Category Archives: Fundraising Talk

Commentary, discussions, and guest posts on fundraising issues.

My New Year’s Resolution (Hopefully Not Just a Post-Conference High)

By Vanessa Abaya 

When I worked as a waitress in my younger days, we had an expression: “Being in the weeds.” This essentially meant that we had lost control of our section, were overwhelmed and needed help to manage the activity. Today (in my less younger days), I am a professional fundraiser and we also use this same expression. Having recently found myself deep “in the weeds”, I thought it was time for some perspective. My solution was to attend the AFP International Conference, recently held in San Francisco.

During my five days at the conference (I also attended a two-day pre-conference), I met dedicated and passionate fundraisers. We opened up about our challenges and frustrations. We laughed at the same jokes, recognizing these familiar situations, despite our distance and diversity. We spoke about our proudest days, which usually involved helping someone in need or making the world just a little bit better.

I was inspired by the incredible speakers. Their sharp insights and deep knowledge challenged me to think critically about my role as a leader, a strategist, and a practitioner. Although disruption seemed to be a common theme, meaningful and authentic relationships with our donors were always at the heart of their sessions.

At one session, the facilitator encouraged me to create an action plan – after all as fundraisers, we’re people of action. First, I committed to making room for study. There is an immense body of work that informs our fundraising practice and this is often available at little or no cost. I’ve scheduled 1-2 hours every two weeks for study – a modest, but achievable schedule.

Second, I promised to engage in conversations with my colleagues about the lessons I learned in San Francisco. I’m fortunate enough to work for an organization that values innovation and excellence. Since returning, I’m already working with colleagues to incorporate some of these new ideas into our organizational plans.

Lastly, I promised to honour what is best about our profession. I haven’t yet worked out the details to this one, but I thought this article was a step towards accomplishing this goal.

I considered my first day back in the office as a new beginning – a sort of “New Year.” According to commonly cited statistics, only 8% of people actually keep their New Year’s resolution. In fact, 80% of people fail by the second week of February. So, the odds are against me. The good news is that if I continue to take small steps and build on my initial plans, my odds of success increase.

We are members of an extraordinary profession. When we succeed, some of the most vulnerable people in our community benefit. Our passion and commitment to our respective causes are truly admirable. And we bridge the divide between those who need a helping hand and those who want to give that aid.

The weeds are out there and we can easily be overwhelmed by them. Consider cutting through the weeds and attend a professional development conference or seminar. You don’t have to go to an international conference. We have incredible professional associations in our backyard. I encourage you to get out there, connect and be inspired.

Happy New Year!

Vanessa Abaya has worked as a fundraising professional for a variety of organizations over the past 20 years, including the University of Toronto, Mount Sinai Hospital Foundation, ROM Governors, AIDS Committee of Toronto, and the Vancouver Playhouse. After building a solid track record as a major gift fundraiser in Toronto, she returned to Vancouver be closer to her family. She currently serves as Senior Director of Philanthropy at BC Children’s Hospital Foundation, overseeing the major gift, leadership giving and planned giving programs. She is an active volunteer with AFP, most recently serving on the Board of the Vancouver Chapter.  She obtained her CFRE designation in 2008.
vabaya@bcchf.ca

 

Metrics, Friend or Foe? (Part Four)

Boyle, Janice

By Janice Boyle

Which ones are the right ones?

The time has finally come for me to share the fundraising metrics that I have found most helpful in describing fundraising effectiveness clearly for the fundraising team and laypeople alike. It’s a simple formula, and it boils down to five words. Sustainable Net Growth, Awareness, Accuracy.

Just to take one step back, if you want to know what to measure, you have to know what your goal is (obvious, but shockingly this is rarely clear). For me, this applies to annual giving specifically (including large annual gifts), and the only ultimate goal that has ever made sense to me is “net revenue”. Again, this is what you have available to support the mission and the necessary administration of the organization. When people start talking about gross revenue, I get glassy-eyed, and start thinking about what I’m going to make for dinner.

So, for those five words.

Sustainable. To me Sustainable simply means that you can repeat your annual net revenue results with a high degree of reliability, which means risk mitigation. And where things get risky for an organization depending on private funding to sustain their operations is having to many eggs in too few baskets. The appropriate metric answers this question: what is the largest amount your organization can lose (donation not repeated) in a given fiscal year, and make it up through other means so your ability to operate isn’t disrupted. Is it a specific dollar amount, a percentage of your budget? At one point in my career, that number was $400,000. If we had a single donor at that level who didn’t return the following fiscal year, we would be able to offset the loss given our other growth rates. Any higher than that, and our net revenue would have dropped year to year. So having a single donor giving more than that increased our risk. Having our top 5 donors give that amount lowered our risk.

So the specific number or percentage will be organization specific, but ideally you want to work towards not being that dependant on one or a very small group of contributors. That also means paying attention to your 80/20 rule (80% of your revenue comes from 20% of your donors). Are you close? Are you top-heavy? (Risky) Are you bottom heavy? (Opportunity). Are the different giving segments of your donors base growing at similar rates?

Now, to figure out your 80/20 rule (and the rest of the metrics I use), I take the principle of donor centred fundraising to heart. A donor is a donor is a donor. They don’t consider themselves “special event” or “planned giving” or “direct mail” or “online” donors . Those are our artificial constructs. They simply see themselves as supporting your mission. We are the ones who put them in silos. So, I look at all donors, and their total giving in a fiscal year when doing any calculation/comparison/chart/whatever.

I also want to clarify how I use the terminology of a “major donor”, which for me is different from a major gift. The best definition I ever heard of the difference between an annual gift and a major gift is that for an annual gift, a donor can write the cheque without consulting their spouse or a financial advisor. They don’t have to think about whether or not they can afford it. They know they can. They can be frequently asked, and give frequently. A major gift is a “stop and think”gift. They would consult with their spouse, their accountant, etc. before making a commitment. They are infrequently asked and infrequently given. My highly technical terms describing the difference in giving is “smooth” versus “lumpy”.

When you are raising revenue to support annual operating (smooth) expenses, sustainable equals smooth. In my opinion, “major gifts” are strategically a bad idea to support annual operations. They are ideal for capital campaigns, special projects, seed funding, really anything that is time limited (lumpy). So I’ve never focused on “major gifts” for annual operations.

I have, however, focused on major donors. One of the things you will notice so far in the definitions, there is no defined “gift amount” mentioned. That is because for every individual, the definition for them (donor-centred) is unique. For some an annual gift is $10, for others it’s $500,000. For annual operations you want to focus on gifts that fall shy of the “stop and think” threshold for that donor. So here is how I define an organization’s major donors. Take the pyramid you created to examine your 80/20 rule distribution, or table, which has giving levels down the left, and has a column for number of donors and total giving by giving level. Have the highest at the top. So, starting at the top and working your way down, what giving level do you get to that in total represents half you annual revenue? Is it 2.5% of your donors, 10%? And what is the lowest giving level? $500, $100, $1,000. Whatever that number is, you’ve just identified what a “major donor”is for your organization. I can’t emphasize this strongly enough…IT DOES NOT MATTER HOW THEY GAVE OR WHAT THEY RESPONDED TO. And that number can change over time. Also, because we all have limited resources, that is the group you want to concentrate your efforts on first, and move as far down into the pyramid as your time and resources allow.

Net. I feel like I have flogged this one quite a bit over the last few articles, but what it means to me is two things. If net is your goal, it means you will choose lower cost fundraising strategies and exhaust their potential before higher cost strategies. Special events are quite low on the list (7 out of 10 for cost effectiveness), but are almost universally coveted with an intensity I simply do not understand. They have their place, but until you have exhausted options 1 through 6…why? And yes, I’ve heard the awareness building argument. Special events are also a very expensive way to build awareness. (Quick tip, radio advertising is cheaper and more effective!)

Secondly, it means you are always working to meet or beat industry standards for the cost of each stream. That’s it. Your overall cost/$ raised is interesting but indicative of nothing.

Growth. Given the societal needs non-profits are working to meet, there is almost always room to do more. I believe there are only two ways to grow sustainable net revenue. More donors. More giving per donor. Those are the top two numbers you should be comparing year over year.

Obviously, it breaks down a little further. How do you get more donors? Through prospecting activity (# of first timers), and keeping as many of your existing ones as possible (annual renewal rate). To grow, you have to be attracting more new donors than you are losing, and you can reduce your losses by treating your current donors better. Even when I was working with an annual donor base of almost 50,000, the segments I looked at never needed to be more complicated than first time donors, renewed donor who gave last year, renewed donors who gave before last year, and the resulting total each year.

In terms of increasing the total given per donor per year, that begs the question “how do we get them to give more often and/or larger gifts?” All your strategies should flow from trying to increase 3 metrics; number of gifts per year, average gift, average annual giving (total over the fiscal year).

Awareness and Accuracy. The higher the public awareness is of your mission, and the more accurately they understand your mission and work, the more receptive they will be to transition from a member of the general public to a supporter. There is a simple and cheap way to understand where you fit in your marketplace, and to see if your efforts are producing any change. Every two or three years, conduct an omnibus survey (you get one or two questions tacked on to someone else’s survey), and the report comes back with useful numbers. The first measurement is always a baseline, and the goal from that point is how to increase it. To measure activity in the meantime, the easiest way is to track impressions. Each type of publicity, print, radio, tv, online has an associated number of impressions assigned to it (how many people see it, hear it, read it). They publish those figures generally as part of their advertising information. Growing the number of impressions each year correlates with increasing your exposure, and logically leads to increased public awareness and accuracy.

There you go, there are my five major metrics. These metrics are my friends. If you have any questions or comments, please feel free to reach out.

And going forward, in terms of convincing those around you what metrics are the right ones for your work? It’s about recognizing the need for ongoing education for those outside our profession about how our business works. There are always new board members, new program managers, new staff, new volunteers, the education never really ends. For us it can feel repetitive and obvious. It’s not, we just live it every day. If you think about it like a renewable chore, like dishes, or laundry, you get a better sense of the required frequency. Although it doesn’t feel like a time-saver, it is. It helps keep the strategic conversations focused where they should be, and it turns your board and your peers into you first best line of defence in reviewing and challenging your plans and strategies. They ask better informed questions, prompting more creative thinking. The laypersons perspective pushes us to valuable insights we otherwise may have never considered. And everyone benefits as a result.

Janice Boyle started her fundraising career as a student caller for UBC’s annual fund. Her career has spanned the social services, education and healthcare sectors over the last 20 years in senior leadership roles. She is passionate about improving her local community, with her specialties in non-profit leadership, supportive infrastructure, and team building. She was recognized in 2011 with the Association of Fundraising Professionals’ Outstanding Professional Fundraiser Award as well as the Business in Vancouver’s 40 Under 40 Outstanding Achievement Award in 2002. She can be contacted at Janice.boyle53@icloud.com

Metrics, Friend or Foe? (Part Three)

Boyle, Janice

By Janice Boyle

A tale of two perspectives: The fundraiser vs. the accountant.

For a quick recap we have covered three of the most ubiquitous and challenging metrics that are (mis)applied to demonstrate the success or failure of fundraising. Today, I want to talk a little more about what I have observed when a strong focus is placed on the metric of cost per dollar raised.

First, I have a quick disclaimer. Anyone who I’ve worked with would describe me as being quite patient and calm. In my work life, I have only ever raised my voice twice, and one of those times happened in a heated debate with our accountant. I think it’s because the financial statements are used to measure almost everything in organizations that the CFO’s position can ascend to that of a Demigod as the producer of those statements. They are viewed as the font of all organizational knowledge. Sometimes, that gets to me. That being said, some of the most influential and brilliant mentors that I have had in my career have been both accountants and financial sector executives. What I most appreciated about their characteristics included pragmatism, the ability to make decisions based on available evidence, and their critical thinking skills. They were also good systems thinkers, and like in fundraising, their work was relatively easy to measure, and it was challenging to earn their respect. It took time, perseverance, and demonstrable, repeated achievement. They are a difficult group to impress.

I also ran into some accountants that at some point in their career had negative experiences with fundraising professionals that led to some initial distrust (we all bring our own baggage into new roles). Ever had an accountant raise their eyebrow or stifle a snicker when you talked about tracking pledges? Or moves? For them, it’s not a real achievement until it’s been deposited in the bank. Ever rolled your eyes…I mean… looked to the heavens for guidance…when you announced a successful and very large, multi-year pledge, and the first question from you accountant/CFO/Director of Finance is “Yes, but when is the cheque coming?”

Their pragmatism (and the hard work of supporting all of us in achieving a balanced budget) leads them to use financial statements as the benchmark for fundraising, like everyone else. Again, this happens in the absence of being educated on what metrics they should be using to evaluate the success of fundraising. Throughout my articles you may be getting the impression that I dislike financial statements. That’s not true. I do like them. It’s an important report that provides critical information on the balance between revenue and expense, financial position, etc. It’s just not appropriate as an evaluative report to measure either fundraising or mission effectiveness. It’s too blunt of an instrument for that.

What I have learned from accounting pragmatism that has been infinitely helpful is that if you are able to demonstrate something that works, they support it. A number of years ago, my Development Committee Chair was an executive with HSBC. He taught me almost everything I know about presenting to and working with board committees. At one point, having just finished Penelope Burke’s Donor Centred Fundraising, I developed a plan to significantly expand the numbers of donors we were calling to personally thank. The top 2.5% of our donors were already taken care of with an assigned development professional and/or board member, but we had several thousand more donors that, I believed, with additional attention, would be more loyal. Having originally come from a telemarketing background, I figured we could essentially use the first half of a telemarketing script (Thank you for your last gift!), and recruit volunteers in the evenings. Low cost, high impact, I was feeling pretty good.

Penelope Burke also said that you can ask for the next gift after you thank them for the last one, and at the time, our receipts were often not as quick as our next ask. This would help solve that problem. So, all excited, I ran it by my Board committee chair. He was less than enthusiastic for two reasons. Firstly, other board members questioned if it was a good use of resources to thank without an ask. On a personal level, as a donor, he preferred not to be thanked, so why would we look at doing this on a large-scale and potentially alienate supporters? I was crestfallen, but they were both valid concerns. And the challenge with trying something new is you have an educated guess on what the outcome might be, but success is by no means certain.

I had the Penelope Burke research in my debate arsenal, but it wasn’t enough. So I suggested a test. I asked him to give me two months to conduct thank you calls with volunteers, and we would track their giving patterns for six months after the call. We would control for other variables, and once we had the results we could decide if it was a strategy worth pursuing. He was very supportive.

We called several thousand donors over two months to thank them and tell them what their gift paid for. The responses on the phone were often comical, because after we thanked them, there was a silence while they waited for the other shoe to drop. And they were always surprised (and thrilled) we just called to thank them. One $50 donor was worried he didn’t put a decimal point on the cheque, because he could understand if we were calling to thank him for a $5,000 gift, but $50? And the volunteers had a blast. It’s probably one of the most rewarding, feel good activities I’ve ever done.

But then came the time to see whether or not the calls made any difference. I was nervous, because I had been so sure it would, but now it actually had to show in the numbers. It’s probably why 11 years later, I still remember the results. In the 6 months since the calls were made, the donors who got a thank you call gave on average 37% more than those who did not get a call! I was so happy, I actually cried. My Board committee chair was convinced by the evidence. (As an aside it didn’t hurt that his sister-in-law was called, and she called him raving about getting the call. I swear that was not intentional! Honest!).

Where the most obvious difference in the Accountant vs. the Fundraiser perspective appears in how each views the goals and objectives of the “back end” of fundraising, or donations processing and receipting. Below, I have a comparison highlighting those differences (and yes, they’re from actual experience).

The goal: Increase net revenue (we both agree on this)

The Fundraiser The Accountant
Professional Perspective: How can we improve the donor experience to drive retention and upgrading? Professional Perspective: How can we control/reduce costs to ensure more net revenue?
Strategy: complete, accurate and fast (7 days) tax receipts. Strategy: process efficiency
Tactics:

·      Streamline data entry processes

·      Increase staffing and incur overtime as necessary to maintain 7 day target in peak seasons (+$)

·      Recruit and train volunteers to support staff efforts

·      Data entry completed before sent to finance for deposit (ensures priority to donor service first and that database and accounts are reconciled)

·      Outsource activities that can be completed faster and more cost effectively than in-house (by hand). E.g. Printing and mailing(+$)

·      Purchase or rent office equipment to speed routing tasks e.g. Letter opener, check stamper, scanner that takes any size paper by automatic feeder for checks. (+$)

·      Focus on data clean up during slower times

Tactics:

·      Streamline data entry processes

·      Hire staffing sufficient to meet annual volume demand (no change in peak periods). (-$)

·      Decrease amount of information entered in peak season eg. Phone numbers, spouse, etc. (-$)

·      Recruit and train volunteers to support staff efforts

·      Gifts deposited first, given to donations processing after (financial statements, getting revenue deposited before month/year-end a priority)

·      All activities completed in-house by existing staff or volunteers. (-$)

·      Utilize standard office equipment to complete all work (-$)

·      Ensure staffing resources minimized to eliminate “slow” times (-$)

Outcomes/Metrics:

Consistent 7 day production of receipts

Increase in annual donor retention rate

Increase in frequency of giving

Increase in average gift

Reduction in returned mail

Reduction in donor complaints

Increased gross revenue

Increased expenses

Increased net revenue

Outcomes/metrics:

Lowest possible cost to complete required work

So, which arm of the organization should be in charge of donations processing? Would it surprise you to know that I believe it shouldn’t matter? Whoever is in charge of it, as long as the goals of the work are clear and agreed to, the appropriate strategies and metrics become obvious.

With the above example, I simply wanted to demonstrate how different perspectives powerfully drive our strategies and metrics (and misunderstandings and arguments). Both perspectives are valid. Both are useful. Both professionals are achieving their goals. My skills and abilities as a leader have been well honed working with those in the financial sector. Learning another perspective is like learning another language. It’s another tool in the tool bag.

What I have found more important than anything else when working with the finance department is that you have to start the conversation with them about your perspectives on how to achieve more net revenue. I’ve been most professionally frustrated when I have assumed we have the same approach. And we know what “assume”ing does to “u” and “me”.

OK, I feel like I’ve got my frustrations about financial statements as an overused yardstick off my chest. If you find yourself frustrated with your own accountant, I have this advice. Invite them out for an after-work drink/coffee/libation of your choice and have a conversation. Get to know them. I promise you it will be worth it.

Janice Boyle started her fundraising career as a student caller for UBC’s annual fund. Her career has spanned the social services, education and healthcare sectors over the last 20 years in senior leadership roles. She is passionate about improving her local community, with her specialties in non-profit leadership, supportive infrastructure, and team building. She was recognized in 2011 with the Association of Fundraising Professionals’ Outstanding Professional Fundraiser Award as well as the Business in Vancouver’s 40 Under 40 Outstanding Achievement Award in 2002. She can be contacted at Janice.boyle53@icloud.com

Metrics, Friend Or Foe? (Part Two)

 

Boyle, Janice

By Janice Boyle

Last week, we talked about the good, the bad and the ugly of using the detailed fundraising budget as a primary fundraising metric. The responses and feedback I received were enough to convince me I am not alone in experiencing the counterproductive pull of a metric being applied with good intentions, but ultimately negative results.

Today, we are going to cover another couple of metrics that are ubiquitous in our industry, and just as commonly misapplied.

Number 2: Gross Revenue

In the business world, gross revenue tells you a lot about a company relative to its competitors. Growth of gross revenue is seen as a sign of corporate health and prosperity. That business lens is often applied to non-profits, where it is perceived that a charity with the larger balance sheet is somehow in better shape. Also, if a charity isn’t growing, the angst around the board and executive table inevitably appears, asking why not? The challenge with applying that business lens to charities is that by definition, the goal of a non-profit is fulfilling its mission, not growing its balance sheets. And the goal of business is to make money. That being said, the charitable sector struggles with producing useful, understandable, and concrete measurements that demonstrate how effectively they are achieving their missions. And in the absence of that, boards and senior executives turn to what is readily available to judge the merits of annual activities, the financial statements.

In fact for all non-profits, money isn’t even mentioned in the mission statement. I always find it perplexing when a charity, as part of their strategic plan, has a financial goal that is a standalone pillar of their plan. I have always considered revenue targets strictly an operational requirement to meet the needs of the strategic plan, not a strategy in and of itself.

As an example, in one of my roles, we were raising approximately $9 ½ million dollars annually. Our expenses were approximately $3 ½ million. So we had $6 million to spend on our mission.     Another branch of the same organization was raising significantly more, approximately $12 million a year. Our board wanted to know how we could work to achieve that level of gross revenue. However, when you looked at their expenses, they were approximately $6 million. Now this wasn’t because they were less efficient or effective than our branch. They just raised funds in different ways, some of which were more expensive. They raised significantly more through special events and we raised significantly more through monthly giving and major gifts. At the end of the day, both of us were raising $6 million towards our mission. Which branch, in your opinion, was doing better? You can see how clearly using a different metric gives you an entirely different answer, which begs the question, which one should you be using?

But one of the challenges of looking at gross revenue and total expenses as a whole leads you to another problematic metric.

Number 3: Cost/$ Raised

When calculated across all fundraising activities of an organization, this number is interesting, but not in any way useful. It is also the metric used most frequently by the general public to judge whether or not a charity is making responsible use of their donations. It is this fact in particular that drives me a little (a lot) crazy, because even if a charity is efficiently raising money, this metric says nothing about how well they are achieving the mission. It’s another example of people using the available information to inform their choices rather than the right information.

So, let’s take an example, looking at that $9 ½ million I referred to earlier. It was made up of prospecting activities, direct mail, monthly giving, major gifts, corporate and foundation giving, and 3rd party events. At one point, I requested the industry standards for cost/$ raised by fundraising method from AFP (Association of Fundraising Professionals) and compared it to what we had.

Fundraising Method Industry Standard Our results
Direct mail – donors $0.20-0.25/$ $0.19
Direct mail – prospects $1.00-1.75/$ $0.80-0.90
Major gifts $0.10-0.20/$ $0.20
Monthly donors Not provided $0.03
Special events $0.50-$0.75 Not applicable

So, according to industry standards, we were doing quite well. And when a donor called and asked us what our fundraising expenses were, the short answer, which varied a little each year, was between $0.30 and $0.34 per dollar raised. However, I did get into the habit, when a donor called asking about our fundraising expenses to give them a different response. “I’m really glad you asked me that. Do you have a few minutes? There is a bit more to explain than the overall average tells you.” Invariably, they would say yes, and it was a great opportunity to educate our donors on how it all works.

But let’s move from the general public to the perceptions of a senior volunteer. I had the pleasure of working with Dr. Geoffrey Ballard, the founder of Ballard Power, and his wife Sheila. They were regular volunteers, and I saw them on a weekly basis. Dr. Ballard was interested in our financials and had questions about the cost of our fundraising methods. He zeroed in on the direct mail, which looked to him like an opportunity to cut costs, because it was a material expense. So we spent some time going through each fundraising stream, how much revenue it generated relative to cost, how we compared to industry standards, and at first I thought that I had convinced him that we were on the right track. But I had not. We finished the meeting with him unconvinced, and on the drive home (most of my inspiration happens on my commute) I thought about how I had presented the information. It wasn’t until the drive in the next morning that I realized how I might better make my point.

I saw him again the following week during his volunteer shift, and we began chatting. I told him I had a question for him that I wanted him to think about. “So right now we have a profit margin of 80% for our direct mail donor campaigns. How much profit does Ballard Power generate annually?” The answer of course was none. It triggered a great discussion on the similarities and differences between fundraising and business, and in the end, we were on the same page (and I learned more about hydrogen fuel cells than I ever thought I would).

It’s been many years since I looked it up, but I put together a slide for the board on average profit margins for certain business sectors. It was eye opening for all of us to compare a business sector that had a profit margin under 10% and was considered successful and well managed next to direct mail at 80% and routinely questioned as too expensive. It really is all about perspective. And just as profit margins vary in the life cycle of a business, the life-cycle of the organization affects the expected cost/$ raised of its fundraising.

Another helpful analogy to explain the cost of fundraising to those in the financial sector is to compare it to (and I might be butchering the terminology, but here it goes) the mix/rate of an investment portfolio. A given portfolio will have an overall rate of return, but it will have a mix of investments that all have different rates of return. They will be chosen as part of an overall investment strategy, each with a specific place and purpose, but just like in fundraising, you wouldn’t know it if you didn’t peek under the hood.

I think helping donors to peek under our fundraising hoods, and understand more about the realistic and appropriate cost of fundraising will go a long way towards advancing the ability of non-profits to talk less about money and more about mission.

I was at a conference a few years ago, and attended a session where a philanthropist was going to share how she decided to give a significant gift to a particular charity. She first talked about how important a low fundraising and administrative cost was to her, because it was an indication of “efficiency” and as a responsible donor, she wanted as much of her gift to go to the mission as possible. So far, this was not news. Then she described how she would give “test” gifts of $25 to several shortlisted charities and see how they treated her (you can call them her donor service metrics).

  • Was she phoned and thanked? Was it the Executive Director?
  • Did she receive her tax receipt and thank you letter in less than a week? Was her name and address correct?
  • Was she invited to tour the charity?
  • Was she invited to a donor recognition event?
  • Was she listed in the annual report?
  • Did they respect her wishes on how often she wanted to be contacted?

As I was sitting there listening, I was adding in my head the people, technology, infrastructure, systems, office space, heat, light, rent, internet, phone lines, etc. to provide that level of donor service for all donors in a year who give $25 or more. Of course it’s doable, but I also know any organization that was spending enough to achieve that would never satisfy its fundraising and administrative cost threshold. Her criteria weren’t difficult to meet. They were impossible. Another to add to my list of things that make you go “hmmmmm”.

When I started this article, I had a neat little outline and figured I could put it together in a couple of hours, but as you can see, it turns out I had more to share than I thought. Before this one gets to long, I’m going to wrap it up for now. Next week, I’ll be talking about another challenging facet of using cost/$ raised as a primary metric – the tension between looking at cost or looking at ROI. My working title at the moment is The Fundraiser vs The Accountant. And I promise, I will get to the list of metrics I have found most helpful. Stay tuned.

I’m also interested in hearing from you. Have you come across an interesting or perplexing metric in your work? I’d love to hear your stories. And let me assure you, you are not crazy, but sometimes the goals we are given are.

Janice Boyle started her fundraising career as a student caller for UBC’s annual fund. Her career has spanned the social services, education and healthcare sectors over the last 20 years in senior leadership roles. She is passionate about improving her local community, with her specialties in non-profit leadership, supportive infrastructure, and team building. She was recognized in 2011 with the Association of Fundraising Professionals’ Outstanding Professional Fundraiser Award as well as the Business in Vancouver’s 40 Under 40 Outstanding Achievement Award in 2002. She can be contacted at Janice.boyle53@icloud.com

Metrics, Friend or Foe? (Part One)

Boyle, Janice

By Janice Boyle

I once heard a quote that has stuck with me over the years. “What gets measured gets done, and what gets rewarded gets done well.” In my 20 years of fundraising I have had a lot of experience with different metrics; some helpful, some interesting but not terribly useful, and others that seem to drive all the wrong behaviour.

I’d like to start with a story from early in my career. While the exact details may be different for you, it’s likely going to sound very familiar. It was my second fundraising role, and I was the new Director of Development and Communications. I was in a regional office and responsible for all fundraising with the exception of direct-mail. Direct-mail was handled out of our national office. Within the first few months I had successfully asked for and closed my first major gift (hooray!). Coincidentally, we had also mailed out a recent prospect campaign. I was so excited with my first successful gift and when I called to thank him, he told me that he had a return envelope from our recent mailing and would be sending his donation to us shortly (oh, crap!). I immediately panicked.

At that time, anything arriving in a business reply envelope was considered direct mail. I was to send it, unopened, to our national office and it counted towards the direct-mail goal. Anything sent in a regular envelope was counted towards my goals. I’m a bit embarrassed to share what I did next. For the next week and a half I looked at every direct mail envelope up against a lamp to see if that particular envelope contained my first major gift. Using this less than scientific method, I did find that first major gift, opened it locally, and it did count towards my targets that year.

I knew in my heart of hearts that this was not particularly professional behaviour. But one thing I have come to appreciate about the human condition is that we respond to the incentives we are given.

I want to go over a few of the most common, well intentioned, but ultimately harmful, fundraising metrics I have seen over my career.

Number 1: The detailed fundraising budget

Now bear with me for a minute, because I appreciate this seems counterintuitive. Fundraising budgets are generally organized by fundraising method (special events, direct marketing, telemarketing, major gifts, planned giving, grants, etc.), donor type (corporate, foundation, individual), or payment method (online), sometimes a confusing mix of all three. These divisions are usually mirrored in staff structure and accountability.

Let’s go back to my first successful major gift. In the first year that donor paid with a personal check. In his second year he gave a corporate check, and in his third year he gave a family foundation check. In three different years this gift showed up in three separate accounting lines; individual giving, corporate giving, and foundation giving. Each year I budgeted this donor would give again and each year I guessed incorrectly how he would be giving. Consequently, the actual amount raised compared to what I had budgeted for in each of these categories was off. In the absence of being provided what fundraising metrics a board should be looking at to determine the efficacy of your fundraising campaigns, they look to the one piece of information they get all the time; the financial statements. Now again, this was early in my career, and I had not yet developed my philosophy of what metrics were critical. So rather than seeing the successful renewal of a major donor over the course of three years, the financial statements told a story of my inability to appropriately budget. This caused concern. And concern causes meetings, reports, presentations and discussion. While I was able to explain the variances in each year, I realized that the amount of time spent both asking these questions and answering them told me that we were looking at the wrong information. Interestingly, in each of these years our overall fundraising exceeded targets.

Another variation on this theme is when you have one staff person responsible for certain accounting lines, like direct-mail, and another person responsible for other accounting lines, for example major gifts. In this situation team cooperation is not encouraged, because it’s not measured. What incentive does a major gifts officer have in discussing a planned gift with a donor when that means the donor moves out of their portfolio and into someone else’s, no longer counting towards their annual targets? What incentive does an annual giving manager have in upgrading their direct-mail donors when, at a particular threshold, say $500, that donor moves to the portfolio of a major gifts officer and can no longer be solicited via direct mail? If all of the fundraising goals/accountability are individual, you will not have a culture of team work.

There is a reason it is considered unethical to be paid via commission as a professional fundraiser. It promotes behaviour that may not take into consideration the long-term value of a donor to an organization. And yet applying this metric in this way measures a fundraiser’s effectiveness exactly the same as commission-based sales.

A third variation on this theme is assigning a donor’s gift to a specific accounting line based on how much they are giving.  At one point, I oversaw a telemarketing team. Our job was to renew, upgrade, and find new annual giving donors and our general focus was donors under $1,000. Every once in a while we would have someone on the phone who wanted to give $1,000 or more. Would you be surprised to learn that this was not a cause for celebration? Why wouldn’t it be, you may ask? Because when a donor passed the $999 threshold, they became a “major donor”, and their gift would show in the “major gifts” accounting line, not telemarketing. We could not include it in that night’s total for the amount we had successfully raised (how we were measured), and so you can imagine over the course of the year we had a number of $999 gifts.

Is any of this sounding familiar?

I hope that by sharing my (not always so proud) experiences with you, I can help show the link between metrics and behaviour. It is a powerful and often overlooked relationship that drives the culture of many a fundraising department.

Next time, I’ll talk about using gross revenue as the primary fundraising metric.

Janice Boyle started her fundraising career as a student caller for UBC’s annual fund. Her career has spanned the social services, education and healthcare sectors over the last 20 years in senior leadership roles. She is passionate about improving her local community, with her specialties in non-profit leadership, supportive infrastructure, and team building. She was recognized in 2011 with the Association of Fundraising Professionals’ Outstanding Professional Fundraiser Award as well as the Business in Vancouver’s 40 Under 40 Outstanding Achievement Award in 2002. She can be contacted at Janice.boyle53@icloud.com