By Todd Cohen
[Note: This article, the last in a series, was written for Blackbaud.]
One organization that has successfully addressed the challenges facing charities is the SickKids Foundation, which has raised more than $100 million a year from over 300,000 donors for The Hospital for Sick Children – the second largest-donor base of any hospital foundation in North America.
Key to fund development at the SickKids Foundation are investment in staff, diversification of fundraising programs, a heightened fundraising role for the CEO, and a focus on major individual giving, planned giving, and direct marketing, said Ted Garrard, the Foundation’s president and CEO.
The SickKids Foundation looks for professional staff with “strong track records in fundraising, marketing, or other associated disciplines,” Garrard said. “We will pay them in the 80th percentile of salaries for comparable positions so we can attract and keep them.”
The Foundation also invests in employees’ growth by allocating the equivalent of 2 percent to 5 percent of their salaries in professional development activities, plus offering a formal mentorship program that trains more senior employees to be effective mentors and then pairs them one-on-one with selected staff members who opt to participate.
Of the Foundation’s 160 employees, about 40 percent are fundraising professionals. And the staff has grown about 30 percent over the past five years through “strategic investments in fundraising areas we’ve identified for growth,” Garrard said.
Diversification of fundraising programs – from the annual fund and events to major giving, planned giving, and capital campaigns – is essential for any medium or large charity, Garrard said.
That approach is needed both to offset challenges to any single program when any segment of the economy underperforms, he said, and to help migrate donors from one program to another “as we manage the lifecycle relationship with the donors.”
One strategy at SickKids Foundation, for example, is to work with donors who first give through direct marketing channels and develop them into major gift donors “once they exhibit loyalty and capacity,” Garrard said.
Using the same approach, it also works with event participants to develop them into monthly donors serviced through direct marketing channels.
Data analytics, sharing
A key to moving donors up the giving pyramid at the SickKids Foundation is the analysis of metrics and sharing that data between the organization’s various fundraising programs to help determine which strategies work within each program.
And a key objective in each fundraising channel is the retention of donors, said Garrard.
“We invest in the capacity of technology and professionalism and strategies to keep donors loyal through stewardship, engagement, and a clear demonstration of impact,” he said. “We set retention targets in each of our programs and strategies to retain donors in those segments as a key focus of our work.”
Fundraising programs that have grown at the SickKids Foundation include major and planned gifts; events; stewardship and donor relations; and information technology and data analysis.
Over the past five years, for example, the share of overall revenue from major individual giving and planned giving has grown to half from a third.
Major gift culture
Supporting that growth has been an increase in staff and in contacts with major donor prospects, as well as a “renewed major gifts culture” led by Garrard, who joined the Foundation as CEO in July 2009, after serving as vice president for external affairs at The University of Western Ontario, where he raised more than $600 million in 14 years, and before that as campaign director at United Way of Greater Toronto, where he raised more than $200 million over five years.
“I was brought in, in part, to really elevate major gifts to this organization,” Garrard said.
Each year, starting in his second year at the Foundation, he said, he has secured gifts of $30 million $40 million, $20 million, and $40 million, respectively.
“We have a real focus on the CEO playing a relationship role in setting a major gift culture,” he said, “and being personally responsible for attracting transformational gifts.”
The SickKids Foundation has built its direct-marketing portfolio through strategies such as door-to-door, direct mail, digital, and social-media campaigns, and “direct dialogue” programs aimed at speaking to people in public locations like airports and shopping malls and trying to sign them up as monthly donors.
Direct marketing efforts alone in the fiscal year ending March 31 raised $27 million, exceeding the goal by $2 million.
Donor loyalty is essential for a successful fundraising program, Garrard said.
“It’s far easier to raise funds from a loyal donor than it is to attract new donors,” he said. “So focus on the donor experience and renewal of that support.”
The annual retention through direct marketing at the SickKids Foundation is 85 percent, which is much higher than the industry rate for charities, Garrard said.
In comparison, only 43 percent of 1.8 million people who donated to 2,342 nonprofits in 2009 gave again to the same organizations in 2010, according to a policy brief that reported findings from the Fundraising Effectiveness Project and was published in January 2013 by the Center on Nonprofits and Philanthropy at the Urban Institute in Washington, D.C.
“These are small donors continuing through programs like direct mail and telemarketing where you’d expect a high rate of attrition,” Garrard said of donors at the SickKids Foundation.
The Foundation helped achieve its high retention rate, he said, by “encouraging most of them to get involved with monthly giving by a pre-authorized credit card.”
Lessons for nonprofits
However large or small a charity or nonprofit, Garrard said, effective fundraising requires a “clear mission for your organization” and “a very good case for support as to why you should be a charity of choice.”
Charities also need “an engaged board that will help you in your fundraising,” and a “real focus on the fundraising programs that are going to deliver results,” he said.
While large organizations benefit from diversified fundraising programs, for example, smaller organizations “shouldn’t try to do everything under the sun,” he said. “They should focus on one or two programs that will have the likelihood to generate the majority of their resources.”
It also is important to hire staff leaders who are “able to propel your fundraising and to engage in best-practice donor engagement and stewardship,” he said.
And smaller charities do not need to look within their own rosters to help staff with mentoring.
“It doesn’t have to come from within the organization,” he said. “It can come from outside. AFP or AHP [Association for Healthcare Philanthropy] can create those mentorship opportunities.”