Category Archives: database systems

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.

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.

Improve Perception to Improve Partnership

Fundraising operations is a tough business. The many moving parts, the level of detail, the (mis)understanding across different departments and donors…these all make it a difficult area to effectively manage.

Perception is particularly challenging to handle. Sometimes, a single anecdote shapes our colleagues’ entire view of operations. One bad gift, one bad report, or one bad training experience can spoil the lot. But, you can avoid some of the pitfalls and improve perceptions. Have a look at this video (it’s a little long but worth it) to get some ideas on the common culprits and best solutions.

[youtube http://www.youtube.com/watch?v=HVtBwszW2N0&w=560&h=315]

What issues have most shaped your perceptions?

Ends vs. Means: A Balanced View of Fundraising Technology

It seems that 2012 will be a year for change in fundraising operations. The proverbial dust is starting to settle on one of the two biggest fundraising operations stories in months. In January, Datatel and SungardHE finalized their merger (click here for details). January also held the other big story about the purchase of Convio by Blackbaud (click here for details).

The Twitterverse has been abuzz. ListServs, blog posts, calls to account managers…the volume of attention to these issues has been significant. How much does it matter? In total, not much.

Wondering if your technology is well-used. Click here for a Test.

Fundraising is still a predominantly top-down, inside-out business (with some exceptions). Grass-roots, high-volume, high-tech fundraising is neat and (somewhat) new, but the essentials–asking engaged people of means for very large gifts–is where most campaigns are won. And, frankly, an organization’s database of choice affects these sorts of gifts less than we might think. For example, have a look at this technology transition cycle. What you will notice is that it’s a loop: you’re never quite finished because you should be constantly learning and adapting the use of your technology. Without long-range, comprehensive implementation plans to fully leverage our technology, we tend to have databases that house name, address, giving, and a few other details.

Now, this may sound odd coming from a guy who champions fundraising operations, published a book to inform fundraising ex Continue reading

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.

Spinning the Top

The central challenge in fundraising operations is managing data, technology, reporting, business processes, and people while balancing the countervailing forces of accuracy, speed, and volume. This new blog will focus on the difficulties that fundraisers experience and, more importantly, how to overcome these challenges, deliver results, and help our organizations raise more money and build more relationships.

I welcome feedback and input, stories and tales of success or caution.