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Business Overview:

  1. 1. Business Area Analysis for The Philharmonic Orchestra Date: September 2, 1999 Introduction: The purpose of this document is to capture the results of the analysis of a business area. This information is a critical prerequisite to the establishment of a strategy for a business area that defines requirements and articulates the means for implementing a business solution that meets those requirements. The Business Area Analysis Document consists of the following sections: • Business Overview • Project Definition • Objectives • Context • Process • Data/Subject Areas • Terminology Location: Mervis Hall, Room 101 Participants: Name Department Role The Schnorrs Page 1 of 12
  2. 2. Business Overview: The annual campaign division of Development Department of the Philharmonic Orchestra is responsible for raising all of the funds to support the orchestra. This department raises approximately $10 million a year to support the operations and education units of the Philharmonic. There are thirteen staff members who work on the annual campaign in the following business areas: Annual Gifts: This area is responsible for the telemarketing and mailing solicitations, as well as the "Patrons of the Philharmonic" program. This division consists of five staff members, including the Philharmonic's database team, and raises approximately $1.5 million annually. Major Gifts: Major gifts is responsible for all individual donations over $10,000. There is one staff member who solicits these individuals and is their Philharmonic contact who helps them with ticket requests and any other special needs. This area raises approximately $2 million annually. Corporate Sponsors: There are currently 25 corporations who sponsor the Philharmonic Orchestra. The typical sponsorship package is between $250,000-$500,000. This division consists of two staff members and raises $4 million annually. Special Events: The Philharmonic holds two Galas annually. 700-1200 patrons pay between $500- $2,500 per ticket for each event and in return get to attend a star-studded concert, followed by dinner and dancing. This sub-division consists of two staff members and the events currently net $1 million after expenses. Special events is the area that attracts the most attention for the Philharmonic due to celebrity and media attendance. Grants: There is one staff member in the grant division who is responsible for applying for all government and foundation grants. The money raised from this division solely supports the education department of the Philharmonic. The grants currently raise $1 million annually. The problem currently facing this organization is the sudden resignation of the Philharmonic's Executive Director last month. The director was involved with every aspect of the organization and there were no formal organizational processes set in place. This lack of standardized processes has left many projects at a "standstill" because the staff members do not know where to pick up where the director left off. As a result, it has become the goal of the development department to regiment their processes in order to improve their efficiency and productivity. The Schnorrs Page 2 of 12
  3. 3. For the purpose of this document, we are concentrating on the Annual and Major gifts business area because it was the most affected by the Executive Director's departure. Annual and Major Gifts As stated before, this area is responsible for telemarketing and mailing solicitations for the Development Department, as well as the "Patrons of the Philharmonic" program. The telemarketing and direct mail programs target current subscribers and members of the community not actively participating in Philharmonic events. The latter party consists of people throughout the city who fit the organization's desired demographic (i.e., upper-middle to upper class and located within 50 miles of the concert hall). The "Patrons of the Philharmonic" is a program comprised of current donors. The program has many donation levels and furnishes donor rewards, such as allowing the patron to attend orchestra rehearsals and lunch with various guest artists to thank them for their donations. The staff in this business area is very busy running the aforementioned programs. They are often busy with the tedious details involved in the individual program operations and processes. Oftentimes these antiquated processes prohibit the group from concentrating on the core mission of this office--to raise money to support the Philharmonic. The following are the major processes that the Annual and Major Gifts area are involved in: 1. Gift-recording process: Each time a monetary gift is received by the Philharmonic, it is first manually recorded in a gift log. This gift log is a paper notebook that is maintained by the database assistant. After the assistant records the gift, the check is copied and distributed to the database coordinator, database manager, annual gifts manager and major gifts manager. The gift is then hand-delivered to the accounting department for deposit in the Philharmonic's bank account. A hard copy of the check is then manually placed in the donor's file. The database coordinator and manager then record the gift into the donor database (Raisers Edge, a Microsoft Access®-based application) and distribute copies of the gift report to the members of the development department. This process is very paper oriented. Before the Executive director left, he considered the option of making the development department a paperless office. 2. Mail solicitation process: Bi-annually, a 600,000-piece mailing is sent to current Philharmonic subscribers, donors and individuals within the desired demographic. The majority of these names are purchased from local mailing houses. The purpose of these mailings is to raise money and awareness for the organization. Over the past three years, these mailings have attained a "bad address" return-rate of approximately 5%. This high return-rate was primarily due to poor database management. Due to severe time constraints on this staff, the Annual and Major Gifts area is not able to maintain and update its donor The Schnorrs Page 3 of 12
  4. 4. database on a regular basis. This group has been primarily occupied with the processing of monetary gifts. These direct mail initiatives have resulted in an overall response rate of approximately 1% or less. The monetary return from the mailing, which equated to roughly $50,000, was often less than the cost of producing and executing the mailing. 3. Telephone solicitation process Two years ago, the annual gift department hired a telemarketing manager to develop a telemarketing campaign. The same 600,000 individuals who received mailings were called and asked to make a tax deductible donation to the Philharmonic. Due to poor results, the organization decided to outsource this process to a professional telemarketing firm. Last year the company had limited success with its telephone effort, partially due to bad phone numbers. A large part of this was the adverse data from Raisers Edge, the Philharmonic's internally managed database. Assumptions: • When this document refers to ticket sales, please understand that the development department does not actually sell and process the tickets. Once these tickets are sold by the subscription department, these patrons become prospective donors, therefore a development function. • There are two concert seasons, winter and summer, therefore leading to two separate direct mail and telemarketing campaigns. • The Philharmonic currently has 300,000 donors. Project Definition: Project Name: The development department of a major symphony orchestra. Mission: Improve the efficiency and productivity of the development department at a major symphony orchestra using standardized processes in order to evolve and grow the annual campaign division. Objectives: Business: • Improve efficiency by reducing staff time spent on the donation handling process by 75% • Expand name recognition and demographic reach 25% per year • Increase donations by 25% annually The Schnorrs Page 4 of 12
  5. 5. System: • Create a system that will allow department to remain abreast of project status and eliminate total reliance on a particular person(s). • Automate the database to handle solicitations, reminders, thank you's, etc. • Increase staff productivity & efficiency in soliciting new donors and increasing donation levels of existing donors • Automate donation handling process (receipt, paper trail, bank handling--checks online) • Outsource the direct mail process for soliciting bi-annual donations • Improve the quality of the department's database content Context: Agents Outside the Company: 1. Donor a) Inflows Donation Description: Monetary gift Media: Check or Credit Card Volume/frequency: 75 gifts per week Inquiries Description: Unsolicited Event Inquiries Media: Phone, Fax, Internet and E-mail Volume/frequency: 100 per week Donor Ticket Sales Description: Subscription and single ticket sales Media: Box Office, Internet, Phone and Fax Volume/frequency: Winter Season: 1,800 per week Summer Season: 12,000 per week Document Requests Description: Change in address, replacement tax-deduction forms, amount of donation change Media: Phone, E-mail, Fax and Mail Volume/frequency: 20 per week b) Outflows Donation Renewal Forms Description: Donation Renewal Forms Media: Paper - Mail Volume/frequency: Approximately 600,000 bi-annually (This includes names on purchased lists.) Thank you notes with tax-deduction receipts Description: Thank you notes and tax-deduction receipts Media: Paper - Mail Volume/frequency: Approximately 300,000 bi-annually The Schnorrs Page 5 of 12
  6. 6. Tickets Description: Concert and Special Events Tickets Media: Paper - Mail Volume/frequency: Winter Season: 1,800 per week Summer Season: 12,000 per week Subscription Brochure Description: Bi-annual subscription brochure and form Media: Paper - Mail Volume/frequency: 300,000 per year Inquiry Answers Description: Answers to unsolicited event inquiries Media: Telephone and e-mail Volume/frequency: 100 per week Invitations to Donor Events Description: Invitations to donor events as part of the Patrons of the Philharmonic program. Media: High quality paper - Mail Volume/frequency: Gala Invitations - 15,000 bi-annually Donor Event Invitations - 300-500 per event (roughly 6 events per year) Document Request Acknowledgement Description: Acknowledgement of the documents requested Media: Telephone, fax and mail Volume/frequency: 20 per week 2. Prospective Donors a) Inflows Subscription and single ticket sales Description: Subscription and single ticket sales Media: Box Office, Internet, Phone and Fax Volume/frequency: Winter Season: 3,600 per week Summer Season: 69,000 per week Inquiries Description: Unsolicited Inquiries Media: Phone, Fax, Internet and E-mail Volume/frequency: 200 per week b) Outflows Direct Mail Description: Donation request letters Media: Paper - Mail Volume/frequency: Approximately 600,000 bi-annually Telemarketing Description: Telemarketing calls Media: Phone Volume/frequency: Approximately 600,000 bi-annually The Schnorrs Page 6 of 12
  7. 7. Tickets Description: Concert Tickets Media: Paper - Mail Volume/frequency: Winter Season: 3,600 per week Summer Season: 69,000 per week Subscription Brochure Description: Bi-annual brochure and form Media: Paper - Mail Volume/frequency: 3.5 million per year (This list comes from the marketing and education departments, as well as the development department.) Inquiry Answers Description: Answers to unsolicited inquiries Media: Telephone and e-mail Volume/frequency: 200 per week 3. Telemarketing Firm a) Inflows Response Reports Description: Weekly response reports Media: Fax Volume/frequency: 1 report a week Bad Information Reports Description: Invalid address and phone numbers Media: E-mail Volume/frequency: Approximately 30,000 bi-annually Donation Report Description: Summary of all donations obtained Media: Fax Volume/frequency: 1 report per week b) Outflows Personal data for prospective donors Description: Names and Phone Numbers Media: Paper - Mail Volume/frequency: 1 report including 600,000 names and phone numbers per campaign Phone Script Description: Solicitation script Media: Email or hard copy via mail Volume/frequency: 1 script per campaign The Schnorrs Page 7 of 12
  8. 8. 4. Mailing House a) Inflows Mail Lists Description: Lists of names, addresses and phone numbers purchased from various companies Media: Electronic media - DAT tape, comma or tab delimited files on floppy Volume/frequency: Varies, quantity of names dictates what and how many lists are used b) Outflows Demographic Criteria Description: Criteria for names, addresses and phone numbers Media: Email or hard-copy via mail Volume/frequency: One instruction set prior to each campaign Agents Inside the Company 5. Marketing and Subscription Departments a) Inflows Subscription Brochures Description: Subscription Brochures for winter and summer seasons Media: Paper - Mail Volume/frequency: 300,000 Personal Data from Concert Patrons Description: Name, Phone Number and Address from concert patron Media: Interoffice Mail Volume/frequency: 80,000 per season b) Outflows Text for the subscription brochure Description: Text about donating to the Philharmonic which will appear in the subscription brochure Media: E-mail Volume/frequency: 1 per season 6. Development Database Staff a) Inflows Donor Database Description: Comprehensive database of donors and their history Media: Network Database - Raisers Edge Volume/frequency: 1 database Donor Monetary Confirmations Description: Hard copies of checks or credit card receipts Media: Paper Volume/frequency: 5 copies per donation The Schnorrs Page 8 of 12
  9. 9. Gift Detail Report Description: Daily report of all monetary donations Media: E-mail Volume/frequency: 1 report per day Mailing Labels Description: Mailing Labels for event invitations Media: Avery Dennison™ Mailing Labels Volume/frequency: 300-500 labels 6 times a year b) Outflows Database Updates Description: New names/changes to be added to the database Media: E-mail Volume/frequency: Varies Mailing Label Criteria Description: Invitation list criteria Media: E-mail Volume/frequency: 6 times per year Process: 1. Primary Business Function: Raise money to support the Philharmonic Orchestra 2. Events/Triggers: a) Inbound Events • Receive Donation • Receive Inquiry • Receive Document Request • Receive Telemarketing Reports • Receive Direct Mail List b) Outbound Events • Sell and Send Tickets • Send Donation Renewal Forms • Send Thank You Notes for Donations • Send Tax Deduction Receipts • Send Subscription Brochures c) Transactions • Gift Recording • Database Management for new and existing donors • Database Management for prospective donors resulting from ticket sales • Donor Events The Schnorrs Page 9 of 12
  10. 10. 3. Roles/Functions Director of Development function: Oversees the department function: Approves all fund-raising projects Deputy Director of Development function: Supervises the Annual Gift Manager, Major Gifts Manager and Database Manager function: Oversees the telemarketing and direct mail process Annual Gifts Manager function: Coordinates the two annual telemarketing campaigns function: Coordinates the two annual direct mail campaigns function: Coordinates the Patrons of the Philharmonic program Major Gifts Manager function: Liaison with donors who give more than $10,000 annually function: Coordinates the six donor events Database Manager function: Supervises Database Coordinator and Assistant function: Runs daily gift reports function: Coordinates with annual gift manager regarding telemarketing and direct mail lists Database Coordinator function: Records daily donations in Raisers Edge function: Updates the database records with new information function: Liaison to the subscription department function: Enters subscriber information into Raisers Edge function: Creates mailing labels for donor invitations Database Assistant function: Initiates gift recording process function: Opens all mail function: Records gifts in a hand-written log function: Copies and distributes checks to appropriate parties function: Delivers checks to accounting function: Delivers log to Database Coordinator Director of Marketing function: Oversees the development and production of the subscription brochures Director of Subscriptions and Ticket Sales function: Oversees the box office and all ticket sales function: Implements the ticket delivery process function: Generates ticket buyer data for the Database Coordinator in the Development Department Accounting Associate function: Processes check and credit card transactions with the bank. The Schnorrs Page 10 of 12
  11. 11. Data/Subject Areas: 1. Donor Information • Name • Address • Phone and Fax Number • E-mail • Donation History • Employment Information • Family Members • Subscriber/non-subscriber • Event Attendance • Referrals 2. Prospective Donor Information • Name • Address • Phone and Fax Number • E-mail • Donation History • Employment Information • Family Members • Date of inquiry 3. Monetary Transactions • Date of transaction • Donors personal information • Donation Amount • Geographic Area • New or existing donor • Subscriber or non-subscriber 4. Donation History • Name • Address • Phone and Fax • Email • Employment information • Contribution level • Events attendance • Last date of donation The Schnorrs Page 11 of 12
  12. 12. 5. Events • Name of event • Guest artist featured • Date • Location • Time • Number of donors invited • Donors giving level • Caterer • Number of attendees 6. Telemarketing Reports • Number of people called • Geographic Location of calls • Donation Amount Raised • Comments • Bad Information • Direct Mail • Responses 7. Direct Mail Campaigns • Date • List(s) used • Quantity mailed • Wrong address return rate • Response return rate • Date of response Terminology: Development Department - The department that is responsible for all the fundraising activities for the Philharmonic Subscriber - A patron who has season tickets to a Philharmonic concert series. The Schnorrs Page 12 of 12