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From the Annual Fund to Major Gifts Jesuit Advancement Association Conference June, 2007. Here We Go – Our Agenda. Overview of prospect/market research Research and Annual Giving Segmentation Direct Mail and Telemarketing Transition to Major Gifts. Here We Go – Our Agenda. Major Giving

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here we go our agenda
Here We Go – Our Agenda
  • Overview of prospect/market research
  • Research and Annual Giving
    • Segmentation
    • Direct Mail and Telemarketing
    • Transition to Major Gifts
here we go our agenda3
Here We Go – Our Agenda
  • Major Giving
    • Understanding propensity and capacity
    • Moves management
      • Cultivation and solicitation
      • Stewardship and recognition
  • Planned Giving
    • Characteristics
    • Marketing
here we go our agenda4
Here We Go – Our Agenda
  • Integration of Development Functions
    • Bringing it all together into a cohesive effort
  • Summary and Questions
underlying assumptions overview
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
slide7

Traditional View of Donor Development

Prospects (Database)

Donors (First Time or Sporadic)

Major Donors

Planned Givers

slide8

True View of Donor Development

Prospects (Database)

Donors (First Time or Sporadic)

Loyal Donors

Major

Donors

Planned

Givers

Major & Planned Donors

ultimate giving
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
definitions
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’
definitions11
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
applications of market research nonprofit
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
what works for you
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?
predictive modeling who uses it
Predictive Modeling – Who Uses It?
  • Finance
  • Insurance
  • Meteorologists
  • Political Pollsters and Campaigns
  • Retail
  • E-commerce
  • Thousands of Nonprofits
nonprofit uses
Nonprofit Uses
  • Higher Education
    • Recruitment, matriculation
    • Retention, graduation
    • Fundraising
  • Other Nonprofits
    • Fundraising
    • Membership
    • Interests/marketing/readership
prospect screening
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?
custom modeling applications
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
wealth screening hard data
Wealth Screening – Hard Data
  • Wealth ID
  • P!N
  • WealthEngine
  • Target America
  • Marts & Lundy
  • Grenzebach & Glier
wealth screening breakdown
Wealth Screening – Breakdown
  • Stock holdings
  • Real estate holdings
  • Business ownership
  • Large asset ownership
  • Income
  • Corporate and foundation executives
annual giving a working definition
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
the relationships between donor types
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?
annual giving applications
Annual Giving Applications
  • Annual giving propensity
  • Target gift amount
  • Membership propensity & levels
  • Direct mail vs. telemarketing propensity
  • Acquisition vs. retention
creative challenge 1
Creative Challenge #1
  • A public university sends one undifferentiated letter to all of its 40,000 non-contributing alumni
the letter
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…

slide31
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.”

however
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”

unfortunately
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)

abandoning the nest
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

it is not happy days
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?

all alumni are equal
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?

improvements
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

improvements38
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.

alternatives
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?
and the point is
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 a working definition
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
propensity capacity

Upgrade

Top Prospects

LIKELIHOODAGL, MGL & PGL

Low Yield

Projects

CAPACITY- TGR & WealthPoint

Propensity & Capacity
what do you know
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
why capacity matters
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
what can you avoid
What Can You Avoid?
  • Over-solicitation
  • Ineffective solicitation
  • Short-term needs vs. long-term prospects
  • Minimizing lifetime value
  • Projection of your opinion
defining moves management
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:

or more simply put

People

Actions

CRM Database

Moves Management

Prospect Research

Or, More Simply Put…

CRM

CRM Database

Feedback

Constituent Relationship Management Solution

Prospect Research

Moves Management

Actions

external prospect research
External Prospect Research

Electronic

Screening

Traditional

On-Line

Historical review (affinity)

Public records research

Peer group evaluation

Development officer feedback

Surveys

  • Wealth

identification

  • Influence and

power identification

  • Generic modeling
  • Custom modeling

Lexis-Nexis

Hoovers.com

Bizjournals.com

Bigcharts.com

tenkwizard.com

Google.com

not all prospects are equal
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
sharing knowledge
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
planned giving facts
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
planned giving facts58
Planned Giving Facts
  • NCPG research

- 42% of Americans have wills

      • 8% say they have charities in their wills
      • 97% do not revoke charitable will provision
      • 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
planned giving facts59
Planned Giving Facts
  • Why people give
    • 97% say they care about the charity
    • 87% desire to do something special
    • 35% tax planning
    • 22% know charity’s representative
planned giving facts60
Planned Giving Facts
  • 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
planned giving by gift type
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
variables and planned gift types
Variables and Planned Gift Types?
  • Age?
  • Wealth?
  • Credit Usage?
  • Past Giving Behavior?
  • Type of Organization?
  • Relationship to Organization?
  • Marital Status?
direct mail
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
telemarketing
Telemarketing
  • Personal, relationship building calls
  • Use as a follow-up to direct mail
  • Thank you calls as cultivation tools
integrating development functions69
Integrating Development Functions
  • Having a plan for all of your constituents
  • Communication among entire staff
  • Tracking Results
  • Analyzing Results
  • Being an Instrument of Change
what you can do
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
what you can do71
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?
what you can do72
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?
what you can do73
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
what you can do74
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
      • Including ‘no contact’ individuals
what you can do for you
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 colwell cary colwell@blackbaud com 1 843 216 6200

Summary & QuestionsCary ColwellCary.Colwell@Blackbaud.com1-843-216-6200