On the Line...with Jason Fisher

Proximity Matters When it Involves Alumni Participation

I’ve had the opportunity to work on hundreds of phonathon and annual giving programs in my career.  As part of my consulting and audit responsibilities, I often take a closer look at statistical results and attempt to dig into the numbers to find trends that the phonathon and annual giving staff can exploit.  It’s amazing how consistent statistical trends are from campus to campus.  What one might consider at first to be an isolated phenomena is often found in other programs as well, leading me to the conclusion that human behavior is remarkable similar no matter what institution people attend.

 

In particular, I like to review the alumni participation rates by proximity to campus.  They tell an interesting story; one that fundraisers should not overlook.   In general, the farther one goes from campus, the higher the alumni participation rate.  I would say that the vast majority of the schools I work with follow this pattern.  In fact, I cannot remember the last time this wasn’t true.  There are a number of theories floating around out there that try to explain this, but let me give you my basic reasoning for why I believe this happens.

Thank You Calls Are an Investment During a Tough Economy

There’s always a place for thank you calls in my phonathon program, and never more so than this fiscal year.  Periodically, alumni, parents, and friends need to hear from the institution without being asked for money.  Perhaps this is just once or twice per year, but it is important for them to understand that when the caller ID says XYZ University, you’re not always soliciting for a gift.  Giving during today’s economy shows real commitment to the institution and a sense of understanding about the important role that philanthropy plays in higher education.  For that, we owe more than just a debt of gratitude to those constituents remembering our program during this challenging time.  Reaching out personally and thanking them makes sense on a number of fronts, not the least of which are donor relations and stewardship.

 

I blogged a few weeks back about the “Philanthropic Priority List”, using the article to emphasize that our constituents have a multitude of choices for where they wish to direct their charitable contributions.  Higher education is effectively in a competition with other worthy organizations, and if your institution does not do a very good job of convincing them of the needs and reasons to give back to your campaign, you’ll likely lose that donor to another group with a good cause. 

Understanding Decreasing Participation Rates- The Philanthropic Priority List

If the average college or university annual giving program achieves 20-30% participation, does that mean that 70-80% of the people are not loyal to the institution?  Of course not.  But as fundraisers, we sometimes struggle to find answers to the tough questions surrounding low participation- especially in phonathon.  We wonder why our nondonors cannot consistently break double-digits, and why our lybunts simply don’t renew every year.  What caused those sybunts to suddenly stop giving?  If you’ve ever asked these questions of your own program, you’re not alone in your thinking.

 

The answers to these questions are a bit of a mystery for each institution, but I’ve developed a philosophy over the years that helps explain why higher education in general has taken steps backward in alumni pledge rates. I call it the Philanthropic Priority List.  It works like this.  Everyone has multiple interests in life.  As a 22 year-old student these interests may be fairly narrow, but they tend to grow with life’s experiences.  Receiving a graduate degree, getting married, starting a family, building a career, and expanding friendships all add to these interests as a person ages.  Before long, a person has a list of charitable groups that they consider giving to every year.  These include undergraduate, graduate, and professional schools, fraternities and sororities, churches, children’s private school or public school fundraisers, national non-profits like United Way or the American Cancer Society, local community organizations, political campaigns, interest groups, and world social change organizations.  Higher education is in competition with all of them, and where your institution falls on their priority list will determine if you get a gift and how much that gift is worth.  Your caller’s job is to persuade the alum to move their alma mater a notch or two higher, thereby increasing the chances of gaining their support.

Concentrate on Donor Retention in Phonathon to Lessen Economic Effects

Today begins a three-part series of blogs devoted to weathering the economic storm and helping phonathon programs make a positive difference for struggling annual fund programs.  All components of a well-functioning development office have a role to play when it comes to hitting the financial goals of the college or university.  Phonathons are on the front lines of this current battle.  While there is much that can be done to improve the amount of money brought in during the course of this campaign, it’s maintaining or even improving the number of donors that will make a major difference when we look at the big picture several years from now.

Before I outline the strategy for donor retention, let’s take a long-term view of the current landscape.  What happens to your annual fund if you lose 10% of your current donors this year due to the economy?  For example, if you had 5,000 donors in FY’07, a 10% decrease represents 500 donors.  How long will it take you to get those donors back?  Chances are, not only will you lose them this year, but quite a few of those donors won’t return for many years, and in some cases not at all.  You might say that 500 donors aren’t really that big of a deal…that new donors can be found to replace them.  But what if embedded in these 500 donors are 10 major gift prospects for the future?  Or perhaps 10 planned giving prospects that will pay dividends 20 years down the line?  The short-term monetary loss may indeed pale in comparison to the long-term damage that comes from taking valuable alumni out of the cycle and habit of giving.  What appears on the surface to be a harmless, temporary stoppage in their annual fund participation could mean that their philanthropic giving is redirected to other areas of interest, in effect breaking their consistent loyalty to their alma mater that took so long to build.  With that in mind, here are a few tips and strategies to keep them on board for another year.

Take your donors to the maximum percentage complete.  The single biggest reason phonathons fail to hit their goal is because they leave prospects uncalled.  Believe it or not, many donors never have the opportunity to give because nobody calls them.  While it’s impossible to reach every donor in your database due to the inevitability that some prospects won’t be available when we call, it is essential that you give it your best shot.  Build in enough time in the calling calendar to achieve at least an 80% completion percentage, and more if you can.  We can’t make everyone answer their phone, but we can use good management practices to improve the chances they will.  Also, consider including cell phone numbers on all donor records to increase the contact possibilities.  Leave no stone unturned when it comes to having the opportunity to solicit these donor prospects.

Research all donor wrong numbers.  How many donors did you call this fall that had a disconnected or wrong phone number?  How about those donor prospects that weren’t loaded for calling because you didn’t have a valid phone number?  And how much money would all those prospects represent if you could retain their support?  Luckily, most fiscal years run until late spring or early summer.  That means you have the winter and spring months to research and identify new numbers to attempt before your donors lapse and time runs out.  These prospects are more valuable than any nondonor you could call this spring.  Phone number research is an investment, not an expense.  Whatever time and money you spend finding good phone numbers for these prospects will more than pay for itself in preventing the leaky bucket problem from happening to your program.

Re-call fall refusals for all donor prospects.  So they said no to you in the fall.  Does that mean they will say no in the spring?  These are people who have previously shown their support, some for many consecutive years.  Whatever you do, don’t let them lapse because we’re afraid to ask again.  Callers can be trained and scripts can be written to soften the call or change the message just enough so that they don’t feel as though the phonathon is harassing them.  A rough rule of thumb shows that lybunt fall refusal segments can be expected to perform at about 30-50% of their original participation rate.  So if your program achieved 75% participation in the fall, your lybunt fall refusals called in the spring should perform at about 25-40% participation.  That’s better than any nondonor group, and often rivals the best sybunts segments you can put on the phone.  If you have a one ask program, strongly consider attempting these prospects again so that you call them as current donors instead of lapsed donors next fiscal year.

Refine and train your callers to overcome the most difficult financial objections.  Quality training is more important now than ever before.  It’s no secret what objections are coming.  How effective the caller is at overcoming these objections will ultimately make the difference in your donor retention figures.  Every donor counts when it comes to closing the gap, and therefore callers must be prepared and trained to overcome all the common economy-related objections they will hear.  These include bad economy, mortgage problems, unemployed or underemployed, fixed income, and student loans.   I cannot emphasize enough how important it is to make sure your callers take pride in their ability to negotiate and make a persuasive argument for why your institution is a good investment during these difficult times.  As a manager, it is your responsibility to make sure each caller has the training, coaching, and tools available to succeed.  There simply is no substitute for a well-trained caller.  Avoid at all costs the temptation to believe that prospects already have their mind made up and there is nothing we as fundraisers can do to influence their decision.  That is a seriously flawed argument and a recipe for falling short of your goal.

We know that it’s all but impossible to retain every donor we have.  But taking a net loss this year because of the economy will hurt more than this year’s productivity, it will have reverberations for campaigns to come. 

Tomorrow- Drafting the Right Message and Challenging Your Prospects to Give