Category Archives: annual giving

Reversing the Alumni Giving Slide: Hope is Not a Strategy

Fewer than 1-in-10 alumni give back! What are you doing about this? And, how long will it take you?

A slide like this is requires a qualitative paradigm shift, not a quantitative shift
Alumni Participation for 40 years: A slide like this is requires a qualitative paradigm shift, not a quantitative shift

Many in our industry have been pointing to the declining alumni participation rates. This isn’t new; since the 1980’s, the rate has dipped 10%! The alarm that these rates should generate, however, has been muted. The malaise toward this decline is likely due to the increasing average gifts education institutions are concurrently experiencing. Even for engaged or elite institutions, this downward trend is, well, alarming. The CNN Money article highlighting this decline points to multiple degrees across multiple institutions as a cause, as well as overall indebtedness experienced by recent alumni. If this were the case, I wouldn’t be so worried for our long-term health. But, I am. And, you should be, too. Here’s why:

  1. Now or never. If you don’t reach your grads from the last 10 years (often called GOLD—Graduates of the Last Decade), they tend not to be reclaimed. Life and other philanthropic interests just get in the way.
  2. Competition is fierce. As the hyper-successful ALS ice bucket challenge is proving (and Kickstarter, fundme, and other “give-right-now” opportunities reinforce) there are only so many disposable income dollars. Giving is typically 2% of GDP each year; it doesn’t rise or fall much, and, in 2013, Warren Buffett was about 1% all giving in the U.S.! If you wait to engage donors on your timetable, other nonprofits may slide in ahead of you.
  3. Education is changing. The days of “the best four years of your life” as a case for support are changing. Campus-based higher education will not be replaced, but many alums did not and will not really imprint with their alma mater.

Many institutions are trying mightily to change the trend. The costs can be great and the return can be fleeting. A few benefit from tightly knit alumni bases with a culture of philanthropy But if yours doesn’t, you need to act. Given the three reasons for alarm, your annual giving effort must change, potentially radically.

Direct mail? Sure, but no longer on your calendar…move mailings to gain preemptive gifts from those who will be poached by other causes. This point cannot be emphasized enough. Your competition isn’t just the crush of holiday mailings which may drown your year-end mailing; the real competition started yesterday, doesn’t care what your mail house schedule is or how long it takes to get an appeal letter approved, and–by today–may have siphoned hundreds of your donors’ disposable income away through crowdfunding, self-funding sites, slick Facebook apps, and other tools that higher ed has been slower to adopt.

Phonathon? Yep, except work harder to get cell phones and build a texting-based strategy.

Social media? Of course, but don’t expect “ice bucket” results. Instead, start with data and analysis, identify and engage well-networked alumni and ask them to tweet, like, and post on your behalf.

Peer-to-Peer? Many in higher ed have great success with “class agent” models. These need more sophisticated tools to support more wired alumni groups. Excel files emailed on an occasional basis are not going to do it for most alums who want to help.

Email? Yep. But, as with cell phone and direct mail, data quality and targeting must be improved.

If you don’t have the budget or the base to tackle the issue, there is a less palatable option—change your focus. We all know US News & World Report is a beast that must be fed. However, only sizable percentage gains will likely affect your institution’s positioning. With your data, annual giving avenues, and donor behaviors, is a 20% gain at all feasible? How much will that pull up your ranking? Most will find that this is a stretch goal, at best. So, dive headlong into retention and upgrades as parallel measures of success. Bring up average gifts…literally by generating larger averages and tactically in board presentations and as metrics.

The future of education may be so different than anticipated that any predictions will be way off. However, this doesn’t mean that preparation and reinvention should be postponed. In fact, because we don’t know what’s coming, we must immediately tackle the sliding participation of our young alumni while working diligently to retain or reclaim more seasoned alumni.

Hope is not a strategy so get going in changing your approach to changing alumni behaviors.

January is National Business Intelligence Month…

…didn’t you know that? Of course you didn’t. With the holidays, closing some year-end gifts (not to mention the books), and learning an awful lot about Amazon’s post-holiday online return policy, how could you keep up with all of the information being thrown at you. It’s hard enough to have the right information, much less use it effectively. Plus, it’s not really National Business Intelligence Month. I made that part up.

So, why the subterfuge? We need to draw attention to the critical need in the advancement business for more and better reporting and analysis. Some of you already have what you need. Some stopped looking years ago. Some have that “special” report that some poor person spends hours to prepare. But, most of us want better reporting, the kind that actually helps us make decisions about the business and tells us things we otherwise wouldn’t have known.

Better reporting requires a few things. This flow chart shows the way to better reporting. But, even more important than creating reporting is turning it into business intelligence.

Report Development Cycle

Let’s work to get even better data into even more clear reports that drives even better decisions. Let’s stop with the ad hoc, don’t-really-learn-much urgent reporting and develop a thoughtful suite of reporting that allows you to direct the team. Let’s develop shared definitions and expectations, allowing our reports to mean the same thing no matter the audience. So, know that I think about it, let’s make January National Business Intelligence Month. Make sure to put it on your calendar for next year.

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!

Is 99-1 the new 80-20? And, if so, how do we deal with this?

Most of us have heard of the Pareto Principle, or the 80-20 rule (80% of production comes from 20% of the resources). For years, philanthropy experts have used this economics principle from Vilfredo Pareto to explain why so much giving comes from so few people.

Of course, for many of the “best” fundraising organizations, that ratio is more like 99-1. That is, in many cases, single, sometimes 9-figure gifts dramatically shift the fundraising landscape for an organization. These great gifts are frequently transformative and non-repeatable, making the replacement of such big gifts a driving and often maddening force for fundraisers. And, such huge gifts may have the unintended consequence of diminishing future, smaller donations from others whose future in the 1% is yet-to-be-determined.

How should you deal with your organization’s experiences with this rule? Here are two angles of approach.

First, your team (researchers, analytics folks, prospect management professionals, gift officers, etc.) need to know wealth, and particularly your organization’s profile. How is it generated? Who has it? Who had it? Who can get more of it, so big gifts are reasonable? Who has so much that they’d like to leave a legacy instead of being the richest guy in the graveyard. A great set of articles in the NY Times (click here) puts some perspective on how new wealth is being generated. Your team needs to know these trends, your constituent’s sources of wealth, and stay on top of it.

Second, and slightly related to the other 99-1 “Occupy” messaging so prevalent in 2011, your team needs to understand that the enormous gap between the super-rich and the rest of us has big ramifications for your programs and your mission. Sure, we need to devote more time to our best prospects. But, you cannot just focus on the super-rich, because it’s a fluid and sometimes cloaked group. And, for many nonprofits, mass-effort, grassroots fundraising pays the bills, even if less efficiently than 7- and 8-figure gifts seem to. So, your team should work hard to treat all constituents well, while employing effective annual giving, analytics and other tactics to maintain base building efforts that help the best bubble to the top.

So, our fundraising efforts need to efficiently direct energy toward the 1% while conscientiously engaging the 99% as valuable near-term partners, some of whom may matriculate into the 1% (or are already there!).

UPDATE: CASE provided some great data on this topic. Here you can see the impact of the top few percent of donors on campaigns. It appears this is a little more like the 70:1 rule, but the lessons are the same:

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.

What data-driven tactics are OK? A quick note.

An uproar about data modeling was in full swing the last few days. The NYT reported that Target uses data to, well, target customers. It got one wrong (spilling the beans about a daughter’s pregnancy to her father!) by getting it right (quickly gathering, analyzing and distributing marketing based on data points that knew more about the daughter than the dad). The data screening and data modeling trends have long taken hold in our industry. Now we are starting to see even more potentially questionable applications of data taken from the corporate world, raising some base questions: What about privacy? What about effectiveness? What about competitive advantage? What about creeping people out?

This raises the question: how far can and should data analysis go in fundraising? As a card-carrying member of APRA, I value research, analytics and prospect management. Data are the fuel for fundraising. As a father, or as a recipient of seemingly countless fundraising calls from poorly trained solicitors via robo-dialing, or as a donor, I wonder everyday where fundraisers should draw the line.

This topic–what data is “available” and how can/should we use it to raise money–is increasingly salient because data points are increasingly available. How should you sort through the details? Here is my three-point quick assessment approach:

  1. My starting point is typically not just can you raise money with a data-driven tactic but will the tactic build relationships?
  2. In the long run, gimmicks and disingenuous strategies deliver fewer results than donor-centric and mission-critical approaches. Which is it?
  3. But, it may not be long before unheard of tactics become commonplace approaches. Do benefits outweigh risks?

So, the short answer to this profound question is that focusing on relationships first should provide the answer for your organization’s approach to what data and when. I’m planning a more thorough look at the topic later this year (HIPAA, FERPA, national do not call lists, consumer data applications, and more). In the meantime, I welcome your cases, conundrums, and ideas.

Balancing when Busy

Fundraisers get busy. Indeed, being busy can be a sign of great things to come, so long as we’re busy with the right things. But, being busy can knock you out of balance. By carefully calibrating your perceptions, your performance, and your priorities, you can ensure that your daily “best practices” are really the practices that are best for your organization.

The forthcoming AFP’s Advancing Philanthropy includes a Management Trends article on this subject written by yours truly. It’s not exhaustive, but presents some helpful guidance for keeping your team productive and your work on target.

You can also click here to find this article on the AFP site. Have a look and let me know what you think. And, for more news and information on transforming philanthropy, visit my site at www.bwf.com or the fundraisingoperations.com site.