Are We
In This
Together?
Conversations about Fundraising in
Federated Organizations
Campbell&Company
Advancement Planning · Fundraising · Communications · Executive Search
Are We In This Together?
Conversations about Fundraising in Federated Organizations
One size does not fit all.
In national and international organizations with local chapters1,
approaches to fundraising run the gamut from “we get more
money when we work together” to “it’s a free-for-all when it comes
to major donors.”
But whether fundraising is collaborative or independent, competitive or
complementary, one thing’s for certain: Your donors expect you to speak
in a unified voice. Regardless of what goes on behind the scenes and the
distinct roles national and local offices play, your donors see a single mission and a single brand,
and if they’re getting mixed signals from your fundraising, you could be leaving money on the
table, or even losing donors.
Campbell & Company, a national fundraising and executive search consulting firm for
nonprofits, recently completed a series of qualitative conversations with eight federated nonprofit
organizations, seeking to better understand the fundraising relationships between these entities’
national and local arms, as well as the opportunities and pitfalls inherent in a federated structure.
The results of this work underscore the challenges of federated fundraising, including the
potential for confusion among donors and concerns about donor “territory” between national
and chapter staff. But our conversations also highlighted some of the opportunities that are
unique to federated organizations, such as working with a supporter to craft a truly meaningful
and donor-driven gift that has an impact locally and globally, or convening staff from across the
country to learn from one another’s successes and challenges.
Our findings clearly show there is no single “best practice” or ideal structure for federated
fundraising, but the keys to success are the same regardless of how you operate: clearly defined
roles, guidelines and practices; open communication and transparency; and, most of all, a
relentless focus on doing what is right for your donors.
1 National Office: For brevity, we refer to the umbrella or parent entities of the organizations we
studied as the “national office,” although we note that several that we studied are international in
scope and presence.
Local Chapter: Similarly, we refer to the subsidiary units as “local chapters,” though some represent
larger metropolitan regions, entire states or multi-state regions. Additionally, some organizations refer
to these units as affiliates or members.
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Study Sample and
Terminology
Largest organizations
Chapter fundraising: $30m+/year
National fundraising: $750m+/year
up to 3,000 chapters
During the summer of 2013,
Campbell & Company studied eight
Smallest organizations
federated organizations whose work
Chapter fundraising: $500k+/year
ranges from human services and
National fundraising: $5m+/year
health care to disaster relief and
70+ chapters
environmental protection. In addition
to service delivery, most also count
advocacy and awareness-building
among their key programs. Many
have distinct 501(c)(4) entities for
their advocacy work, but our study primarily focused on the 501(c)(3) side of the organizations.
The participating organizations included local chapters with annual fundraising programs ranging
from approximately $500,000 to more than $30 million, and with national offices raising between
$5 million and more than $750 million annually. Five of the organizations have fewer than 500
chapters (70 was the fewest), and three had more than 500 (approximately 3,000 was the largest).
For each organization, we interviewed at least one representative from the national development
office and at least one development or executive staff member from a local chapter; conducting
24 interviews in all. Our conversations focused on organizational and staff structure; fundraising
approaches across the program (from direct mail and online giving to major and planned gifts);
resource and knowledge sharing; and successes and challenges.
Of the organizations we studied, only two are single entities legally and financially. For the
majority, the national offices and each local chapter are distinct organizations, with separate
governance, legal and tax status and financial reporting. We have noted the areas where we
believe this difference in structure factored into fundraising approaches or attitudes.
Direct Response Programs
Overcommunication can breed confusion. Your donors are
probably hearing from your organization much more than you
realize. Both the national office and local chapter are likely in
touch, via direct mail, email and/or phone. If you have a (c)(4)
arm, add yet another line of communication to the mix.
Your donors are
probably hearing from
your organization much
more than you realize.
Each of these methods of outreach serves a distinct purpose,
but, chances are, your donors aren’t thinking about the
behind-the-scenes structure of your organization; they’re
thinking about the mission they want to support. They
may choose to give nationally to effect large-scale change or
locally to support program delivery, or both, but they expect
you to have a comprehensive picture of their history as a
supporter. So, if they sent a check to their local chapter last week, and the email they’re getting now
is asking for a gift to national without acknowledging their recent support, they notice.
Donor confusion is especially prevalent at lower gift levels, and uncoordinated strategies for
online and direct mail programs exacerbate the issue. Nearly every organization we studied
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handles online giving from the national office, and most
have at least some centralized email and direct mail. But, if
chapters are sending their own mail and email as well, and
everyone is working on a different database, coordination
can be a complex endeavor, leading to the sort of jumbled
over-communication that can turn donors off.
The answer isn’t as simple as centralizing everything.
While that provides economies of scale and, in theory,
frees chapter fundraising staff to focus on higher-capacity
donors, it can present challenges for building the locallevel major gift pipeline and makes it tougher for chapters
to share the local issues and success stories that build
community visibility and support.
To ensure that your donor communication is
coordinated and not confusing, consider the
following strategies:
“Our donors don’t know where
they’re giving. Not a week goes
by that I don’t hear from an
aggravated donor who says,
‘Will you please stop emailing
me so much and sending me
so many letters?’”
(Local chapter)
“We still operate our own
direct mail program, but the
direction forward seems to be
an organization-wide direct
mail program.”
(Local chapter)
Select a small group of donors and explore how they are hearing from your organization.
The national office and a handful of chapters can work together to conduct an informal “audit”
of donor communications. How many times in the past year were your donors contacted and
through which channels? Were these appeals, other calls to action, news and updates, invitations,
donation acknowledgements, or expressions of gratitude? Were your messages complementary
or conflicting? How clear was it to donors where their money was going? Based on what you
learn, discuss whether you need to scale back the frequency of your outreach or better coordinate
calendars between the national office and chapters.
“When we looked into how our donors were engaging with us across the organization, we found that
half were giving to their chapter as well as to the national office. Both of us were talking to the same
donors, but if our messages were duplicative or, even worse, conflicting, it was jarring for our donors.
As a result, we are ensuring that our national and local messages support one another, and we are
reducing the amount of mail and phone calls nationally.” (National office)
Consider centralizing acquisition activity in the national office with shared revenue for chapters.
For many of the organizations we spoke with, centralization of donor acquisition activity
provides cost efficiency and ensures that acquisition continues to take place in markets where
smaller chapters do not have the time or resources to focus on this activity. Most organizations
that have adopted this practice share revenue with chapters based on a new donor’s ZIP code,
with amounts typically ranging from 5 percent to 50 percent of direct mail and online revenue;
in some cases, chapters receive the full gift unless otherwise designated. The appropriate level
for your organization will depend on how revenue and expense targets are set and what previous
revenue sharing practices have been in place.
“100% of the money goes to the affiliate unless the donor selects ‘Greatest Need.’” (National office)
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Many organizations also share the names of new donors (particularly those with potential major gift
capacity) with chapter fundraisers to share information on local accomplishments, steward their gifts
and later cultivate individually for more significant support. This strengthens relationships with new
donors—boosting retention—and helps identify potential major donors down the line.
“For direct marketing, we provide a set percentage of 15 percent to the affiliate in the donor’s service
area. We also share the names of these donors.” (National office)
It is important to note that any shift toward centralization—whether of only acquisition activity
or a broader direct response program—will be challenging at first, with concerns such as local
revenue decreasing and national “encroaching on a chapter’s territory.” Successfully addressing
these concerns requires open communication, clear protocols and crediting policies, and fair
revenue practices that minimize the impact on chapters’ revenue streams, particularly chapters
that have been actively acquiring donors via direct marketing. Some organizations have used
opt-in programs to let chapters determine whether they would like to use the national office as a
resource for acquisition and ongoing direct response activity.
Examine how to best reduce crossover in appeals.
A common concern among organizations with whom we spoke was overlap in appeals, and
organizations approach the issue in different ways. Some national offices share their lists and ask
the chapters to tell them who to remove; others ask chapters to share lists of donors and prospects
they don’t want included on national appeals. There are challenges for both options. Sharing a list
with a chapter adds to their workload and could lead to delays in issuing an appeal, but asking
a chapter to share names requires a high degree of trust, and we found many chapter staff were
uneasy with this practice.
Whether your direct mail and online programs are fully centralized in the national office or
chapters send some of their own mail and email, it is important that your organization have a
clear way to for the national office to alert chapters (or vice versa) that they will be sending an
appeal to a certain group. Such a practice helps boost transparency and can reduce the likelihood
of a donor getting two appeals in a short timeframe. It also promotes respect for existing donor
relationships, avoiding the situation where a prospect that a chapter has been cultivating for a
significant solicitation is asked for a $100 gift by national the day before.
“Affiliates supply their donor names so that those names may be eliminated from prospect mailings
conducted nationally. We try not to mail national mail to those giving to the local in order to mitigate
competition.” (National office)
Develop sample appeals to keep messaging consistent.
If your donors are hearing from you at the national and local levels, ensure that the messages
they’re getting are complementary, reinforcing one another without being duplicative. National
offices might consider creating sample appeals for chapters to distribute; these should provide
a framework for messaging and suggest areas for customization that highlight local programs,
success stories and giving priorities. Whether these appeals are a requirement or simply a
resource for chapters depends on the culture and structure of your organization and the degree
of chapter autonomy, but presenting a “united front” and coordinated message to donors who
support both your national- and local-level work is vital. We also found that national offices that
have enlisted local chapters to help shape the case used in appeals engendered greater local-level
“buy-in” for the message and direction.
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Major and Planned Gift Programs
It probably comes as no surprise that national office staff
members tend to favor major gift collaboration, and chapter
staff approach the idea cautiously, worrying that their donors
might get “poached.” In 75 percent of the organizations we
studied, at least one staff member cited donor “territorialism”
as a strain in the national/local relationship. In 25 percent
of the organizations, the situation was challenging enough
that local staff said they did not trust the national office with
information on their major donors.
In 75 percent of the
organizations we studied,
at least one staff member
cited donor “territorialism”
as a strain in the national/
local relationship.
“The biggest strain for me is trust. It’s easy to say we’ll maximize this donor for the good of the network
by working together, but I have an operating budget to meet.” (Local chapter)
However, one-third of local chapter staff members who brought up territorialism noted that
they had not personally had any negative experiences with the national office over major donors.
While territory and “ownership” of donor relationships remains a significant fundraising
challenge under federated structures, in some cases, the perception may be worse than the reality.
“I’ve heard my counterparts say that national is poaching donors, but until I see it myself, I won’t
believe it.” (Local chapter)
We also found that organizations that operate as a single legal and financial entity are less likely
to cite territorialism as a concern and are more likely to approach major gift collaboration
favorably. In these organizations, the fact that all fundraising rolls up into a single balance sheet
may reduce the pressure on chapters to “guard” their donors.
“Because there is one bank account, there is no need to share revenue... There is no need for
complicated gift-sharing rules.” (National office)
To move your organization away from questions of who “owns” a donor relationship,
consider the following strategies:
Critically examine the role of your national office and the potential of your support base.
While there is no single best practice for the structure of a federated fundraising program,
considering the questions below can help you understand what approaches may work well and
what pitfalls you should watch for.
• The role of the national office: Several of the federated organizations we spoke with consider
their national office a support team, sounding board and “consultant” to local chapters,
with the main goal of making major and planned giving fundraising more effective at
the local level. In some cases, these organizations have eschewed any revenue sharing
expectation, with local chapters keeping the funds they raise unless a donor specifies
otherwise. Collaboration in these instances is intermittent, with opportunities primarily
driven by donor intent, but issues with trust and territorialism are less common.
“The focus of [our national development team] is to provide programs, tools, materials and backoffice support to the front-line fundraisers in the chapters. Thus, chapters can focus on donor
relationships.” (National office)
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Alternatively, some organizations expect that the national fundraising team is a “major
gift powerhouse,” bringing in significant revenue from major and planned gifts. In these
cases, most organizations have revenue-sharing and gift crediting arrangements with local
chapters; these range from a uniform percentage across the program, such as a 50/50 split,
to complex case-by-case negotiations for each gift that reflect the history of the donor
relationship and the interests of the donor. Regardless of the approach, it is crucial that
national clearly communicate the policy to chapters, and ideally, involve a cross-functional
team representing national and chapter staff in developing and refining the policy. Among
organizations with clear policies, collaboration in major gift fundraising was more common
and successful. Those organizations without revenue and crediting protocols or unclear
policies had greater issues with trust and territorialism.
• The potential of the donor base: Is your support base expanding, contracting or holding
steady? Are your lower- and mid-level donors systematically moving to higher levels of
giving, or have they stalled at the bottom of the donor pyramid? Organizations that feel
their donor base is limited are more likely to experience territorialism as national and local
“compete for scarce resources.” For these organizations, a focus on acquisition, upgrading
and identification of major gift prospects can encourage national and local staff to looking
at how they can expand the donor pool, rather than “defend” it. Collaborating on a
significant gift opportunity can also raise a donor’s sights and help organizations uncover
more revenue from existing supporters.
Package local and national giving opportunities.
Many donors are interested in both the broad mission of an organization and the local-level
application of that mission making a difference in their communities. These donors represent ideal
candidates for collaborative major and planned gifts that pair a local funding priority with a national
one, and several of the organizations we studied have had great success structuring such gifts with
their donors, including national foundations and corporations with strong local presences.
Always let your donor be your guide.
At the end of the day, the interests of the donor should be the primary factor in determining where
and how a gift is used. We found that staff members (whether national or local) who stressed donor
interest and donor intent were more optimistic about partnership with their counterparts.
“We want to ask for the best gift for both the donor and the organization. If a donor wants to make
a difference in Africa, we’re not going to ask for 50 percent of the gift to go [where the donor lives].”
(Local chapter)
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Internal
Communication
Well-defined lines of communication make
work more effective at both the national
and local levels, but, importantly, they also
promote a stronger sense of transparency
and lead to higher levels of trust.
Federated organizations are
large and complex by design, but
bureaucracy can present challenges
for clear communication and dialogue
between the national office and local
chapters. We found that many local
staff were uncertain where to turn if they had a question or problem; others relied on informal
communications with colleagues with whom they’d developed strong relationships.
“We are a huge organization, and local staff don’t usually reach out unless they really need help. I don’t
know who I would talk to if I had a specific issue.” (Local chapter)
Well-defined lines of communication make work more effective at both the national and local
levels, but, importantly, they also promote a stronger sense of transparency and lead to higher
levels of trust. Those who described communication between the national office and local
chapters as clear, proactive and formal (with defined “point people” or regular opportunities
for check ins) reported greater satisfaction with their federated relationship than those who
described communication as informal, bureaucratic, unclear or even nonexistent.
To open clearer lines of communication, consider the following strategies:
Appoint chapter liaisons or chapter relations managers.
We found that staff from those organizations with development-specific chapter relations teams
expressed fewer concerns about territorialism, mistrust and transparency and generally were more
satisfied with the national/local relationship. Chapter liaisons or managers provide a single point
person for local staff to turn to, so they don’t have to navigate a staff directory to try to find the person
who can answer their question. Liaisons can also lead proactive outreach efforts, connect local staff to
colleagues in other chapters, and ensure staff are aware of the resources national offers. We note that
liaisons are very different from “regional gift officers” focused on fundraising in a specific region, as
many local chapters might consider these staff members competitors rather than partners.
“Every single chapter has a field relations manager who serves as a linkage between the global office
and what goes on in the field. Ours is a great resource; he connects chapters us with resources like
webinars, conferences, and other important information. He is always really accessible.” (Local chapter)
Encourage national visibility at the local level.
At one organization included in our study, a new CEO came on board with a vision to strengthen
the partnership between chapters and national. In addition to investing in the chapter relations
department, he personally visited every chapter (more than 300) to hear their experiences,
suggestions and concerns. National and local staff at the organization agree that the partnership
has improved significantly. We note that this was one of only two organizations where no staff
member cited territorialism as a concern, and the local staff member interviewed remarkably
cited no strains in the local/national relationship.
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“We work hard to make sure that the organization never looks like it is top-down. We don’t want
anything to be interpreted that way. In the past, [national] couldn’t go into a chapter’s territory to talk
to a foundation. This protectionist attitude has faded away.” (National office)
Steward your national/local relationship.
The national office should report back regularly to chapters just as it would to donors, using
whatever form best fits the structure and culture—written communications, webinars,
conference calls, visits, or other forms. Regular “report-outs” can emphasize the impact of
chapters’ work and spotlight success stories and strong practices at specific chapters. Most
importantly, these communications are an opportunity to share a progress report on the national
office, promoting transparency and providing a forum for seeking input or addressing questions.
“There’s no transparency in how national operates.” (Local chapter)
Knowledge Sharing
Chapter staff appreciate the resources available to them from their national
offices, including training programs, sample materials and ad hoc consulting
from chapter liaisons and other national staff. We found that they especially
valued opportunities to learn from their colleagues in the field, noting that their
counterparts in other chapters have often faced the same challenges they have.
To promote knowledge sharing that gives chapters a leadership role,
consider the following strategies:
Explore opportunities to convene chapter fundraising staff.
Some organizations use annual conferences for their entire development staff, with sessions led
by chapter and national staff as well as guest speakers. Others with larger staffs use regional
conferences. If in-person meetings are not possible, consider a series of webinars led by chapter
staff around the country, although we note that much of the value of conferences comes in the
informal connections colleagues make outside of sessions.
Provide a forum for chapter staff to raise questions and share ideas online.
Some staff use listservs or intranet message boards for chapter staff to communicate with one
another. We found one organization that had adopted a Facebook-style intranet platform for
its fundraising group, which has become a popular resource for sharing materials, archiving
training sessions and facilitating conversation among chapters.
Consider chapter liaisons.
As mentioned earlier, chapter relations staff can serve as conduits between chapters, connecting
a staff member facing a specific challenge with another who has successfully tackled a similar
situation in another chapter.
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Conclusion
The intricacies of federated structures mean that what works for one organization may not at
another, a factor that has kept any single “best practice” from emerging from the field. Still,
we believe this study is an opportunity to highlight promising strategies that organizations
can consider as they seek to enhance their own operations. In making any changes to existing
structures and practices, we urge careful planning, clear communication, rigorous monitoring,
ongoing refinement and patience to help the national office and chapters best navigate any
significant change in practice.
Campbell & Company looks forward to continuing the conversation about federated fundraising
structure through a national webinar in 2014 that will include a panel discussion delving further
into the experiences, successes and challenges that national and chapter staff have faced in
structuring their fundraising programs. We hope you will join us for the conversation.
Questions? Feel free to contact Sarah Barnes, Director of Marketing and
Communications for Campbell & Company: [email protected]
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