September 30, better known as The Day Before the 4th Quarter has arrived. Beginning tomorrow we’re off to the races. October 1 thru December 31 is often the busiest part of the year for fundraising professionals, especially those in the annual fund world. And there is no better time to take a moment to regroup.

For many, the fourth quarter of the calendar year is ‘make it or break it’ as year-end mailings, phonathons, emails and more are increased to frenzied levels. While I’d recommend a more balanced strategy throughout the year, it’s hard to deny the culture of giving that exists during this period.

As nonprofits begin the giving season, it’s the perfect moment to step back and examine your readiness for the next 90 day period. Missing a deadline or two can make the difference between success and failure. Even a few days can have a significant effect. I can’t tell you how many horror stories I’ve heard of nonprofits with mailings set October 15 or November 1 that miss deadlines by a couple of weeks. This, in turn, effectively reduces the solicition cycle prior to 12/31 by the same amount of time.

Take a few minutes today to meet with your staff. Review your solicitation calendar, your timelines and progress. Are you ready? If you’re producing mailings in-house, do you have the materials? Have they been ordered? Has your team dedicated the time necessary to produce and mail everything on time? Do they understand the importance of the deadlines you face?

If you use outside printers or mailshops, are they ready? It’s their busy season too. Have they set aside time for your projects and understand the importance of delivering them at the proper time? There may be instances where a deadline can be missed by a day or two without a negative effect. This is not one of them. Deadline means deadline, and everyone involved must understand this.

A few minutes today may save days or weeks later. Having everything ready to go will make your holiday plans more enjoyable if you aren’t worrying about your mid-year numbers.

Good luck! May your 4th quarter be your best yet.

Too often, we spend all of our time letting others know what our institution wants from them. It’s a ‘gimme gimme gimme’ attitude and it doesn’t optimize the relationship with our donors, especially leadership annual fund, major gift and planned giving donors. Maybe it’s time we listened a bit more.

The most successful philanthropic relationships occur when the donor and the organization are in sync. When the donor’s aspirations can be fulfilled by making a gift to your organization, the resulting gift is good for everyone.

Many thanks to Kay – one of the gettinggiving.com faithful – for forwarding an article earlier this week about for-profit online education.  Both “scary” and “progressive” are words to describe Kevin Carey’s vision of higher education in the future. . . a comprehensive catalog of classes that can be delivered with a simple click of a mouse.  Carey, by the way, is a policy director for Education Sector, an independent think tank in Washington, DC.  While we all know this technology is available today, I think “We Ain’t Seen Nothing Yet” pretty accurately sums up this topic.

Carey’s article highlights the emerging world of online educational opportunities that may, in the future, offer a complete and affordable alternative to the traditional college campus experience.  One example includes a service that allows students to take as many classes they want, work at their own pace and complete each one as quickly as they are capable of doing so — all for the low low subscription fee of just $99 per month.  That’s right, $99.  I guess if you gave up sleep for a few months and put your nose to the grindstone, that diploma could be hanging on your wall by the end of they year.  And it might cost less than the frame.

I’m not sure how I feel about this.  As I’ve said before, I’m a techno-geek and all things like this intrigue me. In fact, I might just sign up to try it out.  However, much of the learning process associated with college takes place outside the walls of a classroom.  I don’t think I want my kids to stare at their computer monitor every day and end up with a degree a year or two later.  I want them to meet new people and become more independent.  I want them to have eight roommates in a two-bedroom apartment.  I want them to wear school colors and root for the home team.  I want them to walk across campus when there’s three feet of snow just like daddy did.  Above all else, I’ll want them out of my house rather than sitting at my kitchen table taking online classes! 

 I certainly know I couldn’t put a price tag on the experiences I had in college and the growth I experienced in those four short years.  (NOTE: Yes, it only took 4.  I screwed up because I really should have taken at least 5 if not 6 years to enjoy the journey).  I’ve thought about getting my MBA online, but as the article points out most reputable programs actually charge MORE to get a degree online than they do if you’re on campus.  I understand the ‘convenience fee’ and all, but it really is ridiculous when you think about it.  It’s kind of like letting me visit the bank for free (using valuable space, teller wages, etc.) but the ATM charges me $3 just to withdraw a twenty-dollar bill.  I know loan sharks with better deals than that.  At $99 a month, this is no longer an issue.

Regardless, the article is fascinating.  For those of us working in the traditional college campus environment, we need to spend more time thinking about how to work with those graduates who may never (or at least infrequently) step foot on campus.  I know most online programs are still relatively small, but they grow dramatically each year.  I’m not sure what the fundraising outlook is for those audiences, but if we expect to engage them in the future we’d better start thinking more about this issue today.  Right now they’re usually just a minor outlier in our strategy and it doesn’t make much of a difference to our programs.  This will no longer be the case as our online alumni population expands significantly.  It’s possible we’ll find that we simply don’t have much potential in this arena.  Or not.  One way or another, we’ll find out soon.

Read Kevin Carey’s article here and if you have any words of wisdom from your experiences with this type of population in your program be sure to share!

There is a touching article on Bloomberg.com today that demonstrates the power of philanthropy.  It’s a short piece about David Robinson (NBA Superstar) and his relationship with a group of kids at Gates Elementary in San Antonio.  His personal pledge to these students was to pay for their college education if they met some basic requirements such as attending some mentoring meetings, not having attendance problems and staying in school.

These students, now successful adults, are interviewed about the experience and the impact Robinson had on them.  Their success is Robinson’s reward.  When they ‘pay it forward’ by helping others will help Robinson’s support grow exponentially over time.
(See story link at the bottom of this post)

This article provoked some though about my own charitable contributions.  By a quick calculation, I give somewhere in the range of 3% to 3.5% of my annual salary in a variety of ways.  My university gets the biggest chunk, and the rest is spread among several other smaller nonprofits, most local.  However, I’m not sure I’m getting the outcome I could were I to be more thoughtful about my philanthropy before making a bunch of gifts.

To make a difference, philanthropy requires careful thought and planning.

• Just what is it I want to accomplish?  
• How will I know I’m making a difference and not simply taking a tax deduction? 
• How do I define success?
• Is this the best nonprofit to facilitate my priorities?

The biggest question for most, and the answer “YES” is the right one, is this:  Can somebody who doesn’t have NBA-Superstar money really make a difference in the world?

I’ve decided to spend significant time setting my goals for 2011 between now and the end of the year.  The first goal is simple:  Increase giving to 4-5% of annual income.  This is a reasonable increase and a number I can feel comfortable with at this stage in my life.  That’s the easy part. 

The hard part is determining how to allocate those philanthropic dollars.

We often think of major gift donors having made an ‘investment’ in an organization.  Their thoughtfulness is applauded, their objectives clear.  Isn’t this true for many of our annual fund donors?  They’re investors too.  What may seem like a ‘penny stock’ to some is a considerable investment to others.  Making wise investment choices determines a individual’s philanthropic success much as an investor determines the success of his or her portfolio.

Over the next several months I’ll be thinking quite a bit about where I want to focus my efforts for the next few years.  My ‘philanthropic roadmap’ will outline the basic needs I wish to address, the financial resources I want to dedicate and, additionally, how I can personally be involved in the efforts I support. To be honest, I’ve been a pretty hands-off donor in the past as time is often more difficult to come by than anything else.  I’m not sure if I can achieve my goals and still take such a passive role in the process.  That’ll be a big part of the planning process.

The funny thing is, we forget that donors everywhere have differing feelings about what a ‘significant gift’ is to them.  Whether they give $500 or $500,000, they are thinking about the same things I’m describing here.  When we ask them to contribute, we’re asking to be a part of that planning process and to invest in our mission.  We must meet their needs by providing careful stewardship of their contribution and by reminding them often how their investment is reaping dividends for our organization.  In turn, that makes them happier about their investment.  Their ‘philanthropic roadmap’ has plenty of detours – we need to make sure we’re on the same road they’re traveling if we want them along for the ride.  

Take a look at Robinson’s story and you might just be inspired to take some time to think about what your roadmap looks like too.

We now interrupt your regularly scheduled programming to bring you the first episode of “People Say The Craziest Things” on the gettinggiving.com blog.

I’m betting the following fictional reenactment is something you’ve experienced in the past.  I know I’ve encountered this situation too many times to count.  I’m all for feedback, it’s that final phrase (see below) that always kills me!

Two individuals are talking about a fundraising program.  One is a highly experienced fundraising professional with many years in the field.  The other isn’t, but they have an interest in the program.  The one that isn’t just told the fundraising professional how fundraising should be done.  They have a new idea or suggestion that will work much better than whatever the professional fundraiser is doing.  They mean well and truly want to help.

Fundraising Professional
“That’s an interesting idea.  I’ll need to think a little bit about how we would do that.  Normally, we find that we’re more successful when we (fill in the blank)”

The Other Person
“I don’t want to tell you how to do your job, but I know these people and this would be great.  You really need to do this!”

At this point the fundraising professional pulls out 500 pages of graphs, charts, data, historical information and a dissertation that has been written on this very subject.

Fundraising Professional
“Actually, our data and testing as well as information we’ve received from other professional fundraisers throughout the country shows that we are more effective when we (fill in the blank)”

The Other Person

I’m willing to bet you’ve had a very similar conversation.  I just LOVE the ‘my donors are different’ comment.  It always makes me smile.  Inside.

This was a big weekend for colleges and universities around the nation as the annual “America’s Best Colleges” issue of US News & World Report hit newsstands late last week. I’m betting more than one annual giving director has spent time this weekend looking at the numbers in print or online. The annual participation rate extravaganza is officially underway!!

Let me start by making my thoughts on the participation rate metric clear: I hate it. Hope that was clear enough. I’d use stronger wording, but I don’t want to get an ‘explicit’ tag on the ‘getting giving’ blog.

Annual giving folks in higher education are all very aware of the participation rate metric. They may feel pressure to focus on it if their president/board/supervisor thinks participation rate is important to the success of their institution. In some cases, it’s truly ‘do or die’ and in others it’s simply another issue to remain aware of. For those that have the ‘do or die’ type of pressure, it’s likely their strategy is greatly impacted as a result. And usually not in a good way.

The bottom line is that those who chase participation rates are often making strategic decisions that damage their overall fundraising efforts in both the short- and long-term. Some methodologies may be considered cheating the system or, at the very least, walking a fine line between right and wrong but I’ll not be the judge of that. I have great sympathy for those who find themselves in a situation where decisions are made to make a number look good in an annual magazine issue. I can see why they do what they do. I’ll just share a few examples and how these strategies are detrimental to the efficiency and effectiveness of our programs. I’ll assume you all know enough about participation rates to jump ahead a bit.

So, on we go to ‘The Participation Rate Game 101 – Two Common Methods to Look Good in US News”

Method #1 – Reduce The Denominator
How can you increase your participation rate without increasing the number of donors to your institution? It’s simple really – just decrease the number of solicitable alumni you have to report! 100 donors from a population of 1,000 alumni is a 10% participation rate. Find a way to rid yourself of about 200 solicitable alumni and suddenly you have a participation rate of 12.5%. You’re a hero!

You can’t do that can you?

Of course you can, it’s done all the time!

• You can reduce the amount spent looking for lost alumni in the nondonor and even lapsed populations. Geeze, who wants to find a good address for somebody who might not ever make a gift? Of course, it’s possible they aren’t giving because we haven’t reached them, but why take the chance by asking them? It might bring the participation rate down if we knew where they were!

• Try coding those same folks ‘no contact’ and determine them not to be solicitable as a result. Of course, then you’ll never reach them. They’ll never give. But again, they’re not a problem in that pesky denominator anymore!

• Perhaps the elderly non-donors are especially problematic. Again, you might want to code anyone who graduated prior to a certain year as ‘no contact’ since you can’t teach an old dog new tricks. You might not want to mention this to your planned giving department – they’ll likely miss out on some pretty good marketing opportunities to that group. Then again, they don’t have to worry about participation rates do they?

I’m all for allocating resources wisely, and there are valid reasons not to solicit certain populations each and every year based on predictive models, historic giving patterns and more. But a strong annual giving program wants as many solicitable alumni as possible. They fight like dogs to keep up with alumni who move, to find good contact information for everyone, and to at least have the opportunity to receive a gift from as many potential donors as possible. For those who aren’t the best populations, you might not solicit them every year but by keeping the option open you have the chance to eventually bring them on board as loyal and consistent donors in the future. It’s a sad day when the strategy is to eliminate them from the denominator to help the participation rate today when it may negatively impact your fundraising efforts tomorrow.

Method #2 – Increase the Numerator (At All Costs)
With those same 1,000 alumni, taking your number of donors from 100 to 150 raises your participation rate from 10% to 15%. That’s better than Method #1, but the strategy to get from 100 to 150 donors may end up backfiring on you.

• You could overwhelm your population with enough mail to keep the USPS operating at a surplus next year. Everyone can get 20 mailings per year and eventually they’ll give something just to get you off their back. If you’ve got the resources, you can buy yourself a pretty good participation rate. Might not build many good friends that way though. The long-term negative impact might want to be considered.

• You can always let your alumni know that ‘it isn’t about the money, it’s about the participation rate’ and hope they’ll give $1 or $5 because that’s what you ask for. You might tell them you are just hoping to ‘get them on the books to help the rankings’ and any gift will help. Then again, ‘for the participation rate’ isn’t the best case for support is it? I wonder if those donors have the same positive feelings about their philanthropy as they would if they were doing something important like helping deserving students get a great education?!?

• You could also give gift recognition credit to your donors’ third cousin twice-removed and their half-brother if they’re alumni too – then you get three donors for one gift! I’m not even sure who my third cousin twice-removed is, but I’m sure they’d appreciate a note of thanks for my generous support! Maybe all three will renew next year too!

I once had a friend who claimed he could get you any participation rate you wanted, but he might have to bankrupt you in the process. Chasing donors at any level, at any cost, can do just that. In addition to using limited resources to buy donors, have you ever computed the real cost of having that donor? From data entry of the initial gift to gift receipts, stewardship pieces, and renewals, it’s likely more than that $5 you’re asking as a ‘token gift’. Do you really want a bunch of donors that actually help you lose money every year they renew?

It’s also important to remember that your renewal rates on small donors are usually much lower than for those making larger gifts. You may spend a fortune to acquire that $5 donor, spend some more stewarding them, and find that only a very small percentage ever give again. Now what!?!

The whole purpose of the annual fund is to generate much-needed support today while building a pipeline of potential major-gift donors for the future. Buying small-level annual fund donors doesn’t achieve either of these goals and wastes precious resources in the process. Those resources could be utilized much more wisely stewarding your current donor population, acquiring donors with potential for the future, and actually helping (rather than hindering) your bottom line.

These are just a few examples of how programs work to increase their participation rate. There are many many more ways. Some are just bad strategy. Others are downright dishonest. Almost all are wasting both human and financial resources chasing a number that really doesn’t mean much of anything.

By the way, it’s important to remember that participation rate is only 5% of the US News formula. It’s the smallest variable. That’s right. . . 5%. Since it’s such an insignificant part of the rankings, maybe a better strategy is an annual fund that generates the support needed to work on other aspects of the US News formula. Scholarships that help recruit the best and brightest students. Faculty support and research funding that attracts the best and brightest faculty. All those things that make an institution truly better come from fundraising programs that keep their eye on the prize. The impact on rankings might be greater when the institution is provided the resources it needs to improve in those areas that matter rather than focusing on making a random number increase year after year.

If that isn’t an option, I’ll just give you some good news to hold you over until the next issue of US News & World Report. . . . it’s still early in FY10. There’s plenty of time to get that participation rate up for next year!!

For years, the most common question I was asked involved the death of telemarketing. Time and time again, everyone from my bosses to board members to clients (and even folks I just met on the street) would remark that they hate telemarketing and ask ‘Isn’t Telemarketing dead?’ I always made some flippant comment and responded that telemarketing is not dead, but for many it might be a bit under the weather.  I think each was a little disappointed they weren’t able to cancel their CallerID that very day.

An interesting article at BRANDWEEK notes that the Direct Marketing Association projects a 10% drop in direct mail. 10% isn’t a number to sneeze at, but it’s also hardly the death of direct mail.

Why is mail diminishing? Well, many reasons really, including:

• Postage has gone up, continues to increase, and likely will again in the future;
• Printing has gone up, continues to increase, and likely will again in the future;
• Production has gone up, continues to increase, and likely will again in the future;
• Other channels, including e-mail and the flavor-of-the-month Twitter have been developed;
• We’re making BETTER DECISIONS about who we mail to and how we mail, allowing us to deliver the same results with less mail;
• The economy doesn’t help either.

Even with all of those factors, direct mail isn’t dead.  Electronic mail doesn’t replace the USPS any more than telemarketing replaced personal visits.  Each of our communications vehicles have particular strengths and weaknesses, and are all part of a comprehensive annual giving program.  No single channel can do it all.

It never will.

We may have to give up Saturday delivery someday soon, and we may be paying more for stamps in the future, but there will always be a mailbox at the end of the driveway just waiting for someone to peek inside.  Our job is to make sure they peek and then actually OPEN that envelope we so kindly delivered them.  If only we could project the death of the ‘circular file’ so more people would read our mail before they pitch it!