The Annual Giving Exchange

Last week, the Council for Aid to Education (CAE) released its annual Voluntary Support of Education (VSE) survey results.  In addition to a steep decline in overall giving to colleges and universities last year, the report also revealed that alumni participation rates had hit their lowest level (10%) in the history of the survey.

According to CAE, alumni participation has been declining slowly since 2002, when it was 13.4%.  Contributing factors might include:

• Increased student loan debt, likely reducing the sentiment that alumni “owe something back” to their alma mater.
• The proliferation of nonprofits over the past decade, creating greater competition for philanthropy.
• Large (often misunderstood) endowments, fostering skepticism about the true “need” of many colleges and universities.

Declining alumni participation represents a real problem for institutions, and extra annual fund mailings, more e-mail blasts, and additional phonathon shifts don’t address the fundamental issues.  Donors are motivated either out of loyalty to an institution or support for a cause.  For many years, annual giving managers at educational organizations have built their strategies around the former.  Going forward, we need to focus more on the latter.

Loyalty is an asset, but useless when it doesn’t exist in the first place.  However, when we talk more about the causes that our educational institutions support (research, shaping future leaders, etc.), we will have begun to address the real issues behind declining alumni participation.

The Library System at Penn State has been an important part of the University community for years.  Unlike other academic departments and units, however, the Library System does not have a natural constituency of alumni and parents to help support their fundraising needs.  But last year, the annual giving staff found a creative way to address this challenge without cannibalizing the important fundraising activities already taking place across its campuses.

To celebrate the 150th anniversary of the Library System, the annual giving department sent an e-mail to anyone on their database who 1) had a good e-mail address on file and 2) had not made a gift to any part of the University in the past five years – over 100,000 records.  While the e-mail was not a solicitation, the annual giving department was able to use its reporting tools to identify more than 15,000 people who opened the e-mail, half of which (nearly 7,000) already had a good phone number on file.  The outcome was a new annual fund prospect pool for the University’s Library System.

Over the course of the next several months, the phonathon program called into this prospect pool to solicit a donation to the Library System.  The results exceeded expectations with $18,000 in new support and more than 10% of the alumni contacted making a pledge – twice the average pledge rate for someone with no giving history to the University.

Affinity isn’t always obvious.  Sometimes you need to look at things from a different angle to see it.

Next Thursday, February 4th from 12-1pm CST, I will be presenting a one-hour interactive webinar on Leveraging Social Media to Grow Your Annual Fund. In this session we will:

• Discuss how traditional annual giving programs have evolved over the past decade
• Consider how social media has changed the way fundraisers interact with prospects and donors
• Examine the characteristics and opportunities of specific social media platforms including Facebook, LinkedIn, and Twitter
• Demonstrate ways constituent engagement and gift potential can be measured through social media
• Share examples of how social media can be leveraged to grow your Annual Fund

The cost of the session is $125; as always, this fee is waived for clients of GG+A.  Click here for more information and to register.

The business of raising money for charity is not complex.  Beware of making it that way.

It’s not about convincing people to make a donation.  It’s about creating opportunities for people to make a gift in a way (and at a time) that’s both rewarding and convenient for them.  Letters, phone calls, and e-mails don’t convince people to give.  Experiences and causes do.  Fundraising appeals are just reminders that connect people to things that they have already identified as important.

The first question you should ask when evaluating your fundraising appeal isn’t “who should be the signatory?” or “what font works best?” Rather, it’s how does this make it easy for a donor to make gift?

Text fundraising underscores this very point.  In the wake of last week’s tragic earthquake in Haiti, text fundraising has been recognized as an easy and immediate way to support people in need.  Techcrunch’s recent article on mobile giving explains how and why mobile giving has recently come of age.  Click here to read the article, which includes the following list of options for texting support to the relief efforts currently underway in Haiti.

• Text HAITI to 90999 to donate $10 to the American Red Cross
• Text QUAKE to 20222 to donate $10 to the Clinton Bush Haiti Fund
• Text HABITAT to 25383 to donate $10 to Habitat For Humanity
• Text OXFAM to 25383 to donate $10 to Oxfam
• Text HAITI to 25383 to donate $5 to International Rescue Committee
• Text HAITI to 45678 to donate $5 to the Salvation Army in Canada
• Text YELE to 501501 to donation $5 to Yele
• Text RELIEF to 30644 to get connected to Catholic Relief Services
• Text HAITI to 864833 to donate $5 to The United Way
• Text CERF to 90999 to donate $5 to The United Nations Foundation
• Text DISASTER to 90999 to donate $10 to Compassion International

Growth used to be the annual giving mantra.

How can we increase donations next year?  What are we doing to improve participation?  Why has gift club membership been flat?

The benefit of a growth strategy is that it raises your sights and pushes you to be better.  The problem, however, is that it often causes you to neglect what you already have.  By worrying about the donors you want, the volunteers you need, or the resources you lack, you end up ignoring those things that are right in front of you.  Then (like anything that gets ignored) they get rusty, stop working, or simply go away.

We’ve learned some important economic lessons in the past year.  Bigger isn’t always better.  What goes up must come down.  Something is only worth what someone will pay for it.  But the most important lesson of all is that sustainability is undervalued.

Thomas Friedman says that sustainability will be to the next American generation what freedom has been to past generations.  Going forward, value will not be determined by how much something offers now, but rather by how long you can depend on it.

The same will be true in annual giving.  The most valuable donor won’t be the one who can give you $1,000 today, but the one who you trust (and who trusts you) to donate $100 each year for the next 20 years.

There’s a new mantra in annual giving.  It won’t be bigger, but it will be better.

Direct mail has been a fundamental tool in nonprofit fundraising for decades and, as a $50 billion a year industry, it isn’t likely to become irrelevant anytime soon.  But it won’t be around forever.

Today, more than 1.4 billion people communicate through e-mail.  If Facebook were a country, it would be the third largest country in the world.  Nearly $15 billion was donated online in 2008 – 44% more than the year before.

Meanwhile, postage costs have increased 33% over the past decade and direct mail response rates continue to decline.

T. Boone Pickens has a plan to wean Americans off of oil.  Do you have a plan to wean your annual giving program off of direct mail?

In 2009 we watched our economy hit bottom (we hope), Barack Obama rise, Tiger Woods fall, Bernard Madoff go to jail, the King of Pop pass away, a hot air balloon hoax, two wars, and healthcare reform.

In annual giving, we watched postage costs go up again, phonathon contact rates decline, and online gifts continue to grow.

On a personal note, I recently agreed to join Grenzebach Glier and Associates (GG+A), a philanthropic management consulting firm, as Vice President of Annual Giving.  As part of the GG+A team, I will continue to publish this blog and look forward to staying connected with all of its readers.

Click here to become a fan of the blog on Facebook.  Click here to follow it on Twitter.

Happy New Year!  All the best in 2010!

There are many ways to motivate your phonathon callers including games, raises, bonuses, recognition awards, and priority scheduling.

The phonathon manager at Tufts University celebrated this holiday season by baking cookies for her staff.  The headset is my favorite part.

Sometimes it’s the creative, thoughtful, and simple things that motivate us best of all.

Happy Holidays!

The following email was sent from an alumnus to his alma mater.

“Congratulations! You have succeeded in making your online giving form so difficult to find that I will not be able to make a donation this year.”

Many online retailers (the ones that are still in business after six months) invest great time and resources to create an online experience that makes it simple and easy for customers to buy their products. Shouldn’t nonprofits be doing the same for their donors?

Design matters.

The folks at Amazon.com get it. Fundraisers should too.

DonorBadge is a subscription-based software application that helps nonprofits encourage peer-to-peer fundraising on Facebook and other social media platforms. Here’s how it works:

1. A nonprofit subscribes to DonorBadge and integrates the tool into its existing online giving infrastructure.
2. A donor makes a gift to that nonprofit.
3. A “badge” (which includes the nonprofit’s logo) is displayed on the donor’s Facebook profile.
4. The donor is prompted to share the news of their gift with friends.
5. A message is sent to those friends along with a link to the nonprofit’s online giving form.
6. Tracking and analysis is provided through DonorBadge.

The University of Michigan and the University of California at Berkeley have already tested DonorBadge.  For more information, contact Shankar Radhakrishnan at shankarr@orbees.com.