Avoiding The Lapsed Donor Cliff

Posted on 09/17/2017- by Dan Allenby
Dan Allenby

Donor retention rates are measured by taking the population of donors from a given year and calculating the percentage of those donors who made a gift in the following year. For example, if you had 1,000 donors in year 1 and then 600 of those same donors made a gift in year 2, then your retention rate would be 60%. While retention rates can vary widely from one institution to the next, the median retention rate for competitive colleges and universities in the U.S. is, in fact, around 60%. One of the reasons it's important to track retention rates is because they serve as a barometer of donor satisfaction and help you assess the quality of your stewardship efforts. They're also a primary driver of donor counts and participation rates. Prior year donors (often referred to in annual giving circles as LYBUNTs) are more likely to renew than any other segment.  What's more, the likelihood that a donor will renew increases based on how recently they made their last gift. For example, a donor who made a gift 12 months ago is statistically more likely to give again than a donor who gave 36 months ago. Knowing this doesn't guarantee that the donor who gave 12 months ago will renew, but it can help you think about your segments and prioritize your resources. Inversely, the likelihood that a donor will give again declines with every year that the donor lapses - in other words, each year that s/he doesn't make a gift. “The Cliff” (as it's commonly referred to) is the point at which the odds of getting a lapsed donor to give again are lower than those of getting a non-donor (i.e., someone who has never given) to make a gift. For most institutions, this is usually at 4-5 years. Lapsed donors, interestingly, are also more likely to upgrade (i.e., increase the amount of their gift) than any other segment. This is particularly true for donors who have made: multiple gifts in a single year before lapsing a gift of $1,000 or more in a year before lapsing ...

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Securing A Meeting With A Prospective Donor

Posted on 09/10/2017- by Dan Allenby
Dan Allenby

Several things need to be aligned for a successful face-to-face gift solicitation. First of all, you need to find the right prospect. This is someone who either has a relationship or an interest in your institution, as well as the capacity to make a gift. You also need to determine the right time. Maybe it’s been a year since the prospect’s last gift, it's a reunion year for their class, or a special occasion for your institution—like an anniversary of its founding. Or maybe they’ve recently been engaged in some way by visiting campus, volunteering, or receiving an award. Finding the right place to meet is important too. The best location is always where the prospect feels the most comfortable. So, if you have a say, try to meet at the prospect's home or office, where you can see them in their own element. This will allow you to look for clues about their interests and learn more about them as a person. Remember that a meeting doesn't just happen on its own. You’re going to have to ask for it. When you do, make sure it’s clear to the prospect why you want to meet with them. Even though "asking for money" might be on your agenda, try to focus on some of the other good reasons why you might be asking for a meeting. For example: You’d like to give them an update on what’s been going on around campus You’d like to talk with them about their reunion or other upcoming event You’d like to say thank you for their past giving and tell them how it’s having an impact You’d like to get their opinion You’d like to talk with them about “leadership” When you’re clear and direct about why you want to meet with a prospect, the likelihood that they’ll take the meeting goes way up. The same can be said for the solicitation itself. The more clear and direct you are about why you’re asking and how their support will have an impact, the greater the likelihood that your solicitation will end in a yes. Want to learn ...

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Answer Your Phone!

Posted on 09/03/2017- by Dan Allenby
Dan Allenby

There’s nothing more disheartening to a phonathon manager than a center filled with callers listening to phones ring and voicemail greetings. Unfortunately, for many annual fund programs, this is the new reality. Gone are the days when reaching prospects required little more than dialing. Thanks to caller ID, mobile devices, and the negative stigma associated with telemarketing, alumni (particularly young alumni) are less and less likely to answer when their alma mater calls. Today, the likelihood that a prospect will even pick up is less than 50%. This is troubling because phone solicitations typically have much higher donor conversion rates than other channels like direct mail or email. What’s more is that phonathon programs can be expensive to sustain. Like a lot of programs, the University of Buffalo had watched its phonathon contact rates decline for years and they were particularly concerned by the low contact rates among their most recent graduates. They felt like they were missing the opportunity to connect with these graduates in a personal way and worried they weren’t making full use of the phonathon center, which wasn’t cheap to maintain. So they decided to test something new. They sent a postcard to alumni offering a chance to win a gift card for simply answering the phone—regardless of whether or not they made a gift. Their goal was to get more alumni (especially younger alumni) to engage in a discussion, not just respond to a solicitation. They believed that if they focused on connecting with alumni, it would give them an opportunity to update their contact information (paving the way for future communication) and engage them in a personal way. Soliciting contributions would be secondary. Alumni who received the postcard ended up answering the phone at higher contact rates than those who did not, which allowed the callers to connect with alumni even if only for a few minutes. In addition, alumni who received the postcard pledged ...

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The Most Important Metrics in Annual Giving

Posted on 08/27/2017- by Dan Allenby
Dan Allenby

Measuring the results of your annual giving effort can be daunting. There's an ocean of metrics out there to help you track the progress of your program and the individual appeals, constituencies, and funds that contribute to its success. Sometimes the waters get murky and it's not always clear which ones you should focus on. Reporting becomes particularly important around the end of the fiscal year when others—your boss, your boards, your colleagues—really start paying attention. You need to be able to articulate your progress in a clear and concise way. While it’s tempting to take a deep dive into the details, you should always start with the five basics. They are, quite simply, the most important metrics in annual giving. Revenue — This is the amount of money raised for your annual fund. Unfortunately, there's no universal definition for it. Some institutions count only unrestricted gifts while others might include all current-use gifts, all gifts up to a certain threshold or gifts received in response to a direct appeal. Before you start throwing out numbers, take a moment to remind your audience how your institution defines annual fund revenue. Donors — This is the number of individuals and organizations who make gifts to your institution or to a specific group of funds. There are two categories of donors: those who receive hard credit (also known as legal or tax credit) and those who receive soft credit (also known as recognition credit). While only hard credit is important when tracking revenue, both types of credit should be considered when tracking the number of donors. Be careful not to double count. Participation — This is the portion of your constituents who make a gift to your institution in any given year. Think of it as the overall solicitation response rate or what those who work in the private sector call "market share." For a growing number of educational institutions, alumni participation (calculated ...

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How To Be An Effective Annual Giving Leader

Posted on 08/20/2017- by Dan Allenby
Dan Allenby

Coach. Cheerleader. Teacher. Champion. Obstacle-clearer. Of all the characteristics that are beneficial for an annual giving leader—whose team’s importance can sometimes be overlooked amid the ongoing quest for mega-gifts—one stands out above all others. A survey of over 200 annual giving program directors asked participants to identify the first word that came to mind when hearing the phrase “annual giving leader.” Popular responses were clustered to create a word cloud; the more frequently a word was mentioned, the larger the font used. As you can see from the image below, the most common response was strategic. As chief strategists, leadership-level annual giving professionals are responsible for piloting the planning process, establishing goals (and aligning them with the larger institutional goals), and ensuring their program’s productivity. They need to monitor industry trends and best practices and determine how to adapt and incorporate good ideas. They also need to analyze the results and trends of their own programs and then translate key findings into new and improved approaches. At the same time, they have to be able to "manage up"—to help senior advancement leaders understand the capabilities and limits of the annual giving program. Leadership-level annual giving professionals are also the ones responsible for making decisions about where to allocate resources. They need to be able to identify problems and impediments as well as devise effective solutions to deal with them. Since it’s not always easy or possible to get more resources or change people’s expectations, leaders face the challenge of getting the most out of the resources they already have. Focusing on strategy means they need to delegate tasks and responsibilities to others, find ways to empower and retain the most talented staff, and address issues of underperformance. Needless to say, strategic leadership takes work. Above all, being a strategic annual ...

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5 Tactics For Boosting Phonathon Contact Rates

Posted on 08/13/2017- by Dan Allenby
Dan Allenby

Running a phonathon program isn’t cheap. Recruiting and training a staff of quality callers (not to mention maintaining the hardware and software in your call center) requires a lot of time, a lot of effort, and a lot of money. Fortunately, phonathons have a lot of benefits. They have higher conversion rates than direct mail and email appeals, they’re an effective way to acquire new donors and upgrade current donors, and they're the most efficient way to engage a lot of prospects in a personal way. But you can’t take advantage of any of these if your prospects don’t pick up the phone. Here are five ways to boost your phonathon’s contact rates and ensure that your callers talk to as many prospects as possible.   Give them a heads up – Let prospects know you'll be calling with some advance notice. Mail them a pre-call post card, send them a pre-call email, or even run a targeted pre-call ad on your facebook page. Target “phone-friendly” prospects – Don’t spend too much time calling people who have only responded to direct mail or email appeals in the past. Focus first on prospects who have responded to your phone calls in the past. For non-donor segments, try to identify those who share characteristics with your past phonathon responders. Let tired lists rest – Keep your lists as fresh as possible. Avoid calling the same prospects over and over when they don’t answer. Give segments a break after you’ve attempted them 3 or 4 times within a period of a couple weeks. After that, you can try putting them back in the calling pool. Mobilize – As the landline phone makes its way onto the endangered species list, it’s increasingly important to maintain good mobile phone numbers on all of your prospects. Create incentives for prospects to provide you with their mobile phone numbers and consider investing in mobile phone append services. Leave messages – Don’t assume that just because someone doesn’t answer your ...

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3 Reasons To Always Write A Contact Report

Posted on 08/06/2017- by Dan Allenby
Dan Allenby

If a tree falls in the forest and no one is around to hear it, does it make a sound? Maybe. Maybe not. Now, if you have a great meeting with a prospect and you forget to log a contact report, does it really matter? Absolutely. A contact report is a written summary of a development officer’s interaction with a prospect. It records the time and purpose of the meeting and highlights important information that came out of the meeting. Too often, however, development officers don't take take the time to write contact reports after meeting with a donor, which can end up being a big loss for the organization. Here are 3 reasons that you should always write a contact report: First, they provide an easy way to share intelligence with others who work with or on behalf of the prospect. It’s a much more efficient method of communicating a lot of information to a lot of people than having to rely on additional meetings or conversations. Distributing contact reports to colleagues is a good and common practice. It can be as simple as sending an email. Second, the mere act of writing a contact report forces you to reflect back on your meeting and determine what was and what wasn’t important about it. A good contact report is concise and only includes information that is relevant as it relates to advancing a prospect's relationship with the institution. A contact report should not tell the reader what color tie the prospect was wearing, that his sister’s husband’s cousin just got a speeding ticket, or that the waiter spilled orange juice on your lap. It should, however, tell you how he feels about the direction of the institution, what campus events he recently attended, or which professor the prospect liked best when he was in school. It's also beneficial to include other details that, while maybe not directly related to your institution, help to paint a picture of the person, like their political views or other philanthropic causes they support. T...

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The Secret Behind Effective Gift Impact Reports

Posted on 07/30/2017- by Dan Allenby
Dan Allenby

Ask someone to explain the role of stewardship in annual giving and they might tell you about the acknowledgment letters they produce, the donor rosters they publish, and the plaques that hang in their institution’s hallways. While these are all important aspects of stewardship, they’re secondary to the task to showing donors how their gifts have made a difference. One of the challenges in annual giving, however, is that you can’t always tell a donor exactly how their donation was spent. While major gifts typically go to support a very specific need, annual gifts are often pooled together and distributed where an institution’s leadership thinks support is needed most. But even though you can’t show a $50 annual fund donor exactly how that money was used, you can help them to understand the kind of collective impact that results from annual giving. Telling stories can, even in a general way, let annual donors know that their past gifts are making a difference. Recognizing the importance of this, Boston College's annual giving program produces impact reports. These online reports are filled with pictures, videos, and stories about the impact of annual giving on the lives of students and faculty. Donors are sent emails letting them know that the reports are available. Donors also receive quarterly impact report emails, which come from an individual student or faculty member who has benefited directly from annual giving. They include compelling stories and specific examples of how donor support has made a difference in their lives. The impact reports and emails are coordinated as part of the university’s donor loyalty program known as The Neenan Society, since both are considered a core element of the annual fund’s stewardship and donor retention efforts. In the first year after launching their impact reports, Boston College saw an increase in their donor retention rate. But that’s not the only way they knew their efforts were effective. The ...

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Grad Fair Days for Senior Class Giving

Posted on 07/23/2017- by Dan Allenby
Dan Allenby

Researchers at the University of Helsinki in Finland found that babies can learn a lot before they’re even born. Their study examined two groups of mothers-to-be, half of whom were exposed to loud recordings of made-up words in their final months of pregnancy. After birth, the babies who had heard the recordings in utero recognized the made-up words; the other group of babies did not. The researchers could tell because brain activity in the exposed babies increased when those words were played, whereas babies who didn’t hear the recordings in the womb did not react as much. A student’s final semester is like the final weeks of a baby’s time in utero. During this period of great growth and change, students prepare to enter the real world. It’s a time filled with excitement and uncertainty. Many students face the tasks of searching for a job and considering what it’s going to be like to pay rent on their own for the first time. The experiences that students have and the information they take in during their senior year will have a lasting impression on their lives as alumni. Many institutions see the commencement ceremony itself as an opportunity to tell students what life will be like as alumni and what they can expect once they graduate. Letting students know that they are about to become part of a meaningful and active alumni community, that belonging to this community has value, and that resources are available through the institution that can help them grow personally and professionally can have a significant impact on them. At the same time, many graduating students will look to their school to help them navigate through what can be an overwhelming time. The weeks leading up to graduation can be particularly hectic. Aside from all the questions (and anxieties) that arise about life after graduation, many students are cramming for final exams, saying farewell to good friends, and preparing for the commencement celebration. Lehigh University found ...

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The Best Advice You’ll Ever Ask For

Posted on 07/16/2017- by Dan Allenby
Dan Allenby

There’s an old adage in fundraising that goes like this: If you ask someone for money, they'll probably respond with advice. But, if you ask for advice, don't be surprised if they end up giving you money. If you work in annual giving, then you've heard it before: The only time I hear from my alma mater is when they need money! While it’s easy to see how some alumni could feel this way, the truth is that soliciting donations is an important responsibility of any annual giving program. In fact, one of the biggest mistakes you can make is not asking enough. The most successful programs certainly aren't shy about asking. They appeal to alumni for donations on a regular (sometimes monthly!) basis, and they don’t necessarily stop asking after someone makes a gift. Many will follow up with a second appeal shortly after. Research shows that the more frequently a donor is asked - and subsequently gives - the more likely they will be to give again in the future. But don’t confuse this to mean that institutions should only ask for money. Stanford University’s annual giving team knows that engaging alumni and donors involves more than just gift solicitations, which is why they created a mail piece that specifically asks alumni for their advice. With a headline that reads, “Whether you graduated five or 55 years ago (who’s counting?), you probably have some very useful advice for today’s undergraduates,” the piece includes a reply card so alumni can respond with their opinions about the best place to study on campus, whether or not “fountain hopping” is a good idea, and other suggestions that might be helpful to current students. The mailing, which was sent in early May, was done as a test alongside a “bio update” mailing that is typically sent around the same time each year. The goal was to mimic the experience of filling something out and sending a gift. An email, which included a link to a digital survey, was sent a few weeks ...

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