Many annual giving shops struggle with stagnant or underperforming annual giving programs, trapped in traditional approaches that work a little less effectively with each passing year. As we look forward, we wanted to invite a panel of experts to share their perspective on the changing landscape of annual giving. We asked three questions of Dan Frezza, associate vice president for lifetime philanthropic engagement and annual giving at William & Mary; Molly Robbins, director of institutional advancement at Gladwyne Montessori School; and Melissa Rowan, assistant vice president for strategic initiatives at Iowa State University:
- How is the landscape of annual giving changing?
- In light of that, and looking ahead, what are the key steps to set up your program for long term success?
- What is one mistake annual giving programs make too often?
Here is what they shared with us. They will also be speaking on these topics in depth at our next Institute for Annual Giving.
1. How is the landscape of annual giving changing?
Dan Frezza. Annual giving at one point in time was considered the “first stop” for higher education fundraising. Inarguably, this was the case due to many factors. Ranging from career trajectory to pipeline development, it all began with annual giving, and the horizon seemed more impressive to the onlooker than the foreground. Not much has changed in today’s modern world of fundraising – with the exception of one critical difference. Investment in annual giving today matters and exists at levels that just a decade ago would have been unimaginable. A culture of philanthropy has been deemed essential for most organizations and that culture begins with annual giving – hence the increased investment.
Increased investments have brought new tools and ways to think and problem solve. Gone today are the single layered programs that focus on whether you have given recently or not. Today, we measure the way you give, the avenue, the frequency, the cause, etc., which all help to develop a donor’s DNA. We use that DNA to strategically make decisions and use our resources better.
There are many ways to answer this question, but the investment and resources available to us, if we use them well, are in my eyes among the more positive changes.
Molly Robbins. In many organizations, annual fund programs are microcosms of full advancement shops. Staff must be proficient in delivering solicitations and ensuring yield, prospect, pipeline, and volunteer management, communications, CRM management, data analytics, personnel and talent development, and so much more. Just think about what’s involved in managing a Telefund program – learning and managing a database, developing segmentation, training, motivating and retaining staff, managing a budget, ensuring fulfillment, tracking list performance, etc. When I entered annual giving, it was an arena viewed by many as a stepping stone into advancement. Moving up in the field often required moving out of your role and eventually into another area of advancement with a leadership track. This hindered program continuity and maturity, leading to a constant learning curve in key program areas.
Today, annual funds are becoming more sophisticated and more effective in pipeline development, as organizations invest in long-term program and talent development. This is critically important, as schools face both increased competition from causes that are nimbly leveraging technology and communications channels to present clear and compelling needs with a degree of transparency and authenticity that many annual funds lack, and complacency from would-be year-end donors, as tax incentives for giving become less attractive and as Donor Advised Funds become more attractive and accessible.
Melissa Rowan. As our constituencies grow, with multiple generations in the pipeline, we have to be even more diverse in our multi-channel strategy than ever before. Telemarketing is phasing out at some institutions – and becoming a smaller piece of the pie for just about everyone. We have to find other ways to communicate through digital means with our younger alumni and friends, while not losing site of the direct mail programs that continue to be effective and, in many cases, are driving a lot of activity online.
Data has always been the key to effective annual giving strategies, but we need to be collecting more and using it strategically to create more customized messaging based on what our donors, alumni, and friends tell us they care about. If we are good at data collection – for example, what they click on in their emails or how they are interacting with our institutions on social media – we won’t have to guess about their interests. They will tell us, and we can message accordingly.
2. Looking ahead, what are the key steps to set up your program for long term success?
Dan Frezza. Managing resources will make a big difference. Whether wealthy with resources or stricken with poverty, all schools will need to make smart decisions on where and how to invest. One commonality is the culture we all wish to develop. The USNWR #1 and #1000 institutions both seek to create and/or sustain a philanthropic culture. Making the case and deciding how to use those resources will matter more than it ever has.
Look at your program and allow the overall goals or vision to decide the next step. If your program is seeking increased annual dollars, you may decide to invest more in a peer-to-peer tool. If you are looking to grow donor numbers, a text-giving platform or crowdsourced approach may make more sense. And analytics will be essential regardless. Whether you choose to build an in-house dashboard or purchase from one of the many vendors, understanding your program’s donors (and their DNA) will allow you to make smart decisions.
The programs of yesterday are still focusing on a single layer of giving habits. A program of today will leverage all the data at their disposal.
Molly Robbins. Four things:
- Work with (or hire!) a data analyst who will help you optimize your outreach, strengthen ROI, and forecast results more accurately.
- Migrate as many donors as possible to perpetual giving programs, then focus on high-impact stewardship and relationship building.
- Recruit and retain talented staff, having open conversations about opportunities for program development and career growth within your annual fund program. Engage even your newest staff in internal and external landscape assessments, encouraging growth mindsets and multi-year planning.
- Take a step back and approach your organization through the eyes of a current or potential donor. Is your case for support and value proposition for giving clear? Compelling? Easy to find? How does your school compare to other causes that are vying for your donors? How easy is it to make a gift? What happens immediately after making a gift? What about in the weeks or months that follow? Are there opportunities to learn more about your mission? Do your stewardship communications reinforce your case for support?
Melissa Rowan. Start looking 3-5 and then even 10 years down the road and begin to create longer term plans and budgets for how we will evolve with the changing fundraising landscape, especially how we will keep up with rapidly changing technology. We will have to be nimble in the moment, but longer term planning will help.
Message the cause, not just the institution. Young alumni especially want to be engaged in a cause they are passionate about – and they want to give their time in addition to their money. Work closely with campus partners to find ways to engage alumni and other supporters in volunteer activities, things like speaking to classes, mentoring students or other young alumni, serving on advisory committees or boards, hosting events, giving webinars, etc.
3. What is one mistake annual giving programs make too often?
Melissa Rowan. I am a big fan of planning, and I think too often annual giving programs fail to dedicate the appropriate amount of time for analyzing data and using that analysis to make truly informed decisions about the direction and strategies that will lead to the results we want to see. We can’t just keep doing the same thing over and over again, but we also can’t make the change just for the sake of change. I worry that too many programs either do much the same thing year over year without much planning or thought, or they dive into the next big thing without careful and thoughtful, data-driven planning. (And in many cases, I think both scenarios happen within the same program, oddly enough!) So, in a nutshell, there isn’t enough careful, data-driven planning to determine the specific corrections – sometimes large, sometimes small – that will allow a program to reach its goals.
Dan Frezza. Agreed. Programs often make mistakes by making decisions with the wrong or inadequate data. Treating all lybunts the same is an ineffective and outdated approach. Today’s lybunts are different, and understanding that matters. Likewise, approaching all non-donors is dangerous. You may be doing nothing more than further widening the divide between you and your program.
Understanding your data will allow you to determine whether your lybunt John is only gives in December, vs. lybunt Jane who only gives in June. Non-donor Melissa might be ignoring you because of being asked for the wrong area, while non-donor Tim might be resistant only to e-mail. Understanding the differences (and they go much deeper than just these examples) will allow your program to react more appropriately. When a program is having success with growth by taking a broad stroke, they are leaving too much on the table – and eventually that time will run out.
Molly Robbins. It’s also about the need to shift to a greater focus on relationship-based fundraising. Too often, annual giving programs overlook opportunities for authentic relationship building. Encourage staff and volunteers to take time to follow up on a question, to reach out after an online gift arrives, to send a quick, personal email… These small touch-points can transform transactions into meaningful interactions that add value all around.
Image credit: The photo at the top of this page is by Francesco Gallarotti on Unsplash.
Breathe new life into your annual giving program. We invite you to join this panel for a three-day conference that will showcase the most successful tactics in annual giving and help you develop a comprehensive plan to improve your shop’s efforts. Dan, Molly, and Melissa will be joined by Brian Daugherty, and together, they will share key strategies that underpin the strongest annual giving programs and provide innovative solutions to your most difficult challenges.