Friday, April 29, 2011

We've got a long way to go

I started reading Jeff Brook's blog this morning, Donor Retention tells half the story and admit to getting a little excited...

70% retention rates for one organization, 90% second gift rates. I was scratching my eyes wondering if my morning caffeine fix hadn't yet hit me.

It continued to get better as I discovered both net income and organizational growth.

And then it hit.

Comments about stopping acquisition for five years, and how its unethical to tell a donor their (small) gift will make a difference when in fact its going to postage, printer bills etc..

This is not a dig at this organization who made the comments, it's a sector/society wide concern.

I actually wondered if time had stopped still. It was over two years ago I blogged about this very matter in Imagine a World whereby...

Citing Dan Pallotta's game changing book Uncharitable, I provided three practical recommendations for charities to control what they could control and flip the following dreaded question on it's head.

"How much of my dollar goes to the cause"?

The first suggestion was this:

1 Stop apologizing to donors for $ spent on overheads, administration, fundraising. These are genuine costs that are actually necessary and part of the work you do to fulfill your mission.

Enough said.

Finally, it reminded me of listening to Bob Geldof talk about his experiences and his response to the question "Don't you feel the scale of the problem is too big and you aren't making a real difference"?

His response: If I've helped one person, one child, then I've made a difference.

The same can be said for a donors gift, regardless off the size.

If you haven't done so already, please go and buy Uncharitable here at Amazon now. Send a copy to each board member, your boss, all your colleagues.

Because we really do have a long way to go to educate ourselves, as well as punters on the street.


Thursday, April 21, 2011

Budgeting beyond spreadsheets

It’s that time of the year again for Aussie fundraisers, when heads are down and doors are closed as we feverishly plan for next financial year. The budget cycle.

So what should be top of mind when sorting through a myriad of spreadsheets and detailed discussions about the future?

Think three years, not one

Whilst it’s easy to look at the immediacy of our decisions, we know as fundraisers that the real impact often comes a lot later than the toil involved. Regular, monthly giving is a great case in point.

So to overcome the potential blockages placed in front of us when we present our plans, ensure all budgets include the longer term payoff, through years 2 and 3 as a minimum. Even longer where necessary.

That may mean overlaying your income expectations with expected life time value and not just income in the coming year.

Start from scratch, the zero based approach

Whilst I’d agree with the old adage about not fixing what ain’t broken, stagnant programs or those looking for serious growth could do worse than start from scratch.

Consider this. You’re an organisation that generates $1m a year in income. You’ve been tasked with growing that fivefold in three years.

Doable? Most certainly.

Doable within the current program framework? Likely not.

Ambitious growth requires solid investment, informed risk taking and organisational commitment. If you’re planning to transform your program, looking at what you’ve done the last ten years and tweaking it isn’t going to help you make that leap.

Starting afresh and asking yourself and your colleagues “what do I need to do to generate $5m a year” is the question you need to be able to answer. Not, “how can I turn $1m into $5m?”

Balance your portfolio

Diversification and balance are key. A balanced program means investing in areas that will deliver:

* Short term income (cash appeals, emergency appeals, events)
* Medium term income (regular, monthly giving, major donors, donor care)
* Long term income (bequest marketing, donor care)

Having a reliance on more than 80% in one income stream can put you in a precarious place should the landscape move.

If you take a look at those charities around you that have gone through massive growth, there’s no doubt most of it will be driven by one channel. In Australia over the past ten years that’s been F2F (street canvassing) recruiting regular, monthly donors.

But if you look closer, the charities that have harnessed this best have dipped their toe into other vehicles, including more traditional channels like the telephone, DM, direct response television and more recently digital.

When trying to decide how to allocate funds, applying Google’s 70/20/10 rule for investing in innovation is a great way of working to achieve both balance and diversification. This would see:

* 10% of funds dedicated to exploring new initiatives, with the expectation that almost all will fail but occasionally one or two will show potential and end up reshaping the future
* 20% of funds be given to those initiatives that showed promise from the previous year’s new trials, to see if they are sustainable as an income stream
* 70% of funds dedicated to roll-out and optimisation of what is proven to deliver the bulk of (fundraising) income

Invest in donor care

Don’t cut off your nose to spite your face. An acquisition budget with no real commitment to donor development and supporter care is flawed. It’s hard enough to hang onto donors and even hard to look after them without any investment.

That means donor care and stewardship pieces, training for supporter services staff, mystery shopping other charities and generally keeping this topic on your agenda. Acquisition needs to work hand in hand with great supporter development.

So whilst its heads down at the moment, take the time to see the forest for the trees to enable you to help your organisation change the world, now and down the track.

This post featured in the March edition of Pareto Talk.


Wednesday, April 13, 2011

Regular giving growth continues in Australia/NZ

Last week at Pareto Fundraising we released our latest benchmarking results from Australia and NZ.

Thank you firstly to the 41 organizations involved. Hats off to you all.

Some snippets from the latest report:

- Regular giving continues to be the key driver of income growth from individuals. Income growth of around 12% in 2010.

- 3 out of 4 of the charities involved in the study grew their income from individuals in the two years between 2008 and 2010, despite the recession.

- Investment in new donor acquisition continued as volumes of new supporters continued to grow.

- On average, 0.9% of active cash donors have indicated they have left a bequest to that organization. The benchmark for one charity was 6.3% of all active donors having confirmed.

- Recency, Frequency, Value, plus tenure all correlate with propensity to indicate leaving a bequest.

- Income from onetime cash gifts grew less than 1% over the two years between 2008 and 2010, in line with the continued shift toward investment in regular, monthly giving.

If you're interested in knowing more about our benchmarking program please get in touch with our man on the ground, Clarke Vincent.


Thursday, April 7, 2011

It's about the (online) journey, not just the (online) destination

I don't want to sound like a walking book of jargon, but it really is about the journey.

As much so when we talk about the online world. We as a sector spend far too much time worrying, finessing and getting distracted by the destination.

By the destination I mean your website.

Don't get me wrong, it's an important place. And making sure you keep people there, capture data, share stories, and ultimately generate donations is critical.

But getting people there, and finding ways to attract new sources is paramount.

As my colleague Sean Triner says, having a brilliant website (with no traffic) is like having the world's best department store in the middle of the desert. Useless.

When I talk to fundraisers about developing a digital road-map for raising more money online, I often hear people say "yes, well we're building a new website" or "our website is rubbish".

They're focused on the end result, the destination.

Yes it's important, but spending a tonne of effort and resources on building the world's most aesthetically pleasing website is going to be a complete waste of time without any traffic to drive there.

Consider these traffic driving questions:

- Are you looking at ways to re-engage and drive online prospects back to your site? By online prospects I mean previous activists, e-newsletter subscribers or enquirers.

- Are you investing time managing your search activity? See here for an earlier post on Google AdWords for charities. What about your organic listing? Are you spending time to make sure you are ranked as high as possible in search engines, such as Google?

- Are you re-targeting visitors to your site with a different offer? For example, of the 5,000 visitors to your site each month, the majority visit and then bounce away, meaning you haven't 'closed the deal'. Re-targeting allows you to present your offer again to these prospects in an effort to re-engage them. It's relatively inexpensive and is used regularly by those in the commercial world. Yet we seem to be slow on the take up on this. Easier to re-engage that introduce ourselves to those who don't know us.

- Have you investigated the new frontiers in online advertising? The power of behavioral and contextual advertising, where you can present your offer to people whose online behavior dictates they have some affinity/interest in you. Again the commercial world is leaps and bounds ahead of us here, but the technology exists, it's about tapping into whats out there to ensure we're locating real prospects who are showing characteristics that suggest they care. In real time.

Don't get me wrong, the destination requires time and effort. It requires thought around ways to engage and capture. But remember, that without the traffic it really is like the best department store in the desert.