manual Introduction commitment to “wise” philanthropic investment, the shared development of longterm foundation goals, and continued reliance on benchmarking reporting to grow accountability. In fact, it is now commonplace for hospital administrators to factor foundation metrics into system-wide revenue projections. With that in mind, AHP is pleased to publish this manual. AHP knows that the industry is comprised of highly qualified professionals who share a common commitment to quality, excellence, and transparency. Working with the AHP HCPSC and allied experts (in law, health care finance, accounting, and research), AHP presents these reporting standards with guidance on using metrics to communicate effectiveness.

How To Use This Manual

The purpose of this manual is two-fold:

• To provide a set of standards that unify practitioners across the field of health care fundraising and that demonstrate transparency and accountability to leaders, donors, and the public; and • To communicate the definitions of terms developed by AHP practitioners. Ultimately, the use of these standards will enhance the credibility and performance of the profession, thereby increasing philanthropy and the interests of the public. Transforming basic financial and program data into useful information is complex. This manual is designed to help professionals overcome the challenge of establishing best practices, making sure that the tools to provide the greatest impact are available and understood. This manual also is designed to communicate the effectiveness and efficiency of development programs to the health care organization’s executive team. The AHP standards place fundraising reporting practices in the context of Generally Accepted Accounting Principles (GAAP), Internal Revenue Service (IRS), and Canada Revenue Agency (CRA) reporting specifications. This approach has led to the effective translation of fundraising performance into the language of valid outcomesbased metrics. In the manual’s text, the authors refer to reporting entities as “organizations.” Since data will be maintained and compared by multi-hospital systems, individual hospitals, hospital foundations, and other non-profit health care organizations, this term is used as a general reference to cover all possible structures.

AHP Standards Manual

Chapter 1 Defining and Reporting Fundraising Revenue Introduction

When measuring fundraising performance, both micro and macro (“bottom-line”) level analyses are used to demonstrate effectiveness in growing programs with the overriding objective of raising funds for identified priority needs that deliver services to patients and the community. When analyzing fundraising programs, it is impossible to determine what issues are affecting overall performance without isolating program revenue and expenses to study the various program elements. The use of micro-level analysis helps to determine which programs are in sync with accepted standards and which are not. There is also “big-picture” value in reporting overall results with a macro-level analysis. AHP’s reporting standards, definitions, and metrics have been in use since their creation by development professionals for the AHP Performance Benchmarking Service in 2003. They adhere to the following objectives:

• Provide a thorough accounting of all revenue resulting from direct fundraising activity. • Calculate and attribute expenses to direct fundraising activity. • Examine both projected and secured revenues to form a complete fundraising performance picture. • Analyze performance at an individual, fundraising program level. • Analyze aggregated performance figures, resulting from the combination of overall fundraising returns and expenses. • Study the activity and management practices that contribute to reported results. • Consider the controllable and uncontrollable factors that may influence overall and programmatic returns. This chapter focuses on AHP’s key definitions and reporting standards in order to provide a thorough accounting of fundraising revenue from all sources.

Fundraising Revenue

To provide a thorough accounting of fundraising performance, AHP reports fundraising revenue in two categories — “cash” and “production.” Cash represents the dollars available for immediate use by the organization, while production provides a more accurate measure of total fundraising, including both projected and secured revenues.

AHP Standards Manual Chapter 1 Defining and Reporting Fundraising Revenue

Cash and production are then attributed to the appropriate fundraising programs (i.e., annual giving, major giving, planned giving, special events, etc.). Other program performance measures (see Chapter 3) include staff workload and donor response rates. In addition, AHP tracks gifts by source in order to understand commitment levels of key donor constituents.

Annual gifts represent gifts of $9,999 or less from individuals and support groups/auxiliaries, including: • Annual gift pledges (and letters of intent) • Annual gift pledge payments, which refers to an irrevocable commitment or promise to give a gift below $10,000 during the reporting year, including: • Memorial and/or tribute gifts. It does not include pledges from any other program (e.g., major gifts) or gift source (e.g., corporations) in this category.

The information that follows details AHP’s definitions and reporting standards for tracking and reporting fundraising revenue.

Cash and Production

AHP reports fundraising revenues in two separate categories — cash and production. It is important to understand the definitions of these two terms when reporting fundraising returns. These measures are not mutually exclusive. One cannot simply add them together to create a single calculation of fundraising returns. Instead, cash and production are meant to be examined as two separate metrics. Cash includes the current market value of outright gifts (made in any form) plus current-year payments from the previous year’s pledges, planned gift maturities, bequests, and marketable securities. This formula provides a picture of “cash on hand,” including the amount available for immediate use by the organization. Production represents all outright gifts of cash (excluding payments on pledges from previous years) and new gift commitments made in the reporting year. New gift commitments effectively combine all new pledges and letters of intent (including revocable gift commitments) and the current market value of irrevocable planned gifts. Development professionals have found this to be a more thorough measurement of fundraising performance (particularly during a comprehensive campaign when pledge activity can increase by as much as 75 percent). Figure 1-1 provides a simple depiction of the gifts included in cash and production. Figure 1-1: Gifts, Cash, and Production

ts ht Gif Outrig Cash of e Pledg ts en Paym

ifts ght G Outri Cash of

New Pledge Commitments

Total CASH Raised

Pl Pay edge men ts

Total PRODUCTION Raised

AHP Standards Manual Chapter 1 Defining and Reporting Fundraising Revenue

Programmatic Reporting

When reporting revenue as cash or production, fundraising dollars must be attributed to the appropriate individual fundraising program. Fundraising programs that are present in just about every organization are listed below. The definitions for each fundraising program were developed by AHP member practitioners and have been the AHP standard definition since 2003 (see Chapter 5 for more definitions).

When reporting the current market value of an endowment, report it as one figure and as two separate categories, including: • Board Designated/Quasi Endowment, which is the unrestricted funds that have been designated by the board to be invested with the endowment funds of the institution; and • Donor Restricted/Designated Endowment, which includes gifts made at the behest of a donor or designated by the board to the endowment fund.

• Annual Giving — Programs that attract gifts of $9,999 or less from individuals and support groups/auxiliaries. • Major Giving — Programs that attract gifts of $10,000 or more from individuals and support groups/auxiliaries. • Corporate and Foundation Giving — Programs that attract gifts of any value from corporations/businesses and foundations. • Planned Giving — Programs that attract gifts (or commitments) from individuals made as part of an estate or financial plan. • Public Support — Programs that raise grants and gifts from local, state/provincial, and federal government funding sources, which the development function is responsible for raising. • Special Event — Programs that attract gifts of all sizes received in response to any event sponsored by the organization. Gifts and pledges secured in response to a campaign should be counted under the relevant program area listed above, based on gift size, donor type, or event. Gifts secured for endowment or endowed-fund purposes should be reported at current market value in a separate category for endowments. Figure 1-2 illustrates how to report annual gifts in order to capture cash and production. Figure 1-2: How to Report Annual Gifts

Outright gifts are reported in both CASH and PRODUCTION. New pledges are reported in PRODUCTION. Pledge payments are reported in CASH only.

Source: AHP Performance Benchmarking Service Survey (2012).

For each program area, the data captured are:

• The number of gifts (received or expected/pledged) • Dollar value of gifts (received or expected/pledged) • Format by which the gifts were received