Governance | Fundraising | Marketing

© 2 0 1 4 U N L E A S H I N G P E RF ORM A N C E I N C . A L L R I G H T S RE S E RV E D

Data Collection for Strategic Fundraising

Presented by Todd W. Ruopp

Philanthropy Day | October 21, 2014

Governance | Fundraising | Marketing

© 2 0 1 4 U N L E A S H I N G P E RF ORM A N C E , I N C . A L L R I G H T S RE S E RV E D

Helping nonprofits raise more money by focusing the board, aligning the fundraising and telling the agency's best story.

Why me?

Thought I was going to be the pied piper for performance measures in 2007, but I failed

Nobody wanted help measuring performance, but everyone wants help raising more money

Spent the last seven years attempting to understanding fundraising performance

Governance | Fundraising | Marketing

Learning Objectives

After this session you will:

1. Be familiar with fundraising effectiveness research and the impact donor retention has on results

2. Understand how to calculate fundraising metrics

3. Learn a format for presenting fundraising metrics to drive your board's strategic budget decisions

Who wants to be timekeeper?

Participant Survey 10

What is the first idea your board members come up with when wanting to raise more money?

1

80% Individuals

Foundations 15%

5% Corp

SOURCE: Giving USA Foundation, June 2014

Giving in the USA 2013 Data, Released 2014

$335.17 Billion 3

Individual Donors

Revenue Sources

Individual Gifts

Foundation Grants

Corporation Gifts

Government Grants

Fee for Service

Service-Related Income

Investment Income

Sale of Capital Assets

Revenue Source Analysis

Source Unrestricted

Large Cumulative

Amount

Significant Growth

Potential Minimal Servicing

Personal Relationship

Influence

Individual Gifts

Foundation Grants

Corporation Gifts

Government Grants

Fee for Service

Service-Related Income

Investment Income

Sale of Capital Assets

Fundraising Strategy Analysis

Source In-Person

Solicitation Written Proposal

Direct Mail Solicitation

Telephone Solicitation

Online Peer-to-Peer Solicitation

Individual Gifts

Foundation Grants

Corporation Gifts

Government Grants

Fee for Service

Service-Related Income

Investment Income

Sale of Capital Assets

Fundraising Impact Analysis

Source

Significant Impact

Potential Easy to

Implement

Recurring Revenue Potential

Individual Gifts

Foundation Grants

Corporation Gifts

Government Grants

Fee for Service

Service-Related Income

Investment Income

Sale of Capital Assets

Where can I find more donors?

SOURCE: Rosso’s Theory of Constituent Development

Major Donors

Board

Mgmt. Staff

Clients

Employees

Volunteers

General Donors

Members

Former Clients

People with Similar Interests

How do you measure fundraising performance?

1

What is the Life Time Value of your donor?

2

The total amount of giving a donor makes to your organization

during his or her lifetime

Life Time Value

What is your donor retention rate?

2

Of the donors making a gift last year, what percentage made a gift this year

Donor Retention Rate

Calculating Donor Retention

Donors who made a gift last year

The same donors who also made a gift this year

60%

Less than 45% of fundraisers knew their current donor retention rate.

SOURCE: 2014 Bloomerang

5

GOAL: Help nonprofit organizations measure, compare, and maximize

the annual growth in giving

a f p f e p . o r g

Participating Software Firms Donor2

Campus Management Corporation

PhilanthrAppeal

(FundTrack Software)

DonorPerfect Fundraising Software

The Raiser’s Edge® (Blackbaud)

eTapestry

Avectra

Bloomerang

Sage Software

MatchMaker FundRaising Software

Exceed! (Telosa Software)

Metafile

Why it is Important

Growth in giving is increased both by

maximizing gains and minimizing losses, and

management and boards need to know this to

make intelligent, informed, growth-oriented

planning and budgetary decisions.

SOURCE: 2013 Fundraising Effectiveness Survey Report, pp.3

Maximizing Growth in Giving Total Dollars • Gains

– New gifts – Recaptured gifts – Upgraded gift

• Same – Renewed gifts

• Losses – Downgraded gifts – Lapsed new gifts – Lapsed repeat gifts

Total Donors • Gains

– New donors – Recaptured donors – Upgraded donors

• Same – Renewed donors

• Losses – Downgraded donors – Lapsed new donors – Lapsed repeat donors

Dollars vs. Donors (2005-2012)

81 93

86

105

119

105 100 96

2005 2006 2007 2008 2009 2010 2011 2012

82 92

87

99 104

97 107 105

2005 2006 2007 2008 2009 2010 2011 2012

Dollars Ratio

Donors Ratio

SOURCE: 2013 Fundraising Effectiveness Survey Report, pp.15 8

2013 Fundraising Effectiveness Project Report Key Findings

There was a net increase of $37 million in total dollars (growth-in-giving or GIG)

This is despite a net decrease of 44,000 donors

GIG varies significantly according to organization size

Organizations with the highest GIG ratios also experienced the largest new dollar & new donor growth

Groups with less than $500k in revenue experienced net losses

The largest growth in dollars and donors came from new donors

The greatest dollar losses came from lapsed new gifts

The greatest donors looses came from lapsed new donors across all GIG categories.

Median Dollar Gains by Org Size (2011-2012)

23.8%

20.1%

16.4% 17.3%

25.0%

20.7%

15.4%

21.2%

4.0% 6.8% 7.8%

9.1% 9.4% 12.5% 13.0% 12.8%

7.2%

11.5% 14.2%

18.4%

24.3%

20.2%

35.6%

19.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Gain - New Gain - Recapture Gain - UpgradeSOURCE: 2013 Fundraising Effectiveness Survey Report, pp.20

ANALYSIS: Recapture dollars increase with size

ANALYSIS: Upgrade dollars increase with size

Median Dollar Losses by Org Size (2011-2012)

-11.4%

-14.4% -15.4%

-16.3% -15.6% -15.9% -15.2% -16.0%

-21.9%

-16.0%

-12.4%

-10.4% -10.2% -10.3%

-6.6%

-9.6%

-16.6% -18.1% -17.5% -16.8% -16.4%

-15.6%

-17.8% -18.5%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

Loss - Downgrade Loss - Lapsed New Loss - Lapsed RepeatSOURCE: 2013 Fundraising Effectiveness Survey Report, pp.20

Gains & Losses by Size

48.0% 47.0%

63.7%

-72.3%

-57.6% -50.6%

-13.5% -5.1%

16.6%

-80.0%

-60.0%

-40.0%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

< $100k $100-$500k Average $500k+

Gains Losses GIG Rate

Median Dollar Gains by Region (2011-2012)

19.6%

17.8%

20.3%

23.7%

20.1%

16.2% 17.3%

18.7%

23.0%

18.8% 18.0%

7.1% 8.5%

7.3% 5.9%

7.9% 7.1% 7.6%

6.9% 7.2%

5.6%

7.4%

12.8% 11.9%

13.1% 12.4%

14.6%

13.0% 11.5%

13.3% 13.3% 12.7% 13.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Gain - New Gain - Recapture Gain - UpgradeSOURCE: 2013 Fundraising Effectiveness Survey Report, pp.22

Median Dollar Loss by Region (2011-2012)

-14.3% -14.3% -14.1% -13.6% -14.3% -13.5% -14.2%

-15.0% -14.9% -15.2% -15.1% -14.4% -14.3%

-13.0%

-15.9% -14.3%

-12.9% -12.5% -13.1%

-17.3% -16.6%

-13.4%

-17.1%

-19.1%

-17.1%

-14.9%

-17.5% -17.7%

-21.5%

-17.1% -16.4% -16.5%

-17.4%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

Loss - Downgrade Loss - Lapsed New Loss - Lapsed RepeatSOURCE: 2013 Fundraising Effectiveness Survey Report, pp.22

Report Metrics Survey Year Organization Budget Subsector

Arts, Culture & Humanities Education Environment / Animals Health Human Services Public / Society Benefit Religion Related Other

Geographic Region Age of Fundraising Program Rate of Growth Percentile Level

Three Recommendations

Make significant, incremental increases in their budgets, by categories of fundraising effort.

Measure the corresponding incremental return on those investments (ROI), by gain/loss categories.

Make additional incremental increased investments in fundraising effort, category by category, based on the performance (ROI) of previous fundraising activities

5-Step Performance Improvement 1. Compare your gain/loss performance to FEP survey statistics(*). For each of the

Gain/Loss categories, benchmark your organization’s Gain/Loss Ratios against those of other like organizations entering gain/loss ratios, selecting comparative data from the report.

2. Set your priorities for improvement. For example, establish as your objective moving up to the next performance level in the Percentage Ranking tables in each gain/loss category.

3. To achieve your objectives, plan and budget for increased fundraising efforts for priority gain/loss categories.

4. Evaluate progress toward objectives for each gain/loss category.

5. Repeat annually

Prepare Your Own Reports Growth in Giving Report Free, downloadable Excel templates

www.afpnet.org/gigtemplate Creates the core report and 7 other

GIG reports useful for tracking growth

Helpful article: A Better Measure of Success: How to Use AFP’s Growth-in-Giving Reports to Improve Fundraising Performance (Advancing Philanthropy, Mar/APR 2011) www.afpnet.org/files/ContentDocuments/2011MarchApril_135-41FEPLevisWilliams.pdf

GiGi Fundraising Fitness Test Measures your performance against

100 performance metrics and five giving levels

www.afpnet.org/GiGiTest

Todd’s Recommendations Have a donor database, make it mandatory to keep updated.

It is likely the your organization’s single most important asset.

Heller Consulting: FREE CRM Insights report http://theconnectedcause.com/crminsights/

Idealware.org: FREE Consumers Guide to Donor Management Systems http://www.idealware.org/reports/consumers-guide-donor-management-systems

Raiser’s Edge customers use the “plug-in” to generate GIG reports

Todd’s Recommendations Collaborate with the development committee to create an annual development plan

to affect donor acquisition, stewardship and retention.

Create more first-time donor stewardship touch points – hand-written note, event invitation, program updates, invite to people’s homes to hear a client speak

Organize first-time donor after-work social activities

Invite your board members to make “thank you” calls to all first-time donors

Ask first-time donors what it is that prompted them to make an initial gift and capture their answer in your database

Invite donors to experience your programs through volunteering or receiving a tour

Perform a wealth screen of your entire database every two years to establish gift upgrade targets and identify major gift prospects

An Annual Fund

Get the Gift

Repeat the Gift

Upgrade the Gift

Major Gifts

10%

Upgraded

Annual Fund Gifts

20%

Annual Fund Gifts

70%

Annual Fund Pyramid

SOURCE: 2014, The Philanthropy School , Indiana University

$

$ $

$ $ $

Governance | Fundraising | Marketing

© 2 0 1 4 U N L E A S H I N G P E RF ORM A N C E , I N C . A L L R I G H T S RE S E RV E D

Helping nonprofits raise more money by focusing the board, aligning the fundraising and telling the agency's best story.