Screen shot: Wealth Engine

By Deborah Kaplan Polivy, Ph.D.

I read with interest Maayan Hoffman’s article on eJewish Philanthropy, “Federation and Its Future: Floundering or Flourishing?” (November 10, 2017) and rejoiced that the annual campaign was becoming less important as a measure of Federation success notwithstanding that some of the comments in the article seemed to claim that this was a negative development. On the one hand, we are trying to engage prospects, transform them into donors and retain them, hopefully, throughout their respective philanthropic lifetimes. Retention is the critical issue – the more donors we have, the more money we shall raise in the long run and the less dependent we shall be on the “major” or “large” donor who currently makes up such an overwhelming percentage of annual receipts. At the same time, however, it seems from the article that some criticize JEWISHColorado for using as its measure of success “total financial resource development” which assumes a lifetime of giving on the part of contributors or better yet from the organization’s perspective, attention to donor relationships. Sustaining gift giving in whatever form it is expressed – annual, capital, designated, current or future endowment – is the key factor.

According to this article, there is some confusion as to how to measure campaign success. Dr. Jeffrey Solomon seems to say that in relation to annual campaign, the Federations are not doing too well. On the other hand, the article then quotes JFNA Executive Vice President Mark Gurvis who says that “JFNA cannot be judged solely on its annual campaign totals,” notwithstanding that “fundraising output has either been stable or slightly increased.”

He continues, “the raw number of gifts to the annual campaign has gone down while overall fundraising output has either been stable or slightly increased.” I think this is the real issue. We are still focused on annual campaign financial results without considering the number of new and even more importantly retained gifts – no matter the form or size. Retention, I think, is a far more important measure than amount of money because the more donors we continue to engage over time, the more money that the system will attract.

In all of our not for profit fundraising, we continue to focus our attention on the amount raised in the annual campaign and thus keep trying to move our high level or “major donors” up the donor pyramid – asking for more and more money at the very top – and paying little attention to those people at the bottom who might have given to us for years but who are more or less ignored because of the small size of their respective contributions. As one fundraising executive said in the October 17 edition of The Chronicle of Philanthropy, “you’re trying not to have your giving pyramid become a space needle,” which could easily splinter if one of those single gifts maintaining the configuration is taken away. But this is in effect what we are trying to do in order to prevent the totals from flagging from year to year.

Pay attention to thetouch

So what is the answer as suggested by the Hoffman article? First, one of the more salient themes is that “today’s donors wish to ‘touch’ the agencies and programs they hold as priorities.” It seems to me that we have to concentrate on how we construct these opportunities to “touch” and how we teach the necessity of the whole and by implication, unrestricted gifts. We must convey the importance of not accepting support for programs that we don’t need notwithstanding that donors think they may be priorities.

I remember one day school head who told me how her school constructed an ice skating rink because a major donor thought it was important for a successful physical education program. The rink was rarely used and no money was put aside for its maintenance. When telling the story, she just shook her head in disbelief. Or think about how many Jewish centers cannot maintain their buildings when the major donors who supported construction don’t provide ongoing contributions because they moved out of town, lost interest or passed away. In the meantime, there was no effort to simultaneously build an endowment for ongoing upkeep during the capital campaign.

I shall never forget when I sat with a woman who, along with her husband, created a Charitable Remainder Annuity Trust (CRAT) with our endowment foundation. She had been a donor at the bottom of the Federation’s donor pyramid but her professional advisor had recommended this planned gift and she and her husband followed his advice.

She became so enamored with us that she wanted to establish an endowment for a musical program that would be named for her deceased father who loved the violin. We not only did not need another endowed musical program whose costs her contribution would never have covered, but we were sorely lacking some other services in the community – especially Jewish educational programs for children with special needs. When we explained this priority, she immediately changed her focus and provided more monies than she originally had planned. In other words, total financial resource development was a terrific tool to increase this woman’s philanthropy and donor preference was not an issue once we explained the realities of the community’s issues. Moreover, the annual campaign gift increased, too, and a permanent endowment was established when the couple – beneficiaries of the CRAT – passed away.

Other measures of success

Hoffman’s article states that “while JFNA requests organizational strength be judged on more than annual campaigns” – as it should be – “it does not have a handle on the total financial picture … or even what key performance indicators – financial or otherwise – it could or should consistently track across the system.” I would like to propose some easy to measure metrics.

1) How many new donors do we obtain every year?

2) From how many of these new donors do we receive a second gift – or as the Hoffman article suggests, there has to be “an invitation to the next opportunity” whether it is the barbecue she describes or any other cultivation effort that is put into place. We cannot leave our new donors without follow up assuming that they are just going to continue to give with the singular annual request.

3) How many new and ongoing opportunities for engagement have we created?

4) How many individuals – especially those making one or two gifts – have we involved in the organization – these are the “touches” described above.

5) How many of our donors do we keep beyond 3 or 4 gifts no matter the size of the contribution?

6) How many donors who make 3 or 4 gifts do we move to what is called a major gift category?

7) From how many of our supporters do we obtain endowment contributions – not promises to make such donations – but real ones through a current or future mechanism?

I have often thought that in order to incorporate these new measures of success, we would have to remodel our current structures to focus on new donors and keeping them and then to retaining ongoing donors and moving them toward endowment opportunities while also ensuring that they continue to give in whatever ways make sense to them – not us. I also know that for my suggestions to become a reality – even in part – we are going to have to invest in training both staff and boards to realize that while the environment of giving has changed, it also remains the same. We shall just have to incorporate some new emphases on the way in which we do business.

I often remark that when I am interviewed for a consulting assignment, I am asked, “how do you suggest we bring in new donors” to whatever the organization is and no one ever asks, “how do you suggest that we retain the donors we already have.” And yet the latter is what will ensure that the “pie” keeps on growing.

I want to thank Jay Rubin, Former CEO of Shalom Austin, Austin’s Integrated Jewish Community Organization, who read drafts of this article and helped to clarify some of the ideas.

Deborah Kaplan Polivy, Ph.D., is a fund development consultant and the author of The Donor Lifecycle Map: A Model for Fundraising Success (Charity Channel Press, 2017). She also wrote Donor Cultivation and the Donor Lifecycle Map: A New Framework for Fundraising, (Wiley, 2014). Her website is www.deborahpolivy.com.