Friday, October 30, 2015

Recognition Circles: The Art and the Science, Part Two

This two-part guest blog written by DRG Of Counsel member Debbie Meyers attempts to demystify the recognition circle, in theory and in practice. Partone discusses the rationale behind having recognition circles (the art), including why we should have them and how they should operate. Part two highlights some of the FAQ’s and logistics in setting up a family of circles (the science).
Recognition Society FAQ’s

Recognition societies can cause a lot of confusion – with our donors, with our gift officers, even with donor relations professionals. Here is a partial list of frequently asked questions:
1.     How many are too many?
2.     How do I know what giving level to start at?
3.     How do you know when to end one and start another?
4.     How do you let donors know they aren’t in the new society?
5.     How do we brand them so donors know which ones they’re in and why?

It’s enough to make you want to throw up your hands and give up, or at the very least, scratch your head.
My advice? Don’t make things so complicated. 

The earlier blog talked about WHY. Now let’s look at how.

How much staff do you have? How much support do you have from other departments, like marketing, IT and annual giving? That matters. You can’t support five recognition circles with two staff members and no internal support.

Next, who and what. What do you want to accomplish? What behavior do you want to reinforce? Is donor retention a big priority? If so, focus on consecutive giving. Do you need a major gift pipeline? Then focus on leadership annual giving.

Don’t get hung up on a level or threshold. Do the math. How many donors do you have at various levels? Weigh that number against your available resources and budget. If you’re struggling between starting a leadership annual giving circle at $1,000 vs. $2,000 vs. $2,500, look at where the natural bell curve is with a strict tally of donors at each of these levels. If you have a decent-sized staff, and the difference between $1,000 and $2,500 is negligible, then drop down to $1,000. If it’s twice as many donors at $1,000 than it is at $2,500 and you don’t have a lot of help, aim for the higher threshold.

Whenever possible, err on the side of inclusion – include more donors, not fewer – but balance that choice with the limitations of your staff, budget and other resources. Moreover, make sure that whatever program you choose to create, it’s one that you can sustain over time, with staff turnover or any other number of variables that come into play. Be realistic and practical.

And remember, you don’t have to have a circle for every kind of giving behavior you want to encourage and recognize. First-time donors are an excellent example. You don’t need a first-time donor circle. It would be a short-lived circle, since nobody can be in it more than once! And second, you should do something for first-time donors because their first gift is a landmark event and the first step toward consecutive giving. But you can recognize them programmatically. Do something as simple as sending them a cute card or decal. Just make sure you say, hey, we noticed that this is your first gift, and that’s a big deal!

Diamonds may be forever, but recognition circles are not. Yesterday’s major gift may have been $50,000 but today that figure may be more like $100,000. Or you may have lots more donors at that lower level and not enough staff and resources to support them under your current giving circle criteria.

So your giving circle that’s ten years old that recognizes people for cumulative giving of $100,000 may need to go to that big recognition circle in the sky, freeing you up to create a new one. Then how do you tell your $100,000 donors that they are no longer in the ABC Circle? You don’t. You tell them that there’s a new XYZ Circle, and you spell out the eligibility criteria (new minimum level), and you tell them you hope they will choose to participate.

The levels you set for your circles tell donors what your institution considers a major gift or a major leadership gift. Lynne Wester’s formula for cumulative giving circles is that the minimum threshold should be 10 times what your organization considers a major gift. So, for example, if your organization’s major gift threshold is $50,000, then your lifetime recognition circle should start at $500,000.

We tried that at my institution recently, and magically, all the math worked. Our endowed fund minimum is $25,000 and our cumulative giving levels start at $250,000. We moved up from $100,000. Initially I thought $250,000 was an arbitrary number and that $500,000 made more sense. But when the data arrived, we saw that moving the threshold up that high would eliminate three-fourths of the donors who were in the previous cumulative giving society. That was too drastic and with my budget and staff, I felt we could handle more donors. Don’t you love it when things work out?!

Your numbers may not fall into place so easily. In fact, we’re about to move our endowment level up to $50,000 which will wreck the nice symmetry we have. But we always have the option of treating the $500,000 donors programmatically, much like our first-time donors. And the same holds true for $50,000 and $100,000 donors. They don’t fall into our eligibility requirements for recognition in the circle, but that doesn’t mean we can’t do things for them through a program we execute but don’t publicize or brand.

And finally, when branding these circles, have two goals: make them tie into your organization and make them visually related. Carnegie Mellon University and Oklahoma State University have excellent examples of a family of recognition circles that are unique to the organizations – their heritage, landmarks, alma mater lyrics – and visually tie together graphically. Ideally, they also indicate the reason the donor is in the circle. Our planned giving circle is called the Founders Legacy Circle, because these donors are leaving behind an important legacy. Our consecutive giving circle is called the Black and Gold Loyalty Circle, using our alma mater and emphasizing their loyalty in giving year after year.

The most important take-aways are that your circles should have meaning, should work for your organization in providing focus and structure, and should reinforce the behavior you want to see in your donors. If you stay clear on WHAT you’re trying to do, the HOW you do it ultimately should fall into place.

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