Getting to One-Click Giving

Getting to One-Click Giving

Quick for donors and data-rich for schools, online fundraising is taking off.

At Boston College, "You Make It Happen." Or, at least that's the theme dominating the alumni fund's 2005 e-mail campaign, with each edition pairing an alumnus who has given a small amount each year with a researcher at the school who has made an important contribution to his or her field.

"The concept is that unrestricted money that alums give allows flexibility to the university to use it wherever it's needed," says Christine Sanni, executive director of Advancement, Communications, and Marketing at the school.

The concept is interesting, the results compelling. The "You Make It Happen" e-mails have resulted in online gifts averaging between 35 and 40 percent higher than those made over the phone, she notes. "We've got alums that don't respond to mail anymore, or the phone. Now that we're sending them e-mail, this is a way they want to conduct business because it's more on their own terms."

After three years of decline, surveys show donations to educational institutions are on the rise, with higher ed donations comprising the biggest branch of the giving tree. Alumni seem to be opening their wallets wider, with charitable gifts to all levels of education rising nearly 3 percent last year, according to Giving USA Foundation's 2004 data. Modest though it seems, the increase follows a three-year decline in giving to educational institutions.

But perhaps it would be more accurate to say alumni have started to open their browsers wider. Evidence is beginning to show that online donations tend to be greater--by about 33 to 50 percent--than those collected via telemarketing or direct mail.

"The rate of online giving is growing, if not exponentially, at least very rapidly," says Stacey Schmeidel, director of Public Affairs at Amherst College (Mass.). "And the gifts we're getting online tend to be larger. I don't think it's that people are giving the same gifts they'd give over the phone or through the mail. It seems there's an overall increase in both number and the size of the gifts."

"When students are on campus they interact with the university almost exclusively via the internet. Then they graduate and the first thing they get is a postcard from the Alumni Association saying, 'Welcome to the Alumni Association.' We break that valuable connection." -Charlie Cumbaa, Blackbaud

Research supports these anecdotes. Online givers donate more than 50 percent more total (both online and offline) than those donors who do not give online, according to the 2005 Kintera/Luth Nonprofit Trend Report. The same survey found that online giving increased by more than 50 percent in the past year. Competing surveys with totally different methodologies put the total amounts Americans give online somewhere between $162 million and $3 billion--a healthy amount at either end of the scale.

Fueling the growth of online giving in the higher ed market is a definite shift in the way institutions are beginning to look at their alumni relationships. With everything from focus groups and market research, to customized e-mail newsletters with dynamic content, IHEs are often treating alumni with the degree of respect and marketing savvy that used to be reserved just for student prospects. Extending the principal of integrated marketing to alumni makes sense not just from a relationship and fundraising point of view. Eventually it should help lower direct mail and telemarketing costs as IHEs are able to determine comfortably which alums respond best to pure electronic communication.

"There's a lot more integrated marketing going on, the kind that has gone on for years in the for-profit world. We're starting to see more of it in higher ed," says Steve McLaughlin, engagement manager for Blackbaud Inc., a software provider focusing on the nonprofit sector.

When the decision was made to redesign their admission publications and website, Amherst College marketers knew they needed market research to guide their specific changes. In addition to creating focus groups of prospective students for that project, the team organized alumni focus groups to help determine what that group's expectations were for the alumni website.

"We knew alums wanted us to be doing a lot more with the website, but they weren't quite sure what it was," says Schmeidel.

After the focus groups, marketers honed in on the idea that Amherst alums wanted the site to help maintain their intellectual connection to the school, in addition to their practical connections to classmates via listservs and class bulletin boards. The reunion held this year for the class of 1980, the first to plan a major gathering since the site redesign, "set all kinds of records in terms of fundraising and attendance," Schmeidel says. "How much of that is attributable to the [website] is hard to quantify, but that certainly generated a lot more interest around it."

Conducting that level of alumni research, and then implementing solutions based on findings, is crucial in understanding this relatively new means of connecting with alumni, says Linda Cox Maguire, executive vice president of Maguire Associates, which ran the Amherst focus groups.

"Doing sophisticated market research on the alumni population is going to empower fundraising in ways you can only imagine," Maguire says. "Schools have been doing this kind of research with their prospective clients for a long time, but this is relatively new to the world of alums."

One observation that seems to fly over the head of many marketing departments is the acceptance new alumni have for dealing with their alma mater on an online basis only.

"When students are on campus they interact with the university almost exclusively via the internet," says Charlie Cumbaa, vice president of Products and Services at Blackbaud. "Then they graduate and the first thing they get is a postcard from the Alumni Association saying, 'Welcome to the Alumni Association.' We break that valuable connection."

The institution's ability to seamlessly transition alumni to interaction online with other alums and organizations is very important to them, Cumbaa adds.

For the last 18 months or so, Blackbaud has offered NetCommunity, a software companion to its flagship alumni fundraising and tracking product, The Raiser's Edge. NetCommunity aims to bring IHEs the same dynamic content experience found on sites like Amazon.com. So, now an institution's alumni portal can welcome return visitors with a personalized screen and targeted content, such as the message, "Welcome back, Rebecca. Here's the latest news on the crew team."

"Through technology you can make the online experience a lot more targeted," says McLaughlin. "And the more you can make a one-to-one connection, the more successful you're going to be in your fundraising efforts."

Florida Atlantic University switched over to NetCommunity from another vendor because it integrated so easily with The Raiser's Edge. "What happens now is alumni can update their biographical data and employment info, and it's automatically integrated into our system," says Keith M. Fries, assistant vice president of Advancement Operations at FAU. "Now there's no more manual keypunching of address changes."

Direct marketers have long practiced the fine art of market segmentation--putting customers into different "baskets" and targeting products they hope will appeal to that market niche. IHEs are getting into the same game--via e-mail, at least--because it allows for the inexpensive creation of micro-campaigns that are specifically targeted at an alumni's area of interest.

Amherst will start segmenting all of its e-mail this summer using campaign software from Convio. The application allows alumni to choose e-mail preferences, deciding whether they want to receive, for instance, sports news but not the president's monthly message, or news about their particular college but not e-mails from the annual fund.

"Beginning in July, all of our alums will be able to tell us more of what they want," Schmeidel says. "They expect it, and it's in the best interest of the college to reach out to alums without spamming them."

"It's in the best interest of the college to reach out to alums without spamming them." -Stacey Schmeidel, Amherst College (Mass.)

The University of Texas system also uses Convio to send a bimonthly newsletter to 150,000 alumni, looking at both open rates and click-through rates to see which stories alumni are most interested in.

"We're tracking what their interests are, what articles they're looking at, and changing our message based on that," says Juan Garcia, director of Strategy and Market Analytics at University of Texas. Because of the software's capabilities, Garcia knows that 3,000 of his 150,000 alums have opened every single e-mail he's sent.

Convio's Fundraising Center application aids in this micro-campaign strategy, allowing the creation of specialized landing pages to promote a specific gift vehicle based on the target's preferences or characteristics.

Fred Waugh, vice president of Product Management at Convio, says, "Our software enables mass personalization, which is a very expensive proposition in direct mail or telemarketing."

Online donations tend to be about 33 to 50 percent greater than those collected via telemarketing or direct mail.

The Amherst College, Boston College, and University of Texas stories highlight best practices in online relationship building and fundraising by IHEs. But even these schools are grappling with real challenges related to how IHEs are organized and the often aging or disparate technologies that complicate implementation of these kinds of approaches.

Marketers in the Development Division at Boston College, while planning to redesign their web presence, heard through the grapevine that the Alumni Association was planning to do the same. The existing versions of the two sites "didn't even look like the same university," Sanni says.

Sanni proposed that the two groups work together, giving the example of an alumnus checking out a reunion web page but having no easy way to simultaneously make a contribution to the annual fund, simply because in the siloed world of IHEs, alumni and development don't often function as a team. "As a consumer your expectations are that you can get all these services in one place," Sanni explains. "That isn't how universities are organized."

Rather than just share a graphic designer to create a unified look, the two departments ended up "re-imagining the way we worked together," Sanni says. Now Boston College alumni can land on a page that links to alumni or reunion programming, as well as alumni giving.

Making an impression on the bottom line is another challenge in online fundraising. Even at the schools that have put online constituent relationship management tools to the very best uses, there's been little or no reduction in print or telemarketing costs--yet.

"Telemarketing in general is still bread and butter for institutions," says Sanni, who notes that online giving only accounts for 6 percent of total giving at BC. "But that's changing rapidly; e-mail is a much more effective way."

"We're not even close to stopping printing of a view book, and we're spending way more time and money on the website every year," says Schmeidel. "We're all in a transitional state. It's scary, and it does take a long time. But I'm not sure it's happening any faster in the non-higher-ed world."

Rebecca Sausner is a freelance education and technology writer. She can be reached at rdsausner@yahoo.com.


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