Fundraising In A Recession Is A ‘Capital’ Idea

October 17, 2011       Samuel Fanburg      

The goal was $35 million when the Anne Arundel Medical Center Foundation (AAMC) began its “Care Like No Other” capital campaign in 2007. It was a bit of a shock, according to Lisa Hillman, AAMC’s senior vice president and chief development officer, when the total rocketed past $44 million.

“I think it says a lot about this institution and community,” Hillman said. “We are not the sole provider of health care here, but serve a very dedicated market. I also thought the case was compelling, to expand our emergency department and adding in-patient beds.”

The Annapolis, Md., organization experienced fundraising growth unlike what has been felt by other health organizations during the past five years. According to the latest survey for the Association of Healthcare Philanthropy (AHP), annual giving has replaced capital campaigns as the most significant source of funds for organizations. In 2006, capital campaigns represented 21 percent of funds raised, while in 2010 it shrunk to 15.4 percent. Now, annual giving makes up 20 percent of contributions to healthcare groups, according to AHP.

However, for organizations like AAMC, success of a capital campaign came from a retooling of expectations while increasing the ways donors could support the organization.

Hillman said that this began by adding two years to the program and being more flexible when speaking with donors. “Most pledges go from three to five years. But for some of our larger contributors, we allowed them to go for 10 years,” said Hillman. “It’s not something I would recommend specifically, but has worked for us on several occasions when accepting pledge agreements.”

AAMC designed a site specifically for the capital campaign, featuring a variety of ways people could donate along with important information relating to events.

Events such as the 22nd annual golf classic gave fundraisers like Hillman a chance to engage with supporters, even if they might not be able to donate at that time. “Through this time we ultimately learned we need to stick by our donors,” said Hillman. “Keep them close, listen hard and understand where they are coming from and they’ll donate eventually. I would always tell my staff, ‘they are not saying no to you, they are saying no now.’”

Donor acquisition efforts were also increased, said Hillman. Whereas one donor used to give more, they were now giving less. “The joy of fundraising is you get to know some people very well, but the challenging aspect is getting to know more and more people who are giving gifts at a smaller level.” From increasing acquisition efforts in the annual giving program, the organization was able to generate $9.2 million for the capital campaign.

One by-product of the capital campaign was an exhausted fundraising staff, said Hillman. “Fundraisers are generally positive people,” said Hillman and sometimes it was tough to keep the focused at the task at hand. But from Hillman’s experience, the people who were saying, “No” were often coming back later in the year and giving.

Acknowledging that his donors have been on a “roller coaster” from 2008-2010, Arthur “Rusty” Brink, chief philanthropic officer for the Martin Memorial Foundation (MMF), is still managing the middle of a $25-million capital campaign.

“Right now we are over 12 months into the campaign,” he said. “We are going to make a judgment over the next 15 months about how much farther we want to go. Currently, we are in the ‘quiet’ phase, and have been in this phase for about half the year.”

The Stuart, Fla., organization has taken significant steps in using social media to establish a committee of younger donors who have taken the fundraising charge.

MMF created a designation of donors called “lifesavers.” These donors are classified as younger, with no particular threshold, and have become active members in MMF’s fundraising culture. The group comprises 742 members, up from last year’s 580. At the annual Goombay bash this year, (targeted towards younger donors), 740 people bought tickets and 100 percent of them signed up to receive regular information and a newsletter from the organization.

“We’ve been heavily invested in the online world,” said Brink. “We invested $125,000 to build our site and feel we are well positioned for five years down the road. One-third of the people coming to the main hospital’s website are coming to the foundation’s website, as well.”

Engagement is not limited to the online world. The MMF recently began making more of an effort to chat with donors in their homes. Brink said almost 900 donor visits have been made this year, when six years ago they made only six visits.

The MMF also started a lifetime recognition program that rewards supporters who contribute a minimum $10,000 a year for five years. The program started with 33 donors in 2003 and has since expanded to 206. Participants in this program are also likely to volunteer.  

“We attribute our philanthropic energy in this area to our administrative leadership and our CEO,” said Brink. “We have a committed board giving usually $10,000 individually a year (it’s not required) and two donor liaisons with a 24-hour telephone number.”

Keeping communication consistent requires honesty. Even during the most gaping lows of the recession, Brink still gave supporters a complete picture of what was going on, even using what he called the “risky “ tactic of telling donors about a 15-percent loss in asset values.

“The more articulate and repetitive you can be about where the money will be used, the better,” said Brink. “It really helps if you can point to something that carries the value of their contribution. We reported to them how well our investments did, even if they were less than expected. It’s a little like dealing with your mom and dad, just be straight up and stress the importantance of what you do.”