Dear Esther – Part 10

Dear Esther,

At recent town hall meetings, you have noted several times the recent decline in alumnae donations and participation in the annual fund. As you have described, the alumnae participation rate in the annual fund currently sits around 22%, translating into around $1M in annual revenue.

Consider the following quote from the founder of the Kresge Foundation, Sebastian Kresge (yes, the same Kresge Foundation that has contributed several million dollars to Chatham in recent years in matching capital campaign challenge grants and after whom the Buhl Atrium is named):

“Giving away money is not an easy job. Money alone cannot build character, or transform evil into good; it cannot restore the influence and vitality of the home; neither can it maintain the valleys and plains of peace. Spent alone, it might as well stay in the vaults…it cries for full partnership with leaders of character and good will.” [1]

Alumnae donations cry for partnership with leaders of character and good will, and on this front, you have fallen short. We believe that Chatham has failed to implement a strong resource development foundation, poised for future growth and funding diversification necessary to support and sustain CCW. Lack of donor communication, alumnae engagement, poor staff retention and inefficient fundraising methods have led to the significant decline of fundraising. As donors and engaged alumnae, we expect accountability from our alma mater to be good stewards of our donations with a keen awareness of future fundraising trends and best practices. We can assure you that with key strategic improvements in advancement efforts and engagement, our dollars will follow.

WHAT WE KNOW…

Fact: The cost of replacing a senior-level development manager has rippling effects on the fundraising success of an organization. According to Cygnus Applied Research, the inclusive cost of turnover of one senior-level manager is now estimated at $952,300 on average (including the time to rebuild donor relationships, training/onboarding time and recruitment costs, impact on fundraising activities during the transition time, etc.). [2]

You read that correctly. Nearly $1 million per staff member. Consider for a moment the turnover in Chatham’s advancement department just in the past few years: three VPs of Advancement, a couple of Annual Giving Directors, a Planned Giving Director. Given this new research, Chatham’s poor retention of senior-level advancement staff has slighted millions in potential revenue growth and alumnae engagement. Each time a staff member transitions prematurely, donor relationships and alumnae engagement suffers dramatically. By understanding the full impact of staff transitions, additional resources and support focused on the retention of key staff will have significant impact on the amount of donations CCW is able to secure.

Fact: Those who volunteer with an organization are twenty times more likely to make a donation than those who do not volunteer. The donations made are, on average, larger than the donations given by those who do not volunteer. [3]

There is common saying used in fundraising circles – “ask someone for money and they will give you advice. Ask someone for advice and they will give you money.”

Alumnae engagement is essential to fundraising success. More alumnae engagement translates to increased donations, plain and simple. The Save Chatham administrators have gathered anecdotes from many alumnae throughout the past several months about their attempts to volunteer with no response from CCW. Whether it’s serving as a class agent, participating in scholarship interviews, attending college fairs or coming to campus to participate in an event, volunteer opportunities are endless at Chatham. Engaging alumnae in volunteer efforts is a simple, low cost strategy to increase donations. When you turn down a volunteer or fail to effectively engage her, you in turn negatively impact donations.

Fact: The lowest cost and most effective fundraising growth strategy is to retain current donors. [4]

According to the most recent Fundraising Effectiveness Project study, more than 60% of donors who stopped giving to their organization reported that they did so because they did not feel as though the organization cared about them. Donor retention and continued cultivation of current donors is critical to any effective fundraising program.

Consider this – the average retention rate of donors from the first year they give to the second year is 22%. That’s right. Only 22% of donors continue giving after their first gift. However, if you can retain that donor through the second year, 60% of them will make a donation in the third year. Consider the number of donors in recent years who have made their first gift. What have you done to acknowledge and cultivate those donors?

Best practice research in effective donor retention shows that for optimal donor retention, there should be two “touch points” within the first 90 days of a donation and at least one more in the first year. Touch points can include an acknowledgement letter, a thank you call, a letter from a grateful scholarship student, an invitation for tour of new campus facilities or a simple e-mail.

Let us illustrate this point with a story we have heard from an engaged alumnae donor. A few months ago, she received a solicitation call from the student phone-a-thon of the university she attended for her Master’s degree. She told the student that she gives quite a bit of money to her undergraduate alma mater and wanted to keep her support with Chatham. The alumnae decided to make a small gift of $75 just so her participation could be counted. Two days after she made her gift, she got a handwritten thank you note from the student. Two days after that, she received a thank you letter from the head of the fundraising department. A week after that, she received a bumper sticker with another thank you letter explaining how her donation was already hard at work supporting scholarships. She was so blown away by their follow through that she made another donation.

The fact of the matter is, she has never received a thank you note for any of her donations to Chatham. She has donated several thousands of dollars since she graduated five years ago and served as a class agent for several years. Aside from a credit card or tax receipt, she had never received a thank you letter from Chatham for her donations.

How are you, Chatham, making donors feel that you care about them? Why should we continue to donate? Communicate, acknowledge and cultivate, and the dollars will easily follow.

Fact: The number one reason people don’t make a donation is because they haven’t been asked. [5]

This seems incredibly basic, but the simple fact remains – many alumnae are simply not asked to make a donation. In particular, we have heard several sources report that GOLD alumnae (Graduates of the Last Decade) are not solicited for a donation unless a current e-mail address is on file. The Save Chatham administrators have also fielded many comments through our various feedback channels with reports from alumnae who have not been solicited for donations since graduation.

With increasing channels to connect to alumnae, there simply is no excuse. Efforts to update alumnae records and enhance prospect research and alumnae communications are not only a necessary strategic focus for current fundraising goals, they are critical to serve as a pipeline for future major donations. Smaller donations now can be major donations later. To quote an anecdote from a leading fundraising research firm, SeaChange Strategies, “we may not be the shiny, red paint on the Porsche. But [we] are indeed the engine of a growing and thriving fundraising program.” [6]

WHAT WE BELIEVE…

With fundraising focused on engagement of alumnae using a donor-cultivation strategy instead of the current method of passive, intermittent solicitation, the fundraising potential of CCW alumnae could improve significantly. Alumnae donations suffered as a result of institutional failings in staff retention and a strong advancement strategy focused on CCW. We as alumnae are committed to CCW. We believe that by increasing engagement with alumnae, you can make big strides in increasing your donor base and fundraising goal. Attempting this after the coed vote will be too late and will have disastrous results.

WHAT WE WANT…

A delay of the Board of Trustees Vote.

As we have noted in previous blog posts, a transition to coeducation will only continue to be detrimental to fundraising efforts. Given the poor track record of fundraising efforts in recent years and the lack of focus on donor retention and alumnae engagement, we believe the coed vote should be delayed by at least a year. In that time, we ask you and the administration to provide us with the following:

  • A strategic fundraising plan that includes a comprehensive strategy focused on donor cultivation and alumnae engagement.
  • A staff retention strategy to recruit, engage and retain the right talent to implement fundraising goals
  • A comprehensive strategy for alumnae engagement through advancement and volunteer efforts

You have asked for our feedback, Esther, but are you and the Board really listening? If so, you will take this letter to heart and act upon our requests.

Sincerely,

The Save Chatham Movement

[1] http://kresge.org/about-us

[2] http://www.cygresearch.com/afp/DCL-Handout-AFP-Int-2014.pdf

[3] Wang, L., & Graddy, E. (2008). Social Capital, Volunteering and Charitable Giving. Voluntas, 23-42.

[4] http://www.urban.org/UploadedPDF/412731-Donor-Retention-Matters.pdf

[5] http://www.strengtheningnonprofits.org/resources/e-learning/online/identifyinganddevelopingdonors/Print.aspx

[6] http://seachangestrategies.com/missing-middle/

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