Waking Up Your Annual Fund 2009


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This was presented at the 2009 National Philanthropy Day Educational Workshops for AFP Northeast Indiana. Topic is how to improve your annual fundraising results by focusing on some basic keys to success, evaluating results and focusing on donor retention.

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  • We are not going to be discussing how to tweek your direct mail copy, or newsletter, or how to run a unique special event, or share some innovative new fundraiser that will make you the envy of the fundraisers everywhere. As a fundraiser, I have written many direct mail pieces, and newsletters and special events and done many face to face solicitations…ran the annual fund etc. So I can discuss those things, and certainly doing those things well impacts fundraising…. BUT, what I want to do today, is give you a broader understanding of your role as a fundraiser, what things impact how well you raise dollars. In fact, you can have the best dang direct mail piece on the face of the planet, or run the greatest special event this town has seen, but without the “7 Keys” to success I am going to share with you… your annual fund will stay flat year over year or worse.
  • 365-day development program that is the primary source of operating funds
  • Notice That in a typical year 40% of charities DO NOT raise more money. So normally, almost half of all charities don’t necessarily do fundraising well!! Why do some charities always seem to do well regardless of outside environment? Some charities are doing well right now or dare I say, “maybe even better”. MY GOAL TODAY IS TO SHOW YOU THAT YOU CAN DO WELL REGARDLESS!
  • Surveyed 43 Institutions (mostly independent schools, and higher ed.) on Fiscal Year. Half reported decrease in annual fund, while half saw no change or increase.
  • Do expectations of fundraisers matter? Does attitude or mindset affect ability to raise money? ABSOLUTELY!!!! That Brings me to KEY #1 to Waking Up Your Annual Fund…..
  • Share a bit about experiences with attitude….CEO, Board, Volunteers, etc.
  • Video of wave pool in Japan…filled to the brim!! I’m not sure this is what we mean by a shrinking Donor Pool? Do you want to stay in the stinky pool or move to better fundraising waters?
  • Stock Market dropped 90%, charitable giving declined by 20% (from 1931-1933) BUT look at what happened after 1933… Anecdotally locally…smaller gifts but more donors Emotional Connection – “gave what they could at lowest point” …possible lifetime donors Pattern of giving in every economic downturn since is similar Bottom Line: During tough times, Americans dig deeper to help those less fortunate than themselves!
  • Keep a focus on the fundamentals and long term Keep a focus on the mission of the organization
  • You need a good foundation or support for an annual fund to thrive.
  • Even with a good foundation and support structure, annual fund programs can be flat.
  • This is your real job….CHIEF BUCKET OFFICER! Acquisition and Retention go hand in hand…. Typically lose 30% of donor base annually! What does that mean for Acquisition? Maintaining the Status Quo is picking up as many new donors as you loose each year. NO GROWTH!!! No wonder only 60% of charities see growth in annual support in a normal year!! Losing 5 donors for 6 they obtain. NO wonder we are all so tired…. Successful fundraising programs understand this dynamic.
  • See what you are doing well Find the biggest holes in your bucket Goal is to focus greater effort and resources at areas with most potential What do I mean by Analyzing….
  • GROUP EXERCISE – 3-4 to a group, look at the report, New donors, upgrades, downgrades, lapsed Where can you improve? Remember the bucket? Also monitor donor segments ( churches, monthly donors, presidents circle, etc) NEED ETAP DEFINITIONS
  • What approaches are cost efficient? CPDR Which are wasting your resources? Where can you improve?
  • Know motivations for giving…first time and repeat gifts. What caused them to give in the first place…what do they respond to most? What programs have the most loyal support?
  • HERE ARE SOME OPPORTUNITIES FOR DESIGNATED GIVING: What are your donors responding to most?
  • Create an acquisition plan and budget Communications, Website, Direct Mail, Peer to Peer, Special Events, etc Focus on Retention efforts Stewardship, Renewal Solicitations, Relationship Building Focus on building relationship and upgrading
  • I’m going to share what in my opinion are the most effective strategies (or TOP Strategies) for increasing annual support in the current economic climate Depending on the weak areas you find in your shop
  • Recruiting new donors can cost up to 10 times more Acquisition of new donors is dismal in current environment! You must continue to acquire new donors, but donor loyalty is King for Growing your annual fund.
  • Current and former donors are your best prospects
  • How the first gift is handled (no matter what size) will impact donor loyalty Appropriate and timely acknowledgement 24-48 hour turnaround As personal as possible Appropriate to size of gift Thank you should be a “thank you” not another solicitation Need to clearly communicate how funds were used prior to asking again Be sure calendar staggers appeals and newsletters USE EMAIL Renewal – You loose a 50% of cash donors after first gift – Could have been one-time, special purpose? Many LYBUNT/SYBYNT Strategies…lift notes, phone calls
  • New Donors need to be treated differently Typically, get thank you, dropped into regular mailing and renewal cycle You must BUDGET for Retention
  • Quickly list You CAN raise Major gifts for annual support…even create a gift chart for annual support Provide example of $7,000 annual gift…personal visit from CEO at Whites You CANNOT upgrade current donors IF YOU DO NOT ASK Them to increase their support. EX: Rainbow Acres letter to major donor each year (donor preference) Monthly, automated donors will stay with you 5-7 times longer than cash donors. In fact, during recession, automated monthly givers have maintained giving…client – June 09 Finance Statement showed major decrease in every donor segment EXCEPT monthly donors! Find ways to engage donors more in the organization.
  • Waking Up Your Annual Fund 2009

    1. 1. Waking Up Your Annual Fund Consultants of Philanthropy ● Fund Raising ● Training Robert Croft, CFRE November 12, 2009 AFP Northeast Indiana
    2. 2. It’s Been the Best Year Ever!
    3. 3. <ul><li>“The 30 Best Careers for 2009” </li></ul><ul><li>(November 2008) </li></ul><ul><li>“Top 15 Jobs with Stress that Pay Badly” </li></ul><ul><li>(November 2009) </li></ul>What a Profession!
    4. 4. Today’s Objectives <ul><li>Move you from CNN to US News & World Report …from Death Valley to Hangin’ 10 on a Ginormous Wave of Annual Fund Success! </li></ul><ul><li>Learn 7 “Keys” to annual fund success </li></ul><ul><li>See your job as Chief Bucket Manager ! </li></ul><ul><li>Learn how to Analyze your program </li></ul><ul><li>Discuss Top Strategies for growing annual support (in the current economic climate) </li></ul>
    5. 5. Definitions <ul><li>Annual Giving: </li></ul><ul><ul><li>An amount given annually. </li></ul></ul><ul><ul><li>A fund-raising program that generates gift support on an annual basis. </li></ul></ul><ul><li>Annual Fund: The total gifts made on a yearly basis to support yearly budgets or general operations. (Sustaining Fund) </li></ul>
    6. 6. Two Common Ways of Annual Giving <ul><li>Once a year campaign: “Annual Fund Drive” - same time, same request, same amount, same donors, same method </li></ul><ul><li>A year-round series of targeted fundraising efforts </li></ul><ul><li>What’s Your Approach? </li></ul>
    7. 7. How are You Doing?
    8. 8. How are You Doing? Tough, But Making It It’s Bad, Very Bad! Breaking Even! Raising More!!!
    9. 9. Just How Bad is It? <ul><li>Giving USA 2008 : </li></ul><ul><ul><li>40% decline in market, 2% drop in overall charitable giving from 2007 </li></ul></ul><ul><ul><li>First decline in giving since 1987, only second decline in giving since 1956 </li></ul></ul><ul><ul><li>However, giving remained steady as a percentage of GDP at 2.2% for 2008 vs 2.3% for 2007 </li></ul></ul><ul><ul><li>Human Services declined 12.7% (15.9% when adjusted for inflation) YIKES! </li></ul></ul>
    10. 10. Just How Bad Is It? <ul><li>AFP State of Fundraising </li></ul><ul><ul><li>Less than half (46%) of charities raised more dollars in 2008 than in 2007 </li></ul></ul><ul><ul><ul><li>Typically about 60% see an annual increase </li></ul></ul></ul><ul><ul><li>14% raised the same amount in 2008 </li></ul></ul><ul><ul><li>40% raised Less in 2008 than 2007 – An all time high! </li></ul></ul>
    11. 11. Martz & Lundy Study – Oct. 2009 <ul><li>Capital and Endowment Giving declined most </li></ul><ul><li>Average change in annual fund was 2% decrease </li></ul><ul><li>The number of donors on average decreased by 1% </li></ul>
    12. 12. Just How Bad is It? <ul><li>Unemployment - 10.2% (highest since 1983) </li></ul><ul><li>Rasmussen Consumer Index (Nov 9, 09) </li></ul><ul><ul><li>Just 21% of adults say personal finances are getting better </li></ul></ul><ul><ul><li>50% say they are getting worse! </li></ul></ul><ul><ul><ul><li>Figures have changed little since beginning of 09 </li></ul></ul></ul><ul><ul><li>25% say economy is getting better </li></ul></ul><ul><ul><li>49% say economy is getting worse </li></ul></ul><ul><li>Stock Market has rallied since Spring </li></ul>
    13. 13. Just How Bad Is It? <ul><li>AFP State of Fundraising – Optimism </li></ul><ul><li>Lowest level of optimism in history of survey: </li></ul><ul><ul><li>28% expected to raise more in 2009 </li></ul></ul><ul><ul><li>36% expected to raise less in 2009 </li></ul></ul><ul><ul><li>36% expected to raise same in 2009 </li></ul></ul>
    14. 14. Waking Up Your Annual Fund Key #1 <ul><li>RIGHT ATTITUDE </li></ul>
    15. 15. Right Attitude
    16. 16. Do you want to stay in the stinky pool?
    17. 17. Bad News, Good News or Who Cares? <ul><li>Chronicle of Philanthropy – Oct. 29, 2009 “America’s Top Charities Face Tough Fund-Raising Year” </li></ul><ul><ul><li>Top 400 charities’ are anticipating a median decline for 2009 of 9% </li></ul></ul><ul><ul><li>These charities are anticipating a 1-2% INCREASE in giving for 2010. </li></ul></ul>
    18. 18. Mal Warwick - “Is it Time to Panic Yet?” <ul><li>Can you find the Great Depression on this chart? </li></ul>
    19. 19. Mal Warwick - “Is it Time to Panic Yet?” <ul><li>Nonprofit Revenue during the decade of the Great Depression </li></ul>
    20. 20. Fight or Flight? <ul><li>“ The strategic and tactical decisions made by charities will have more influence on their fortunes than will the recession itself. Charities have more control than they think they do, as long as they FOCUS on the fundamentals of their programs, do not panic and FOCUS on the long term.” - Advancing Philanthropy, Jan/Feb 2009 </li></ul><ul><li>AFP Toolkit (member benefit at AFPnet.org) </li></ul>
    21. 21. Waking Up Your Annual Fund Key #2 <ul><li>FOCUS </li></ul>
    22. 22. Waking Up Your Annual Fund Key #3 <ul><li>A GOOD FOUNDATION </li></ul>
    23. 23. Foundations of Strong Annual Funds <ul><li>Annual Fundraising Plan </li></ul><ul><ul><li>Set attainable goals </li></ul></ul><ul><li>Case for Support </li></ul><ul><ul><li>Clear purpose for fundraising </li></ul></ul><ul><li>Regular Donor Communications </li></ul><ul><ul><li>Must clearly show how support truly makes a difference </li></ul></ul><ul><li>Volunteer Fundraisers </li></ul><ul><ul><li>Volunteers make the best fundraisers! </li></ul></ul>
    24. 24. Keys to Success <ul><li>Strong Board Support </li></ul><ul><ul><li>Including financial </li></ul></ul><ul><li>Keeping Records </li></ul><ul><ul><li>Donor software program </li></ul></ul>
    25. 25. Why is Annual Support Flat? <ul><li>In non-recessionary environment, flat or declining annual fundraising is often due to: </li></ul><ul><ul><li>Too much emphasis on inefficient methods </li></ul></ul><ul><ul><li>Poor donor acquisition, or lack of planning or budget for acquisition </li></ul></ul><ul><ul><li>Poor donor retention </li></ul></ul><ul><ul><li>Neglecting to analyze results and adjusting (usually from “tyranny of the urgent” and being understaffed) </li></ul></ul>
    26. 26. The Development Challenge <ul><li>The Fundraising “Bucket” </li></ul><ul><ul><li>Acquisition </li></ul></ul><ul><ul><li>Retention </li></ul></ul><ul><ul><ul><li>Nonprofits lose 5 donors for every 6 they obtain - Fundraising Effectiveness Project </li></ul></ul></ul><ul><ul><li>Identification </li></ul></ul><ul><ul><ul><li>Major Gifts </li></ul></ul></ul><ul><ul><ul><li>Monthly Donors </li></ul></ul></ul><ul><ul><ul><li>Planned Gifts </li></ul></ul></ul>
    27. 27. Waking Up Your Annual Fund Key #4 <ul><li>Tending the </li></ul><ul><li>Bucket </li></ul>
    28. 28. Tending the Bucket <ul><li>Analyze Your Organization’s Giving Trends </li></ul><ul><li>Must have donor software program and USE IT to have meaningful data </li></ul><ul><li>Keeping Records a Must </li></ul>
    29. 29. Giving Dynamics Report <ul><ul><li>GROUP EXERCISE: 3-4 to a group </li></ul></ul><ul><ul><li>What areas are strong? </li></ul></ul><ul><ul><li>What can be improved? </li></ul></ul><ul><ul><li>Remember the bucket? </li></ul></ul>
    30. 30. Approach Report
    31. 31. Waking Up Your Annual Fund Key #5 <ul><li>Know Your Donors </li></ul>
    32. 32. Campaign Analysis Report
    33. 33. Waking Up Your Annual Fund Key #6 <ul><li>Strengthen Weak </li></ul><ul><li>Areas </li></ul>
    34. 34. Strengthen Weak Areas <ul><li>No New Donors? Why? </li></ul><ul><li>New Donors but high attrition rate? Why? </li></ul><ul><li>Donors Not Upgrading Support? Why? </li></ul><ul><li>What can you do in each of these scenarios? </li></ul>
    35. 35. Waking Up Your Annual Fund Key #7 <ul><li>Focus on Effective Strategies </li></ul>
    36. 36. Focus on Effective Strategies
    37. 37. Acquisition vs. Retention (In this economy) <ul><li>Which do you choose? </li></ul><ul><li>Which costs more? </li></ul><ul><li>Martz & Lundy Study: New commitments for all purposes saw an average decrease of 33%. </li></ul><ul><li>Retention is King for Growing your annual fund. </li></ul>
    38. 38. Top Strategy #1 – Donor Retention <ul><li>Renewals, Renewals, Renewals… </li></ul><ul><ul><li>Retention (keeping donors in the bucket) should be your HIGHEST priority! </li></ul></ul><ul><ul><li>Retention has larger impact than acquisition </li></ul></ul><ul><ul><ul><li>A 10% increase in donor retention can increase the lifetime value of the donor database by up to 200 percent. - IU Center on Philanthropy </li></ul></ul></ul>
    39. 39. Top Strategy #1 – Donor Retention <ul><li>How do you Keep Donors? </li></ul><ul><li>Key Drivers to Building Donor Loyalty: </li></ul><ul><ul><li>Satisfaction </li></ul></ul><ul><ul><li>Trust </li></ul></ul><ul><ul><li>Commitment </li></ul></ul>
    40. 40. Top Strategy #1 – Donor Retention <ul><li>Retention Starts with the First Gift </li></ul><ul><li>Don’t Over-Solicit </li></ul><ul><ul><li>Penelope Burke – “Donors will give again when they are satisfied their last gift was used the way they intended.” </li></ul></ul><ul><li>Communicate regularly and clearly </li></ul><ul><li>Secure a Renewal </li></ul>
    41. 41. Top Strategy #1 – Donor Retention <ul><li>Create a New Donor Process </li></ul><ul><ul><li>Welcome Letter or Packet </li></ul></ul><ul><ul><li>“ Credibility” Letter (within 2 months) </li></ul></ul><ul><ul><li>Newsletter or email </li></ul></ul><ul><ul><li>“ Best ever” renewal package (within 3 months) </li></ul></ul><ul><li>Implement a phone “Thank You” program </li></ul>
    42. 42. Top Strategies 2-5 <ul><li>Raise Major Gifts for Annual Support </li></ul><ul><li>Upgrade Current, Regular Donors </li></ul><ul><li>Create a Monthly Giving Program </li></ul><ul><li>Engage Donors in Volunteer Activities </li></ul>
    43. 43. Conclusion – 7 Keys to Waking UP <ul><li>Right Attitude </li></ul><ul><li>Focus </li></ul><ul><li>A Good Foundation </li></ul><ul><li>Tending the Bucket </li></ul><ul><li>Know Your Donors </li></ul><ul><li>Strengthen Weak Areas </li></ul><ul><li>Focus on Effective Strategies </li></ul>
    44. 44. Wake Up Your Annual Fund, Surf’s Up