April 8, 1999 | Read Time: 10 minutes
Long used to seek small donations, the phone becomes a major-gifts tool
When the Barbara Ann Karmanos Cancer Institute, in Detroit, began its $100-million capital campaign last fall, it was clear the non-profit group did not have enough staff members or volunteers to solicit all of its potential donors in a personalized way.
Fund raisers realized they needed to make some tough calls about how to reach as many people as possible. Those deemed likely to give less than $10,000 would be contacted by paid telephone solicitors, while donors with the potential to give $50,000 or more would receive a visit from a Karmanos fund raiser or volunteer.
Left out of the mix were the hundreds of donors likely to give $10,000 to $50,000. Rather than ignoring them, the cancer institute took an unconventional approach and decided to use paid telephone solicitors to reach those donors, too.
It worked. The Karmanos Center has already received 74 donations worth an average of just over $10,000, and the calls, which cost about $25 per potential donor, are continuing.
As the Karmanos Center and other charities are learning, telemarketing — long used to get relatively small gifts from large numbers of people — can inspire more generous gifts too. Many charity leaders, frustrated that they cannot recruit enough volunteers for in-person solicitations, have turned to the phone.
“We don’t have a huge campaign apparatus with a lot of volunteers,” says Chuck Hammond, chief development officer at the cancer institute. “Telemarketing is a great way to reach prospects at that level quickly and efficiently without using volunteers.”
But even professional telemarketers say that charity officials should think long and hard about using the telephone to contact people who make mid-level and larger gifts. In addition to its potentially high costs, telemarketing calls are almost never as effective as a personal visit from charity staff members or volunteers, they say.
“Non-profits need to be very, very careful that they’re not getting lazy and seeking the easy way out,” says Michael J. Rosen, executive director of marketing for the Development Center, a Philadelphia telemarketing firm that works with charities. “Absolutely every effort should be made for staff and volunteer leadership to appeal to these individuals.” He says it should be “a last resort” to hire a telemarketing company to make solicitations.
But sometimes using the telephone to reach those donors makes sense, he says. “For some organizations, mid-level $10,000 to $25,000 donors are quite voluminous,” he says. “At that point, it’s not practical to visit those people, so mass phoning makes sense.”
Greg Carlson, president of IDC, a Hendersonville, Nev., telemarketing company that has worked with colleges and universities since the 1970s, says that his firm is increasingly being approached by other types of charities that want the company to solicit gifts of up to $25,000 because they don’t have the manpower to contact donors themselves.
Some charities, however, do manage to organize telephone drives to handle campaign solicitations for large gifts on their own. The United Jewish Appeal, in New York, has a staff of 50 in-house callers who work on the charity’s annual campaign, which raised $123.7-million last year. Callers last year tried to contact 3,000 donors who had the potential to give from $1,000 to $5,000. The employees reached 1,365 of those donors, more than 300 of whom agreed to give $1,562, on average.
Whether charities use their own employees or a telemarketing firm, big gifts are usually far more time-consuming and expensive than calls for small gifts, experts say. Routine telemarketing requests generally take a couple of minutes, while calls for large contributions often involve several phone conversations, lasting close to 10 minutes each, and sometimes much longer.
In one campaign — a $27-million capital drive to pay for new broadcasting equipment — Oregon Public Broadcasting spent about 19 cents to pay telemarketers for every $1 they collected by telephoning big donors. That is under the 35-per-cent limit on fund-raising expenses recommended by the Better Business Bureau and other watchdog groups that monitor charity solicitations, but still a sizeable expenditure for the station.
Dan Metziga, vice-president for development, says the cost was well worth it. In a test last year, telemarketers called 15,000 of the station’s donors, asking them for $750 to $25,000. They reached 9,000 donors, 2,200 of whom agreed to give a total of nearly $1-million. So far this year, additional calls have raised another $185,000. Nearly 100 donors have agreed to give $1,200 apiece in response to callers’ requests that they give $100 a quarter for three years. The station also got one $25,000 contribution and several gifts of stock, including one worth $15,000.
The results have been so positive that the station may continue using telemarketing indefinitely to seek gifts of $750 to $2,500 — or even $5,000 — says Mr. Metziga. What surprised Mr. Metziga was not only the large gifts that came in but also how pleased donors were by the phone solicitations. Initially he had been worried that the calls would anger donors who in the past had been solicited only through on-air drives and direct mail. But so far, nobody has complained, and a few donors have even said they were impressed with the telephone drive.
Each telemarketing campaign has its own strategy for convincing donors to consider large gifts. Oregon Public Broadcasting sent donors two letters before making any calls. The first was from the host of a popular TV show and the other from a board member. The latter, which asked for a specific amount, told donors they would get a call in about a week. For those who fund raisers believed were capable of making the largest gifts, the first call was to set up an appointment for the next call to talk about the gift.
Some donors send in gifts before they get the phone call, says Mr. Carlson of IDC, but fund raisers hope they don’t. While those gifts may help cut the costs of making phone calls, the early gifts are often smaller than if donors had talked to a caller, he says.
Some telemarketers think the best strategy is to call donors without first sending a letter. “There can be a down side if the letter contains the actual monetary request,” says Joyce Brundage, vice-president for client services at Public Interest Communications, a Washington telemarketing firm that raises money for non-profit groups. “We’ve seen cases where people make their decision prior to the phone call,” she says. “They decide, ‘Oh, that’s so much money, I’m not going to do it,’ or they give less.”
Whether or not calls are preceded by a letter, special incentives can lead donors to give more than they might otherwise. Barbara Schwan, vice-president of marketing at Steven Dunn & Associates, a telemarketing firm in Venice, Cal., says that one client, the Chicago Symphony, raised $4.6-million in gifts of $1,000 to $25,000 by offering donors a chance to name parts of the new hall being built with proceeds from the drive. Some 338 donors reached by telephone made a gift of at least $5,000 in response to an offer to place a plaque engraved with someone’s name on a seat in the symphony’s hall.
The incentives offered to donors are not the only ones that matter in a telemarketing campaign. Experienced fund raisers say that, particularly when seeking large gifts, they have learned to avoid companies that reward their employees with financial and other incentives based on the number of calls they make in a set period of time.
Donors shouldn’t feel rushed, says Liz Gilchrist, major-gifts manager at Greenpeace, the Washington environmental group, which makes calls to 700 donors once or twice a year asking for gifts of up to $2,500.
Callers should be highly trained and experienced at soliciting big gifts, she says. “It’s a whole different mentality, making first and second ‘asks’ and knowing how to deal with objections. It takes some thoughtfulness.”
She adds: “These are some of our best donors. We’re interested in hearing responses from them.”
Many charities find the responses that telemarketers do get from big donors to be an important form of feedback.
In the Oregon Public Broadcasting campaign, Mr. Metziga says that the paid callers let the station know if donors have not received a premium they had been promised in an earlier appeal, or if they would like to talk to someone at the station about the campaign.
The telemarketers also compiled statistics about donors’ responses to questions related to fund raising. Some 75 per cent of people who were asked to make big gifts over the telephone said they were interested in the station’s effort to provide viewers with better-quality television pictures by acquiring sophisticated new equipment.
Using a telemarketing firm, he says, “is almost like having a marketing research effort, in addition to fund raising.”
As efforts to seek big gifts by phone become increasingly common, a few charities are starting to use telemarketing to seek the largest gifts that many donors will ever make: bequests.
World Vision, an international-relief organization in Federal Way, Wash., for example, hired Gift Planning Direct, a new company in Santa Monica, Cal., to make phone calls to find out which of its lapsed donors would consider a bequest to the charity.
The company contacts people over 65 who have given regularly to an organization and then suddenly stopped. Fund raisers have long known that such donors are good candidates for bequests. They may be on fixed incomes, so they cannot give now — but they often still hold the charity in high regard and may be willing to leave money or other assets to the organization.
Because fund raisers often don’t have enough time to seek out such donors, they may end up losing out on those gifts, says Tom Siegal, an executive at Gift Planning Direct.
To try to get around the problem, the company ran a campaign for World Vision, in which 6,400 people who had not given to the charity for a year or more were mailed a letter, thanking them for their past support and offering them free monthly newsletters on financial topics such as the importance of drawing up a will, estate planning, and how to find qualified financial advisers. The letter also said that donors taking part in the program would receive a telephone call.
Nearly 2,000 were called; the rest either said they didn’t want the material or couldn’t be reached by telephone. Of those 2,000, 950 said they wanted the material and were receptive to the phone calls.
The company’s calls identified 152 people who said they had already included World Vision in their wills and another 24 who said they planned to do so. Seventy-three of the previous donors said they would consider a bequest.
Fund raisers at World Vision say they have no way of knowing how much will ultimately come to the charity as a result of the telemarketing effort, but they now know which donors warrant more attention. Donors who say they have put the group in their wills are invited to become part of its Host of Hope Society so they can get special newsletters and other information about the charity.
Telemarketing is a logical way to communicate with donors about large gifts, says Jay Steenhuysen, World Vision’s director of planned giving. “Our experience shows that the phone can be used to draw donors closer to our work without offending them. As a medium, the phone works.”
