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Why is Annual Giving So Important?

May 20th, 2010 | 2 Comments | Posted in Annual Giving

Last week I was fortunate to spend time and engage in conversations with many dedicated annual giving professionals.  I was at an excellent conference that had me thinking again about why annual giving should be important to all non-profit development programs.  I have thought a lot about this lately.

If you are an annual giving professional, or if you have ever been one, you might be thinking I have been pondering the obvious … but over the past three years I have spoken to an organization which discontinued its phonathon, another which closed its annual giving program, and a large university which actually ceased development operations.

Today, I can happily share that the closed development program reopened, that the annual giving office recently hired not one but three development professionals, and while the phonathon isn’t yet calling even 20% of the available prospects, it again calls thousands of individuals annually.

In these challenging times I’d like to give any of you who need to speak out for your annual fund a little supporting information.  When debating the importance of annual giving and its value to our non-profit organizations, we must consider the following:

1) Annual giving donors have a lifetime value that far exceeds any one gift …  so even if we are down because of the economy or identifiable fundraising mistakes and don’t break even in a given year, our organizations will almost certainly be strengthened over time

2) Our annual giving is marketing of our non-profits to broad audiences … in effect our marketing is subsidized by fundraising and this must be considered an addition a return on our investment

3) More than 75% of $10,000+ donors, in one Target Analytics study, gave six or more annual gifts before their first $10,000+ gift … highlighting that indeed annual giving cultivates donors for even greater support in future

4) 88% of those the same $10,000 donors took three or more years from their first annual gift before making their $10,000+ gift … suggesting that for many, annual giving could be a necessary step before some make major gifts

5) Annual giving solicitation vehicles and tools often tell us more about the condition of our databases for all of our organizations activities … indeed mailing and conversations about annual giving often collect more information updates than any other activity of the non-profit

6) Meer and Rosen reported that a college graduate that has given $20 each of the first five years after graduating, will give eight times as much as the graduates to give one $100 in those five years … so it is not enough for us to have a fund for people to give to, we must have a program that actively seeks support and then a repeated renewal of that support

For more on your annual giving efforts, please give me a call or drop me an email.

Brian Lacy

(860) 478-9291

Do you know Jay Frost?

May 20th, 2010 | No Comments | Posted in In The Spotlight


Jay Frost is a consultant, speaker, author and serial third sector entrepreneur.  Over the past 25 years, he has played a leadership role in a number of companies serving the nonprofit world, including BFTConnect LLC,, WealthEngine and WealthID.   Jay has also worked as a fundraiser at the International Rescue Committee and Meridian International Center and as a grantmaker at the National Endowment for the Arts.  As a volunteer and educator, Jay has been a member of the CASE Industry Advisory Council and a member of the board of the Association of Professional Researchers for Advancement.  He is a frequent speaker on fundraising, philanthropy and social media and is active on Twitter, Facebook, LinkedIn and Twibes.   We caught up with him in advance of his “Social Media and Fundraising” webinars to ask why nonprofits should care about sites like Facebook and Twitter.

What does social media have to do with fundraising?

Everything!  Websites are like a roadside stop.  Social media is the highway through which the traffic flows.  If we want to attract and hold the attention of donors, we need to be where they are, engaging in the conversation, rather than just waiting for them to show up on our doorstep.  This is especially important to donor acquisition and diversification.

Can nonprofits raise money through social networks?

Yes, of course, and they are doing so.  But the impact of these networks is much greater than that.   Fundamentally, social networks are not a tool for our use but rather a pathway through which we can engage in conversation, learn and exchange information.  In that realm, the audience collectively determines what is of interest and what they want to share with their own peers.  In short, it is not about what we want to sell but what they want to buy.  That means that a broad audience can take it upon themselves to advocate on your behalf, bringing in new constituents and revenue.  But we must be comfortable sharing power for this approach to work.

What’s the risk and reward?

The risk with social media is that we cannot control what people say about us or with whom they say it.  It is important to note, however, that this is true whether we engage social media or not.  If we aren’t on Facebook, but people are commenting about us there, we have no way of monitoring or participating in the conversation.  If we are participating, we can learn, share, sometimes mold opinion and certainly work to welcome those within that world to come join us as volunteers, members, donors and solicitors.  More importantly, these networks reach people our standard forms of acquisition would likely never touch, allowing us to engage many more people across a broader range of experience and backgrounds.

How did you come to be involved in social media?

Generating conversation between people with different professions, opinions and backgrounds is one of my greatest passions.  Social networks provide a wonderful platform for bringing people together who otherwise wouldn’t communicate.  In the nonprofit world, fundraisers, donors and academicians don’t often intersect and exchange ideas.  What better way to advance philanthropy generally and fundraising specifically than to exchange information and ideas among the chief stakeholders using the ultimate world-flatteners: Twitter, LinkedIn and Facebook!

To learn more about Jay’s next “Social Media and Fundraising” webinars for Brian Lacy & Associates, visit  You can learn more about Jay’s work at the Frost on Fundraising website (, Twitter ( or Facebook (  You can also reach Jay directly by phone at 571-426-6214 or by email at

Naming Rights with a Twist

May 20th, 2010 | No Comments | Posted in Fundraising
The Distinguished Founders Circle of donors photographed with the Business school Dean Mike Percy. From left top row. Mick Percy, Sandy Sprague, Stan Milner, Court Carruthers, Bottom row, Dr. Dianne Kipness, Irv Kipness, Guy Turcotte, and Roger Philips. The U of A business school launched a major fundraising effort and raised $20 million to keep the faculty name as is. Photograph by: Shaughn Butts,

The Distinguished Founders Circle of donors photographed with the Business school Dean Mike Percy. From left top row. Mick Percy, Sandy Sprague, Stan Milner, Court Carruthers, Bottom row, Dr. Dianne Kipness, Irv Kipness, Guy Turcotte, and Roger Philips. The U of A business school launched a major fundraising effort and raised $20 million to keep the faculty name as is.
Photograph by: Shaughn Butts,

Facing the prospect of a corporate title on the doorway, graduates of the University of Alberta School of Business started a campaign that raised more than $20 million to keep the name just as it is.

Three years ago, a fundraising committee thought it could set up a rich endowment by changing the name and joining the ranks of Toronto’s Rotman School of Management or Calgary’s Haskayne School of Business.

The committee even found interested buyers. Then members had a change of heart.

Instead, almost 170 alumni donated more than $20 million, and the school now has a signed certificate saying the current name will be preserved in perpetuity.

“People are loving it. It’s almost like counter-culture,” said Mike House, a member of the fundraising team.

Rather than honouring a single alumni who made it big, the name represents the whole community, he said. “They’re not about putting themselves first.”

Donors, alumni and administrators gathered at the Alberta Art Gallery on Monday to celebrate.

“This school is owned by its alumni. It’s owned by its community,” said Mike Percy, dean of the business school. “Always has been, always will be.”

The art gallery was built by many of the same donors, he said. “That’s what makes this city unique. There’s quiet wealth here.”

Preserving the name is a way of thinking for the future, he said. The school could have chosen one of its most famous alumni, and “at the end of the day, after one generation, no one knows who they are.”

The $20.5 million will be invested to support the school. Some of the interest will fund the salary of a new research chair position. Other funds will support the general operating fund to make it less reliant on provincial government budgets, while some will support scholarships.

The school was founded in 1960, and has several internationally known programs, Percy said. It also ranks consistently in the top 40 in the Financial Times of London rankings for research.

Stan Milner, a local businessman and philanthropist who led the committee, said members’ change of heart came when they started thinking about the future. “Because we’re building this for forever,” he said.

“Mind you, if Mr. (Bill) Gates showed up with $100 million, we might have changed our minds,” Milner added with a laugh.

The committee started the campaign in 2007, shortly before the economic downturn. But as the economy picked up, many alumni were happy to get involved.

The name “Alberta” gives the school a sense of place, like the Harvard Business School, he said. No one gets confused about where that is.

“(But) the Harvard Business School is so remarkably secure because their endowment is so huge,” he said.

Only endowments can give the type of reliable funding that will let the Alberta School of Business attract and keep star professors. “You need a few Wayne Gretzkys around.”

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IRS Extends Deadline for Nonprofits to File for Tax-Exempt Status

May 20th, 2010 | No Comments | Posted in News and Updates

“Now that the May 17 filing deadline has passed, it appears that many small tax-exempt organizations have not filed the required information return in time. These organizations are vital to communities across the United States, and I understand their concerns about possibly losing their tax-exempt status.

“The IRS has conducted an unprecedented outreach effort in the tax-exempt sector on the 2006 law’s new filing requirements, but many of these smaller organizations are just now learning of the May 17 deadline. I want to reassure these small organizations that the IRS will do what it can to help them avoid losing their tax-exempt status.

“The IRS will be providing additional guidance in the near future on how it will help these organizations maintain their important tax-exempt status — even if they missed the May 17 deadline. The guidance will offer relief to these small organizations and provide them with the opportunity to keep their critical tax-exempt status intact.

“So I urge these organizations to go ahead and file — even though the May 17 deadline has passed.

“Filing a tax return for the small organizations is easier than you’d think. It just takes a few minutes to fill out the electronic notice Form 990-N (e-Postcard). This is available for small tax-exempt organizations with annual receipts of $25,000 or less.”

For access to the e-Postcard and further details, see Annual Electronic Filing Requirement for Small Exempt Organizations, Form 990-N (e-Postcard).

Why Donors Name or Intend to Name a Nonprofit in Their Wills

May 19th, 2010 | No Comments | Posted in Fundraising

We asked bequest givers and those who plan to amend their wills at some point to include a bequest to rate their primary reasons for naming a nonprofit in their will. Their answers most often related to intrinsic, personal feelings rather than tangible benefits. On average, younger Americans with wills (ages 40–54) and those of any age group who plan to amend their wills tended to offer nearly all of these reasons more frequently.

The majority of those who already have a bequest in their will or intend to amend their will at some point to add one cited the following as a primary reason for doing so:

» You just feel it is the right thing to do (81 percent).

• Those aged 40–54 and those with college degrees are slightly more likely to say this is a primary reason (87 percent each).

• This is also a primary reason for those with household incomes of $50,000 or more (86 percent).

» You can have peace of mind that you are doing something good (56 percent).

• Six out of 10 (61 percent) of the youngest Americans in our sample (ages 40–54) list this as a primary reason.

• Current givers favor this reason (60 percent, compared to 49 percent of likely future bequest givers with wills).

The following reasons swayed fewer than half of potential bequest givers but still factored into the decisions of at least 1 in 5:

» You can leave a legacy to an organization you care about that will live on after you are gone (46 percent).

• This reason appeals slightly more to:

• Those with incomes of $50,000 or more (54 percent).

• Those with a college degree (54 percent).

• Those between the ages of 55 and 64 (52 percent).

» You can honor someone you love or admire with a gift in his or her name (29 percent).

• This is most attractive to younger prospects (37 percent of those aged 40–54).

• This reason applies more to future (33 percent) than current (26 percent) bequest givers.

• This is more likely to appeal to women (32 percent) than men (25 percent).

» You can set an example for family members (26 percent).

• This is more attractive than average to younger prospects (33 percent of those aged 40–54).

• One-third (33 percent) of those with a college degree say this is a major reason.

» You can simplify your estate for your heirs (23 percent).

• This is more attractive to those with a college degree (28 percent).

• This reason is stronger among current (26 percent) than future (19 percent) bequest givers.

» You can pay back a kindness you’ve received, such as a scholarship or medical care (23 percent).

• This reason appeals to the younger prospect group (32 percent of those aged 40–54).

• More future prospects are drawn to this reason (29 percent) than those who have already included a bequest (20 percent).

• Those with household incomes of $100,000 or higher and those with a college degree are also likely to see this as a major reason (28 percent each).

» You can reduce the amount your estate will pay in taxes while keeping the amount you give to family and friends the same (21 percent).

• While neither gender differs notably from the average, this reason is more likely to appeal to men (25 percent) than to women (17 percent).

• Those who intend to include a bequest but haven’t yet are more likely than current bequest givers to credit this as a reason (27 percent among intended givers, compared to 17 percent of current givers).

» You can provide income for family members through gift annuities (19 percent).

• Those who intend to include a bequest but haven’t yet are considerably more likely than current bequest givers to credit this as a reason (28 percent among intended givers, compared to 12 percent of current givers).

» You can reduce the amount of income tax you pay now (13 percent).

• Those who intend to include a bequest but haven’t yet are more likely than current bequest givers to consider this important (18 percent among intended givers, compared to 9 percent of current givers).

• This is slightly more attractive to those with less education (18 percent of those with no more than some college education).

Motivations for Bequest Giving: Why People Give and Why They Don’t | 3

» You feel it is expected of you, for example because of your involvement in an organization (12 percent).

» You can receive income later from deferred gifts and take the tax advantage now (9 percent).

• Those who intend to include a bequest but haven’t yet are much more likely than current
bequest givers to credit this as a major reason (15 percent among intended givers, compared to 6 percent of current givers).

• This is attractive to younger prospects (15 percent of those aged 40–54).

» You can sometimes receive perks or privileges associated with a higher level of giving than what you can afford on an annual basis (3 percent). Six percent did not offer any of these as a primary reason.

*This research was provided by The Stelter Company

Tech-savvy Generations Care About Privacy

May 19th, 2010 | No Comments | Posted in Social Media

FacebookPrivacyS_590854gm-aAll the dirty laundry younger people seem to air on social networks these days might lead older Americans to conclude that today’s tech-savvy generation doesn’t care about privacy.

Such an assumption fits happily with declarations that privacy is dead, as online marketers and social sites such as Facebook try to persuade people to share even more about who they are, what they are thinking and where they are at any given time.

But it’s not quite true, a new study finds. Despite mounds of anecdotes about college students sharing booze-chugging party photos, posting raunchy messages and badmouthing potential employers online, young adults generally care as much about privacy as older Americans.

The report, from researchers at the University of California, Berkeley and the University of Pennsylvania, is among the first quantitative studies looking at young people’s attitudes toward privacy as government officials and corporate executives alike increasingly grapple with such issues.

“It is going to counter a lot of assumptions that have been made about young adults and their attitudes toward privacy,” said Mary Madden, senior researcher at the Pew Internet and American Life Project. She was not part of the study but reviewed the report for The Associated Press ahead of Thursday’s release.

Among the findings:

Eighty-eight per cent of people of all ages said they have refused to give out information to a business because they thought it was too personal or unnecessary. Among young adults, 82 per cent have refused, compared with 85 per cent of those over 65.

Most people – 86 per cent – believe that anyone who posts a photo or video of them on the Internet should get their permission first, even if that photo was taken in public. Among young adults 18 to 24, 84 per cent agreed – not far from the 90 per cent among those 45 to 54.

Forty percent of adults ages 18 to 24 believe executives should face jail time if their company uses someone’s personal information illegally – the same as the response among those 35 to 44 years old.

The survey, based on a 2009 telephone survey of 1,000 Americans 18 and older, did find some areas with generational differences in attitudes. For example, while 69 percent of all respondents said a company should be fined more than $2,500 for privacy violations, only 54 percent of those 18 to 24 years old thought the fine should be that steep.

Even so, the majority of young people generally agreed with their older counterparts in wanting more privacy, not less.

“Yes, there are some young people who are posting racy photographs and personal information. But those anecdotes might not represent what the average young person is doing online,” said Chris Hoofnagle, co-author of the study and director of information privacy programs at the Berkeley Center for Law and Technology.

Although they grew up in the digital age, young people know surprisingly little about their rights to online privacy, the study found. They seem more confident than older adults that the government would protect them, even though U.S. privacy laws offer few such safeguards.

The lack of knowledge about the law, coupled with an online environment that encourages people to share personal information, may be one reason young people can seem careless about privacy, according to the study, which was conducted in July 2009 and has a margin of sampling error of plus or minus 3.6 percentage points.

There is also some evidence that, by virtue of their age, adolescents and young adults’ brains are hard-wired toward risky behaviour, the report said, citing past psychological studies.

The researchers suggest that lawmakers and educators should not assume that young adults do not care about privacy and therefore don’t need protections.

Rather, they say, “policy discussions should acknowledge that the current business environment … sometimes encourages young adults to release personal data in order to enjoy social inclusion even while in their most rational moments they may espouse more conservative norms.”

Yet that doesn’t mean you shouldn’t believe all the stories about younger people prolifically posting photos of their beer-guzzling, scantily clad selves.

“But there is not enough research to find out (whether) older people do the same thing,” said Joseph Turow, professor at Penn’s Annenberg School for Communication. “Older adults, they may not show up naked, but they may be releasing other kinds of (personal) information.”

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What Can We Learn From Our Global Fundraising Neighbors?

May 19th, 2010 | No Comments | Posted in Fundraising

It is always a useful and productive experience to spend time in a new environment. That is the reason we fundraisers like to go to conferences. AFP, CASE, IFC, NTEN are great events that give us opportunities to get together, collaborate, learn and ultimately return home with ideas and best practices that will help our organizations achieve their goals.

What if we could extend this knowledge sharing beyond our own borders? What if we could learn how fundraisers in Bolivia deal with the lack of postal or banking systems? How did a Dutch organization generate more than 500,000 monthly donors? How are Italian organizations using digital media to drive results? How could we, wherever we are located, learn from our fundraising cousins on the other side of the planet?

Working for a global software company that only serves nonprofits, I am lucky enough to spend a great deal of time traveling and talking to nonprofits around the world. What has become obvious to me during my travels and my experience living internationally is the similar passion, drive and optimism that nonprofits around the world share with each other. There may be differences in fundraising styles and techniques from country to country, but the philosophy and passion remain the same. We also, as a global fundraising community, share many of the same challenges and concerns.

The State of the Nonprofit Industry (SONI) is the leading market research survey of several thousand fundraising organizations across multiple countries in Europe, Asia Pacific and North America. The survey focuses on issues critical to today’s nonprofits, including operational issues, technology, accountability and fundraising. This research has enabled us to assess the differences between fundraising in different parts of the world and track the trends over the years.

One example of a current challenge that is universal (or at least global) is the increased trends of donors wanting greater visibility of where their money is going. In fact, 60 percent of organizations in Germany responded that they had seen an increase in this area.

I noted earlier about the optimistic nature of nonprofits globally. This was also an area we polled in the SONI, asking organizations how they expected total income to change from 2009 to 2010. Almost all participants across Europe stated that they expected fundraising revenue to increase, with France being the most optimistic about 2010. Investments were also up, with 61 percent of U.K. organizations seeing an increase in 2010.

One of the most obvious differences between Europe and the U.S., for example, is the different focus between recurring giving and major giving. Almost all survey participants in Europe stressed the importance of sustainer or monthly giving programs, while the results for North America remained flat. In fact, the U.S. has never truly adopted recurring-giving programs on mass, which, as a British person living in the U.S., I find interesting and a significant opportunity. A recent report by Target Analytics, a Blackbaud company, measured the results of monthly giving programs for more than 15 large U.S.-based organizations and found some telling trends:

  • monthly donors tend to be younger than those that give single gifts;
  • recurring donors have much higher retention rates; and
  • monthly donations are less likely to be affected by economic downturns.

Not only are these recurring-gift programs an excellent source of mostly unrestricted, recurring revenue, but they also provide a huge pool of committed and loyal supporters who might make for excellent major- or planned-gift prospects.

The way European organizations acquire these monthly donors is also an interesting difference between our two continents. Face-to-face fundraising is still a huge method in Europe, where a fundraiser or canvasser stands on the street soliciting monthly donations from passers-by. The U.K.-based Third Sector publication estimates that approximately 700,000 donors signed up by this method in 2009. Clearly this form of acquisition is not common in the U.S., and many organizations would, I’m sure, claim that it would not work in the U.S.

Consider this though: Face-to-face is becoming more common in Canada (I was recently approached by two separate large and well-known international nonprofits in Toronto within 10 minutes), and Greenpeace already is successfully acquiring new donors in many U.S. cities.

While the U.S. is by far the largest philanthropic market in the world, there are other markets that are growing significantly (i.e., Latin America). These markets have not had the luxury of fundraising best practices or standards, and they often lack an established culture of giving. Many times they do not have a professional fundraising body and lack the capacity that we in developing countries take for granted.

What we do see in these markets are organizations that are extremely creative. They innovate. They take risks. With little to lose and almost no resources, they look for new and unique ways to reach their constituents and find great, and often unexpected, success. Perhaps that is something we can learn from them.

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E-Newsletter and Text Messaging Sign Up

May 19th, 2010 | No Comments | Posted in News and Updates

Invite Others to Sign Up For This E-Newsletter    or    Sign Up for Helpful Text Messages Yourself

Share your cell phone number and your carrier, to receive at most one text fundraising tip each week.  Sign up now!

Should My E-mail Design Match My Web Site?

May 19th, 2010 | No Comments | Posted in Email

It’s very important to use design elements—such as color, art, logos, etc.—to make visual connections between your Web site and your e-mail. When you sign up e-mail list members on your Web site, you want the e-mail to be an extension of the site that your customers recognize. If there is a disconnect because the e-mail doesn’t look like the Web site, your subscribers may think your e-mail is spam.

Conversely, when you send out e-mails with a call to action that takes recipients back to a landing page, you don’t want to confuse those readers by sending them to a Web site that doesn’t look like the company you portray in your e-mail.

This happened to me recently. I got an e-mail from a major airline that featured a color scheme that was predominately the company’s trademark yellow and orange. Clicking through to the airline’s Web site, I was shocked to land on a page that was mainly blue and purple. My initial thought was that I was on the wrong page. What I learned is that the company rebranded its Web site but has not carried the new branding elements through to its e-mail program.

While it’s not unusual for companies to rebrand or to freshen their brand, it’s important to keep some of the old elements—at least on a temporary basis—to bridge to the new brand. You also need to make sure that your e-mail program catches up at the same time. This can be a struggle if e-mail marketing and your Web site are managed by different groups, but the outcome is worth the effort.

When designing your e-mails, look to your Web site for design elements and incorporate some of those elements into your e-mail. If you have an html Web site, you can even use elements from the Web site to easily design your e-mail.

Remember: it’s all about integrating the same look and feel from Web site to e-mail, and even to printed marketing materials. Carrying a similar look throughout all these customer touch points makes customers comfortable with your brand, which in turn makes them comfortable pulling out their wallets.

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Gasp! My Server Went Down

May 19th, 2010 | No Comments | Posted in Cartoons