N.C. A&T gearing up for campaign

By Todd Cohen

GREENSBORO, N.C. — North Carolina A&T State University in Greensboro is preparing for a comprehensive fundraising campaign that has just begun the early stages of its “quiet” phase, and could set a goal and begin its three-year public phase in 2017.

The school faces big challenges as well as big opportunities as it plans for the campaign, says Kenneth E. Sigmon Jr., who joined A&T in January as vice chancellor for university advancement.

Sigmon says the school, which has 24 positions in development, advancement services and alumni relations, needs to fill nine of them, and aims to grow the team soon by three to four more.

The school also needs to build “best practices” for its annual-giving program, he says, as well as secure major gifts and planned gifts; identify alumni it has lost track of; and increase the share of alumni who contribute to the school.

And for a comprehensive campaign, which will raise money for capital needs, programs, faculty support, scholarships, annual fund and endowment, the timetable is relatively short because the funds it will raise will be used to address goals the school set in 2011 that it aims to achieve by 2020.

The total value of those needs is nearly $270 million, an amount that will need to be adjusted as A&T sets priorities and gauges the response of top donors to its “case” for support, says Sigmon, who previously served for three years as vice president of development at the Oklahoma State University Foundation, and before that was associate vice chancellor for university development at North Carolina State University in Raleigh.

“Being on a fast track, we don’t necessarily have the typical cultivation period for a lot of major donors,” he says. “But the opportunity is that we’ve had some very generous alumni and friends already contribute, so we have a base of generous supporters that help by giving and opening doors to other people.”

With a study that Atlanta consulting firm Alexander Haas has conducted for it on the feasibility of a campaign, A&T has begun a year-long effort to talk to roughly 100 of its top donors, friends and volunteers, making its case for their support.

Based on their responses, the school will set a goal for the campaign.

Critical to the campaign will be filling vacant positions, including associate vice chancellor for development; assistant vice chancellor for advancement services; director of stewardship and donors relations; prospect researcher; director of gift planning; director of major gifts; and four major gift officers.

Of those, the school is actively recruiting for the positions of associate vice chancellor and stewardship director, and both alumni-relations jobs.

Sigmon also needs to fill a communications position and a program officer in the office of alumni relations, and possibly an additional position in the area of stewardship and donors relations.

“Major” gifts, or those of $25,000 or more, will be key to the campaign, as will developing “best practices” for the annual fund. Overall giving to the school each year, including to the annual fund, has totaled about $7 million in recent years.

Annual giving is “not only a source annual revenue, but it’s renewable, expandable and flexible, and a breeding ground for future major-gift prospects,” Sigmon says.

Planned gifts, or those that are deferred and involve complex transactions, likely will account for up to 20 percent to 25 percent of the campaign.

Also key will be corporate and foundation support, which in the fiscal year ended June 30, 2014, accounted for nearly half of private support the school received.

And the school’s strategic plan calls for roughly tripling its endowment to $75 million in 2020 from $45 million.

A&T also aims to boost — from eight percent — the share of alumni who contribute to the school. That “participation rate” puts A&T in the top third of the 17 schools in the University of North Carolina system, but behind UNC-Chapel Hill, which at roughly 17 percent has the highest rate, Sigmon says.

With contact information for 48,000 to 50,000 alumni, the school also is working to find “lost” alumni.

And it aims to use social media and email in the campaign, and to get students involved in annual giving before they graduate.

“The university wants to be the preeminent land-grant university, the institution of choice for very-high-achieving students who are inspired by what we do as a land-grant — teaching and learning, civic engagement, and transformative research that helps solve the grand challenges of society,” Sigmon says.

A&T, which was founded in 1891 with federal land-grant funding, was the second land-grant university in the U.S. — after Iowa State University — and the first in North Carolina for people of color.

The goal of the advancement office, Sigmon says, is to “support the long-term vision of the university and serve the community here at A&T by making the university affordable for students, by having high-quality faculty, and by putting those kinds of programs in place that are cornerstones of a land-grant university, and doing that through private philanthropy.”

Fundraising, Part 2: Healthcare groups invest in capacity

By Todd Cohen

[This article was written for Blackbaud.]

Investment in fundraising capacity continued to pay off in 2013 for hospitals, medical centers and long-term care facilities, says Bill McGinly, president and CEO of the Association for Healthcare Philanthropy, or AHP.

Organizations that raised the most money invested more in staff, in securing major gifts, and in overall fundraising capacity.

“It costs money to bring in money,” McGinly says.

Total giving to AHP’s roughly 5,000 members totaled $8.9 billion in 2013, roughly the same as the previous year.

And over half of fundraising revenue typically comes from an institution’s “family,” including employees, physicians, top executives, major donors, board members, and patients.

An AHP survey that generated responses from 28 percent of its members found median net fundraising grew in sync with spending on fundraising.

Organizations that spent $4.8 million on fundraising, for example, generated over $18 million in median net fundraising revenue.

In comparison, organizations that spent $2 million to $4.8 million on fundraising generated $9 million in median net fundraising revenue, those that that spent $425,000 to $910,000 generated $2.2 million, and those that spent $60,000 to $425,000 generated to $565,000.

Spending on staff was a key investment, McGinly says, with the most successful fundraising taking place at organizations that invested in staff compensation, in hiring experienced fundraising professionals, and in making sure at least one fundraising professional was dedicated to each fundraising program, such as the annual fund, major gifts, planned giving, and events.

“They’re hiring and compensating staff, and bringing staff in that have more  experience,” McGinly says.

Among organizations that performed best in fundraising, even those that posted the most modest results typically spent $800,000 or more on direct expenses for staff.

Organizations with the most effective fundraising operations also focused on their return on investment and recognized that spending on overhead is “essential,” McGinly says.

“You’re not going to raise dollars unless you are hiring people and paying the overhead necessary to support those activities,” he says.

AHP has encouraged its members to develop “dashboards” that track net fundraising revenue, return on investment, and the cost to raise a dollar.

Organizations can use that data to measure gains and successes, providing their executives and boards with information they need to make decisions about fundraising strategies and investment.

While the cost of raising a dollar measures efficiency, McGinly says, investment in overhead is equally important.

“A lot of organizations that are efficient aren’t raising the dollars they need,” he says. “They lose an opportunity because they’re afraid to take a risk or take advantage of something that’s really going to give them a return.”

Next: Higher education cultivates major gifts.

The series:

Part 1: Growth tied to capacity, cultivation, communication.

Part 2: Healthcare groups invest in capacity.

Part 3: Higher education cultivates major gifts.

Part 4: Data key for independent schools.

Part 5: International affairs groups refine message.

Part 6: Religion focuses on fundamentals.

Part 7: Arts and culture groups focus on donors.

Part 8: United Way diversifies.

Part 9: Conservation groups connect with donors.

Part 10: Communication, planning key for human services.

Part 11: Peer-to-peer strategy fuels medical research.

Fundraising, Part 2: Healthcare groups invest in development capacity

By Todd Cohen

[Note: This article is from a report written for Blackbaud, which asked me to look at fundraising strategies that nonprofits have found to be effective.]

The continuing recovery of the economy has helped fuel strong growth in giving to the more than 5,000 members of the Association for Healthcare Philanthropy since a slight drop in 2009, says Bill McGinly, the Association’s president.

Overall giving to nonprofit healthcare providers, including hospitals, medical centers, long-term care organizations, hospices and children’s facilities, grew to nearly $9 billion in 2011 from $8.3 billion in 2010, and that trend continued in 2012, he says.

While much of that growth has been tied to the economic recovery,  it also reflects “more stimulation and activity in planned and major gifts, and the commitments people are making,” he says,

Fundraising performance is the direct result of investment in fundraising capacity, McGinly says, including the size of the fundraising staff.

Organizations that had 10 or more full-time direct fundraising professionals and were among the highest performing organizations raised a median of $9.4 million, a median that was double that of organizations in all other performance levels based on total dollars raised.

High performers also had more “maturity” in their fundraising programs, and a bigger variety of programs or ways to give.

After health care giving fell roughly $1 billion in 2008, health care organizations also have seen expanded revenue from  special events and annual giving programs, while funds from major and planned gifts plunged in 2008 and 2009 because of a “lack of confidence related to the economy,” McGinly says.

Organizations that kept fundraising staff instead of cutting positions were able to work on maintaining relationships with major donors or those interested in planned giving, and giving in those programs has rebounded more quickly, he says.

Contributing to that recovery, in addition to the revival in the economy and donor confidence, McGinly says, has been greater awareness on the part of donors about the importance of health care philanthropy as a result of the national debate on health care reform.

Health care organizations that have been effective at fundraising also have provided ongoing training for fundraising staff; hosted activities that get donors to their facilities; engaged their volunteer and executive leaders; heightened the level of contact with donors through more meetings and appeals; and reignited capital campaigns.

More recently, annual campaigns often are involving three appeals, not just one.

High performing organizations had direct fundraising staff that outnumbered all their counterparts by three to one.

And organizations that relied on multiple activities, such as special events, annual campaigns and invitations to visit the facility, performed much better in their fundraising than organizations that had fewer activities.

The result was that high performing fundraising organizations raised nearly 11 times more in net fundraising production after costs, including cash and pledges, than all their counterparts.

Key to effective fundraising, McGinly says, is a strong culture of philanthropy within an organization.

“Fundraisers need to hold their bosses accountable and step up and take the lead in making sure that philanthropy is an integral part of the financial picture of their organization,” he says, “and that it can be depended upon, and that is it crucial in building what the future of their organization will be.”

Next: Human services groups focus on direct response marketing

The series:

Fundraising, Part 1: Basics key as economy starts to recover

Fundraising, Part 2: Health care groups invest in development capacity

Fundraising, Part 3: Human services groups focus on direct response marketing

Fundraising, Part 4: Museums aim to diversify donor base

Fundraising, Part 5: Major gifts a focus of environmental group

Fundraising, Part 6: Direct marketing a key for public society benefit group

Fundraising, Part 7: International affairs group aims to show

Fundraising, Part 8: Faith-based groups count on direct mail

Fundraising, Part 9: Independent school partners with parent volunteers

Fundraising, Part 1: Basics key as economy starts to recover

By Todd Cohen

[Note: This article is from a report written for Blackbaud, which asked me to look at fundraising strategies that nonprofits have found to be effective.]

With the struggling economy beginning to show some life again, and donors regaining some confidence, nonprofits need to be focusing on fundraising fundamentals.

That is the view of fundraising professionals in nine fields of interest.

“The primary tactic that seems to work most effectively is to ask people for money,” says John Taylor, associate vice chancellor for advancement services at North Carolina State University.

“So many organizations I have worked with just kind of sit back and watch the money come in the door, and expect the same dollars from the same donors every year, and fail to recognize that the philanthropic climate is changing,” he says.

Bill McGinly, president of the Association for Healthcare Philanthropy, says building a “culture of philanthropy” within a nonprofit is critical, as is building the capacity of the nonprofit’s fundraising operation.

“Until fundraising is recognized as a strategic partner in planning for today and for the future of the organization,” he says, “you’re going to struggle a bit more in order to build or grow philanthropy.”

From engaging donors and volunteers and demonstrating impact to effective branding, direct-response marketing and back-office operations, fundraising professionals say, nonprofits need to invest in their fundraising programs and operations if they expect to produce results.

This series looks at some strategies that fundraising professionals say are working in their fields of interest, starting with higher education.

Higher education

When John Taylor joined N.C. State University as associate vice chancellor for advancement services in November 2008, just after the economy collapsed, the school’s advancement operation had less than a handful of prospect researchers and roughly 1,300 rated prospects coming out of its most recent campaign.

Today, the school employs three people in its prospect management department and another six in its prospect research department, and has 21,000 rated prospects in its database, Taylor says.

That is one result of a “complete reengineering process” of its fundraising operation that N.C. State launched at about the time Taylor joined the university.

Spurring that overhaul have been not only the ailing economy but also heightened competition for philanthropic dollars, huge growth in the number of nonprofits, and the added challenge of catastrophic disasters like Hurricane Sandy, he says.

“You just can’t rely on those same dollars from those same donors,” he says.

Key to N.C. State’s strategy has been support for engaging its donors, including “more focused suggestions,” renewals of annual gifts, “more targeted” asks, and solicitation of eight-figure gifts.

And that has paid off: In the first six months of the fiscal year that began July 1, N.C. State raised $82.4 million, up from $26.9 million in the same period a year earlier.

The school is working with donors not just to renew the gifts they make every year, but to make “much more substantive, transformational gifts,” Taylor says.

Its prospect management meetings, for example, feature “focused conversations about strategies for approaching donors, prospect assignments, and making sure the assignments are fairly distributed” across the range of donor categories.

Those categories include initial “discovery” of prospects and whether they are viable as donors; “stewardship” of donors who have made a gift; “emerging” prospects who will be asked to make a gift within three years; and “top prospect” donors who will be solicited within 12 to 18 months.

The advancement office also sets expectations for major gift officers on the size of their portfolio, and on the number of asks and visits they should make, and uses that information to show their progress and evaluate their performance.

It also has invested heavily in infrastructure, increasing its advancement services staff by 50 percent to just over 30 people, and converting its operating system and development software system.

And it has been “asking people for money, and in particular for more money,” Taylor says.

In the six months through Dec. 31, 2012, annual giving totaled $1 million, up from $837,000 in the same period a year earlier.

And the number of households giving $1,000 or more has grown 25 percent.

“The most important tactic,” Taylor says, “is engagement of your constituency.”

Next: Healthcare groups invest in development capacity

The series:

Fundraising, Part 1: Basics key as economy starts to recover

Fundraising, Part 2: Health care groups invest in development capacity

Fundraising, Part 3: Human services groups focus on direct response marketing

Fundraising, Part 4: Museums aim to diversify donor base

Fundraising, Part 5: Major gifts a focus of environmental group

Fundraising, Part 6: Direct marketing a key for public society benefit group

Fundraising, Part 7: International affairs group aims to show

Fundraising, Part 8: Faith-based groups count on direct mail

Fundraising, Part 9: Independent school partners with parent volunteers