Fundraising and Repetition

Jeff Brooks had a great post today on his blog Future Fundraising Now titled The power of repetition in fundraising. I believe the root cause of most poor fundraising response results is the insidious belief that donors will like us better, and as a result donate to us, if we refrain from communicating with them "too often" and make the same pitch over-and-over.

If I may quote Jeff, "Despite what many people think, simple repetition is one of the most powerful tools in your creative arsenal. The savviest fundraisers use it all the time to ratchet up emotion -- and results -- from their donors."

 Jeff goes on to relate a study of new direct-mail donors that found that these mail recipients had received a direct mail acquisition piece six times before they responded to it. Many charities that I am familiar with believe that it is sufficient to mail prospective donors once or twice a year! No wonder total acquisition numbers are declining precipitously.

Think that just is the nature of a dying direct mail field? Nope, electronic media such as email requires even more repetition.

Jeff also recommends that repetition within the letter or email is also critically important. He states the call to action should be repeated five, ten, or even more times. Clearly, once is not enough.

So, get over your reticence. Your organization is worthy, your mission is important. Those who want to give to you deserve your perseverance.

Grants: Rejected! Done? Fini? Move on?

You've done your research. You found a great foundation that is a perfect fit for your organization. They have supported other organizations just like yours. You've even connected with the grants manager and they think you're wonderful. You have a fantastic program and write a bang-up proposal. Months go by and then you receive the following, dreaded response: "We receive requests from many worthy nonprofit organizations. We wish we could fund them all. Unfortunately, we cannot support your program at this time." Drat! All the planets seemed to be aligned. The heck with them! Next proposal...right? Wrong!

You need to find out why you were rejected. It may not be what you think. I found just such a foundation and the outcome was initially disappointing. But I called my contact and asked why we were rejected. I expected to hear something like this, "Although you are a great organization, ___________ (fill in the blank: "...your organization is not a fit, your program is not a priority, we are supporting XYZ organization that does the same thing, your proposal sucked, etc.")

What I heard was, "Your proposal was really great and it is something that we would really like to support. Unfortunately, we ran out of funds by the time we got to your proposal. Let's get together at the beginning of the next funding year and talk about it. I recommend you submit your proposal again just as it is. Don't change a thing."

If I had just moved on, reacted defensively, or just slinked off into the night with my tail between my legs, I would have never found out that it was still very viable. Now, not all calls reveal such great opportunities. Even candid, helpful, rejection feedback about NOT being a fit would be good for future proposals.

The point is ask, probe, follow-up.

Growing Philanthropy Part 3: Identifying New Audiences, Channels, and Forms of Giving with Strong Potential for Growth

Encourage the adoption of monthly giving. Monthly giving has so many benefits for charities and donors that I am always amazed at how few nonprofits promote this option. Per Sergeant and Shang, the lifetime value of supporters giving in this way is estimated to be 600 to 800 percent higher than "non-sustainer" donors. They note that younger donors prefer monthly giving because it is considered more convenient and environmentally friendly, requiring less renewal and reminder mailings. Donor retention is far higher for sustaining donors as well. It's a no brainer.

Improve the sector's engagement with young people. Promote giving at an early age and help develop a "giving habit". Utilize new digital media such as digital applications, virtual environments, gaming platforms, and social networking. Find ways to make it easy, affordable, and enticing to include them in the philanthropic process.

Encourage and promote best practices in social media. Traditional giving channels still significantly outperform online giving, and social media accounts for only just over 10 percent of that small portion. Nonetheless, social media has a huge potential to greatly increase a supporter's engagement, and engagement is the key to healthy giving. Social media also has the potential to build donor commitment, trust and loyalty. But it must be done well. This is a great opportunity for an astute nonprofit since so much social media based fundraising is done so poorly.

Encourage asset-based giving. 93 percent of American wealth is made up of stocks and non-cash assets such as real estate, business interests, and personal property. Charities are "missing the boat" if they are solely focused on chasing the 7 percent cash available. Provide easy means for donors to contribute asset-based resources.

Improve the quality of bequest fundraising. Although 80 percent of Americans will support the nonprofit sector during their lifetimes, only 8 percent will provide for charities in their estates. Sergeant and Shang believe part of the challenge is that charitable bequest solicitation has been relegated solely to the planned giving departments at nonprofits. They suggest that soliciting bequests should receive wider and broader communication and informational materials be accessible and employed by all staff.

Leveraging companies to promote philanthropy. Since many individuals spend most of their waking hours at work, provide opportunities in the workplace to educate employees about charity missions and outcomes. It must be more than simply a card table and brochures set up in a lobby. One nonprofit had launched a campaign to address obesity and set up a fajita bar at a local business to teach workers how to prepare healthy fare. They effectively hammered home their brand, their goals, and addressed latent objections such as proper dieting is no fun.

Although Sergeant and Shang's report included other recommendations, they concluded with this insightful statement, "Instead of viewing donors as a source of revenue and maximizing the value of that relationship, they (nonprofits) need to focus more on the individual and the articulation of that person's philanthropy. Only when we stop asking for money and instead ask for individuals to reflect on their own philanthropic identity will the needle truly be moved on giving."

Let's move the needle.

Growing Philanthropy Part 2: Developing Public Trust

The second finding that Sargeant and Shang suggested in their whitepaper, Growing Philanthropy in the United States, is the necessity to develop public trust and confidence in the fundraising sector. They state, “Organizations are the conduit by which donors fulfill their own aspirations. Donors don’t give to organizations but through organizations.” The disconnect that Sargeant and Shang see is that, as charities become more focused on removing financial risk, enhancing effectiveness, and employing more proven fundraising techniques, the process becomes more mechanistic. The donor can be viewed as, and feels like, a “piggy bank” rather than a partner in the cause. I believe some of this is the result of a rather corrosive, if initially well-meaning, emphasis by industry watchdog organizations on the percent of funds spent on program versus fundraising costs. I believe this puts undue pressure on nonprofits to squeeze as much revenue out of each transaction as possible.

Sargeant and Shang propose that nonprofits must see supporters as more than simply donors, but they should be regarded as “individuals with their own philanthropic aspirations and goals.” They suggest that donors may not even be aware of what their goals truly are and that it is the responsibility of the organization to “find new and creative ways through which individuals can discover and express their own philanthropic identity and thus experience the joy of giving.” They admit that this sort of identification on the charity’s part would require a greater degree of donor research and necessitate additional staff time, expertise and cost. All at a time when the aforementioned “program vs. fundraising” metric is being put forth as a litmus for what is a “good charity” worthy of donor investment.

Additional recommendations include:

Empower regulators to enforce 100 percent filing of Forms 990 and increase their utility.  Include more narrative that would focus on the outcomes achieved by the nonprofit thus shifting the emphasis from efficiency to effectiveness.

Blow the whistle on organizations claiming to have zero cost of fundraising. Recent research found that 59 percent of organizations did not claim any fundraising expenses. Come on! How can you believe anything a charity reports with this sort of blatant info manipulation?

Fund the development of a website in the United States to educate the public, boards, and other stakeholders. “There is gross misunderstanding in the public as to how nonprofits work. Many Americans still believe the sector is populated largely by volunteers, that managers are paid poorly (if at all), and that income can be generated at zero (or close to zero) cost.” It is critically important to communicate how nonprofits really work.

Encourage nonprofits to develop complaint schemes.  Many organizations are hesitant to create complaint schemes for fear of raising false expectations about their ability to resolve issues. Good complaint handling boosts loyalty. In fact, there is some indication that resolving a problem successfully creates greater loyalty than being problem free.

Fund the development of a website to facilitate peer-to-peer evaluations of nonprofits. Much like the comments and ranking sections on commercial online sites such as Amazon, providing a forum for donor commentary and evaluation may well inspire more people to give.

Develop new and more appropriate measures of performance. Watchdog groups such as Guidestar, Charity Navigator and Charity Watch place far too much emphasis on charities demonstrating what tends to be stifling efficiency standards rather than organizational effectiveness. Nonprofits need to be proactive and help define what is effective and better articulate the investment needed to achieve mission outcomes.

Develop the self-regulation of fundraising. The key concerns of the public appear to be:

• A perception of an “excessive” volume of communication
• The quality and tone of that communication
• The use of enclosures in mail
• The use of inappropriate or shocking imagery
• Data errors in the communication
• A sense of intrusion, created by the media employed for the message

Sargeant and Shang claim no one has yet addressed these issues properly. They recommend a greater focus on the development and promotion of professional standards or the creation of a body that would accredit good quality fundraising in a similar way that the Better Business Bureau accredits good business practices.

Wow! We have a lot of work to do. And we're not through all of Sargeant and Shang's recommendations or themes.

Next post I'll review their third theme, Identifying New Audiences, Channels, and Forms of Giving with Strong Potential for Growth.

Growing Philanthropy

As mentioned in my March 20th blog post, back in June of 2011, fundraising experts Adrian Sargeant and Jen Shang from the School of Philanthropy at Indiana University published a report presented by Blackbaud, entitled Growing Philanthropy in the United States. Their research had found that, despite increasingly sophisticated fundraising practice, the development of sophisticated planned giving vehicles, the appearance of the Internet, and the rise of new digital channels, giving as a percentage of average household disposable (after tax) income has been static at 2% for at least 40 years. This, despite the increased level of human need presented as a challenge to nonprofits.  The number of natural disasters has tripled since the 1960s, the number of armed conflicts almost doubling during this period, one in six Americans are challenged with hunger and one percent of Americans are homeless.

Sargeant and Shang’s findings were reviewed at the Blackbaud 2011 Nonprofit Executive Summit and the conclusion of the participants included the following needs within the industry:

• Enhance the quality of the donor relationship
• Develop public trust and confidence in the fundraising sector
• Identify audiences, channels, and forms of giving, with strong potential for growth
• Enhance the quality of fundraising training and development

For the next four posts I will share additional details of each of these findings. First, addressing the donor experience:

Enhance the quality of the donor relationship

• Understand donors have their own philanthropic aspirations and goals and find new ways for them to express their own philanthropic identity
•  Go beyond maximizing the donors gift to your organization and develop the philanthropy of your supporters
• Allow donors to have greater control over their giving relationship
• Enhance focus on retention of donors by building the loyalty of supporters, since a 10% increase in retention can result in a 200% improvement in lifetime value of a supporter
  
• Breakdown organizational silos and encourage greater collaboration between teams
• Reduce high turnover rates (30% per annum) in the fundraising profession, often caused by CEOs and Board members who value their own limited personal experience or “gut feel” more than they do the accumulated fundraising body of knowledge, so that meaningful relationships have time to develop
• Educate stakeholders about the necessity of a longer term and integrated approach to fundraising

I know many of these issues have been the topics of industry webinars and conferences. But how much progress has been made over the past three years since Sargeant and team published their report? I dare say, not much. Certainly, the lingering effects of the recession have prevented many organizations from indulging in what they may feel is the luxury of donor relationship building. Tight budgets may have reduced opportunities to invest in any activities beyond bare-bones solicitation. Unfortunately, failing to make progress regarding the foregoing issues has a direct impact on current fundraising success and the next blog posting topic - Developing public trust and confidence in the fundraising sector. 

Until then…