making better fundraising decisions

Blackbaud Thought Leadership Webinar

- August 14th, 2012

Making Better Fundraising Decisions

Nowshad (Shad) Ali; [email protected]

Craig White: [email protected] 1

Nowshad (SHAD) Ali, CFRE, CPBA, CPVA

August 14th, 2012

Making Better

Fundraising Decisions

Making Better Fundraising Decision – Thought Leadership Seminar| Page

#2 © 2007 On Purpose Leadership Inc.

Our Presenter – Nowshad (Shad) Ali President & CEO On Purpose

Leadership

CFRE; CPBA; CPVA

Former senior development roles at:

– Canadian Diabetes Association

– Big Brothers & Big Sisters

– Osteoporosis Canada

– The Lung Association

Volunteer roles include;

– AFP Fdn for Philanthropy Canada

– AFP Int’l Professional Advancement

– AFP Int’l Research Advisory

– AFP Canada Research Chair

– Saskatchewan Association of Human

Resource Professionals

– Canadian Society of Association

Executives


- August 14th, 2012






Journey for this Session

Making Better Decisions – Key elements|

Components of Strong Organizations

Fundraising Strategies

Applying the 3-S model

Improving results with better Information



Begin With the Fundamentals

AFP Code of Ethics http://www.afpnet.org/Ethics/EnforcementDetail.cfm?itemnumber=3261

Donor Bill of Rights http://www.afpnet.org/ethics/enforcementdetail.cfm?itemnumber=3359

AFP Ethics Assessment http://www.afpnet.org/Audiences/MemberNewsDetail.cfm?ItemNumber=6126

AFP/Ipsos Reid – What Canadian Donors Want http://afpcalgary.afpnet.org/International/RepResdetail.cfm?ItemNumber=11841

http://www.afpnet.org/Ethics/EnforcementDetail.cfm?itemnumber=3261

http://www.afpnet.org/ethics/enforcementdetail.cfm?itemnumber=3359

http://www.afpnet.org/Audiences/MemberNewsDetail.cfm?ItemNumber=6126

http://afpcalgary.afpnet.org/International/RepResdetail.cfm?ItemNumber=11841


- August 14th, 2012






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Making Better Decisions – Key Questions

Is the Quality of the decision important?

Is commitment from others important to the

decision?

Do you have enough, and the information needed

to make the decision?

Is the problem the decision seeks to resolve well

structured and well defined?

If you make the decision yourself how will it affect

others and or the commitment of others?


- August 14th, 2012






Making Better Decisions – A Simple Process

Set Objectives

Explore & Prioritize Options

Choose Best

Options

Generate Controls Needed

Implement, Monitor, Adapt



Albert Einstein

“The significant problems we face today

cannot be solved at the level of thinking

we were at when we created them.”


- August 14th, 2012






Components of a Strong Organization

Operate from sound financial base

Good understanding of shared roles and responsibilities

Effective use of all resources

Capacity to be creative, flexible and adaptable



Components of a Strong Organization

Clear understanding of environment

Constant focus on the mission (business, where

we are going and how we plan to get there

Communication, Communication, Communication


- August 14th, 2012






Peter Drucker

“ Management exists for the sake of the institution’s

results. It has to start with the intended results and

has to organize the resources of the institution to

attain these results. It is the organ to make the

institution, whether business, church, university,

hospital or a battered women’s shelter, capable of

producing results outside of itself.”



Strategy - Three Strategies in all of Fundraising

Acquisition

Renewal

Growth

Cultivation


- August 14th, 2012






Traditional Pyramid



Structure - The Real Donor Pyramid


- August 14th, 2012






Systems - Success will require that you:

Understand your donor and supporter markets and segments that can be the most productive.

Focus resources on those revenue generation opportunities that offer the most growth in income.

Use proven successful strategies and tactics to attract and keep a donor and supporter base that shares your organization’s vision and believes in your mission.

Be clear about your success to date and the challenges before you.

Recognize your capabilities as well as skill and resource gaps.

Know from whence you came and to where you wish to go.



Sound Fund Development Vision

A corporate-wide, donor relationship plan that focuses on developing

long-term donor relationships that create loyalty

Knowledge-based marketing plans that evolve through constant

learning and feedback

Efficiencies and effectiveness in all donor contacts through intelligent

use of donor data

Developing a behaviour based (trigger based), consistent,

routinized donor plan for every donor relationship


- August 14th, 2012






Objectives in Support of Vision

Integrated activities and systems resulting in knowledge-

based donor contact strategy

Donor Contact management systems

Full reporting capabilities

Good stewardship & ability to effectively manage quality

donor relationships

Fund development efficiencies and effectiveness (ROI)



Data Management Plan to Support Vision

A fully integrated corporate-wide information

system to enable:

– Systematic processing and routinized

management of donor information across all levels

– Quick and easy on-line access to donor

information

– Systematic treatment of all donor points of contact

– Continuous refinement of fundraising efforts using

timely, accurate and insightful information


- August 14th, 2012






Stage 1 Communal

Stage 2 Serial

Stage 3 Symbiotic

Stage 4 Integral

Collation of Information Gaining insight into donors from past behavior

Developing an understanding of likely future behavior

Real-time response to donor’s needs

Data in different places

Data entry de-centralized

Low level of controls, procedures, protocols, coordination

Standards not formalized

security levels low Usage narrow

data more likely to be centralized

Controls, procedures, protocols, coordination higher

Some standards formalized

Security levels moderate

Usage broadening

Database centralized (in rare cases different databases)

Controls, procedures, protocols, coordination formalized and implemented

Standards formalized and managed, measured

Security levels high Usage broad

Integral coordination among all relevant – across divisions, geographies and other boundaries

Sophisticated and or established major gifts focus

Formalized sales/solicitation process

Multiple contact points managed, number of solicitors

Integrated Development Program

Development staff IT Staff

Development Director, IT Staff, Analytics experts,

Marketing

Symbiotic coordination between collator, analytics experts and line organizations

Development staff, IT Staff, Cross Department integrators



Solutions that work

CRM, Internet Solutions

Data Management Solutions – use of Action Tracks and Prospect tabs

Financial Management Solutions

Giving Scores & Custom modeling

Online/Net Community – Cultivation and Acquisition online

Friends Asking Friends – Grow

Guide Creative - integrate into web design


- August 14th, 2012






Alvis Sweeney

“Relationships are the first order of business and the

only business you’re in.The reality is, everyone is

going after the best customers; protecting your

customer base is critical. It is economic suicide to

concentrate on acquiring new customers without

doing everything in your power to retain existing

customers.”

Customers: (donors/members/volunteers)



If this is so simple why is it so hard:

Transaction VS Relationship

Expense VS Investment

Income VS Equity

Get VS Give

Overnight VS Over Time

Us Vs Them

Disease/issue VS People


- August 14th, 2012






“Every organization is

perfectly designed for

the results they get.” (Peter Drucker)



Benchmarking research indicates

A donor can be defined as reaching the loyal donor threshold when he

or she has given to your organization in a minimum of three of the past

five years, or 60 percent of the time. Once people achieve this

threshold, they are much more likely either to advance to a higher

level of annual giving or to make a planned or major gift.

after six solicitations per year, the likelihood for long-term loyalty

diminishes significantly. As a result, it is important for charities to focus

on building long-term relationships rather than on squeezing an extra

$20 from donors in any given year. It is time to realize that seventh

fundraising letter sent in a year is likely to alienate the same small

donor who might otherwise be a good prospect for a large gift a few

years down the road.


- August 14th, 2012






A few Key things to be looking at

Are retention rates increasing or decreasing? Which donor segments have the best retention?

Is my donor upgrade strategy working? For particular lifecycle stages, are my donors giving more today than in past years?

What is the lifetime value of donors acquired through the web versus those acquired through direct mail?

Are increases in average gift having a negative effect on donor retention?

What is the impact of a sub-par acquisition year on future years’ revenue?

How have my heavy lapsed reactivation efforts impacted my donor portfolio and affected retention and donor value?



http://www.afpnet.org/Audiences/ReportsResear

chDetail.cfm?ItemNumber=3113 Overall* donor retention was 41 percent in 2010 (Median).

– That is, only 41 percent of 2009 donors made repeat gifts to participating

nonprofits in 2010

Overall* donor attrition in 2010 was 59 percent.

– That is, 59 percent of 2009 donors did not give again to participating

nonprofits in 2010. These donors are also known as ―lapsed donors‖ or

―LYBUNTs‖ [Last-Year-BUu-Not-This]

Repeat* donor retention was 70 percent. New* donor retention

was only 27 percent

Database* donor retention in 2010 was 10 percent.

– That is, only 10 percent of all prior donors of record in participating

nonprofits’ donor databases gave again in 2010.

http://www.afpnet.org/Audiences/ReportsResearchDetail.cfm?ItemNumber=3113



- August 14th, 2012






http://www.afpnet.org/Audiences/ReportsResear

chDetail.cfm?ItemNumber=3113 Overall* donor retention was 41 percent in 2010 (Median).

– Donor retention is less than the FEP survey median of 41 percent for groups of

donors making gifts of under $250 and significantly higher for groups of $250-and-

over donors where retention can range up to 70 percent or more

Adrian Sargeant and Penelope Burk report in their books that donor

retention can be increased by 50 percent -- or more – by investing in

communications to donors about their gifts at work and other aspects

of donor relations. A 50 percent increase in the FEP survey‘s 45

percent gift$ retention for 2010 would increase gift$ retention to nearly

70 percent

Such increases in retention rates alone can significantly improve the

annual rate of growth in giving in the nonprofit sector as indicated in

Figure 7. For the average FEP 2009-10 survey respondent, an

increase in gift$ retention from 45 percent to 70 percent would mean

an increase in net growth in giving from -2 percent to 23 percent.



Path To Improved Results

•Assumptions Research Improved Assumptions

•Behaviour or Improved Action Behaviour

•Results Improved Results




- August 14th, 2012






The Impact Donor Modeling Is Having



Done Well Donor Modeling Helps

Increase return rates

Increase gift sizes

Accelerate major and planned gift programs

Plan and prepare for campaigns

Improve targeted marketing

Identify the best prospects for various giving

levels and types


- August 14th, 2012






Done Well Donor Modeling Helps

Better prospect identification for major gifts,

planed giving and annual fund programs

More appropriate target gift ranges for

solicitation strategies and timing of

communications

Increased success rates in securing

appointments with Planned Giving and Major

Gifts prospects

Increased response rates in DR programs

Decreased cost of mailings and telemarketing

programs

Enhanced engagement of solicitation

volunteers and staff



Different Forms of Data Analysis

RFM Analysis

Data Mining

Cluster Analysis

Predictive Modeling


- August 14th, 2012






Breakdown of a model…

- 34 -

Graduate

School

Age

Per Capita

Income

Home Value >

$500K

Years of Giving

High Retail Credit

Constituent Code



-

5,000

10,000

15,000

20,000

25,000

30,000

$1-50 $51-100 $101-250 $251-500 $501-$1,000 $1,001-2,500 $2,501-5,000 $5,001- 10,000

Giving Range

# o

f D

onors

Actual

Potential

Understanding Annual Fund Potential


- August 14th, 2012






Where is good data coming from

Inside your own database

Access studies and papers like FEP, What Canadian Donors Want,

and other research results

Giving scores and custom modeling

Talk with your donors including surveys,(segment based on common

traits not just gift levels or response mechanisms)

Use internal and external data sources. Create a profile for your

donors and look for other people like them

Focus foremost on building the relationship with existing donors and

maximizing the support from them.



Some Helpful Resource links

http://www.supportingadvancement.com/revenue/samples/samples.htm

http://www.malwarwick.com/assets/pdfs/successful10-07.pdf

“Monthly Donors: Why you want them, how to get them, how to keep

them.” Canadian Fundraiser eNews. April 30, 2003.

http://www.canadianfundraiser.com/newsletter/article.cfm?ArticleID=787&ClientID=9697

http://www.mastercardmerchant.com/cgibin/orderform.cgi?form=market_acceptance

http://www.blackbaud.com/resources/white-papers.aspx

http://www.supportingadvancement.com/revenue/samples/samples.htm




http://www.canadianfundraiser.com/newsletter/article.cfm?ArticleID=787&ClientID=9697

http://www.mastercardmerchant.com/cgibin/orderform.cgi?form=market_acceptance





- August 14th, 2012






Final Thought!

"Research is like a lamppost to a drunken man - it's just as

vital for support as illumination."

A point of view can be a dangerous luxury when

substituted for insight and understanding……

(Marshall Mcluhan)

…see over



Nowshad (Shad) Ali, CFRE

President & CEO I On Purpose Leadership

1-866-644-7673

Direct: 306.652.1417 I Mobile: 306.220.7764

[email protected] I www.onpurpose.ca

Craig White

Manager of Sales, Blackbaud Canada

Direct: 843.654.3278 | Mobile: 843.323.8111

[email protected] | www.blackbaud.ca

Thank You for allowing me this luxury to express my

point of view on the subject.

mailto:[email protected]

http://www.onpurpose.ca/

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