The Annual Giving Exchange

Has your phonathon reached its limit?

If your prospective donor population always looks too large and your resources always seem to be too few, then the answer is probably no.  Don’t worry, you’re not alone.  The good news is that your phonathon has room to grow and probably deserves a greater investment of your time and budget.

But if you’re generating similar donor and dollar numbers year after year, or if you’re attempting the same prospect ten times without an answer, then your program may be saturated.

Endless growth is not a realistic expectation for a phonathon program.  If you think your program has reached its capacity, it might be a good time to refocus on quality instead of quantity.  Rather than making more calls, look for ways to make better calls.

Refine your staff recruiting systems, improve caller training, and concentrate on segments which are more likely to have positive returns.  Use callers to thank donors for recent gifts.  Conduct surveys.  Not all of these tactics will have immediate financial returns, but they may be the best way to advance the overall relationship with your donors if your phonathon program has reached its limit.

Willie Sutton was an infamous American bank robber born at the turn of the century.  He stole millions of dollars and spent over half of his adult life in prison.  Urban legend has it that when Sutton was asked by a newspaper reporter why he robbed banks, he answered, “because that’s where the money is.”

Skeptics of social media should take note.  Today, social media websites like Facebook, LinkedIn, and Twitter have over 700 million unique visitors.  Over 60% of Americans say they have recently visited a social networking site.  If Facebook were a country, it would be the eighth most populated country in the world.

The biggest difference between traditional annual fundraising (direct mail, phonathons) and social media fundraising is that donors are more empowered.  Choosing which people and organizations are important to them, donors come to you using social media platforms.  It’s the same reason why annual funds are seeing restricted donations outgrow unrestricted gifts.

The goal of a fundraiser should be to create opportunities for donors to make gifts in ways that are convenient for them.  As the proliferation of social media continues across all age groups, we need to be exploring ways to use it to engage our donors.  Why?  Because that’s where they are.

Walter Cronkite, who died the other day at the age of 92, was truly an icon.  I watched the media coverage of his life with curiosity.  On one hand, it’s interesting to watch a community (in this case, the media) honor their own.  But I was also struck by what “Uncle Walter” represented to an entire generation.  Referred to as “the most trusted man in America,” Walter Cronkite embodied something that many would argue has been lost in today’s media – trust.

Trust can be a nonprofit organization’s most valued asset.  But it’s fragile.  Trust has no recipe.  When it’s damaged, it’s nearly impossible to repair.

Trust isn’t guaranteed simply because you are a nonprofit organization.  It needs to be earned by providing the community with a benefit that the government or market can not.

Trust isn’t lost simply because you have a $10 billion endowment.  It’s lost when you don’t explain to your entire community how an endowment works and what long-term benefits it can provide.

Trust isn’t broken simply because you charge $40k for tuition, a procedure, or an experience.  It’s broken because you don’t return something worth more than that to those who paid the bill.

Trust isn’t destroyed simply by asking for money.  It’s destroyed by not explaining why you need private support, by not investing donations wisely, by not showing your community the impact of philanthropy, and by not saying thank you.

What are you doing to build trust in your organization?

Communities are built on relationships.  Nonprofits typically understand this and know that philanthropy can be a barometer to help them measure the strength of their relationships and the sustainability of their communities.

This is why asking for money should be simple.  Like harvesting a crop after years of cultivating soil and planting seeds in the right season, a gift solicitation should be thought of as one stage in a long-term relationship with a donor.  This cycle starts with identification and evolves through engagement, understanding, solicitation, and stewardship.  No one stage of the cycle is any more important than another.

Annual giving has a cycle too, one that exists in perpetuity.  Reed College in Portland, Oregon does a nice job of reminding its donors about this cycle.  Click here to see the token of appreciation they sent to more than 5,600 alumni, parents, and friends who made a gift in FY09.  Shared through a link contained in an e-mail, this simple and inexpensive gift not only tells donors that their support is appreciated but reminds them that one annual fund cycle has closed and a new one has begun.

Czar (noun) – any person exercising great authority or power in a particular field.

Organizations in crisis often resemble organizations faced with rapid innovation.  In both scenarios there is no playbook, and success usually depends on two factors: flexibility and leadership.  The willingness to adjust organizational ideals, priorities, and resources is just as important as the ability to identify, empower, and follow good people.

The emergence of social media in fundraising has created great excitement, but the current recession has added a unique challenge.  Hiring freezes and budget constraints have forced many development programs to rethink how they might otherwise approach the many new opportunities presented by social media.  If you don’t currently have the resources to hire new staff to respond to and manage these opportunities, then consider appointing a current member of your team to serve as your social media czar.

Ideally, your czar should be someone who is curious about social media, but also understands the traditional operations of an annual giving program.  They should spend time each week talking with peer programs and reading publications and blogs, and should attend conferences and webinars when possible.  They should create a list of ways that your organization is (or could be) using Facebook, Linked-in, and Twitter to enhance your donor community, and they should share their findings and recommendations with others on your team.

One of the biggest challenges in fundraising is acquiring new donors.  To do so, we develop creative direct mail packages and flashy e-mails, make countless phone calls, build predictive models, and design complex segmentation schemes.  We spend hours planning and often invest more money than we expect to get in return, at least initially.

But what happens when we’re successful at converting a prospect into donor?  We send them a thank you letter, maybe a thank you e-mail, too.  Perhaps we add them to our magazine or newsletter mailing list.  Then, next year, we code them as a LYBUNT (last year but unfortunately not this year) so that we don’t forget to solicit them again.

The days and weeks following a donor’s first gift are critically important to their relationship with your organization.  Promptly acknowledging gifts is always important, but when someone makes their first gift, it’s often their way of making a statement.  It could be their way of asking for your attention or their way of testing how well you’ll steward future gifts.  More than likely, though, it’s their way of joining a community, of becoming part of something larger than themselves.

So seize the moment and celebrate new donors.  Make sure your annual fund program has a special way (or ways) to welcome new donors into your community.  Start by customizing your thank you letters and e-mails to acknowledge first-time gifts.  Consider sending them a welcome package with small, inexpensive tokens of your appreciation such as a calendar, bookmark, or magnet.  Or ask your volunteers to reach out to them with a phone call.  Better yet, ask your new donors if they’d like to volunteer.

Then, next year, don’t look at them as a LYBUNT.  Instead look at them as an FTD – a first time donor.

1. Write a list of last year’s successes and failures.
2. Create a mission statement for your Annual Fund.
3. Send handwritten thank you notes to anyone who made their “first gift” last year.  If that’s more than a few, recruit the help of volunteers, students or colleagues.
4. Call on three peer programs to compare last year’s results and exchange one big idea.
5. Create a Twitter page for your organization.  If it already has one, post a tweet to celebrate the beginning of a new year.
6. Reallocate 10% of your direct mail budget to social media.  If you don’t know how to spend it, use it to hire a consultant.
7. Estimate the return on investment of your annual giving program (ROI = dollars raised – expenses) and compare it to that of your overall advancement program.
8. Conduct a donor survey.
9. Thank all of your colleagues for their help last year.
10. Join The Annual Giving Exchange – http://agexchange.net