Posts tagged ‘The Stelter Company’

May 29, 2015

Avoid the Pitfalls to Raise More Money

Yesterday, I made my first public speaking appearance since my successful battle with cancer began just over a year ago. I served as the plenary presenter at the Philanthropic Planning Group of Greater New York Planned Giving Day Conference. My topic:

Ripped from the Headlines: Learning from the Planned Giving Mistakes of Others”

It was a particularly moving day for me. You see, I was scheduled to speak at PPGGNY’s conference last year. Unfortunately, because of my health, I had to cancel. It marked the first time I ever canceled a professional appearance.

Meryl Cosentino, the Vice President of PPGGNY and Senior Director of Planned Giving at Stony Brook University, was very understanding and kind. She stayed in contact with me during my recovery and, when she learned of my return to professional life, she invited me to speak at this year’s Planned Giving Day. I thank Meryl and her colleagues for the invitation to present.

So, PPGGNY Planned Giving Day marked my first speaking cancelation and, now, my return to the speaking circuit! I’ve come full circle!

To help me celebrate the happy occasion, The Stelter Company generously sponsored 20 copies of my book, Donor-Centered Planned Gift Marketing, so we could give them away to random winners during my presentation. I thank Stelter for its thoughtful support. I also thank Stelter for contributing valuable material to my book. The company’s commitment to the nonprofit sector is remarkable, though not the least bit surprising.

Michael Rosen at PPGGNY Planned Giving Day Conference.

Michael Rosen at PPGGNY Planned Giving Day.

During my talk, I shared several stories about well-known nonprofit organizations that have stumbled. I also shared plenty of useful tips, and a story that provided the overarching theme to my presentation. The story contains an important lesson for all nonprofit professionals:

Several months before my surgery, I visited southern Utah with a good friend. We went hiking in Escalante National Monument, a spectacular wilderness. On the more treacherous trails, I was particularly cautious. I carefully placed my feet with each step. I looked at where I was going to step next so I could pick the best spot. Because I exercised great caution, I didn’t stumble once.

Coming off one challenging trail, I found myself on a wonderfully flat, gravel path. I gave a sigh of relief. I was pleased to be able to spend more time looking at the lovely scenery rather than the trail and my feet. However, as soon as I had that thought, I stepped into a small gully, a tiny wash. And I went falling straight over. After grabbing my camera to make sure it was undamaged, I checked myself. With the exception of a skinned knee and bruised ego, I was fine.

From that experience, I learned a profound lesson.

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January 31, 2014

Avoid Making Faulty Assumptions about Donor Loyalty

Loyal supporters are valuable assets for every nonprofit organization.

Unfortunately, there is an alarming lack of understanding about the definition of “loyal supporter.” Before we address that issue, however, let’s look briefly at why loyal donors are so important.

Because it’s more cost-efficient to retain donors than acquire new ones, loyal donors allow charity fundraising programs to operate more efficiently. The lifetime value of such donors is greater. More money, more cost-effectively raised means more funds for mission fulfillment.

Interestingly, loyal donors also exhibit greater engagement tendencies as researchers Adrian Sargeant, PhD and Elaine Jay, PhD observed in their book Building Donor Loyalty:

Donors who remain loyal are also much more likely to engage with the organization in other ways. Long-term donors are significantly more likely than single-gift donors to offer additional gifts in response to emergency appeals, to volunteer, to upgrade their gift levels, to lobby for the organization, to actively seek out other donors on the organization’s behalf, to buy from a gift catalogue, and to promote the organization to friends and acquaintances.”

Sargeant and Jay even quantify the value of this additional activity. In their experience, they have seen that such activities can increase donor lifetime value by 150 to 200 percent.

Increasingly, charities are coming to appreciate the benefits of having loyal donors. For example, progressively more development professionals understand that loyal supporters make the best planned giving prospects.

This raises the question: Who is a “loyal supporter?”

In the context of planned gift marketing, one development professional recently defined loyalty as a combination of giving frequency, giving recency, and cumulative giving amount. I agree, but only to a point.

Cover- Building Donor Loyalty -- click to see book at AmazonFirst, as Sargeant and Jay describe in their book, loyalty can be either passive or active. Passively loyal donors might give because their friends give, because they want to do something while they continue to search for the charity that is just right, or even because of inertia. By contrast, actively loyal donors care passionately about the organization and its mission. They identify with the values of the organization and regard donations to it as an essential, rather than discretionary, part of their personal budgets.

When it comes to fundraising, actively loyal donors are the only truly loyal donors. In other words, not all regular donors rise to the level of being loyal supporters.

Second, people can be loyal supporters without being donors. They even can be so intensely loyal that they make a generous legacy commitment.

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November 2, 2012

Despite Survey Report, Recognition Clubs Make Sense!

Despite a report from The Stelter Company that seems to suggest otherwise, donor recognition clubs can still be a valuable part of a sound development program.

Last month, I reported on insights and flaws contained in What Makes Them Give: 2012 Stelter Donor Insight Report. Now, I want to more thoroughly explore the controversy the report has spawned regarding the subject of whether or not donors want to be part of a donor recognition club.

The survey asked planned gift donors and “best prospects”:

Are you currently a member of a donor recognition club for any charity — this would be an organization for major donors and/or people who have made a planned gift to that charity?”

The survey found, “Just 14 percent of planned givers and best prospects are currently members of a recognition club.” That breaks out as 17 percent of planned givers and 13 percent of best prospects saying they are members of a recognition club, according to Bev Hutney, Director of Research and Innovation at Stelter. Of those who are not members of a recognition club, only three percent of both groups say they would like to be “invited” to join one, when asked:

Would you like to be invited to be a member of this kind of organization for a charity you support, or would you prefer not?”

On the surface, the responses seem to suggest that donor recognition clubs are of little or no interest to donors and, therefore, of little or no value. However, Hutney acknowledges that interest might be low because the term “recognition club” might not be understood by those not part of such a group. Or, they might have been put-off by the idea of being “invited” to be part of such a group. Also, the use of the term “organization” might have been confusing for some.

The other issue with the survey result is that Selzer & Company, the research company that conducted the study, failed to take into account Social Desirability Bias. Russell N. James, III, JD, PhD, CFP, an economist and Director of Graduate Studies in Charitable Planning at Texas Tech University explains the issue with SDB this way:

One study found between 10 percent and 75 percent of the variance in participants’ responses can be explained by SDB (Nederhof, A. 1985. ‘Methods of coping with social desirability bias: a review.’ European Journal of Social Psychology, 15(3):263-280.)  Also, we know specifically that SDB is most likely to occur in responses to socially sensitive questions (King, M. and Bruner, G. 2000. ‘Social desirability bias: a neglected aspect of validity testing.’ Psychology and Marketing, 17(2):79–103.) like the issues we are dealing with here. For example, if you ask someone, ‘Are tax benefits motivational to you in making a charitable gift?,’ the answer is going to be ‘No,’ because ‘Yes’ is a socially inappropriate answer.

“Nevertheless, econometrically, we can see that deduction rates do strongly influence actual giving. Similarly, if you ask someone, ‘Would you like more public recognition of your donations?,’ the socially acceptable answer is ‘No.’”

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October 19, 2012

Latest Stelter Report Flawed but Still Insightful

Earlier this month, The Stelter Company presented the findings of its latest research project at the Partnership for Philanthropic Planning’s 2012 National Conference on Philanthropic Planning. What Makes Them Give: 2012 Stelter Donor Insight Report is the Company’s third study of planned giving in the United States.

As a nerd and as the winner of the 2011 Association of Fundraising Professionals/Skystone Partners Prize for Research in Fundraising and Philanthropy, I enjoyed reading the report. And, I thank The Stelter Company for adding to the nonprofit sector’s base of knowledge.

While flawed, the report does offer some interesting tidbits. This post will examine some of the useful tidbits and problematic flaws. Some of the insights are new while others will confirm what experienced gift planners have long known or suspected.

Many Planned Givers Are NOT Loyal Donors

Perhaps the most interesting finding is that 21 percent of those who have made a planned gift “never donated to the charity before putting a planned gift in place.” An additional 20 percent did give to the charity prior to making a planned gift, but did so for less than five years.

The conventional wisdom has been that loyal donors make the best planned giving prospects. However, the report shows that 41 percent of planned gift donors are outside of the loyal-donor model. This underscores the importance of making planned gift messaging ubiquitous.

Planned Givers Are NOT Always Large Current Donors

Among those who have made a planned gift and who have also made an annual giving donation to the charity, 40 percent gave less than $500. Only 16 percent have given $5,000 or more. While the old donor pyramid, where small donors become major donors and then become planned gift donors, may be true for many, the vast majority of planned gift donors have not first been major donors.

This means that, when looking for prospective planned gift donors, development professionals must consider the organization’s entire database. This includes large donors, medium donors, small donors, and even non-donors.

Bequest Giving is the Most Popular Planned Gift

The study found that “a bequest is the most popular vehicle for planned giving.” The report confirms what has been a long-held belief among gift planners and a fact that I included in my book, Donor-Centered Planned Gift Marketing.

This is good news for all nonprofit organizations. Virtually all nonprofits can easily and inexpensively promote bequest giving. For those organizations with a bit more expertise and resources, a bequest conversation or a bequest commitment may provide a gateway for a conversation with the donor about more complex giving vehicles. If the market finds a bequest to be the most popular form of planned giving, savvy planned gift marketers will take notice and market accordingly. On the other hand, bequest giving may be the most popular vehicle because it is the one that is already most widely promoted by the nonprofit sector; perhaps this should be examined in a future study.

Many Planned Givers Are Reluctant to Tell the Charity

Among those who have made a planned gift, 49 percent say that they have not told the charity. This raises an important question not asked as part of this study: Why haven’t you told the charity?

I suspect that many donors simply consider their estate planning a private matter and, therefore, choose not to disclose a planned gift provision to the charity that will benefit. I also suspect that others do not want recognition from the charity that they suspect will lead to more pressure to give more either to that charity or another nonprofit organization that takes notice. But, the biggest reason for nondisclosure may simply be that donors do not understand the value of disclosure to themselves and to the organization. Development professionals need to do a better job of articulating the benefits of disclosure to encourage more donors to do it.

Planned Givers and Prospects Use Social Media

A majority of planned gift donors and prospects surveyed use at least one of five social media networks tested:

–Facebook, 39 percent

–Google Plus, 19 percent

–LinkedIn, 17 percent

–Twitter, 6 percent

–MyLife, 1 percent

The report found, “Almost one-fourth of major donors, current planned givers and best prospects in their 40s would like to connect with nonprofits on Facebook.” Donors and prospects are using social media. Smart development professionals will meet donors and prospects where they are. This means including social media in the marketing mix.

Few People Are Asked for a Planned Gift

Only 26 percent of planned gift donors and best prospects — “people who say they will definitely or probably make a planned gift in the future” — say they have received a letter or email about planned giving. Only 17 percent say they have been asked directly for a planned gift.

If nonprofit organizations want more planned gifts, they need to ask more people, more often, and in the right way. With so few people receiving direct planned giving communications, there is not a high-degree of competition. On the other hand, this means tremendous potential.

While What Makes Them Give contains some useful and valuable information, I have some issues with other elements of the report:

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