Tuesday, April 27, 2010

What to do following Haiti?

In the days following the tragic circumstances in Haiti, many fundraisers posed the question, what should non-emergency charities do?

Should they continue to appeal to donors? Should they keep prospecting? Should they delay things till 'the dust settles'?

My colleague Ruthann and I discussed this. For about 12.8 seconds. And then realised, as I blogged about back them, that it was business as usual. Full steam ahead.

Ironically for us we were due to lodge an appeal for a client just two days after the Haiti earthquake. So when we got to work on the morning after and realized the enormity of the Haiti disaster, we braced ourselves for the obvious question that our client could reasonably ask...

Should we delay the appeal?

The brief chat with the client was just that, brief. They trusted our judgement and agreed wholeheartedly. The appeal was urgent. It needed to go out. We needed to raise the money.

And it did, it went out on time.

So what happened?

A little over 3 months since the first (of two) stages of the mailing was dropped and the appeal is rocking along nicely. Net income (that's taking into account all costs) is up around 25% on last year, and rising daily. Average gifts and response rates are both up from 2009.


Because the appeal did what it needed to do. Strong call to action, told a compelling story, used personal information, asked appropriately.

It really was, and still is, business as usual for non-disaster charities.


Friday, April 23, 2010

Volume vs. Value?

When I ask fundraisers which they'd prefer for their recruitment efforts - get more donors in the door (volume) versus get more money (value), not surprisingly the response usually starts and ends with 'both'.

On Tuesday I presented to 14 brilliant Canadian organization's who have pooled their data together as part of Pareto Fundraising's benchmarking cooperative. Brilliant because they have the foresight to see the tremendous insight provided by coming together to share for the greater good. Hats off to you guys.

I digress a little.

As we walked through the latest round of analysis, discussing the implications of the findings (more to be released shortly), questions and debate arose around certain fundraising methods/channels.

"Why would we do that? It seems a lot of work for little net return"

Good point indeed.

And herein lies one of the challenges we face. Do we want lots of new people or lots of income from new donors?

For example you have channel X which brings you $800 net on average after 5 years. Wonderful you think. But you can only find a few hundred of them a year.

On the flip side channel Y delivers just $350 after taking into account all costs in the same period. But you can recruits in the thousands each year.

What to do. What to do...

Here's my take on this:

- The decision should be made in light of what delivers the most long term income overall.

- There may be other factors dictating your ability to invest in channel X or Y. For example what's your comfort level with channel X which may ruffle some feathers both internally and to the general public?

- Linked to the above point, yours and your organizations attitudes to take risks are incredibly important.

- Consider the roll out potential of any method of recruitment. Pointless investing in something that offers little beyond any trial phase.

The short answer is you likely need a balance of both. Really solid drivers of growth in volume balanced with 'money in the bank', vehicles that deliver lots of net income.

For example, in countries like Canada and Australia if you want large volumes of monthly donors you invest in street recruitment. If you want long term, loyal and valuable supporters, digital and direct mail recruited donors are your meal ticket.

Consider the above points, and what you are setting out to achieve.

Whatever you decide, have the long term interests of those you exist to help, your benefactors, front of mind.


Thursday, April 15, 2010

Securing Future Growth: 10 Point Plan

I just got back from the AFP International Conference in Baltimore.

The session I presented focused on securing future growth, looking at some critical lessons from the global financial meltdown and what charities can do to prepare themselves for ensuing tough times.

In reality however the session essentially talked about a blueprint for more effective fundraising.

You can find the presentation here. I've also included a summary of the 10 points that are covered in it:

1 Stop using ROI as key measure and focus on net income. An obsession with ROI can be destructive and stop you focusing on real growth. Worry more about increasing net income.

2 Don’t sacrifice long term for short term. Cuts you make in acquisition and planned gifts/bequests are difficult to make up. You're always playing catch up. See the forest from the trees.

3 Accept that donors are not cheap. Therefore spend time looking at those will deliver the most, long term net return.

4 Use data cleverly to make informed and strategic decisions. Data + Intelligence = Insights. Understand what the data is really telling you, all is not always what it seems.

5 Avoid distraction.
Spend more time doing what you know will make you lots of money, then on things that have the potential to make you some. That doesn't mean don't innovate - but remember, innovation isn't about doing new stuff that no one else is doing, it's about doing things you're not currently doing.

6 Look around at what others are doing: understand where growth is coming from. Scan environmentally. Benchmark. Mystery shop others. Look to see what others are doing: good, bad or indifferent.

7 Implement proper, well thought out supporter relationship management. Looking after donors means: proper thanking, giving and getting feedback, being personal, focusing on the 'honeymoon period' (first 30 days after someones first gift).

8 Get the fundraising tactics right.
Continue to ask, tell stories, ask for the right thing, give people deadlines.

9 Focus on monthly givers. Ongoing, automatic (monthly) giving has transformed the fundraising landscape*. It continues to grow (even in the recession where we saw growth of around 10%). It's the way to go. Caveat is in the US where fewer organization's have ridden the monthly giving wave, but this is changing.

10 Use multiple vehicles to find new supporters. Multi stage and multi channel recruitment programs are rocking right now. Simply relying on one acquisition vehicle is dangerous and blinkered.

The crux of the session focused on decisions we can control, not those we can't. The organizations that have/are coming through the financial crisis in healthy, and in sometimes 'better' shape are those that have adhered to the above blueprint.


Wednesday, April 7, 2010

Is your appeal urgent?

I've had a few philosophical discussions (and debates) about the use of the word urgent in fundraising appeals.

My take is simple. If you need the money and you're putting it to good use, it's difficult to argue it isn't urgent.

That being said, it can be tricky going back with the same message every single time you appeal to your supporters.

There are a number of ways you can display the need for funds in an urgent manner, without the use of the word emblazoned across every page of the appeal and the outer envelope, namely:

- The use of a deadline. "Will you please send your gift by the 30th of June so I can decide with my team whether we will be able to fund XYZ..."

- The tone and language used within the letter. No need to sensationalize, but linking the need to a real person helps bring home the gravity of the situation. And hence the need to drop everything and act. Now.

- The repetition of the ask, which reinforces the need, and implicitly it's urgency. As a rule, within a 4 page letter aim to have the ask repeated 5-6 times to maximize results.

And there is another way. Please note, this is merely a tactic and I wouldn't suggest using this more than once. See the diagram below of a pack we developed a few years back. Anything stand out?

If you guessed the express post envelope (with guaranteed next day delivery) then you were right.

This was sent to around 450 identified high value donors. The pack cost more than $10 a piece for this segment, but bought in well over $100k. Not bad.

Of course the success can't be solely attributed to the use of the express post envelope. The message within had to look and feel urgent. Which it did.

The envelope definitely helped. But remember, this was a tactic, and it hasn't been used for this group since.

Ask yourself, is my appeal really urgent? And if so look at ways you can display it's critical nature, besides the use of the dreaded 'U' word.