Tuesday, June 30, 2009

The power of benchmarking

Check out my recent SOFII article talking about the power of benchmarking in your fundraising program.



Saturday, June 27, 2009

Of course direct mail isn't dead

I don't often write about this topic, for not wanting to expose myself to the "oh yes, but his agency produces DM" argument. Sod it, today I'm throwing that care out the window...

I read a great blog, as usual, on the Agitator today which talked about a paper written by Chuck Pruitt of AB Data.

And as the Agitator post states, Chuck is mad! Mad with the direct mail doomsayers who bang on about the channel being dead and buried.

Chuck makes some really good points. And yes Chuck I agree with you wholeheartedly.

The message I give people is:

- Direct mail may not be growing, but it's a big chunk for many to protect

- The best use of other media like online/social media is to support other channels, including the mail

- Do direct mail better, not less

To illustrate the point that it's not the death knell for the mail, see the chart above from our Canadian benchmarking study at Pareto Fundraising in 2008. 25% of income from the charities that participated came the year prior from the mail.

A big source of income from some large Canadian organizations.

Oh and in case you're wondering, we're seeing the same trends all over the world.


PS - if you want to find out more about our 2009 Canadian benchmarking study email me to register for our webinar next Tuesday, the 30th of June.


Friday, June 26, 2009

What to learn from the Toronto garbage strike

I’m always fascinated by how people respond in a crisis. Or even when something unexpected happens.

So I’m particularly intrigued by people’s behavior in Toronto right now. To fill you in, there is a city workers strike at the moment which is affecting a range of services including childcare, but the most disturbing and obvious disruption is to garbage collection.

That’s right, garbage workers in the city have been on strike for 4 days. Not nice.

The picture above is a garbage can/bin at the subway near my house. It quite clearly says not to use it, but has that stopped people? No. All around the city this is a common sight, garbage stuffed into each and every part of these disposals.

So what?

Well, this and the way people in Toronto are trying to dispose of their waste (in some cases illegally) got me thinking about our behavior in unexpected situations. And in particular to the way some fundraisers have behaved in the wake of the global downturn.

Frankly, there are lots of parallels.

We panic.

We make rash decisions driven by emotion.

We don’t necessarily gather all the information we need before we act.

Like the resident who illegally dumps their trash in Lake Ontario, some fundraisers are acting like frightened turtles and pulling back on all acquisition. Crazy stuff. But it’s happening.

Why? Because we’re emotional creatures. Don’t get me wrong, fundraisers need emotion. We tell stories for a living, that’s our job.


I just hope like hell (I think sometimes forlornly) that people, and I mean fundraisers, think rationally, as well as emotionally.

“We’re stopping all acquisition this year”.

I’ve heard this over the last few months and honestly it’s just stupid decision making driven by someone/a group of people behaving emotionally. If you look at the evidence out there in the sector, there are loads of examples all over the world showing you can still recruit new donors, in some cases as well and better than ever.

So, Torontonians, don’t do stupid things with your garbage. And fundraisers, act in an informed way, not emotionally.


Wednesday, June 24, 2009

Debunking some common fundraising myths

The best part about working for a data driven (obsessive) agency is you get to either debunk or prove ‘common’ fundraising myths.

So I thought it would be useful, and a little fun, to debunk a few common ones. Here goes…

1. I need a product, like child sponsorship, to grow a successful monthly giving program

Garbage, rubbish, bollocks (insert whichever vernacular you like). Simply not true. Yes, organization’s that have child sponsorship “products” have an advantage. But only because they have created an emotional connection with someone. And that’s the key, finding your emotional triggers with your donors.

Refer my earlier post about getting the most by getting it monthly which talks about the fundamentals behind a successful program. Some of the most flourishing monthly programs I have seen (many which started from scratch) are built not on fancy product names but on explaining to donors why you need ongoing, monthly support.

Take the National Heart Foundation of Australia as an example. Four years ago they had a little over 1,000 monthly donors, today over 11,000. Mostly driven by solid direct marketing (phone and mail) and explaining to people how critical funding work like cardiovascular research is to saving lives. It can be done.

2. I should stop mailing donors who used to give one time cash gifts and now give monthly

Response rates to direct mail appeals (as an example) from this group I’ve seen range from 16% to 43%. In short they are for most organization’s I’ve worked with the best responders to further solicitations. Again it makes sense. They are your best donors. So treat them well and they will respond.

This works in the long term as well as the short term. This group (cash who ‘converted’ to monthly) on average deliver more value to date than most other groups of donors, including other types of monthly giving recruits.

3. No one reads long letters

If done properly, long will always beat short. Again, refer my previous post on this.

You can’t send a 6 page phone bill and expect to out pull a short letter, but a well crafted letter that tells a story, is backed up by data driven ask amounts repeated throughout the copy, an easy to complete response mechanism, is urgent and has a target amount will always rock. And will beat a shorter letter.

Why does it take 4 pages though? Who knows. Who cares. Actually that’s not true, I do care. But put simply it’s because it takes that long to do all the things you need to do to make it a brilliant letter. Every single test I have seen around this has proven that longer truly is better.

4. If you mail too much, you will fatigue donors and they will stop giving

The organizations with the best retention rates are those that mail/contact the most frequently. And by mail I don’t mean ask, I mean talk to someone which includes feeding back, caring and thanking.

I looked at an organizations data the other day that mails around 12 times a year, which includes up to 10 financial asks. They have a 2nd gift rate of around 50% (better than the 30% I have seen through benchmarking studies here in Canada) and an overall (year to year) renewal rate of around 70% for cash donors. I’d argue they’d be higher than that if their approach was more personal and engaged donors more effectively, but the point is they talk to donors often (and ask lots) and it works.

5. Street recruitment (face to face/direct dialogue) is bad for the brand and therefore harms income

I’m sure there are those that think recruiting on the street has damaged Greenpeace’s brand. I’d argue, as I’m sure Greenpeace would, that around $1b in income globally over the past decade and a half is pretty darn good. And no doubt outweighs any ‘brand damage’.

There are arguments all over the world, at fundraising conferences, between fundraisers and ‘watchdogs’ and in pubs about the value of this type of recruitment.

But let’s face it, it works. It works looking at volumes of people it brings in (saw a report last week that showed 680k donors signed up on the street in the UK last year, up 16%). It works looking at value over time, typically these types of recruits bring in between $500 and $600 (CAD) over 4-5 years.

Bottom line is it works.

The caveat is it has to be done properly, organizations need to understand how to treat these donors (typically who are younger) and there are all sorts of back end things to consider. But the brand argument doesn’t stack up. Unless you monumentally screw it up and have a PR disaster on your hand (I.e. a canvasser abuses someone on the street).

Have you got any common fundraising myths you’d like me to debunk or prove?


Friday, June 19, 2009

Busting attrition: eight simple steps

We’ve just finished some work with a large international organization, comparing key fundraising measures across 12 of their countries fundraising programs.

Yesterday during the presentation the subject of attrition cropped up several times, particulary around Year 1 attrition.

I reckon there are some absolute imperatives when it comes to keeping people on board in the first year and in particular the first three months. These tips are independant of which channel they were recruited by, what time of gift they gave (cash v monthly) etc.

Eight things to not only remember, but live and breathe to help you combat attrition:

1. Don’t accept stupidly long/sloppy response times when saying ‘thank you’. It cannot take 4 weeks to thank.

2. Don’t rollout with the same thank you letter or piece that you’ve been sending since 1983.

3. Don’t bung in an annual report (or like piece) to a welcome package, purely because you have twelve boxes left in the storeroom. Most annual reports are garbage (I say “most”, there are some great ones).

4. Do make sure you get the donor’s details right at point of recruitment. In our Canadian mystery shopping studies last year 47% of monthly gifts were not able to be set up, most because we never received a response to our letter/email but some because the details captured by the charity were wrong.

5. Do test phoning new donors to say thank you and tell them how they are going to make a difference. We’ve had clients test this and prove (statistically) that this increases the value of someone’s giving.

6. Do promise to feedback when you thank, and then follow through on that promise regularly.

7. Do where possible use imagery and dollar handles ('your $10 a month is going to pay for two malaria nets for someone live in Zambia') to reinforce the reasons for support.

8. Do use the right mechanisms to talk to people. My 80 year old grandmother may not be able or want to open a video message you’ve sent her, but my 19 year old brother will.

Make sure you tick these boxes regardless of the way you recruit and the types of donors and gifts you acquire. There are other things to factor into the mix to best look after those who have come on board, but this is a solid place to start.


Tuesday, June 16, 2009

To premium or not to premium?

I know this is a question many organization’s often ask themselves and I’m not the first to blog about this. Nor will I be the last. By premiums I mean including things like labels, gift cards and even blankets (yes even blankets!) as gifts in DM packs.

My response is pretty simple. If it works keep doing it. BUT…

By ‘works’ I mean, does recruiting premium donors deliver more value in the long term (taking into account subsequent gifts, cost to cultivate and send ongoing premiums) as non premium recruits?

If the answer is yes then keep doing it.

Intuitively many fundraisers think that that this is just a tactic to get people in and the long term value is not as great. This is where data is great. Well actually, not just data, but data + intelligence, which equals insights.

And so recently with a Canadian client we looked at this very situation. The client has a very strong premium driven program, recruiting big volumes. But they also tried, like many organizations to “beat” their premium control pack with a non premium (or what many refer to as “mission based”) pack.

When we looked at the data, what we saw was no statistical difference over the lifetime of the two types of recruits, looking at response, average gift, income and the total value (again, taking into account all subsequent costs and income).

The key thing for this client however, and tipping them in the favor of continuing with their premium strategy was that the volume they were able to recruit with the use of premiums far outstripped the volume they could get using their mission pack.

It was a no brainer for them. Premiums it is.

However, one caveat. Where this client, and many others could do better is by using really solid, supporter focused, personal and authentic style warm/house mailings to develop these relationships further. Many have tried and failed with this (because of the “reliance” by premium recruited donors of receiving further premiums).

But I have to say that what I have seen by many trying this is frankly, garbage.

By supporter focused, personal letters I mean data driven (referring to past support, motivations etc), long letters, use of colloquial language throughout, telling brilliant and emotive stories. Really solid relationship management.

So what’s the message here?

Of course the answer is always test, test and keep testing to see what works best.

It may be premiums as the key tool in your recruitment strategy, it may not. It may be a hybrid to balance volume versus value. And of course, look at the data to see what happens long term, not just comparing response rates and average gift. Dig deeper.


Friday, June 12, 2009

"This is the most important letter I have ever written"

You won't beat this for the most powerful piece of copy you can write.

I've just read a pack that was produced for one of our Australian clients last month and this was the first line.

And guess what? It doubled income from the previous year.

Not just because of this line, but it helped. Why else did it work?

- It was honest. "..facing an unprecedented financial crisis which is forcing me and my team to make decisions I never imagined we would face just twelve months ago". It goes on to talk about what that means to beneficiaries.

- It was urgent. "I need your help right now".

- It was data driven. The asks were based on previous giving. Donors were asked for more than ever. "By making your most generous gift ever".

- It was personal. There were 30 uses of the word 'I' and 20 uses of the word 'you' in a four page letter.

- It told a story. A beautiful, compelling story about a child whose life had been touched by their work.

- It was easy to respond. The ask was clear, the vehicle to respond was simple.

Yes, it also mentioned the 'R' word. But there was a reason. They have been significantly hit by falling revenues and therefore in a position where services would be cut if a solution was not found. It was therefore relevant to mention this.

I was reminded about effective copy after reading the latest post on The Agitator this morning.

Writing effective, compelling and successful copy is not that difficult. It requires discipline, honesty and a great story.

Do you have to write the most important letter you have ever written?


Wednesday, June 10, 2009

6 step plan to 'lead' your fundraising right now

You'll notice the subject didn't include the 'R' word. Remmber, I banned it.

Alas I thought I'd revisit some stuff I've been talking to lots of people about recently. Some fundamental lessons to remember right now. I was reminded about this after reading yesterday that charitable giving in the US fell $2b last year according to Giving USA. Frightening upon first glance, but in context fell less than 1%. (In Canada, we know giving rose in 2007 to $10b, but don't have sector wide data for 2008 as yet).

So, what do we do to not only manage, but lead fundraising in tough times?

1 Make sure you rock at supporter relationship management/caring for your donors.

That includes: genuine thanking, genuine feedback, genuine two way engagement (getting people to take action, fill in surveys etc).

That excludes: ignoring donors, tardy follow up, getting distracted by cool and funky things in favor of the downright dull but important (I.e. thanking).

2 DON'T sacrifice long term for short term

I recently spoke to someone from a large national organization who told me they were forced to cut $40k from their planned giving budget. For no reason other than they felt it was the right thing to do.


You never make up ground with this type of thinking. Successful, growing organization's lift their head above the water and see that it takes commitment now to reap returns later.

This relates to acquiring donors also. Refer my post earlier in the year about smarter, not less acquisition.

3 Avoid distraction and focus on those things that will have the biggest impact

Follow the Pareto principle, the 80:20 rule. Focus your energies where they reap the greatest returns.

Don't mess about with marginal activities. Get your house in order: get your donor care right, spend more on high value appeals that bring in large chunks of net income, ensure your monthly giving welcome process is working.

This doesn't mean don't be innovative. But remember, innovation isn't necessarily doing new things, it's doing things you're not currently doing.

4 Get the balance right between cost and value

Let's say you normally spend $50k to develop an appeal that raises $300k.

You then realize if you spend $100k you can raise $500k.

Your ROI has dropped but your net return has increased. Think about which one provides the best value and helps have a bigger impact on your beneficiaries.

5 Use data to make informed and strategic decision

Not the time to make decisions based on 'gut' feelings or intuition (or if you do, test these feelings).

To use a really tactical example, if you recruit monthly donors using street recruitment. Find out what is actually the biggest driver on attrition (hint: normally it's age: younger donors more likely to attrite).

Run your data through some statistical modeling package and determine what the key driver is and then do something about it. If you find that younger donors are more likely to stop giving, don't force your agency to recruit younger donors (the agencies will go bust and that's not good for anyone).

Treat these younger donors differently, work out what they respond to, use different mediums to cultivate and ultimately retain them.

Bottom line is the data above doesn't alone allow you to raise more money by keeping more donors, but the insights gleaned from it will.

6 Look around and see what others are doing

Take your blinkers off. What are other organization's doing that's working (and that's not)?

Don't be confined to looking just within your own country, look abroad.

Mystery shop other charities and see what you can learn from good and bad donor care/fundraising practices.

Consider benchmarking yourself against others and see what's happening outside the four walls of your organization.

The world isn't going to spontaneously combust. It isn't all doom and gloom. Whatever you do, don't retreat like a frightened turtle. Follow the steps above and you'll come out of these times better, stronger and able to help more beneficiaries.

And isn't that what it's all about?


Tuesday, June 9, 2009

I've succumbed to the pressure. Tweet, tweet...

But let's make it very clear.

I won't be telling you that I just had vegemite on my toast or that I've just downloaded some new songs onto my iPod.

My twitter account is focused on bringing me closer to those in my sector. (I've heard it all before you twitter nuts are crying..)

As a social experiment and less than 24 hours in, I'm blown away by its viral powers. A little freaked out at the same time at some of the people and organization's who are already 'following me'. Strange because it never bothered me that people followed my blog, but weirdly I don't as yet feel the same about twitter.

Anyway for fear of becoming a technophobe I'm giving it a shot. Let's see how many interesting tidbits of information I can uncover, the number of people I can connect and share with and fundamentally, does it open me up to things and people I wouldn't have otherwise come across?

Oh, and I did have vegemite on my toast this morning.


Saturday, June 6, 2009

How the hell do you not know what you do?

Well, apparently many charities don't know what they do. Or at least they don't help their staff answer questions about the work they do.

As I've posted about previously, I've become a bit of a voyeur, mystery shopping charities all around the world, and last year here in Canada.

The upshot is, as a sector we are crap at looking after our donors. I've written lots about this, see one of my articles here on SOFII.

The fact that we can't get the basics right (thanking, responding, setting up gifts) drives me batty.

I was recently sitting in the reception of a charity (whom shall remain nameless) and overheard a conversation between the receptionist and a donor/potential donor, whom has enquired about donating but wanted more info.

Whilst I couldn't hear the other end of the call, I got the crux of it. Someone was ringing to ask about making a gift and clearly enquired about some specific areas of this organization's work.

The receptionist answered, "I'm sorry I can't help you with that, the person who could help talk about those specific projects is on vacation till next week".

They then proceeded to say goodbye and the call ended.

Of course, I wasn't shocked. I've heard this countless times. The point is, it wasn't the receptionist fault. In most cases, shoddy donor care really isn't the fault of the individual communicating with the donor.

It's the fault of the organization and the leadership within for lack of investment in training.

Not providing the resources (and I mean training) for staff is cutting off your nose to spite your face.

Great donor care requires leadership. It requires leadership seeing the value in treating donors well and doing something about it.

Even if someone is on reception for a day, they should be told where each 'type' of call should be directed. That's it.

I wouldn't expect that person to know the ins and outs of the organization but being given the tools to direct donor enquiries is not negotiable.

Fair to say that donor likely won't call back.


Tuesday, June 2, 2009

If you're training and professional development budget has been cut...

Then there is absolutely NO excuse not to be registered with SOFII.

I was staggered last week at AFP Toronto's Fundraising Day to hear about the number organization's who have in my opinion, cut off their nose to spite their face, and slashed training budgets. This is classic short term thinking. And frankly WRONG.

It's nonsensical to me. Everyone's talking about how it's more difficult to fundraise, yet we make it even harder by not giving our staff the opportunities to develop themselves? Crazy.

Anyway SOFII gives you a plethora of meaty information from fundraisers around the world. Learning's, exhibits, opinions from the best in the business. and it's FREE.

So, stop reading my rant. Register for SOFII now.