IN RESPONSE TO A RESPONSE

to my May 21, 2008 blogspot, I will revise my statement about my interest in my sons participating in philanthropy to the extent they can and should. Quoting my fundraising mentor Hank Rosso, “Fundraising is the gentle art of teaching the joy of giving.” Yes, it is the least we can do for our children.

CRAWL BEFORE YOU START RUNNING & TALKING

Recently I spoke with a representative of a non-profit who mentioned that their organization planned to conduct a $200 million capital campaign. Prying into their planning would have been impolite, however, it reminded me of Barack Obama’s recent joke: The campaign for the Democratic presidential nomination has been going on so long, babies have been born, and they’re already walking and talking!

A capital campaign, an organized, intensive fundraising effort to secure extraordinary gifts for a specific goal (bricks and mortar, cash reserves, endowment funds) during a precise period of time, is similar. You can’t overlook the gestation period -- in Obama’s case, the primary. When contemplating a capital campaign, don’t overlook the feasibility study!

A thorough examination of the ability and willingness of an organization’s community to provide the requisite leadership and funds to make a capital campaign successful is a different animal than annual fundraising planning. Organizations usually have a history and a mission statement, a strategic plan, leadership that concurs with fundraising programs, development staff to lead activities from the rear – components necessary for conducting normal fundraising. But, when deciding whether and/or when to conduct a capital campaign, determining feasibility is crucial. Skip this step and all else will very likely fail.

An organization must amass as much relevant information as possible on, about and from valid stakeholders: the prospective individual donors, foundations, corporations and government entities who will affect the outcome of a campaign. As Hank Rosso, founder of The Fundraising School, noted, “Their level of loyalty and commitment can be an essential factor in the nonprofit’s decision to implement or to delay the start of a much-needed capital campaign.”

A parallel question when designing a feasibility campaign is the question of whether an organization has experienced staff available or whether it is better to hire outside counsel. Having been staff and consultant, the advantages of using competent outside counsel exceed any possible detriment. First and foremost is that prospective participants will speak with more forthrightness given the confidentiality afforded by outside consultants. Additionally, third parties bring greater objectivity.

It is profoundly important to clarify how an organization is viewed in the eyes of prospective donors, to know whether a community understands the importance of the proposed capital campaign and has the ability to support such an endeavor, to determine if there is adequate access to sufficient financial resources, to assess organizational infrastructure and human capital to conduct a campaign, to assure the organization’s need can inspire prospective donors to commit significant contributions well before a campaign is launched.

If you would like information on capital campaigns or on hiring campaign counsel, feel free to call me: 847/227-7174.

SPLIT PERSONALITIES

Like so many parents, I’m concerned about whether my twin boys, part of the Millenial generation (born on a frigid January 1st, 1988), are participating in philanthropy to the extent they should. I’ll acknowledge I may be making flawed generational assumptions as I look at their snowboards, longboards and keyboards, which didn’t exist when I was their age. I’m over 30 and one of my generation’s maxims was, “Don’t trust anyone over 30.”

Obviously, fundraising professionals need to understand multigenerational personalities and the motivational values and considerations shaped by their life experiences. For example, this perception that today’s young people aren’t as philanthropic as previous generations is turned on its head by a new study from Indiana University’s Center on Philanthropy.

Based on data from a 2007 survey of more than 10,000 individuals spread across five generations, the report, Generation Differences in Charitable Giving and in Motivations for Giving, found that while those in the Millennial generation, born after 1981, are generally less likely to give and tend to give less when they do make a donation, those tendencies are associated more with income, education level and religious attendance than generational affiliation. All other factors being equal, the report found, the average giving level of Millennials was roughly equivalent to that of donors across all generations.

According to the report, the Millennial generation is more likely than any other generation to cite the "desire to make the world a better place to live" as a key motivation for their giving, while members of the "Silent" generation — individuals born between 1929 and 1945 — are more likely to cite a "need to provide services that the government can't or won't" as one of their most important motivations for giving.

Members of my kids’ Millennial generation still want to make fundamental contributions to society. Often younger generations are eager to participate in their family’s tradition of giving with a gravity and commitment that surprises and surpasses parents and grandparents. They have great potential to become life-long donors with rising earning power.

Does this good news offset the concerns of my Baby Boom generation about our ability to live comfortably in retirement? Ruy Teixeira of the Century Foundation says that as the “U.S. economy slides into a recession, the economic insecurity that has afflicted so many Americans during the Bush administration is likely to get even worse…. Back in early 2002, 59 percent of non-retirees said they expected to have enough money to live in retirement. That figure has now fallen to just 46 percent.”

The “Boomers” saw a tremendous transfer of wealth from their Depression era parents. While these are turbulent economic times, there has been an enormous creation of wealth in some sectors in the past seven years and new foundations are cropping up by the thousands.

All non-profits should be seeking diversification in their donor base and opportunities to inspire current and future donors. As ambassadors for philanthropy, understanding differences helps us illuminate current and prospective donors underlying values, strengthen relationships and achieve mutual goals.

ONWARD ONLINE

Online fundraising is one of the fastest growing sources of new income for non-profit, for-profit and political organizations. M+R Strategy Services in Seattle, WA (www.mrss.com) has just issued a new study with very significant information for online fundraising and advocacy. According to M+R, the total amount raised online by their study partner organizations grew by 19 percent from 2006 to 2007.

As much as the new advocacy technies may not want to hear this, to a large extent online fundraising strikes me as very similar to direct mail marketing… response rates, monthly and yearly giving patterns, average gift size, issue identification. Everyone who is concerned about the base of their fundraising pyramid ought to read this report.

Key findings from their 2008 eNonprofit Benchmarks Study present important fundraising, advocacy and messaging metrics. Between 2006 and 2007:

- The number of online gifts went up 24 percent in 2007, and the total amount raised online increased by 19 percent!
- Email open rates have fallen from 21.3 percent to 17.6 percent, and click-through rates have dropped from 4.9 percent to 3.8 percent.
- Their average nonprofit study organization sent an average of just over 4 emails per subscriber per month in both years.
- The annual churn rate, or the rate at which an email list “goes bad” in a year, dropped two percentage points (from 21 percent to 19 percent), a positive trend.
- The average advocacy email response rate in 2007 was 7.5 percent. The average fundraising email response rate was .13 percent.
- While $1,000+ gifts made up just 1 percent of overall online donations in 2007, these gifts made up 20 percent of the amount raised online.
- Almost 60 percent of the participants’ subscribers did not take any online advocacy actins in 2007.
- “Super activists,” the subscribers taking 6 or more online actions in a year, made up just 5 percent of the total email list size but accounted for 42 percent of the organizations’ total actions.

While response rates declined across all study organizations from 2006 to 2007, the amount raised continued to go up due a great deal to the fact the average email list has grown larger than the rate of decline.

The average gift size for all the nonprofit organizations included in the study was $87. International organizations reaped larger average gifts ($123). Environmental, health and rights organizations’ gifts were about half that, in the $65 - $70 range.

The findings in this 41 page report should raise lots of questions for today’s nonprofit organizations concerning yearly giving patterns, average gift size considerations, monthly revenue supporters, as well as fundraising and messaging strategies, and technology issues like pixels and spam.

Not surprising to most fundraisers, forty percent of online giving occurs in the last quarter of the year, too. How can you encourage contributions at other times during the year? Do you tie fundraising appeals to your advocacy action requests, identifying what inspires supporters and raising money at the same time?

Are you sending emails too often – the most common complaint site subscribers cite for unsubscribing -- or not enough, so they aren’t tethered to you? How can different graphics impact your activism and response rates? Does your site have powerful, engaging content? These are key questions for list management.

M+R Strategic Services’ suggestions for improving online giving growth are worth considering:

Optimizing the sign-up mechanisms on your organization’s web pages.
Earned outreach
List chaperones with other like-minded organizations
Viral marketing
Paid advertising

If you’re going to do online fundraising, you might as well know what you're doing and do it right!

STRATEGIC PLANNING: LIKE THE PAIN OF CHILDBIRTH

I know something about the pain of childbirth: 18 hours of labor, a C-section and twin boys. The gestation period for creating a strategic plan can take longer than bringing a person into the world! How often has your favorite organization forgotten to incorporate one of the key players in the delivery - the fundraising staff - from the beginning of the strategic planning process?

Plainly, a strategic plan is a vision of your organization's future and the road map to achieve that future. A good plan extends forward at least five years. Profound questions have to be asked and answered, goals and objectives and desired outcomes must be outlined, plus metrics for assessing progress, timelines and budgets must be developed.

Although the ultimate goal of the strategic planning process is to develop a plan and put it in motion, the value of the planning exercise often lies in the process itself. Integrating stakeholders into the process gives them an opportunity to learn more about the organization, to share perceptions of its strengths and weaknesses, and to discuss critical issues affecting, or likely to affect, the organization in the future. One of the most time-consuming parts of strategic planning is responding to issues of concern to various stakeholders. In any event, the process should be designed to generate decisions arrived at by consensus. Single-person planning, no matter how prescient or efficient, almost always eliminates the opportunity to distribute ownership of the plan — and, by extension, responsibility for the organization's future — among key stakeholders. A consensual approach, on the contrary, is likely to ensure that key stakeholders believe in the organization's vision of the future and are committed to supporting it.

Those who can affect the outcome must be involved actively in the discussions, analysis and evaluation, and planning and approval of the strategic plan. Fundraising professionals are to strategic plans as obstetricians are to pregnancies!