Finance, Fundraising and Technology: Beyond the Bottom Line

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  • 1. Alzheimer’s Association Finance Directors Meeting April 5, 2003 - Dave Harkins VP, Director of Strategic Services The Jackson Group Finance, Fundraising and Technology: Beyond the Bottom Line
  • 2. What We’ll Cover
    • Overview of philanthropic giving in the U.S. and how it has evolved
    • How it will impact what you do
    • Focus on Finance
      • Best Practices for Finance leadership
        • It’s more than just the numbers!
  • 3. Charitable Giving 2001 Contributions $212.00 billion by contribution source Source: AAFRC Trust for Philanthropy/Giving USA 2002
  • 4. Charitable Giving 2001 Contributions $212.00 billion by recipient type Source: AAFRC Trust for Philanthropy/Giving USA 2002
  • 5. Charitable Giving Total Giving 1971 - 2001 Source: AAFRC Trust for Philanthropy/Giving USA 2002 $ in Billions Inflation-Adjusted Dollars Current Dollars * Recessions in purple: 1973-1975; 1980; 1981-1982; 1990-1991; 2001
  • 6. Charitable Giving Individual Giving and Personal Income Adjusted for inflation Source: AAFRC Trust for Philanthropy/Giving USA 2002
  • 7. Charitable Giving Individual Giving and the Stock Market Adjusted for inflation Source: AAFRC Trust for Philanthropy/Giving USA 2002
  • 8. Charitable Giving Wealthiest 20% of Americans contribute 67% of all philanthropy Total individual giving Source: “Trends in wealth and Philanthropy”, Boston College Social Welfare Research Group Formula applied from 1999 giving to 2001 giving.
  • 9. Charitable Giving Individual Giving As a percentage of personal income 1990 – 2002 Source: AAFRC Trust for Philanthropy/Giving USA 2002 1.9% 1.8% 1.8% 1.8% 1.7% 1.6% 1.8%
  • 10. Charitable Giving Growth in 501(c)(3) organizations 1991-2001 Source: AAFRC Trust for Philanthropy/Giving USA 2002
  • 11. Charitable Giving
    • Giving behavior is not changing
    • Our generosity as a nation is driven by our resources as a nation
    • Competition for donations is growing
  • 12. Beyond The Numbers
    • The contributor “pie” is about the same
      • Contributions will tend to be “shifted” from one area to another
    • Individuals have more causes to which to contribute
      • Causes are becoming more and more individualistic
      • Some level of consumerism will appear
        • “ What have you done lately” syndrome
        • Clarity in purpose is needed
          • Not just at the national level, but at the local level
      • Aside from research dollars, donors may want to see more dollars allocated for local efforts
    • There is a movement of financial firms into philanthropy
    • Increased importance of professional advisors
  • 13. What Others Are Finding…
    • Operating model has to change
      • How do we engage and manage multiple constituents across multiple channels?
        • Must agree on the primary “customer” (Donor, Foundations/Corporations, Chapters, Recipients, etc.)
    • Organization and governance as to be evaluated
      • Are we working as a team to solve key “business” challenges
      • Are we structured properly to execute efficiently?
      • How do we make decisions as a “system” to show a unified front to various constituents?
      • How do we define success?
        • Revenue generation
        • Maximizing use funds raised
        • Creating higher level of impact for the cause
  • 14. What Others Are Finding…
    • Demand for “localized” accountability for chapters as individuals request more of their contributions stay “at home” for local programs
    • Increased need to better educate donors on local vs. “Association” contribution
    • Requirement to better understand the needs, values and expectations of donors
      • Will impact systems and technology
      • Direct Marketing/Fundraising
  • 15. Focus on Finance Finance’s role in leading the organization through change… It’s not just about the bottom line.
  • 16. Best Practices – Finance Leaders
    • Business Leadership
      • Approach everything from the “business perspective”
        • Pragmatic about execution of programs, plans and initiatives
        • Asks the difficult ‘show me’ questions
          • “ Can we realistically expect that many new donors…?”
          • “ I don’t see how the users of this system will gain the value anticipated…”
          • “ Have we really had enough time to prove the value of... that fundraising offer, that data, or that screen design”
      • General Planning
        • Provides guidance and direction on programs, marketing and technology investments
        • Helps determine the actual costs of programs, as well as fundraising campaigns
          • Goes beyond basic math…really gets to the heart of the real cost, no matter how difficult
  • 17. Best Practices – Finance Leaders
    • Budget Leadership
      • Key process – “Top down” approach
        • Provides base data and assumptions to “departments”
          • Built on program needs, admin costs, projected growth in other costs
        • Conservatively estimates revenue growth based on input from fundraising and other sources
      • Finance sets the published figure for revenue
        • Usually far more conservative than Fundraising’s
          • Fundraising folks will still try to meet their target (wo-hoo!)
        • Generally assumes costs for fundraising and technology are accurate as provided
  • 18. Best Practices
    • Compliance Management and Support
      • Keep the organization honest about the numbers
      • Help the organization understand and meet guidelines (CBBB Standards/BBB Wise Giving Alliance)
        • Particularly important for those marketers/fundraisers to understand!
  • 19. Best Practices
    • Reporting and Analysis
      • Forecasting
        • Revenue
        • Cost
      • “ True Cost” of programs and/or campaigns
      • Donor Value
        • Cost of acquisition
        • Long-term value of a donor
  • 20. Questions?
  • 21. Thank You! Dave Harkins VP, Director of Strategic Services The Jackson Group [email_address] Direct: 630.820.2087 5804 Churchman By-Pass | Indianapolis, IN 46203 | 1-888-Jackson | www.jacksongroup.com