Wednesday, June 22, 2011

BIG's Blog: Can you help us?

I recently participated in a conference call where an educational institution sought help to meet the fundraising goal for the upcoming year. The goal was to double their fundraising income within a two-year period. After an analysis of their fundraising results, it became clear that the revenue goals were unrealistic. Let me explain why.

First, their universe of 60,000 which consisted of alumni or parents of students was not going to grow. Instead, due to a declining enrollment, the number of future alumni would not meet the attrition rate for this file.

Second, the institution’s fundraising strategy to alumni was direct mail. The institution saw a significant decline in response rate over the past few years. Currently, the response was less than four percent. As expected, the school’s revenue was down significantly from prior years. Staff attributed this to the increase in direct mail costs.

The question asked by the institution was how they could address the rising costs. My thought was: Is cost really the problem or are there other changes that this institution should consider? In my next blog, I will present my theory on their question. I would love to hear your perspective on whether you think that cost is the “real” problem.


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