Annual Giving The Measures and the Trends

Transcription

1 Annual Giving The Measures and the Trends March 31, 2011 Shaun B. Keister, Ph.D. Associate Vice President for Development The Pennsylvania State University 1 Annual Giving The Measures and the Trends Measures in Annual Giving Measuring a Quality Program Donor Retention / National Benchmarks Donor Reactivation / National Benchmarks Upgrading Donor Acquisition / National Benchmarks Reporting Internal / External Benchmarking COUNCIL FOR ADVANCEMENT AND SUPPORT OF EDUCATION 2

2 Annual Giving The Measures and The Trends Trends in Annual Giving Generational Differences On-line Giving Telemarketing Dollars vs. Donors Donors Dollars Stewardship COUNCIL FOR ADVANCEMENT AND SUPPORT OF EDUCATION 3 Trends in Annual Giving Generational giving differences On-line giving Telemarketing trends Donors vs. dollars Stewardship s emerging role

3 Trends: Generational Differences For the first time in history, annual funds must deal with four distinct generations: Civics Boomers Generation X Generation Y (Net)/Millennials Trends: Generational Differences Civics Give out of loyalty Respond to authority figures Direct mail responsive Reluctant to give over the phone On-line giving emerging

4 Trends: Generational Differences Boomers Respond to emotion Students make great solicitors Mail and telemarketing responsive Tend to give in order to create change Trends: Generational Differences Gen X Pragmatic; cynical Think globally realize they cannot change the world, only certain things about the world (cluster their giving) Visual generation Cell phone responsive On-line responsive / social media savvy

5 Trends: Generational Differences Gen Y (Net) Too early to tell; but their focus could be on their communities View global, diversity, and education as givens Cell-phone responsive (capture the numbers)/reliant Not mail responsive On-line responsive capture but market via social media Most importantly value the dollar differently; do not under-ask Text giving? Trends: Generational Differences One size no longer fits all Increased market segmentation Diversify how we approach prospective donors, and what our message is for each market/generation Will only become more complicated and complex Personalization of appeals is essential to survive and thrive

6 Trends: On-line Giving E-solicitations can invoke emotion and a call to action that can be more effective than direct mail E-flashes vs. html formatted vs. viral marketing Short, succinct messages Communicate with donors via for purposes other than just solicitation Other emerging technology opportunities Pod casts Text messaging Social networks Facebook Higher education light years behind other organizations Trends: Telemarketing Challenges Radical decrease in contact rates Generations X and Y much harder to reach due to busy lives and alternate ways of communicating Cell phones replacing home phones as primary phones (but now we can purchase cell numbers)

7 Trends: Telemarketing Opportunities Screening devices mean only those who want to talk to you pick up the phone Knowledge of generational responses to phone can lead to better, more strategic segmentation Phone still outperforms mail in participation rates and average gift (if done well) Cell phone number for life Phone success is still on the rise Trends: Dollars vs. Donors While both continue to be important to most institutions, reality will soon set in Younger generations (X and Y) are less likely to participate but more likely to make larger gifts Value of the dollar Education not preferred charity Harder to reach As older generations die or discontinue their giving, the chase to have high participation rates will become a losing battle

8 Trends: Donors Forget participation focus on number of donors Continue to update records capture addresses / cell numbers Use a variety of coordinated forums to solicit phone, mail and Develop constituencies other than alumni to boost donor numbers (largest growth potential are parents and friends) Trends: Donors Be realistic trends do not support higher participation rates in the future. Educate campus leaders about reality and inherent challenges related to participation. Shift focus to number of donors Be cautious about benchmarking peers everyone calculates participation differently See New Yorker article on rankings (Malcolm Gladwell, Dept. of Education, The Order of Things, The New Yorker, February 14, 2011, p. 68.)

9 Trends: Dollars You get what you ask for Generations value money differently; younger generations = best annual gifts Payment plans, EFT, and credit card options can lead to larger gifts A compelling case and strong reasons to give inspire people to give more accountability matters Second asks Trends: Dollars Telemarketing still the best for upgrading donors Quality calls (8-10 minutes) coupled with aggressive ask levels lead to significant increases in average gifts Caller training is key If you increase average gift, you increase revenue the bottom line matters National trend donors down, but dollars up (except in 2009)

10 Trends: Stewardship Stewardship has become more important than ever before, even with annual fund donors Donors more intensely focused on accountability Educate them about impact of their gifts Transparency Only 11% of donors believe charities are spending money wisely Only 31% believe charities doing a very good job helping people (Princeton Survey Research Associates) Trends: Stewardship How do we motivate and thank our donors? Trinkets and toys no longer work what donors really want is access and engagement Sophisticated and loyal donors want information and want to be a part of the action Integrate them into the life of your campus and areas they support

11 Questions & Answers COUNCIL FOR ADVANCEMENT AND SUPPORT OF EDUCATION 21 Measuring a Quality Program Too many numbers, too little time What matters the most? Donor retention Donor reactivation Upgrades Donor Acquisition Develop systems/reports to track these!

12 Donor Retention Once a donor has given 5+ consecutive years, unlikely they will lapse loyalty 85% of major gifts come from donors who first gave to annual fund Correlation between planned gifts and annual giving loyalty Higher the gift, stronger the retention rates Donor Retention: National Benchmarks Median Donor Retention Rates Target Analytics

13 Donor Retention: National Benchmarks Median Multi-Year Donor Retention Rates Target Analytics 71% 70% 68% 69% 63% 63% 62% 67% 66% Target Analytics Private Public Overall Donor Reactivation Recapturing lapsed donors is second only to retention as means of boosting your donor and dollar totals For each additional year lapsed, harder to reactivate Set goals for reactivation rates

14 Donor Reactivation: National Benchmarks Median Donor Reactivation Rates % 19% 18% 17% 16% 14% 19% 18% 16% Target Analytics Private Public Overall Donor Reactivation: National Benchmarks Median Revenue per Reactivated Donor $442 $410 $352 $277 $290 $252 $317 $319 $300 Private Target Analytics Public Overall

15 Donor Reactivation: National Benchmarks Median Change in Reactivated Donor Revenue % 9.2% 9.2% 2.6% -5.8% -7.6% -0.1% -18.7% -15.2% Target Analytics Private Public Overall Upgrading At least 35% of all donors should upgrade support each year over previous gift level Second ask programs help boost upgrading Less than 20% should downgrade

16 Donor Acquisition Still important to acquire new donors every year, though less impactful than retention and reactivation Acquisition increasingly difficult donors more selective about philanthropy Impact of economic downturn Young alumni complicate acquisition Donor Acquisition National Benchmarks Median Change in New Donors % -2.2% -6.6% -5.5% -4.2% -5.0% -9.4% -11.0% -13.2% Target Analytics Private Public Overall

17 Donor Acquisition National Benchmarks Median Revenue per New Donor $171 $162 $150 $147 $139 $141 $137 $136 $127 Target Analytics Private Public Overall Donor Acquisition National Benchmarks Median New Donor Retention Rate % 29% 32% 31% 29% 28% 28% 28% 26% Target Analytics Private Public Overall

18 Reporting Develop reports around key metrics to track success Important for strategic planning and measuring effectiveness Provide reports to your supervisor and other stakeholders Help them understand which metrics spell success Internal / External Benchmarking Use these metrics to benchmark against yourself from year to year Use them to develop common framework among peers to do external benchmarking

19 QUESTIONS?