Nonprofit Law Resource Library
How to go fishing across the pond
The Washington Window, found in Selby Abbey, contains the arms of the Washington family with three red stars above two red bands that are the model for the American flag.
Every June, the Giving USA Foundation announces 'the number' - how much money was given in private philanthropic gifts by US individuals, foundations and corporations in the calendar year just passed.
In 2007, it was $306bn - the second highest amount in history. This is roughly equivalent to £150bn, give or take a few pence. With all this cash at their disposal, might some wealthy Americans wish to help deserving British charities?
It's worth asking the question, because the US is the world's largest private philanthropic source, and it is very open to the idea of donating to other countries. The UK also receives more donations from US foundations than any other country, according to a 2004 report by research organisation the Foundation Center. But how do British charities decide whether pursuing US donations is worth the effort?
One way is to consider where foundations already donate money. There are three favoured sectors among UK recipients: elite cultural institutions, agencies working in international development and universities. Their work is easiest to 'sell' in America, but the absence of other causes is not a refusal to fund: it is an absence of well-crafted requests.
To start with, discard the easy notion that Americans are searching for a place to unload their wealth. They are not. Americans have more than 1.1 million domestic charities to choose from - the largest 'third sector' in the world.
Instead, think about the 'bridge' between UK need and US resource and ask what connects the two. For example, medical advances are often transferable, which allows cancer and Alzheimer's groups to raise funds in the US. However, US donors will be interested in research or best practice - not in care provision or grants to third parties.
One of Britain's best selling points for fundraising is its role as keeper of world patrimony, particularly that part dear to the hearts of wealthy Americans. This helps institutions such as the British Library, the British Museum, the Royal Academy of Arts and the Tate galleries to raise millions every year.
Another approach is to highlight US-UK cooperation. For example, the Imperial War Museum used this connection to raise funds for the American Air Museum at Duxford. A chief donor was Walter Annenberg, the late US ambassador to Britain.
Celebrating a specific US presence in Britain is also a good way in. The American Museum in Britain, in Bath, has raised funds for some years through its American friends group, the Halcyon Foundation.
Any organisation with alumni living and working in the US must consider fundraising in America, not only from Americans who attended British institutions, but also from British alumni now resident in America. In the US, Americans expect to donate annually to their educational institutions, churches and local hospitals.
Americans that have attended your institution expect you to ask for annual gifts, occasional capital gifts and a legacy. And don't overlook British graduates living in the US. They will experience the enormous enthusiasm with which Americans embrace their educational institutions. Oxford University's annual appeal is rumoured to raise one-third of its total from North America. If true, it is no accident. Considerably less than one-third of Oxford alumni live there.
American tourists are another source of prospective donations, and they are self-selecting. Thousands of British charities miss a golden opportunity to identify donors from those walking into museums, nature parks and churches. When you are assessing your admission charge, consider that Americans expect to be asked to contribute. After all, out of 300 million Americans, they have presented themselves at your door.
There is a limit to what these people will give. You cannot whack them with a £15 admission charge and then plead for an additional contribution. On the other hand, by the time they have finished viewing the exhibits and had their coffee, the memory of the admission payment will have faded into a glow of appreciation for your work. Time to present the sign-up sheet "to be kept up to date on our activities".
I often meet American donors to UK charities who had no connection to or personal interest in the cause other than having been asked to give by someone they knew. Requesting and making donations is part of the fabric of US middle and upper-class life. When an American has a family foundation, the request becomes even easier, because it can be couched as advice about applying to the foundation. Even many of the larger foundations have special interest funds for private direction by individual trustees.
Nearly all US corporations have 'contribution programs', and most will not bother to define the purposes for which small, local gifts can be made. Whenever possible, a gift should be sought by a charity representative who knows someone at the corporation. Of course, such a transaction excites the morbid British fear of placing a friend under obligation. From the US perspective, however, the solicitor has done the corporation a favour by identifying a worthy local recipient and vouching for the charity's legitimacy.
To raise money in the US, you need a purpose - usually a specific project or programme, conceived and budgeted (both expense and income) for one to three years, with a sense of urgency. Organisations with weak fundraising at home are unlikely to attract US donations, because US donors expect to supplement your domestic support, not provide a substitute.
Next, you need to assemble willing board members or anyone else with an interest. Americans are not fussy about the formal roles of those who do the soliciting. When the volunteers are assembled, the discussion should be a broad search for connections to the US. For example, your charity's banker may know American financial people, who, in turn, may open up prospects for corporate contributions. Or perhaps wealthy Americans live or regularly spend holidays locally. Does any member of your board spend time in America, for personal or professional reasons? A careful, even if at times anecdotal, discussion among volunteers can often reveal connections to US wealth.
The largest gifts will usually come from in-person solicitations. Next best are telephone requests. Mailed solicitations are much less compelling to Americans.
Be prepared to be asked how many members of your board contribute to the charity. If the answer is none, then it will be better to leave America alone. If you enter the American philanthropic market, you have to play by American rules: all board members make gifts commensurate with their financial resources.
Help does exist. There are a few dozen people in the UK who specialise in US-UK giving. But you cannot outsource fundraising: a charity's volunteers and staff must carry it out themselves.
Fundraising in the US requires effort, yet it can energise both staff and board, giving them an opportunity to operate internationally in a realm with vast financial potential.
Lost in translation
Differences in definition
There is divergence in British and American vocabulary even at the simplest level. Some words or expressions have opposite meanings on different sides of the Atlantic - for example 'to table a motion' and 'it went down (or up) a bomb'. My UK clients are often asked by American accountants to list all charity 'directors' and reply with the names of senior staff members who carry the title of 'director'. The American accountants mean, but do not know to say, members of the governing board.
Other words look similar, but have different meanings. 'Overheads', for example, does not exist in American accountancy. In the US non-profit sector, the term is understood to mean expenditure with no direct bearing on projects, which is subtly different from the meaning in Britain. This can be an important distinction in the funding application process.
In the US, the 'financial year' is called a 'fiscal year'. That's easy enough, but the danger is that the US fiscal year is named for the year in which it ends - for example, the British financial year 2007/08 is known as 2008.
Differences in meaning
The most dangerous misunderstandings occur because of a difference in styles of expression. The emphasis in a polite British conversation is often on what is implied, rather than what is said. An American conversation is usually defined by what is said out loud. The difference is apparent when the fraught subject of money is discussed.
The four key questions
Charities must be sure that they have answered explicitly - not just implicitly - these four key questions that define requests for donations in America:
- Who are you?
- How much do you want?
- What do you want it for?
- Why should I give?
All donation decisions flow from these answers. To answer the questions explicitly is an essential adaptation for working in the US philanthropic market. It is no different from producing an automobile with left-hand drive for the American market.
In particular, "how much do you want?" tends to cause such a lot of difficulty for most people in the UK that the question is often avoided altogether. So although there should be a great advantage in a shared language, the absence of shared custom and expectations can make fundraising a frustrating exercise.
US Fundraising for small charities
Small charities can succeed in the US market. Here are two examples, each with only a board of trustees and one staff fundraiser.
This is a thousand-year-old, cathedral-size structure in north Yorkshire in need of renovation. One of the 15th-century stained glass windows it wanted to restore as part of a programme of renovation includes the heraldic arms of the Wessington family, one of whom was a prior at the abbey.
The first President of the United States, George Washington, was a descendant of the family carrying the later formulation of this name. The Wessington arms contain the stars and bars that became the model for the American flag.
By capitalising on the George Washington connection, the Abbey was able to generate hundreds of thousands of dollars in donations from the World Monuments Fund and other private donors.
South Georgia Heritage Trust
The South Georgia Heritage Trust, based in Dundee, promotes the conservation and protection of the physical and natural environment of South Georgia, the remote British island in the South Atlantic.
SGHT raised nearly a million dollars from US sources. Part of this has come through carefully targeted foundation requests. These were complemented by a broad-based effort with individual donors to support a compelling project: the purchase of a reproduction of Ernest Shackleton's lifeboat, the James Caird. The boat will be installed at the South Georgia Museum, one of the trust's projects. Meanwhile, the trust also seeks to engage the interest of American eco-tourists, who visit by cruise ship.