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NDSU, MSUM take different approaches to telemarketing

FARGO-North Dakota State University's foundation recently contracted an outside firm to take over its telemarketing, and the shift is already yielding big gains.

FARGO-North Dakota State University's foundation recently contracted an outside firm to take over its telemarketing, and the shift is already yielding big gains.

The call center brought in about $150,000 the first quarter of 2015, compared to $104,000 in last year's first quarter, according to a cost analysis The Forum requested under the state's open records law.

Chief of Staff Nonda Mack said that's because the firm, Ruffalo Noel Levitz, makes a concerted effort to ask donors to upgrade their gifts. NDSU's average gift from telemarketing is up about $37 from one year ago, to $110 from $73, records showed.

Formerly RuffaloCODY, the firm took over NDSU's call center in July, but started operating the center at full capacity in January, records show. The foundation planned to pay the firm about $379,000 for 2015, which includes the salaries of student employees.

Combining that with other costs, such as printing and phone, the foundation is spending $409,000 on telemarketing this year, up from $390,000 in 2013 and $369,000 in 2012. The foundation spent just $302,000 on telemarketing in 2014, but that's because the primary manager resigned mid-year to take a different job, Mack said.

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The foundation still raised about $527,000 from telemarketing last year, which was down from $625,000 in 2013 and $532,000 in 2012, but again, management turnover affected the center's performance in 2014, Mack said.

When the center's manager resigned, the foundation decided to contract with Ruffalo, and now they're hoping the cost will be worth it.

Across the river, Minnesota State University Moorhead takes a different approach to its call center.

University spokesman David Wahlberg said his hunch was that outsourcing "is a pretty lucrative thing to do," but at MSUM, large gifts are not necessarily the call center's goal.

"For us, it's really more about the relationship that we build when we make the phone call," he said.

Building a connection

Building relationships with alumni is equally a part of NDSU's call center, Mack said. That's why they use student callers.

"It's all about the connection, absolutely," she said. "I don't think people would be compelled to give if it was just a call center employee."

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She and Wahlberg both highlighted the conversations students can have with alumni.

"They want to know 'Did it snow today in Moorhead?' and 'What are students talking about?' " Wahlberg said. "It's less about the gift today and more about the long-term relationship."

For the past three years, MSUM has spent about $70,000 per year on telemarketing, according to records requested by The Forum.

MSUM's net income from telemarketing has been growing-from $28,000 in 2012 to $41,000 in 2013 to $65,000 in 2014-but is still nowhere near the $225,000 net income that NDSU made in 2014, which was lower than it could have been because of management turnover, Mack said. NDSU's telemarketing net income was $235,000 in 2013 and $163,000 in 2012.

Wahlberg was not concerned about the output of MSUM's eight-month, nine-student call center.

Those conversations keep alumni feeling connected to the university, he said, and are one of many activities that encourage alumni to give "when the time is right for them."

Professional telemarketers

NDSU's call center, on the other hand, is year-round and employs 23 students, said Shaylyn Allen, a Ruffalo Noel Levitz employee who manages the center.

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Allen declined to talk about the firm's techniques-which are trade secrets, she said-but records show that the foundation is pulling in larger gifts and more gifts by credit card.

About 37 percent of this year's first-quarter gifts were by credit card, compared to about 29 percent of last year's first-quarter gifts, records showed.

Gifts by credit card are preferable because that guarantees the foundation will get them, Mack said. Pledges don't always come through-about $169,000 was pledged to the foundation this first quarter, but only $150,000 was received.

The call center is also bringing in larger gifts than before.

Although fewer pledges were made this first quarter-1,541 pledges compared to last year's 1,570-those pledges were for $169,000 compared to last year's $115,000, records showed.

This year, about 45 percent of first-quarter pledges were upgrades and just 19 percent were downgrades, records showed. In last year's first quarter, 14 percent were upgrades and 70 percent were downgrades.

The University of North Dakota, South Dakota State University and the University of South Dakota also use Ruffalo for telemarketing, Mack said, and the firm's website touts itself as "the leading provider" of fundraising services in higher education.

But Mack emphasized that although the income is "why we're doing it," they share MSUM's mission. The foundation wants alumni "to feel like they're still a part of their alma mater and know what's going on," she said. "People just love to hear from the students."

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