The Annual Giving Exchange

If I could go back in time to 1903, I’d ask Mary Anderson if she thought her new invention called the “windshield wiper” would have much of an impact on the way people traveled.  If I could go back to 1946, I’d ask Percy Spencer how much he thought his invention called the “microwave oven” would affect the way we people eat.  If I could go back to 1974, I’d ask Arthur Fry how many people he really thought would find his new invention called the “post-it note” useful.

I assume that the inventors themselves had great expectations for their ideas.  But I also wonder about the people who were around when these inventions were first introduced.  Did anyone then truly understand how much these inventions would impact the lives of people now?

There are plenty of skeptics in annual giving who question how much social networking will help nonprofit organizations raise money.  I think that’s understandable.  Online social networking is very new, it seems to change quickly, and so far there is no proof that it offers a good return on investment.

Others are eager to incorporate social networking into their annual giving programs.  If you are one of those people, take some time to consider the big picture.  Ask yourself how this new innovation could someday affect the role that annual giving plays within advancement programs.

Click here to watch Charlie Rose’s recent interview with Marc Andreessen.  Marc is best known as the co-founder of Netscape, the first popular web browser.  He is on the Board of Directors of Facebook and eBay and is a key investor in Twitter and Ning.  The interview frames social networks (where they came from, why they’re important, and where they’re going) and might be helpful when considering their long-term impact on our industry.

Saturday Night Live recently did a skit making fun of direct mail marketing.  It’s funny, and like all SNL skits, should be taken in good humor. It’s important to be able to laugh.  It’s even more important to be able to laugh at yourself.

All humor aside, though, the skit also makes an important point that those of us in annual giving should consider.  We know that direct mail is effective.  If it wasn’t, we wouldn’t do it.  But don’t lose sight of the fact that some people perceive direct mail to be wasteful, intrusive, and annoying.

Click here to watch the skit.  Enjoy it.  But also take a moment to think about how your direct mail campaign might be perceived by your donors.

There are many alternatives to sending direct mail – phonathons, e-mail, social networking, or even sending no mail at all.  But rather than abandon a successful program because of how a few people perceive it, consider what you could do to adjust the broader perception of your mail campaigns.

Are you sending direct mail too often, or not often enough?  Does your choice of paper stock send the message that you’re an A+ operation or environmentally unfriendly?  Are there ways that you could send mail only to people who have been responsive to it in the past?  Is direct mail best used as a way of renewing past donors?  Likewise, are alternative media channels best used as a means of acquiring new donors?

Effective fundraising is about building relationships with your donors.   Direct mail is no exception.  In fact, it can undermine those relationships if you’re not careful.

One of the most pleasant sounds in fundraising is the harmony between annual and planned giving.

Consistent annual fund donors are excellent prospects for planned gifts.  In fact, consistency of giving, rather than gift size, is often the best predictor that a donor will consider longer term planned gift strategies.  Some of the most meaningful planned gifts come from donors who have never even considered a major or capital gift, but who have instead made small annual fund gifts throughout their lifetime.

In the mind of a donor, a planned gift can actually feel like a way of endowing their annual support beyond their lifetime.  Planned gifts can also provide solutions for donors who don’t feel in a position to make a significant donation during their lifetime, but do want to support a charity over the long term.

All too often we in development perceive annual giving and planning giving at opposite ends of a spectrum.  When we do, we miss out on the many benefits of collaboration.

Here’s my advice to those of us in annual giving.  Take time to meet with members of your gift planning team.  Ask them what they perceive to be the link between annual and planned giving.  Offer to help identify prospects for them.  (More than likely they will offer to return the favor.)  Familiarize yourself with your organization’s current planned gift donors to see who is also providing regular support to your annual fund.  If you have a recognition society for planned giving, consider ways that it might provide additional stewardship to some of your best annual fund donors.

Whatever you do, don’t think that planned giving has nothing in common with annual giving.  Or worse, don’t think of it as a threat.  Most donors do not stop making annual fund gifts after they have decided to include a charity in their estate plans.

There is great harmony between annual and planned giving.  You just have to listen for it.

Seth Godin was the head of direct marketing at Yahoo in the 1990s and is thought of by many as the father of permission marketing.  As an author and blogger, he writes about tribes – the idea that effective marketing requires organizing people into groups around issues that they care about.

This idea of tribes should not seem new to us in annual giving.  Our marketing strategies have always sought to segment people into groups based on affinity (giving history, age, class year, athletic teams, clubs, geography, etc.)  In doing so, we push customized messages through direct mail, e-mail, and phone hoping that it will inspire them to support our cause.  While this strategy is certainly better than a generic appeal, I think we need to take it further.

Look around and you’ll see evidence that mobilizing people into groups can have a dramatic effect.  We all watched a former community organizer organize his way to the White House and everyday we see the emergence of social networking websites as a way for people to identify and connect with others who have like interests.  I hope this does not get lost in the annual giving profession.

Click here to watch a 15 minute video of Seth Godin talking about tribes.  While you’re doing so, consider how the idea of tribes could be applied to your annual fund.  Think about the impact of marketing through people instead of marketing at them.  While this idea may require a shift in thinking, it really shouldn’t seem radical.  To paraphrase Shakespeare’s 59th Sonnet, there is nothing new under the sun.

Here’s a question for those of us who work in education:  What will the impact of online social networking be on alumni reunion programs?

If the fundamental purpose of a reunion is to reunite old friends, I have to assume that the advent of online social networks will cause some change.  Now that alumni are able to stay connected on a daily basis through websites like Facebook and Twitter, will they still view class reunions as important in their personal lives?

I think that schools who have little reunion tradition or lack class affinity will steadily deemphasize reunion programming.  At those institutions where reunions have long been a part of the culture, however, I think the reunion as an “event” will no longer focus on bringing the masses to campus.  Rather it will serve as a platform to entice key volunteers and donors to campus so that they can participate in other key advancement activities (board meetings, commencement, etc.)

Annual giving teams will begin to see social networking websites as helpful tools for mobilizing volunteers and donors around class gift campaigns.  Assigning a list of classmate phone numbers to reunion gift committee volunteers will become passé.  Instead, we’ll ask volunteers to create class groups in Facebook where they can post messages about their class gift.  Or we’ll ask them to tweet about their class gift to their followers on Twitter.

And there is especially good news for those institutions that want to provide reunion programming to their alumni but don’t have it in the budget.  Online social networking tools may actually offer them a simple and inexpensive way to accomplish this goal.

Ahh…spring.  The bells are ringing and the birds are chirping.  And many of us in annual giving are counting down to the close of another fiscal year.  As we tally our dollars and begin planning for next year, don’t forget that it’s not too late to remind your donors about corporate matching gifts.

Every year, as a benefit to employees, thousands of companies offer to match gifts that their employees have made to charitable organizations.  It’s an easy way for donors to increase the impact of their contribution – something especially meaningful in a recession.

Although some companies have indeed cut back on matching gift programs in order reduce expenses, many have not.  Some charitable organizations have, in fact, seen an increase in matching gift activity recently.  Perhaps this is a signal that donors are taking advantage of matching gift benefits for the first time as a way of sustaining their past levels of support in tough times.

Many donors make the mistake of thinking that their charity will follow up on potential matching gifts. This is almost never the case. A simple letter or e-mail reminding your donors that such benefits might exist at their company can often make the difference in meeting your fundraising goals. Your note can be a friendly reminder to your donors that they need to follow-up with their human resources department to initiate a matched gift.

There are some easy-to-use resources available to help both donors and charities.  Check out matchinggifts.com for more information.

We’ve heard a lot recently about using networking Websites (Facebook, Twitter, LinkedIn) to raise money and manage volunteers, but not much about how to use networking as a program management tool.

Rather than create a group within an existing social network, try creating one of your own.  Ning.com is an online platform that makes it easy to build an online community for any group.  This will give you the advantage of accessing group member information and communicating with the group exclusively and securely.  It’s very easy to use and free.

Try this.  Go to Ning.com and register a group for your phonathon staff. Call it:

http://yourorgname.phonathon.ning.com.

As the group manager you will be able to collect caller biographical and contact data, broadcast announcements, post training manuals, match caller names with pictures, celebrate achievements, and advertise important news.  Your site will also be a helpful tool for scheduling shifts.  As network members, callers will be able to post comments or request to switch changes.

Go ahead, take your phonathon program to the next level.

LYBUNT, SYBUNT, Non-donor…yawwwwwwn. While past giving is certainly a good predictor of future giving, it’s not the only way to segment your data. Consider ways to dig deeper. Try this segmentation strategy for your next phonathon campaign – ranked in order of highest priority:

1. Made a gift for the first time last year

2. Made a gift through the phonathon in the past

3. Paid a past pledge on a credit card

4. Last gift in top 10% of your gift pyramid

5. Made gifts in each of the past 3 years

6. Made gifts in 2 of the past 3 years

7. Made a gift in 1 of the past 3 years

8. Made a gift at any point in the past

9. Unpaid pledges from last year

10. Never made a gift before

Start by writing down the total population in each of these segments. Then write down number of people in each group when you exclude people in any group above it (called mutually exclusive counts.) This will help you allocate your resources and track your segment penetration rates. Be sure that each segment has a customized script that speaks to the unique way each supported your organization in the past.

The Annual Giving Exchange is a forum where annual giving professionals share ideas and network.  Join today!