Category Archives: Gift Processing

Subtle Clues to Leverage for Gift Administration

How to Leverage what we Learn
How to Leverage what we Learn

The Wall Street Journal’s article on JP Morgan’s new $10,000,000 cap for accounts in their private banking area. On the surface, this seems like an issue only for the 1%, but philanthropy, of course, is affected substantially by this group. So, their banking issues are our philanthropy issues. And, this particular issue can be leveraged to improve operations and gift administration.

“How so?” you might ask. One specific consideration is how gift administration can learn from and leverage details about donors’ bank accounts. Here’s how:

  1. Banks Matter. If a donor is nice enough to write a $50 check to your organization on a JP Morgan Private Banking account (look at the middle left of the check, typically, to find the account type), that donor might have easily added a few zeroes to the gift. After all, those account holders are deca-millionaires!
  2. Numbers Matter. Have your team check the check number. That nice donor writing check number 35780 likely has substantial cash flow; the average donor will likely write just a few thousand checks in their lifetime (and Millennials may write nearly none at all).
  3. Name that Donor. Check accounts held in trust, with “TTEE” listed, and other such naming conventions likely mean that the donor has enough assets to have placed them into a trust. This is a typical move for those who will be affected by probate court upon their death…and, right now, that means having more than $5 million in assets via your estate.
  4. Pictures are worth a thousand words. Have the gift team look at what else the check tells us. If there check has puppies and mentions the Humane Society, for example, you know where the donor’s heart is.

These tips and tricks should be applied to improve your day-to-day operations. Establish a process whereby gift analysts can forward such findings to the research team or gift officers so you get some added movement on these donors.

What other tricks would you suggest to improve gift administration? Your comments on this would be welcomed. Happy fundraising!

4 Indicators that Caging is Right/Wrong for You

Gift processing is the core of fundraising operations. The steps to carefully and quickly

From Cannon's An Executive Guide to Fundraising Operations
From Cannon’s An Executive Guide to Fundraising Operations

handle our donors’ contributions are at the heart of our business processes, databases, reports, and technology. Some of us in the industry have been seeing an interesting shift in this core business process: the rise of caging. It is an important alternative for you to consider.

As an alternative to in-house gift processing, caging outsources gift intake, batching, entry, and receipting. The approach is not new, particularly among high-volume, low-average gift processing outfits supporting cause and cure organizations. The new shift has been among those universities and healthcare organizations that see an opportunity to streamline operations while improving outcomes. Additionally, the technology available for scanning, remote entry, and data import has improved so rapidly, off-site entry is surprisingly simple to implement.

But, is it right for you? Perhaps. Consider these four indicators:

  1. High-volume, low-average gifts. Caging companies create economies of scale, so some volume is needed to make this approach profitable. Once you’re in the 5-figure transaction range, it may be worth a look. As you approach and fall into the 6-figure transaction range, you owe it to your organization to evaluate these options.
  2. Donor and donation make-up. The business processes designed by caging companies are efficient. However, a majority of your donors need to frequently use reply envelopes and standard devices to make the process scaleable. It’s even more important that you consider what your donors might think if they mail off a gift to a PO Box in another state (imagine a Sooner sending a gift to processed in the Longhorn state!).
  3. Complexity of the front-of-the-line. This issue is counter-intuitive. The more complex your important gifts and pledges are at the front of the line, the more sense it makes to establish a caging approach. Such a practice will remove the tendency to “plow through the pile” of work that can drain a processing team and distract them from the truly important items in the pile. Instead, a caging company can siphon off the small donations and allow the team to focus on what matters most.
  4. Desire to strengthen strategic analysis. Finally, if you want your gift processing team to move form “entry” to “analysis”, you should consider a move to caging. When the mundane, day-to-day entry grind is assuaged by a caging partner, your professionals can start to analysis gifts more thoroughly. The resulting increases in prospecting, analytics, and stewardship will be significant.

Caging isn’t for every institution. However, it is an increasingly viable alternative to the typical, in-house approach. Having helped organizations evaluate and then implement the approach, I can attest to the value of this model and the likelihood its application will increase in the years to come.

December 2012 is National Month Month…

…or so I tweeted a few weeks ago. My plan is to envelope the work we lovingly call fundraising operations, or advancement services, or “the back office”, or “you know, that stuff they do with computers” into 12, neat monthly categories. The purpose is to drawn attention to whole sets of work that we sometimes avoid but can never quite escape (I’ve tried).

So, for those of us so fortunate to be toiling away the day after December 25th, what “National _____ Month” would you designate and why?

The Purpose of the (Gift) Process

Log jam
Are gifts and data updates piling up?

“Tis the season…for bottlenecks and backlogs in our processes. Fundraising operations requires consistent, efficient processes. But, fundraising is an inconsistent business. We are in the business of the exceptional, as was the focus of my 99-1 blog a few months back.

As we approach year-end with (hopefully!!) piles and piles of gifts to process, let’s remember four essential ideas:

  1. The purpose of gift processing is first and foremost stewardship.
  2. The reason we (should) love fundraising is because our teamwork can generate a sometimes overwhelming volume of gifts.
  3. Our business process should be efficient ( doing “the thing right”) and effective (doing “the right thing”).
  4. We must adopt a front-of-the-line approach to ensure that our most cherished donors receive the level of stewardship they deserve for their role in our 2012 success.

Having your team abide by these four essential ideas will ensure that we don’s lose track of why we’re so busy in the first place. Good luck!

Change is Hard…but Decline is Worse

Development and alumni organizations face obstacles and challenges each day. It seems that pressure comes from all sides and angles. Raise more money, despite a slow economy. Engage more people, despite increasing competition for space in people’s lives. Lately, two core changes have been impacting nonprofits around the country: leadership changes and technology issues. Both of these affect fundraising operations, and finding a way to “handle” these issues is critical. On the leadership front, high functioning presidents and vice presidents are in high demand. Tenures of university presidents and healthcare CEO’s declining. There’s not much most can do to stop this slide, except to be prepared for it to happen. On the technology front, 2012 was full of mergers and other changes that substantially impact development technology suites. Much of this change is aligning with the tail-end of many product life cycles. These changes affect every nonprofit for a donor database, so one of these days these marketplace changes will affect each organization. More change is stemming from social, online, and BI-based innovations occurring at a pace that’s hard to match. The most dangerous aspect of the core changes is the all-too-frequent dip in productivity organizations experience “as a result of” the change. This issue is in quotes because, while leadership and technology change is hard to “manage” (we typically don’t have much control), these changes can be anticipated and protected against. The good news is that both of these changes can be managed through a similar set of solutions which will keep decline at bay in the midst of change:

  1. Plan the work. A plan that aligns with the organization’s mission and vision will help ride out the turbulence from a big leadership or technology change. You might be surprised at how effective a good plan is in keeping the trains running on time.
  2. Work the plan. The plan should have measurable targets for behavior. Great plans will reward and steer attention to the highest value activities we can muster. So, if the plan is in place, working it should generate the results your organization needs, despite a presidential transition or a looming conversion.
  3. Avoid the tyranny of the urgent. In both cases, careful change management (starting with requirements, weighing options, evaluating real and intangible costs) must prevail over short-term thinking and flailing actions. Plus, reminding folks about what’s important in their daily work and the impact their role has on the organization’s constituents can help retain staff despite rough patches.
  4. Get in front of disruptive change. This last issue is the most complicated and I’ve dedicated a separate blog to it. Leadership and technology changes are disruptive, often resulting in entirely new ways of doing business. We have seen in 2012 with Hostess, and over and over again for Kodak, that markets move on, and our offerings must match today’s and tomorrow’s needs. As fundraising tactics shirt around direct response, as phonable and mailable constituents decline, as the nature of our organization’s missions and deliverables change (think MIT’s free open courseware offerings and the impact of the Affordable Care Act on healthcare philanthropy), our fundraising strategies and tactics must keep pace.

And, if we plan the work, work the plan, and remain focused on the important, we can get through change without a dip n productivity. Do you have suggestions for handling change and avoiding declines in the process? Let’s hear about them!

How many engines does this plane have?

Last night was instructive…

My work with groups on the fundraising operations often centers on the delicate balancing act between the countervailing accuracy, speed, and volume. Expectations and perceptions about perfection often play a countervailing role here, too. That is, our efforts may be spinning along nicely, but an anecdotal error or oversight can throw a wrench in things simply because our expectations were too high. What most folks don’t think about often enough is that perfection is typically too expensive to deliver. I’ve written about the front-of-the-line approach to help handle this. I’ve also recommended that organizations set attainable expectations around exceptions, then adjust perceptions to better match reality. So, this is the prologue to my instruction last night…

A few months ago, during a discussion about gift processing accuracy, I heard “Well, I think our letter should be perfect. I mean, you fly a lot, so don’t you expect your flights to be perfect?” My answer: “Nope. I expect them to take off and land safely.”

Last night, I was reminded of this conversation when I found myself on an MD90 with only one operable engine last night. The situation reminded me that I will take great exception management systems over the false promise of perfection any day (lesson #1). After take off, our flight apparently lost an engine. This sounds scarier than it is; the pilots didn’t tell us this until we landed.  Once off the plane, we learned a new one would be procured and, within a few hours, we were back in the air (lesson #2).

Lesson #1 here is straightforward: Systems that help you notice errors are essential and these must be implemented and doggedly maintained. The pilots could have ignored the error; one engine worked and the flight wasn’t that long. But, great operations should identify problems to fix as much as they keep problems from happening.

Less #2 was more subtle: I knew within two minutes of take-off (for about the 88th time this year) that something was off. But, the pilot maintain confidence in the cabin by communicating effectively and not over-sharing information.  Once on the ground, we were given updates and times to expect future updates. As inconvenient as the situation was, communication helped us maintain realistic expectations.

My two hopes for you this summer are a) that you can continue to calibrate your operations through better and better expectation management and b) safe travels!

8 Secrets of Success

Fundraising operations is tough business. You must carefully balance accuracy, speed, and volume issues. The details are mundane and the technology is complex. Last week, I had a chance to share 8 secrets to spinning like a top via the AFP webinar series. I had a lot of fun crafting the session. It was also challenging because there are more like 800 secrets to successful operations.

Here’s a summary of what I see as the dirty little secrets that, once known, can help your operations spin like a top:

  1. Not all data matter. We spend way too much time on record maintenance for the masses and not enough on our front-of-the-line constituents!
  2. Technology trickery. We fool ourselves into thinking that technology does everything for us. It’s just a tool. Databases don’s ask people for gifts. For more, click here.
  3. Easy to avoid. Analysis paralysis, particularly the millions of unnecessary ad hoc reports we seem determined to create each year as an industry, is easy to avoid. Pick your best reports and use them to make decisions, consistently.
  4. (Mis)Perception problems. We talk past one another and understand things differently. Once we realize that two smart people can view the same scenario differently, then respect each others’ vantage point, we can make real progress. I did a Prezi on this topic with my colleague Cassie Hunt last year; check it out.
  5. Conversions are easy. The act of converting data from one database to the other is the easy part. The hard part is that technology transitions take years, require multiple iterations of implementation efforts, and never really stop.
  6. Forecasting is undervalued. we don’t spend enough time looking into the future. For prospects, for proposal pipelines, for budgets, for staff growth…we generally get too caught up in what’s in front of us, at a huge overall cost.
  7. Power to the people. Our industry is suffering from turnover, often due to lack of training, weak salary levels, or a lack of trying to retain our folks. The costs here are tremendous, particularly if your operational institutional memory walks out the door. Here’s a good look at the issue by my colleague, Mark Marshall.
  8. Discipline, discernment, and delegation. If we exercised the 3 D’s in all operations areas, we would make substantial strides to spinning like a top.
Like I stated, though, these are just 8 of the hundreds and hundreds of nuanced, secret, subtle issues that affect fundraising operations. What are your secrets to success?

Leveraging your Systems in a Changing World

Competition in the fundraising software marketplace has yielded some big changes and some even bigger questions. Organizations are increasingly asking the “should I stay or should I go” question, no matter what system they’ve implemented. Questions of which vendor, which product, and with what impact and effects can be difficult to answer these days. Corporate mergers, shrinking client bases, growing product portfolios, and increasingly “flexible” applications complicate assessments.

Your fundraising software should help your organization raise money and build relationships. Period. As odd as it is coming from a fundraising operations guy, nonprofits can (potentially) raise as much money from Rolodexes as CRMs. But, better tools should support better results. So, what’s a smart fundraiser to do? Consider these five questions:

  1. Necessary vs. Nifty. If your team hasn’t shown the ability to leverage what’s already available and critical to supporting fundraising, a new and nifty tool won’t likely help.
  2. Expense vs. Cost. Change has costs, but your budget (within reason of typical fundraising results) should’t be the deciding factor. TCO (total cost of ownership) should include opportunity costs, which could show an inability to manage critical data and relationships that result in leaving money on the table (or not even knowing which table to visit!).
  3. Capacity vs. Complexity. New tools (or moving from old tools) can seem like a great option. The reality is often different from expectations, though. What may appear to be a penchant for expanded applications (capacity) is frequently stymied by the time and energy needed to adopt more complex tools.
  4. Perception vs. Performance. Perceptions about systems use (see Gartner.com’s hype cycle work) generally follow the “grass is greener” model. However, actual selection, conversion, and implementation of a new system may not generate the performance improvements desired.
  5. Culture vs. Change Management. Most tools are a reflection of the culture they support. Transparent teams like KPI’s and broad access to  systems because they foster openness. More risk averse teams may never be able to launch and leverage a robust CRM because they aren’t willing to share “so much data.”

These five contrasting issues are the starting point for your “stay or go” question. Before your team even starts to entertain the “where,” make sure you’ve established the “why” and that you’re asking the question for the right reasons. This will increase your likelihood to leverage systems, not just buy and install new, still-ineffectual tools.

These ideas stem in part from a series of client-based trips and discussions I’ve been involved with in recent weeks. We seem to start on the path of “tools” and move quickly to “behavior.”  There’s a potentially controversial tag line from the NRA that “Guns don’t kill people, people kill people.” The obvious point here is that tools are only as effective as those who use them. I prefer the message carried forward on Happy Gilmore with the Mr. Larson, aka Jaws from the Bond series wearing this great shirt–“Guns don’s kill people, I kill people.”

Of course, I’m no homicidal sociopath, I simply like the idea that it’s personal responsibility for the tool that yields the right results. So, to leverage your systems, look first in the mirror.

Quick Tax Tip

I’m no CPA, nor am I a lawyer. So, the tip here isn’t about taxes, per se. Instead, this quick note is to encourage your team to use tax time as  a stewardship touch. Advancement services, aka fundraising operations, gets caught at the wrong end of the 80/20 rule around tax time. We sometimes focus so much on volume (i.e., everybody gets a year-end statement) that we sacrifice quality. I’m not referring to accuracy but instead volume of effective touches. So, as April 15th comes along this year, commit your team to this top-focused, tax tip:

  1. Use tax time to ensure that every major prospect and donor gets a spring-time touch–in-person, call, or mail, in that order of preference.
  2. Create lists of “last fiscal year” donors who deserve a call to ensure that they have everything to support their giving.
  3. Engage portfolio managers to connect with every assigned individual along these lines. Non-donors could be contacted with a special script designed to engage them for the current year or reflect back on previous year’s giving.
  4. Make it a habit to go beyond any year-end giving statement for your best donors. Consider linking a tax message to a calendar year impact statement, complete with response devices for your donors.

Data suggest that donors claim that tax deductibility is  minor driver for gift decisions. Nonetheless, every American donor has potential gain from such tax issues, so your team should be prepared to engage every donor in the next few weeks to ensure that your organization’s gratitude–and ongoing worthiness and need for future support–are front-and-center.

“I’m calling on behalf of…”

Last night, 8:32 p.m. CT. A truncated transcript from a call (note: I’m sensitive to using a single anecdote to make decisions, but this was teachable moment):

(me): “Hello”

(some guy, about 10 second later): “Hello? Um, hello?”

(me): “What can I do for you?”

(some guy): “Is Mr. or Mrs. Cannon home?”

(me): “This is Chris Cannon?”

(some guy): “This is [name] calling for [top 10 national nonprofit]. I’m not calling to raise money. [really?] I’m calling to ask you to write10-15 letters…[script went on for another minute]”

(me): “Thanks. That’s not really how we like to participate in the organizations we suppo…”

(some guy): Click.

Seriously? I answered the phone, listened to some guy, and was interested enough in the organization to start to tell him how I might become engaged and that guy hung up. The reminder here is that we entrust dozens, maybe hundreds of people to our philanthropic brand each day. Are you doing all you can to train, engage, and otherwise prepare these folks to be good stewards of your good will? Are callers on quotas that diminish real discussions? If you’re not addressing these issues, your fundraising may suffer along with your brand.

The phone call didn’t provide the only lesson, though. After hang-ups, etc., I frequently call the organization back. I care a lot about nonprofits, and I’d bet management would like to know when their good reputation is being sullied.

So, in calling this organization back, an odd and maybe very dubious thing happened. The 800 line provided an opt-out (“press 2 if you do not want to receive calls like this”). I pressed “2”. Then, I had an option to add my number to the organization’s opt-out list. Terrific, I thought. I didn’t want more wasted calls like the one I had just experienced. Next, though, a very curious thing happened. I entered my phone number but the computer program didn’t register it correctly. I entered my area code but the computer-generated response indicated a different number. My wife watched me enter the correct number, only to hear the wrong number repeated back. I hung up and called back with similar results. I tried a third time and the computer program finally “figured” it out. Computer programs can fail, of course, but it sure felt like a purposeful, nearly endless loop to get off the list.

So, the second lesson of such a call is that, even if it’s an error or an oversight, you can lose potential donors forever by appearing to be too automated, too computer-driven, and too focused on your agenda rather than your potential donors. Fundraising is my vocation and I encourage groups to push their boundaries. For example, I frequently tell healthcare nonprofits that it’s patently irresponsible not to engage patients as potential donors. I do so because it can raise dollars and I truly believe in the power of philanthropy in the healing process (see a great application from Children’s Minnesota). This advice isn’t about limiting efforts but your strategy should mirror your constituency and stay away from gimmicks.

I’d love to hear your stories about these sorts of experiences. Together, we can help to keep our reputations strong and our (potential) donors happy.