Case Study: Operation Smile

Seizing the Opportunity,Rising to the Challenge(s!)

Kyla ShawyerCOO, Operation Smile

Tom HarrisonCEO, Russ Reid

Right strategic partnerRight experienceRight people

CONTROL OFFER:

$15 will help provide surgeries to children with cleft palate

CONTROL OFFER:

$15 will help provide surgeries to children with cleft palate

1 surgery = $240

or

$20/month

Major gifts

Direct mail program

What else?

Where did we get the money?

Long form or short form?

$20/monthor$240 for a surgery?

Landing pageorcall center?

How do we handle attribution of web donations?

Creative

How should we tell our story?

How do we show severe images?

Foundersorcelebrity?

Which regions resonate best?

Hide

Before & After

The story behind the story

Where we wereDepartment silosRevenue silosDonor ownership issuesPoor donor experience

Where we were

The future of fundraising One big happy familyTom Gaffney, Nonprofit Times, 2008

Old WayNew WayOrganizational Philosophy/structureFragmented; competitiveHolistic; collaborativeOrganizational Philosophy/structureMultiple Channels/businesses ultimately overseen by the individual department headIntegrated Channels/businesses overseen by one CRM headFocusShort-term: reaching this years goalLong-term: building for the long-termMeasurement of SuccessChannel owners judged by the results from their channelChannel owners judged by the results generated by the entire enterpriseMeasurement MetricShort-term focus: revenue/net revenue generated by the channelLong-term view: overall value (revenue+ non financial value) generated by the constituentData recordsOwned by the channel which acquired recordOwned by all channelsStrategic InitiativesWIIFM (Whats In It For Me): developed and launched by individual businessesWIIFU (Whats In It For Us): developed by CRM head, after weighing enterprise options; launched by individual businessesTouchpoint PhilosophyIndependent: communications launched when it makes most sense for the Individual channel/businessInterdependent: one common Communications Plan shared by all channels/businesses. Touches driven by what makes the most sense for the constituentCommunications PhilosophyOrganization-centric: about our needs and what interests usConstituent-centric: about the constituents interests, and what appeals to donors

Challenges The Stomach AcheThis is how weve always done it.

But we are Marketing and Communications, not Fundraising?

How will we be able to measure ROI?

Breaking down the silos Who do I need on my side? Do your homework Focus on consensus building Create advocates Its going to hurt a little bit! Donor first

25th anniversary

4,000 surgeries in 10 days across 25 countries with medical volunteers from 80+ countries

DMA Nonprofit of the yearSeize the momentum!

So where did we end up?

Marketing Organizational StructureTom Gaffney, Nonprofit Times, 2008

Infrastructure for Growth

Infrastructure for GrowthAccount Director/Strategy/AnalyticsPresidentStrategyCreativeMediaAccount/Media/Strategy/AnalyticsMedia/StrategyAccount DirectorSVPAnalyticsSupervisor/Data ControlTeleservcsManager/Data ControlAccount DirectorAccount Executive/PR Director

Global Group HugOrganization-wide re-branding effortSurveyed all stakeholders for input:Defined core values New mission statement Developed a new tagBrand essence video

Where We Are Now Integrated campaigns Look globally and strategically Increased donor value and our value to the donor

Goal: Teamwork = 1,000 smiles!1.000Smiles

What did we learn?

Clear objectivesBoard, management and staff alignmentSecure budgetHire the right agency partnerHire the right peopleKnow your donorsCreate the right offer

Choose optimum channelsIntegrate across all mediaTarget creative at the right audienceTest. Test. Test.Micromanage call center and landing pagesInvest in growthRetention. Retention. Retention.Lather. Rinse. Repeat.

What can go wrong?

Non-alignmentInternal messaging battlesSilosInsufficient commitmentInsufficient infrastructureThe I have ideas too syndromeNot implementing the 40/40/20 ruleResponse channel oversights

The next 10 years

The story, behind the story, behind the story

Does a merger make sense?

How do we keep our key stakeholders aligned as we continue to change and grow?

How do we change our special events culture to a major gift culture?

How fast do we grow globally?

Q&A

Thank you!

Kyla Shawyerkshawyer@operationsmile.org757.321.3225

Tom Harrisontharrison@russreid.com626.463.9400

*KYLAGood morning. Im Kyla Shawyer, COO of Operation Smile.TOMAnd Im Tom Harrison, CEO of Russ Reid. Congratulations to Kyla on her promotion. She has been heading fundraising at Operation Smile and has been so successful that she was elevated to COO. So one of the things we may want to talk about in the Q&A is how you break out of your niche into broader management responsibilities.*KYLAWere all in the fundraising business, so I assume you all know Operation Smile. Were devoted to providing life-changing surgeries to kids with cleft lips, cleft palates and facial deformities around the world. We were founded in 1982. Our annual budget is $110 million. *KYLAAnd thanks to our network of volunteer surgeons, anesthesiologists, and nurses, we operate in more than 60 countries and have provided over 200,000 surgeries and 3.5 million patient evaluations in the past 30 years.

TOMOperation Smile has been amazingly successful.

*TOMBut how many of us secretly think, Sure, if I could offer a 45 minute surgery to cure innocent kids with facial deformities for only $240, I could have results like that, too.

Lets be honest. Did you think that? Maybe just a little bit?

*TOMThink again. Operation Smile has been doing life-changing surgeries for children around the world for 30 years. Theyve had brilliant, charismatic co-founders Bill and Kathy Magee for 30 years.

*TOMTheyve had before and after photos of kids for 30 years. They did major gift work and had an agency doing a direct mail program.

They had all that before.

*TOMBut they didnt have much growth until they were willing to look at their entire work completely differently.

*KYLATen years ago Operation Smiles board realized that we were too dependent on the tremendous major gift fundraising of our founders, Bill and Kathy Magee, and they challenged us to diversify our fund raising far beyond anything we had ever done before.

*KYLATo enlist tens of thousands hundreds of thousands of Americas in the mission to provide surgeries to children around the globe. To create a movement. The board committed the money. And they allowed us to take the risks.

*KYLAThe first thing we did was bring in a strategic partner. For us it was Russ Reid. For you it could be another agency. But the key is to find an agency that comes along side of you as a true strategic partner.

And I cant say enough about the importance of having the right strategic partner with the right experience and right people to challenge you, to learn with you and to grow with you.

*TOMOperation Smile beefed up their marketing team, recruiting Kyla and Kyla brought Jann Schultz (whom many of you know) and, over time, a team of people to support the new effort. Faced with the boards challenge, I can tell you that the marketing people responded as the best marketing people do.

KYLAOur point is that our successful fundraising strategies seem obvious to all of us now. But what seems obvious now, wasnt obvious then.

*TOMAs fundraisers, we know that the offer, our case or proposition to donors, is vital. We were looking to diversify beyond foundations and major donors to attract tens of thousands of regular donors. The previous control offer in direct mail was a $15 ask to help us provide surgeries to kids with cleft palate.*TOM

(ASK) Does that work or should we try other offers? Educating physicians in poor countries?*TOM

(Discuss)

We ended up wanting to bring much more specificity to our offer. Thanks to the donations of the docs and nurses and all the medical equipment, we calculated that we could provide a surgery for $240. Varies by country, but thats an average. Op Smile didnt have a monthly sustainer program, so we decided to test if we could use $20/month x 12 = $240 (cost of a surgery). *KYLALets talk about Channels. We were doing fine in major gift. We had a direct mail program.

(ASK) What else should we try?

(ASK) Why would that work? What would it look like?

(DISCUSS) Mail, TV, digital, phone, events

We decided to test TV.*KYLA

We decided to test TV.*TOMDISCUSS: Where did we get the money to launch a multi-million DRTV strategy?

*TOMShould we do long form (30-60 minutes) DRTV or short form DRTV (60-120 seconds)? Huge decision!

*TOMShould we ask for $20/month or a first gift of $240 to pay for one surgery? A $240 ask is virtually unheard of as a first gift, but we thought the visuals were so powerful and the concept of a simple fix to a complicated problem worth a try, though we didnt expect it to work as well as $20/month. (ASK) What do you think happened?

*TOMDo we drive viewers to a landing page or a phone center?

*TOMHow do we handle attribution of web donations?*KYLALets talk creative. *KYLAHow should we tell our story?*KYLAHow do you portray facial deformities and surgeries on TV without viewers looking away, or worse, switching the channels? *KYLAShould we use founders (Bill and Kathy) or a celebrity spokesperson?*KYLAWhat countries resonate with prospective donors and which dont? Where will parents and kids emote?*(SHOW dueling spots, appeals, catalog covers to ask audience to vote for winner)*(SHOW dueling spots, appeals, catalog covers to ask audience to vote for winner)***TOMSo we had a lot going on. We wanted to make sure that we were integrating everything so the donor experience of Operation Smile was consistent whether it be digital or mail or TV or one of our events. If youre responding to a DRTV show, the landing page looks like the show youve just been watching. The TV and the mail carry consistent graphics, messages and offers.*KYLA

Tom I have to stop you there. I think we need to tell them the story behind the story*TOM

Ah yes, as we know, there always is one isnt there*KYLA

As you can see, we had a plan but effective implementation was critical

Over the years we had created fundraising and marketing departments that more resembled a mix of separate businesses oftentimes competitive, because each was measured by how much revenue they generated on their own, and unwilling to share donors that they considered to be theirs

Sound familiar?So, our where we were consisted of : Department silos / revenue silos / donor ownership issues, poor donor experience.

Show of hands if anyone has dealt with or is dealing with some of these issues today? Look around youre not alone!*KYLA

To put this into context, on the fundraising and marketing side, we were experiencing some serious challenges that were impacting our fundraising potential and our ability to create meaningful relationships with our donors

By way of example: A lack of coordination between our marketing and communications departments and our DR team meant that our donors received two totally different newsletters from our organization

Here is the marketing and communications newsletter developed by the Marcom team vs. and I use the word vs. intentionally, the DR newsletter

The marcomm newsletter focused on our organizational achievements vs. The impact of the donors gift It was inconsistent in look and feel to any of the mail pieces that donors received through the DR program, down to the color palate, type font, style, content- Complete department silos meant that Drop dates were not properly coordinated who knows, our donors may even have received these two mailings on the same day!

There were other issues. The Marcom team at the time - included the online team, and in effect owned the website.

there were constant arguments over who owned the online donor and the online revenue.

DRTV was a large component of our DR acquisition program, yet, there was no real estate on the home page that connected it to the DRTV offer

Whichever way you looked at it, we were creating a poor donor experience which was never anyones intention, but was a direct result of departments working independently vs. collaboratively.

Looking back its hard to believe but unfortunately this was our reality and something needed to be about it.*KYLA

What we were dealing with is best illustrated in this chart from Tom Gaffneys article in the NPT published in 2008. (Thank you tom!)

When I saw this, the light bulb went off! In the past we were set up in the old way - fragmented, competitive, organization centric

We recognized that we needed a more integrated and holistic approach. A structure that allowed for the oversight of all parts, the ability to strategically integrate all resources, and create a donor-centric approach to maximize the interests and value of every person on the database. It sounded simple, it sounded wonderful, how nice to be one big happy family, but it was easier said than done. *KYLAAs we embarked on our journey, there were many challenges.

We needed to undergo a philosophical change and overcome entrenched viewpoints throughout the organization

The Attitude But This is how weve always done it. was prevalent Anybody heard that?

Certain areas suffered an identity crises But we are Marketing and Communications not Fundraising!

There was a lack of understanding and a general need for education .

The concept of integration seemed alien (especially among the Board) How will we be able to measure ROI if it is all integrated and anyway if email doesnt cost anything why dont we just do that and nothing else? *KYLA

But first we had to break down the silos

Once you identify an opportunity for change ask yourself who you need on your side to make it happenThen ask yourself who will stand in the wayBring them ALL to the table to talk it through

Do your homework:Anticipate issues and be prepared to answerInvite people to be a part of a task force to gain buy in

Focus on consensus building and collaboration Take the time to understand each other teambuildingThe Puzzle Game! The DISC assessmentDiscuss organizational goals

Create advocates!

Its likely going to hurt a little bit!

Donor first philosophy its all about the donor, not about us!

*KYLA

Timing is critical, seize momentum and ride the wave! We had a lot going on and it created the impetus for change:

TOMThe 25th anniversary World Journey of Smiles provided surgeries to more than 4,000 beautiful children in 25 countries during a 10-day period. Op Smile has over 5,000 medical volunteers from over 80 countries and has trained over thousands of medical professionalsThe 25th anniversary united the organization.

Op smile was also awarded the DMA Nonprofit of the Year award providing recognition and internal credibility

Created the perfect environment for bold organizational breakthroughs*KYLA

So where did we end up?

*KYLAFrom an organizational structure it looks something like this

CRM Owner: This is the ultimate owner, responsible for everything and anything that has to do with enhancing the organizations relationship with the constituent.

(Key objectives: Integration and Synergy. As someone who oversees all businesses/channels, this person works with the business owners to map out an overall communications plan; set holistic measurement criteria; identify the optimum value maximization strategy for each constituent; identify budgets, and investment allocations.)

Strategy Board: This consists of business owners as well as strategists whose role it is help put together an integrated marketing plan across all businesses, and setting and re-setting priorities.

Business Owners: including communications, public relations, development (includes online, offline, major gifts, special events), marketing, database and analytics.

Support Functions: such as creative services responsible for providing support to all areas

*TOM

Talk about RR teams support of Op smiles org and goals*TOM

Talk about RR teams support of Op smiles org and goals

*KYLA Following this we launched an

Organization-wide re-branding effortSurveyed all stakeholders for input:Defined core values Developed a New mission statement Developed a new tagBrand essence video*KYLA

So where are we now

Able to implement fully integrated marketing and fundraising campaigns

Able to look globally and strategically about where we are and how we operate

Align resources across the entire organization to increase donor value and our value to the donor*TOMWe worked very carefully at that. SHOW integration calendar.*TOMWe worked very carefully at that. SHOW integration calendar.*TOMPerhaps it was best seen in our City Campaigns where we took the marketing budget we would spend in a market and concentrated it all at one time: DRTV shows, spots, special events, PR, digital, mail. The works. All focused on a single objective. (Show samples from SLC, tell story)*KYLA

The goal was to work together to raise 1,000 smiles. Break down silos by bringing stakeholders together

Deepen the connection with the public

Showing the The whole is greater than the sum of its parts AND WE DID IT!

*TOMIn the first 5 years following our new program, Operation Smiles donor base increased tenfold. Income skyrocketed 650%. *KYLAWhat did we learn?*TOM Clear objectives (in our case diversify our fundraising program and greatly expand our donor base to grow net revenue)KYLA Board, management and staff all aiming for the same target.TOM Secure budget for testing AND for roll-out of successful campaigns.KYLA Hire the right partner agency with the experience, depth and smarts to get you where you want to go and continue to grow with you.TOM Hire the right people (intelligence, curiosity, experience, skills, attitude, emotional health, commitment, ability to collaborate for the good of the organization)KYLA Know your donor audience and what theyll support (not what you wish they would support)TOM Create the right offer (Dont just take what you have. Determine what is it you do that donors are most likely to support and package it in a way that makes it easy to give.)

*KYLA Choose the optimum channelsTOM Integrate across all media, targeting the right audiences through the right media. KYLA Target your creative at your audience, not at yourself.TOM Test. Test Test.KYLA Micromanage the phone center and landing pages.TOM Invest in growth.KYLA Retention. Retention. Retention.TOM Lather. Rinse. Repeat.

*KYLA What Can Go Wrong? (What problems, roadblocks and obstacles can impede growth and what to do to anticipate and overcome them.) *KYLA Nonalignment of board, management, staff.TOM Battle over messaging with program and brand people. If the goal is growth, the messaging needs to target people who will give with an offer that appeals to them.KYLA Silos that prevent integration.TOM Insufficient organizational commitment to testing, learning and roll-out budget.KYLA Insufficient infrastructure.TOM I have ideas, too. Believing that all ideas are equal. Choose experience and expertise IN FUNDRAISING and test it.KYLA Mistakes with audience (40), Offer (40) or Creative (20).TOM Response channels (phone center/landing page experiences). Not dreaming big enough; or testing small enough.

*KYLASo thats what we did and what weve learned. Now maybe youll help us talk about some of the opportunities and challenges over the next 10 years?(ASK each question and lead a discussion)

*TOM

OK Kyla, so in this transparent, sharing environment of senior leaders that this conference has brought together, lets talk about the challenges we face in the next 10 years. The story, behind the story, behind the story?*TOMWhats with the on-again, off-again merger talk? Is this something we should do or not do? Why?

How many of you have been through successful mergers? How many of you have been through failed mergers?

Lets talk about that (or save for the breakout session)

*KYLAAlso critical - As we continue to change and grow and cope with a changing landscape. how do we align a new CEO, the board and the Founders ?

How many of you face this issue?

Has anyone had success with this? And what did you have to go through to make it happen?

*Switched this to TOM

TOMSo, remember when we were too reliant on events or major gifts? Weve been so successful in DR, that our DR is out-pacing our major gift development and were leaving money on the table. How do we remedy this? Who else has faced this?

*TOMGlobal growth how fast do we grow? Where? Franchise or United Nations model?

KylaThis is a huge area we have been wrestling with, the complexities and politics of which can be mind boggling, but where the potential is enormous! I am so excited about this opportunity I could talk about this for hours so perhaps we could share our experiences in a breakout session.

*Q&A

*KYLAGood morning. Im Kyla Shawyer, COO of Operation Smile.TOMAnd Im Tom Harrison, CEO of Russ Reid. Congratulations to Kyla on her promotion. She has been heading fundraising at Operation Smile and has been so successful that she was recently elevated to COO. So one of the things we may want to talk about in the Q&A is how you break out of your niche into broader management responsibilities.*