ROI and Intel question

[Adriana Bitoun]

Good afternoon fellow listserve members,

 

I have some  intel  questions that I hope this group could help me find the right answers.

 

1. Does anyone has an ROI about Annual Giving? What is the value proposition in terms of the overall fundraising schema, and is there an industry average that moves a donor from annual donor to major/principal?
2. Digital Engagement Officer – does anyone have good Position Descriptions that would be willing to share with me?

 

I appreciate any help, I would like to present something to my leadership and would love to substantiate any information with industry standards and best practices.

 

Thank you!

 

 

Adriana Bitoun Director of  Strategic Advancement Resources (ST.A.R) U.S. NAVAL ACADEMY ALUMNI ASSOCIATION & FOUNDATION 247 King George Street Annapolis, MD 21402   p. 410-295-4150 m. 562-805-8815

 

[Andrew McMahon]

I believe Kirk Schmidt of Wisely might be able to help with the first. He's posted alot about such metrics on LinkedIn and experiments he's done (and is a member of this group).

This is a very hard question to answer. Everyone that I've ever met in this field, though, seems to agree on the following:

1) the vast majority of first acquisition takes place at low $ amounts and large pool of low $ donors can eventually yield some principal gifts;

2) acquisition at a high dollar level-- $100k or greater--is very rare and usually happens only with some kind of board or VIP involvement. For many places, this is the exception rather than the rule as a point of entry for your largest contributions.

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[STEVENS, ANDREA]

Hi, Adriana –

 

I’m not totally clear on the kind of Annual Giving ROI you’re looking for, but I specifically like to track direct mail appeals with the cost-to-raise-a-dollar metric. Total Cost / Net Raised (Total Raised – Total Cost). I think it makes sense to most people when reporting it out. There are lots of industry standards out there that you can Google to see what average benchmarks are according to what type of mailing or appeal it is.  Works for events and other fundraising tactics as well. 

 

I’m also of the opinion that measuring the number of donors is key to raising revenue and finding major giving candidates.  It’s about the relationships, even at the entry level of giving.  If the relationships are there, the revenue will follow.

 

Finally, what makes a major donor is different for every org.  See what the gifts look like among your top 10-20% of donors, excluding estate gifts.  That might give you a ballpark on what is “major” for your org.

 

Andrea Stevens  (she / her / hers)

Director of Annual Giving and Alum Relations

   Direct: (502) 992-9371

   Cell: (502) 296-7682

   www.lpts.edu

   1044 Alta Vista Road

   Louisville, KY  40205

 

Be a SEMINARY SUSTAINER:

Make Your MONTHLY GIFT @

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From: donorpart...@googlegroups.com [mailto:donorpart...@googlegroups.com] On Behalf Of Adriana Bitoun
Sent: Monday, February 28, 2022 1:16 PM
To: donorpart...@googlegroups.com
Subject: [Donor Participation] ROI and Intel question

 

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[Louis Diez]

Hi Adriana and all,

I was going to present on a very similar topic with Jim Langley at CASE NYC. (Adriana, I just got permission to share the slides so resharing with the group.)

The slide below shows the percentage of people making major/principal gifts at each level of consecutive years of giving vs. "low dollar" donors.

After year three, the percentage of people making principal gifts is greater and stays that way for each consecutive year of giving.

This is from a study on a dataset of over 30k constituents. I think it makes a pretty solid vase for building the right kind of pipeline. 

We've been applying a lot of this at Muhlenberg with good results. If anyone wants the full presentation, please send me a note.

(Also, I was analyzing the VSE survey data and would love your feedback on this ranking.)

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[Moody, Kelly]

Hi all,

I suspect that you all know the folks over at BWF.  This week they are doing a webinar on the very topic of digital giving as a pipeline for major and principal giving:  https://bwf.zoom.us/webinar/register/WN_4RYJI59QTfe9jF7Q5QDsxw?utm_medium=email&_hsmi=204142245&_hsenc=p2ANqtz-8PoXokzNxX7ZJcGXvJKnB9nBh-Oe01D8dX-AHzZ3ML0GZoxOAD8CltkSL2u5Q6WYKJ0fNaY2mKOxVWrgt5q9K2pi9LKQ&utm_content=204142245&utm_source=hs_email.  I always learn a ton on their webinars.

Best,

Kelly

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"Not everything that is faced can be changed, but nothing can be changed until it is faced."   -- James A. Baldwin

[Kirk Schmidt]

If you would like to talk this through, I'm more than happy to help. Unless your principal donors were mostly from Board/ED connections, you'll probably find a lot historically came from, or at least donated to AG at some point in their tenure in your database.

That said, annual giving tends to have a decent ROI in the long run because

1) While acquisition rarely causes a positive return in the first year, there is normally gift size growth while retention decays

2) The annual cost to maintain is usually relatively low

There is strength in numbers, though. More donors, more chance that some portion will move through the pipelines. So, unless annual giving is losing money in the long run, at least from a theoretical perspective, you want to basically burn money until you have maximized donors for the money on acquisition. That way you are dealing with the largest pool possible. I know that a nonprofit will never quite do that, but effectively AG's ROI is about creating the largest possible pool and less about pure revenue.

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[Adriana Bitoun]

Thank you All,

 

This is intriguing and interesting for me, we are an independent foundation that supports the Naval Academy, we are authorized to raise funds for them however, different from traditional Higher Ed fundraising divisions, we are not subsidized and have to raise funds to sustain ourselves. While trying to demonstrate the value proposition of the annual giving program, I could not find any metrics that would addressed this, for us the annual fund raises around 11% of the annual total, so in terms of revenue, it does not provide the highest yield, and I want to suggest that investing in annual giving yields long term results as the chart shared by Louis demonstrates.

 

Thank you for the collective input, I truly appreciate it.

 

Adriana Bitoun Director of  Strategic Advancement Resources (ST.A.R) U.S. NAVAL ACADEMY ALUMNI ASSOCIATION & FOUNDATION 247 King George Street Annapolis, MD 21402   p. 410-295-4150 m. 562-805-8815

 

 

From: donorpart...@googlegroups.com <donorpart...@googlegroups.com> On Behalf Of Louis Diez
Sent: Monday, February 28, 2022 4:08 PM
To: donorpart...@googlegroups.com
Subject: Re: [Donor Participation] ROI and Intel question

 

CAUTION: This email originated from outside of the organization.

Hi Adriana and all,

 

I was going to present on a very similar topic with Jim Langley at CASE NYC. (Adriana, I just got permission to share the slides so resharing with the group.)

 

The slide below shows the percentage of people making major/principal gifts at each level of consecutive years of giving vs. "low dollar" donors.

 

After year three, the percentage of people making principal gifts is greater and stays that way for each consecutive year of giving.

 

This is from a study on a dataset of over 30k constituents. I think it makes a pretty solid vase for building the right kind of pipeline. 

 

We've been applying a lot of this at Muhlenberg with good results. If anyone wants the full presentation, please send me a note.

 

(Also, I was analyzing the VSE survey data and would love your feedback on this ranking.)

 

 

 

 

 

On Mon, Feb 28, 2022 at 3:39 PM Andrew McMahon <mcmahon.and...@gmail.com> wrote:

I believe Kirk Schmidt of Wisely might be able to help with the first. He's posted alot about such metrics on LinkedIn and experiments he's done (and is a member of this group).

 

This is a very hard question to answer. Everyone that I've ever met in this field, though, seems to agree on the following:

1) the vast majority of first acquisition takes place at low $ amounts and large pool of low $ donors can eventually yield some principal gifts;

2) acquisition at a high dollar level-- $100k or greater--is very rare and usually happens only with some kind of board or VIP involvement. For many places, this is the exception rather than the rule as a point of entry for your largest contributions.

On Mon, Feb 28, 2022, 1:43 PM Adriana Bitoun <adriana...@usna.com> wrote:

Good afternoon fellow listserve members,

 

I have some  intel  questions that I hope this group could help me find the right answers.

 

1. Does anyone has an ROI about Annual Giving? What is the value proposition in terms of the overall fundraising schema, and is there an industry average that moves a donor from annual donor to major/principal?
2. Digital Engagement Officer – does anyone have good Position Descriptions that would be willing to share with me?

 

I appreciate any help, I would like to present something to my leadership and would love to substantiate any information with industry standards and best practices.

 

Thank you!

 

 

Adriana Bitoun

Director of  Strategic Advancement Resources (ST.A.R) U.S. NAVAL ACADEMY ALUMNI ASSOCIATION & FOUNDATION 247 King George Street Annapolis, MD 21402   p. 410-295-4150 m. 562-805-8815

 

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[Hall, Cameron]

Hi Andrea,

 

Your example is a great approach to track ROI, but you may also want to factor in staff time/salary spent on a project to get a more accurate portrayal of ROI.

 

Cameron J. Hall (he, his)

Executive Director of Annual Giving and Lead Generation
University of South Carolina | University Development

Office: (803) 777-9812 | Cell: (205) 790-4834

 

 

It’s not how much we give but how much love we put into giving. – Mother Theresa

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[Adriana Bitoun]

Thank you, yes staff is part of the equation, and while every institution is different I want to think there should be a benchmark.

 

The PowerPoint Louis shared yesterday was an exact representation of how staff and their duties behave like a stock portfolio. I want to think annual giving is a bond that yields low but steady rates and will be of value if reinvested over time. Principal, major and planned gifts are riskier “investments” with higher ROI and higher risk.

 

 

Adriana Bitoun Director of  Strategic Advancement Resources (ST.A.R) U.S. NAVAL ACADEMY ALUMNI ASSOCIATION & FOUNDATION 247 King George Street Annapolis, MD 21402   p. 410-295-4150 m. 562-805-8815

 

 

From: Hall, Cameron <camero...@sc.edu>
Sent: Tuesday, March 1, 2022 11:39 AM
To: STEVENS, ANDREA <aste...@lpts.edu>; Adriana Bitoun <adriana...@usna.com>; donorpart...@googlegroups.com
Subject: RE: ROI and Intel question

 

CAUTION: This email originated from outside of the organization.

[Louis Diez]

Here is the full presentation:

https://docs.google.com/presentation/d/1M8B-6DD0fm6SScQFIbObEBE8gJsIZlgYFx7wksz4X78/edit#slide=id.g10a20320ba7_0_57

Louis Diez, PhD
Executive Director, Annual Giving

loui...@muhlenberg.edu

c: (484) 781-2332

o: (484) 664-4327

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[Andrew McMahon]

Adriana,

Yes, I think you are right with the portfolio analogy. A large well-established annual giving program with a large number of "small dollar" donors giving over many years is the lowest risk option and can produce stable yearly returns. But they are pretty expensive to start and you can expect to lose 80% or more of the donors you acquire after the first year they give. That's the tricky part---the upfront costs can be pretty big and you'd expect to be in the red for a while if you were starting from scratch.

I've seen good data on this before, I just need to find it. I can pass it on once I locate it again....

On Tue, Mar 1, 2022 at 11:55 AM Adriana Bitoun <adriana...@usna.com> wrote:

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