Seeking Not Just Fundholders, But Co-Investors

CEP’s most recent report takes a look at a question all community foundation donor services staff want answered: how can you increase satisfaction among foundation donors? What is the magic bullet for increasing referrals, gifts into existing funds, and overall loyalty? As an employee of a foundation that houses hundreds of advised funds and a small shop of donor-specific staff, managing the personalities and expectations of donors can be a daunting task. Therefore, I was interested to learn findings presented in What Donors Value: How Community Foundations Can Increase Donor Satisfaction, Referrals and Future Giving.

The study, framed in a national context, cites the growing alternatives to the community foundation model. Commercial charitable gift funds continue to increase their market share, with Fidelity Charitable reporting a 55% increase in outgoing grants and incoming contributions from 2012 to 2013. Giving circles and online resources like GuideStar provide alternatives for the “do it yourself” donor, and challenge community foundations to increase their “relevance, impact, and distinct appeal to donors.”

Not surprisingly, the report shows that donor satisfaction is a critical issue for community foundations. Donors’ plans for future giving and the likelihood that they will recommend the foundation to others can be linked to their level of satisfaction, and CEP’s findings are a reminder that building donor loyalty is all about getting back to basics.

One of the strongest predictors of donor satisfaction is donors’ sense of the foundation’s level of responsiveness when they need assistance. Basic customer service and short response times are important factors in ensuring that not only are donors’ needs met, but that they also feel valued. The report cites examples from various foundations with high levels of donor satisfaction who describe a “culture of responsiveness.” Some practice a 24-hour rule, where all calls are returned within a day. Others stagger vacation time to ensure that donors don’t get voicemail fatigue during the holiday season. Staff members also state that it helps to be conscious of donors’ preferred method of communication.

In my view, one of the most critical pieces of being responsive is setting clear expectations. If I’m told there will be cake (which I always hope there will be, preferably chocolate) and I’m given an apple, I’m not going to be satisfied. Likewise, we have to be honest and up front with our donors on all levels.  Taking responsibility for errors, responding accurately rather than immediately, and explaining the foundation’s internal processes helps to build trust and set expectations for both donors and staff.

Recently, the Community Foundation of Greater Birmingham put this idea into action, beginning before our donors even walk through the door. As a mid-sized, placed-based foundation, we have learned that our strength is not in serving as an alternative to the large-scale, low-cost charitable gift funds that crank out billions in grants each year. It’s in playing a leadership role in our community. By listening to what our citizens need and responding, in partnership with our donors, through philanthropy. Our prospect list could easily be titled “civically obsessed citizens of Greater Birmingham.” It’s comprised of people who write op-eds in our local newspaper challenging the public education system, who chair fundraisers for our arts organizations, and who are vocal in saying that they want to realize a better community. They are the folks who demonstrate philanthropy in action, and we seek them out to not only become fundholders, but co-investors.

This prospecting model is one tool that helps make our Giving Together program possible. Started in 2007, Giving Together provides a platform for Foundation donors to leverage their giving by co-investing in our competitive grants and initiatives. Donors can choose to serve on a site review team where they visit nonprofits in the field, evaluate grant proposals, and provide feedback on funding decisions. Based on their passions, they are also informed of special funding opportunities that the Foundation is helping to spearhead, like our coordinated response to the 2011 tornadoes that struck our state, or a newly formed summer learning consortium. 2013 was a banner year for Giving Together, with 42 donors contributing over $1 million to amplify our competitive grants and initiatives. By branding ourselves not as a vehicle for charitable checking accounts, but as a community convener, leader, and advocate, we hope to attract donors who are naturally inclined to engage with the Foundation at a high level.

While CEP’s data indicates that donor “engagement is not the key to satisfaction,” we have found that donors participating in the Giving Together program have a deeper understanding of our work and unique value, an incredible appreciation of our staff, and are empowered to share the story of the Foundation with others. They also see first-hand the impact we are having on the community – and this may be the most critical part of their participation, as CEP finds that donors’ perceptions of the foundation’s impact on the community are also a key indicator of satisfaction.

As community foundations continue to navigate the ever changing and expanding landscape of the philanthropic world, we know that donor satisfaction will always play a critical role in helping to demonstrate their value. CEP’s data shows us that customer service still matters, and so does having an impact in the community. Setting expectations and communicating clearly from the beginning can help ensure that donors find the right fit in a community foundation; let’s hope that when they establish a fund we can become partners in creating positive change. That’s a business model I believe in.

Lora Terry is the Donor Relations Manager at the Community Foundation of Greater Birmingham.

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