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Donor Participation Project

9/16/20 Lunch Analysis: Growing Engagement Among Underrepresented Groups

This session has passed. Read the summary and takeaway points here.

How have you tried to broaden your donor base and make it more representative? What has worked for you? What backfired?

As part of the Donor Participation Project, this Lunch Analysis session will be guided by Patrick Powell, AVP of Volunteer Engagement and Donor Philanthropy at Morehouse School of Medicine.

An expert in donor engagement and community-building, Patrick is part of one of the fastest-growing institutions in the country at Morehouse School of Medicine.

Brainstorm and Discuss this Topic With Peers During our September 16 Lunch Analysis

Lunch Analysis is a 45-minute meeting that is a part study group, part scholarly discussion, part brainstorming session, and part support group. Participation is open to all who fundraise or have fundraised at a nonprofit.

Each Lunch Analysis covers a specific topic in donor participation and has required preparation and discussion. This one will be on September 16, 2020 at noon EST.

Required Preparation

Take a moment to jot down the answer to the following questions:

  • What is the percentage of alumni giving/participation for your Black and or Latino donors?
  • Has leadership placed an emphasis on engaging donors of color at your institution?
    • If yes, what are the strategies or best practices you’re utilizing to identify and cultivate this constituent group(s)?
    • If no, what do you perceive the barriers are to these discussions? 
  • How has that impacted your desire to cultivate these specific groups if at all?
  • Have you experienced any success or rejection as a result? 

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    Past Sessions

    8/19/20 Lunch Analysis: How We Gather (Millenial engagement, community-building)

    Participants

    Adrian Annette Owen, CFRE, AVP for Advancement Services at LSU Foundation

    Allison Kerivan, Director Of Annual Giving at Bentley University

    Benjamin Osterhaut, Director of Annual Giving at Elizabethtown College

    Billie Handa, Director of the Annual Fund, Denison University

    Cameron Hall, Senior Director of Annual Giving at Texas Tech University

    Hawken Brackett, Executive Director of Strategic Engagement at The University of Alabama

    James Barnard, Executive Director of Annual Giving and Integrated Marketing at University of Cincinnati Foundation

    Jayanne Sevast, Director of Development, Annual Campaigns at Kutztown University of Pennsylvania

    Miriam McLean, Director of Development, University Initiatives at Tufts University

    Patrick Powell, MBA, CFRE, Senior Development Officer at Children’s Healthcare of Atlanta

    Sean Devendorf, Senior Director of Annual Giving, University Advancement at Tufts University

    Sierra Rosen, Executive Director of Planned Giving at Brown University

    Categories
    Donor Participation Project Resources

    Donor Participation Project Kickoff: How We Gather Report

    Angie Thurston of Sacred Design joined a group of fundraisers as part of the Donor Participation Project to discuss the implications of the How We Gather report for nonprofit engagement and donor participation.

    The document below summarizes the main points discussed:

    • The sector also needs a reliable way to know what is working well in the areas of donor engagement. In the current pandemic environment, especially in the area of digital engagement.
    • Angie shared a great thought:

    People come for [the workout/artistic self-expression/having dinner with like-minded individuals/something else] but they stay for the community.

    • Donor participation as it is sometimes defined can become a superficial numbers game. A deeper definition of authentic donor engagement is seen as necessary.
    • It is important that there is wide representation among donor constituencies. The current trend toward fewer donors making larger gifts feels undemocratic.

    Q: What are the common threads among the organizations in your report that have been able to grow large communities?

    “Community” is a word that is frequently used in an empty way, but we its true that we found a hunger for authentic community. This is different from something like “networking,” which can be valuable in its own right.

    Q: Larger, more established nonprofits include a broad variety of interests under their umbrella. How can we connect with and leverage those communities?

    In larger nonprofits, like universities, communities develop organically around different issues. Sometimes these communities have a separate identity from the main organization. How do we have those communities embrace the values of the “mothership”?

    Angie: This reminds me of meetup.com. There are thousands of communities made possible by this platform but its members identify with each other not with meetup.com. Some suggestions:

    Q: How do we message the values of the organization, especially to sub-communities that have their own values?

    Angie: Messaging about values depends on the extent to which the “real thing” is happening. Naming “values” is more effective if they match what is already going on. Otherwise, they come across as empty.

    People should testify to the values of their community, based on their experience.

    This connection between what is really happening and the official “values” can break down as organizations scale and grow. Some organizations are so reliant on the founder for these values that they fall apart when he or she is not there. We’ve all been guilty of this: “Developing Leaders for the 21st Century” sounds empty.

    The statement of values is less important than the lived experience.

    Among Millenials, there is a noticeable search for community, accountability, and an authentic voice. Communities must engage their constituents to be active, be purposeful, and demonstrate value to their members.

    Angie: What we found striking is that lot of people (especially Millenials) are looking for deep community. But they are hesitant to talk about it in those terms (there is still a stigma for “loneliness”). People are wary of hyperbole. What they find appealing is “come play live music for one hour.” In other words, they want to hear the unexagerated reality of what the offering is.

    Messaging should come from this lense. What are you actually doing? In real-life terms? Why have you made the decision to do that? Corporate messaging has exploited the word community and other concepts so much that people are hungry for a sense of reality.

    Participants:

    Khadija Hill
    James Barnard
    Hawken Brackett
    Franklin Guerrero
    Cathy Dodge-Miller
    Patrick Powell
    Ivan Alekhin
    Angel Terol
    Joanna Schofield
    Sierra Rosen
    Tilghman Moyer
    Patrick Powell
    Michael Spicer
    Rebekkah Brown
    Louis Diez

    Categories
    Resources

    Should we have suggested donation amounts?

    Question from a reader:

    This discussion came up, and I was hoping you may be able to direct me to some resources I can share with her to make the internal case for ask amounts in appeals. Thanks for anything you can pass along!

    I have a difficult time convincing that specific ask amounts work. Am I completely off base?

    Including a suggested ask amount is considered a fundraising best practice. As such, it’s included in the fundraising letter checklist.

    There is scientific research that shows that including a suggested donation amount gets more people to give. They also tend to give the amount you suggest.

    References:

    Edwards, J. T., & List, J. A. (2014). Toward an understanding of why suggestions work in charitable fundraising: Theory and evidence from a natural field experiment. Journal of Public Economics114, 1-13.

    Goswami, I., & Urminsky, O. (2016). When should the ask be a nudge? The effect of default amounts on charitable donations. Journal of Marketing Research53(5), 829-846.

    Reiley, D., & Samek, A. (2017). Round giving: A field experiment on suggested charitable donation amounts in public television. University of Southern California working paper.

    Categories
    Donor Participation Project Resources

    How to Grow Giving Participation

    I recently shared a list of US higher ed institutions with a high growth rate. Specifically, alumni giving participation growth between 2009 and 2019.

    My team and I have been interviewing the top 10 in the nation. This varied list includes Ellon University, Villanova University, Morehouse School of Medicine, and Princeton University. Here is what we’re learning:

    Donor growth is (one of) the VPs personal priorities

    Growing organizations have the unit in charge of growing this metric (typically “Annual Giving” or “Annual Giving and Alumni Engagement”) reporting directly to them.

    They act like “community incubators”

    A “community incubator” is a term I created to describe organizations that are constantly generating different engagement opportunities for their donor base. “It’s a volume business,” one of the growing org VPs shared with us.

    None of the schools told us that they had just grown and grown their existing engagement opportunities (i.e. reunion program, alumni board) to reach their ambitious growth goals.

    Instead, they told us that they were constantly innovating and finding new segments and designing engagement opportunities for these constituencies: primary care physicians, alumni business owner marketplace, athletics-focused groups, the list goes on and on.

    They do not shy away from transactional exchanges

    All the growing schools embraced the fact that, at times, people will just “give to get.”

    What they get can vary from access (“dinner with the president”) to simple incentives and promo items in the public radio-style, or simply satisfaction (“the 100th gift will unlock $10,000 to a specific program!”). Often, this is done to promote first, second, and third gifts.

    Intensive use of incentives, challenges, and matches are an integral part of all of these programs.

    They make recurring gifts easy and emphasize this way of giving wherever possible

    They all have robust offerings and streamlined systems for monthly giving and multi-year pledges that you can make online, on the phone, or by mail.

    They experiment and change their org chart based on priorities and team strengths

    If they’re convinced that annual giving and engagement are two parts of the same coin, they will put them together in the same department. If they believe that a certain area needs more attention, they will have it report directly to the VP. If they believe that this is no longer the case, they will change the org chart again.

    Stagnation and rigidity are not part of the vocabulary at any of these organizations.

    Categories
    Resources

    Emotion-Based Fundraising May Not Work In the Long Run

    This article is not about fundraising and yet it answers some good fundraising questions.

    An article on behavioralscientist.org on why behaviors based on emotions do not last.

    Why giving days and other giving events work and why they sometimes struggle to retain the new donors they generate.

    Why the design of your gift form (online or paper) is more important than you think.

    Why we should think about defaulting to monthly giving.

    Why we should consider the global effect on fundraising capacity of our decisions, not just how many dollars the next letter will raise.

    Recommended read.

    Categories
    Resources

    Why Retain Donors?

    Recently, I was asked to do some simple modeling on the effect of retention rates on revenue.

    The results were surprising. You can read the post and resulting conversation here.

    The post author’s goal was to show what that investing in donor retention is better than investing in donor acquisition (getting new donors) OR donor extraction (getting more major gifts from your existing pool of prospects).

    The model is simplistic but the consequences for our engagement strategy are profound.

    Tale of Two Nonprofits

    We compared two nonprofits, one with high retention and low acquisition and another with low retention and high acquisition. Unsurprisingly, the high retention nonprofit grows and grows…

    image (1).png

    …while the low retention nonprofit stays the same, barely recovering the number of donors they lose every year.  

    image (2).png

    (For those interesting in playing with the numbers, the spreadsheet is freely availably here: https://docs.google.com/spreadsheets/d/1SzstQEA8PrkHXKD_JS1mH_RvfMG7JzQ581j2RwLdixg)

    To calculate revenue, I presumed that all donors start out as annual donors ($25/year) except for a small pool of donors who have been with the org for a while (5% of those who have given for three years or more) who then become major donors and make a $10,000 gift.

    Here, the high retention nonprofit ends up making four times more per year…

    image.png

    …vs the low retention nonprofit:

    image (3).png

    Assumptions

    Post-analysis, it was enlightening to think through the underlying assumptions. If this is so clearly a better strategy, why doesn’t everybody do it?

    • If you’re investing in retention, you’ll also need to invest in major gift capacity.

    If you decide that a high-retention strategy is for you, after seven years you’ll have a major donor pool that is five times bigger. 
    This means that you’ll also need to invest in gift officer, stewardship, and admin training/personnel to be able to proportionally maintain your ability to get major gifts from that engaged pool (the 5% rate in the model). 
    It is a decision that requires at least a three-year commitment. How many orgs are operating on year-to-year plans?

    • Not Everyone Wants or Can Handle Growth

    On the service delivery side, it takes vision to become the organization that is worthy of receiving this extra funding. Your service model might work at your current scale but will have trouble reaching more people. Maybe there is internal resistance to becoming so reliant on fundraising revenue.

    Perhaps, despite all your current needs, additional revenue would create more problems than it would solve. Major gifts typically have some type of restriction in their use. Unless you have a crystal clear vision and are willing to walk away from certain gifts, an influx of restricted gifts could be problematic.

    The people factor can also be important here. In this new world where you 4x your fundraising revenue, would you grow your people and make it a priority for them to stay?

    • With Great Engagement Comes Great Responsibility

    More engaged constituents are people that expect a superior level of human communication with the organization. Many of us find this challenging enough as individuals, even more, when dealing with organizations. Some organizational leadership may actually prefer having less engaged, arms-length constituents. The disconnect happens when they also want those disconnected constituents to be audaciously generous.

    • The 5% “Extraction Rate” is a Big Assumption

    In the model, I assumed that the “extraction rate” remains constant at 5%. In other words, your capacity to generate gifts from the pool of donors with high engagement and high capacity. It probably fluctuates more than this. As gift officers turn over, staff needs to be retrained, and donor relationships rebuilt. You would think it made sense to offer longevity bonuses at least for the time it takes for major gift relationships to mature.

    • Engagement == Annual Donor

    Having annual donors is nice but, in this model, it isn’t only about the money. More generally, it is about having people engaged with the organization long and deeply enough so that the few with the capability to make a transformational gift are inspired and invited to do so. In the past, it may have been hard to measure other forms of engagement so making an annual gift was a good proxy. This is no longer the case and every org with a CRM can build an engagement score of some type.

    The true goal is to maintain and increase engagement year over year. 

    This engagement can express itself in multiple ways: making a gift, being an active member of your community, or visiting your website every week.

    Categories
    Donor Participation Project Resources

    8/19/20 (noon EST) Lunch Analysis

    ANNOUNCEMENT: Research co-author Angie Thurston will be joining the discussion portion of the meeting!

    Religious participation and giving is seeing the same decline as overall civic life participation.

    The authors of this report study the “emerging landscape of Millennial communities that are fulfilling the functions that religious congregations used to fill.”

    Angie Thurston and Casper ter Kuile discover and analyze successful communities with thousands of members (religious and non-religious, they include CrossFit for example) that bring meaning and purpose to its members, many of whom are Millenials.

    As we struggle with how to involve people in general and Millenials in particular with our organizations, this is a surprising treasure-trove of ideas.

    Brainstorm and Discuss this Report With Peers During our August 19 Lunch Analysis

    Lunch Analysis is a 45-minute meeting that is a part book club, part scholarly discussion, part brainstorming session, and part support group. Participation is open to all who fundraise or have fundraised at a nonprofit.

    Each Lunch Analysis covers a specific topic in donor participation and has required reading and discussion. This one will be on August 19, 2020 at noon EST.

    To Take Part

    • Download and read the file above.
    • Choose one of the profiled communities and try it out: visit their website, sign up to their platform, join a newsletter.
    • Pick one element that you could apply to your own fundraising program right away. Prepare to share your thoughts!

    Sign up here to get the Zoom details (I check that all participants are from legitimate fundraising organizations):

      Join Us

      James Barnard, Executive Director of Annual Giving and Integrated Marketing at University of Cincinnati Foundation

      Tilghman Moyer, Vice President at Development at University of Arizona Foundation

      Hawken Brackett, Executive Director of Strategic Engagement at The University of Alabama

      Grant Kelly, Senior Director of Development at The Johns Hopkins University

      Noah Maier, National Principal Gifts at OneforDemocracy.org

      Michael Spicer, Director of Alumni and Parent Engagement at Pomona College

      Colt Chambers, Director of Development at Georgia Ballet

      Ivan Alekhin, Development Coordinator at National Parks Foundation

      Categories
      Resources

      Simple Guide to Fundraising Excellence

      Best practices for nonprofit organizations with or without dedicated development staff.

      Categories
      Resources

      Three Fundraising Metrics

      Three metrics for forward-looking fundraising organization:

      1. Retention rate: How many donors you keep year over year
      2. Acquisition rate: How many new donors you bring into your organization
      3. Extraction rate: Percentage of your moderate to highly engaged constituents make an annual/major/planned/principal gift every year

      Typical areas that should focus on these metrics:

      1. Retention: donor relations & stewardship, annual giving
      2. Acquisition: annual giving
      3. Extraction: leadership gift officers

      All there are necessary for a growing, inclusive organization. If you focus on extraction, then you’re creating risk in the long term (not enough engaged donors), if you focus on acquisition, you’ll have a lot of arms-length donors and will have difficulty converting them into major donors. If you focus on retention, you’ll have a highly engaged community but your financial results will not be there.

      Categories
      Donor Participation Project Resources

      Heroes of Alumni Giving Participation

      You could easily call the last 10 years “the lost decade” in alumni engagement. Based on VSE data I analyzed, US higher ed lost 285,293 alumni donors on an annual basis.

      The heroes of this lost decade are schools that increased both the number of alumni donors AND their participation percentage (number of alumni giving / alumni of record). How did they achieve this feat? Here are the top 10.

      Top 10 Higher Ed Institutions by Alumni Giving Participation Growth 2009-2019. Source: VSE and own analysis.