Three Bears How to Plan a Mid-Level Program that is Just Right For Your Organization Susan Paine Direct of Direct Marketing Human Rights Campaign Jann Schultz Director of Donor Relations Operation Smile Cathy Finney Associate Vice President MINDset direct January 28, 2010 2 3:15pm
Mid-Level Giving Programs
The Emergence of Mid-Level Giving Programs In most organizations, there had been a gap in the donor giving cycle. Lower dollar gifts are managed by direct response. Higher dollar gifts are managed by major gifts. Each group found own techniques and systems by which to manage their donors. Oftentimes there was little collaboration or communication between the two groups. 3
The Emergence of Mid-Level Giving Programs This very segmented approach to donor development created a gap into which a number of donors were falling. Not yet ready for the one-on-one relationship with a major gift officer, yet deserving more than standard direct response treatments. 4
The Emergence of Mid-Level Giving Programs A number of factors have forced us to start focusing on these gap donors Increased competition from organizations Changing donor expectations Suffering economy We need to work more effectively and more collaboratively to meet the expectations and needs of this type of donor. 5
The Emergence of Mid-Level Giving Programs Mid Level Donor programs have become an important element in smoothing out the movement of donors from low dollar to higher dollar giving: Allow organizations to provide these more committed donors with appropriate treatment Identify donors with the propensity and capacity to move up to major gifts Utilize a combination of techniques from direct response and major gifts, providing a seamless transition up the donor giving ladder 6
Areas of Focus for Mid Level Programs Mid-level giving programs require attention to more than just increased production and postage values: Audience Selection Message Depth and Approach Balance of Communication Donor Management and Migration 7
Mid-Level Giving Programs: Shapes and Forms Approach to mid-level giving programs can be vastly different in organizations of different size and with different resources including staff, time, and money. Floors and ceilings Staff management of donor Where does program reside? Internal vs. external resources Collaboration w/ broad-based and major gifts teams Branded vs. non-branded programs Program goals 8
The Story of Papa Bear OR a Brief History of HRC s Federal Club Susan Paine Direct of Direct Marketing Human Rights Campaign 9
Meet HRC s Papa Bear 10
The Human Rights Campaign. Founded in 1980 The largest national lesbian, gay, bisexual, and transgender political organization Grassroots force of more than 750,000 members and supporters across the country Effectively lobby Congress, provide campaign support and educate the public to ensure that GLBT Americans can be open, honest, and safe at home, at work, and in the community 11
Overview: HRC s Federal Club From Humble Roots to a Well-Oiled Machine Revenue Trends Analytics Growing mid-level giving through Direct Marketing Channels Q & A 12
From humble roots 13
Founded 1981 in Columbus, OH Enterprising volunteers raise $6000 at a house party. HRC staff formalize the idea of $100/per month, $1200 annually. Program evolves to one of the most successful volunteer, peer-to-peer mid-level giving programs in the country. 14
to a well-oiled machine. 15
Today 32 communities nationwide 2-3 Co-Chairs represent local communities on Board of Governors = 150 volunteer leaders 4800 Federal Club Members= $5 million/year Gala Dinners = $5.2 million/year Provides a ladder to the Federal Club Council at $5000+ 16
Staffing Director and staff of 3 manage day-to-day and work with co-chairs Director of Communities & Volunteer Relations structure and policy guidelines Director of Direct Marketing creates pipeline opportunities Executive and Program Staff conference calls, speak at events and inspire donors to give 17
But there is more to the story. 18
What s wrong with this picture? 19
20
Analytics 21
Looking to Data (and good consultants) for the Answer Mal Warwick and Associates used Target s DonorCentrics Explorer to understand LTV and Retention Program shrinking rather than growing Impact of recession on mid-level giving Bringing direct marketing techniques to a direct solicitation program 22
Lifetime Value by Channel and Year of Origin 23
Total Federal Club Revenue by FC Origin Source 24
Growing Mid-Level Giving through Direct Marketing Channels 25
Telemarketing TM has been the mainstay of recruiting for FC Complex, 3-step call: Ask to join FC at level based on prior giving If no, ask to give $100 per month (sustaining or annually) If no, ask to join Partners (< $100 sustainer program) If no, ask for a nice, juicy 1x gift Produces over $200,000 in 1x gifts, 250 Partners and about 125 new Federal Club members 26
Direct Mail Annual direct mail invitation emphasizes leadership and inspiring others to support HRC s work to achieve equality Offers a FC branded wireless mouse Brings in 60-100 per year Almost no 1x income 27
Insert & Letter Dear Susan, True leadership is built on strong personal convictions and a steadfast belief that your actions can make a real difference. And the right leader can galvanize a movement. 28
Brochure 29
Brochure As a member of the HRC Federal Club, I feel personally connected to the work. Not just because I give, but because I am a part of a community that cares about equality and justice for all. 30
Online Recruitment Newest source of Federal Club Members Brings on 25-35 FC members per series Good analytics thanks to...m+r Strategic Services Run an urgent, deadline driven campaign Don t fear the premium Make it a real campaign by promoting in other online venues 31
Audience Selection $50+ monthly sustainers Inactive sustainers who gave $75 or more monthly before canceling Donors who gave $200 or more cumulatively in the last 12 months Those who gave at least 2 gifts of $100 within the last 3 years Those who bought a ticket to a fundraising event in the past 3-9 months Former Federal Club members and former Major Donors 32
First Ever Federal Club Series (2007) HRC Federal Club Campaign Recipients Open Rate Click through Response Rate #of Gifts Annualized Revenue Federal Club Invite #1 Federal Club Invite #2 Federal Club Invite #3 8,910 22.21% 0.44% 0.02% 2 $6,196 8,890 22.14% 4.13% 0.04% 4 $8,592 8,913 19.25% 1.04% 0.22% 20 $26,500 Message Total 26,713 21.20% 1.87% 0.10% 26 $41,288 Monthly enews Promo Promo in weekly insider update Campaign Total 4 $5,100 3 $3,600 33 $49,988 33
Other Quick Tips Include your mid-level giving option on all donation pages and reply devices Cultivation and Stewardship Survey your donors ask how and when they want to hear from you (and do it) Offer multiple opportunities to get involved in your work Run renewal and reinstatement programs 34
Remember what you learned when you were young Say please and thank you. (And don t put your elbows on the table.) 35
The Story of Mama Bear Jann Schultz Director of Donor Relations Operation Smile 2010 WASHINGTON NONPROFIT CONFERENCE January 28-29, 2010
Operation Smile Our Cause: Operation Smile provides free surgeries to repair cleft lip, cleft palate and other facial deformities for children around the globe. Founded in 1982, we mobilize a world of generous hearts to heal children's smiles and transform lives across the globe. 37
Once upon a time at Operation Smile Launch of direct response program 38
Goldilocks and Operation Smile We know the story but what was Goldilocks doing? Lost in the woods Curious about her situation Testing and experimenting Makes mistakes Just right says Goldilocks Does the wrong thing So how is Operation Smile similar to Goldilocks? 39
Challenges Poor organizational readiness Lack of defined program Silos Ownership Gaps in Donor Lead Strategy Definition of Middle Donors 40
What did Goldilocks do right? She took action! 41
Do something! One Thousand Holiday Smiles Campaign Build a Dream Campaign Care Centers for the World Campaign Special Segment Treatment Ornament in Holiday Card Membership Appeal Matching Gift Appeal Thank You Strategy Donor Lead Strategy 42
1000 Holiday Smiles Campaign Established Offer: Help provide a smile Main Package Outer Envelope 9x12 Multi-version letter signed by Co-founders Multiple Ask Strings (5) $240 - $1400, $5800 for medical equipment and open ask Open ask only Brochure Smile Bag to sign and return BRE Follow Up Letter Letter signed by Roma Downey Holiday Ornament BRE Telefundraising Call Bounceback and Ornament 43
1000 Holiday Smiles Campaign Letter from Co-founders and Response Device 44
1000 Holiday Smiles Campaign Brochure 45
1000 Holiday Smiles Campaign Response by component: Main Package 38% Follow Up Letter 18% Telefundraising 33% White Mail 12% Avg. Gift: $220.38 Back of Ornament 46
Build a Dream Campaign Offer Test: Supply a Care Center with BOD Match Pre-Postcard from Roma Downey Main Package Outer Envelope 9x12 Multi-version letter signed by Roma Downey Lift Note from Co-founders Insert floor plan of care center DVD 8 minute video Response Device BRE Follow Up Letter Signed by Co-founders Lift note from parent of child who received surgery Response Device BRE Telefundraising Pre-Postcard 47
Build a Dream Campaign 48
Build a Dream Campaign Floor Plan of Care Center Response Device 49
Build a Dream Campaign Main Mail Package Follow Up Letter Telefundraising Average Gift $268.63 19% Response Rate DVD Cover 50
Care Centers for the World Campaign Offer Test: Capital Campaign for Ethiopia Center Segment Test: Medical Volunteers Pre-Postcard Pre-Email Main Package Outer Envelope 9x12 Letter signed by Dr. Magee Insert of blueprint Brochure DVD Bounceback Hospital Gown & tag Follow-Up Letter Lift Note from Meti s Parents Bounceback Tag 51
Care Centers for the World Campaign Insert - Blueprint Outer Envelope Response Device 52
Care Centers for the World Campaign 53
Care Centers for the World Campaign Did not include telefundraising Response 50% less than previous campaign Average Gift $246.27 Meti in hospital gown made by volunteers 54
Donor Thank You Strategy Donor Database Team All donations receive Tax Receipt/Acknowledgement from Operation Smile Donor Relations Team Thank You Calls or Handwritten Notes $240 $5000 Development Major Gift Team Thank You Calls or Handwritten Notes $5000 Special Handling $10,000+ and special requests Office of the Co founders Thank You Calls and/or Notes $5,000+ Events Thank You Notes from Organizers
Donor Lead Strategy Donor Relations Team Donor Services / Information / Individual donors / Community Volunteer Fundraising events <$10,000 Cause Related Marketing Regional Development Team Major Gift Fundraising $10,000+ Volunteer Chapters Student Programs Follow Up Process Follow Up Process Follow Up Process Donor Database Team Gift Processing & Recording, Receipts and Acknowledgements, Tributes In Honor/Memory
Testing and Experimenting Defining a Middle Donor Identifying offers for mid-donor appeals Standard Smile offer Adapted capital campaign stocking a care center Capital Campaign Care Center in Ethiopia Anniversary Offer version of smile offer Components of Campaigns Regular DM Program Testing Segmentation 57
Goldilocks woke up and ran away! Just like Goldilocks, what have we done wrong? 58
Live Happily Ever After Organization is ready to take on a comprehensive middle donor program Collecting best practice data for creation of new program Breaking down silos and working in collaboration with Development Consensus on definition of middle donors Direct response is best place to own the program 59
The Goldilocks Strategy Assess your situation Remain curious explore your options Research best practices Test elements of a program Thank You Strategy Donor Lead Strategy Special Mid Donor Campaigns Understand you will make mistakes Evaluate and re-test Find what is just right for your organization 60
Goldilocks and The Three Bears Original Illustrations by Mary Ellsworth 1941 Published by THE SAALFIELD PUBLISHING COMPANY, AKRON OH ~ NEW YORK Made in the United States of America Available online at: http://mediainformatics.biz/kidsbook/bears.html 61
The Story of Baby Bear Cathy Finney Associate Vice President MINDset direct 2010 WASHINGTON NONPROFIT CONFERENCE January 28-29, 2010
The challenges in a small organization The steps are all the same: Understanding who your high-value donors are Defining the audience Determining program goals, format, branding, and implementation strategies But the challenge is that the same basic principles required to care for and steward these mid-level donors are done WITH FEWER RESOURCES. 63
Keys to Success in Small Organizations Understanding the implications of small changes in investment Collaboration Planning Proper utilization of staff resources 64
Washington National Cathedral Mid-Level Program Donors who contribute $500-4,999 annually 650 donors; approximately 1.3% of active donor file In FY09, raised more than $2.03 million from this group with an average gift of $358 Collaborative approach to executing their plan 65
Washington National Cathedral Mid-Level Program That was then 3 levels of giving: broad-based (up to $499) Mid-Level ($500 4,999) 1907 Society ($5,000 +) All donors at the mid-level were assigned and managed within individual portfolios Donors were never included in broad-based communication efforts Staff changes and competing priorities meant that many donors treatments were inconsistent and haphazard. Donors fell through the cracks 66
Washington National Cathedral Mid-Level Program This is now A smaller number of donors are assigned Unassigned donors are managed as special track within the broadbased communications calendar Balance of cultivation and solicitation efforts Versioned appeals or separate stand-alone efforts created specifically for this group May occasionally be included in in-house directed communications 67
Washington National Cathedral Mid-Level Program This is now Staff are utilized appropriately for additional touches when necessary: Named as contact for donors at the mid-level In support of special campaigns Make thank-you calls when special gifts are received Stewardship efforts are now automated and efficient 68
Baby Bear Mid-Level Giving Programs In smaller organizations with smaller budgets programs you have to focus on creating program efficiencies: Versioning existing appeals for audience; Turning appeals into cultivation opportunities Creating stand alone appeals that can be altered to fit into broad-based budget 69
Versioning Appeals July 2009 was the first effort in which we created an appeal version for the mid-level donors. #10 Closed-face package which reviewed the progress of the prior year and talked about priorities in the coming year. Limited number were selected -- cream of the crop and recent donors were omitted. 128 donors were included Letter was versioned to reference their value to the organization 33 gifts were made; a 25.78% response rate. Total revenue for the effort was $18,850; an average gift of $571. Total cost was $123. 70
Appeals as Cultivation Offers Balancing out communication efforts for Mid-Level donors to provide both cultivation as well as solicitation efforts throughout the year is key. WNC has turned 4 broad-based efforts into cultivation offerings for its higher-value donors: Calendar Thanksgiving Appeal January Certificate Easter Appeal 71
Appeals as Cultivation Offers Calendar Stewardship Mid-level donors received the calendar in FY09 and FY10 as a cultivation effort only No ask for a gift was included Letter copy acknowledged their support and thanked them. 72
Appeals as Cultivation Offers Letter Copy You are a vital part of our efforts to host open conversations on the great issues of the day; to proclaim a voice of generous-spirited, inclusive Christianity; and to help create a more hopeful and just world. We are so grateful for your support, and as a small gesture of gratitude, we are enclosing a copy of the Cathedral s 2009 Calendar to thank you for the many ways you help to sustain our work here. 73
Appeals as Cultivation Offers No Ask 74
Appeals as Cultivation Offers FY09 Calendar Stewardship Results Mid-Level Donors Balance of File # Mailed 445 54,294 # of Gifts 47 6,361 Response Rate 10.56% 11.62% Total Revenue $ 16,562 $ 164,631 Net Revenue $ 15,810 $ 88,644 Cost/Dollar Raised $ 0.05 $ 0.51 -- Mid level donors accounted for less than 1% of the file mailed, but more than 9% of the income. -- It cost less than $800 total to include mid level donors in this effort, and raised more than $16,000. -- Only additional impact on internal staff required was in reviewing copy for wording changes as well as pulling the file. 75
Mid-Level Specific Efforts Appeals created specifically for mid-level donors, even in small organizations, play a key role in the overall program. These can be more cost prohibitive. Inserting at least one comprehensive effort that is created around the mid-level donor is key. Can be stripped down for a lower-dollar donor. 76
Mid-Level Specific Efforts Mid-Level Specific Effort: Preservation Stakeholder Call Created a three-phase campaign specifically for higher value donors, and to drive increased giving through a strategic direct response technique. Included all mid-level donors (assigned and unassigned) Also invited major gift donors and prospects. Utilized staff participation. Created a lower-dollar version to mail to the balance of the file which didn t warrant this this level of treatment, but took the place of their February effort. 77
Mid-Level Specific Efforts Mid-Level Specific Effort: Preservation Stakeholder Call Results: Highest net appeal of the year for all audience groups. 531 mid-level donors were included. 92 gifts or response rates of 17.33% Total revenue of more than $77,000 and average gift of $840.76. In addition: Allowed major gift donors to be included in an exclusive cultivation effort. Created new excitement around the featured theme and served as a good learning opportunity for donors areas of interested (at all levels). Format and theme of call will be repeated this February. 78
Revisiting: Keys to Success Understanding the budget implications Creating a mid-level program doesn t mean an exorbitant investment. Collaboration Utilize resources organization-wide, from broad-based to major gifts. Planning Know what s coming up, plan to include higher-value donors accordingly and develop strategies around existing efforts. Proper utilization of staff resources Understand the importance of staff in building relationships and utilize staff interaction when possible. 79
Questions? Susan Paine Director of Direct Marketing Human Rights Campaign susan.paine@hrc.org Jann Schultz Director of Donor Relations Operation Smile jschultz@operationsmile.org Cathy Finney Associate Vice President MINDset direct cfinney@mindsetdirect.com 80