Top Challenges For Nonprofits

May 31, 2007

A new study from the Johns Hopkins Nonprofit Listening Post Project identifies the following as the top “very significant” challenges for nonprofits, as indicated by responding organizations:

  • Charitable fundraising (68% of organizations)
  • Health benefit costs (58%)
  • Government budget cuts (47%)
  • Generating fee income (46%)
  • Board recruitment (46%)
  • Public understanding (41%)

That fundraising is the top concern is hardly a shocker; but somewhat surprisingly, only 23% of nonprofits cited “accountability demands” as a very significant challenge.

One has to wonder how much the 77% of nonprofits who don't perceive accountability as a significant challenge overlaps with the 68% who have fundraising problems!

Roger & Tom

P.S. The sample included 341 nonprofits from the children & family services, elderly housing & services, community & economic development, and museum & theaters sectors.

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Converting Online Subscribers Into Donors

May 30, 2007

In this Guest Agitator post, Karen Taggart, Director of Nonprofit Services at Care2, discusses the challenge of converting e-subscribers into donors. Says Karen:

“It is no secret in direct mail that recency is key to successful fundraising. We all send appeals to donors who have just given and would never even consider prospecting to rented lists full of old names.

So how to do we take this long-standing DM lesson and apply it to our growing email lists? What is the best strategy for converting new email subscribers into donating members?

Not surprisingly, A 2005 study conducted by Informz showed that click through rates dropped noticeably 30 days after the name was acquired and even more drastically after 60 days. Clearly this indicates the importance of contacting new online subscribers as soon as possible. But how soon, exactly? And what should that contact should look like?

Is it better to cultivate the new email subscriber before asking for the first gift? Or, is it more effective cut to the chase and make the initial contact a direct fundraising ask?

One effective strategy in the commercial world has been the welcome series; different messages containing information about the product or program sent at various intervals after an opt-in occurs and prior to a direct purchase request. For example, Fossil (the watch company) reports tripling their email market revenue and increasing conversion rates by 84% after implementing their four-part welcome series.

Based on these returns, it is no wonder so many non-profits implement similar programs. And an added bonus of the welcome series is that it can put to rest concerns about upsetting, and potentially losing, new leads by asking them to give money right away.

But should we really wait that long before asking a warm lead to make a contribution?

M+R Strategic Services recently tested an online welcome series (welcome, survey, fundraising appeal) against sending a straight fundraising appeal as the first email solicitation. The study found not only did the initial hard fundraising ask increase giving, but churn rates were actually lower on this group as well.

So, perhaps our biggest fear about upsetting new subscribers by asking for money right away is not true after all.

What is the answer? Unfortunately, we don’t yet know with 100% certainty. While predictive analysis of your online fundraising may not be as consistent as with your DM, testing the treatment of new email subscribers is critical to successful fundraising and advocacy work – especially as more of our acquisition programs shift online.

And don’t forget to examine ways to integrate these names into your existing programs. Perhaps the optimum combination is an online welcome, followed by a mail solicitation coupled with a phone call. So test, test and retest!

To which The Agitator adds: Test, test, and retest. This discussion continues at http://www.frogloop.com/.

Roger & Tom

P.S. Karen Taggart can be reached at karen@earth.care2.com.

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Can An Atheist Be An Angel?

May 29, 2007

The answer is YES if you're Bob Wilson.

Bob, along with Ted Turner, is one of my favorite philanthropists. Both are iconoclasts who never fail to surprise, even when one appreciates the underlying values that drive their giving.

Bob, ranked 12th in 2006 on the Chronicle of Philanthropy's list of most-generous donors, just gave $22.5 million to fund need-based scholarships to New York City Catholic schools.

Bob's an atheist.

As reported by Bloomberg, Bob's explanation is twofold. As he says: “Let's face it, without the Roman Catholic Church, there would be no Western civilization.” And he points out that he's giving the money to pay tuition, not giving directly to the schools. A fine point for the canon scholars, Bob! Students need not be Roman Catholic to apply.

To the beneficiaries, there's no question, Bob will be an angel. And he would be to the Jesuits who taught me.

I wonder how an atheist reconciles himself to being an angel! And does he demur when St. Peter eventually invites him through the pearly gates?

Tom

Thanks to Chronicle of Philanthropy for heads-up.

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Colleges Fail At Online Marketing

May 25, 2007

Tell us it ain't so!

According to Primary Research Group's 2007 Survey of College Marketing Programs, cited here, based upon interviews with 55 American colleges, it appears that college marketers are still at the stone tablet stage.

As reported by interactive marketing consultant Hollis Thomases, PRG says that only 47% of colleges use online advertising in their marketing campaigns. About 18% engage in search engine marketing, with 14% using any form of paid advertising service from Google.

Observes Thomases, who has a number of higher ed clients:

“In an age when higher education students are among our most wired online populace, the people who make the marketing decisions for those institutions are still in need of the most elemental education. At traditional higher education institutions, it's tough to pitch online media strategy when they're barely acquainted with the fundamentals of online marketing.”

The Agitator has lots of “.edu” readers. We hope some of you might tell us she's got it wrong, and we'd be even more delighted if you offered an example of your own whiz-bang online marketing.

On the other hand, if you're marketing a higher ed institution to prospective students or fundraising from alumni, and online tactics are not part of your core strategy, you oughta be fired.

Roger & Tom

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Raining Cats & Dogs For ASPCA

May 24, 2007

Responding to our post, Give Your Donors A Voice, Ayumi Stubbs shares with The Agitator the success of the ASPCA with inviting supporters to submit their own content for ASPCA's website:

“Last year we started a simple cat photo contest that we promoted to our weekly newsletter subscribers (ASPCA News Alert). Our expectations were low - we just wanted something fun to offer our readers to participate in, to celebrate Adopt-a-Shelter Cat month. The response was overwhelming - we received thousands of photos.

Then we picked ten winners and announced them in our newsletter, linking back to our website. The response to the winning photos also surprised us - the open rate shot up 25% - and the winning photos instantly became one of the most popular sections of the website - and remained so for quite awhile because our readers forwarded it on to so many of their friends. We were also able to take advantage of the high traffic and promote donation opportunities to our readers and new visitors.

We learned a great lesson from this contest about how much our newsletter subscribers love to submit their own content. We had a dog photo contest later that year, and we plan to continue the photo contests this year. It's so simple, no fancy shmancy web 2.0 stuff involved - just a good old-fashioned contest for our newsletter subscribers!”

Ayumi Stubbs
Manager of Internet Communications, ASPCA

Ayumi, you and the ASPCA team deserve a raise!

Admittedly, it's hard to imagine a deeper vein to tap than people's affection for their cats and dogs! But the point stands … the ease of sharing digital content opens terrific opportunities to engage your supporters. Here's another example …

Over at Environmental Defense, the internet team has invited e-activists to help compose a Declaration of New Patriotism, prompted by the group's effort to cast stopping global warming as a patriotic challenge.

Arguably, this is a bit more cerebral than inviting supporters to send a photo of Fluffy or Fido, and perhaps not as likely to take off virally. But still, Environmental Defense has received over 1,000 responses after a few days.

In both cases, we'll bet the content creators donate more, renew more than the non-responders. We can't claim causality here (i.e., arguably the supporters already most committed are the ones who participate by submitting content). But smart test design would permit the proposition to be examined.

Meantime, don't wait … there's no downside to offering digital participation to your members, donors and activists.

Roger & Tom

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Salvation Army … Fading Brand?

May 23, 2007

Months ago an Agitator post applauded the Salvation Army in the face of a New York Times article probing whether the organization was losing its way.

Critics questioned whether it was appropriate for the Salvation Army to use proceeds of a $1.5 billion bequest from McDonald's heiress Joan Kroc to build community centers that offered water aerobics and ice skating as a way to engage the public. And organization leaders fretted over whether the very size and visibility of that gift would cause potential small donors to feel they weren't needed.

The Agitator thought the Salvation Army was on the right track. It was modernizing with the times.

But now an article in Forbes (registration required) on the Army's current marketing efforts makes me wonder.

The US head of the Salvation Army, an international evangelical mission, says: “There is an inadequate knowledge of who we are and what we are.” This from an organization that spent $2.8 billion in 2005 running rehab centers, shelters and meal services for the needy. The SA ran $19 million in TV ads in 2006, and it's using DonTrump celebrity golf, online banner ads, fashion shows and Times Square stunts to chase awareness.

All in all, the communications strategy appears to be “throw it at the wall and see what sticks.”

Gimmicks aside, a visit to the Salvation Army's website tells you a lot of what you need to know about why the organization might be a fading brand. Confusing, difficult to navigate, arcane in language, unemotional, devoid of engagement tools, pedestrian in describing its goals, approach and programs. One of the least compelling websites I've ever seen for a nonprofit focusing on meeting human needs.

A multi-billion dollar organization should be able to tell its story with overwhelming impact!

The Salvation Army is a becoming-classic case of an old-style organization that seems trapped in a “charity” mindset. That is, it believes people will keep supporting us because we're doing noble deeds and they'll feel a moral duty to respond.

Not any more. Those people will be dead soon, and new donors — even those strongly motivated by faith — speak a language of performance, results, personal empowerment and effectiveness.

I'm all for a brand freshening its make-up as the times change. And perhaps there's a strategy behind what appears to be merely thrashing about that the Forbes piece didn't communicate (but that's what I went to the SA website looking for, only to be disappointed).

Certainly the needs addressed by the Salvation Army are not fading away. Let's hope the organization can successfully renew itself and re-confirm its relevance for meeting those needs.

Tom

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The Not-So-Hidden Bonanza

May 22, 2007

Last week the Journal of Philanthropy carried the summary of a study by Campbell & Company on bequest giving.

And once again I found myself asking why aren’t fundraisers — particularly those good in direct response — falling all over themselves to get in on what the Journal of Planned Giving estimates to be a $41 trillion bonanza.

Maybe it’s because “planned giving” has historically been viewed as some arcane science best left to Planned Giving Officers trained in legal and tax matters. After all, what could a lowly database or direct response fundraiser possibly know about this?

Well, inferiority complexes aside, the fact is that any organization with a base of donors, some giving history, and some gumption can launch a successful legacy/bequest marketing program. Best of all, using proven direct response techniques, these programs pay off quickly and handsomely.

Tomorrow (Wednesday the 23rd) from noon to 2 p.m. The Legacy Giving Group, will hold a free seminar in the conference room of the Human Rights Campaign at 1640 Rhode Island Avenue, N.W. in Washington, D.C.

I’m part of this Group and I want to share some of my missionary zeal over legacy and bequest marketing with readers of The Agitator. So, if on this short notice you have two hours, you’re certainly welcome to attend. Just drop an email to rogercraver@gmail.com and let me know you're coming.

My point is to not flog yet another seminar on planned giving, but to alert you to the fact that for too long a sense of mystery and complexity have served to obfuscate an approach to fundraising that should be on the top of every organization’s fundraising agenda.

Just consider these facts from the Campbell & Company study:

  • Most people who name nonprofits in their wills tend to have been steady donors during their lifetimes. And, as a rule, they contributed an average of $2000 more annually than other non-legacy donors.
  • 33% of the donors surveyed have not yet made a planned gift, but say they would consider it.
  • Only a small percentage of “retirees” have made bequests, but a whopping 25% say they are willing to consider doing so.

At a time when the average Return on Investment for direct mail campaigns is around $3:1, shouldn't you invest some time in understanding how your direct marketing skills can be used in marketing bequests, where the ROI is $20:1 and where the payoff comes far more quickly than most fundraisers imagine?

[For a view that is quite contrarian to that of most planned giving fundraisers, visit my earlier post, Secret Riches and Why You're Missing Them, and download The Legacy Giving Group’s white paper there.]

.

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Give Your Donors A Voice

May 18, 2007

By now, most nonprofits publish an e-newsletter of some sort. These range from uninspired re-hashing of print newsletters to original e-pubs that take full advantage of the tools that can make online publications far more dynamic and compelling.

For example, commercial marketers increasingly are enlisting their customers to create and submit content of their own (”consumer-generated-content”), often video material, which is then (once vetted) used in the marketer's e-publication.

As e-pub readers see this happening, the payoff for marketers include:

  • increased open rates for e-newsletters (customers are interested in other customers);
  • higher credibility for the e-pub (especially when companies allow unhappy customers to speak out);
  • boosts in cross-selling (from word-of-mouth recs as customers submit their own product reviews, or simply talk about how they've used the product);and,
  • improved customer loyalty (as companies are seen to be listening and responding).

No reason why nonprofits can't capture some of these same benefits.

Think about content — particularly in the form of video, audio clips, and photos — you might ask your members, donors, and activists to provide. Then use it, not just passively on your website, but actively in the e-pubs and other e-messaging you push at your supporters.

Here's an article from Marketing Sherpa describing how successful commercial marketers are harvesting consumer-generated-content. Their lessons: don't expect it to happen overnight; make it fun; offer incentives … the return is worth it.

The Agitator would be happy to share your experience with our readers.

Roger & Tom

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Evaluating Your Online Investment

May 17, 2007

A recent review of some of Convio's online benchmarking data reminded me of the importance of true bottomline metrics.

Especially in view of results from a recent survey by blogger Nancy Schwartz at Getting Attention indicating that barely one-third of nonprofits actually measure the effectiveness of their marketing efforts. Unbelievable! The other two-thirds should be fired. But I digress.

Two of Convio's numbers stood out to me.

With regard to website visitors, Convio reports that amongst the clients it studied, a median of 2.8% of site visitors were converted to registrants. In other words, of each 100 folks who stop by, people who sought out the site in the first place, less than 3 are sufficiently enticed by something they find to seek an ongoing connection!

What does that say about the quality of the visiting experience on nonprofit websites?! The web team probably argues, “Not to worry, we're offering a treasure trove of valuable information … every person who visits is enriched by our wonderful in-depth content and spiffy Flash animations. That's a terrific benefit.”

Bull! Even your direct mail prospecting should pull donations (i.e., hard cash) at the rate of 1% or better. If the mail team said, “Don't worry about response rates, our mail is educating thousands of people” … you'd fire them.

With all the power inherent in the web medium to draw a person in, intrigue and entertain her, interact in a personalized manner, offer value, is the best we can do merely converting 3%? Again, these are visitors who didn't arrive at your site by accident. Either you drove him there in the first place, or your site popped up as relevent as he used search tools to aid his quest, or your site was referred to her by another site that she trusts. And still, 97 of 100 walked away without a trace.

True, Convio's 2.8% is a median … a bunch of folks did better (Convio mentions “Christian organizations” in first place at a median of 12.5%). Exactly who … and how much better, we'd sure like to know. Those are the websites we should be studying.

The second number that struck me measures the fundraising productivity of nonprofit house email lists. Convio reports that the most effective vertical is animal welfare organizations, with a median donation of $12.35 per email address (not per donor).

Probably not many fundraisers talk openly with one another about this number. Trade secret, you know. Truth be known, many probably haven't calculated it.

I'd love to interview some brave soul who boasts of a median per email address value in the $50 neighborhood. This shouldn't be an outrageous target … even conceding that e-lists do have multiple purposes, including sending emails to Congress that no one reads.

Lots of groups do better than $50 average gift per online donor, but arguably the per e-name measure is a more useful indicator of the intrinsic quality of the e-list. If you're building your house e-list from sources (or using tactics) that don't yield appreciable fundraising productivity, I would begin to question the real “hold” you have on those individuals for other, less demanding purposes.

For my tastes, both these metrics — web visitor conversion and per email address median donation — are excellent indicators of the ROI you're getting from your online investment. There are a lot of other smiley-face measures out there, like web traffic and email alert response rates, that can make an online team feel good … but these activities don't cut to the chase at the end of the day with the CFO.

Tom

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What Does It Take?

May 16, 2007

I just read the results of a client's survey that, among other things, was seeking to identify the issues that respondents regard as “crucial to the well-being of the country.”

Out of eighteen issues offered to a constituency that tilted “liberal” on social issues, only 20% selected “fighting for a better life for disadvantaged Americans” as a crucial issue (they could have selected any number as crucial). Only 8% chose this as one of three to five issue challenges they wanted the next Administration to address when it takes office.

Then I read this Guy Kawasaki interview of Richard Stearns, Prez of World Vision, about the work of his group and the difficulties of interesting Americans in the global poverty issue.

Asked what are the biggest hurdles to alleviating poverty, Stearns answered: “One word: apathy.” He elaborated that the key obstacle is that poverty is often not personal.

In the face of general apathy, World Vision and similar groups like Save the Children and Christian Children's Fund do raise appreciable amounts of money because they do succeed in focusing donors on individual children with their “sponsorship” approach.

Still, when I see the survey results mentioned above, I wonder. Maybe one of these groups should launch a program where the donor “sponsors” not just a recipient child, but also the education of an apathetic American or two!

In the face of such apathy, it seems shockingly misguided (to say nothing of hypocritical in many cases) for so many folks to deride the involvement of celebrities like Bono, Madonna, Oprah and Jolie, and cause marketing efforts like the recent Idol Gives Back.

What does it take to get people with means to give a damn about other people they'll never know? Or to use their political voices on behalf of the disadvantaged?

Shouldn't we want more from our government than safe shores, cheap fuel and a comfortable retirement?

Tom

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