The Latest Wake-up Call

July 7, 2008

At the very time when the stock market is dropping, unemployment is rising and fundraisers are attempting to read the tea leaves in preparation for next year’s budgets, Target Analytics has released their Index of National Fundraising Performance for the 1st Quarter of 2008 … and the picture ain’t pretty.

Not only did the number of direct response donors continue to decline, but, for the first time, the increases in revenue per donor that have compensated for the decline in number of donors failed to prevent an overall revenue drop.

The Index’s authors say the falling donor populations “may be due to a mix of factors including economic changes, a changing generational profile in the United States, changing attitudes of donors about giving, and a change in focus by fundraisers toward higher-dollar donors.

Whatever the reasons the numbers are a bit spooky:

·The number of new donors has declined 7.6 % over the past two years. (However, the rate of decline has slowed from 5.3% in the first quarter last year to 2.3% in this first quarter of 2008.)

·Retention rates continued to fall with first-year donor retention dropping 6.6% in Q1 2008 over the same quarter a year before.
·And reactivation rates declined 5.0% from Q1 2007 to Q1 2008.

Among the 72 organizations included in the Index only those in the environmental and animal welfare sectors escaped the pain. For advocacy groups (what Target Analytics calls the “Societal Benefit Sector) there is sunshine among the clouds. New donor growth rose 6.1% in Q1 2008 with 69% of the organizations in this sector showing positive donor growth.

The news wasn’t as encouraging for groups in the International Relief Sector where new donor acquisition declined 23%–the greatest decrease of any sector –and reactivation rates were down significantly as well, falling 21.6% from Q1 2007 to Q1 2008.

And we shouldn’t be looking for clear skies and a return to growth in the near-term future. As the economy slows, so does giving.

Now’s the time to take another look at next year’s budget and make sure you’re spending more, not less, to achieve on donor satisfaction and loyalty to hold on to your base.

Roger

 

Posted by rcraver | Filed Under Don't Miss these Posts, Hot Research, Measuring Up, advocacy, charities, demographic trends, direct mail, donor retention, fundraising, loyalty, nonprofit management, nonprofits, research | Leave a Comment 

Thank You For Stealing

July 1, 2008

 

The maxim very successful fundraisers live by was set forth by George Bernard Shaw 80 years ago: "The mediocre borrow, genius steals."

In short, when you see a winning concept, campaign, technique, whatever, just steal it. Adapt it. Run with it.
Which brings me to today’s plea: All of us need to be sending more samples of good and great campaign or one-off efforts to SOFII the marvelous fundraising attic (aka: swipe file) where you can find all kinds of useful, informative and stealable stuff.
SOFFI just posted its June additions yesterday. For example:
§ActionAid’s controversial Bollocks to Poverty campaign.
§ Inspirational direct mail from a seven-year-old schoolgirl.
§ How Giving Scotland turned a crisis into a triumph.
§ A simple but brilliant idea for involving business people in the fight against heart disease.
§ Croatia’s campaign for mobility and independence for blind people.
§ A small organisation’s low-cost solution to recognising donors.
§ Hannah’s make and bake cake and biscuit sale.
§ The launch of a high level monthly giving product designed to upgrade donors in their thousands.
§ How a beautiful flower, the Edelweiss, became an involvement device and a symbol of hope for a hospice in Romania.
§ Make–A-Wish and upgrade your donors.

§ Twenty years before Barack Obama, the tale of an African American’s bid for the White House. Common Cause takes on the excesses of the American legislature. [Hey, this is copy I wrote 20+ years ago, long before "mid-level donor programs" were even a glimmer in whatever consultants’ eyes and it’s still good, he says, in all modesty :) ]

Seriously, so much great thinking, great creative and great innovation occurs every day in our trade, but we need to be far more energetic in sharing it with the rest of our world.

So please, vow to take 15 minutes, find one or two samples and get it up on SOFII’s site.

Thank you for stealing.

Roger

Posted by rcraver | Filed Under Uncategorized, advocacy, cause marketing, charities, communications, copywriting, creativity, direct mail, direct marketing, drtv, email marketing, fun | Leave a Comment 

Too Much Charity?

June 13, 2008

A recent edition of the Chronicle’s online Philanthropy Today got me scratching my head.

One piece, Mass Charities Urged to Merge and Pool Resources, reported that the Boston Foundation was urging the 36,000 nonprofits in Massachusetts to consider either merging or at least sharing resources with their like-minded compatriots. Their message … too many groups for too few — indeed, dwindling — resources. The number of nonprofits in Mass has almost doubled in recent years.

Another piece, Aid Groups Urged to Revamp Operations in Poor Countries, indicated that with tens of thousands of "unregulated" aid groups operating in the health field, they’ve become difficult for health officials in those countries to manage and deal with effectively. Each charity "does its own thing" and ometimes the charities even compete with local health authorities by hiring away the indigenous health professionals who are in short supply.

So, is the message here that there can be too much of a good thing?

Are all these groups, be they in Massachusetts or the developing world, equally competent and deserving? That of course would fly in the face of all human experience. Are some redundant to others? Of course. Are some mere ego trips for their leaders? Bingo again.

The problem is, there no "market" (or an extremely inefficient one at best) for weeding out the under-performers. Regular Agitator readers can probably detect me becoming more and more agitated on this point.

Note that I’m not pushing the "all nonprofits should be more business-like" line.

What I am pushing is "perform or die" … and figure out a way — your way — to establish that your nonprofit actually is performing … performing in the sense of achieving substantive goals, not just processing stuff.

Maybe there should be a "sunset" provision of some kind on IRS charitable status.

Here’s a crude approach that will doubtless offend many readers … you lose your charitable status if you can’t demonstrate at the end of every five years that you have more resources than at the beginning of the period. Sure, there are groups that might be clever enough to be raising more money even though they aren’t accomplishing much. But, heck, if their donors are too incapable of demanding to see and assess the case, well I guess they’re getting what they paid for, aren’t they?! Who else is supposed to make that judgment? And for those groups that are raising less, the "market" has spoken … it’s time to exit the playing field gracefully.

Of course I believe any sunset rule, formal or informal, should be more intelligently grounded. Maybe the guys at Give Well blog can come up with something.

But meantime, I just can’t believe Massachusetts or Africa would be worse off if half as many nonprofits (or even fewer) were expending the same level of resources in each region as today’s number of groups are. I think scale matters … a lot.

Would I shut the door on new charities? No. Especially if they succeed at putting old ones out of business!

As reported by the NY Times a few weeks ago, new group like Nothing But Nets springs from the pages of Sports Illustrated. A new movement is galvanized that in barely two years has bought and distributed 2,029,286 malaria-fighting nets, presumably representing over $20 million in contributions … introducing all sorts of new people, especially young people, to giving and social action, and forging powerful alliances with marketing machines like the NBA. Spectacular!

Have they forced an under-performer off the playing field. I don’t know. But I submit that if they did, it would be an added bonus!

Tom

Posted by tbelford | Filed Under Don't Miss these Posts, accountability, charities, marketing metrics | 3 Comments 

The Nonprofiteer Is, Well, Agitated

December 21, 2007

And we love it!

Today she takes a whack at those who complain that there are too many nonprofits out there. (The Agitator confesses to having “fewer is better” days.)

Her argument in a nutshell: If our political system was remotely responsive (jabbing her finger in particular at whimpy Democrats on privacy and Iraq funding issues) and law-abiding (jabbing here at an Administration that flouts its utter disdain of constitutional checks and balances), then perhaps fewer citizens would feel they needed to take matters into their own hands.

Amen to that!

It's year-end … be generous to the nonprofits of your choice!

Roger & Tom

Posted by admin | Filed Under Don't Miss these Posts, charities, nonprofits | Leave a Comment 

Fundraiser! Are You A Fraud, Or Just A Fool?

June 21, 2007

Jeff Brooks at Donor Power Blog just did a post that spiked my blood pressure.

He — correctly — took to task a report that, over a one year period, UK nonprofits earned merely 39 cents in donations for each $1 they spent on direct mail (and 44 cents for each $1 spent on all direct marketing).

The new study was reported in an apparently clueless article in the Stanford Social Innovation Review titled, “Pyrrhic Fundraising.”

Jeff points out that the study was “likely” talking only about donor acquisition programs, as opposed to looking at ROIs that factor in the entire donor development process (i.e. lifetime value). I emphasize the word “likely” because it's impossible to locate the actual study, purportedly just published in the Journal of Nonprofit & Public Sector Marketing.

[Indeed, I was really excited to discover via the Stanford article that such a publication even existed, but my excitement was quickly quashed when my online searching could only produce a cite indicating the Journal's website was last updated in August 2006.]

Maybe the authors will read this post and furnish The Agitator with the study.

But meantime, I have to conclude that Jeff Brooks was too restrained in suggesting the article “might lead people astray.” Jeff's rightly worried that mainstream media tends to echo just the headline message of pieces like “Pyrrhic Fundraising” and that such secondary coverage might frighten off erstwhile donors.

I agree with Jeff. Read this article and you might well conclude that charity fundraisers were either fools or frauds.

In fact, Jeff is far too polite. Any “study” that does not examine donor acquisition costs in the full context of lifetime value is pure horse****!

And further, any reporter who doesn't “get it” shouldn't be writing about fundraising.

So I don't know who The Agitator should fire first, the study authors, or the Stanford Social Innovation Review's reporter!

Tom

Posted by admin | Filed Under You Oughta Be Fired, charities, fundraising, marketing metrics, nonprofits | Leave a Comment 

Advice From UNICEF, Red Cross, Habitat

January 9, 2007

Marketing honchos from three of the nonprofit mega-brands made some interesting observations that were buried in DM News' Outlook 2007 edition.

From Habitat's Tim Daugherty:

“[We] are realizing the importance of leveraging online giving in a much more integrated fashion … It is no longer acceptable to treat all of your donors in the same manner, no matter the source of acquisition. A fully integrated approach is becoming an expectation of the donating public.”

Asks The Agitator: Does your database give you a single, unified profile of the donation history of each contributor, whatever the medium of soliciting and responding?

From ARC's Carol Cassidy:

“Donors are savvy and continue to raise the bar of expectations for timely and accurate acknowledgements. The investment in strong and healthy stewardship programs remains critical.”

“The greatest tip we can give is transparency and accountability. We intend to be centered on how donors want to give, to what they want to give and to continue to spend their money as they intend.”

Asks The Agitator: Do you invest enough in timely, personalized acknowledgements? How would you judge what is “enough” when it comes to thanking contributors? Finally, how explicit are you about reporting progress on the specific issues or programs that prompted the individual donor's gift? Is this all too taxing for you? Then don't complain about a 25% or 30% first year renewal rate!

From UNICEF's Jeff Towers:

“Increasingly, nonprofits are being scrutinized by media, by watchdog groups and donors who expect more results, greater efficiency ratings and less overhead … In a market that is flooded with causes, scrutiny and competition, we must continue to stay relevant and competitive using the same, if not fewer, dollars for fundraising costs.”

Asks The Agitator: What are the surest paths available to nonprofits to improve the yield of your fundraising spending?

We think two are most important: 1) shifting as much donor engagement as possible to the online medium; and 2) being brilliantly inventive and even maniacal about donor retention. We know your reaction: “Duh!” But we'll assert that most organizations are not pressing the envelope on either score … we see far too many copycat programs out there.

Posted by admin | Filed Under General Post, charities, fundraising, nonprofits | Leave a Comment 

Giving Totals for 2006

January 2, 2007

In case you missed it over the holidays, a survey for the Wall Street Journal conducted by Harris Interactive found that 83% of Americans contributed to a charity in 2006, with average total giving of $1220 (down about a hundred bucks from 2005).

Here are the categories used, with percentage of respondents giving to each.

Religious 35%
Hunger/food 34%
Health/disease 31%
Disaster 27% (down from 49% in Katrina's 2005)
Shelter 26%
Animal 23%
Education 20%
Arts 10%
Other 15%

Some demographic breakdowns are avaliable in the downloadable PDF, but nothing remarkable overall (unless you're struck by the fact that we contibute more to the welfare of beleaguered pets than to our childrens' education). It's unfortunate that these generic polls do not distinguish cause giving from charities; nor do they include contributions to political campaigns.

Posted by admin | Filed Under General Post, charities, fundraising, philanthropy | Leave a Comment 

No Money Please, We’re British

November 29, 2006

About the only joy of living on airplanes is that I get to Europe frequently and can then tune in to all the channels of the BBC.

One of my favorite programs (programmes) on the “Beeb” as the Brits call it, is “Hard Talk.” The sometimes puckish, often downright aggressive talking heads, always preppy and well-groomed, well-suited interviewers take on everyone and everything.

Last night

Stephan Sakur, “Hard Talk”'s smooth interviewer with the impressive credentials of 15 years as a BBC foreign correspondent, and a tight-jawed style that would make every American wannabe Anglophile jealous of his style, took on Dr. Salvatore LaSpada the head of a British organization called the Institute of Philanthropy. Dr. LaSpada is an American ex-pat –and a very smooth one at that—proselytizing mega-giving and offering advice to mega-donors.

As a former associate director of the Rockefeller Foundation, with lots of experience from other philanthropic ventures , he does know something about mega giving and mega wealth.

Setting aside my personal prejudice against folks who are too slick and too smooth and far too glib, the fact is that Dr. LaSpada turned out to not only overcome my prejudice against well-coifed, bearded, smooth talkers. He was was eloquent in terms of defining and defending the role of the private/independent sector.

Defending and helping to define the future role of private philanthropy in fundamentally socialist countries (meaning the state/national government predominently pays and the public doesn’t feel much responsibility) in the UK and the Continent ain’t easy for any American. The values of the “old” vs. “new” country are remarkably different. And George W. Bush sure ain't helping us bridge that gap!

What LaSpada did so well is to define why American philanthropy is what it is and why the values behind it may well be exportable.

Read on below for key takeaways….

Continue reading “No Money Please, We're British”

Posted by admin | Filed Under General Post, charities, fundraising, philanthropy | Leave a Comment 

Give Thanks For Nonprofits At Thanksgiving

November 23, 2006

A recent report on MSNBC notes that America's 1.4 million nonprofits (as registered with the IRS in 2004) account for 5.2% of the nation's economic output and 8.3% of its wages and salaries.

That's a significant contribution indeed to the nation's economic well-being, but it pales in importance to the enormous good work charities, cause groups and other nonprofits accomplish on behalf of making a better world.

For that we should all be thankful. In fact, we should be equally thankful for the doers and the funders, be those funders mega-donors like Buffett, Gates and Turner or one of the millions of mainstream donors whose $25 and $50 gifts comprise the bulk of philanthropy in America. Or be those funders “traditional” grantmakers or the latest round of “philanthropreneurs.”

At the same time, there's much for nonprofits to be reflecting upon these days in terms of how they can become even more effective in meeting their goals.

The same MSNBC report cites a Harris poll from the summer in which only 10% of respondents strongly agreed that charities spent their donated funds in an “honest and ethical” manner. Clearly, for all charities, accountability and integrity — building trust — in the most fundamental sense must be paramount.

And everybody these days seems more focused, properly we believe, on delivering measurable results and progress. Recognizing that difficult issues surround how to measure progress in many nonprofit pursuits, our community still needs to accept and respond to the reality that Americans are trained to expect forward movement and visible results … in fact, this expectation is in our blood. Unfortunately, at the same time, we all seem to be more and more impatient.

So as you digest your Thanksgiving leftovers these next few days, here are a few articles you should also chew over. They all deal one way or the other with the state of philanthropy in America as 2006 ends. Good food for thought.

First, three good overviews from Stephanie Strom in the NY Times (requires subscription), Kathleen Day in the Washington Post and Jane Lampman in the Christian Science Monitor. As well as the aforementioned MSNBC report.

Then a nice series of thought pieces prepared in conjunction with the recent philanthropy confab hosted by Slate.com and Bill Clinton, from Henry Blodget on venture philanthropy, Sebastian Mallaby on the “threshold test for philanthropists,” and David Nasaw with a rather contrarian view.

Have a Happy Thanksgiving!

Posted by admin | Filed Under General Post, charities, fundraising, philanthropy | Leave a Comment 

We’re Flabbergasted

October 28, 2006

This post in Don't Tell The Donor really surprises us, since we generally find this guy quite insightful … hence his inclusion on our blogroll.

Basically the post calls “total rubbish” the following comment by a writer for a local business publication:

Today, nonprofits need to operate like a business. Budgeting funds is a must, along with executing careful and appropriate fund raising with outcome measures in place to asses its use of funds and success.

For the record, the local biz writer goes on to say (here's the full article):

Measuring outcomes is more than just good management. Having accessible outcomes data also improves the organizations’ capacity to fund raise and advocate on behalf of its mission and clients. Nonprofits need to market what they do to their community and have open books for their funders.

To which we say: Absolutely! Absolutely! Absolutely!

“Total rubbish”!?

To not understand that the fundamental demand for accountability is growing — in fact, becoming paramount — among each and every donor category is like denying gravity exists. Indeed, that's one of the key strategic conclusions of the very NYU Wagner School study on donor confidence apparently misread by Don't Tell The Donor. Here's our review of the must-read Wagner Study from awhile back, which includes a link to the full study.

If you “Don't tell the donor” how you are achieving outcomes and carefully stewarding her or his contributions you might as well kiss that donor good-bye. Whatever the role other institutions, like big business, have played in undermining public trust in general, like it or not, that diminished trust in all institutions is the reality every fundraiser and every nonprofit must confront head-on today.

Posted by admin | Filed Under Don't Miss these Posts, charities | Leave a Comment 

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