Cover Story: All for One

In the late 1980s, United Jewish Communities/The Jewish Federations of North America had more than 800,000 donors. By 2009, that number had dwindled to fewer than 500,000. A steady, 20-year decline in donor numbers is a sure indication that something is wrong — something much deeper and long-term than the down economy that has been decimating donor bases across the nonprofit sector since last year.

UJC/The Jewish Federations of North America, an umbrella organization that represents 157 local Jewish federations and 400 independent communities across North America, is focused on strengthening the Jewish community worldwide by protecting and enhancing the well-being of Jews through core values of repairing the world, charity, social justice and learning. The umbrella organization boasts an annual budget of $30.34 million, and independent federations have collective annual revenues of $3 billion from annual campaigns, endowments and foundations that are used to fund social-service and education needs, from aiding the Jewish needy to adult education. Federation funds, which are funneled through UJC/The Jewish Federations of North America, also go toward assisting Jews in Israel and overseas.

In researching the attrition happening in its donor ranks, the organization found a key cause to be donors moving out of federations they had donated to but then not connecting with federations in their new locales. Sharing information and best practices among the federations historically happened on an ad hoc basis, at best. So, if a donor moved from one city to another and staff at that federation knew someone in the federation area the individual moved to, that person would let it know of the move. Otherwise, poof … the donor was gone.

"Sometimes they would send spreadsheets back and forth and say, 'Here are the 10 people that we found when we did our National Change of Address filter,' or, 'We were just informed by our donor that they moved; here is their information,'" says Adam Smolyar, senior vice president of strategic marketing and communications for UJC/The Jewish Federations of North America, who joined the organization about a year ago. "So they would do sharing. But when you have 157 federations and everybody is incredibly busy and focused on fundraising, obviously that's going to slip through the cracks."

The effects of attrition finally came to a head last year when, at the demand of its member federations, the umbrella group implemented an 8 percent budget cut, followed in April by an 18 percent cut, which included staff layoffs and an accompanying reduction in dues for most federations.

Executive Vice President and CEO of the Jewish Federation of Greater Washington Misha Galperin had noticed the effects of attrition in his locality for years.

"Our population in particular is very mobile … because we have a very significant influx of people here all the time," Galperin says. "Only about 15 percent of our donors are native Washingtonians."

He hired Marsha Sussman as managing director of marketing, communications and direct response to address the issue.

Sussman, now an independent consultant for the federation and president of Response Concepts in Bethesda, Md., is an expert in building donor bases, and acquisition and retention. She hit the ground running and built models to look at the attrition rate of donors and the impact of acquisition over one year, two years, etc., to analyze what the Jewish Federation of Greater Washington needed to do to turn the pattern of attrition over and grow its base. One thing she found out was that a declining donor base wasn't an issue in D.C. alone but rather a major problem for all of the North American federations.

"This is not an isolated problem," Sussman says. "It is a real problem for many organizations, that people are moving nationally. They're really great, they're a dedicated donor and then they move to another city. The question is what do you put in place so that when someone moves to this new city, you don't lose them out of your system. You don't lose them as a donor.

"I work closely with peers at other Federations across the country sharing our analyses and experiences with growing the donor base. At a meeting with my fellow federation marketing directors, I presented the idea of launching a 'cooperative database' where federations could swap names of people moving from our federation or another area," Sussman says. "It's much less expensive to reactivate a donor, even if they come from another area, than to acquire a new one. There's definitely a limited pool of potential new donors, particularly when you're working with a very targeted market like we are. It's very hard to find these people to begin with, and then once you find them, you have to convince them to become donors. Anyone who's given to a federation is more likely to give the next time."

Sussman came up with a systematic plan for her federation to implement locally, as well as things that could be done at a continental level to start turning around the trend of attrition. She worked with Smolyar to develop a major direct-marketing initiative that they called New Move, designed to allow and encourage member federations to share information about donors who have moved from one territory to another. The goal was to get the most accurate, up-to-date information into the hands of all the federations and ultimately turn around the trend of the declining donor bases.

Buy-in
To get buy-in for New Move from other federations within the system, Sussman and Galperin attacked key decision-making levels: Sussman worked her marketing colleagues at other federations, while Galperin worked to get leadership buy-in at federations across the nation. They quickly realized that a key to getting federations on board with the idea was demonstrating its value, so they set up a pilot program to test it with the Washington, D.C., federation and seven other of the larger federations last fall.

The program had three main goals:

1. Reactivate donors and generate growth.

2. Provide an easy-to-use program.

3. Get 25 percent federation participation in the program across the country by spring 2009.

"We have really a broad range of sizes all the way from the very small federation that may or may not have a marketing director to the top 10 that have huge marketing departments," Sussman says. "So we had to create a program that everyone felt like they could participate in and everyone was going to benefit from."

The pilot program was coordinated by one staff person on Smolyar's team and through a vendor that coordinated collecting the data, running it through NCOA, deduping it and spreading it back to the federations. The strategy of the pilot, Smolyar says, was to get everybody excited about the program and show them the value of it by actually giving them the files of people who'd moved to their federation areas.

The pilot program was a success, and Sussman created a map (shown above) to show how many people from the pilot cities moved to other federation areas nationally. With phase two — the spring iteration of New Move — the organization got 69 federations to take part.

"The interest was incredibly high from the beginning," Smolyar says. "It was almost as if there was this pent-up demand. People knew we needed to do something like this, but there was no instance of somebody stepping up and coordinating it."

Of the 69 participating federations, 16 were large, 13 large/intermediate, 22 intermediate and 18 small. Together they sent a total of 358,739 records, including past donors, current donors, prospects and recent movers. The data showed that almost 38,000 people from the 69 federation regions moved to 148 new federation regions.

By cleaning the records of expires and actives, UJC provided federations with new addresses for 15,377 records. E-mail addresses were added to 82,914 records and phone numbers to 192,373, and another 9,479 people were found to be deceased. In addition, five federations took advantage of the option to receive supplemental demographic data, including age, income, net worth, presence of children and number of adults per household.

The organization now is encouraging federations to participate in New Move twice a year — during the High Holidays (September) and Passover (April) — to get donor information on track before what are traditionally the most responsive seasons for its constituency. The cost is roughly $400 per federation to cover the NCOA cost.

"We see that as the best practice from the National Change of Address perspective because the data does need to be refreshed," Smolyar says. "A significant amount of people tend to move in six months, and it dramatically helps with both acquiring the new donors but also with improving the cost of fundraising when you talk about direct mail or any other means of reaching out to donors, obviously."

To date, the effort has generated more than 65,000 new prospective donors by uncovering past donor information, expanding contact information and increasing information-sharing among member organizations. But probably the most amazing aspect of the whole project is that it's not a creation of one central database, but rather a standardized contribution where data is collectively shared, filtered and then reported back to federations so they can update their files.

"In a system where every organization is independent and does their own direct marketing, does their own fundraising in their own territories, the mere fact [that they're] signing up and sharing data on a collective and consistent basis is a huge jump in trusting the process and realizing that they will reap real benefits," Smolyar says.

Branding issues
UJC also looked into branding as a possible cause of its difficulty in keeping and acquiring new donors. To get an understanding of where its brand stands, the organization conducted its first-ever branding research in the fall of last year, looking into what people think it stands for, who is familiar with it and how it stacks up against other nonprofits.

It found that local Jewish federation familiarity was pretty good (about 50 percent), but there was a significant familiarity gap for younger Jews. For example, 57 percent of 18- to 34-year-olds who already donate to Jewish causes are not familiar with their local Jewish federations.

"Because familiarity is the basic building block of any branding activity, you cannot, obviously, become a donor or a loyal donor or an advocate for the charity before you are aware that the charity exists," Smolyar says.

It doesn't help that unlike other large federated systems like United Way, American Red Cross, YMCA and Boys & Girls Clubs, federation names or logos are inconsistent, which creates confusion. About 90 percent of the 157 dues-paying federations have "Jewish Federation of" and then their geographic locations as their names, but they aren't visually consistent.

"We have 157 entities that show their different faces to the public from a branding perspective, whether visual logos and messaging and so on and from a media overlap perspective," Smolyar says. "Obviously the media markets don't recognize the 157 [federations] that we have.

"Branding's primary job is to actually clearly communicate who you are, how you're connected and what you're about."

To right this, the organization is in the process of changing its name from United Jewish Communities to The Jewish Federations of North America to correspond to the names of most of its federations.

It's also developing a new logo. While it's not requiring the federations to change their logos, Smolyar says a lot of federations are interested in adopting it.

In fact, 10 federations are now part of a pilot group to help the organization develop its logo, with plans to implement the newly designed logo within their local federations. Smolyar is hoping the branding initiative prompts the other 10 percent of federations to adopt the "Jewish Federation of" naming structure, and all federations to adopt the logo. For federations that want to keep visual identities they've developed for their local brands, the organization is encouraging them to at least add "Endorsed by Jewish Federation of North America" to their taglines.

The organization plans to unveil the third prong of the rebranding effort — an online awareness campaign using banner ads — at its general assembly meeting in November in Washington, D.C. The core purpose of the campaign is to raise awareness of what Jewish federations do and invite people to connect. Smolyar says that between those three elements — aligning its name, getting key federations from across the system to adopt the name and logo locally, and having an awareness campaign — he thinks there will be enough incentives for local initiatives to join the rebranding movement.

True community
Though they're operating as separate initiatives, Smolyar sees the rebranding and sharing of information as intimately related.

"It's about leveraging the power of the collective here, whether through sharing of information and coordinated direct marketing or through representation of our mission and values on the branding side," he says. "To really leverage the scale that we obviously have from being one of the largest charities in the world."

Smolyar says that while coordinating New Move and getting federations all on the same page has been challenging, the job of an umbrella organization is to be laser-focused on doing everything it can to help local federations meet their needs, especially in this economy, where many are facing limited resources and increased demands from the community.

The organization's donor attrition was driven, in part, by a dynamic continental population on the move, but an additional reason is the organization's historical focus on dollars — rather than donors — raised. Smolyar says the organization focused on netting gifts from larger-dollar donors rather than growing the donor base, something he says often seems easier than running a disciplined direct-marketing campaign that aims for a broader base but lower-value donor. According to Sussman, it's been a real challenge to get people within federations to understand why it's important to grow the donor base.

"The short-term goal is to grow the donor base with the expectation that in the long run the revenue will follow," Sussman says. "But one of our other goals for our community is to build our community, so therefore we're also looking for participation and people to feel like they're part of our community."

Participating in the annual campaign reflects the enduring Jewish principle that donating to a communal fund is a central act of community membership.

"We're an organization whose mission is to build community, and the act of participation in an annual campaign — coming together with thousands of other people — is something that has value in and of itself regardless of the amount of money one raises," Galperin stresses.

Thanks to Galperin's and Sussman's efforts, the attrition trend has been reversed at the Jewish Federation of Greater Washington, and the federation is increasing its donor base.

"It's sort of a truism — it's much easier to retain a customer than to get a new one. So we've always looked to the database that we have and the people that were contributors to us who may have contributed this year and didn't contribute the previous year to see if we can re-engage them, reactivate them, reinvolve them," Galperin says.

The process also has been a lesson in community for federations themselves in terms of having to share donors. The organization has experienced a few situations doing New Move where federations have been reluctant to give up donors who've moved because they've grown to depend on them. While Galperin says that's understandable, it's also shortsighted.

"I think that with the population being as mobile as it is, unless we do this together, we'll have a very hard time really surviving the system," he says.

New Move has given federations a source of prequalified prospects — people who were giving to another federation in another community who already are familiar with the organization's mission and approach.

"These are people who are used to participated giving," Galperin says. "The basic ingredients are people have to be interested and committed to the cause, and they need to be asked. So the New Move [has given] us an opportunity to do the ask."

Top down
The organization's leadership will be put to the test this year, as new CEO Jerry Silverman recently took the helm. Silverman has worked for the past five years as CEO of the Foundation for Jewish Camp, where he has been credited with substantially raising the organization's profile and revenues.

Under his leadership, the Foundation for Jewish Camp increased its assets to nearly $20 million from $4 million by the end of FY 2007, the most recent year for which tax filings are publicly available.

Sussman stresses that New Move wouldn't be successful without the support from real senior management, namely Galperin. Having the leaders of the organization — and local federations — incorporate donor growth into their goals and objectives has set it on a path for success.

"It's right there, crystal clear; it says that one of our goals is that we need to figure out how to build our donor base," Sussman says.

"When you have that support," she adds, "especially with something that's a little bit more of an abstract concept — it's not as tangible as money that you see that comes in that you're allocating out — when you have that support and when you have a really strong leader behind you, it really makes a big difference." FS

Abny Santicola is managing editor of FundRaising Success. Reach her at asanticola@napco.com