The Next Generation of Thanks May 22, 2012

ALLISON LEWIS LODHI, CFRE – Vice President, Consulting

Objectives

• Donors by the Generations

• Next Generation Giving Needs

• Building Lifelong Donor Relationships

• Putting it All Together

• Q&A

Myth Busters … Surprising Facts

•Email is the Most Popular Online Activity for all

•Average Social Networking Site User is age 37

•61% of Facebook Users, 64% of Twitter Users are over 35

•LinkedIn is Used Most by Boomers

•By Age 19, 6% of Gen X were Veterans, 24% of Matures

•TV is Still the Most Influential Advertising Channel for all

•Most Millennials Prefer Face to Face Solicitation

U.S. Digital Consumers

Source: Nielsen

Industry Realities

Development Professionals

•Dependence on Major Gifts

•Poor Pipeline Development

•Impatience with Strategy

•Diminished Lifetime Value

•Lost Dollars Compounded

•High Acquisition Costs

•Data Overload

Donors

•Age Demographics

•Consumer Behaviors

•Shrinking Attention-Span

•Diminished Lifetime Value

•Eroded Confidence in

NPOs to “Manage Well”

The Generations

Matures as Donors

Born: before 1945

U.S. Pop: 39M

Give: 79%

# Causes: 6.3

Avg Yr: $1.066

Channels

1st Heard: Mail (35%)

Receive: Mail, F2F

Give: Mail

Warren Buffet

Born 1930

Boomers as Donors

Born: 1946-1964

U.S. Pop: 78M

Give: 67%

# Causes: 5.2

Avg Yr: $901

Channels

1st Heard: Mail (19%)

Receive: Mail, Phone

Give: Mail, Web

Melinda & Bill Gates

Born 1964 & 1955

Gen X as Donors

Born: 1965-1980

U.S. Pop: 62M

Give: 58%

# Causes: 4.2

Avg Yr: $796

Give to

Accomplish Their Goals

Channels

1st Heard: Mail (16%)

Receive: Email

Give: Web, Peer, Mail

Angelina Jolie

Born 1975

Gen Y as Donors

Born 1981-1991

U.S. Population 51M

Give 56%

Causes Supported 3.6

Average Annual $341

Give to

Make a Difference in the World

Channels

1st Heard: WoM, Google

Receive: Email, IM, Text

Give: Web, F2F, Text

Mark Zuckerberg

Born 1984

Next Generation Giving Needs

Matures Generation

Copes Well With

•Tradition

•Practicality

•Anonymity

•Rules, Authority

Sensitivities

•Materialism

•Entitlement Mentality

•Are Indirect Communicators

Motivated By

•Loyalty, Dedication, Sacrifice

•Duty, Obedience

•Traditional Rewards

•Directive Leadership

Ways to Engage

•Rewards Reflecting Longevity

•Team Players – Groups,

Volunteering, Service

Matures Generation Stewardship

•Receipt: Paper, Straightforward, Tax File

•Thank You: Traditional Letter, Personal Note

•Annual Report: Print

•Recognition Event: Consider Spouse Role, Elite

•Tchotchke: Lasting, Practical (Waterford Crystal)

•Stewardship Report: Print, Simple, Effective, Leaders

•Feedback Loop: Ask in Person, Mail Survey

Boomers Generation

Copes Well With

•Team Orientation

•Big Picture

Sensitivities

•Does Not Respect Titles

•Absolutes, Structure

•Conflict

•Feedback about Self

Motivated By

•Personal Growth

•Fresh Perspectives

•Optimism

Ways to Engage

•Vision-Casting

•Seek Advice & Counsel

•Brainstorming

•Personal Growth

Opportunities

Boomers Generation Stewardship

•Receipt: Paper and Email, Humanized

•Thank You: Card, Colorful

•Annual Report: Print or Email, Big Picture Perspective

•Recognition Event: Traditional

•Tchotchke: No

•Stewardship Report: Impact, Results, Optimism

•Feedback Loop: Ask in Person, Phone Survey

Generation X

Copes Well With

•Tons of Information

•Change

•Technology

•Multi-Tasking

•Global Thinking

•Informal/Flexible

Sensitivities

•Environmentally conscious

•Promotions … done poorly

•Must have freedom

Motivated By

•Time for Leisure & Family

•Non-Traditional Rewards

•Training and Education

•Goals

Ways to Engage

•Projects, Lots to Do

•Volunteering

•Recognition (small)

•Fun Parties & Groups

•Giving Circles

•Promotions … done well

Generation X Stewardship

•Receipt: Auto-Responder, Email, Mail

•Thank You: Interactive

•Annual Report: Email, Update on Goals

•Recognition Event: Traditional

•Tchotchke: Non-Traditional

•Stewardship Report: Educational, Families

•Feedback Loop: Email Survey, Focus Groups

Generation Y

Copes Well With

•Tons of Information

•Fast Pace

•Structure & Flexibility

•Technology

•Sociability

•Diversity

•Multi-Tasking

•Tenacity

Sensitivities

•Anything Slow

•Dealing with Difficult People

Motivated By

•Empowerment

•Consumerism

•Heroism

•Constant Feedback

Ways to Engage

•Peers & Networking

•Collective Action

•Personal Relationships

•Virtual & Real Events

•Volunteering

•Make it all about “Me”

Generation Y Stewardship

•Receipt: Auto-Responder, Email, Direct Login

•Thank You: Interactive, Social Media Integration

•Annual Report: Email, Personalized, Collect Action

Progress Report

•Recognition Event: Virtual or Real, Social, Relaxed

•Tchotchke: Yes, Mission-Based

•Stewardship Report: Personalized, “You” Made it Possible

•Feedback Loop: Yes! Email, Social, Web Survey, Quiz

Lifelong Giving

Reaching Today’s Donor

• Alignment to Consumer Preferences

• Intuitive Response Mechanisms

• Intense Personalization

• Convenience and Options

• Behavioral Interest

Timing is Crucial

• Nonprofits lose access to engaged constituents over time

• A plan to react quickly is crucial to activating long term value

5 Keys to Donor Loyalty

1. Determine Donor Motivations & Shared Values

2. Manage Donor Satisfaction

3. Build Donor Commitment

4. Foster Trust

5. Maintain Regular Contact

1. Determine Motives & Shared Values

• Measure Satisfaction

• Active & Passive Data

• Surveys

• Focus Groups

• Generational Strategy

• Fundraising

• Stewardship

2. Manage Donor Satisfaction

• Set Expectations and Preferences Up Front

• Appropriate Welcome

• Communication Frequency, Timing, Preferences

• We Will Ask Again

• Establish Key Performance Indicators

• Donor LifeCycle™ Migration

• Cross-Channel Donor Movement

• Real Retention, Second Gift Conversion

• Provide Timely Thanks in Multiple Formats

• Personalize Everything

• Use Multi-Channel Tactics

• Present a Second Gift Opportunity within 60-90 Days

• Consider High-Value Sustaining Giver Program

3. Build Donor Commitment

• Meet the Expectations Set

• Welcome New Donors,

Provide Context

• Be Transparent and

Accessible

• Accept Feedback in Many

Formats, Act on It

4. Foster Trust

Welcome Series Example

ONE TWO THREE

MAIL

• Provide Interactive Engagement Opportunities

• Communicate More Often with Donors

• Be Integrated, Cross-Channel

5. Maintain Regular Contact

STRATEGIC: Thoughtful and planned

CONSISTENT: Reflects a common message

INTEGRATED: Anticipates cross-channel

CONGRUENT: Leverages channel strengths

INTENTIONAL: Drives toward stated goals

Relationship Pathways Example

Use Cross-Channel and Leverage Rich Media (as appropriate)

Web Prospect

Capture Email Collect profile

data Welcome

series Initial

solicitation

New Donor

Thank you Welcome

series RFM

segmentation

Monthly giving

program

Event Participant

Thank you Coaching

series Post-event

stewardship

Next event early

registration

Putting It All Together

Building on Existing Plans

Existing Marketing Campaign Pursuant’s Integrated Campaign

Donor Intelligence & Personas

• Leverage Donor Behavior

• Predict Most-Likely-to-Give Prospects

• Allow Prioritization of Resources and Time

• Inform Business Rules for Moves Management

• Leverages All Communication Channels

Passive vs. Active

Passive Involvement

“It just happened through unsupervised thinking.”

• Inclusive. Wide Net. Generic.

• Analyzed in retrospective by aggregate/cohorts/segments

Data: RFM, rates (e.g. click-thrus, response) heat map

Active Engagement

“It was catalyzed into being (but I feel like it was my idea).”

• Exclusive. Prioritized. Specific. Intentional. Chosen.

• Analyzed in real-time or future by decision points/individuals.

Data: questioning, survey, face to face, 2-way conversation

Holistic Generational Strategy

DONOR INTELLIGENCE DONOR RELATIONS

• Better Donor and Prospect Prioritization

• Deeper, More Relevant Relationships

• Lowered Costs, Fewer Lost Opportunities

• Minimal Donor Frustration

• Empowered Supporters

• Improved Efficiency

• Compound Value of Future Gifts

Outcomes

10% Increased

Retention

=

Up to 200%

Increased Donor

Value

Sargeant & Jay 2004

No, Thanks

• New Donor Dollars Gained …

• All Lost Due to Poor Retention

• Donor Dollars Lost at Approx 3x Rate of

Recapture

53.5%

-55.4%

- 1.9%

CATEGORY TOTALS

New 21.7%

Recapture 12.4%

Upgrade 19.4%

All Gains Combined 53.5%

Downgrade -20.3%

Lapsed New -14.1%

Lapsed Repeat -21.0%

All Losses Combined -55.4%

Source: 2011 Fundraising Effectiveness Project, AFP International

Key Take-Aways

• Next Generation Giving Needs

• More engaging stewardship approaches

• Channels

• Peers

• 24/7 access, transparency

• Multiple gift-giving mediums

• Results, constant feedback

Key Take-Aways

Building Lifelong Donor Relationships Requirements

• Prioritize constituents and resources by KPIs

• Build on existing plans

• Achieve channel congruence and relevance

• Position stewardship as a catalytic driver of donor behavior

• Foster commitment through engagement

• Set and meet expectations

• Communication with relevance

Q&A

Allison Lewis Lodhi, CFRE

5151 Belt Line Rd., Suite 900

Dallas, TX 75254

317.841.0641 direct

317.361.5496 cell

allison.lewislodhi@pursuant.com

www.pursuant.com

Resources & Thank You!

•Acri, Sue. (2009) Passing the Torch: Attracting and Cultivating the Next Generation of Philanthropist. Pursuant

Ketchum and Giving Institute.

•Bhagat, V., Loeb, P. and Rovner, M. (2010) Next Generation of American Giving. Convio, Edge Research and Sea

Change Strategies.

•Davis, Emily (2012) Fundraising and the Next Generation: Tools for Engaging the Next Generation of

Philanthropists. http://literature.foundationcenter.org/2012/04/philanthropy-and-gen-xy.html

•Glenn, J. (2008) The Original Generation X. Brainiac, Boston.com.

•Mature Marketing Matters: Marketing and Motivating Boomers and Beyond. Creating Results.

http://knowledge.creatingresults.com/category/millennialsgen-y/ Accessed 2012.

•Traditionalists, Baby Boomers, Generation X, Generation Y (and Generation Z) Working Together: What Matters

and How They Learn? How Different Are They? Fact and Fiction. United Nations Joint Staff Pension Fund.

Accessed 2012.

•(2009) The New Generation of Philanthropists. The Center on Philanthropy at Indiana University.

•(2011) The Millennial Donors Report. Achieve and Johnson Grossnickle and Associates (JGA).

•(2011) Fundraising Effectiveness Project,.AFP International.

•(2012) Millennial Generation money-Obsessed And Less Concerned With Giving Back, Study Finds. Huffington

Post.

Works Cited