from the annual fund to major gifts jesuit advancement association conference june, 2007

From the Annual Fund to Major Gifts

Jesuit Advancement Association ConferenceJune, 2007

Lawrence Henze | Page #2© 2004 Blackbaud

Donor Development

Here We Go – Our Agenda

Overview of prospect/market research Research and Annual Giving

– Segmentation– Direct Mail and Telemarketing– Transition to Major Gifts


Donor Development

Major Giving– Understanding propensity and capacity– Moves management

• Cultivation and solicitation• Stewardship and recognition

Planned Giving– Characteristics– Marketing



Donor Development

Integration of Development Functions– Bringing it all together into a cohesive effort

Summary and Questions



Donor Development

Underlying Assumptions (Overview)

We need to understand our constituencies Effective prospect research depends on:

– Understanding key segments– Thinking “out of the box”

Each organization has multiple donor profiles– Key to effective cultivation and solicitation– Understanding non-donor segments

Ultimate GivingMining your Database to Maximize Gift Potential


Donor Development

Traditional View of Donor Development

Prospects (Database)

Donors (First Time or Sporadic)

Major Donors

Planned Givers


Donor Development

True View of Donor Development

Prospects (Database)

Donors (First Time or Sporadic)

Loyal Donors

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Pl a

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Donor Development

Ultimate Giving

Everyone on your database has an ultimate gift Ultimate gifts may be of any size or type Data mining will help you to determine the ultimate giving

potential of your prospects Once you know the ultimate giving paths on your database,

you may develop cultivation/solicitation strategies suited for gift maximization


Donor Development

Definitions

Market Research (The Market Research Society)– “A systematic way of finding out what people believe,

think, want, need or do.”– “…and establish policies matched to the public’s needs.”– A.k.a. survey research, social research, and ‘prospect

research’


Donor Development

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


Donor Development

Applications of Market Research (NonProfit)

Targeting donor prospects Test new solicitation strategies Evaluate program performance Evaluate solicitation performance Assess prospect interests Benchmarking Monitor constituent satisfaction


Donor Development

What Works for You?

What do you analyze?– Do you know what is effective?– Do you know what non-donors think?

Do surveys work for you? What are you doing online?


Donor Development

Predictive Modeling – Who Uses It?

Finance Insurance Meteorologists Political Pollsters and Campaigns Retail E-commerce Thousands of Nonprofits


Donor Development

Nonprofit Uses

Higher Education– Recruitment, matriculation– Retention, graduation– Fundraising

Other Nonprofits– Fundraising– Membership– Interests/marketing/readership


Donor Development

Prospect Screening

When to use? How to use?

– Have an implementation plan!– Secure commitment from all players!– Use it! Evaluate it!– Do something different!

Use alone or in combination?– Comprehensive to focused, or vice-versa?


Donor Development

Custom Modeling Applications Annual giving propensity Target gift amount Major giving propensity Planned giving propensity

– by planned giving “type”

Membership propensity & levels Direct mail vs. telemarketing propensity Acquisition vs. retention


Donor Development

Modeling Direct Marketing Data


Donor Development

Wealth Screening – Hard Data

Wealth ID P!N WealthEngine Target America Marts & Lundy Grenzebach & Glier


Donor Development

Wealth Screening – Breakdown

Stock holdings Real estate holdings Business ownership Large asset ownership Income Corporate and foundation executives

Annual Giving

It is the cornerstone of most successful major and planned giving programs


Donor Development

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


Donor Development

The Relationships Between Donor Types

Is annual giving the basis of:– Major giving success?– Capital campaign success?– Planned giving success?

If yes, are there exceptions? Do we underestimate the value of the $20 annual

donor?– Do we over-solicit these individuals?


Donor Development

Annual Giving Applications

Annual giving propensity Target gift amount Membership propensity & levels Direct mail vs. telemarketing propensity Acquisition vs. retention

Rating Propensity

Who is most likely to contribute?


Donor Development

Annual Giving Model


Donor Development

Annual Giving Scores

Targeting Right

Direct Mail with a Purpose, or Looking for Love in all the Right Places


Donor Development

Creative Challenge #1

A public university sends one undifferentiated letter to all of its 40,000 non-contributing alumni


Donor Development

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…


Donor Development

But…




But, prior to 1957, it was “State College and Agricultural Institute.”


Donor Development

However…




However, until 1987, they were known as the “Red Indians”


Donor Development

Unfortunately…




Unfortunately, in a nightmarish record of futility, they lost all of their games between 1974 and 1987 (perhaps prompting the change to Red Rabbits)


Donor Development

Abandoning the Nest…




The Raven’s Nest was abandoned in 1993, and the site now features a tattoo and piercing parlor


Donor Development

It is Not “Happy Days”…




And even if it were still open, who calls it a “malt” anymore?


Donor Development

All Alumni Are Equal…




Do you really think a 30 year old and a 50-year reunion class alum should be asked for the same gift amount?


Donor Development

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


Donor Development

Improvements…

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 word!

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.


Donor Development

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?


Donor Development

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?

Major Giving

Everyone wants major giving success, but are you willing to walk before you run?


Donor Development

Major Giving – A Working Definition

Solicitation efforts designed to:– Promote significant giving– Promote loyal giving– Reach one donor at a time– Develop a personal relationship– If desired by the donor, to publicly recognize their special commitment


Donor Development

Propensity & Capacity

LIK

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AG

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CAPACITY- TGR & WealthPoint

Projects

Upgrade Top Prospects

Low Yield


Donor Development

What Do You Know?

If you have propensity and capacity?– Segmentations– Messages– Frequency of solicitation– Exclusion/inclusion– More than giving history and wealth tells you


Donor Development

Model - Major Giving Propensity


Donor Development

Why Capacity Matters?

In the giving equation, is it less important? Three reasons people do not give:

– Not asked– Do not support your mission– Not asked for an appropriate gift


Donor Development

Target Gift Model


Donor Development

Target Gift Distribution


Donor Development

What Can You Avoid?

Over-solicitation Ineffective solicitation Short-term needs vs. long-term prospects Minimizing lifetime value Projection of your opinion

Moves Management

Building Relationships That Last a Lifetime


Donor Development

Defining Moves Management

Correspondence Phone calls and meetings Visits to organization/volunteer activities Proposals and concept papers Ask for involvement

Strategically developed, personalized activities designed to cultivate and strengthen relationships:


Donor Development

Or, More Simply Put…

CRMCRM Database

Pro

spect

Rese

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Moves

Manageme

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Actions

Feedback

Constituent Relationship Management

Solution

People

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Moves

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Act

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Donor Development

External Prospect Research

ElectronicScreening On-Line Traditional

• Wealth identification• Influence and power identification• Generic modeling• Custom modeling

• Lexis-Nexis • Hoovers.com• Bizjournals.com• Bigcharts.com• tenkwizard.com• Google.com

• Historical review (affinity) • Public records research• Peer group evaluation• Development officer

feedback• Surveys


Donor Development

Not All Prospects are Equal

A development officer’s pipeline is established by identifying, rating and ranking a prospect’s:

Wealth indicators Improvement Capacity and propensity scores Responses to personal interactions

Debunking the Myths of Planned Giving

Myths, Mysteries, and Meaningful Planned Giving Research


Donor Development

Sharing Knowledge

Planned giving facts Methodology of determining donor profiles

– On your own– Market research

Understanding the Donor Lifecycle– Annual, major and planned giving

Understanding Planned Giving Behavior– Myths and realities will be addressed throughout


Donor Development

Planned Giving Facts

Wealth transfer (Boston College study)– $41 trillion to be transferred from one generation to next in 50 years– Estimate that $6 trillion will be given to charities


Donor Development


NCPG research - 42% of Americans have wills

o 8% say they have charities in their willso 97% do not revoke charitable will provisiono 14% say that they have considered this provision without being

asked– 89% of planned gifts are bequests– 73% do not inform charities of will provision


Donor Development


Why people give– 97% say they care about the charity– 87% desire to do something special– 35% tax planning– 22% know charity’s representative


Donor Development


Extremely passive solicitation methods Appeals are broad based and require request for more

information Expectations are unreasonably low

– Far less than 1% give using this methodology


Donor Development

Age Distribution – Major Giving


Donor Development

Age Distribution – Planned Giving


Donor Development

Planned Giving by Gift Type

Each “type” has different traits– Annuities– Charitable remainder trusts– Bequests

Mass Marketing – one to one– Opportunity to target planned giving prospects


Donor Development

Planned Giving Propensity


Donor Development

Variables and Planned Gift Types?

Age? Wealth? Credit Usage? Past Giving Behavior? Type of Organization? Relationship to Organization? Marital Status?


Donor Development

Direct Mail

Remember importance of annual giving– Multiple opportunities to spread the word

Set sights on higher response rate– 1% unreasonably low

Direct mail is passive by nature– Plan follow-up for highly-rated prospects

Information vs. solicitation– Asking is not the sole purpose


Donor Development

Telemarketing

Personal, relationship building calls Use as a follow-up to direct mail Thank you calls as cultivation tools

Integrating Development Functions


Donor Development

Integrating Development Functions

Having a plan for all of your constituents Communication among entire staff Tracking Results Analyzing Results Being an Instrument of Change


Donor Development

What You Can Do

How many “we have always done it that way” programs do you have?

Evaluate the success of each of your direct marketing efforts– Cost per dollar raised– Upgrades– Response rate– Retention rate


Donor Development

What You Can Do

Do your direct mail letters really speak to your constituencies?

Do you contact your best prospects too frequently? Do you manage your vendors and consultants?

– Do their strategies match your institution?– Custom vs. cookie-cutter approach?


Donor Development

What You Can Do

Review your prospect assignments– How many assigned?– Is the number of prospects reasonable?– Are prospects being moved through the stages?– Are prospect contacts being tracked?– What are you doing with unassigned major gift prospects?


Donor Development

What You Can Do

Is your planned giving program too passive? You do not need to wait until you have a planned giving

officer to have a planned giving program! People skills vs. technical skills


Donor Development

What You Can Do

At the end of the day:– Have a plan for donor retention– Have a plan for donor acquisition– Have a plan for moves management– Have a plan for reaching everyone on your database

o Including ‘no contact’ individuals


Donor Development

What You Can Do For You

Remember the mission Take chances to grow professionally and personally Be passionate about your work Have fun

Summary & Questions

Cary [email protected]

1-843-216-6200

from the annual fund to major gifts jesuit advancement association conference june, 2007

Documents

questionslawrence henze

blackbauddonor developmenthere

major giftslawrence

constituent database

social research

survey research

multiple donor profileskey

ultimate giving paths