A Case Study in Tripling Fundraising Results

Tammy Zonker, Chief Philanthropy Officer at The Children’s Center of Wayne County (Detroit), recently joined us for a webinar in which she guided us through a case study of a three-year philanthropy operations turnaround, which resulted in 300% growth in net contributions in just 36 months.

In case you missed it, you can watch the replay here:

Full Transcript:

Steven: All right, Tammy. My watch just struck 1:00. Is it okay if I go ahead and kick us off officially?

Tammy: Let’s do it.

Steven: All right. Cool. Well, good afternoon, everyone, if you are on the East Coast and good morning if you’re on the West Coast or somewhere in between. Thanks for joining us for today’s Bloomerang webinar, “Operation Rubber Tree: A Case Study on Tripling Fundraising Results in Just 36 Months.” And my name is Steven Shattuck and I’m the Chief Engagement Officer over here at Bloomerang and I’ll be moderating today’s discussion, as always.

And just a couple of housekeeping items before we get started. I just want to let you all know that we are recording this presentation. I’ll be sending out that recording later today. If you have to leave early or perhaps you want to watch the content later on, review it or share it with a friend, you will be able to do that, have no fear.

Look for an email from me later on this afternoon. If you don’t get that for some reason, if it goes to spam, let me know. I’ll send you the recording again or you can look on our blog. We’ll also post it on our blog in about a week. You’ll also get the slides if you haven’t already gotten the slides. We’ll make sure you get all the goodies from today.

As you are listening today, please feel free to use that chat box right there on your webinar screen. Our guests and I will both see those for the next hour or so and we’re going to try to save some time for Q&A at the end. So do not be shy at all. We love to hear your questions and comments and we’ll try to answer just as many as we can before 2:00 Eastern. And you can follow along today on Twitter. You can use the hashtag #Bloomerang or our username @BloomerangTech.

If you have any trouble with the audio or the visuals here, usually these webinars are only as good as your own internet connection. One little trick we’ve found that works pretty well is to dial in by phone for audio. If you have any trouble with the computer audio, it’s usually a little bit better by phone. So if you can do that and you don’t mind doing that, just check out the ReadyTalk email that went out about an hour ago today. There’s a phone number in it just for you.

If this is your first Bloomerang webinar, I just want to say a special welcome to you folks. We do these webinars just about every Thursday. We have a great guest. Today is no different at all, but if you are not familiar with Bloomerang, our actual core business is donor management software. So if you are in the market for that or if you just want to check us out and learn more, visit our website. You can even download a quick video demo and see the software in action. So check that out if you are interested.
But for now, I am really excited to introduce one of my favorite people. Tammy Zonker is joining us from beautiful Detroit. Hey, Tammy. How’s it going?

Tammy: It’s going great, Steven. Thanks for having me.

Steven: Oh yeah. I would not miss this. I actually saw this presentation delivered live at a conference and I told Tammy, “Tammy, you’ve got to come on Bloomerang and give this presentation because it’s so awesome.”
If you guys don’t know Tammy, you’ve got to know her. She is the President and Founder of Fundraising Transformed. She’s a coach. She’s a trainer. She has led many nonprofit teams to raising a ton of money. I think she’s up to about $400 million raised through her actual employee at nonprofits and her coaching business. In her practitioner role, she currently serves as the Chief Philanthropy Officer over at the Children’s Center in Detroit in addition to running her agency.

And if that wasn’t enough to keep her busy, she also does webinars and speaks at tons of conferences and does private workshops. Tammy, I don’t even know how you do all this and still get the crazy results you do through all your work. I’m glad you do. I’m going to pipe down because you are obviously an expert and an awesome person, so I’m really excited for you to share this case study with us. So take it away, my friend.

Tammy: Awesome. Thank you, Steven. All right. So we are going to talk about Operation Rubber Tree, which was a case study of tripling philanthropy fundraising results in about three years at the Children’s Center in Detroit. And the first question I always get when people come on to a webinar or hear me speak live is like, “Okay, why Operation Rubber Tree? What does that mean?”

The rubber tree is actually this really phenomenal unique plant. It’s a tree that grows incredibly rapidly. It grows to over 100 feet tall and it’s known to grow about two feet or more in a single year. So that was what we were aiming to do at the Children’s Center. We wanted to very rapidly grow our fundraising results.

Some of you may know the song “High Hopes.” I won’t sing it for you here because Steven would cut me off and put me on mute. But the tune goes something like, “What makes that little old ant think he can move a rubber tree plant? Anyone knows an ant can’t.” But it goes on in the chorus, “But he has high hopes.”

And that was what my very small but tiny team of development professionals at the Children’s Center, that was our theme song. Who would believe that this small group could actually triple philanthropy in three years? But it was high hopes and a metrics-driven plan. So I’m going to walk you through how we pulled together the team and the tools that we used and the strategies to accomplish just that.

But first I want to give you a little bit of context about the Children’s Center. Children’s Center is this amazing organization in the heart of Detroit where we serve about 7,500 children and families each year, children who have experienced unimaginable abuse and neglect or some of them come from perfectly loving homes but they have a mental health issue or behavioral health issue and it’s only compounded by the fact that they live in extreme poverty.

So transformational work, amazing work is happening there. We have over 300 employees, operate on about a $27 million budget. When I first came into the Children’s Center as a Chief Philanthropy Officer in June of 2012, they were raising just about $1 million and it was almost all event-based. You all know what that means, right? That’s the most labor-intensive way to raise money. So they were ripe for transformation.

So here’s how the net numbers shook out. You can see that on the first little mound there, the little sapling, that’s what I inherited. They were raising $1,017,000 net. When I say net, it means direct cost, minus direct growth, minus direct cost, which does not include labor. In that first year, we were able to increase it to just over $1.4 million, then $2.1 million and then by that third year $2.5 million. We actually did raise over $3 million, but the way that it landed at the very end of the year, it got pulled over into the next fiscal year. I guess you just have to take my word for that or pull the 990s.

But why was it so important? Why were we so aggressively pursuing fundraising growth? Well, it simply was because we were on a burning platform, very vulnerable place. Between the year 2008 and 2011, the state of Michigan had cut more than $40 million from the mental health budget. The vast majority of that was in children’s programs. So even though we were raising $1 million out of a $27 million budget, it was continuing to shrink and there was such an enormous gap between what we were able to deliver in terms of services to vulnerable children and what really needed to be delivered. So the philanthropy absolutely had to fill the gap.

So coming into the organization . . . and I had done some training and consulting with the Children’s Center previously. So I absolutely knew the operations of the philanthropy department, knew what I was getting into. The first thing that we did . . . any of you who are gardeners, this is what you would do, when you come into a new garden plot, you assess what’s the richness of the soil? What’s the moisture? What’s the drainage? How much sun does it get?

So essentially in the philanthropy area, you take a look at the equivalent. How are the staff? What’s their reporting structure? What do our donors think of us? What’s our cost per dollar rate for each of the fundraising channels that we engage our practices, our policies?

Of course, what’s the quality of our data? Has it been entered consistently? Can we get good data out? This is one of the reasons I love Bloomerang so much is it sets you up for success in getting good, good data. Great system. What’s your brand strengths? Again, incredibly important to your fundraising results. And then how does the board or how do committees participate in philanthropy?

So we really took a deep dive assessment of all those areas. The areas I’m going to talk about today are the three bullets that are bold, the first three bullets. So that was kind of the garden plot. Now you have to look at what tools do I have to grow this garden? So of course, I’m a big believer in the Association of Fundraising Professionals. The first thing we did was got the organizational membership so everyone on my team could participate in those monthly education sessions.

We had the software in place. We looked at the meeting cadence and the communication structure and really how could we grow philanthropy strategically, thoughtfully? So we put together a three-year budget, looked at root cause or what we call smart numbers, activities that we could do on a daily basis that we knew would drive results.

Then of course, how are we going to report growth and net fundraising numbers and then what we call Beyond Cash. This was a really beautiful dashboard that really looked at the internal health of your philanthropy area. It was created by brilliant Peter Drury out in Seattle. So he’s given me permission to give you a little glimpse of that today as well.

All right. So when I first came in, the first thing I did was I sat down with my team and I asked what are your proudest accomplishments with the organization? What are the things that are life giving to you that are part of your core accountabilities? What are the things that hold you back? What keeps you from performing at your absolute peak? We looked at the job descriptions and do each of the job descriptions have clear, measurable expectations, key performance indicators. What metrics are we looking at both at the team level and at the individual performer level? What was our culture of accountability?

What I saw out of that after talking with this really amazing group of people is that they were really passionate about helping children heal. They loved our donors. They were incredibly busy but they weren’t always effective. One of the key things I saw is that activity does not equal effectiveness. Everyone was trying to help each other out, first and foremost, versus focusing on their core accountabilities and the top three to five things they needed to accomplish each and every week.
So we really took a look at that. We redefined what accountability really meant to our team and we created a new description of it. For us, being accountable, being in integrity meant doing what you said you were going to do by when you said you were going to do it or getting into communications the very moment you saw that I can’t keep my word. So that may be going back to me and saying, “Tammy, I promised you this information by Tuesday. I didn’t anticipate these things happening. Would Wednesday at noon work for you?” And then getting agreement like, “Yes, Wednesday is great. Thank you for getting in communication.”
It also meant doing the work the way it was meant to be done or better. So no shortcuts that cost the organization, our team or the donor. And then really using checklists and things to keep us all on track and in integrity.

We also created a culture where it was okay to make mistakes. In fact, we encouraged it. We’re like, “I made the biggest mistake today. Come here, everybody. I want to tell you about it and let’s learn from it.” We wanted to create a culture where it was okay to make mistakes but it was important that we made new mistakes and that we used our old mistakes as a place to stand. What’s that saying? I’ve seen it on social media a lot lately. It’s, “I don’t win or lose. I either win or learn something,” something to the effect of that. That was what we wanted to create within our team.

Then we borrowed a meeting rhythm cadence born out of the Rockefeller Habits, which is a book that was written. Literally someone said, “Hey, Mr. Rockefeller, richest man in the history of the United States, how did you do it? How are you so effective?” And he actually had someone follow him around and identify what he did on a daily, weekly, quarterly, yearly basis that made him so effective.

So that’s been turned into a system. Here’s the snapshot of that system. I’m actually going to start with the column on the far right. So once a year I bring together my full development team, we call it the philanthropy team, and we have an annual all-day meeting. It starts with a good news check-in, which is really just a way to build trust. So you’d share your piece of personal good news, a piece of professional good news and we do that at every meeting.

We talk about our top three to five priorities for the week but then we really delve into what is it we want to accomplish this year. What are our one-year goals that roll up to our three-year goals and what do we need to focus on each quarter to accomplish those things? Then once a quarter, we revisit those and we set those quarterly goals. We report on how we did in the past quarter. Again, that’s the full team.

On a monthly basis, I get together with just my directors and we focus on the operations, the fundraising, all the key elements of our development team. And then on a weekly basis, we have a full team meeting. That’s everyone on the team that comes together. Again, you can see the agenda.
So everyone on the team has an opportunity to submit agenda items. So what it does is it really keeps us in communication. It keeps us operating as a unit. It also helps us understand what’s going on in our colleagues’ world. What are their top three to five priorities that week? Which helps me to understand not only how can I support them, but in the request I want to be sensitive to what’s going on in their world as I make requests of them. So this was a great tool that helped us. I’m hoping that you’ll find some value in it too.
So out of all of that, here’s what we found. There are seven truths out of Operation Rubber Tree, the first one being Operation Rubber Tree was not for everyone. We originally had a team of five. We added two new positions. So it grew to a team of seven in that first year, but we had three resignations and two terminations.

Those terminations weren’t necessarily legacy people. It was not out with the old, in with the new. One of them was a bad hire. One of them was a hire that came in and then said, “Oh, this isn’t for me after all. Everyone says their biggest challenge is volume management of work, but you guys are crazy.” So what I saw was that every staff change, whether it was voluntary or involuntary, we grew from it and it made us a lot stronger.

So here’s how that org chart looked when I first walked in. The Chief Development Officer, that was the role that I was stepping into, they had one direct report, the Director of Development, who managed the events manager, the volunteer manager and administration, which included, of course, the database management.

Within a year, I moved the Director of Development to the position of Director of Individual Philanthropy, hired a Director of Corporate Philanthropy and then created a new position called Director of Philanthropy Operations. This person stepped into a role where they could focus on making certain that our events were staying on time, in budget, that gift recognition and acknowledgement letters were going out within 72 hours, that those letters were being changed with each campaign or at least every six months, looking at what I find is not that exciting, like coding the payables and getting them to finance and signing off on expense reports.

But for this person we’ve hired, she loves that stuff. She loves being the glue and kind of being the ringmaster of this three-ring circus. It’s very life giving to her. That freed me up in my role to focus on major gifts and fundraising strategy. So it was really looking at what is each individual’s gifts and talents and how can we match them to the roles that would empower not only them personally but the entire team? Again, now she manages all of the events, volunteerism, and administration.

And then the next year something happened. We as an organization decided that we were going to pursue a five-year contract to open up a Head Start Academy. And the person who became the Head of School was previously a Director of Program Enrichment. So she was doing over 120 events a year that were focused on our consumers, the children and families we serve. So things like Homework Mondays and Wednesdays, monthly birthday parties, monthly game nights, summer day camp, foster parent appreciation dinners.
So when she went to be Head of School, all of those accountabilities rolled up to philanthropy with the thought that volunteers can help run those. So you can see how the org chart changed. The positions that are in that deep burgundy, those are fundraising accountabilities. The positions that are in green are focused on volunteerism and enrichment programming. You can see on the far right that the events manager and the administrative person splits their time between those accountabilities. So our team did grow rapidly but so did our non-fundraising accountabilities.

All right. As a part of all of this, we did a deep dive into job description. So really identifying core accountabilities, specific measurable performance expectations. So you can see here just a snapshot of the job description the Director of Individual Philanthropy. So they were going to focus on donors at the $1,000 a year, up to $5,000 a year. We had goals around increasing that giving society which we call the Village of Giving by at least 10% annually. We had goals around retention.

So it was very specific and very metrics-driven. So at any point in time, this individual knows, am I winning? Am I on track or am I behind? So we could easily then strategize if we were behind how to get ahead. If we were on track, how to ensure we finish strong and if we were ahead in the game, we celebrated and really looked at what are the activities that are driving this excellent performance so we can replicate it as appropriate in other levels of our team?

We did the same thing for the Director of Corporate Philanthropy and really charged both of those roles, corporate and individual philanthropy with spending 70% of their time in the community, in front of donors, not in the office because although we have, of course, donors, staff donors, the majority of our donors are not in the office. Let’s get out. Let’s meet with them. Let’s love them up and let them know how their gifts are making a difference.

Regina asked a question, “How do you specifically fundraise knowing that the monies are needed to build out the team?”

So I was very fortunate even in the interview and the preliminary conversations before taking on this role. I talked with the CEO and we agreed that if we were going to aggressively grow fundraising results, it would require an investment. It would require an investment of staff, of tools and we would need some time to ramp up. So you’ve got to spend some money to make some money. Fortunately, I had a CEO that was bought into that and a very supportive executive committee as well of the board.
All right. So then that new position that we created, the Director of Philanthropy Operations, again, you can see very specific expectations. We want those acknowledgement letters going out the door accurately within 72 hours. I’m expecting monthly reconciliations with the finance department. I’m expecting that we are managing our spend to how we budgeted our expenses. And all of that good stewardship, all of that running a tight ship would inspire donor confidence and gratitude and affinity and we would have an 85% greater pledge fulfillment rate.

And then here’s my role. I held myself to the same kind of level of accountability. I needed to spend a specific amount of time out in the community. For me, that’s 20% with the major gift portfolio that I manage. I needed to have 10 or 12 face to face visits a month with donors. Very specific accountabilities. I think that was key. Everyone knew the unique value that they bring to the team and were really empowered to focus on that accountability and to really play in their wheelhouse.

So then we took a look at the effectiveness, like okay, we’re raising about $1 million a year in events. We’re raising x-amount of dollars in non-event-based fundraising. How effective and how efficient are we in that realm? So we did a deep dive into all of that.

The first thing we did was we took a look at every event. I did, I don’t know, I think it was a seven or eight-year history and calculated what was the cost per dollar raised for each of those events. We looked at also the indirect time that staff was putting in on those events, even though they didn’t get calculated into the cost per dollar, you know which events are super labor-intensive and which ones are manageable.

And then we asked ourselves some questions. Does this particular event bring guests closer to our mission or is it just a fun party? Is there a post-event call to action? Are we staying at that $0.50 cost per dollar raise or in that realm? Is there any way to increase revenue without fatiguing the donor? Is there any way to reduce our cost without reducing the guest experience? Could we expand the audience? Could we add a raffle? Should we take away valet? Those kinds of questions.
Here is that analysis, that eight-year analysis of really our three signature events. This top event is the gala, which is associated with the Detroit International Auto Show. It’s a big night in Detroit where literally thousands and thousands of people come to a car show at our convention center where all of the big manufacturers debut new models, new concept cars. So we have a gala that starts before that event, shuttles people to the car show, brings them back for a big party, dancing, dinner.

So you can see we calculated how many guests have attended year over year? What’s the total sponsorship year over year? Set ticket sales, gross revenue, expenses, net revenue, cost per dollar raised. We even did a deeper dive on our expenses. So of the $250,000 that we spent to raise $508,000, how much of it was venue? How much of it was décor? How much of it was food and beverage? So we can really get some muscle around what works, what didn’t and how we could really work smart and plan this event smartly.
One of the events that really caught my eye was the year that we were able to keep our cost per dollar raised under 40 cents for this big gala with an open bar. As it turned out, the theme that year was Under the Big Top. So that was probably the only time you can charge $300 per person to come to a gala where you serve them hot dogs and cotton candy and kind of that circus theme. So we began to really distinguish what types of themes are costing us more money. What types of themes are most cost effective? Our Power of Possibilities Breakfast is really phenomenal. We typically spend less than 10 cents to raise $1.00.

Detroit Uncorked is an event where we really had an aha moment. It cost us about 50 cents, 48 cents to raise $1.00, but we never could really scale it. In its very best year, we netted just under $80,000, more likely raised $40,000 or $50,000 most years. Then we split that with the Detroit Wine Organization, who helped us put on the event, the only difference was they had one staff member and I was putting multiple staff members on it.

So it really was costly if you factored in the more significant indirect costs that we put into it. So we made the decision collectively to retire that event. They now, Detroit Wine Organization does an event with Gleaners Food Bank here. It really works for them. Food and beverage, it goes much better than beverage and children anyway.

Okay. I see a few more questions coming in. We’re going to do some more Q&A at the end. So hold some of those questions. But the point is, you really have to dissect your events and look at what is truly working and where can I make some changes? Or truth number two, do I need to retire this event? That was what we learned.

Sometimes you need to prune fundraising events that have a low return on investment, which sounds so easy to do but we absolutely know that we’ve got to, as you retire the event, reach out to board members or donors who especially love those events and walk theme through why you had to retire it. If you’re going to rapidly raise money and increase double, triple the amount of funds you’re raising, you have to focus on the things that are going to give you the best return on investment.
Okay. So now we’re going to talk year-end campaign. So you can see that in 2010, the Children’s Center netted 97 cents from their campaign. So we teased, “That was a