Catholic School Development Foundation (CSDF), a non-profit operating foundation, will have the sole purpose of providing development and fund-raising counsel to Catholic elementary schools and secondary schools. Operating foundations are defined as “An organization that uses its resources for research or provides a direct service.” (Foundation Directory of 1995, p. vi.)
While most operating foundations depend upon large endowments, the concept driving this foundation relies instead upon a “living endowment.” This term, wide-spread in Catholic school circles, refers to the sisters, brothers and priests that educated several generations of immigrant families while themselves living a vow of poverty. Our Catholic schools have never had a financial endowment. Instead, their flourishing at very low costs to families is due to their living endowment.
However, CSDF consultants can be operated via a living endowment. This does not mean they must be religious. It does not mean that CSDF employees must live in poverty. In fact, compensation is just as good as that offered by for-profit firms. To understand how this is possible one must first understand the for-profit consulting fee/cost structure.
For-profit companies charge $15,000 per month to campaign work. This is a standard industry fee. About one-third of this amount goes to the consultant who does the work. Another third is overhead, which is primarily training costs and the cost to make presentations across the country to new clients. The remaining three-thirds is profit for the firm’s owner. This standard income/expenses structure poses a problem for the for-profit and offers an opportunity for non-profits.
The problem for conventional firms lies in young consultants who see the monthly fees charged, compare it to their paycheck, and conclude “I can do this on my own.” Consequently, the established national firms face constant turnover, recruitment and training costs while suffering a chronic lack of experience in the consultants who actually do the work. At the same time, they have created a barrage of new regional competition. Over the past ten-years, there has been a surge in the number and size of development consulting businesses. Most have only one owner. Although the business card might read “John Doe & Associates”, there are very few associates.
The opportunity for the not-for-profit lies in the one-third of fees that normally would be profit. What if, instead of buying a house on the beach for a firm owner, those profits were set aside each month in a cash reserve to serve Catholic schools that cannot afford development counsel? Jesuit High School may be able afford to pay 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.
- Two clients in Year 1, four in Year 2, seven in Year 3. From here, growth can accelerate much more quickly.
- Sales have grown steadily between Year 1 and Year 3.
- Break even for three consecutive years as CSDF establishes its name and reputation. Generate earnings in year four allowing us to begin gratis consulting projects.
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.
- Our clients’ long-term interests will always be our priority. We will not accept a campaign if you are not prepared. Then we’ll do everything we can to get ready.
- We are development consultants and not fundraising specialists. 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 of Success
These are the keys to your success:
- Capability to attract, retain and motivate qualified employees
- Perception in the market as a specialist servicing Catholic schools.
- As a non profit dedicated to their cause, it is important to build trust with potential customers.
A company’s #8216 capital leaves the office 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. Since the late 1980s there has been an explosion of new consulting firms serving non-profits with fundraising and consulting services. 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 key to your success.
People find it attractive to set up their own businesses once they have some experience. It all comes down to the nature of a new industry: fundraising consultancy is the ultimate “low entry barriers” business.
- There are not any education requirements.
- There are no professional degree requirements.
- There are no licensing requirements. An individual who cuts a ten dollar hair must be licensed. But a consultant leading a $10 million campaignâ€“putting an organization at great riskâ€“requires none.
- In the end, finding work is about relationships and not having knowledge or experience. Because so few Board members have experience with major gift fundraising, it is difficult for them to separate experienced professionals from good salesmen.
- If the school was high-profile, it only takes one campaign to launch a career working as a consultant.
- The office and start-up costs are also minimal. Since clients never visit the firm, a home office will easily suffice. A great voice mail system could give clients the impression that you are a larger firm. Many small-sized firms were started for less than $5,000.
In summary, it’s relatively simple to create an independent company. To grow an organization, it must have qualified employees. To do this, it must be more attractive for consultants to stay than to leave. This is what we will focus on later.