The Annual Giving Exchange

Ask an annual giving manager about their overall alumni participation rate and you’ll probably get a quick and accurate answer.  But ask them about the participation rate of a major gift officer’s prospect portfolio and many won’t have a good answer for you.

Every major gift officer’s prospect portfolio should be evaluated for annual fund participation on a regular basis.  This should happen in a meeting (quarterly, if not monthly) that includes the annual giving and major gift teams as well as the head of development.

These meetings should be used to examine the participation rate of each major gift officer’s portfolio and to review lists of major gift prospects that have not yet made an annual fund gift.  This will give each major gift officer an opportunity to consider their own annual gift strategies or ask for help from the annual giving team in boosting their portfolio’s participation rates.

Encouraging partnership between annual giving and major gifts will not only build a stronger development team, but will bolster your donor pipeline and increase the overall achievement of your annual fund.

Congratulations! After years of cultivation through phone calls, e-mails, letters, and events, one of your most important prospects has made their first annual fund gift.  Thank them as quickly as you can, right?

It’s not uncommon to think about how quickly we thank our donors.  Prompt recognition is critical.  Nothing can bitter the taste of philanthropy more than letting too much time lapse without acknowledging a donor’s generosity.  But there’s something even more important than how quickly a gift is acknowledged.  It’s how consistently we recognize our donors.

Imagine the experience a donor would have if, after making a gift, she received a e-mail an hour later, a letter a week after that, a phone call a month after that, a personal visit three months after that, and a postcard six months after that.  All just to say simply, “thank you.”

Imagine if this constant stream of gratitude continued into the next year and the next and the next, regardless of whether or not that donor ever makes another gift.

Imagine if your next annual giving plan included a means of thanking your donors quickly and constantly.

Imagine if this strategy were applied to anyone who had ever made a gift to your organization, not just those who made a gift last year.

Just imagine.

A fundraiser’s job isn’t to ask for money.  It’s to build relationships.  Engagement is the way an organization cultivates its relationships at the broadest level.

Most of us have probably used the term.  My sister is engaged to be married this fall.  Our military is currently engaged in Iraq and Afghanistan.  And while we often use the term in fundraising, our strategy for promoting it is not always clearly defined.

Defining an engagement strategy requires input from across the entire advancement operation.  Begin by asking your staff, volunteers, and donors how they define, promote, and measure engagement.  Their answers will not only help determine your tactics, but they will reveal the best way to measure your progress.

There are many ways donors can engage with your organization.  They can visit your campus or headquarters, volunteer their time, attend an event, or talk with another member of your community.  But donors can also engage with your organization online.  Visiting your Web site, following you on Twitter, or reading your e-mail newsletter, are all real (and easily measured) forms of engagement.

Philanthropy is also a form of engagement, one of most significant and lasting.  More importantly, though, it’s a common result of consistent and thoughtful engagement.

Worry less about how to ask for money and more about how to engage your donors.  When you do, the rest of your work will take care of itself.

Technology has always been both a catalyst and an obstacle for phonathon programs.

Automation software has allowed call centers be more efficient, but caller ID has made it more difficult to get donors to answer the phone – some reports indicate attempts per completed call increased nearly 50% over the past few years.  And while it seems that everyone has a mobile phone these days, federal regulations still prevent telemarketing to them in most cases.  On top of it all, running a call center gets more expensive every year because of their significant human resource requirements.

So, are phonathons still worth it?

There’s no right answer because every program is unique.  But here are a few things to consider:

• Phonathons can be a great way to grow a young annual fund, but beware of investing too much in mature programs that are at or near capacity.
• Avoid paying a premium to solicit someone by phone if they have historically responded to less expensive appeals like direct mail or email.
• Don’t call more people.  Focus on calling the right people.  Use wealth screening and predictive modeling to better segment your calling pools.
• Have your callers conduct donor surveys and thank-you calls during downtimes.
• Rent your call center to other charities when you’re not using it – a good way to offset your own costs.

Fundraising is a business of relationships, so programs that empower people to talk to other people will always be worth it.  The key to managing an effective phonathon is finding the right level of investment and balance of resources for your particular program.

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?