The Stanford solution.

Stanford started quite the commotion when they announced the end of their telefund program a few weeks ago. This bold move has initiated an important dialogue regarding the future of phone programs in development offices. But before you go pulling the plug on your telefund program, there are some important items your organization should consider.

Telefund Program Considrations

There are some considerations before pulling the plug on your telefund program.

Evaluate life without phoning.

It appears that Stanford evaluated all of the available data and made its decision. The risk for Stanford, or any other institution making this decision, is that they likely didn’t have data from a period of years with no calling at all (not just the removal of a segment). In other words, they deduced that, because of the reduced connection rates, the negative comments and scores on surveys, and any other data points they had, eliminating the phone program made sense. But there was no control in that test. These next few years will be informative in terms of acquisition and entry of new donors into the pipeline. In the future, what will it take to reverse this decision if an institution determines it hurts their fundraising program?

Remember that Stanford is in a unique situation.

It is critical to note that Stanford seems to adopt non-alumni as well or better than any other institution. This is important because phonathons are typically an acquisition tool and the first entry point for many alumni or marginally connected constituents. Stanford may not feel any pain in acquisition for a number of years, and maybe they will never feel the effects because they adopt non-alumni donors so nicely (not to mention they raised $1.6B in FY16). That being said, most institutions need to look at the relationship between the acquisition of new donors and future major gift prospects and donors. Other channels, such as direct mail, email, and social media do not acquire new donors as effectively as the phone. Ultimately, that is why all other institutions should be very careful in drawing conclusions based on Stanford’s decision. Large and small, public and private alike, few or none have exhibited the skill in generating such significant gifts from individuals who have no connection to their institutions as Stanford has. That makes virtually every other place vulnerable to the negative effects of this decision in ways that Stanford might be immune.

Think about objectives and metrics—determining direction and ROI.

Before making any decision about a program, consider what the objectives are and how you are measuring outcomes. Most institutions use phonathons to acquire new donors, potentially upgrade existing donors (especially previous phonathon donors), and engage tough segments. We know acquisition is expensive, but how much is your institution spending on it? If you calculate the cost and study the success rate of different channels for your institution, that may help you make your decision. If you outsource your phone program to a vendor, keep in mind that you should still guide the strategy you want used. Too often, institutions outsource their calling program and stop paying attention. Phonathon vendors need to be actively managed by the institution. The vendors have experience, but what metrics you use and what your institution’s objectives are might be different. The institution should be looking at the data and determining who they are calling and for what reasons.

Remember the strengths of a telefund program.

When reviewing your telefund, remember that these programs have a long list of strengths, many of which aren’t necessarily measurable by a simple look at ROI. As mentioned above, phone programs are typically the cheapest and most effective option for donor acquisition. Additionally, they play an important role as a part of multi-channel approaches when paired with e-solicitation, social media, direct mail, and personal solicitations. Phone programs have proven success at upgrading donors to higher giving levels and acquiring second gifts in a fiscal year. And finally, they are a terrific opportunity for your program to thank donors, to learn about their motivations and attitudes, to identify leadership annual gift prospects, and even identify and qualify major gift prospects.

Phone programs are not going away quite yet, but rather the purpose and value is evolving. If your institution is discussing doing away with the phone program, take a moment to review what the current objective of your phoning program is, and then ask what it should be. While we often hear about a dinner being disrupted, we also hear stories of true connection and engagement.

Bentz Whaley Flessner’s annual giving team has experience navigating these tough questions about the benefits and challenges of calling programs. Our integrated analytics specialists ensure our advice is grounded in data. Contact us today to discuss assessing, launching, or revitalizing your annual giving program. Together, we transform philanthropy.

BWF Client Advisory originally published October 26, 2016

Copyright © 2016 Bentz Whaley Flessner & Associates, Inc.

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