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.