A few weeks ago, I presented a webinar with my colleague Kyle McGowan from Vanderbilt. We focused on leadership annual giving, also known as “gap” giving. Gap giving is a frequently overlooked category; it’s too big for the phonathon, but too small to be counted as a “major gift.” As we discussed in our presentation, however, it is important for several reasons:
- Money raised at these levels–the ones in the “gap” between the annual fund and major gifts–is generally not trivial. Further, these gifts are often unrestricted and realizable in the current year.
- Usually, there are many more leadership annual giving prospects than major gift prospects.
- Leadership donors could easily be your next major gift prospect.
- Leadership annual giving is a great place to train your next major gift officer.
Kyle shared examples from Vanderbilt’s newly-created leadership annual giving program. He covered how the dynamics of leadership annual giving differ from major and principle giving, and how this new program is helping Vanderbilt to meet their broader goals of visiting more prospects, learning more about their constituency, and improving their stewardship capacity. A recording of the presentation is now available for viewing. Some thoughtful questions were submitted concerning Vanderbilt’s experience, the responses to which we we’ve shared with you below.
Does your program have a strategy for leadership annual giving? Let us know, we would love to hear from you!
- Dan, do you define an “annual gift” as an annual, renewable gift from the same donor? Or, is there an inherent churn of say, 10% dropoff and 10% additions, due to death, moving, or other changing circumstances?
There will always be churn. My definition is that the gift has the likelihood of being repeated, which is a somewhat subjective assessment. Inevitably, some percentage of donors will drop off each year, for a variety of reasons.
- How did Vanderbilt develop portfolios for their leadership annual giving officers?
We conducted a screening with GG+A to narrow our list to around 4,000 unmanaged prospects, which we then assigned to the Leadership Annual Giving team. Based on geographic density, we further narrowed this list to about 2,000 names. As we develop our trip itineraries, we review additional records to find other nearby prospects.
- 40% of our alumni are young alumni; are there young alumni are in your leadership annual giving pool? Do you target them?
Young alumni equal approximately 10% of our leadership file. When we come across them, we make a special effort to make sure they are on our visit itinerary.
- With whom will you work to create the annual gift impact report and how will you deliver it? Will you send it to a specific level of donors?
For FY 2012, we will send the impact of fund report to Vanderbilt Fund donors. This will show the impact of the Vanderbilt Fund on campus. It will be sent to all Vanderbilt Fund donors.
The report requires a partnership between the development office and the financial affairs office. Financial affairs needs to bless the numbers we present to the donor population, and they also need to allow for editorial flexibility for development to present a report that is consistent with the case for fundraising. The report will be delivered in print.
- How do you plan to recognize first-time donors? With a gift? Special wording in acknowledgments?
The first time donor recognition will be a straightforward acknowledgement, accompanied by information describing additional ways to get involved. The important part of this piece is to recognize them for their specific behavior and to encourage them to stay involved.
- Are there leadership annual giving officers for graduate and professional schools at Vanderbilt? Where does your budget come from? To ask the same ROI question differently, what might be a reasonable ratio as a goal? 2.5x expenses?
The leadership annual giving team handles all the leadership prospects, except for those from the medical school, which has its own team of leadership giving officers. Our budget comes from Development and Alumni Relations. We budget $50,000 to $60,000 for travel. Since we’re a relatively new program, we continue to explore ROI calculation options. One option is to measure the incremental growth from the leadership annual giving prospect pool and reference that back to incremental cost of the program.
- What segments do you define as “non-productive”?
We define “non-productive” segments as follows:
- Lapsed donors who have not given for 10+ years
- Never donors who are more than 15 years out of school
Additionally, we don’t consider managed, major donors or prospects to be part of the prospect pool for leadership annual giving.
- How important is the face to face visit? Do you leverage annual giving societies? Events or athletics? What kind of leave-behind items do you use?
The face to face visit is the strategic component that is sine qua non. We want to talk with our prospects directly and strengthen our relationship to them; this is the best way to learn about our constituencies.
We invite our prospects to give at the gift society level, but we don’t generally include events or athletics. The leave behind varies according to prospect type; we include information about the school to which they normally give, along with a standard pledge card.