Category Archives: data managament

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!

Prospecting Revisted…or why I avoid American Airlines

A few months back, I shared a story about a fundraising caller who hung up on me. I was ready to talk to him about my family’s philanthropy, but the paid caller had something different in mind, so he hung up on me, before he learned that I cared about his cause. Bad customers service, I wrote, can kill a long term relationship.

Fast forward a few months to today and to some of the worst customer service I have ever received….

Flying for your commute can be interesting. Today it involved switching concourses and airlines and checking through security twice (and a five hour delay). Awesome! As a savvy, frequent traveler (about 200,000 miles a year), I was able to switch airlines, but I couldn’t seem to confirm my seat by phone. Because I had a first class seat on Delta, I queued up (with one person in front of me and one behind) in American Airline’s first class lane. The check-in helper was quick to point out I had to stand in line elsewhere, even though I was willing to pay for a first class ticket. (No wonder I avoid American.) To solve my problem, I moved to an electronic kiosk, secured my seat, etc. Round two of American Airline’s awful customer service involved their business club gate keeper who also immediately treated me like a burden.

Here is the message: I am a prospect for American Airlines. In fact, statistically, I suspect I’m the equivalent to a deca-millionaire prospect for Fundraising. There just aren’t too many people like me who fly so much as a potential client/donor. American Airlines–and all of us in the constituent relationship business–should strive to deliver outstanding service in the hopes that the right people are stewarded.

So, before, I come off sounding overly self important (which is not my intent) or too petty toward American Airlines (which sort of is my intent), let’s confirm the message. This little parable can come in handy as you think about the way you look at your prospects. Give them a little more time and attention. View every touch as a chance to deeper relationships, not just speed up processes. Don’t let just simple criteria rule out what could be great parters. And, while you’re at it, you might want to avoid American Airlines.

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?

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:

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.

3 Solutions to Prospecting Problems

After 1,000’s of discussions with gift officers and prospect development professionals around the world, I’ve come to a simple conclusion: we could all be doing more. More research. More discovery. More proposals. More prospect management meetings. More data entry and tracking. More, well, fundraising. What I have mostly learned, though, is that doing more through better partnership is attainable using three easy-to-remember tactics.

The Obstacles:

Discussions with prospect development professionals in research, prospect management and analytics typically include sentiments like:

  • “Sometimes I hear back from the fundraiser, but I usually don’t.”
  • “I don’t even know if they read the profile.”
  • “The meetings we hold are so frequently canceled or ignored, I don’t know why we bother.”

From frontline fundraisers, I hear all too often:

  • “I’m increasingly just using Google…”
  • “Prospect management meetings and other parts of the process really have nothing to do with how I operate.”
  • “It’s tough to be subjected to a barrage of questions from folks who’ve never asked for a big gift.”
The reality is that both sides are partly right and partly wrong. To move forward to deliver really extraordinary results, your team needs to overcome these obstacles. Here are the three ingredients to the solution:

The Solution

There are three simple tactics that address these issues:

  1. Respect: All sides bring value. Respecting each other’s strengths does not diminish our own. Instead, all parties need to celebrate what they do best and bring to the table. Every great organization succeeds through an effective division of labor, so make sure all divisions are respected in the process.
  2. Discipline: Neat and nifty tools and options are a distraction. So, new predictive models, meeting approaches, or discovery tactics need to be rooted in a disciplined focus on what’s best for donors and our organizations. This means no Blackberrys and iPhones in meetings and it means no “information for information’s sake” 20 page profiles.
  3. Planning: Fundraising is challenging because its not transactional. We cannot force (or even persuade) donors to give big gifts, so this means we must all be strategic planners. You must use every bit of intelligence, every database field, and every chance encounter with great prospects to build a team-wide plan to engage the best prospects. Then remembering the respect-discipline tactics, rigorously execute plans.

Team-based solutions for prospect development are best, but they are elusive. Many 1,000’s of conversations on the topic have convinced me, though, that the issue isn’t the database or the reporting scheme. It’s not the codes or other system details. The root challenge–and, consequently, the source of the solution–is more elementally embedded in how we respect each other, focus our energy, and plan for the future.

How much is that donation in your window? Calculate the Costs.

I get this question a lot: how much should it cost to process a gift? It’s a valid question most easily handled with: “It depends.”  Well, I’m tired of that answer so I’ve devised a calculation. My math is not as important as your organization’s math, but we should all be more focused on how to deliver more resources to forward our missions (i.e., streamline costs and/or increase revenues).

What are the costs of processing a gift or pledge? The components vary, by gift type, organization type, and others. The main cost is staff time, but we should also include a portion of the database costs, any services or service fees, and the materials/resources involved.

With costs estimated, how do these costs accumulate? Gift processing has four stages–intake, batching, entry, and finalization–so I’ve explored each to give a sense of costs per stage:

  • Intake: how the gift comes in affects costs.
  • Batching: the type of gift and associated information should be factored in.
  • Entry: some gifts take a lot longer to enter than others.
  • Finalization: receipts, thank yous, and reconciliation all take time and money.

Of course, every organization will differ in the actual calculation. That’s part of what makes this such a hard number to determine. Have a look at this infographic that calculates the cost to process each gift:

Processing gifts costs variable amounts
Your team's numbers will differ, but these components add up

The bottom line is that all gifts cost time, energy, and resources to process. Is your cost $6.50 per gift? Is it much more? Less? If your team is too efficient, you may be missing stewardship or quality control opportunities. Below some level, a gift costs an organization money. That number is probably closer to $20 for some gifts (tributes) than anyone would like to admit, especially if your team processes thousands of $20 gifts. The nature of philanthropy makes it nearly impossible (and certainly un-palatable) to reject small gifts, but messaging around the impact of giving could switch from the overly naive “every dollar counts” notion to something more sophisticated. So, be sure your efforts are pointing donors in the right  direction.

Don’t take my word for it. Do the math. Then, with your organization’s answer(s), try to shape donor behaviors through smarter direct response strategies supported by streamlining your operations so that you deliver as much money as possible to support your mission.

And, please share your calculations and ideas in the comments.