FROM PERIL TO PROFIT WHAT DONORS SAY WILL TURN FUNDRAISING AROUND IN THIS ECONOMY

1. FROM PERIL TO PROFITWHAT DONORS SAY WILL TURN FUNDRAISING AROUND IN THIS ECONOMY

2. This Seminar Draws From… Donor-Centered Fundraising Philanthropy in a Turbulent Economy Communication Is the Ask

3. How Profit Is Made in Fundraising Not-for-Profits can only spend fundraising profit. Profit is the remainder between the value of the gift and the cost to get it The profit margin widens the longer a donor gives; therefore, extending donor retention equals earning higher profit a manageable number of donors, encouraged to stay loyal and inspired to give generously makes more money for a NFP than does a volume of donors which is so large that it has to be handled through mass marketing

4. How Fundraising Actually Works large-volume fundraising is the norm donor attrition is over 90%, with 65% of contributors never making a second gift constant, high volume acquisition is deployed to make up for the loss of large numbers of unprofitable or barely profitable donors this drains the fundraising budget, leaving too few resources for donor retention strategies

5. Fundraising Cost

6. Why is the norm in fundraising actually the less profitable option? An Intriguing Question…

7. DONORS ARE ON THE MOVE

8. Changes in Giving: 2008 to 2009 • # donors contributing: down 5.8% (continuing a 3-year decline) • Donor Retention: down 1% (continuing a 5-year decline) • Donor acquisition: down 12.9% (3-year decline) • Reactivation of lapsed donors: down 6.5% (3-year decline) • Average gift value: down 2.1% (first time this has declined in 5 years of measuring) • 2009 Index of National Fundraising Performance; Target Analytics; performance of 35 million donors compared between 2008 and 2009

9. DONORS’ CHANGING GIVING BEHAVIOR 2002 TO 2007

10. How respondents’ giving philosophy has changed in the five years prior to economic decline

11. THE DONOR-CENTERED SOLUTION

12. What inspires donor loyalty and increasing gift values? • prompt, meaningful gift acknowledgment • reassurance that gifts will be used for a specific end purpose • measurable results on the impact of donors’ contributions

13. A March/09 review of NFP websites found that only 43% stated their mission & goals and only 4% identified how they use charitable donations Are Donors Noticing the Shift to a Donor-Centered Model?

14. Getting Donors and Keeping Donors – Not the Same Thing UNIQUE SELLING PROPOSITIONS FOR PROSPECTS AND DONORS

15. Why Donors Stop Giving(from Donor-Centered Fundraising, 2003) • 46% of study donors stop giving for reasons connected to a ‘failure to communicate’ • 41% stop giving because of over-solicitation

16. What Are Measurable Results? • progress that can be quantified – for instance, increase in volume of service or enhanced quality of programs • only specific programs and services can be measured

17. Why Are Measurable Results So Important to Donors? • they allow donors to evaluate whether their gifts are being used effectively • they justify donors’ assessment of themselves as contributing members of society

18. RESTRICTED vs UNRESTRICTED GIVING Case Study

19. PHILANTHROPY in a TURBULENT ECONOMY

20. How the Study, Philanthropy in a Turbulent Economy, Was Conducted • Online survey conducted between January 12 and February 3, 2009 • Cygnus reached out to 963,458 donors by partnering with 69 not-for-profits • 21,947 respondents started the survey; 17,365 answered all questions for a completion rate of 79.1%

21. PROFILE OF SURVEY RESPONDENTS

22. Gender

23. Age 54.3% are between 45 and 64 years of age

24. Annual Household Income

25. Has Responsibility for Financially Supporting Children or Other Family Members

26. Occupation

27. Highest Level of Education

28. Religious Practice

29. Volunteer positions held by the 68% of respondents with volunteer experience in last 12 months

30. GIVING PROFILE OF RESPONDENTS

31. Number of charitable causes supported in 2008 43.7% support 3-5 causes

32. Average Value of Gifts Made by Respondents in 2008 all respondents and top 5% by total giving

33. HOW THE ECONOMY HAS AFFECTED RESPONDENTS AND THEIR PHILANTHROPY

34. How the economic downturn has affected respondents

35. When respondents expect the economy to recover

36. Short-term vs Long-term Expectations for Recovery • Respondents between 75 and 84 years of age are slightly more optimistic about the time it will take for the economy to recover • Respondents earning over $200,000 are somewhat more optimistic • Respondents who are more pessimistic about the timeframe for economic recovery gave, on average, 40% more money to charitable causes in 2008

37. Anticipated giving in 2009

38. Reasons for planning to maintain or increase giving

39. Why some respondents will decrease charitable giving in 2009

40. How respondents will decrease their giving in 2009

41. Will the 24% of respondents committed to multi-year gifts alter their terms due to the economic downturn?

42. “But I Did Everything Right” Case Study

43. FUNDRAISING OPPORTUNITIES

44. Donor Acquisition

45. To what degree would the following scenarios motivate you to give to a not-for-profit organization? 1=not at all motivating 7=highly motivating

46. Double Gift Value 1=definitely would not 7=definitely would

47. How the economic slowdown will influence respondentsto alter their methods of giving in 2009 Respondents under 35 years of age

48. How the economic slowdown will influence respondentsto alter their methods of giving in 2009 Respondents 35 years of age and older

49. Gender and Income

50. Gender and the likelihood of doubling gift values