Business Spotlight: Strategic Fundraising Inc.

Strategic Fundraising Inc. knows how to get the most bang out of Americans' bucks.

The St. Paul, Minn.-based, direct-response fundraising firm raised $12 million for John McCain's presidential campaign this year and was listed among Inc. magazine's 5,000 fastest-growing private U.S. companies in 2008.

The company uses creative strategies, analytics and technology to provide telephone fundraising and related services to not-for-profit and political organizations. Its largest call center is in Springfield, 3300 S. National Ave., Ste. 500.

With clients including the National Republican Committee, American Lung Association, National Rifle Association and more than a dozen state Republican committees, demand for Strategic's fundraising and membership management services, driven by strong performance and word-of-mouth, has produced three-year sales growth of more than 69 percent, according to Jeremy Landon, communications manager.

"These are blue-chip organizations," said CEO Dan Rice, who founded the company in 1991. "It's a very great blessing to have a great stable to reach out to small-dollar, grassroots contributors."

In 1990, Rice recognized that fundraising organizations needed a better way to raise money for their causes, so he set out to build a company that would emphasize lifetime relationships with donors. He raised $4,000 in seed money; signed a lease for a small office in St. Paul; purchased folding tables, chairs and phones; and hired college students to begin making fundraising calls for the political arena.

"We really started because I have a passion for political organizations that we serve and felt there was a need for high-quality, professional results to assist with fundraising," Rice said.

Today, Strategic has the capacity to manage approximately 20 million calls annually, thanks to 700 employees at its St. Paul headquarters and its call centers in Springfield; Fargo, N.D.; and Eau Claire and Oshkosh, Wis. The Springfield call center employs 215, and nearly two-thirds work full time.

"Success is a function of being able to attract, recruit and maintain a high-caliber work force," said Springfield Site Manager Troy Kaufmann.

One of those workers is Thomas Jennings, a professional fundraiser in the Springfield office who reached $2 million raised in April. He has worked at the Springfield call center since July 2001.

"Hitting the $2 million milestone is a tremendous achievement. It's clear that Thomas has a real passion for the work we do on behalf of our clients," Rice said.

The Springfield call center has a number of veteran employees who have achieved notable milestones. Professional fundraisers Doug Wight, Sandra Earnest, Gail England and Lisa Leach have each reached the $1 million-pledged mark, and another 12 employees are well on their way, with pledge totals exceeding $500,000.

In the direct-response marketing world, it's all about testing creative concept, copy, telephone scripts and contact lists.

"We do a lot of pre-analysis," Kaufmann said. "We're not about cold-calling. We know a lot about these people before we make a phone call. We know how much they gave in the past."

Strategic Fundraising's database was created through 68 million calls made since 1991, in addition to information from public and private information sources. Officials say that deep database has helped the company absorb any reduction in giving due to the tightened economy. An election year also encouraged contributions, they say, pointing to the millions raised for McCain.

Rice takes pride in the fact that his employees all speak fluent English - a skill that is less common in the telemarketing industry due to foreign outsourcing.

Kaufmann puts a lot of effort into making the Springfield call center a fun work environment and helping his employees stay accountable to their fundraising goals. The company offers a flexible work schedule that allows employees to work as few as five hours or as many as 55 hours a week based on blocks of time that work for them and their families. Strategic Fundraising recently increased its benefits packages and also offers a variety of insurance programs, starting with a basic plan for $8 a month.

Kaufmann said the company's biggest challenge right now is figuring out how to expand smartly to accommodate more clients: "We have some clients who left and want to come back and we don't have the capacity now to take them back. We need to expand at an appropriate rate that we can handle."

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