Fundraising and Philanthropy

Not-for-profits use electronic technology to raise funds

June 8, 2009

Most of us wouldn't drop what we're doing to show our friends a form letter that included our names in the salutation.

A personalized video, on the other hand, might make an impression. That's what Butler University found out in a recent fund-raising experiment.

The Indianapolis liberal arts college e-mailed a video to 20,000 potential donors with the subject line, "You are making headlines at Butler." In the video, an actor approaches several people on the street and asks, "Do you know who the key to Butler's future is?" Each person replies by pointing to a prop--a Time magazine cover, a billboard or a T-shirt--emblazoned with the e-mail recipient's name.

"I thought it was very clever, and very cute," Butler alum Linda Broadfoot said. She and two other colleagues who work at Keep Indianapolis Beautiful received a video.

"We all commented on how funny it was," Broadfoot said. "We all watched it. We forwarded it to people."

Fund-raisers are experimenting with all sorts of electronic solicitations these days. They don't know yet whether their use of eye-catching technology will result in a net gain in giving.

Traditional media come with long-established benchmarks, Indianapolis consultant Mike Laudick of Laudick/Brown & Associates said. For example, direct mail sent to people who've never given will cost $1 for every dollar raised. The cost drops for repeat donors, Laudick said. Direct mail sent to people who've given before can raise $5 to $10 for every dollar spent.

"I've not seen anyplace where there's acceptable cost-per-dollar raised on some of these new media things," Laudick said. "Clearly, with all these activities, you have to net some money."

Erica Altuve, senior director of annual giving at Butler, said her goal was to get attention, and the video accomplished that.

"We've received very, very positive feedback," she said. "We've received feedback from people we did not send the appeal to."

Butler hired Pursuant Group, a full-service fund-raising firm based in Plano, Texas, to produce the video. It was e-mailed to alumni, parents of students, and past Butler supporters. The video was a complement to other forms of solicitation, all of which carried the theme, "You are the key to Butler's future."

Altuve declined to say how much the experiment cost, but she said Pursuant provided a break-even guarantee.

Video appeals are common among organizations that have staff with the expertise to mount such campaigns or the resources to hire professionals.

The Indianapolis Museum of Art in April sent its donors a video of CEO Max Anderson talking about the museum's financial woes.

It was the first time the IMA had put Anderson in front of a camera to make a direct appeal.

"We heard back from some of our best donors, our closest friends that were kind of proud we did it," Development Services Manager Gabie Benson said.

The video was e-mailed at the same time the IMA sent out traditional mailers, Benson said. She was pleased that 28 percent of the 15,000 people who received the e-mail proceeded to open it.

"It takes some time for non-profits to get a strong, immediate response from e-mail solicitations," said Benson, who formerly raised money for the Indiana University Foundation.

As more e-mail goes unopened, Benson thinks video has the potential to at least get attention.

"The message is certainly the most important thing," she said. "You have to tell a story. You have to tell it really, really quick."

With an entire new-media staff at the museum's disposal, Benson said she would expect the IMA to make a video-based appeal at least once a year.

Altuve said she'll be looking closely at the return-on-investment from the Pursuant production.

Butler set out to raise $1.8 million in unrestricted donations in the fiscal year that ended May 31. Old-fashioned direct mail and student telemarketers will likely bring in the bulk of that money.

In Altuve's opinion, phone calls from students are the most effective means of fund-raising en masse.

"Students have the opportunity to share with loyal donors why their gift is so important, in their own personal stories," she said.

Electronic solicitations will continue to be part of the mix, especially as Butler goes after the hard-to-crack category of people who've never given.

"It's always more expensive to acquire new donors," said Mark Helmus, vice president of university advancement.

One drawback to e-solicitation is that the novelty wears off before it can be tested multiple times.

Jonathan Purvis, executive director in the IU Foundation's Office of Special Gifts and Annual Giving, first saw personalized video used by the Obama campaign in a get-out-the-vote drive.

"That particular technology is still fresh and relevant," he said. "One more round, it won't be novel anymore."

While always trying to stay ahead of the latest wave, Purvis said e-solicitation can't be "so gimmicky that it trivializes the philanthropic purpose."

Even the principals of Blue State Digital, the firm that aided Obama's online fund raising, will point out that technology doesn't work unless the audience is interested in the message, Purvis said.

"What really will always cause an individual to support an organization is [that] their values are aligned with the institution," he said.

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