Our own Jay Love recently joined Andrea Kihlstedt on her excellent Capital Campaign Masters series to discuss the role a donor database plays in capital campaign planning and execution.

You can listen to the full discussion below:

Full Transcript:

Andrea: Thank you so very much for being with us today. This is Andrea Kihlstedt and we are talking about your donor management system and whether it’s up to the capital campaign challenge. We have today with us Jay Love, who is the cofounder and CEO of Bloomerang. Let me tell you just a little about . . . Jay, are you there?

Jay: Yes, I am.

Andrea: Nice to have you with us, Jay.

Jay: Delighted to be here today, Andrea.

Andrea: Thanks. Let me tell you just a little about Jay. Jay, I believe I would call him a serial entrepreneur or a serial founder. He is a guy full of ideas who not only has ideas but then takes them seriously, gets the best people in the world and moves them forward with services and products that are really great for the field. Jay was the founder of eTapestry and I think you ran that for about 10 or 11 years. Is that right, Jay?

Jay: Yeah, actually 13 years in total.

Andrea: Wow. That was really groundbreaking in the field. I remember when eTapestry started. There was nothing like it. And then you, I guess, sold that and went on to create Bloomerang. Is that right?

Jay: Yes. Absolutely. There were a few years in between there where I was involved in outcomes management as CEO of a company called Social Solutions, which was based in Baltimore, Maryland, that was the leading outcomes measurement tool and outcomes management tool for nonprofit. So, it was really nice to get a chance to view the mission side of the work and then, of course, my real love has always been with the fundraising and with campaigns and things like that. When I had the opportunity to work with some really neat industry experts to create Bloomerang, I said, that’s where I need to be next. So, it’s been a lot of fun.

Andrea: Fantastic. I’m particularly excited to have you on this call because not only have you created these organizations for the field, these donor relations organizations, but you’ve also chaired or co-chaired with your wife at least one capital campaign, so you know what this field is.

Jay: Yes, very much so. We’ve done one capital campaign and one endowment campaign. My wife was executive director of the fourth-largest public school foundation in Indiana. She did that for 13 years. We in Indiana have this wonderful group called the Lilly Endowment that challenged all the public school foundations to raise endowment funds and they would do a match for that. Her foundation was the very first one to achieve the full match level for that. So, that was our first experience with doing that with all their donors and moving many of them into a major donor level.

Then we got asked to co-chair the YMCA Central Indiana capital campaign for the building of a new building. That was even more enlightening. Then I got to serve on the campaign committee not as the chair but the campaign committee for our food bank here, Gleaners Food Bank. It was a $14 million capital campaign that finished with $17.5 million and a brand new facility out near the Indianapolis Airport that people are still just sort of raving about. It’s been a lot of fun seeing those items all unfold.

Andrea: Wow. Well, you are certainly the appropriate guy for this group given that most of the people that we’re involved with are either planning a campaign or in the middle of a campaign or wrestling with a campaign or finishing a campaign, that’s our meat and potatoes. So, thank you so much for being with us today, Jay, and hi to all of you who are here on the call with us.

Let us sort of dive into the subject matter with this image. Just to let you know, Jay, every time I think about donor management systems, this is sort of the way it makes me feel. It’s like I know they’re important. I know they matter. But boy, are they ever not my thing. Maybe I’ve never worked with them enough, but I’m really happy to have you here to help make them more friendly to me and perhaps for other people on the call.

Jay: That word “friendly” and” useful,” we’ll see those two permeating throughout our entire discussion here.

Andrea: Yeah, terrific. I’m sure they’re not as scary and overwhelming as I think they are, but here are five topics we’ve crafted today. We’ll go through each of them–donor systems in your campaign, common problems that you see, Jay, what’s new in the field and what’s coming, building capacity through a campaign. That’s a topic that’s hot for me at the moment. Then I thought we’d end, Jay, by you telling us a little more specifically about Bloomerang and heading people in that direction if it’s something that they want to take a look at.

Let’s start out, Jay, by having you tell us a little about what are donor systems like that and how do they function within the context of a campaign or how do you set them up for a campaign.

Jay: Okay. Well, the donor systems really take and become three different hats or three different legs to a stool is how I try to explain it to people. Many people think of donor systems as the pure record keeping system. You’re using this system to keep the records of actual gifts and pledges and when people think of a campaign, you obviously think about the ability to do multi-year pledges so that people can make a larger commitment to do that.

So, you first of all have to have the capacity that you can properly record and administer not only outright gifts, but the pledges and the pledge processing that comes with that.

Now, the second part of that revolves around the daily communications or usage for that. As part of any capital campaign, there’s going to be a wealth of communications, not only after the major gift’s asked or done and you’re trying to reach out and get the campaign out to all the rest of your constituency. There’s going to be written communications, there’s going to be electronic communications, etc.

So, one facet of this is making sure that it’s a system that came take care of all of your written and electronic communications and properly record those and most importantly, know what the prospective donors or existing donors do in the way of their responses to them.

Then the third one is at the beginning of the campaign many times when you’re in that silent phase is being able to have something that’s easy enough to use that your executives and fundraisers are able to go in and record all of the details and notes and all of the facts and information and hopes and wishes of owners regarding any personal phone calls and personal face-to-face meetings hat take place.

We all know as you’re trying to bring out those lead gifts, there’s going to be a lot of personal interaction. I often times see that the donor management systems don’t easily allow that. We have people keeping notes in Word. We have people keeping notes in Excel. We have people keeping notes in an email system like Outlook or something of that nature. Unfortunately then, it’s very hard for everybody to have a quick, easy view of that.

More importantly, it doesn’t set you up in very good shape for keeping those campaign donors and we have them become more loyal annual fund donors or in a case like my wife and I, we were doing a capital campaign for the Y and none of the notes and none of the details from the last capital campaign ten years earlier were available to us.

So, it was almost embarrassing trying to go back to some of the same people that had made lead gifts before. We didn’t really know what their desires, their hopes, their wishes were. If there had been a system that would have been easy enough for everybody to use, that all would have been there and honestly would’ve probably allowed us to do the campaign in about half the time, Andrea, than what it took for us to piece all the pieces together secondhand. It was a really difficult task that way.

Andrea: That’s really interesting. Jay, it’s interesting for me to think about having a system that multiple people, even volunteers or campaign chairs can access. Is that the way you have it set up so that you would then train campaign volunteers, for example, or a campaign chair, they would get trained in using the system?

Jay: Very much so. Since most of the newer systems today like Bloomerang are online systems, you can access it from any device connected to the Internet or the web. So, you can pull stuff up and put notes in via your phone, via a notebook or a laptop or a tablet. So, we don’t find it going out to everybody usually, but we usually find if you’ve got a board chairman, the head of your development or fundraising committee, the campaign chairs, as well as your staff because beyond those key people, most everybody else that’s working in a volunteer capacity is usually working alongside a staff member of your organization of your nonprofit.

As long as that staff member or that executive has access, all of the details from those meetings and notes from those meetings can go in there and do that. It’s really, really important as soon as that meeting is over that you get to a convenient spot and get as much of that information in there because as we all know, the difference between someone making a lead gift of six figures versus seven figures or six figures versus five figures can be is there some aspect of the project that really fits with their dreams and their wishes and their hopes for your organization and for your mission.

That comes sometimes down to very small nuances, as you can probably attest to, Andrea, that people find that it’s important for them to support at that major level.

Andrea: I assume, Jay, that the new systems can give limited access to people. Is that right?

Jay: Yeah. You could have it so that people could only put new information in versus accessing that. Now, I know as campaign chair, I was always given–as co-chair, I was always given a complete record of every financial transaction anybody I was meeting face to face with had ever made for that.

In fact, I would have been somewhat embarrassed to be in front of them without knowing what the giving history of that individual was. I think the people that I was meeting with assumed as campaign chair that I was aware of their past giving and we openly talked about that in most of the meetings that I was associated with to do that now.

I agree with what you’re saying, Andrea, that you’re not going to do this for everybody, like you said, I usually listed that the access was limited to the campaign chair or co-chairs and your board chair and the committee chair for the fundraising committee. Now, some of those positions overlap, but sometimes that could be three or four different people as well as your paid staff. Obviously a consultant in most cases being involved two, one or two consultants that were part of the consultancy they engaged to help them with the capital campaign.

Andrea: Move to the next slide here and look at what are the common problems you see?

Jay: Let’s talk about–there are two that I talk about. It’s accuracy and capacity. Let’s take the easier one first. It’s accuracy. Time and time again, we see people that have a system of some nature, whether they’re keeping names and donation amounts in an Excel file or something they created or they’ve got a commercial system. They’ve never done an NCOA.

They’ve never updated all the addresses so they are deliverable addresses. We know that the average person in this country moves once every seven years. That means over the course of seven years, there can be 75 to 80 to 90% of your database that has undeliverable addresses. So, the only way around that is to do an NCOA process so that you can update that on an annual basis or sometimes even more than once a year to do that.

The other one that I think is very important in a campaign status is making sure we have proper employee information and employer information so you can find out how many of the people you’re talking to or you’re reaching out to for the campaign have an employer that does matching gifts or will supplement that to do it or in the case we found when I was doing the YMCA campaign, if we had a local employer that had 20% of their workforce that was using our facility for wellness benefits, it was very obvious that perhaps that employer should be making a donation too as well as the individual employees.

So, making sure that you’ve got as much information as you can about employer relationships and details about whether or not they match gifts and their giving history is just as important as the accuracy on that. So, those are a couple things that come into play from an accuracy standpoint.

Andrea: What is NCOA?

Jay: That is something that is done with the US Post Office. It’s the National Change of Address, NCOA. Basically they will take an electronic file of all the names and addresses you have on file and tell you if you have a deliverable address or if that person has moved. You know when you move and you let the Post Office know you’re forwarding your mail to another place? That is all available.

They will correct any minor imperfections and they will let you know everybody that has a brand new address so that your mail is actually going to be delivered properly in case you’re not sending everything out first class. If you mail something out first class, you get something back saying it was undeliverable, but if you do it other classes, that doesn’t always come back to you.

Andrea: Now, the other piece that you had, you had accuracy and now capacity.

Jay: Capacity–time and time again, we find that systems are so difficult to use that many times, we’re not talking about the professional fundraiser doesn’t login, but we find that the chief executive of the organization. We all know that if you’re in a campaign and you’re going for the top five lead gifts, you’re probably going to have your CEO in those meetings.

Sometimes it’s going to be private conversations with the CEO without even having the professional fundraiser or the consultant or the campaign chair there. We need to make sure those notes from those meetings with your CEO as well as the professional fundraisers are all there so we know what’s been discussed leading up to the campaign.

For instance, if you know that most of your lead gifts are going to come from your board and that the CEO has had lunch meetings with your board members twice a year for the last five years, it would really be quite wonderful to know what was discussed in those lunch meetings with the board members and whether or not some of the stuff you talked about were subjects that were going to be solved and addressed by the capital campaign.

So, the capacity really comes into play. Hopefully your database is not being held hostage by one single end user or one single database administrator, that everything has to flow in and out of that person because if so, there’s only going to be a limited amount of information that can go in there just due to time constraints if nothing else.

Andrea: Yeah. I can almost imagine everyone on the call sighing. Are you all sighing because your systems don’t have enough of that information? Probably. Yes, Brenda, I’m sure you’re sighing. Probably everybody else is as well. One of the things this addresses for me or raises in my mind, Jay, is coming up with the systems that actually would get all of that into the database or someplace where it would be accessible. Who gets trained to do it? Who’s responsible for doing it? Who makes sure it gets done? Do you have best practices in that for a development office?

Jay: It depends on the complexity of the system that you’re using for that. Most of the brand new systems now, I’m going to guess almost everybody that’s on our call today or listening to it as a recording has a smartphone, an iPhone or something of that nature. They’ve got some phone apps. Well, when you download a phone app, it better be easy enough that I can figure out how to use it without going through six hours of training or else that phone app is not going to get to be used.

Well, most of the newer systems now are designed to operate much like the phone apps, where there’s very little training and it’s sort of intuitive that you know that if you want to look up something and find somebody’s record, this is where you would put information in and things of that nature. So, part of that best practice really comes around having something as I mentioned earlier as we were just entering the call, this extreme ease of use really comes into play so that you can do that, then having it integrated.

So, like right now, if your fundraising system is also your email system, you don’t have to worry. Every time you send an email out, it’s going to record that this is the email you sent, this was the content of the email, this was who opened it, this is who forwarded it to their friends. But more importantly, every single reply that comes back to your constituency, replying that email in one form or another is going to automatically go into the system. So, you have that without doing it.

The same way for having it integrated with your website. If you have it integrated with your website, anytime someone registers for events or makes an online donation or signs up to be a volunteer, all of that should flow in directly without having someone having to retype it.

So, those integrations with your website, with your volunteer system, with your email system, if those are all tied together, then 50% or more of the information you want to have in there is already there automatically and then you can just add the rest as part of your day-to-day work.

Andrea: Now I’m sighing for a different reason, because it sounds like a fantastic way to operate, where things get easy. That’s amazing.

Jay: Yeah. You see so many other industries operating this way. If someone was selling you jewelry online or selling you clothes or anything like that, they all have the systems for every transaction. That’s why Amazon knows us all so well. Every single thing we do with Amazon, they have a record of. They know your likes and dislikes. They’ve taken it to the point where they know what to suggest to you based upon all these electronic interactions all being stored. No one there is functioning as a data entry operator at Amazon. I doubt if they even have a single one anywhere in their employment.

Andrea: Jay, I’m interested in knowing what you’re seeing now. You started with eTapestry. Now you’re doing Bloomerang. What’s next? Where is the field moving? What are you working on?

Jay: I think what you’re seeing is what I alluded to a minute ago is the fundraising database system and your email system are one and the same. Almost every more recently introduced product or service of that nature, those two are combined so that they’re one and the same. So, if you’re updating an email address, it’s going to be updated right in your email system as well as your regular system. So, it’s all there together.

We’re also seeing the complete integration with your website and with your special event registrations and other items that would appear on your website. You’re seeing that. Then of course more and more of the systems are cloud-based so that the vendor that is responsible for providing the system takes care of all the backups and all the restores and you don’t have to worry about that, being able to be cloud-based and online to do that.

And then as I mentioned a little bit earlier, the ability to access most of the system, if not all of it, via your smartphone. So, you could be in your car after having lunch or breakfast with somebody and you can just use your smartphone before you leave the parking lot and put all of your notes in and any of your ideas and thoughts and mark when you want to follow up again next time for that.

So, we’re seeing these record keeping systems becoming more of what we call CRM systems or constituent relationship management. So, we’re managing when we want to follow up with somebody and we don’t have to keep separate calendar systems or we don’t have to try and remember in our mind that, “Oh, I need to schedule to get back with that person in three weeks.”

That will all be part of the notetaking and part of the system so that it’s all tied together. As you can imagine, it keeps everything from falling through the cracks. You can go from where you are managing 20 or 30 or 40 contacts to where any individual can manage several hundred contacts and never miss any steps of the process.

Andrea: Are you working with any of the major gifts people to look at how they might increase portfolios based on your systems?

Jay: Yes. We’ve had the good fortune. We all know that the colleges and universities do a pretty good job of this. They have a fair number of major gift officers for that. We’ve had the privilege to actually work alongside some of the major gift officers at some institutions and just say what are your biggest bottlenecks in your day? What would make your day that much easier?

Because those folks are, even if they’ve got older systems, they’ve figured out ways that all these notes and all these details and next follow ups and stuff are getting into the systems, even if they have to brutally manually make sure it gets in there. Just listening to what they would like to see and have done for them, particularly anybody that’s moved into a major gift officer role from the commercial world, they’ve been out in the commercial world, maybe in a sales or an executive capacity and then they moved into the nonprofit world.

They’re saying, “Why don’t I have the same tools I had available for me a few months ago when I was doing this for this company A, B and C?” Because believe me, every time a Procter & Gamble rep or every time a Lilly Pharmaceutical rep calls on a doctor or a retail establishment, all of the details of what they’re talking about is being kept in a system and it’s telling them when to get back with them and what past orders were like and all. Everything is right there at their fingertips right on their phone or right on their tablet.

We have been operating at such a disadvantage of not having that information there that now we’re seeing that even though we’re five or ten years behind, the systems and their compatibility with the other tools we carry with us are all catching up really, really fast.

Andrea: Yeah. That’s really interesting. I have a question here from Pam from Gunnison, Colorado. She’s the director of the community foundation there. She would like you to talk about confidentiality policies and how cloud-based options open access to donor information.

Jay: We have found that the number of security breaches have gone down significantly via a cloud-based system because it requires proper ID and passwords to get in and the access to that terminates based upon a time lapse for that. So, the old situation where someone logged into a client server-based package to do it and then left to go to the restroom and someone walked by their desk and everything was there in full view, we’re seeing that doesn’t happen where people stay logged in all day or the file servers themselves are not at risk.

I was working with a faith-based organization in Colorado Springs and they had a client server-based system in their office and there were about seven or eight people there. It was the CEO’s birthday. So, they all went out for lunch and did not lock the office doors and someone came in and actually stole the file server, left all of the computers on all the desks. Someone stole the file server from that and had full access to everything regarding that nonprofit’s record. They had over 100,000 donor records that were compromised because someone stole the file server. That will never happen in a cloud-based system for that.

We had another situation where–it’s sort of a sad story too–but it was a private school foundation that was in the Carolinas in North Carolina. They were debating whether to go to a cloud-based system and their board was worried about security and all and they had sent me their data to give them a data conversion quote for that and they had decided not to move forward with it.

The foundation was housed in an older house next door to the school itself and that house caught fire and burned down and they lost all of the central file server with all of the records and all of the backups were destroyed too. Nothing was up in the cloud for that. They called me in a panic mode wanting to know if there was any chance the electronic file they had sent me for a data conversion quote was available.

We routinely keep those for up to 90 days before we totally destroy them too. We were somewhere between the 60th and 90th day when they called me. We were able to totally restore all of their records going back a couple months earlier to do that. That might have been the fastest new system approval for a cloud-based system by a board that I’ve ever seen happen. They had an emergency board vote and moved forward with having that come to the light for them.

So, what the cloud-based does is, as you can imagine, all the things that are in the cloud right now for that, there is double and triple and quadruple redundancy with areas that every precaution that can be made is being done to do that, much more so than most nonprofits, particularly small and medium-sized ones can do in their own office. So, we’ve taken leaps forward to do that.

I often tell the story with eTapestry, Andrea, I was meeting with people–not eTapestry but with Fund-Master before that, software–I was meeting with a group of my end users and I had about 100 of them in Chicago. I was asking them about security. I was saying, “All of you are the system administrators. How many of you have backed up your data any time in the last week?” Out of 100 people, I had like 15 that raised their hands. I said, “That’s great.” I said, “How many of you backed up within the last 24 hours?” Then there were only five that raised their hand for that.

Then I asked the important question, “How many of you have ever taken any of your backups and ever tried to restore them to see if you had usable data?” I had one person in the center of the front row that raised their hand and 99 of those other system administrators had no idea whether their data was ever usable that was there. Just to let you know, most of the vendors in the cloud-based space do that daily.

Andrea: So, there really are two types of security and then I want to move on. But it seems like the type of security you’re talking about and it’s a very important piece is losing data because it’s not backed up or because someone steals the hardware for it.

Jay: Or not protected, yes.

Andrea: Or not protected, right. So, the other kind of issue that I think Pam is interested in knowing and perhaps others are these questions of cyber security, “Are the Russians going to hack our system?” to use an up to date question.

Jay: Absolutely. No system is 100% foolproof. Most of the major vendors utilize what’s called intrusion detection software. What that does is if anybody is trying to intrude and use a robot of some nature to create IDs and passwords in a systematic manner to see if they can figure out how to get in there to do it, that detects it. In our case, if someone tries to do something erroneously more than three times, they are permanently shut out and it takes a person to be able to allow them to come back in to do that. So, it avoids the robot detection to do that.

Still, though, just like we were sort of talking about before, the biggest problem is somebody gives somebody else their credentials, their ID and their password without realizing that they’re giving it. They may have it written on a post-it note on their computer or something and someone’s in their office and that person jots that down and goes someplace else and can log in. That seems to be where we have more data at risk than we’d have from any sort of cyber attacks at the present time.

Andrea: Yeah. That’s a part of training people and raising their awareness.

Jay: Or to use some other password besides their dog’s name or their street address or something like that that we so often find. One of the things that you find most of the systems do is require you to change your password every 60 or 90 days so that you are creating something new and different that is not going to be compromised because each time you change your password, it usually becomes a more difficult one for someone to compromise.

Andrea: Let us move on. This next topic that I’d like to discuss, building capacity, is one that’s a real hot button for me at the moment. I am just in the process of realizing that every capital campaign should include some aspect of capacity building, that it’s a time in the life of an organization where you can get people to do things and to fund things that in the day to day life of an organization, it’s often very difficult to do.

So, one of the clear areas of capacity building, though I think there are several others I wanted to explore, but one of the clear areas is this, setting up, updating, improving donor systems like yours. What is your sense of what might be put into a capital campaign? If an organization were to a say we’re planning a capital campaign and I were to say to them some piece of this should be upgrading your systems, updating your systems, what would you encourage them to do?

Jay: Which happens often. The first thing I would encourage them to do is to take an assessment of what their current needs are. What are the functions they’re currently doing with whatever system they have now, which may be something as simple as an Excel spreadsheet or a more commercially available system, and talk about what are the essential items that we do on a day-to-day basis right now?

And then what are some of the key objectives that we want to do going forward, not so much system-related but let’s say, “Do we want to automate the registration for events? Do we want to incorporate more electronic communications? Do we want to give donors access they can update their information online, which is what a lot of universities and colleges do with their alumni for that? Do we need to integrate it with our volunteer information?”

Once you have those guidelines to do that and the capital campaign time when you’ve got some additional funds coming in is an ideal time to make this come to life is to make sure you know what your current and future needs are and then to engage a few of the providers of those to see how good a fit that you would have for that. They should be able within short order to give you an idea of a budget you can put in place to accommodate that and make that come to life.

One of the nice things about so many of the online systems now, you don’t have a large upfront capital expenditure. It’s more a pay as you go type of approach. So, you can break it out into quarterly or annual payments that takes care of training, supporting the system, converting your data, the day to day usage of it.

Everything can be rolled into one but you pay as you go. It gives you a lot more flexibility. You don’t need as much upfront capital dollars. But it also makes it easier if for some reason you’re not satisfied, you can just sort of stop that payment and you don’t feel like you have a lot of lost dollars at risk there. You can move to something else if it’s not working according to plan.

Andrea: Do you have, Jay, or do you use an assessment form of some sort or some kind of an organized way of helping someone figure out what they need or what they should need?

Jay: Yes. We actually do. We actually call it a needs assessment form. We work with each person that’s going to be touching the system and usually with a 20-minute to 60-minute conversation can fill out what most of those requirements would be and then we usually end up working with their IT or technical staff to see if there are other systems and things that we need to be aware of that there would be appropriate integration points like, “Do you want all of the information from your gifts and pledges to automatically roll over to accounting system or some sort of a financial system?” so that doesn’t have to be entered twice for the organization.

So, that can be done. Usually that fact finding can be done depending on the size of the organization in as little as an hour or up to three or four or five hours to pull those details together.

Andrea: A capital campaign is a great time to start nudging people to do that, factor into capital campaign planning that is specific to this task.

Jay: Yeah. I’ve seen certain formulas that depending on the size of the campaign, anywhere from 1% up to as much as I’ve heard 4% of the campaign dollars could be used to justify some sort of an administrative systems upgrade as part of the campaign itself to do that. You’re right. This is an ideal time to do it. I would guess one out of every four or five of our new installations comes while someone’s either about to enter campaign mode or currently in a campaign mode and needing to make sure they get some better systems to help them reach the success with a campaign.

Andrea: Yeah. That’s interesting. I’m happy to hear that. I am about to start pushing everyone a little more. So, those of you on the call, beware.

Jay: Yeah. It’s an ideal time to do that because there’s an urgency that you’re going to be talking about major gifts maybe more so than you would in a typical year and having the right system, if nothing else, to properly handle multi-year pledges and matching gifts and things of that nature, that really comes to light in the heat of a campaign.

Andrea: What is your part in the marketplace, Jay? What size organizations do you deal with? What’s special about Bloomerang? Before I forget it, I wanted to ask you in terms of what’s new in the field, how and if systems like yours dovetail with prospect research. That was a question I had for you earlier and I forgot.

Jay: Wonderful. Let me take that first. Several of the systems integrate very tightly with prospect research tools. For instance in ours, if you’re looking at a donor record in Bloomerang, there’s actually a button or a link right there that you can click and it will tell you all of the prospect research information for that person at that address.

And in particular the better prospect research companies really do a good job of focusing in on gifts to other nonprofits because we know the second best indicator for a major gift is major gifts to other institutions that are nonprofits. Obviously previous giving to your institution is the number one indicator, but the fact that someone has a philanthropy intent in their family and in their individuality and have made other major gifts to other institutions, it’s great.

My favorite part of demonstrations is that we’ll type in the name and address of a board member when we’re showing the system and you can almost always hear the surprise in somebody’s voice, Andrea, when they find out that a longtime board member of their organization is making a five-figure gift there and they’re making a six or seven figure gift to another nonprofit that they’re not on the board of. That’s always very enlightening the first time someone sees that to do it.

Now, just a little bit about Bloomerang. Bloomerang was created because of the fact that we found so many of the systems were too hard for the average person, the average executive to use. So, we tried to create it to be much more like a phone app and have that type of ease of use. The real reason that we brought it to light besides ease of use, when we realized that most nonprofit fundraisers and executives had no idea what their donor retention rates were.

We wanted to make sure that there was a tool that would immediately show what your current donor retention rate was from year to year and what were the factors that had the biggest influence on improving that because I still remember, Andrea, the first time I really realized that the average nonprofit in this country only retains 42 to 43 to 44% of their donors but the average commercial business retains 90 to 95% of their customers from one year to the next.

I thought to myself, that’s a tremendous gap. What would ever happen if we could lower that gap that we could get at least every nonprofit using a system to get to 50, 60, 70, maybe even 80% donor retention rates from year to year? It would totally revolutionize the impact upon their missions. So, Bloomerang was built to really address that retention problem and part of it was making it so that everybody could use the system that had the desire to and the proper security to use it.

Andrea: And when did you start Bloomerang? Is there an average size of organization that uses it?

Jay: Absolutely. We started it in 2011. So, we are just coming out of our fifth year of operation for that. We focus in on organizations that raise with their fundraising efforts anywhere from $100,000 a year up to $10 million. So, we focus in to the groups that are in that probably 95, 96% of the registered nonprofits in the country that raise up to $10 million on an annual basis for that to see.

Usually, the major universities and other institutions that raise above $10 million are very, very direct mail oriented and we have a good direct mail engine, but not a sophisticated segmenting type of direct mail engine that would apply for organizations that are raising $100 million a year or $50 million a year or something of that nature.

Andrea: Let’s say that a smaller organization were to sign up with Bloomerang. What would that look like?

Jay: Well, the really small organizations–I don’t know any of your folks that you have on the line–any organization that their prior 990 filing was below $100,000, we actually provide Bloomerang free as part of our way of giving back to the nonprofit marketplace. We sort of hope that those people grow to become $2 million and $3 million organizations down the road. But if you’re below $100,000, it’s there. If you’re below $250,000 but above $100,000, we reduce the price of the product by 80%. That allows them to reach that and get into the product without any problem in that regard too.

Otherwise we base it upon–there’s an unlimited number of users. We want as many people at your organization to be using it as possible. It’s just based on the number of records that you have. So, up to 1,000 records, it’s pretty straightforward. It’s $99 a month. And then it stair steps up for every 5,000 or 10,000 additional records that you have all the way up. Our largest customers have somewhere around $250,000 to $300,000 records that they’re dealing with. We work one on one with people and supplement that with short videos.

We have found the most effective training video for us is four minutes or less in length and as we convert data for organizations, we assign a project manager, whether we’re converting something as simple as an Excel spreadsheet or something much more sophisticated like a commercial database for that, that person works with you with a scheduled weekly meeting. We usually try to do 30-minute calls once a week and for the easier conversions, that goes on for three or four weeks. Sometimes for the larger ones, it goes on for 9, 10, 12 weeks.

During each one of those calls, we spend approximately 50% of that call in individualized training, where we log in together and work with a sample database and show you how to do the day-to-day work, which gives you a much better way to know how to test the data conversion to make sure everything is converting over properly for you because invariably, most people use the data conversion time period as a way to clean up their data and a way to do that.

It’s not uncommon if there have been several different users of a system, one person put in the data this way, the next person put it in a little bit differently and all of a sudden, the codes and the meanings for what the various descriptions are can sometimes get a little bit out of whack. We help do that for them.

Andrea: Right.

Jay: The other major difference that we do and it was a dream of mine that finally came true for us is we have an underlying algorithm that creates what we call a donor engagement or a prospect engagement meter. So, if you can imagine, there’s a meter on your screen for every person you look up, much like the gas gauge in your car. We can tell how engaged somebody is.

They can move from moderately engaged to mildly engaged to highly engaged and it’s based upon a combination of about 50 different factors going on behind the scenes. How many interactions and meetings are there? How many phone calls? How many emails? How many times do they visit your website? How long are they on your website? How many committees and boards do they serve on? How many terms have they been there? How many events did they attend?

All of that information goes in. We worked with a gentleman named Adrian Sargeant, who helped us design the algorithm. For instance, we know that if the donor or the prospective donor initiates a conversation or initiates a meeting or a phone call, that has three times the engagement value versus us reaching out and making a phone call to somebody. All of those factors come together that every day on everybody’s database, we’re moving those engagement meters a little bit up or a little bit down for everybody that they have an interaction with.

So, you can imagine if you’re getting ready to do a capital campaign, you can say, “Give me a list of everybody in my database that’s passed the midway point in engagement,” that would be all of your first people that you’d be talking to for different-sized gifts for your campaign.

Andrea: You are tracking donor retention now on your site.

Jay: Yes.

Andrea: I’m wondering if you’ve seen improvements.

Jay: Absolutely. We have around 5,000 active users of our system right now across the United States. We are seeing that the average customer of ours moves their donor retention up about three-quarters of 1% every 12 months. We’ve seen some that have tremendous gains of 10 and 20% and we’ve seen others that are very marginal, but the average is for every 12 months they’ve been using our system that they are moving their donor retention rate up just under 1% a year.

Andrea: And do you give them training on the things they might do to do that or does that tie in to your donor engagement process?

Jay: Yeah. We have something in the system called alerts. We are adding more and more to that right now that tell you. For instance, we will let you know that this donor is within 30 or 60 days, you get to set the filter or even 90 days of about to lapse to see. We also let you know that we know that from like Adrian Sargeant’s best practices that for a brand new donor, you want to have three touches in the first 90 days.

We can let you know that you’ve only had one or two touches instead of having the three. We know that if you move that up to a three-touch minimum in the first 90 days, the chances of that donor becoming a retained donor improve by more than 100%. It’s so much fun bringing it to life too, Andrea, because these are the types of things we see happening around us with so many other tools and I kept saying, “Why is it that professional fundraisers don’t have these at their disposal?” So, we’re doing our best to try to get them there that they can now.

Andrea: If someone is interested in finding out more about Bloomerang or considering that in the context of upgrading their systems, how would they do that? Who would they talk to? What’s the best way?

Jay: Well, it’s real easy. If you just go to any search engine on the web and just type the word Bloomerang, the first five or six things that come up will all be about our business and will take you right to our website. You’ll find that you can pick from a one-minute video or a five-minute video. When you download that video, you get the option of asking if you’d like to talk to somebody or if you’d like for us to leave you alone to watch the video to do that, but if you just type that word in “Bloomerang,” it will pop up there.

If you go to the second or third page of Google search and other search engines, you’ll sort of find that Bloomerang is a very beautiful purple lilac flower. You’ll start finding where you can buy those flowers after you find all of our information there to do it. But it’s a real quick and easy way to find it. All the basic information you’ll want will be right on the front page of our website.

Andrea: Excellent. That’s fantastic. I thank you so very much. It’s been really interesting to hear you talk about this. It further inspires me to do more about capacity building in the context of campaigns. I will certainly be nosing over to your site and looking a little more carefully at what you have so I can use it and be more knowledgeable as I talk to other people who we’re working with.

Jay: Thank you. My contact information is on that website and if anybody has an individual email question they’d like to ask me, I’d be glad to answer that too.

Andrea: Okay. Are you jay@bloomerang.com?

Jay: Yeah, j.love@bloomerang.com.

Andrea: Okay. It’s hard to forget your last time.

Jay: It’s easy to remember. Thank you.

Andrea: Okay. Excellent. Well, thank you so much and thanks to all of you who joined us today.

Kristen Hay

Kristen Hay

Marketing Manager at Bloomerang
Kristen Hay is the Marketing Manager at Bloomerang. From 2018 - 2020, she served as the Director of Communications for the Public Relations Society of America's local Hoosier chapter. Prior to that she served on several different committees and in committee chair roles.