1

Keep Your Friends Close: Strategies for Becoming a Donor-Centered Organization

2018 Workshop on Annual Giving and Alumni Engagement Rowan University

July 11, 2018

Today’s Agenda I. The National Landscape

II. Investing in Giving

III. Implementing Donor-Centered Fundraising

IV. Seeking New Philanthropic Opportunities

2

About CCS

Leading fundraising consulting and

management firm

Worked in 5,000 cities around the world

Largest and most experienced permanent staff

Varied and flexible client engagements

Clients are among the most recognizable brands in philanthropy nationally

and internationally

Philadelphia - New York -Chicago - San Francisco - Los Angeles - Baltimore - Washington - St. Louis -

Dallas - Seattle - Boston - London - Dublin

3

Select Philadelphia-Area Experience

© 2016 CCS Fundraising 4

Select New Jersey Experience

© 2016 CCS Fundraising 5

Select Higher Education Experience

© 2016 CCS Fundraising 6

The National Landscape

A n O v e r v i e w

7

Last Year, Americans Gave

$410.02 Billion!

For the first time ever, charitable giving exceeded the $400 billion mark!

70% / $286.65B Individuals 16% / $66.90B Foundations 9% / $35.70B Bequests 5% / $20.77B Corporations

8

Source: Giving USA 2018

Other Reasons to Celebrate

9

Giving by individuals increased $14.27 billion over last year.

5.2% Increase

Giving in the U.S. rose 5.2% between 2016 and 2017.

The 6 largest subsectors all saw increases in giving.

Source: Giving USA 2018

Most Charitable Sectors Saw Increase in Giving

10

2.9% Religion

6.2% Education

5.1% Human & Social Services

15.5% Foundations

7.3% Health

7.8% Public Society

8.7% Arts, Culture & Humanities

4.4% International Affairs

7.2% Environmental & Animal Welfare

Source: Giving USA 2018

International Affairs

Foundation

Religion Public Affairs

Health Colleges & Universities

$1 Million+ Gifts to Sectors

11 Additional Source: Chronicle of Philanthropy Million Dollar List

131 Gifts $2.1B

453Gifts $6.8B

9 Gifts $67.8M

20 Gifts $115.1M

42 Gifts $329.6.3M

41 Gifts $413.1M

10 Gifts $63.8M

91 Gifts $1.0B

28 Gifts $4.1B

7 Gifts $37.9M

Primary/Secondary Education

Arts, Culture, & Humanities

Human & Social Services

Environmental & Animal Welfare

Source: Giving USA 2018

Americans are Generous

12

Additional Sources: IUPUI Lilly Family School of Philanthropy: Overview of Overall Giving, 2017 Bank of America U.S. Trust Study of High Net Worth Philanthropy 2016

56% of the general US population gives

91% of wealthy households give

83% of wealthy individuals plan to give as much or more through 2018.

Source: Giving USA 2018

In Higher Education – Alumni Dollars are

© 2016 CCS Fundraising 13

Source: 2017 donorCentrics® Annual Report on Higher Education Alumni Giving

In Higher Education – Alumni Donors and Participation are

© 2016 CCS Fundraising 14

Source: 2017 donorCentrics® Annual Report on Higher Education Alumni Giving

Donors

Participation

What is your reaction to these trends? Are you seeing these trends at the local level?

15

Investing in Giving

16

Non-Profit Aspirations

17 Source: State of the Nonprofit Sector, Nonprofit Finance Fund

76% reported increase in demand for services

52% were unable to meet demand

84% project increase in

demand

48% anticipate being able

to meet demand

18

Investing to Meet Demand

Reasonable Cost Guidelines for Cost to Raise a Philanthropic Dollar

Solicitation Activity Reasonable Cost Guidelines (per $1.00 raised)

Direct mail (acquisition) $1.25 to $1.50

Direct mail (renewal) $.20 to $.25

Membership associations $.20 to $.30

Activities, benefits and special events $.50 (gross revenue and direct costs only)*

Donor clubs and support group organizations

$.20 to $.30

Major Gift / Individual solicitations $.10 to $.20

Corporations $.20

Foundations $.20

Special Projects $.10 to $.20

Planned Giving $.20 to $.30

*To calculate bottom-line total costs and net proceeds from a benefit event, calculate and add the indirect and overhead support expenses to direct costs incurred and subtract from gross revenue.

19

Average Amount Spent to Raise $1 in Contributions, by Subsector

$0.15

$0.16

$0.24

$0.18

$0.22

$0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30

Environment and Animals

Health

Education

Arts, Culture and Humanities

Human Services

Cost to Raise a Philanthropic Dollar cont.

Does your organization invest to meet demand?

20

Implementing Donor-Centered Fundraising

21

22

Offers a unique impact opportunity for your closest friends;

Provides the most cost-effective method of fundraising;

Secures the largest gifts from the smallest number of donors (90/10 rule);

Raises sights, inspiring significant gifts from other donors; and

Creates a programmatic focus for your best prospects.

Questions to

Consider:

Who asks?

At what levels?

Who will they ask?

What is the unique value

proposition?

How will they ask?

What materials

are utilized?

How will donors be

recognized?

How will donors be stewarded

and engaged?

Why Individual Gifts?

Core Elements of Major Gift Strategy

© 2018 CCS Fundraising 23

In today’s climate, professionalizing major gift efforts is a key driver for success.

MA JOR GIFT CYCLE

Core Elements of Major Gift Strategy, cont.

© 2018 CCS Fundraising 24

IDENTIFYING TOP PROSPECTS

PRIORITIZING PROSPECTS

Ca

pa

cit

y

Family

Education

Business affiliations

Wealth

Philanthropic Interests

Giving History

Interest x Capacity

= Potential Gift

Decreasing Donors

25

In 2000, 66% of households made donations, but by 2014, that figure was just 56%.

The decreases were across the board, regardless of donors’ age, income, or level of education.

Economic swings

Demographic changes

“New” philanthropy

Religion’s loosening grip

POSSIBLE REASONS

Donor Motivations

26

Donors Give Based on the Impact of Their Gifts

Analysis of Interview Results of 39,000+ Non-Profit Stakeholders Since 2011 (CCS Analytics)

of households earning more than $75,000 of middle

income households

of households earning less

than $30,000

…have donated money to a charitable cause or organization in the last year.

95%

86%

67%

Financial Relief/Tax Benefit

Being Asked

Owe the Community

Religious/Moral Obligation

Ability to Give

Impact of Gift 88%

76%

66%

57%

63%

33%

83% of Americans have donated money to a

charitable cause or organization in the last year. Much of this went to local charities.

Focus on Problem/Solution Models & Tell Impact Stories

27

According to the 2016 U.S. Trust Study of High Net Worth Philanthropy, high net worth donors reported they would always give for the following reasons:

15.7%

18.0%

23.3%

27.3%

35.7%

38.7%

44.0%

54.1%

Because of your political or philosophical beliefs

To receive a tax benefit

Because of your religious beliefs

In order to give back to your community

To support the same causes/orgs year after year

For personal satisfaction, enjoyment, or fulfillment

When you believe that your gift can make a difference

Because you believe in the mission of the organization

Tax benefits rank 7th

Stories

Historically Recently

Data/Metrics

28

How Impact is Shown

© 2018 CCS Fundraising 28

• $60 million gift from a donor • Impact Report created as a stewardship piece

- Say thank you - Demonstrate impact of gift - Maintain the relationship

29

Impact Reporting

• Direct Impact shows ROI and Data through Infographics, Pictures and Stories

29 © 2018 CCS Fundraising

When specific impact is hard to measure or demonstrate, show impact in other ways:

Growth Expansion Revenue Reputation Talent acquisition

30

Impact Reporting, cont.

30 © 2018 CCS Fundraising

31

Impact through an Appeal

31 © 2018 CCS Fundraising

32

Personalized Thank You

32 © 2018 CCS Fundraising

The Donor-Centered Checklist

© 2018 CCS Fundraising 33

Build a strong culture of philanthropy

Understand prospects’ interests, goals & concerns

Engage prospects in the process

Personalize strategy and approach

What unique strategies are you engaging to foster a donor-centric environment? How do you demonstrate impact to alumni? How do you demonstrate impact to increase annual giving?

34

Seeking New Philanthropic Opportunities

35

Play Strong Offense and Defense to Acquire, Retain, and Upgrade Donors

36 Source: 2018 Fundraising Effectiveness Survey Report

Online giving made up 8% of all giving. Offer Multiple Engagement Channels

37

12% 40% 38%

Online giving increased 12%

Monthly online donations jumped 40%,

which accounted for 16% of all online dollars

38% of donors who gave online in 2016 made another donation in

2017

37%

Only 37% of nonprofits track whether their

website visitors donate

25% 51%

Mobile increased

205% in 2017

25% use mobile devices to discover nonprofits

51% of people visit a nonprofit’s website

using a mobile device

25%

25% of donors complete their donations on

mobile devices

205%

Sources: Chronicle of Philanthropy: “Online Giving Rose 12% in 2017,” 2018 Chronicle of Philanthropy: “Online Donations Rose a Median of 23%,” 2018 Chronicle of Philanthropy: “Few Nonprofits Do Enough to Make Sure Website Visitors Become Donors,” 2018 Nonprofits Source: “Online Giving Statistics,” 2018

Harness Data to Leverage a Major Gifts Program

38

HNWIs are defined as having a net worth of $1 million+

Sources: Bank of America: U.S. Trust Study of High Net Worth Philanthropy, 2016 Credit Suisse: Global Wealth Report, 2017 Bank of America: U.S. Trust Insights on Wealth and Worth, 2017

91%

of HNW households

donate to charity

83% of HNW

households plan to give as much

(55%) or more (28%) through

2018

$2.7T total net worth of

the Forbes 400 List of Richest Americans in

2017 HNWIs live in

North America, accounting for

31% of the global HNWI population

5.2M

Set Ambitious Yet Achievable Milestone Goals

39

Estimating a range of future giving levels by leveraging the qualitative and quantitative data gained from interviews, wealth research, and past giving

OUTCOMES IN MILLIONS

MONTE CARLO SIMULATION OUTCOMES

90% of Outcomes Fell Between $7.6M - $8.9M

Use Predictive Analytics to Focus on Big Bet Possibilities

• Big Bets attempt to change the world

• Radically change organizations and/or

movements

• The Power of the Big Bet

– 2000-2012: Rare

• Only 2 percent of even the

largest US human services

agencies (those with more

than $10 million in annual

revenue) received one

– Behind a remarkable proportion of

society’s most effective nonprofits

and social movements

© 2018 CCS Fundraising 40

Attributes of Big Bet Philanthropy

Compelling social problem: pervasive problem

whose solution would appeal to a mass

audience

Compelling vision for solving the problem:

clear and enduring arrival point that matters

Credible pathway to success: problem can be

reasonably reduced, alleviated, or eliminated

Proven results: empirical evidence of

effectiveness

Track record for growth: appropriate metrics

for evaluating key benchmarks and milestones

Pathway to scale: replication or emulation

opportunities are anticipated on a larger basis

Clear role for philanthropy: large gift will make

a significant impact

Sustainable economic model: lack of complete

dependence on uncertain resources

Exceptional leadership: demonstrated

proficiency, competency, and ability

Why us rationale: institution is best positioned

to address the problem

Strong relationship: big bets typically

preceded by four smaller gifts (10x growth

per gift)

© 2018 CCS Fundraising 41

According to industry sources and a review of the top 30 social change gifts of $25 million or more announced in 2015, the most successful big bet opportunities share the following key defining attributes:

© 2018 CCS Fundraising 42

Big Bet Giving $50 million+ publicly announced US gifts to social change nonprofits (Excluding the Gates Foundations)

# DONOR RECIPIENT AMT ($M)

YEAR DESCRIPTION

1 Joan B. Kroc Salvation Army $1,500 2004 Build community centers and support an endowment

2 William and Flora Hewlett Foundation

ClimateWorks Foundation

$461 2008 Start an international campaign to combat climate change

3 Ford Foundation International Fellows Program

$330 2000 Develop leaders in underrepresented groups and communities around the world

4 Gordon and Betty Moore Foundation

Conservation International $261 2001

Identify and preserve biodiversity hotspots around the world

5 Michael Bloomberg

Various nonprofit organizations

$250 2008 Wage campaign to reduce smoking in the give developing counties with the most smokers (China, Bangladesh, India, Indonesia, and Russia)

6 Mary Joan Palevsky

California Community Foundation

$200 2006

Provide unrestricted support (the foundation used funds to create an endowment for issues including public education and empowerment of disadvantaged populations)

7 John D. Hollingsworth, Jr.

Various nonprofit organizations

$180 2001 Help the YMCA and other nonprofits benefit the community in Greenville, S.C.

8 Tashia and John Morgridge

Fund for Wisconsin Scholars

$175 2007 Provide scholarships for talented, low-income Wisconsin high school graduates attending one of the state’s public colleges or universities

9 Fred Fields Oregon Community Foundation

$150 2012 Support local issues such as education

10 Robert E. and Dorothy King

Stanford University

$150 2011 Empower local leaders to alleviate poverty in developing economies through research and innovation

Source: Stanford Social Innovation Review, “Making Big Bets for Social Change,” Winter 2016 Indiana University’s Million Dollar List, the Foundation Center, and the Chronicle of Philanthropy

Plan for Wealth Transfer

43

Over the next several decades,

$30 TRILLION will change hands as Boomers pass on their accumulated assets to the next generation(s) ($9 trillion by 2027)

52% 62% 80%

HNWIs expect to leave

Sources: Bank of America: U.S. Trust Study of High Net Worth Philanthropy, 2016 Bank of America: U.S. Trust Insights on Wealth and Worth, 2017

of millennials show great interest in investing for impact compared to Gen X (37%) and Boomers (29%)

of HNWIs do not include younger generations in their giving decisions

of their wealth family as inheritance, and give 16% to charity

What creative strategies or next practices are you seeing?

44

Appendix

45

Chris Polito Vice President

Chris brings twelve years of experience designing, implementing and managing key philanthropic initiatives for non-profit organizations in the Northeast, Mid-Atlantic regions and Canada. For Chris, there is nothing more rewarding than collaborating with organizations in seeking funds to advance their mission and heighten their reputations in the communities they serve. Since joining CCS in 2006, Chris has conducted feasibility and planning studies and development assessments; orchestrated capital and endowment campaigns; guided Annual Appeals; and implemented leadership and major gifts fundraising for numerous clients. Organizations that have benefitted from Chris’s counsel include the Arch/Dioceses of Bridgeport, CT, Brooklyn, NY, Camden, NJ, Metuchen, NJ, Newark, NJ, Philadelphia, PA, Toronto, ON, Trenton, NJ as well as medical centers, secondary schools, associations and foundations in the tri-state area. Chris grew up in Colts Neck, New Jersey, went to Red Bank Catholic High School and received a Bachelor of the Arts degree from The Catholic University of America. He currently resides in Mount Laurel, NJ with his wife Marisa and daughter Grace.

Chris Polito, Vice President

46

Carolyn brings more than a decade of experience working with and within nonprofit organizations in the human services, religious, social and academic sectors. Carolyn has managed projects and teams from small parishes to large international organizations.

With CCS, Carolyn provided strategic counsel for the Archdiocese of

Philadelphia's historic $200 million dollar campaign and conducted development

assessments for Habitat for Humanity International and the State University of

New York. Carolyn has extensive experience with volunteer management as well

as composing and presenting case statements, reports and strategic plans. Prior

to CCS, Carolyn gained hands-on experience with major gifts, annual funds, grant-

writing, marketing, special events and staff management; leading development

teams at both Habitat for Humanity Philadelphia and Malvern Preparatory School

during periods of significant growth within each organization.

Carolyn received a Master’s Degree in Nonprofit Leadership from the University

of Pennsylvania and a Bachelor’s Degree in Religion from La Salle University.

Carolyn spends as much time as possible at the beach with her husband and two

children. Carolyn serves on the Leadership Giving Committee at Bishop Shanahan

High School and is an advocate for Open Adoption.

Carolyn McLaughlin, Senior Director

Carolyn McLaughlin Senior Director

47

Download data from today’s presentation and additional giving information!

go2.ccsfundraising.com/2018Landscape

48

49

Thank You Chris Polito Vice President O: (215) 567-6760 C: (202) 276-5397 E: cpolito@ccsfundraising.com www.ccsfundraising.com