finance, fundraising and technology:beyond the bottom line
DESCRIPTION
TRANSCRIPT
Alzheimer’s AssociationFinance Directors Meeting
April 5, 2003
-Dave Harkins
VP, Director of Strategic ServicesThe Jackson Group
Finance, Fundraising and Technology:Beyond the Bottom Line
What We’ll Cover
Overview of philanthropic giving in the U.S. and how it has evolved
How it will impact what you do
Focus on Finance• Best Practices for Finance leadership
It’s more than just the numbers!
Charitable Giving
Corporation$9.05(4.3%)
Foundations$25.90(12.2%)
Bequests$16.33(7.7%)
Individuals$160.72(76.8%)
2001 Contributions$212.00 billion by contribution source
Source: AAFRC Trust for Philanthropy/Giving USA 2002
Religion$80.96(38.2%)
Education$31.84(15.0%)
Human Services$20.71(9.3%) Health
$18.43(8.7%)
Arts & Culture$12.14(5.7%)
Public/ Society$11.82(5.6%)
Environment$6.41(3.0%)
I nternational Affairs$4.14(2.0%)
Foundations/ Unallocated Giving$25.55(12.1%)
Charitable Giving
2001 Contributions$212.00 billion by recipient type
Source: AAFRC Trust for Philanthropy/Giving USA 2002
Charitable Giving
Total Giving1971 - 2001
Source: AAFRC Trust for Philanthropy/Giving USA 2002
0
50
100
150
200
250
1971 1976 1981 1986 1991 1996 2001
$ in Billions
Inflation-Adjusted Dollars
Current Dollars
* Recessions in purple: 1973-1975; 1980; 1981-1982; 1990-1991; 2001
Charitable Giving
Individual Giving and Personal IncomeAdjusted for inflation
Source: AAFRC Trust for Philanthropy/Giving USA 2002
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
Indiv
idual G
ivin
g/N
um
er
of
Household
s
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Pers
onal I
ncom
e/N
um
ber o
f Household
s
Average Giving Per Household Average Personal Income Per Household
Charitable Giving
Individual Giving and the Stock MarketAdjusted for inflation
Source: AAFRC Trust for Philanthropy/Giving USA 2002
0
200
400
600
800
1,000
1,200
1,400
1,600
1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001
Sta
ndard
& P
oor'
s 5
00
0
20
40
60
80
100
120
140
160
180
Giv
ing in
Billio
ns o
f Dolla
rs
Stock Market Individual Giving
Charitable Giving
Wealthiest 20% of Americans contribute 67% of all philanthropyTotal individual giving
Source: “Trends in wealth and Philanthropy”, Boston College Social Welfare Research GroupFormula applied from 1999 giving to 2001 giving.
Next 19%34%
Wealthiest 1%33%
Remaining 80%33%
Charitable Giving
Individual GivingAs a percentage of personal income 1990 – 2002
Source: AAFRC Trust for Philanthropy/Giving USA 2002
1971 1976 1981 1986 1991 1996 2001
1.9% 1.8% 1.8% 1.8% 1.7% 1.6% 1.8%
Charitable Giving
Growth in 501(c)(3) organizations1991-2001
Source: AAFRC Trust for Philanthropy/Giving USA 2002
516,554546,100
575,690599,575
626,225654,186
692,524733,790
773,934
819,008
865,096
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Charitable Giving
Giving behavior is not changing
Our generosity as a nation is driven by our resources as a nation
Competition for donations is growing
Beyond The Numbers
The contributor “pie” is about the same• Contributions will tend to be “shifted” from one area
to another
Individuals have more causes to which to contribute• Causes are becoming more and more individualistic
• Some level of consumerism will appear– “What have you done lately” syndrome– Clarity in purpose is needed
• Not just at the national level, but at the local level
• Aside from research dollars, donors may want to see more dollars allocated for local efforts
There is a movement of financial firms into philanthropy
Increased importance of professional advisors
What Others Are Finding…
Operating model has to change• How do we engage and manage multiple constituents across
multiple channels?– Must agree on the primary “customer” (Donor,
Foundations/Corporations, Chapters, Recipients, etc.)
Organization and governance as to be evaluated• Are we working as a team to solve key “business” challenges
• Are we structured properly to execute efficiently?
• How do we make decisions as a “system” to show a unified front to various constituents?
• How do we define success?– Revenue generation– Maximizing use funds raised– Creating higher level of impact for the cause
What Others Are Finding…
Demand for “localized” accountability for chapters as individuals request more of their contributions stay “at home” for local programs
Increased need to better educate donors on local vs. “Association” contribution
Requirement to better understand the needs, values and expectations of donors
• Will impact systems and technology
• Direct Marketing/Fundraising
Focus on Finance
Finance’s role in leading
the organization through change…
It’s not just about the bottom line.
Best Practices – Finance Leaders
Business Leadership• Approach everything from the “business perspective”
– Pragmatic about execution of programs, plans and initiatives– Asks the difficult ‘show me’ questions
• “Can we realistically expect that many new donors…?”• “I don’t see how the users of this system will gain the value
anticipated…”• “Have we really had enough time to prove the value of...
that fundraising offer, that data, or that screen design”
• General Planning– Provides guidance and direction on programs, marketing and
technology investments– Helps determine the actual costs of programs, as well as
fundraising campaigns• Goes beyond basic math…really gets to the heart of the real
cost, no matter how difficult
Best Practices – Finance Leaders
Budget Leadership• Key process – “Top down” approach
– Provides base data and assumptions to “departments”• Built on program needs, admin costs, projected growth
in other costs
– Conservatively estimates revenue growth based on input from fundraising and other sources
• Finance sets the published figure for revenue– Usually far more conservative than Fundraising’s
• Fundraising folks will still try to meet their target (wo-hoo!)
– Generally assumes costs for fundraising and technology are accurate as provided
Best Practices
Compliance Management and Support• Keep the organization honest about the numbers
• Help the organization understand and meet guidelines
(CBBB Standards/BBB Wise Giving Alliance)– Particularly important for those marketers/fundraisers
to understand!
Best Practices
Reporting and Analysis• Forecasting
– Revenue– Cost
• “True Cost” of programs and/or campaigns
• Donor Value– Cost of acquisition– Long-term value of a donor
Questions?
Thank You!
Dave HarkinsVP, Director of Strategic Services
The Jackson Group
[email protected]: 630.820.2087
5804 Churchman By-Pass | Indianapolis, IN 46203 | 1-888-Jackson | www.jacksongroup.com