The Annual Giving Exchange

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.