In-Depth: Is Phonathon Really Dead?

If you haven’t heard, Stanford University ruffled some feathers last week by announcing that is doing away with its phonathon. Here's the announcement from Stanford. Donor Relations Guru and Annual Giving Network wrote about it.

Here’s my take. Stanford is not the first to get rid of their phonathon and they won’t be the last. Does that mean that phonathon is dead? No way!

One friend of mine said “So It Begins” on Facebook about this because with such a high profile university ditching their phonathon, annual giving specialists all over the country will have to go into a new cycle of justifying their programs to administrators who think that their universities are also Stanford.

The truth is that Stanford could afford to stop fundraising full stop and they wouldn’t lose any market share for years. Eventually revenues might drop, but it would take a while. The loss of new fundraising revenue wouldn’t seriously impact their rankings or ability to recruit students for decades probably.

Stanford has two very powerful things that your university probably doesn’t have that make it possible for them to say to donors: “You meet us on our terms. We don’t feel like calling you anymore.” Or as they put it in their paperwork. “Give online. It’s the modern way to give!”

• Brand recognition

They are #5 in the nation. They are in the company of Harvard, Princeton, Yale, Columbia and The University of Chicago. They completed a $6 Billion (with a B) campaign in 2012, which means they raised all that money during the economic downturn. If we looked honestly at the brands of our institutions, most of us are regional or national institutions at best. Stanford is a global brand. The simply don't need phonathon to communicate and shore up their brand.

• Endowment

Stanford’s endowment is $22.2 Billion. At a 4% spending allocation per year, that would provide $888 Million annually. The annual operating budget for my alma mater (The University of Southern Mississippi) is approximately $278 Million. And Southern Miss is lucky enough to use unrestricted giving as a value-add and not require those funds to meet that operating budget. Many colleges and universities NEED that unrestricted income and they need to continue to educate their constituents about their needs. Stanford could fund THREE mid-size universities every year with just 4% of their endowment revenue (without touching their corpus).

Donor Relations Guru makes the point that we should be multichannel and of course we should. Giving donors options and honoring their choices should be part of your plan. But if you aren’t Stanford and you don’t have a long game plan to replace the things that phonathon brings you (up-to-date data, donors, positive public relations, dollars, and donor education) proceed with caution. Don’t get rid of any medium that you can afford that gives your donors another way to give. I work for an institution that stopped communicating with donors via phone a while back and now we have to rebuild and repair those relationships. 

Phone calls have significant advantages that haven’t changed:

• It’s personal (much more than a mailing or a Facebook post)
• Dialog not monologue (Phonathon is not passive. It’s active. It’s asking.)
• Cost effective and scale-able (Compared to major donor visits)

Imagine if we just gave up trying to visit major donors and just decided to tell them all to give online. I don’t think we would clutch our pearls. We would laugh and wish that institution the best in their experiment. (I guarantee that political candidates aren't even considering giving up their "Get Out the Vote" phonathons!) Personal interaction works best. We know this because fundraising is about relationships. But it is also about asking. Phonathon allows us to do both and reach a large amount of people at the same time. No other medium does this.

If your phonathon isn’t working, it probably isn’t because the medium is dying. It’s more likely that the problem originates from poor caller training/management, you have poor contact rates or ironically, you aren’t calling enough to make your fixed costs worthwhile. There are solutions to all of these issues. 

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