Benchmarking Fundraising (Part 4 of a series)

Benchmarking Fundraising (Part 4 of a series)

By Tom Wilson Major Gifts Guru

I previously reported on a presentation by Gary Hubbell at the CASE VIII conference in Seattle. In cleaning off my desk I found his handout with some scribbles that I finally deciphered enough to complete this benchmarking series.

I also need to credit Elmhurst College president emeritus, Bryant Cureton, who co-presented with Mr. Hubbell. It was fascinating to hear from this wise college president how benchmarking was important to him. Of course he wanted to know how fundraising was going at the college – performance benchmarking. When asked what he really focused on he noted he wanted to know overall results, how much it cost to raise a dollar (CTRD), and alumni giving. He noted that he was passionate about alumni participation so that’s what he wanted tracked and compared to other institutions in their peer group.

Other items from Gary Hubbell:

  • CTRD – cost to raise a dollar; the vice president, president, and board members want to know this number (the rest of the fundraising staff, not so much)
  • ROI – return on investment; when we invest a dollar in fundraising what is the return?
  • KRI – key performance indicators; more common as major gift officers are assigned a benchmarked number of prospects with a written cultivation plan; how many proposals have been presented to donors; the secured gifts rate, average production for a major gift officer
A caution. I met someone a year or so ago who was brought into an engineering and science based university to manage 85 major gifts officers. She was hired to bring a softer, less data driven management style to their fundraising. They had been so benchmarking oriented, so compelled by numbers that they kept losing staff members. She told me that they had to relax accountability in the first year on the job to let the new major gifts officer understand the institution and to build a list of prospects they could interact with. By year 3 she expected full productivity but realized coaching people was far more important than just tracking numbers.

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Benchmarking Fundraising (Part 3 of a series)



Benchmarking Fundraising (Part 3 of a series)


By Tom Wilson Major Gifts Guru

In the first two articles of this series, I presented information that Gary Hubbell, one of this book's authors, had presented at a recent fundraising conference.

This book resulted from a three-year benchmakring study for AHP (Association of Healthcare Professionals) Here are some highlights from Lessons from Benchmarking: Fast Forwarding the Maturity of the Fundraising Operation (Gary Hubbell & Mary Reinders).

“Data shows successful programs have more staff and more overall time devoted to identifying, cultivating, and securing major gifts from all sources.”

“Benchmarking can be used as an accelerant to program growth. However . . . . heed this one caution: benchmarking is neither simple, nor a superficial solution in itself. Its power is not in the comparative data, but in your understanding and use of the information. . . .”

You can measure:
  • Number of new donors
  • Number of donors giving more than $10,000
  • Renewal rate (of new donors and repeat donors)
  • Total dollars raised
  • Average gift size for everyone, board, employees
  • Number of volunteers involved
  • Length of giving
  • Revenue and expense ratio (ROI)
This is a quick read. Jim Collins Good to Great and the Social Sectors is referenced often. Collins has great concepts that can help all of us. So I really enjoyed the references to his work. Chapter 6 is particularly helpful in terms of concrete examples that can get you thinking about your own program. Thanks to Gary and Mary for their work here.

Permanent Link: Benchmarking Fundraising (Part 3 of a series)

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Benchmarking for Major Gifts (Part 2 of a series)

Benchmarking for Major Gifts (Part 2 of a series)

by Tom Wilson Major Gifts Guru

Here's more information from Gary Hubbell's presentation at the recent CASE regional VIII conference.

Context is everything. While you can look at some secondary national data in your field around fundraising, the context of the size of your organization, your community, the age of your fundraising program, etc. can impact how the data turns out.

Hubbell suggested selecting 3 to 5 peer institutions who you can benchmark with over time. Also select one or two aspirational organizations who you would like to be similar to in 5 to 10 years.

Use the data from these organizations to conduct indepth benchmarking with your own program. Know who to emulate and why.

A good example for me was when I was at my university. We were focused in science and technology and one time when I was in southern California I got to visit with my counterpart at CalTech. While I learned a few things through this information benchmarking visit, I came to realize that their program which was highly focused on planned estate giving from their long term alumni wasn’t going to fit our 20-year old institution at all. If I were to benchmark our major gifts program after CalTech, I would have failed.

Don’t forget to gather qualitative research in addition to the quantitative. Gary noted that some organizations select their peer institutions for benchmarking and take the entire president’s cabinet to their peer institution’s campus for a day of one-on-one and team meetings to learn personally what is going on. It's not just data that's important.

Hubbell recommended a book that he likes: Jason Saul – Benchmarking for Nonprofits. Saul recommends that you start small and be focused and use the discipline of benchmarking over time.

Other comments from the session:

  • Use benchmarking insights to develop strategies, process improvements, and to determine performance (How are we doing?).
  • The key is: who are your peers now? And, who do you aspire to be in the future?
  • Two cautions – not enough information can be a problem as can too much information. Determine what 5 to 7 measures you want to benchmark over time (2 to 3 years).
  • It’s critical to figure out what the leader wants to track by benchmarking as it may be different than the information the manager needs to run his or her team.
This was part 2 in the series. See articles 1, 3, and 4 below:

Permanent Link: Benchmarking for Major Gifts (Part 2 of a series)

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Benchmarking for Major Gifts (Part 1 of a series)

Benchmarking for Major Gifts (Part 1 of a series)


By Tom Wilson Major Gifts Guru

I just got back from the CASE VIII conference in Seattle. Gary Hubbell, a fellow consultant that I haven’t seen for 15 years, was there. He was presenting benchmarking material from his new book, Lessons from Benchmarking: Fast Forwarding the Maturity of the Fundraising Operation (Hubbell & Reinders).

Here are some points I gathered from his presentation. Future articles in this series will cover additional points and a quick review of the book.

  • Use benchmarking not only for comparisons but for process review, and to identify best practices.
  • Internal benchmarking allows you to measure yourself and your program over time: How are we doing at the end of calendar year 2009 compared to 2008? Fiscal year 2008 compared to fiscal year 2007?
  • Process benchmarking – what are the steps we take in securing a major gift? In thanking the donor? How does our process compare to others? What lessons can we learn from others to improve our processes?
  • Good benchmarking can show the way for more program investments.
For me a good example of program investment benchmarking would look like this. We have 500 prospects rated at $25,000 or more for our upcoming campaign. Benchmarking indicates each major gifts officer can handle 125 prospects (given no travel and no other internal duties). We have 2 major gift officers now. 3 more need to be hired for our campaign to move into high gear.
  • Scorekeepers want to know we’re being effective.
When I facilitated a CEOs panel last June for the AHP Pacific regional conference the main question these hospital CEOs had was how to measure fundraising effectiveness.
  • You don’t have to benchmark your entire program.
You can just compare and benchmark major gifts programs. Look at just your fellow higher education colleagues or you can look at all programs in your geographic area (as those are the folks you will be competing with for donors).
  • Since best practices change over time, ongoing benchmarking keeps your team continuously learning.
  • Data that drives process drives behavior. Benchmarking can lead to behavioral change.
There's lots of information here and more to come as we continue this review of benchmarking. This article was part 1. To see parts 2, 3, and 4 here:

Permanent Link: Benchmarking for Major Gifts (Part 1 of a series)

http://majorgiftsguru.com/2009/02/benchmarking-for-major-gifts-part-1-of.html

Family Foundation Fundraising

Family Foundations

By Tom Wilson Major Gifts Guru

Of the $306 billion contributed in America in 2007, foundations gave 13% ($39 billion). A subset of foundations are family foundations. The Chronicle of Philanthropy recently reported on a Foundation Center study of these family foundations which they define as having “measurable donor or donor-family involvement.”

This means that such large foundations as the Gates Foundation, Lilly Endowment, David and Lucile Packard Foundation, Gordon and Betty Moore Foundation, and the Annenberg Foundation are included in the following family foundation information.
  • Grant making by family foundations totaled $18.5 billion in 2007 (double the level of their giving from 10 years ago)
  • $24 billion was contributed to establish or grow family foundations in 2007
  • 37,539 family foundations exist with total assets at the end of 2007 of $294 billion
  • 11,555 family foundations have been created since 2000
  • 10,181 have assets of at least $1 million or paid out grants of $100,000 or more in a single year
  • 48% family foundations report giving less than $50,000 in 2007
  • Only 1,600 family foundations employ staff members
  • Just 617 are considered to be large foundations
  • Family foundations established before the 1940s typically have 7 trustees while those established since the 1960s median was 3 trustees
To review the full report, “Key Facts on Family Foundations" (2009 edition) go to the Foundation Center’s website by clicking here.

Please remember that all this information was valid at the end of calendar 2007, things will be much different when the data from year end 2008 comes in. And, while foundations are always an attractive fundraising target (they are meant to give money away after all), many have experienced dramatic reductions in their assets (and some devastated by the Maddoff scam). Any foundations that make multi-year commitments will be dramatically reducing grantmaking in 2009 so they can honor these pledges while still meeting their 5% distribution requirement.

Another reminder as you instantly through out the small end of the family foundation list. Many of these small foundations are what I call “place holders.” They are set up during a donor’s lifetime to get the donor, family, family advisors used to the foundation world. Upon death or a major positive liquidity event, these small foundations can grow rapidly. I had one of my university trustees operate his foundation in this way. We had done research and found a very small corpus and a pattern of small donations with one big gift of $30,000. Yet, we knew he had wealth. He made a $1.25 million gift and was debating on whether to put money in his foundation to cover it or just do it personally. His advisors finally decided he could just write out a check from his personal accounts. The lesson here – really keep track of these small family foundations over time and their founders right now.

Permanent Link: Family Foundation Fundraising

http://majorgiftsguru.com/2009/02/family-foundation-fundraising.html

Fundraising Training Feedback

Listening to Participants

By Tom Wilson Major Gifts Guru

As you know from attending my training sessions on listening, gettng collective feedback at every opportunity is important to Kaizen – continuous process improvement.

When I make presentations around the country, many groups use feedback forms to learn how their speakers are doing.

  • "Your training on listening to donors was excellent, as are your book and blog." Nancy
  • "You were such a hit here in Corpus Christi. Have a great week from a member of your Fan Club." Carolyn
Here is specific feedback from my recent presentation in Virginia on "Listening to Donors: Essentials of the Win Win Ask."
  • "Sharing your personal experiences and stories to give the practical application of what you were presenting"
  • "Very engaging, knowledgeable and helpful"
  • "Very detailed information on how to"
  • "Well organized, good PowerPoint, good humor, likable and fun, made it less scary"
  • "Good pacing and audience interaction which allowed participants to give ideas and suggestions"
  • "Dynamic, animated, clear presentation, useful information and relevant examples"
And, of course there are always suggestions for improvement.
  • "Longer session; needs more time to adequately cover the topic"
  • "Went a bit too fast"
  • "Go over material slower and provide some more advice for smaller and newer organizations"

Permanent Link: Fundraising Training Feedback

http://majorgiftsguru.com/2009/02/fundraising-training-feedback.html

Fundraising in Alaska

Rasmuson Cutbacks

By Tom Wilson Major Gifts Guru

The largest foundation in Alaska, the Rasmuson Foundation, recently announced a 14% cutback in giving in 2009 from $22 million to $19 million. According to this Associated Press story on JuneauEmpire.com Rasmuson Foundation no grants larger than $25,000 will be made this year.

Ramuson Foundation assets fell from $600 million to $380 million so the 14% cutback is modest compared to their asset reduction of nearly 37%.

Permanent Link: Fundraising in Alaska

http://majorgiftsguru.com/2009/02/fundraising-in-alaska.html

Public Radio Capital Campaign Success


Public Radio Success


by Tom Wilson Major Gifts Guru

The New York Times just reported that New York City's public radio station, WNYC, just completed a $62.9 million campaign. This exceeded their target of $57.5 million that was set in 2005. $11 million was raised in the last 5 months.

Check out the support page of WNYC's website above to see how they are using their major gifts club, The Producers Circle,and levels within it to encourage annual giving of $1,000 or more.

It's encouraging to see organizations continue to be successful in spite of our tough times. Keep faith in your donors.

Permanent Link: Public Radio Capital Campaign Success

http://majorgiftsguru.com/2009/02/public-radio-capital-campaign-success.html

Capital Campaigns in Virginia

Fundraising in Virginia

By Tom Wilson Major Gifts Guru

I just got back from a training workshop for Volunteer Hampton Roads in Virginia (Norfolk). In talking with one of my colleagues there, Keith told me about how capital campaigns are doing in Virginia. He said that because of the large number of military contractors everything seemed to be doing fine. A few of the northern counties got overbuilt in housing so they are suffering, but with new energy and people in Washington, D.C. it shouldn't take too long to fix that challenge. Of course, everyone wants their 401 K to go back up.

He told me a great story about the importance of listening and being patient in capital campaigns. For one of his clients, he interviewed a gentlement who said he would give a token $25,000 but that this cause just wasn't that important to him. Keith recommended to his client that they take the time to cultivate this prospective donor. Listen to his interests and be patient.

The rest of the story? Now, 18 months later the donor is excited about the cause and is talking about a gift in the $250,000 range.

The lesson here is cultivate for the big gift, not the quick gift.

Permanent Link: Capital Campaigns in Virginia

http://majorgiftsguru.com/2009/02/capital-campaigns-in-virginia.html

Comment on Listening to Donors

Comment



As this weblog grows over time, I encourage all of you to make comments. I want to particularly direct your attention to a recent one from Jay Frost of Frost on Fundraising.


Click here to read Jay's reaciton to my post earlier this week on the importance of qualifying donors through listening.

Permanent Link: Comment on Listening to Donors

http://majorgiftsguru.com/2009/02/comment-on-listening-to-donors.html

Higher Education Campaign Success



U of O Campaign Success


Since I live in Oregon, it was fun to see the success of one of our state universities, the University of Oregon. Their success story is a prime case history of a successful comprehensive higher education capital campaign. Here are the facts:

  • $853 million raised, far surpassing the $600 million goal

  • Started 1/1/01, concluded 12/31/08 (many university campaigns take 5 to 8 years to complete)

  • The campaign was comprehensive – "Campaign Oregon: Transforming Lives” raised $99.8 million for student scholarships and fellowships, $106.1 million for faculty support, $186.1 million for academic and program support, and $138.2 million for improving academic campus facilities

  • Student support: private gifts more than doubled funds available for UO scholarships

  • Faculty support: Campaign gifts funded 35 new endowed chairs and professorships and the Fund for Faculty Excellence Awards, carrying annual salary supplements of $3,000 to $16,000 a year, have been awarded to 52 faculty members to date

  • The sciences: About $55 million, part of a larger gift from philanthropist Lorry I. Lokey, includes $30 million for faculty support, $10 million for graduate student support and $10 million for program support

  • New facilities: Campaign gifts helped fund more than $250 million worth of new and improved academic facilities, including two new science buildings; a new business complex; and renovation and expansion of the music, education and theater facilities, the Jordan Schnitzer Museum of Art and the Museum of Natural and Cultural History. Athletic facility improvements include the Autzen Stadium renovation and expansion, Hayward Field improvements, PK Park baseball stadium and the Matthew Knight Arena

  • Programs: Campaign donors financed a new journalism center in Portland, new programs in securities analysis and product design, and increased endowments for Special Collections in UO Libraries and the Oregon Bach Festival
All types of nonprofit organizations should model their campaigns on this comprehensive pattern. And, take the time for your campaign to mature and develop. Count everything, be broad in your thinking, and work with donors to develop projects they consider a Winning Gift.

For related articles click here

Permanent Link: Higher Education Campaign Success

http://majorgiftsguru.com/2009/02/higher-education-campaign-success.html

Listen to Qualify Donors, Especially in Tough Times

Listen to Qualify Donors


No matter how much Internet research you do, how much wealth screening and prospect research, the best way to qualify a donor is through a face-to-face meeting.


This is especially true when times are tough like they are in 2009. Don't guess or presume, be a dectective and find out from the source.


Two recent interviews I held recently help prove this point,


I was interviewing a board member for a philanthropic market research study. He was a retired car dealer. I asked how he was doing with the economy. "I sold my dealerships quite a few years ago and during the dot com bust of the late 90s I lost about 40% of my net worth. About 18 months ago I told my broker that something felt strange; put all of my assets into cash. I haven't lost a thing in the past few months. I'm thankful I can still make some gifts."


At a client campaign cabinet meeting I met a banker. Fearful of what he would say, I asked him how his bank was doing. To my surprise he said: "2008 was our best year ever and we expect 2009 to be even better."

For related articles click here

Permanent Link: Listen to Qualify Donors, Especially in Tough Times

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$100 Million Gift


$100 Million Gift


Some huge mega gifts are still being made. The New York Times reported that Phillip Ragon made a 10-year $100 million pledge to Massachusetts General Hospital in Boston to create an institute for vacines to AIDS and other diseases.

Philip (Terry) Ragon noted: "By providing flexible funding and by connecting science and engineering at MIT and Harvard with the research and clinical resources of Massachuesetts General Hospital, we intend to empower many of the world’s best researchers to focus on what they view as the most promising research. We hope to engage them in a multidisciplinary collaborative effort for which there may be no greater benefit - curing the ill and saving lives.”

Ragon is founder, owner, and chief executive officer of InterSystems Corporation, a multinational hospital information software company based in Cambridge, Massachusetts. His wife, Susan (pictured above) is is vice president of Finance and Administration at InterSystems.

While administered by the Hospital, the Ragon Institute is a collaborative partnership of the Hospital, Harvard University, and the Massachusetts Institute of Technology (MIT) (Mr. Ragon is a 1971 alum).

For related articles click here

Permanent Link: $100 Million Gift

http://majorgiftsguru.com/2009/02/100-million-gift.html

Fundraising News & Trends

Fundraising News & Trends

Below please find all of the fundraising news and trend analysis pieces that I have posted to MajorGiftsGuru.com:


Series on Major Gift Officer Pay & Productivity

Permanent Link: Fundraising News & Trends

http://majorgiftsguru.com/2008/12/fundraising-news-trends.html