Changing from an In House Caging Operation to an Outsourced Model

1. Changing from an In House Caging Operation to an Outsourced Model

2. Your Speakers Tiffany Fortier serves as Vice President of Sales, Marketing and Client Relations at FISC Solutions, a nationwide back office processing service company. She is responsible for the overall coordination, management, and leadership of FISC’s sales, marketing, and client relation divisions. Paulette Karas, CFRE has been with the Marist Brothers’ Development Office since its inception 25 years ago. She currently is the Co-Director of Development and jointly directs all aspects of a diversified and comprehensive fundraising program. Ryan Butts serves as Director of Donor Relations and Major Gifts and oversees the direct mail and major gifts efforts for Mundelein Seminary, the largest Catholic graduate seminary in the United States.

3. Today’s Discussion • Accountability in the industry. • A look at caging models. • Panel discussion: busting the myths of outsourcing.

4. Need For Accountability • Cultivating a culture of accountability and transparency. • Accountable • [uh-koun-tuh-buh l] • 1. subject to the obligation to report, explain, or justify something; responsible; answerable. • 2. capable of being explained; explicable; explainable. • Transparent • [trans-pair-uh nt] • easily seen through, recognized, or detected. • 2. open; frank; candid.

5. More Conscientious Donor • Lots of choices…1.4 million+ tax exempt organizations in the US. • Accountability in the industry. • Watch Dog Groups • NCDC Development Office Audits • Donors must make sound decisions on where to invest their money. • Expect Results • Expect Reporting • Expect Security • Hold religious organizations to a higher standard.

6. Outsourcing Segregation of Duties Built In Controls Reporting Functions Imaging Audit Trail Risk Sharing

7. How does this impact your organization? • Reflect on your operation practices. • Consider: • Best Practices • Security • Operations • Banking • Finding efficiencies. • Realizing accountability within staff. • Personnel balance and resource management.

8. Components to Caging Operation

9. In House Gift Processing • Primarily Manual • Mail Retrieval • Opening/Coding • Batching • Special Mail Handling • Data Processing • Deposit Preparation • Physically Travelling to Bank to Deposit • Paper Storage • Monthly Donor Process • Primarily Automated • Cost of Equipment • Cost of Software • Maintenance • Training Employees • Glitches (Trouble Shooting)

10. Outsource Defined Outsource [out-sawrs, ‐sohrs] to send away (some of a company's work) to be done by people outside the company to procure (as some goods or services needed by a business or organization) under contract with an outside supplier <decided to outsource some back-office operations>

11. Outsourced Caging Services • Standard turn around all year long. • Imaged enabled processing and archive. • Automated updating. • Reduced errors. • Efficient environment. • Electronic deposits. • Online archive. • Document retention program. • Takes on risk associated with best practice standards.

12. Automation • What is needed for automated scanning? • OCR Scan Line • 2D Data Matrix Barcode

13. Updating Your Database • How do I update my donor database? • Provider can enter data directly into your system. • Not considered “best practice” in terms of security. • Provider can transmit a file specifically formatted to update your system. • Secure data exchange. • Considered “standard” in the industry.

14. Security • Is my information protected? • Assess the provider’s security controls. • Make sure they follow best practice standards to keeping data and physical responses safe. • Ask the provider if they have audit reports completed by an independent audit firm and request a copy to review. • Donations sent to a processor instead of your organization effectively segregates duties and provides an outside audit trail.

15. Sample Security Question • Does the Service Provider have a written Information Security Program that has been documented, approved and implemented? • Ask the Service Provider to give you a synopsis of their security program. • Ask the Service Provider who in the organization has been assigned responsibility for the Information Security Program. • For a full list of sample security questions to evaluate service providers please contact me or see the January 2014 edition of Dimensions. Courtesy of Brenda Paradis, Senior Information Security Advisor with Sage Data Security, LLC

16. Panel Discussion: Busting the Myths of Outsourcing

17. The Marist Brothers • Located in Chicago, IL • Founded in 1817 by MarcellinChampagnat, a newly-ordained priest raised in France during the French Revolution. • Province Development Office established in 1989. • The Marist Brothers are an international community of more than 3,400 Catholic Brothers. • Have outsourced caging and acknowledgment letter operations to FISC since June 2012.

18. Mundelein Seminary • Located in Mundelein, IL • Archbishop George Mundelein opened St. Mary of the Lake Seminary in 1921 under an original 1844 charter of St. Mary's College. • University of St. Mary of the Lake / Mundelein Seminary is the major seminary and graduate school of theology for the Archdiocese of Chicago. • Have outsourced caging and acknowledgment letter operations to FISC since October 2013.

19. Survey says… • We compiled the following questions and answers based on what we have learned when talking with nonprofit organizations throughout the country. • There are many common concerns/questions about outsourcing, so we thought we would discuss them head on. • In addition to the answers FISC has gathered, we have two clients who will share their own experiences as it relates to these questions. • Let’s begin…

20. Losing Control • Will I lose control? • Working with an outsource partner is a collaborative effort. • Success relies on defining your needs, and creating the right solution together. • Gain accountability by having a carefully spelled out statement of work detailing responsibilities and expectations. • Select a provider that has experience working with Catholic organizations.

21. Driving Factors • What are the main reasons you chose to outsource? • Speed up the process and thank donors faster. • Get more done. • Affordable cost. • Benefit from technology without the investment • Short staffed. • All of the above.

22. Staffing • Will outsourcing result in layoffs? • Repurpose staff to focus on donor relations and stewardship work. • People moving on; retiring, relocating, etc. • Do not need to hire for busiest times. • Hiring, training, security, business rules • What to do with staff during down times? • Working with a partner ensures that necessary staff and expertise are on hand, with the right number and right type of people at your disposal.

23. Management Challenges • What will change? • Win-win situation. • Small staff, data entry ingrained. • Staff still informed and aware. • Speed in which processing is accomplished.

24. Development Department • What will change? • Department overall. • More net revenue for program. • Analysis, planning to department. • Reestablished fundraising focus.

25. Cost of Outsourcing • How do I justify paying someone to do our work? • Cost savings realized through: • Economies of scale. • Better technologies and innovations. • Reduced labor costs. • Reduce equipment investment and maintenance. • Reduction of bank fees. • Look at the cost of entire process, not just direct mail costs and what’s coming in.

26. Postal Changes • Do I have to change my mailing address for donations? • Post office box at provider’s location. • Batch mail and send it to provider. • Sweep mail at the post office.

27. Thank You Letters • Where do letters fit in? • Donor can be thanked faster. • Cost of letters, man power, equipment. • Cost allocation. • Not all or nothing…

28. The Donor • Did the donor notice anything? • Thank you letters went out much faster. • Change of mailing location. • Shape the message for making the change. • Most donors understand, but can’t make everyone happy.

29. Cultural Change • How do I deal with the aftermath of outsourcing from a staff perspective? • Talk to your staff. • Reassign staff as needed. • Explain impact on day to day. • Development department – database, lists, print shops – what is the goal here? • Working with vendors, coordination.

30. Ancillary Services • Anything else I should know about? • Image based depositing. • Benefits associated with Check 21. • Remote lockbox. • Local scanner to scan checks AND remittances. • Online archive. • Think about how you want to view your work.

31. Summation… • Best Practice as it relates to caging, is the new reality. • Donors want to know their money is being handled appropriately. • Outsourcing gives organizations the opportunity to realize automation and security best practices without the ongoing investment. • Each outsourced relationship is different…the best way to know, is to ask!

32. Questions? Need more information? Please contact: Tiffany Fortier Paulette Karas Ryan Butts (207) 513-3442 (773) 881-5343 (847) 970-4951 tfortier@fiscsolutions.com maristbr@maristbr.org rbutts@USML.EDU