Setting Annual Fund Goals

When your Annual Fund Board chair shares his glee over staying up until 3am developing a regression analysis to help your Goals Committee set the Annual Fund goals, you know you are at MIT. Fortunately, there is also basic math to help you figure out your fiscal year goals.

In this example, we’ll set goals for FY19.

Retention: # of FY18 donors who also gave in FY17/# of FY17 donors = FY18 retention rate. Multiply your retention rate by your FY18 total donor count and you’ll know how many donors you can expect to retain in FY19.

Reactivation: # of donors who gave in any of the past five fiscal years except FY17/# of FY17 donors = FY18 reactivation rate. Multiply your reactivation rate by the total of your FY18 donors to calculate the number of donors you can expect to reactivate in FY19.

Acquisition: How many were new donors in FY18? # of new donors in FY18/# of FY18 donors = acquisition rate. Multiply your acquisition rate by your total FY18 donors to calculate the number you can expect to acquire in FY19.

Add together your expected retained, reactivated and new donors to calculate your total projected donor goal.

NOTE on ADJUSTMENTS: If you look at the data for three or four years in a row, you will see your trends and know if you should expect to retain, reactivate or acquire more or less donors this year. If your percentage rates have been going up steadily, apply a higher percentage. If the percentages have been in decline and you don’t plan to do anything different, apply a slightly lower percentage.

For help with your data and annual giving needs and strategy, contact me. Theresa@TJLPartners.com 508-523-3893

Measuring Annual Giving Success

While interviewing for my first fundraising position at MIT, I was asked, “How do you feel about numbers?” I chuckled and thought to myself, ‘One, two, three, four, five. I feel good.” The truth is that I had no idea what my interviewer really meant by that question, but I soon found out. She was talking about data and data analysis. How did I feel about working with numbers? What was my level of competency? Thank goodness for that required statistics class in grad school!

In the early ‘90s, the data we collected, tracked and analyzed was basic, especially compared to today. Starting my fundraising career at MIT was a piece of luck because, of course, it’s all about the math! I remember the annual giving director leading meetings devoted to reviewing results and trends he noticed in the reports – where we were up or down as compared to this time last year? When I became a director, I did the same with my staff. I knew that at least one person was listening (perhaps a future annual giving director), even if I was boring everyone else. At MIT, I was definitely listening.

When I was asked recently how to measure annual giving success, the data analytics gears began to turn. Despite my subsequent revelation that all fundraising success is measured by the impact on the people the funds support, there are numbers we should track to measure our results.

In annual giving, here is what you should be measuring on a basic level.  

·        How many total donors? How many as compared to this time last year and/or over the past four years? How many donors at each giving level?

·        How many dollars? How many dollars as compared to this time last year and/or the past four years? How many dollars at each giving level?

·        % Participation = of undergraduate donors/# of solicitable donors x 100

·        Sources of gifts: how many donors have given through each solicitation channel including mail, phone, email, online (through your website), social media, face-to-face?

·        Return on investment for each marketing channel: How much do you spend on each channel and how many dollars and donors come in through each?

·        How many are new donors, reacquired lapsed donors, and renewed donors? In other words, how many have we acquired, reactivated or renewed year to date and as compared with prior years?

In the next part of this series on Annual Giving and Data, we will discuss how to set annual fund goals.

For help with your data and annual giving needs, reach out. Theresa@TJLPartners.com 508-523-3893

RECRUITING AND SOLICITING YOUR NON-PROFIT BOARD

Working with boards can be an exhilarating experience. Learning from and working with the best talent from your community can elevate your non-profit to new heights. And yet we hear stories about people struggling to work with boards, including ineffective or absent board members.  How can you recruit effective board members, set clear expectations, and solicit their philanthropic commitment? My experience comes from both serving on and managing effective non-profit boards.

Assessment and Recruitment

Before you begin your recruitment process, it’s important to develop criteria or needs for your board. Are you looking for board members with financial expertise, leadership and management experience, or philanthropists? Look for both short-term and long-term needs, understanding that some board members will stay longer than one term. What is your succession plan for key positions on the board?

Potential board members can be sourced in several ways including referrals from effective current or former board members; referrals from staff or non-board volunteers; a review of current donors and volunteers; and from corporate sponsors or businesses that align with your mission. It’s important to vet your list by gathering as much information as you can about each person.

How to Recruit Effectively

Once you have your list and you have gathered information about your board prospects, it’s time to begin to cultivate your volunteers. For some organizations there is a particular timeline for recruitment, but you should always be cultivating potential volunteers.

Meet with prospective board members in-person or by phone to learn more about their work, their volunteer experience, and their connection to and knowledge of your non-profit. Share with them the compelling work of your organization, the impact it’s having on people, why your work is important and urgent, and why you need this person to join your cause. What is it about him or her that serves a need for your non-profit? How can they make an impact?

Don’t rush this process to meet an artificial timeline. Much like cultivating donors, the process matters to both your non-profit and your board member.

Setting Expectations

When recruiting new board members, it’s so important to set expectations. Early in my career I recruited volunteers successfully – 90% said yes! The reason for my impressive record is that I told them they could do as little or as much as they wanted. Wrong. Don’t be afraid to set expectations, to share a volunteer position description and to ask for what you need. I guarantee you that your best board members will be impressed with your professionalism, thoroughness and the fairness of setting expectations for all. Having no clear expectations leads to confusion and resentment when some board members give their time, talent and treasure and others do not. More than likely, those who don’t know what is expected of them will either disengage or create their own path. Board members want their wisdom and work to be meaningful.

How to Solicit Your Board

How many of us struggle to get 100% philanthropic participation from our boards? It’s a nice concept, but unless you are willing to put in the work, don’t expect it to happen just because you wish it or your board chair states it in the first meeting.

Here’s how you get 100% participation:

1)     When recruiting new members, set the expectation for giving. Let them know you will be having a conversation about their philanthropy and that they should begin to consider what they would like to do philanthropically for the organization.

2)      Set up a conversation with each member one-on-one. Bring the board chair or fly solo, whatever works best for you. If it’s the board chair, ask him or her to share their own story about why they give and to talk about the impact of the non-profit on people’s lives.

3)     When soliciting current board members, have a conversation at least every year, if not more often, about their philanthropy. Philanthropy is very personal so give it the quality time it needs with each board member. Even if they are in a multi-year pledge, set the time aside to discuss their giving. Why? Thank them and tell them how their giving is impacting your organization. Ask for their feedback. Circumstances change all of the time so opening the line of discussion about their commitment can produce lovely outcomes.

4)     When soliciting long-serving board members who have not yet given, prepare for and work to overcome any objections. Share with them that the amount is not what’s important, it’s the participation. Remind them that non-profits need both their time and their money. Make the expectations for board service as clear for them as any new board member. Ask questions about their perception of your organization or how they feel about the impact the non-profit is having on people’s lives. Ask how they would like to make a positive impact through their philanthropy. Ask their advice about how to get to 100% participation from the board. Let them help you solve this problem.

Time and treasure, when given through love and with joy can have a wonderful impact on both the donor and the recipients.

Theresa Lee currently serves as a proud member of the University of Maine Alumni Association and is CEO of TJL Partners, a consultancy serving non-profits.

MEMBERSHIP + GIFT = THRIVING NON-PROFIT

Non-profits who rely on memberships are often challenged to convert those members into donors. The conventional wisdom is that members derive a benefit while donors do not. Organizations are reluctant to ask members to give believing members won’t give without a direct benefit.

When stewardship is done well by telling your story, donors receive the greatest benefit – supporting the cause they care about and seeing it thrive. If donors are shown how their gift is impacting the organization, they will understand the value of giving.  

So why not approach members with the same value proposition? Make a gift to keep the cause you love thriving and growing so your membership will ultimately hold the greatest value. All of your members have a connection to your organization and some of your members are philanthropic. There is a way to know who among your membership is philanthropically-minded. You can learn about your members by tracking their activities – how long they’ve been members, how often they are visiting, and what events they attend. Your data, along with third-party data can be analyzed to help you understand who among your members will make the most likely donors.

Need help focusing on which members to approach? Data analysis can help you target members who share similar characteristics to your donors. You can begin to convert members to donors. You can improve your fundraising while better understanding your membership base.

Raising Dollars AND Donors

It’s June which means the fiscal year deadline looms for Advancement colleagues trying to reach donor and dollar goals. For 25 years I worked in annual and major giving, toggling between the urgency of getting a gift THIS YEAR and understanding the need to take one’s time to cultivate a relationship that nurtured a major donor’s interest in making an impact on the university.

At one college, a major gift did not count as an annual gift and donors were required to make an additional unrestricted gift to be counted as a participant. At another university, a major gift counted toward participation in the Annual Fund, no matter the amount or designation.

I’ve participated in a rebranding exercise to rename unrestricted – it turns out the donors were literal and understood that unrestricted meant, well, unrestricted. What they didn’t understand was the need, the urgency or the impact of making an unrestricted gift. Marketing and communications addressed that and giving to “unrestricted” went up once the case was made and the impact shared, but participation continued to go down.

The decline in participation maps against the change in the economic disparity in America – the top 1% of American households own 40% of the wealth, more than the bottom 90% combined. According to Giving USA, the impact on fundraising is that fewer people are giving, but those who do give are giving much more. In 2017, donors gave $410.02 billion dollars to charitable causes and 70% of those dollars were given by individuals.

So how do we address declining participation while finding those wealthy donors who can make an impact on the dollars raised? This should not be an “either/or” decision, rather a “yes/and” solution. The first step is data analysis to understand your trends – who are you retaining and who are you losing? Where is the wealth for your organization? Who is inclined to give? Knowing more about which constituents to target and how to communicate the impact of giving to your organization allows you to use your precious resources wisely. Strategic and intentional fundraising can help raise dollars AND donors.

Why and How to Thank Donors

When your non-profit solicited gifts – whether by mail, email, phone or in person – you no doubt talked about the impact that the donors would have on your cause and the donors responded with support. What a thrill for you to get gifts! The donors felt just as good as you did because they knew they helped a worthy cause. So how do we keep that good feeling going?

We say thank you.

That may seem very straightforward, but non-profits struggle with how to do this effectively.

Nine principles of good stewardship.

1.      Always start with a strategic plan – stewardship should not be reactionary.

2.      Acknowledge the receipt of the gift as soon as possible.

3.      Personalize the thank you, no matter the size of the gift.  

4.      Involve the beneficiaries of the gifts by sharing their stories.

5.      Celebrate loyal donors.

6.      Engage and cultivate your donors.

7.      Demonstrate the impact of giving.

8.      Measure the outcomes of stewardship through data analysis.

9.      Words matter.

Ten practical ideas to thank donors.

1.      Collect hand-written notes from students, faculty, board members and staff and mail them to first-time donors, long-loyal donors, and annual leadership donors.

2.      Ask the beneficiaries of the philanthropy to write about the impact of the giving on their research, education, or the help it provided and send those notes via email each quarter to all donors.

3.      Use ribbons on event name badges to honor loyal and leadership donors. Ask your event speaker to recognize leadership and loyal donors at ALL events and have preferred seating for your most loyal donors.

4.      Ask everyone on the fundraising team to steward gifts. Your gift processor could write thank you notes for unrestricted gifts or to reactivated donors because they are often the first to see that the long-lapsed donors have come back. 

5.      Use social media to promote fun prize-package give-a-ways to loyal donors. 

6.      Ask leadership donors to host thank you events at their home, club or other interesting venue. Access to interesting locations always draws a crowd.

7.      Recognize corporate sponsors at events and in the text of the follow up thank you to attendees.

8.      Always send a report summarizing the results of the fundraising year and talk about IMPACT.

9.   Send short thank you videos from beneficiaries of the philanthropy.

10.   Send pictures of people that demonstrate the impact of the giving.

Stewardship should be timely, personal, genuine and engaging.

Special thanks to TJL Partners Affiliate Beth McGonagle for her contributions to these stewardship ideas and principles!

How Do You Know How Much to Ask a Donor For?

While presenting at a recent CASE Conference, a member of the audience asked, “How do you know how much to ask a donor for?” I felt the collective movement as the audience of major gift fundraisers leaned forward, eager for the simple answer. What was the mathematical equation we could all rely on?

The panelists each delivered that seemingly frustrating and vague answer, “It depends.” And they were right.

Asking a donor for a major gift is a big deal even for the very experienced fundraisers among us. It is not, nor should it ever be, routine. One should have done a lot of work evaluating, listening, relationship building, cultivating, and educating before asking. What are some of the ways you can position yourself as a fundraiser to make the right ask?

·        Evaluation of data: What do you know about the prospect in terms of biographical information that would be an indication of wealth or better yet, liquidity? What does your data tell you about your prospect’s inclination to give? Is there a good record of past giving, attendance at events, volunteering, or engagement with social media with your institution? Is this data captured on the prospect’s record?

·        Cultivation and Relationship Building: How have you established a relationship with your donor? If you are asking the right set of questions, you should know about her passions, her philanthropic interests, and many other details about her connection to your mission and philanthropy. How much of her total philanthropic spending is your institution receiving, if any?

·        Impact: The most important question you can ask your potential donor – one that will lead you and the donor to the answer of “How much should you should ask for” – is “What kind of an impact would you like to make?” This moves the conversation from a dollar amount to an idea, and often results in the donor giving more than what you planned to ask her for.

For example, you may have learned through research that the donor has the capacity to make a $50,000 gift. When asked about impact, the donor reveals that she would like to fully fund a scholarship, an amount much higher than $50K. Now you can have a conversation about how to fund a full scholarship instead of asking for an amount that you predetermined. Even if the donor does not have the capacity now to fund a full scholarship, you can work with her over time and creatively help her to realize her dream.

Always understand what kind of impact your donor would like to make before making the ask.

Is Your Non-Profit Data Deprived?

In the information age, you are at a data disadvantage if you aren’t paying attention to the precious resource of your database.

Regularly refreshing and enriching your data can lead you to new donors and a better understanding of your current donors. When you make investments in data, the knowledge it gives you will provide guidance about using your resources strategically to target the right set of constituents for engagement and fundraising.

You are practicing data avoidance if you aren’t monitoring data on a regular basis.

Understanding what kinds of reports to ask your database administrator for is the key to success. Do you have a set of key metrics to set goals and regularly monitor progress? Suggestions for donor analysis include a look at detailed donor retention, a detailed weekly donor and dollar report tracking against the last few fiscal years, an appeal tracking report which will help you understand the sources of your gifts, and an individual major gifts report which will help you with timely stewardship.

Don’t get stuck in data immobility.

If you are able to pull data for analysis, how good is your team at finding patterns and making strategic decisions? Training your team to understand reports and analysis, even on a basic level, will go a long way toward making strategic decisions and tactical plans. Use your data to segment and customize your communications, outreach, solicitations and stewardship. In a data-driven world, non-profits have to stay current by maintaining good data, analyzing it regularly, and taking action on the findings.

3 Mistakes Even Smart Fundraising Teams Make that Keep Them Worried About Declining Donors and Dollars

·        Taking Donors for Granted

o   You expect donors to always be there and give even when you do not show that you are grateful.

o   Imagine sitting at your kitchen table writing out a check for $50, $100 or $1,000, sealing the envelope, putting a stamp on it and sending it back to your favorite charity. You feel really good about your gift. A few days and then a week goes by and you haven’t received anything back from the charity. Another week goes by and you finally receive the long awaited thank you note in the mail and it’s…wait for it…a tax receipt. It’s useful, but it doesn’t match the joy you felt when you made the gift. Or you receive a thank you, but it doesn’t take into account that this is your first gift, your largest gift, or even where you designated your gift.  

o   What if you received a thank you call when the charity received your gift and the person who called you noted that this was your first, largest or second gift of the year? Or what if the thank you call was from a student or a recipient of the funds and they let you know what a difference your gift made in their lives?

·        Not Sharing the Impact of the Giving

o   You don’t regularly share the financial and social impact of the donor’s gift on the organization and people. What has happened as a result of the gift? Who does your non-profit serve?

o   You have so many great stories about the funds you raise and what those gifts are doing for your organization. Share stories with donors in a consistent and captivating way. For example, a psychology professor is doing research on Alzheimer’s and dementia. She sends a first-person story via email about breakthroughs in her research in a clear and compelling way. We can all relate to having aging relatives or know family and friends suffering from Alzheimer’s and we want to know researchers are making progress.

o   Use video (check out ThankView) to send a direct thank you message from a student who is an athlete, honors student and who has had several interesting internships. Help her share how grateful she is for the donors’ generous support.

·        Not Focusing on the Persuadable Donor

o   You have your loyal donors – people who give to you no matter what. You have people who will never give. And then there are the persuadable donors.

o   Persuadable donors are those that behave like loyal donors in other ways, but who are not giving. You can use predictive modeling to learn who they are. And then you can ask them in the right way, at the right time, with the right person for the right cause.

o   First analyze and understand who your donors are and then match those characteristics to those who have not yet given. If you aren’t using your data to help you focus on the persuadable donor, you are missing opportunities to gain donors and dollars.