1:1 with Ted Garrard

Over the course of 2019, Nicole Nakoneshny, KCI’s Lead, Knowledge + Insights, will be going one-on-one with the members of our Philanthropic Trends Advisory Board to talk about the future of fundraising and philanthropy and explore What’s Next for Canada’s charitable sector.

INTERVIEW WITH TED GARRARD, CEO OF SICKKIDS FOUNDATION

Q: When it comes to fundraising, what’s trending?  What’s timeless?

A: On the trending side, a digital revolution is happening. When we say digital, we’re not talking about a single thing; it’s an ecosystem. It’s a way of doing things. For the charitable sector, some might say this revolution started with the ice-bucket challenge. However, what we are seeing now is that rather than those one-off digital engagement opportunities, charities are building digital into the core strategy of how they fundraise. Now this is a bit of a generalization, because unfortunately I don’t think everyone is doing it. Thinking through how we can take the entire fundraising process – from cultivation to stewardship – and embed all of it into a digital platform is a top priority for us at SickKids Foundation. We aspire to be the number one digital charity in Canada by embracing the digital culture, and embedding it into all traditional aspects of philanthropy.

To me, what’s timeless is mission-based fundraising. You’re nothing as a fundraising organization without a clear mission and vision of what you want to achieve. I also believe that fundraising is still a personal relationship-driven business. Going back to the digital revolution though, I believe this is where we need to combine the trending and the timeless. For example, something we are looking at is how to nurture personal relationships with donors through a digital portal where they can have more of a self-guided engagement experience. If they need their tax receipt, they can get it on the portal. The fundraiser can also serve donors content they may find interesting through the portal. This keeps the personal relationship alive, but empowers the donor to engage with us more independently, which is what digital technology already allows people to do in most aspects of their lives.

Q: What has been most difficult in this process of switching to a “digital ecosystem”?

A: One thing is that as a charity, we are always mindful of cost per dollar raised (CPDR). The limitation of resources is always front and centre. Another constraint has been acquiring the talent that has digital experience and competence, especially given our compensation structures in the non-profit sector.  Overcoming the fear of change, particularly in light of the multi-layered decision making structures in our organizations (board, committees, etc.) is a third challenge.

And finally, I would say impatience. I see this as a long-term investment that won’t necessarily yield visible short-term results and returns. It’s a crucial investment to make though, because soon enough, if you have not shifted to be a player in the digital economy, you will be left behind.

Q: Are you surprised by anything that you see happening?  Or perhaps not surprised?

A: I’m surprised that so many charities are slow to embrace the change that is happening with the digital revolution. I am also quite surprised that we’re still talking about the cost per dollar raised (CPDR). There is not enough public discourse dispelling the myth that charities should run on shoestring budgets.  As I’ve said many times before, we’ve moved beyond the bake sale, and charities today must have a degree of sophistication to do their work.  At SickKids Foundation, we have over 200 employees, we’re turning over more than a quarter of a billion dollars per year, and we process about a million and a half transactions per year. That just doesn’t happen for free.

What isn’t surprising to me is that there is still intense competition, and that there’s a continued reliance on major gifts, although I do think you can have your major gifts and “the rest, too”.

Q: Why do you think people are still so fixated on a low CPDR? How can we change the discourse in the future?

A: I think too many charities have built it into their value proposition. If we want to appeal to this next generation, I don’t think they’re going to care as much as our parents and grandparents did about the cost of fundraising. They’re going to care what kind of impact we have.  I also think that we, as a sector, haven’t done a good enough job of educating donors that it’s reasonable to invest to make money, just as any business would.

I think it will probably continue to be on people’s minds in the future, but how we can move the needle is by not continuing to add a low CPDR as a value proposition to donors.

Q: What should sector leaders be talking about and focused on?

A: It seems that many leaders in the charitable sector still tend to be focused on how they’re going to meet campaign goals, annual goals, and see immediate dollars rather than building long-term, sustainable organizations. I’ve always said that I would not be doing my job if I’m not positioning the organization for success a decade or two after I leave.

There is not enough public discourse dispelling the myth that charities should run on shoestring budgets.  As I’ve said many times before, we’ve moved beyond the bake sale, and charities today must have a degree of sophistication to do their work.

Q: Fewer Canadians are making tax receipted gifts.  What does this mean for how we raise money?

A: I think that this decline in tax receipted giving is in part due to the increasing polarization of wealth, which is more of a broader macroeconomic issue than it is a specific one to our sector. Plus, there haven’t really been any new tax incentives for charitable giving in a very long time, and the current incentives are not being reinforced, so people are often unaware of them.  I also think that competition and donor fatigue are playing into it, causing less Canadians to think about giving a tax receipted gift. This doesn’t mean that they’re not giving, however. For instance, we bring in millions of dollars through cause related marketing with corporate partners, in which people are giving at the cash register, or checking-out online and receiving a “would you like to make a donation” prompt. These are not receipted gifts, but they’re still happening.

Q: At SickKids Foundation, you’ve bucked the trend of a declining donor base and are seeing growth in the number of people giving to you.  To what do you attribute this success?

A: Yes, we’re seeing an increase of 7-10% in our donor base per year.  I would say this is because we have really invested in the brand. We figured out how to make our story more compelling to the public, particularly a younger demographic, and more skewed to men than our traditional branding. We made our narrative more edgy, found famous endorsers like Ryan Reynolds, and extended it through social media. That’s when we started receiving a large amount of donations from people who had never given to us before.

Q: Is this scalable to smaller organizations?

A: I do think it’s possible for smaller charities to invest in their brand and innovate in order to grow their donor base.  But that could mean doing things they haven’t done before.  For instance, teaming up with other charities with a similar mission, these organizations could scale up and invest in the kinds of things I just talked about. And, this might be a bit provocative, but I also think there are too many charities in Canada, and some consolidation might be beneficial in more ways than just this.

Q: 1 in 2 Canadians aged 18-34 say they are inclined to give directly to causes through crowdfunding than to a charity. How do charities compete and attract young people to give?

A: We should be engaging the next generation and asking them, how can we be appealing to you? How should we be telling our story to you? We focus our youth engagement strategies on those in their mid-twenties and up. Our method of engaging youth has been our two programs; SickKids Innovators and SickKids Activators.

Activators tend to be young professionals who want to help raise money for SickKids. Here, we work with them to develop and execute fundraising ideas targeted to the next generation. Innovators are next generation philanthropists, who tend to be in their late twenties to their thirties, who have to commit to giving $10,000 total over a two year period. Innovators are offered networking and social events, and opportunities to vote on initiatives that will receive funding at the Hospital. 

Q: We keep hearing about the impending wealth transfer, now predicted to be upwards of $1 trillion over the next decade.  What should organizations be doing to be ready?

A: In the past, I’ve seen organizations with such potential for planned gift portfolios, but that had little-to-no staff members focused on securing those commitments. When I arrived at SickKids Foundation, there was only one staff member dedicated to planned giving. Over a few years, I added seven more. If you don’t have the feet on the street, you won’t secure those estate gifts. This type of fundraising is a ‘contact sport’, especially since this generation is still geared toward those one-on-one contact relationships.

Q: We are closely watching the trend that ‘doing good’ is increasingly being incorporated into corporate brands and strategy. What will that mean for charities?

A: First of all, I think we need to embrace it rather than resist it. We know from research that Canadians are more likely to buy from companies that engage in philanthropy and do social good. The way we have looked at it is to really customize what that relationship could look like with a given company, and then have a whole menu of options to activate. It may be through traditional corporate giving, it may be through employee giving, or it may be through cause related marketing as I mentioned before. You have to play matchmaker here though; find where your priorities align with those of your potential partner. But a word of caution as the worst thing you can do in this case is make stuff up that you cannot deliver to land a partnership. I’ve spoken to a lot of corporate donors who have been disappointed with the results of their partnership because it did not live up to what was promised by the charity.

Q: It is estimated that upwards of 78% of organizations don’t have a formal succession process for their leadership positions and that only 41% of organizations have identified potential future leaders.  Does that worry you?

A: Succession planning is something that I don’t think is being done particularly well. There are so many skillsets that you need to bring into leadership roles. It’s not just about fundraising; you need to know about governance, communication, the changing world of technology, how to lead teams, etc. As our peers in the sector think about the role they have in succession planning, they should think about the various dimensions that are going to be needed for the next person to be successful. You’ll likely find these dimensions will be much wider than just being a good fundraiser. I would say that if you are trying to groom people in your organization to succeed you as a leader, make sure you’re giving them the help they need to understand the diversity of what’s required to be successful in these roles.

Q: What’s an issue facing the sector that relates to fundraising that isn’t getting enough attention in your opinion? 

A: I don’t think charities are paying enough attention to the lifetime value of donors. When thinking about the investments you’re making into fundraising efforts, rather than thinking about that one time donation you’re working on, you need to keep in mind the lifetime value of that donor. Here, we are mindful of the lifetime value of our donors, and that helps us make investment decisions, and how we will steward them. I think that this is a component of fundraising that people don’t spend enough time thinking about because we are so focused on trying to meet annual goals and land quick gifts.

Another thing that doesn’t get talked about enough, particularly in mid to large sized charities, is the siloed nature of fundraising. This means that there isn’t much focus on the donor journey through the different channels of giving. An example would be taking one-time donors and migrating them into making monthly gift, or engaging them in events, or eventually even securing a major gift from them. A while ago during a public intercept fundraising initiative that we did at Pearson Airport, a gentleman approached us and offered to make a gift of $1,000 per month. This was highly unusual, considering the average monthly gift is $26. So our staff looked at his profile to see if he’s done anything else for us in the past, and sure enough he had been buying hundreds of our lottery tickets over the years. Our research team found out he is a big corporate franchisee, and he was giving the lottery tickets to his employees. Later on we went and visited him, and landed a $1 million commitment. Since then, we’ve engaged him in multiple ways, and he now has increased his commitment to $8.5 million.

Q: What are the things that you believe should be on every charity’s agenda right now as it relates to their fundraising program?

A: I think that every charity should be thinking about:

1. The role that digital can play throughout the whole donor pyramid,
2. How you can better integrate the donor journey across multiple giving channels,
3. How you might be able to re-position your brand and tell your story in a way that will be compelling to your existing stakeholders, but also a new generation,
4. Ensuring that the donor experience is every bit as important as your customer experience on the ground level,
5. Surrounding yourself with the best possible talent… those who are inspired by your mission, who will come to work every day wanting to make a difference, and who think outside the box.

And finally, I think every charity needs to be changing their perspective to one that builds for the long term and embraces the need for investment and innovation.

Ted Garrard is CEO of SickKids Foundation in Toronto.  SickKids Foundation is responsible for raising funds for The Hospital for Sick Children, one of the most respected children’s hospitals in the world, and for granting funds across Canada to advance child health.  Previously, Ted was Vice-President (External) at The University of Western Ontario, a position he held from 1996-2009. Ted received his BA and MA degrees in political science and economics from York University and worked for one year as a policy analyst with the Ontario Liberal Policy Research Office before joining United Way of Greater Toronto. He is also an active community volunteer and is presently Chair of Canada’s Children’s Hospital Foundations and Chair of the Woodmark Group (the 27 leading North American children’s hospitals). Ted was named a Member of the Order of Canada in June 2018.