Taking Control of the Annual Fund

1. Taking Control of the Annual Fund Bring Meaning to Donor-Centered Fundraising

2. Donor Development

3. Ultimate Giving • Every individual has an “ultimate gift” • Ultimate gifts may be any level, any type • One method to determine ultimate giving is simple segmentation analysis • Best method to determine ultimate giving levels and types: predictive modeling • Find ultimate giving profiles, develop appropriate marketing strategies

4. Major giving prospects • Leadership giving • Annual giving prospects • Planned giving prospects • Unlikely to give to your organization • Solicit? • Lower affinity to organization, but capacity to give is high • Relationship needs to be cultivated Propensity & Capacity

5. Becoming an Annual Donor • Solicitation/Acquisition • Special Events participation • Membership

6. Demographics Trends that bode well for community college fundraising

7. A Return to Kansas – Less Mobility • People are staying in one home, one community, much longer • Nomad rate is lowest since data was tracked in 1940 • Factors: • Aging population • Internet, online commuting • Focus on family life

8. Benefits for Community Colleges • Greater sense of community • Increased understanding of organizations that strengthen the community • Attend local events • Opportunity to bond with community, think outside of traditional programming • Boomerang kids

9. Annual Giving It is the cornerstone of most successful major and planned giving programs

10. Annual Giving – A Working Definition • Solicitation efforts designed to: • Promote introductory giving • Promote loyal giving • Reach larger groups of individuals • Be efficient and cost effective • Minimize the intrusion on the donor’s life

11. Relationships Between Types of Donors • For almost every type of nonprofit, annual giving or membership is directly correlated with: • Major giving success? • Planned giving success?

12. …On the Subject of Over-Solicitation • Let’s take control of our own giving patterns • Let’s bring those ideas to our organizations • Let’s put some meaning into the oft-used, oft-ignored concept of donor-centered fundraising • Loyalty, loyalty, loyalty • Looking beyond gift amount

13. Annual Giving ANALYTICS What Do We Need to Know to Be Successful

14. Definitions • Data Mining: Investigating and discovering trends within a constituent database using computer or manual search methods • Predictive (Statistical) Modeling: Discovery of underlying meaningful relationships and patterns from historical and current information within a database; using these findings to predict individual behavior

15. Types of Organizational Data • Types of Data • Demographic • Giving History • Activities/Relationships • Transactional • Attitudinal • Interests

16. Meaningful Measures - Revenue • What do you need to know to study and analyze the effectiveness of your annual fund: • Total revenue • Revenue per donor • Average gift • Cost per dollar raised

17. Meaningful Measures - Retention • What do you need to know to study and analyze the effectiveness of your annual fund: • First-year retention • Multi-year retention • Overall retention • Reactivation

18. Meaningful Measures

19. Meaningful Measures - Solicitation • What do you need to know to study and analyze the effectiveness of your annual fund: • Analyze by solicitation • Response rate • Retention • Attrition • Average gift • Cost per dollar raised

20. Meaningful Measures - Habit • Time-of-Year Giving • Create a pool of all donors over the past 10 years • Create a subset of donors giving in at least 6 of the 10 years • Plot the months/quarters of their gifts • Identify the habitual donors • Why is This Important? • Ultimate giving • Cost savings

21. Tracking Success vs. Events

22. Tracking Success vs. Events

23. Statistics on Your Own • Study the relationship between giving longevity and ultimate giving • Alternatively, the relationship between giving levels and ultimate major giving behavior

24. Need to Prove This Relationship? • Create a file of $1000 (or another meaningful dollar amount) donors using number of years giving (prior to first major gift) • 20 donors, range from 2 to 18 years • Plot data using Excel • Study AND interpret the trends

25. $1000 Gift Analysis

26. What Did We Learn? • Findings • For example, major donors make an average of 9 annual gifts prior to reaching $1000 gift level • Establish a threshold, such as 6 annual gifts, to identify potential $1000 prospects • Start a new communication stream with these prospects • Also study planned giving behavior and its correlation with loyal annual giving

27. What Did We Learn? • Conclusion: A significant number of major donors exhibit “trigger point” behavior • You are “growing your own” major donors • When donors activate these trigger points, they appear on your major donor radar screen • This is proactive data mining to analyze annual giving effectiveness

28. More Thoughts? • Assume the following: • A major gift equals $5,000+ • For 60% of the file of major donors, their last gift before $5,000+ was $2,000 • For 70% of those individuals, their last gift before $2,000 was $500 • Create a donor relations threshold at $500

29. Age and Major Giving Analysis

30. Age and Planned Giving Analysis

31. Targeting Right Direct Mail with a Purpose, or Looking for Love in all the Right Places – Let’s Have a Little Fun!

32. Creative Challenge #1 • A public university sends one undifferentiated letter to all of its 40,000 non-contributing alumni

33. The Letter STATE University Dear Graduate: Like me, you probably look back fondly on your years at State University. Cheering on the Red Rabbits to gridiron victory. Enjoying a malt at the Raven’s Nest. The friendships and romances with your classmates, which, in many cases, lasted a lifetime. Today we are launching a major endowment campaign with the goal of raising $50 million. And that is why it is so important that we receive your gift of $1,000…

34. But… STATE University Dear Graduate: Like me, you probably look back fondly on your years at State University. Cheering on the Red Rabbits to gridiron victory. Enjoying a malt at the Raven’s Nest. The friendships and romances with your classmates, which, in many cases, lasted a lifetime. Today we are launching a major endowment campaign with the goal of raising $50 million. And that is why it is so important that we receive your gift of $1,000… But, prior to 1957, it was “State College and Agricultural Institute.”

35. However… STATE University Dear Graduate: Like me, you probably look back fondly on your years at State University. Cheering on the Red Rabbits to gridiron victory. Enjoying a malt at the Raven’s Nest. The friendships and romances with your classmates, which, in many cases, lasted a lifetime. Today we are launching a major endowment campaign with the goal of raising $50 million. And that is why it is so important that we receive your gift of $1,000… However, until 1987, they were known as the “Red Indians”

36. Unfortunately… STATE University Dear Graduate: Like me, you probably look back fondly on your years at State University. Cheering on the Red Rabbits to gridiron victory. Enjoying a malt at the Raven’s Nest. The friendships and romances with your classmates, which, in many cases, lasted a lifetime. Today we are launching a major endowment campaign with the goal of raising $50 million. And that is why it is so important that we receive your gift of $1,000… Unfortunately, in a nightmarish record of futility, they lost all of their games between 1974 and 1987 (perhaps prompting the change to Red Rabbits)

37. Abandoning the Nest… STATE University Dear Graduate: Like me, you probably look back fondly on your years at State University. Cheering on the Red Rabbits to gridiron victory. Enjoying a malt at the Raven’s Nest. The friendships and romances with your classmates, which, in many cases, lasted a lifetime. Today we are launching a major endowment campaign with the goal of raising $50 million. And that is why it is so important that we receive your gift of $1,000… The Raven’s Nest was abandoned in 1993, and the site now features a tattoo and piercing parlor

38. It is Not “Happy Days”… STATE University Dear Graduate: Like me, you probably look back fondly on your years at State University. Cheering on the Red Rabbits to gridiron victory. Enjoying a malt at the Raven’s Nest. The friendships and romances with your classmates, which, in many cases, lasted a lifetime. Today we are launching a major endowment campaign with the goal of raising $50 million. And that is why it is so important that we receive your gift of $1,000… And even if it were still open, who calls it a “malt” anymore?

39. All Alumni Are Equal… STATE University Dear Graduate: Like me, you probably look back fondly on your years at State University. Cheering on the Red Rabbits to gridiron victory. Enjoying a malt at the Raven’s Nest. The friendships and romances with your classmates, which, in many cases, lasted a lifetime. Today we are launching a major endowment campaign with the goal of raising $50 million. And that is why it is so important that we receive your gift of $1,000… Do you really think a 30 year old and a 50-year reunion class alum should be asked for the same gift amount?

40. Improvements… STATE University Dear <Name>: Like me, you probably look back fondly on your years at <State University. > Cheering on the <Team Name> to gridiron victory. <Enjoying a malt at the Raven’s Nest.> The friendships and romances with your classmates, which, in many cases, lasted a lifetime. Today we are launching a major endowment campaign with the goal of raising $50 million. And that is why it is so important that we receive your gift of <$1,000>… Using strategic customization, we can isolate variables that impact response rate and reflect “predictors” from statistical modeling

41. Customization… STATE University Dude: Was college great or what? I’m still partying man! You knew this was coming, didn’t you? That’s right, we’re asking for money. Welcome to the real world! But the thing is, it’s not really that much. And by giving $50, you could be helping some slacker who has even less money that you did when you were 18. With much less complexity, we can mail two or three basic versions of the letter, testing dollar asks based on age or other financial/class year criteria.

42. Alternatives • Letter 1 to graduates of less than 10 years • Letter 2 to graduates of 11-25 years ago • Letter three to graduates of more than 25 years • How do we use differences in their experiences, ages, to create messages more appropriate to them?

43. And the point is… • Graduates spent 4 (or more years) becoming individuals • Lived in different times at school with varying world events • Totally different life stages, from finding a first job (or second) to pondering retirement • So why use the same letter with the same ask?

44. So, You Agree? • That the targeted, donor-interest letter would receive a higher response? • So, if it works, why not prospect to individuals who shared the same characteristics as known donors using a similar targeted message?

45. Writing a Direct Marketing Piece • Identify the message or messages you want to share • Divide these concepts into “motivators” and “details” • Use the motivators as the central component of your marketing effort • Details are supportive and should not be interfering with the motivators

46. Contact Information Lawrence Henze Managing Director, Target Analytics lawrence.henze@blackbaud.com 843-991-9921

47. Special Thanks to: Sam Ackerman Caliban Creative 703-313-9120