Utilizing the Fundraising Effectiveness Program in your Healthcare Organization Heather Paul, Raiser’s Edge Solutions Consultant Anne O’Neal, Senior Account Manager - Healthcare SCAHD 2010

Heather Paul | Page #2 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Session Objectives Inform Inspire Invite Involve

Heather Paul | Page #3 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check What is the Fundraising Effectiveness Project? A project to help nonprofit organizations measure and compare their annual growth in giving by gain/loss category and increase the net by maximizing their gains and minimizing their losses

Heather Paul | Page #4 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check The AFP’s “Fundraising Effectiveness Project” Who is in the Study? 1430 responses to the annual FEP survey for 2008 Small to midsize organizations Averaging less than $1 Million in annual gifts $4 Billion in gifts analyzed since 2005 Contributors & Detractors of Value For Every $6 Raised there is $5 lost-07/ 08 is Break-even

Heather Paul | Page #5 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check 5  Includes Gifts – Restricted And Unrestricted Pledge Payments Cash and Fair Market Value for Stocks In-Kind (tangible) donations  Excludes Pledges Deferred gifts Donations of personal services and use of facilities Costs-benefiting- donors portion of special-event income Fundraising Effectiveness Project Surveys

Heather Paul | Page #6 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Fundraising in Hard Times- What to Do? Assess your situation Create a plan to move forward Intensify your cultivation & stewardship efforts Assess your communication plan & case for support

Heather Paul | Page #7 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Objective Review fundraising data from FY 2007 to FY 2008  Help identify areas of strength  Help identify areas of improvement Goal:  Align focus with areas of strength and improvement

Heather Paul | Page #8 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Action Plan Create fundraising effectiveness benchmarks and identify areas of opportunity Leverage Blackbaud’s Performance Improvement calculator to determine what metrics need to be improved and by how much in pursuit of your goal (define financial sustainability benchmarks) Review potential next steps to derive additional fundraising improvements

Heather Paul | Page #9 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Why does it matter? “You can’t manage what you can’t measure” Create your own KPI Score Card Cultivation Retention Acquisition (Participation)

Heather Paul | Page #10 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Contributors of Value Detractors of Value

Heather Paul | Page #11 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Gains and Losses

Heather Paul | Page #12 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Decreasing the Losses to Increase Net Gains The Importance of Retention: AFP’S “Fundraising Effectiveness Program”

Heather Paul | Page #13 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Aggregate Results – 1400 non profits in Huge variance in performance when comparing best in class to others Gain Ratios

Heather Paul | Page #14 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Aggregate Results – 1400 non profits in Huge variance in performance when comparing best in class to others Loss Ratios

Heather Paul | Page #15 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check FEP data – 2008 All Verticals Based on The Association of Fundraising Professional’s 2008 Fundraising Effectiveness Project data. $1.1 billion in donations from1.2 million donors organizations. Contributors Detractors

Heather Paul | Page #16 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Let’s Look at Best in Class for Retention

Heather Paul | Page #17 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Let’s Look at Best in Class for Retention

Heather Paul | Page #18 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Let’s Look at Best in Class for Average Giving

Heather Paul | Page #19 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check FEP data – 2008 Health vs. All FEP Verticals 22.1% 43.3% $920

Heather Paul | Page #20 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Case Study Starting the Journey

Heather Paul | Page #21 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check One Sampled Org vs. FEP Ed and PHL Average

Heather Paul | Page #22 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Sample Organization – All Donors – 3 Year Trend

Heather Paul | Page #23 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Observations vs. Peers: Strengths : Retention exceeds FEP peers, but is below local area average peers Lapsing less new & long term dollars than local area average peer New and recaptured to lapsed ratio is better than local peers Improvement: Donor growth is down >9% year over year $/Donor is 23% less than average area peers and 32% below prior year Upgrade to downgrade ratio is unfavorable to peers Retention rates are below area average

Heather Paul | Page #24 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Summary of Findings:

Heather Paul | Page #25 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Increase the number of total donors by 10% (to FY 08 levels) via new and recaptured donor growth while maintaining current retention levels GOAL SETTING ASSUMPTION #1:

Heather Paul | Page #26 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Increasing the number of donors to FY2008 levels increases fundraising by $243,157 over three years: Goal Setting Assumption #1:

Heather Paul | Page #27 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check GOAL SETTING ASSUMPTION #2: Improve average $ per donor by 20% to $1,571 (still below peer average and below prior year)

Heather Paul | Page #28 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check If you increase the average $/donor by 20% (still below peers & prior year) without any change in donor growth or retention rates, the increase in fundraising would be $1,190,341 over three years: Goal Setting Assumption #2:

Heather Paul | Page #29 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check GOAL SETTING ASSUMPTION #3: Increase donor retention rates to the average of the peer area schools, taking retention from 52.9% to 65.5% over a three year period.

Heather Paul | Page #30 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check If you only increase the retention rate from 52.9% to the area peer average of 65.8% the increase in fundraising would be $1,046,315 over three years: Goal Setting Assumption #3:

Heather Paul | Page #31 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check And if you can…. Increase new donor growth Improve the average dollars per donor Move retention rates to peer levels The increase in fundraising would be $2,782,565 over 3 years: All Cylinder Option - Assumption #1, 2 and 3: Yeah, Great. But how?

Heather Paul | Page #32 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Impact Of Blackbaud Solutions – “Set Goals” EducateEngage InspireSteward Donor Retention New Donor Acquisition Average Gift Per Donor Major Gifts Median Growth Efficiencies (Cost Saving) AFP’s Gain & Loss Segments – Retention Losses are Greater than Recaptures

Heather Paul | Page #33 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check WHAT ARE YOUR PEER’S BEST DEMONSTRATED PRACTICES?

Heather Paul | Page #34 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check BEST DEMONSTRATED PRACTICES: Increase new donor growth “I’m reaching out to patients in new ways” “I keep the demographics in mind and tailor my message”

Heather Paul | Page #35 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check BEST DEMONSTRATED PRACTICES: Improve average $ per donor “I now use wealth screening” Customized asks Asks in excess of prior year gifts

Heather Paul | Page #36 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check BEST DEMONSTRATED PRACTICES: Increase donor retention rates “I’ve built new ways to communicate with existing donors” “If I lose a donor I ask why. We survey lost donors each month”

Heather Paul | Page #37 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check What is Next? Confirm version of Raiser’s Edge is 7.81 or higher Get your staff onboard by attending Thursday’s FEP web seminar ( Call Anne O’Neal to submit your data to Blackbaud to convert into the Analyzer Submit your data to AFP

Heather Paul | Page #38 © 2009 Blackbaud Utilizing The FEP Data – A Fundraising Health Check Thank You: Additional Questions? Anne O’Neal x3160