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PMI - Donor First Program Case Study

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Presented to Project Management Institute, Hampton Roads Chapter, Feb 2011. This case study examines the Donor First program developed by Jann Schultz, examining donor touch-points, defining multiple …

Presented to Project Management Institute, Hampton Roads Chapter, Feb 2011. This case study examines the Donor First program developed by Jann Schultz, examining donor touch-points, defining multiple projects and designing a program to engage and retain more donors while delivering long term value.

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  • Presentation: Donor First Program Case StudyAuthor: Jann Schultz, Director of Donor RelationsVersion: February 2011, PMI Hampton Roads ChapterOverview: The objective of Donor Services is to nurture and build long lasting relationships with our constituents who financially support, volunteer and advocate for Operation Smile. From a business perspective, it is loyalty and long term value that drive increased revenue for the organization. This case study examines the “Donor First” program–examining donor touch-points, defining multiple projects and designing a program to engage and retain more donors while delivering LTV.Introduction: Jann SchultzDirector of Donor Relations at Operation Smile, Jann’s specialty is the design, training and implementation of donor-centric strategic programs. She has more than 13 years call center experience in the for profit sector implementing integrated marketing programs to build brand awareness and drive revenue. Drawing on her extensive knowledge of creating and facilitating delivery of consumer sales and service programs, Jann has led the development of a “Donor First Philosophy” at Operation Smile to build a robust donor loyalty and engagement strategy within the Direct Response Fundraising program. Jann is now focused on building “Donor First” programs with Operation Smile International Foundations and has helped launch direct response fundraising in Japan, Italy, Sweden and the UK.Jann: I have the privilege of working for Operation Smile as the Director of Donor Relations. My areas of responsibility include our Donor Relations Team, Donor Database & Gift Processing, Donor Care – a mid-level giving fundraising team and Global Direct Response Marketing. While I wear many hats – all these areas touch or interact with our donors.I look forward to sharing with you today how Operation Smile has designed and implemented a program called “Donor First.”
  • Let me introduce you to Operation Smile, founded by Dr. William and Mrs. Kathy Magee and based in Norfolk, Virginia.Now in our 29th year, Operation Smile has been providing free reconstructive surgery to children around the world - suffering from the physical and emotional distress, caused by cleft lips, cleft palates and other facial deformities.Since 1982, we have transformed the lives of over 160,000 children and have a presence in over 60 countries.This care is delivered by Volunteers – international medical professionals from over 76 countries – who come together and travel to areas around the world where this population is underserved.
  • For almost 20 years, the primary method of raising funds at Operation Smile was through a traditional Major Gift and Corporate Grant fundraising program. The use of Direct Response marketing was launched in early 2004 to acquire new donors and grow our revenue so we are able to help more children. We have been very successful in these efforts:our donor base has grown from 20,000 in 2003 to over 675,000 in 2010Number of patients treated by Operation Smile has grown from just over 6,000 in 2003 to over 16,000 in 2010However, with this growth the organization noticed a rising level of “background noise” from - donors, volunteers and advocates - coming from a variety of channels.The result was the need for a customer service program to assist our constituents, which we call Donor Services.As these were new opportunities for Operation Smile, new staff was brought on board to manage the program. A Senior VP with extensive experience in Direct Response Marketing was brought on board and I was recruited from the For Profit Sector as a member of the Direct Response Team, responsible for donor services. We recognized the opportunity to better serve our constituents and potentially increase revenue by applying best practices from our experience in the for profit world. We did this by initiating a project framed within the context of a new philosophy for the Organization - “Donor First.”
  • JANN: As the Director of Donor Relations, my objective is to effectively nurture and efficiently build long lasting relationships with our constituents who financially support, volunteer and advocate for Operation Smile. From a business perspective, it is loyalty and long term value that help drive increased revenue for the organization.It is through this lens - putting the Donor First - that we examined every touch-point of the donor from their perspective, defined multiple projects and implemented a program to enhance their experience, retain more donors and deliver LTV.
  • JANN: As the sponsor of the project, I began by reviewing both environmental factors and our organizations process assets.It helped being new to Operation Smile at the time – much of this was done as part of my on-boarding process – gathering documented information, reviewing the data, interviewing internal stakeholders as well as our external partners.As this was my first venture into the non-profit world, I conducted research and interviewed peers to identify benchmarks and metrics. One of the wonderful things I have found is that non-profits are amazingly open and willing to share information – this has been a huge benefit.I also identified and assembled my team – and being a non-profit, we are always working with limited staff and resources. So, what did I find?
  • JANN: These were just some of the challenges that were identified, that became defined activities within the project.I recognized many of them from my years in the for-profit community. It was just that they were simply expressed slightly differently.The Operation Smile culture is focused on delivery of our mission – transforming children’s lives. This is a very critical need when you are dealing with the 4th most common birth defect in the world. With attention focused on our mission, the organization lacked an integrated approach to retaining new and existing donors.We had haphazard processes in place that lacked efficiency and quality and didn’t consider the impact to the donor.Based on research & interviews, we identified that we were not meeting industry standards for timeliness of gift deposits, receipting and acknowledgements.Our third party vendors that we were contracted with were contributing to many of these challenges and adding to our issues based on quality of data and service.
  • JANN: In the second phase of our project, we conducted full internal and external reviews. (data gathering)We started with all the various touch points with our donors – from who answered the phone, to our acknowledgements, and more.Then we asked these questions: is this touch point effective in communicating with the donor? And do we have a method for capturing those communications and responses?We did an Internal Review of staffing, process and procedures to see how they fared when you consider the Donor First.We looked at the technology, the procedures and the quality of the data contained in the Donor Database.Staffing – we had to identify not only if we had enough staff to effectively focus on the donor - but did we have the RIGHT people, who understood our objectives and had the right skill set?Did they have the resources they needed to do their job? Were procedures in place to support the donor during problem resolution?It required unraveling convoluted legacy workflows - they have been around forever, and continue because it is “easy” for the organization, not necessarily what is best for the donor. And we conducted an external review of our Third Party VendorsDid we have the right partners? Were our Direct Response programs integrated across channels for consistency of communication to our donors? Were our vendors also putting the “Donor First” during phone interactions and specific tasks such as “time to acknowledge”?
  • JANN: During the data gathering process, we recognized that our donor database was the common denominator across all touch points - which led us to concentrate on the database as our first initiative.Some examples of what wasn’t working well…Our database “team” consisted of one personThe database was under utilized by fundraising staffMultiple information silo’s weren’t connected to the databaseData entry wasn’t standardized and there was a lack of a quality assurance processAnd our gift processing vendor provided data that was incompatible with Postal Service standards - the data required extensive manipulation prior to importIt became clear that if we could address these issues, the database would be our most important support mechanism for our Donor First Project.So a Database Quality Initiative was launched. This means we have a central location for capturing high quality information from all our touch points and communication channels – and as a result - the ability to listen and respond to our donor, building engagement and loyalty.
  • JANN: During the next phase of the project, we executed improvements in areas that touch the donors.Our primary acquisition channel is DRTV. For a first time caller, their phone call to the DRTV Call Center may be the only personal interaction they have with Operation Smile. Based on donor feedback, we did not have a partner that was meeting our needs. To insure these interactions meet the expectation of “Donor First” we conducted an RFP and ultimately changed call center vendors to improve our donor experience. I personally provide training at the call centers annually to establish my expectations of the “Operation Smile Donor First Philosophy”. To handle the growing number of “customer service” type phone calls generated by the growth of our direct response program, a Donor Relations team had been established at headquarters. Through the “Donor First” project, we have changed and enhanced the role of the Donor Relations team. Donor Relations is now the primary contact and resource for the organization – providing a high level of personal interaction and consistency for our constituents. Their use and documentation of ALL interactions with donors in the database has resulted in a wealth of information that we have been able to report on and use to determine future actions.
  • There are other areas that were impacted during execution of the Donor First program.One area that was a critical issue was our direct mail gift processing. I conducted an RFP process that resulted in the selection of a new gift processing vendor. Operation Smile and our vendor implementation team identified specific areas that could have substantial impact on the donor first experience including same day deposit of donations and next day generation of tax receipts. In addition, we beta tested and implemented an online image viewing program to significantly reduce problem resolution response time.To more effectively interact and communicate with donors, we created or revised many of our workflows. A couple of examples: - We developeda clearly structured way to manage who in the organization handles which donors. Using a Donor Lead Strategy, the Donor Relations team uses relationship sales qualification skills to determine the donor’s needs. They either continue to work with that donor or connect them to the appropriate person in the organization.Our Donor Thank You strategy, a clearly structured way based on the level of gift, to identify who in the organization will thank the donor in addition to the required tax receipt/acknowledgement.And we documented New Procedures – which I’m sure makes sense to everyone here, but when you are dealing with limited resources at a non-profit, the hardest thing to do is simply write things down.
  • As the project continued, we were able to leverage donor feedback during the monitoring and controlling phase of the project.Our online communication with donors had been very basic. Non-Profit budget to apply to high tech programs is limited, at best. Our website was primarily a comprehensive billboard of information online, and we could take donations. As the Donor Relations team expanded their role to be the focal point for e-communications with donors we had an increasing number of requests for expanded online capabilities. The result has been… A complete revision of the website in late 2009 with improved content, better navigation, engagement paths & marketing segmentation. We implemented an online end of year tax receipting portal for donors to access their giving history and print out a tax receipt that rolled up all of their donations during the calendar year.new revenue opportunities have been identified – we launched a personal fundraising site - Onesmile.org - which has had a very positive response from our donors. One of our student club members raised more than $25,000 on his personal fundraising page.And our donors let us know that while they may not be medical professionals, they would still like to support Operation Smile with various service projects, so we developed Community Volunteer content on the website so our constituents could help us right in their own communities.An important part of this project was establishing reporting and analysis – which had not been possible before the Donor First program. Prior to 2007, we were not able to accurately report revenue on an ongoing basis. Today, we have daily dashboards and monthly reporting in place – allowing us to recommend and implement timely corrective actions across our direct response programs.With the success of our Database Quality Initiative, we now have annual analysis done of our data which informs our fiscal year fundraising planning process.We are also able to take advantage of unique non-profit benchmarking, both Nationally and within our International Relief Sector – allowing us to benchmark our direct response program results against other organizations such as Doctors Without Borders, Save the Children, CARE and Habitat for Humanity.
  • So, has the Donor First Program been effective? We can measure the results in tangible ways:We have improved our efficiency & response time for our donors - From a 48 hour lag time to Same Day Deposits – both internally and with our gift processing vendor partnerWe’ve realized an 80% improvement in Time to Acknowledge…(from 2 weeks to in the mail within 48 hours) which has directly impacted an improved revenue stream…4% of our Direct Mail revenue is now coming from our Acknowledgement Program utilizing timely second, third and fourth asks…Using 100% scanning and the implementation of an online ImageViewer, we’ve seen an 86% reduction in response time to donor concerns
  • The Donor Relations Team, previously considered a cost center - now has a comprehensive Donor Loyalty & Engagement program in place.- We have reduced complaints from our donors about the service they receive at our DRTV Call center and improved capabilities with our new call center partner. We can now capture comments & feedback from donors and we have workflows at HQ to respond to these requests in a timely manner. With the reduction in Donor Concerns, we have been able to expand our ability to call and thank our donors for their generous contributions, building important personal relationships with our donors.We have established a SAVES Program - reaching out to donors who give to us on a monthly basis when their credit card declines, resulting in the retention of more than 1000 donors for over $400,000 in annual revenue.The team is able to focus on Grassroots Fundraising -– This program included the creation of materials to assist Community Volunteers in their efforts – which brings in over $400,000 in annual revenue.And we have been able to identify cost savings by eliminating unnecessary or duplicate vendor services as we better understood our workflows and processes.
  • So I started the Donor First Program by identifying challenges within the organization. Have we been successful in addressing them?The Operation Smile culture will always be focused on delivery of our mission. We don’t want to change this! However, we have been successful in addressing the importance of the donor. We launched a new mission statement in 2009 that reflects this: Operation Smile mobilizes a world of generous hearts to heal children’s smiles and transform lives across the globe.In Fiscal Year 2010 we saw <25.8%> improvement in retention of donors and a <24.2%> increase in revenue. That works out to $1.8 million dollars in additional revenue for Operation Smile.Our haphazard processes that didn’t consider the impact to the donor have now been replaced or enhanced and have the entire team always “thinking like a donor”Instead of not meeting, we now exceed industry standards for timeliness of gift deposits, receipting and acknowledgements.Our third party vendors that contributed to our challenges have been replaced and are fully engaged with us on our journey of putting the “Donor First.”
  • Transcript

    • 1. Donor First Program Case Study Jann Schultz, Director of Donor Relations PMI Hampton Roads Chapter February 2011
    • 2. Operation Smile
    • 3. Fundraising • Major Gift & Corporate Fundraising • Direct Response Marketing – Direct Mail, DRTV, Online, Tele-fundraising • Donor Services Recognized potential for improved service and revenue growth
    • 4. Donor First Philosophy To make the Donor’s experience as exceptional as the services we provide to children & families served by Operation Smile, around the world.
    • 5. Initiated “Donor First” Project Phase One • Evaluated existing policies, procedures, standards and guidelines • Reviewed historical data • Interviewed internal and external stakeholders • Conducted research and interviewed non- profit peers • Identified team members and resources
    • 6. Challenges • Culture focused on delivery of mission – transforming children’s lives • Poor retention of donors • Lack of process & procedure that supports a “Donor First Philosophy” • Did not meet non profit industry standards in multiple areas • Third party vendors contributing to the challenges
    • 7. Internal and External Reviews Phase Two – Data Gathering • Internal Review – Donor Touch Points – Donor Database – Donor Relations Team – Workflows • External Review – Direct Mail Provider – Direct Mail Keying & Caging – Direct Response TV Call Center
    • 8. Common Denominator Donor Database • Under utilized • Information silos Result: • Database Quality Initiative
    • 9. Project Execution Phase Three Key Touch Points: • Direct Response TV Call Center • Donor Relations Call Center – HQ
    • 10. Project Execution Phase Three (cont.) • Direct Mail Processing • Revised Workflows • Documented New Procedures
    • 11. Monitoring and Controlling Phase Four Donor Feedback • Website • Online EOY receipting • Personal Fundraising - Viral Marketing • Community Volunteer Content Reporting • Revenue Reporting • Annual Database Analysis • Quarterly National Benchmarking • Annual Sector Benchmarking
    • 12. Closing Process Phase Five – Measuring Results & Reporting • Improved efficiency & response – Same Day Deposits – 80% Improvement in Time to Acknowledge – 4% DM Revenue from Second Ask Acknowledgement Program – 86% Improvement in Problem Solving Response Time
    • 13. Closing Process Organizational Process Assets (Updates) • Donor Loyalty & Engagement – Reduction in Donor Concerns – Expanded Thank You Program (Phone Calls) – SAVES Program (CC Declines) – Grassroots Fundraising • Cost Savings - eliminated unnecessary vendor services
    • 14. Addressing the Challenges • Culture focused on delivery of mission – New Mission Statement • Retention of donors • Process & procedure that has us “think like a donor” • Exceed non profit industry standards in multiple areas • Third party vendors
    • 15. Speaker Contact Information Jann Schultz Director of Donor Relations jschultz@operationsmile.org 757.321.7645 LinkedIn: Jann (Erickson) Schultz Twitter: @jannschultz

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