DEVELOPING A NATIONAL STANDARD FOR FUNDRAISING METRICS FOR CATHOLIC INSTITUTIONSA Bold Call to Action

Presented By Gregory J. Griffin, Sisters of St. Francis of the Neumann

CommunitiesSarah O. Hanley, The Catholic Foundation of Greater Philadelphia

Daniel McCormack, Hospital Sisters of Francis Foundation

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COMMITMENT TO LEAD

This presentation:• Is not a prescription on how to fundraise• Or a treatise on fundraising ethics

It is

A call to live up to our obligation as members of our association, the National

Catholic Development Conference

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NCDC MISSION STATEMENT

Our MissionNCDC is the fundraising resource for Catholic organizations and their sponsored ministries, providing education, advocacy and leadership.

The National Catholic Development Conference is the United States’ largest membership association of charitable religious fundraisers. Our nonprofit membership consists of religious communities of men and women, shrines, social service agencies, schools, parishes, dioceses, seminaries and international relief agencies. Corporate partnership is available to businesses wishing to promote the interests and purposes of the Conference.

NCDC affirms the mission of each of its member organizations by working for and with them in the context of fundraising as a ministry

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OUR MORAL IMPERATIVE

What are we asking for?• Commitment from every NCDC Development

Director to calculate Return on Investment (ROI), Cost to Raise a Dollar (CRD), and Institutional Fundraising Value (IFV) annually using a consistent set of criteria.

• Take a leap of faith that your calculations (good or bad) will ultimately help to raise the standard for all Catholic fundraisers.

• Share results with NCDC to build the national standard for Catholic Institutions.

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BUILDING THE STANDARD

Why?1. It is an opportunity to build trust and

engagement for our ministry of development from our communities’ Leadership.

2. There isn’t any reliable or comprehensive fundraising “watchdog” group truly measuring Catholic Fundraising.

3. We can immediately increase transparency for Catholic donors everywhere.

4. We will greatly strengthen our development programs.

5. This is what our Association, NCDC, does!

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RETURN ON INVESTMENT AND COST TO RAISE A DOLLAR

What is ROI and CRD?

ROI = Total Fundraising Revenue / Total Fundraising Expenses

CRD = Total Fundraising Expenses / Total Fundraising Revenue

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CHALLENGES TO DEVELOPING ACCURATE INDUSTRY STANDARDS

Challenging to be accurate:• Every fundraising institution is different

• Variables include:• Type of Institution• Age of Institution• Fundraising Approach• Accounting Practices• Institutional vs. Departmental

• Lack of History• Competition and Honesty – Charity

Navigator/Guidestar/Wise Giving Alliance

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INDUSTRY STANDARDS

The AAFRC Trust for Philanthropy - CRD $.20 AFP - CRD range of $.20 - $.45. BBB Wise Giving Alliance – No more than $.35Charity Navigator – No more than .$35

Less than 10% of all of the charities rated by “watchdogs” such as Charity Navigator,

Guidestar or Wise Giving Alliance are categorized as religious (much less Catholic)

charities.

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WHY NOT CATHOLIC OR RELIGIOUS ORGANIZATIONS?

From Charity Navigator’s Home Pages “What Kind of Charities Do We Evaluate?”

We do not evaluate charities that are exempt from filing the Form 990. Many religious

organizations, like the Salvation Army, are exempt under Internal Revenue Code from

filing the Form 990. As a result, we lack sufficient data to evaluate their financial

health.

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WHAT COUNTS IN DETERMINING ROI?

Total Annual Gift Income – Every dollar that is counted as a “gift” to an organization including realized planned gifts, annual gifts, special events sponsorships, gift pledges made only in the year they are secured, major gifts –restricted and unrestricted – comprise this number. If an organization is recording it as a gift, then it is counted toward this number.

  Total Annual Fundraising Operating Expenses –

Every dollar that is directly spent on fundraising efforts including administrative costs, salaries, benefits for paid staff, travel expenses, continuing education and determinable overhead costs such as telephone, Internet, and office equipment comprise this number.

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INTRODUCING INSTITUTIONAL FUNDRAISING VALUE (IFV) AND COST (IFC)

What is it? • Metrics that look at the bigger picture• ROI and CRD provide insight into how

effective a program is within itself (cost x to raise y)

• IFC and IFV provide insight to what impact fundraising has on the overall institution (fundraising costs x towards institutional expenditures of y and fundraising raises x% of overall institutional revenue of y)

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INTRODUCING INSTITUTIONAL FUNDRAISING VALUE

How are they calculated? 

Total Fundraising Expenses /Total Institutional Expenses = Fundraising Cost

to an Institution (IFC)

Total Fundraising Revenue/Total Institutional Revenue and Support = Fundraising Support to an Institution

(IFV)

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COMPARATIVE METRICS VALUE TO US

• Providing Appropriate Perspective to Leadership

• A Part of the Whole Picture – This is bread and butter – Where is your value added?

• Programmatic ROI and CRD excellent way to manage fundraising efforts.

• Support for Additional Investment in Fundraising

• Stronger Case to donors and prospects.

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CASE STUDY #1

Sisters of St. Francis of the Neumann Communities - 430 vowed women religious in 5 primary

regions, covering 13 states and two countries.

- Congregational offices in Syracuse, NY- Formed in 2004 - Historically, shared the same Franciscan

heritage that grew out of a Franciscan congregation founded in 1855.

- Congregational Mission Advancement started in 2009.

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HOW ARE WE DOING OVERALL?Year Total

Fundraising Revenue(in millions)

Total Fundraising Expenses

Return on Investment (ROI)

Cost to Raise a Dollar (CRD)

Total CongregationalOperating Budget(in millions)

Total Congregational Revenue(in millions)

FundraisingExpenses as a % of Overall Operating Budget

Fundraising Revenue as a % of Overall Congregational Revenue

2009 $949,077 $422,579¹ 224% $.44 22.8 34 1.8% 2.7%

2010 $1.44 $564,787 250% $.39 23.9 26.7 2.3% 5.3%

2011 $2.15 $630,985 341% $.29 24.6 10.7 2.5% 20.1%

2012 $6.7* $755,385 882% $.11 24.5 27.6 3.0% 24.1%

2013 $2.58 $855,140 302% $.32 23.1 25.4 3.6% 10.1%

2014 $2.49** $756,981 328% $.30 22.1 17.6 3% 14.0%

* Includes Over $5 million in Estate Gifts** All gift revenue plus full pledge amounts for multi-year gifts made in 2014¹ 2009 – 2012 MA Expenses do not account for Total MA Expenses in these years due to some expenses being logged in congregational administrative

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COMPOSITION OF TOTAL GIFT INCOME

2009 2010 2011 2012 2013 2014

Gift Income 903000 1070000 1530000 1630000 1970000 1640000

Bequests Real-ized

46077 370000 620000 5070000 606000 901000

$500,000

$1,500,000

$2,500,000

$3,500,000

$4,500,000

$5,500,000

$6,500,000

$7,500,000

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2009 2010 2011 2012 2013 20140.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Fundraising Income as a % of Total Congregational IncomeLinear (Fundraising Income as a % of Total Congregational Income)Fundraising Expenses as a % of Overall Operating BudgetLinear (Fundraising Expenses as a % of Overall Operating Budget)

GIFT INCOME AND EXPENSE TO TOTALS

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BEING GOOD STEWARDS OF SOSF FUNDS Investing in our future

Mission Advancement Ministry Staff – 2010 – 5 Full-Time Lay Professionals (Coverage in 3 regions, no

congregational center) 2015 – 6 Full-Time Lay Professionals, 1 Half-Time (coverage in all

regions, congregational center including database coordinator) Technology – Investment in Raiser’s Edge (one-time set-up

expense, annual renewal), Target Analytics (one-time set up expense, annual renewal), RE Training (annual subscription)

Assessment and planning – Campaign Feasibility Study by George Ruotolo and Associates (2013)

Marketing and Communications – Largest area of annual increase due to skyrocketing mailing and printing costs, increased active donor base, increased number of mailings per year

Building our constituency – Acquisition Mailing Programs run in East Coast (2013) and Hawaii (2014)

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BEING GOOD STEWARDS OF SOSF FUNDS

Initiated detailed operating budget process with MA staff in 2011.

Review every program, every year to streamline, cut or maintain costs without compromising quality and effectiveness of programs.

* Example: Segmentation and Mail Frequency

Collaborate with the Business and Leadership Team to determine final annual operating budget numbers.

Work with Business and Finance throughout the year to manage MA budgets

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Mission Advancement – Advancing the Mission

• Intentional , Aligned, and Integrated • Supporting the Strategic Priorities of the

Congregation• Presence sustainer to our external

populations• We are a ministry• Our Mission Advancement model best

supports our ability to effectively steward congregational initiatives

• Fundraising is an important outcome of what we do

MISSION ADVANCEMENT – WHO ARE WE?

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Mission Advancement – Traditional Value• Award-winning congregational newsletter• Constituent-specific programs for planned giving, major

giving, annual giving, corporate giving, foundation support

• Robust schedule of annual regional special events including a day of thanks to our Benefactors

• Sophisticated and robust donor acknowledgement program

• Evolving use of web, social media, technology to enhance our fundraising presence

• Well managed database that has grown from 14,000+ active records to close to 30,000 active records in 4 years.

• Single, congregational voice to our external audiences

MISSION ADVANCEMENT - SO MUCH MORE THAN JUST DEVELOPMENT

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• Strategic Planning support/facilitators for congregational initiatives, programs and ministries (Stella Maris, St. Marianne Cope Shrine and Museum, Vocations, “Enlivening our Chapter Directives,” Aging Services)

• Research support for congregational initiatives, programs and ministries (Museums and Shrines, vocations, merchandising programs, Associates programs, retreat centers, prayer enrollment programs, etc…)

• Consultative support for congregational initiatives, programs and ministries (Change a Heart, SMC canonization, Leadership issues and initiatives such as preparation for SMC remains and SMC Museum move, Jeffrey House sale, Hawaii residential discernment preparation, Mid-term assembly preparation )

• New program initiators (merchandising program, SMC 175th anniversary, congregational benefactor day)

• Sister engagement (through programs and initiatives, direct communications through presentations, publications, and participation in regional and congregational committees)

PROPHETIC ADVANCEMENT – VALUE ADDED PROGRAMMING

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OBSERVATIONS FOR US Since the congregational mission advancement program was

launched in 2010, we have trended toward annual increased Return on Investment and decreased Cost to Raise a Dollar.

In 2013, several one-time investments in consultants to conduct a congregational feasibility study a direct mail acquisition mailing and a comprehensive prospect screening accounted for over 60% of expenses. Despite these expenses, our ROI and CRD were still relatively strong.

These numbers do not include value enhancing functions that our ministry plays including strategic planning, program research, new program initiation and consultative services.

As our congregation continues to age out of active-paid ministry, mission advancement will become more integral to income generation for the community.

We are constantly preparing for that. As a percentage of overall expenses vs. income generation for

our congregation, Mission Advancement programming is an excellent investment and getting better!

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TAKEAWAYS

• Clearly articulated the value of advancement efforts to the community.

• Reassuring Leadership that investments in Mission Advancement were paying immediate dividends while incurring minimal cost to the congregation.

• Reinforce the comprehensive value of advancement efforts to the congregation beyond fundraising

• Pave the way for increased funding for programs and initiatives in the future.

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CASE STUDY # 2

The Catholic Foundation of Greater Philadelphia

The Catholic Foundation of Greater Philadelphia (CFGP) exists to serve the mission of the Catholic Church for the betterment of the lives of people in Southeast Pennsylvania. Providing donors an avenue to fulfill their charitable goals

through Catholic projects, programs, organizations Providing parishes, ministries and Catholic organizations

the tools and the structure to develop additional resources and support.

The Catholic Foundation of Greater Philadelphia (CFGP), an independent 501(c)3 nonprofit organization, stewards and manages gifts from donors to ensure they are used for their intended purpose.

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NUTRITIONAL DEVELOPMENT SERVICES In November 2013, Nutritional Development Services was

about to lose much needed government funding. The Catholic Foundation of Greater Philadelphia saw this immediate need and created a targeted mailing to raise funds for this immediate need. This special appeal provided supplemental funding for essential

programs provided by Nutritional Development Services (NDS).

NDS provides close to 7 million meals per year. The CCA provides funds for NDS programs as well, such as the Community Food Program. This program encourages people who have food, or access to

food, to share with those who do not. The program is currently in the five county Philadelphia area,

funded with private gifts, individual gifts, and the CCA. Those at NDS do envision themselves recreating miracles of

loaves and fishes, striving to meet many needs.

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NUTRITIONAL DEVELOPMENT SERVICES The Community Food Program of Nutritional Development

Services serves as a vehicle for parishes, schools, businesses and other community organizations to provide food for the hungry.

Gifts from this special appeal have enabled NDS to develop a strategic plan to broaden their impact further across the community by increasing deliveries, as well as making these deliveries larger.

There are three projects being planned:

A small community garden at St. Thomas Aquinas Parish in Philadelphia.

Support for Veteran Families program, which aids veteran men and women who are being integrated into the community.

Kensington Visitation Center “Eat healthy, live healthy” food pantry initiative.

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THE NDS APPEAL

CFGP developed a targeted mailing to specific previous donors to CCA, with a fundraising goal of $250,000. This mailing addressed a specific need. One letter was sent using a tear-off pledge card

and return envelope. This tailored mailing drove ROI and effectively

utilized minimal funding to produce and send.

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RESULTS In under two months, $457,000 was raised or 183% of the

$250,000 original goal. The overwhelming success enabled NDS to launch the three

projects previously outlined.

Raised $457,000 – spent $41,000 for mailing (printing, postage, staff resources)

ROI 457,000/41,000 = 1115%

CRD 41,000/457,000 = $0.0897

Due to the strong results, the leadership and staff of NDS requested that CFGP run a similar special

request again in 2014. This mailing has achieved similarly robust results.

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CASE STUDY #3

Hospital Sisters of Francis Foundation

Hospital Sisters Health System (HSHS) comprises fourteen hospitals in Illinois and Wisconsin Five hospitals > 200 beds Three hospitals < 25 beds

Hospital Sisters of St. Francis Foundation (“Foundation”) is the philanthropic arm serving all HSHS hospitals. All fundraising revenue, related expenses, and transfers

to hospitals are administered by the Foundation Assets are pooled for investment purposes, but each

hospital’s funds are accounted for separately Local philanthropy programs are advised by a volunteer

council at each hospital

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WHAT ROI LOOKS LIKE (I THINK)

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HSHS FOUNDATION EXPERIENCE Annual Giving and Special Events, punctuated by

periodic bursts of campaign activity:CTRD ROI

Campaigners: $ 0.16 / 625%

Non-Campaigners: $ 0.38 / 263%

Post-campaign CTRD frequently climbed to > $0.50

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WHERE WE WENT WRONG…

Advisory Board Benchmarking Study

…AND HOW IT HURT US

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WHAT WE WANTED TO AVOID

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AHP BENCHMARKS

© FY2012 AHP Report on Giving USA

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CASH VS. PRODUCTION Cash includes the current market value of outright

gifts (made in any form) plus current-year payments from the previous year’s pledges, planned gift maturities, bequests and marketable securities.

Production represents all outright gifts of cash (excluding payments on pledges from previous years) and new gift commitments made in the reporting year. New gift commitments effectively combine all new pledges and letters of intent (including revocable gift commitments) and the current market value of irrevocable planned gifts.

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COMPARING APPLES TO APPLES

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SETTING THE FLOOR All local foundations will achieve a $0.33 CTRD over a

five-year rolling average.

Local foundations that fall below the threshold in any year must present a recovery plan for review and approval by the Foundation board.

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MONTHLY SCORECARDS

June FY 2015Jun 1Q 2Q 3Q 4QFY FY FY FY FY

2015 2015 2015 2015 2015

Contribution & Bequest Revenue (000's) $1,530 $2,103 $3,519 $1,567 $3,471 $10,660 $10,565

Cost to Raise $1.00 $0.20 $0.39 $0.27 $0.61 $0.29 $0.35 $0.32

Contribution & Bequest Revenue (000's) $288 $451 $916 $534 $1,128 $3,029 $1,903

Cost to Raise $1.00 $0.17 $0.31 $0.18 $0.31 $0.16 $0.21 $0.38

Contribution & Bequest Revenue (000's) $277 $412 $823 $418 $689 $2,343 $1,638

Cost to Raise $1.00 $0.14 $0.27 $0.17 $0.32 $0.21 $0.23 $0.35

Contribution & Bequest Revenue (000's) $11 $39 $93 $116 $438 $686 $264

Cost to Raise $1.00 $0.93 $0.72 $0.33 $0.25 $0.07 $0.17 $0.56

FY2014

Metric Metric Goal GoodFYTD2015

LOCALFNDNS

FY15: $10,722.8

FY15: $0.37

EWD

FY15: $1,953.9

FY15: $0.29

SNS

FY15: $280.9

FY15: $0.43

SMGBSVGB

FY15: $1,673.0

FY15: $0.26

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WEEKLY FLASH REPORTS

Q-C-C-S = Qualification, Cultivation, Commitment, Solicitation

REMEMBER: Revenue is a consequential metric. You need to

pay attention to process inputs, not just outcomes.

AUG Production Goal Variance % Next month 1Q Goal Gap to 1Q Gifts

BookedQ-C-C-S Actions

SEB 1,770$ 260,810$ (259,040)$ 1% 334,810$ 812,430$ (756,120)$ 204 6 SJB 772$ 875$ (103)$ 88% 875$ 2,625$ 2,879$ 73 1 SMD 58,670$ 40,000$ 18,670$ 147% 22,000$ 107,000$ 56,676$ 35 7 SAE 2,771$ 44,050$ (41,279)$ 6% 18,230$ 121,560$ (90,742)$ 242 4 SJH 27,325$ 12,225$ 15,100$ 224% 27,225$ 41,675$ (10,890)$ 9 7 SFL 9,397$ -$ 9,397$ NA 500$ 500$ 11,969$ 72 - SJS 71,241$ 239,600$ (168,359)$ 30% 126,500$ 681,600$ (564,893)$ 284 22 SMS 145$ 540$ (395)$ 27% 340$ 1,570$ (966)$ 3 - SJCF 17,990$ 16,520$ 1,470$ 109% 13,670$ 44,360$ (15,681)$ 181 32 SHEC 63,214$ 48,025$ 15,189$ 132% 53,525$ 157,075$ (75,594)$ 273 32 SVSM 153,688$ 62,567$ 91,121$ 246% 124,567$ 341,399$ (83,166)$ 685 13 SCO -$ 5,085$ (5,085)$ 0% 5,085$ 50,344$ (50,344)$ - - SNS 78,943$ 238,150$ (159,207)$ 33% 168,450$ 539,550$ (346,579)$ 155 6 TOTAL 485,927$ 968,447$ (482,520)$ 50% 895,777$ 2,901,688$ (1,923,450)$ 2,216 130

CURRENT: 08/20/15 11:00 am LOOK AHEAD

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A CALL TO ACTION

• An Individual Moral Imperative• A Collective Expression of Commitment and

Leadership• A Path to Greater Excellence in Catholic

Fundraising• A Service to our communities and our God!

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Fundraising is, first and foremost, a form of ministry. It is a way of announcing our vision

and inviting other people into our mission

As a form of ministry, fundraising is as spiritual as giving a sermon, entering a time

of prayer, visiting the sick, or feeding the hungry.

- Henri Nouwen