From the Chronicle of Philanthropy, here’s a list of America’s Top 50 donors in 2011, the amounts given and the lucky charities.

These 50 donors gave $10.4 billion … although #1, Margaret Cargill, an heir to the fortune of her grandfather’s Cargill Corporation (agriculture and food production), gave $6 billion of that in a bequest to her two foundations (which give to the American Red Cross, Nature Conservancy, YMCA and Public Broadcasting Service, among others).

Twenty-nine donors gave $50 million or more.

My favorite is Paul Allen, the Microsoft co-founder. Wonderfully eclectic giving — arts, social services, a rock music museum, Native Americans entrepreneurship, a science fiction museum, and neuroscience. He’s the guy on this list I’d most want to have dinner with.

Tom

He was taking me to task for treating cultivation merely as a monetary cost. Actually, The Agitator has been a huge champion of cultivation (try searching our blog for "loyalty" or "donor retention") and I can’t find a word of his comment to disagree with.

Says Andrew:

"If your cultivation of donors is entirely based on their participation in your programs, then the costs of cultivation are easy to bear, even at an initial loss. So, my objective as a fundraiser is to get people to come to our events, in prison, and interact with our participants and graduates. That’s part of our mission, so we have more incentive to get people involved–and cultivated–than to just look at everyone as a "donor" and only a donor. When our volunteers come to prison and work with our guys, they are costing us money–we have to have food, staff, materials, etc–but that money almost always translates into huge revenues–roughly every dollar spent on prison events yields $19 in revenue since almost all of our donors, major and minor, come to our events at some point. We maintain a healthy positive cash balance, but in effect, it makes sense for us to spend a lot of money on cultivation because it’s really just programming.

One last thing–since foundations account for a pretty big part of our revenues each year–it’s important to keep in mind the kinds of cultivation that you do. Even with our foundations, the objective is never just to look at them as pools of cash for our benefit–the real value is in the fact that they require us to think about our programs and offerings, and then again that throughout the year they require us–sometimes in very thoughtful ways–to measure and assess what we’re doing. I’ve learned that most foundations treat honesty and candid feedback about what happened as their primary form of involvement in our organization. They’ve never come to us and said that we should run our program a certain way, they just ask us to think about what happened and there is tremendous value in that since most individual donors never do that."

Great advice. Sounds like a  tremendous program PEP has. Andrew, you  deserve a raise!

Tom

But we also asked fundraisers to identify the "single biggest challenge your fundraising program faces in 2010" … and we were a bit surprised at some of the responses.

Way ahead as the #1 challenge — expressed in a variety of ways — was getting Board  and senior executive buy-in, including direct participation, for more aggressive fundraising efforts. In response after response, the "top brass" was described as uninvolved, unengaged, too cautious, in denial, etc. For example …

• "Getting board members involved and energized"
• "The perception that direct mail doesn’t work and that investment in acquisition isn’t worth it"
• "Panic and short-sightedness of top management"
• "A board that doesn’t get it"
• "Persuading management to try new approaches and techniques in both direct mail appeals and technology"

Some comments were even more caustic! One respondent said simply: "Our CEO!"

"Selling" marketing programs and investment to the "corner office" and to Boards can indeed be challenging. Especially if management has felt surprised by previous unmet fundraising goals, or is simply shell-shocked by the impact of the recession on the last 18-24 months of fundraising.

It’s unfortunate, but probably true, that just as leadership needs to be considering re-investing in fundraising and looking for opportunities, they are feeling most cautious and skeptical and stressed.

While candor should always be the watchword, it is super-important in adverse climates. Candor is a prerequisite for credibility. Fundraisers need to make their cases based on accurate, well-analyzed data about the past, and defensible, explicit assumptions about the future. We’ve helped clients and their Boards through this process in the past, and will comment more in future posts.

The second theme in our open-ended responses is related to the first. Many respondents commented about diminished capacity and resources to get the job done — even more pressure to produce the funds, but less support to do it. Expressed as …

• "Achieving more with fewer dollars"
• "Too much work for too few people"
• "More effort is needed to raise the same amount of dollars, so without more capacity, even staying the course is challenging"
• "We’re exhausted. It took three times the effort to stay flat last year"

Part of this is inevitable … less income, cuts must be made — 24% of our respondents said that their organization’s fundraising staff had been decreased in 2009 (as we reported yesterday, 22% expect to invest more in staff in 2010). Part of it reflects less working capital — as all parts of the organization are called upon to absorb budget cuts — available to invest in fundraising operations (excluding staff).

But, finally, some of it undoubtedly reflects the timidity of Boards and senior management in the face of the recession … what one respondent called "the lack of confidence by senior decisionmakers."

Fundraisers need to be watching the numbers carefully in the coming months, in order to be prepared to make their case for more resources as soon as the right "upticks" in key metrics begin to appear.

Staff "depression" and fatigue are tough challenges. There’s no silver bullet we’re aware of. But we’d stress candor again … here in the sense of getting all parties in the organization on the same page in terms of what level of performance and outcomes are fair and reasonable to expect.

We see these results as a serious "heads-up" to senior nonprofit executives and Boards. Be attentive to staff morale and take steps to nurture it. Set realistic expectations. Be open to the case for more fundraising investment when it comes knocking on your door.

We’ll comment more in the future about spending out of the trough. One key is to focus on extracting more value (i.e., net, re-investable income) from current donors. We’re surprised more respondents don’t appear to be pointed in that direction … despite all The Agitator’s haranguing on this subject!

The third major theme is definitely one we would anticipate — funding new donors! For example …

• "Recruitment of 1st time donors, even at very small levels, has really fallen off"
• "Identifying broader pool of potential donors"
• "Finding new donors in a climate where more people are staying with the organizations they have supported in the past"

Wouldn’t we all like to have the answer to that one?! Another area for future focus by The Agitator.

Thanks again to our readers who provided all this intelligence and shared your plans. As we’ve indicated, your responses — with the interests and challenges you’ve expressed — will guide our editorial direction in coming months.

Roger and Tom

P.S. Complete results of our 2010 Fundraising Plans survey, including  all stats and verbatim comments, will be emailed to The Agitator’s Premium subscribers on Friday.

Today we’re looking at where fundraisers plan to invest their resources in 2010.

We asked: "For each of the following areas, indicate whether you expect to invest more in 2010 than in 2009, less, or about the same." Here are the results for "More" (and in parens, "Substantially more"):

 Some observations …

1. Given fundraisers expectations of where they expect performance improvement in 2010, the top three investment areas — online giving, major gifts, and screening for gift potential — are no surprise at all. Note that 20% are investing "substantially more" in major gift solicitation … it looks like a lot is riding on an assumption that major donors are prepared to "return to the fold."

Also, with fundraisers betting big on online giving, here’s an article from Fundraising Success that might be useful … it talks about how to "sell" online fundraising to executive management and boards! It links to an entire guide on the subject from not-disinterested Convio.

2. The commitment to investing in planned giving is gratifying to see. For too many nonprofits outside the education and health sectors, planned giving is an afterthought.

3. We confess to being a bit surprised that more investment in direct mail doesn’t get a stronger endorsement, particularly given respondents’ expectations that prospecting for new donors will improve (77% believe that prospecting results will improve in 2010). Are nonprofits finding new donors online? We’d like to see more evidence of that.

4. Similarly, the relatively poor showing for offer and copy testing is curious. In fact, 41% of respondents say such testing "doesn’t apply." We would think that heaps of testing should occur as groups seek to expand prospecting (whether in the mail or online) and to adjust their messaging and "asks" to suit changing donor moods.

5. It’s no surprise to see telemarketing bring up the rear. Indeed, 44% say this tool doesn’t apply. In our experience, telemarketing is a very effective channel for quickly assessing donor giving mood in general, and for message/offer testing.

Finally, it’s good to see that at least some groups — nearly one-in-four — expect to bring on  fundraising staff in the coming year.  We sense a great deal  of fundraising staff fatigue out there … more on that tomorrow.

Roger & Tom

P.S. Complete results of our 2010 Fundraising Plans survey, including  all stats and verbatim comments, will be emailed to The Agitator’s Premium subscribers on Friday.

Those responses indicated relative calm at this stage of the fundraising year. As Tom summarized: “Being an optimist, I would characterize the results as saying that seven-in-ten fundraisers believe their programs are holding their ground or improving.”

As another optimist commented: “Good campaigns are winning out against a bad economy. Good issues that really matter to people can mitigate against pessimistic economic outlook.” Commented another: “The economy will continue to be a problem. On the positive side, we have a lot of best practices to establish here, so in the end I believe we’ll hold our own this year."  

Today we’re releasing the verbatim responses to the survey. These provide a richer sense of how fundraisers are assessing the situation … and what they are doing about it.

You can view the survey results, including verbatims, online here, or you can download a list of the verbatim comments here.

For fundraisers whose programs are performing worse than they expected at the outset of 2009, three reasons seem to dominate:

• For direct response fundraisers, average gifts remain down (although, for most, numbers of donors seem stable);
• Foundation and corporate giving is down, as well as grants from state governments; and,
• Events seem problematic.

We asked fundraisers about the adjustments in strategy they planned to make in the balance of the year, as they evaluated first-half results. These themes emerged.

1. First and foremost, a very strong emphasis on cultivating and deepening relationships with current donors of all types – from small donors to foundations. As one respondent put it: “Help our current donors ‘feel the love’”!

2. More careful donor analysis to tighten targeting and segmentation, sharpen “ask” strategies, and add personalization for house appeals.

3. Increased emphasis on planned giving.   

4. More online fundraising.

5. Reviewing and strengthening messaging and their core fundraising case.

6. And some are casting a wider net, looking for new foundation or major gift support. [Personally, we'd expect a tough go here. In a down economy, these types of donors – especially those with diminished resources – will be looking to narrow their giving to a “proven” few to whom they want to remain loyal and ensure “safe passage” through tough times ... not looking to expand their universe.]

Finally, we also get the sense that fundraisers see themselves as more focused and working harder … on everything from donor analysis to finding cost savings.

No question … fundraisers will earn their keep in 2009!

Roger & Tom

Wrong! Seeing data is pretty cool.

The Foundation Center last week launched "Philanthropy In/Sight", a data visualization platform designed for grantmakers or anyone seeking to understand the impact of philanthropy throughout the world.

I’ll let their release describe this impressive tool:

"With this new online tool, users can quickly create customized Google maps to explore giving patterns, emerging trends, and funding relationships globally, nationally, or at the community level. Updated weekly, the Center’s in-depth data on over 97,000 grantmakers and more than 1.6 million grants can be combined with dozens of demographic and socio-economic data overlays, resulting in "mashups" that vividly depict where foundation dollars are having the greatest effect or where funding is needed most …

The maps pinpoint the locations of grantmakers and grant recipients and offer a wide choice of filters and criteria. Users can open the "pins" for details about funders, recipients, and grants; display giving geographically by country, state, county, city, metro area, congressional district, or zip code; and choose from 26 fields of interest and 1,100 specialty areas."

PhilanthropyIn/Sight is available on a subscription basis, but you can take a guided tour here.

Well done Foundation Center … you deserve a raise!

Tom

Here’s an example of women joining other women at the local level to support such causes. It’s equally important because it shows the impressive power of local giving circles … in other words, we can all do something like this. And we don’t need Facebook to do it!

As described by Claudia Zorn Schafer (formerly of GetActive/Convio):

Hi Tom!
Great to see your post on the Women’s Funding Network, 90 women=$174M last week! I recently joined the board of The Women’s Fund of Winston-Salem.  One of the biggest challenges in developing a broad, diverse group of women is to offer opportunities where all women can be philanthropists.

Since many giving circles have minimum financial contribution requirements, The Women’s Fund of Winston-Salem took a different approach by offering a unique membership model: Individuals can join with a $1,200 per year contribution, or a group of up to 12 women and girls can collectively contribute $1,200 for a group membership. Each individual and each member group annually receives a vote in determining the organizations and programs to receive funding each year.

Since our launch in November 2006, The Women’s Fund of Winston-Salem has grown to more than 700 members, 550 of whom belong to a group. Currently, there are 73 groups, with about one-third of the groups comprising 12 members, one-third having 2 to 4 members, and the final third having between 4 and 12 members. Some women have multiple memberships. 

The composition of The Fund’s groups varies. There are mothers and daughters; sisters; lesbian couples; and members of the local Moravian, Unitarian, Episcopal churches and local synagogue. There are also neighborhood groups and co-workers from Wake Forest University law and medical schools as well as various local businesses. There’s even a group with several women who are each named Margaret.

The group membership model reinforces the power of collective giving and has been successful in other ways, too: In the past two grant cycles, groups voted significantly more than individual members: 92% of the groups voted on the 2008 grant proposals compared to 59% of individual members. And, in terms of our annual renewal rates, women who are part of a membership group renew at higher rates than our individual members.

The Women’s Fund of Winston-Salem just released our RFP for the 2009 grant cycle. We anticipate granting $170,000 to local nonprofits in 2009, including offering smaller organizations an opportunity to compete for funding through a new Grassroots Grants Program to help improve the lives of women and girls in Forsyth County. It’s a modest effort compared to the 90 women=$174million, but we’re on our way to building a diverse community of female philanthropists focused on creating social change for women and girls in our community.

Like the other members of the Women’s Funding Network, we’re concerned that fewer than 7% of all philanthropic dollars nationally are earmarked for programs for women and girls. Thanks again for highlighting the important work being done by members of the Women’s Funding Network.

Best regards,
Claudia Zorn (now Schaefer; just got married!)

Terrific report, Claudia. Great to hear from you.

Tom

Here’s how he describes the initiative:

"We’re launching a site called Jobs for Change, a career service and marketplace for social change jobs that we’ve created in partnership with dozens of nonprofits, including Young Nonprofit Professionals Network, AmeriCorps Alums, Echoing Green, Network for Good, and Encore Careers. You can check it out at http://jobs.change.org.

Our goal is to spark a nationwide movement toward careers in the common good – including nonprofit, government, and social enterprise jobs. We’re currently building a huge database of social change jobs with our partners and have just hired a team of career advisors who will be blogging every day to provide guidance on finding and developing a career in social change."

I’ve browsed the Jobs for Change website. It’s excellent, and with support from the nonprofit community it will only get better.

Danny, you deserve a raise!

Tom

Today, the Women’s Funding Network and Women Moving Millions announced that more than 90 women have committed individual gifts of $1 million or more, with a total of $174 million raised, to improve the lives of women and girls.

These funders have responded to a three-year campaign initiated by philanthropists Swanee Hunt and Helen LaKelly Hunt.

The gifts benefit groups working around the world who are members of the Women’s Funding Network.

What a great press release to receive!

Tom

P.S. I wonder if they renew annually?

Whatever your field of interest — medical research, alleviating poverty, arts & culture, education, international humanitarian assistance, and much more — and whether you are a donor or a recipient, there’s something in this superb compendium of articles for you. Oddly the one area not covered is the behavior in these troubled times of the small gift donor.

For the best overview, read Stephanie Strom’s article on the impact of the economic downturn on giving. Her report, prepared with assistance from James Freed, gives a surprisingly upbeat picture, given the circumstances. Foundations, with conservative investments and rolling multi-year portfolio values driving grant levels, will not have as much immediate downturn as the major market indices. Super-wealthy individual donors and corporate foundations say they might stretch out their giving a bit, but they don’t talk in terms of major cutbacks.

As noted, however, there are no articles in the compendium on the expected behavior of your basic direct mail or online small gift donor.

For insight into that, at least as proferred by nonprofit fundraisers and their consultants, you’ll need to read The Agitator’s Vital Signs 1 Report, based on our recent canvas of the community and posted last Friday. An updated Vital Signs 2 Report will be posted November 21st. Stay tuned!

Tom