But of course the core message — you must re-inspire your donor — doesn’t just apply to new donors … it applies each and every time a donor makes a gift.

Most nonprofits have banked their biggest chunk of annual contributions in the last few weeks. How effectively have you thanked those donors? Would your ‘thank you’ have given your donor a thrill?

Jeff Brooks at Future Fundraising Now excerpts what you should NOT do in a thank you from an excellent ‘must read’ post — How to Craft a Killer Thank You Letter by Gail Perry at Fired-Up Fundraising.

I do agree with Jeff (who disputes Gail) … you should always keep selling. That’s not inconsistent with the first purpose of the ‘thank you’, which is to express genuine gratitude and rekindle the emotional charge that inspired the donation in the first place. It’s a matter of having the right touch.

Tom

P.S. Keep those responses to our 2012 Agitator reader survey coming in. Takes only five minutes. The better we know you, the more relevant we can make our content.

Boy can I identify with drooling over those comic book offers when I was a kid.

I never tried to order the seven foot Polaris sub big enough for 2 kids (after all, who wouldn’t want to take along their best mate?!), but I did send away for the fishing kit that came with 500 ‘guaranteed to catch the big ones’ lures (or was it 50?). The kit never did arrive, but it has only been in recent years and after much psychotherapy that I came to blame my mother for not sending the money … as opposed to the vendor I wrongly assumed as a kid had stolen my money.

What does this have to do with fundraising?

Mark realizes now (I’m not sure when he came to his realization) that the Polaris sub was made out of cardboard and would have turned into a “pile of sodden pulp” after a mild drizzle.

He would have been terribly disappointed. And so he says:

“I’m a little older now, but I still have dreams. And, like many other people, I try and make those dreams come true by supporting charities. A cure for cancer, the end of poverty and prevention of animal cruelty are all on my list, but just like buying a submarine, the result of giving often leaves me feeling a little flat.”

He’s talking about the mediocre, uninspiring response most of us get when we contribute to charities. He continues:

“Fundraising isn’t just about asking. If it was that simple, charities would be awash with money. It’s about giving something to your donors that they need and value.

That doesn’t mean simply telling donors what your charity does (yet again) in a welcome pack.

It’s about grabbing the one chance when you are virtually guaranteed that a donor will open your communication and read it. You can then give them just what they want…

• Recognition for what they’ve done.
• The opportunity to demonstrate that fact to others.
• Authentic, personal treatment.
• A reason to smile (or cry).

If we do that, we’ll find people will actually want to open our appeals. And though they might not get as excited as I did about the thought of my own personal submarine, it will go a long way to encourage a one-off donor to become a long-term supporter.”

Well said, Mark!

Sit down and take a look at your org’s welcome or acknowledgement package … does it meet Mark’s test. Would it rekindle the excitement your donor enjoyed in giving their gift? Or is it a pro forma ho hum toss-away?

Tom

P.S. Keep those responses to our 2012 Agitator reader survey coming in. Takes only five minutes. The better we know you, the more relevant we can make our content.

I expected Mark to be making a point about building relationships. Your year-end giving isn’t simply a response to some clever tactics dreamed up in October and executed from mid-November on. Those tactics are simply tapping into a (hopefully deep) reservoir of donor interest and commitment that your organization should have been nurturing for months.

However, Mark focused on something more narrow … sharpening your online giving strategy.

To be sure, heaps of donations have passed digitally into nonprofit coffers over the past 3-4 weeks.

By now, you’ve probably counted it … compared it to your projections (resulting in high-fives or gulps) … and even compared it to last year’s results (which, as Mark points out — citing Blackbaud — were up 34.5% in 2010 over 2009 for the sector … a high benchmark to beat).

I hope your next step will be to identify exactly what worked and what didn’t with your year-end online campaign. What is there to learn … and fix? Especially with regard to your conversion effectiveness at every step along the online giving process — from initial response (e.g., email subject lines and use of URLs in mail packages) to close (e.g. capture rate of your landing pages).

While the largest chunk of online giving still occurs at year-end, you’ll be leaving a lot of money on the table during the year, starting with your first online appeal of 2012, if you don’t attend to these learnings right now.

Mark is right about that.

But all the ‘fixes’ are just that … tightening the nuts and bolts. Don’t forget that the fixes still ultimately rest on the bedrock of donor commitment, which some nonprofits enjoy far more than others (as we’ve reported here).

Tom

Our colleagues at DonorVoice are going to replicate in the UK their recent US study of donor commitment.

The call is out for UK charities who would like to participate in the study, which will be conducted in association with Ken Burnett and SOFII. Here is what Ken said about the US study, as well as an Executive Summary describing what that well-received work revealed.

There are two elements to this project. The first will study a representative sample of recent, frequent UK cause donors. This work will provides a national benchmark, computing Donor Commitment ratings for fifty top UK charities and NGOs across the health, human services, international aid & development, youth & children, environment & conservation, animal welfare, and armed services sectors (see full list here).

The second element looks at the same issues using samples (with transaction histories) from house files provided by participating UK organizations. To ensure adequate sample sizes, the study is best suited to larger charities operating on a national scale.

So far, five major groups from the child sponsorship, international relief, higher education, homelessness and environment sectors have signed up. The study can accept up to fifteen participants. UK participants will be charged a £1,000 fee each to cover direct costs of the work.

If you would like to consider participating, the DonorVoice information and sign-up page is here. Participants must sign-up and provide the required donor sample files by the end of December. The study will be undertaken in January, with results released at a in-person briefing in London in February.

From Ken Burnett:

“To have a ‘top 50’ of nonprofits ranked by the commitment of their donors is a breakthrough. You now know what to do to nudge your nonprofit up that list. To be able to delve into your organisation’s donor files and identify where you’re doing well and where you’re falling short, well, that strikes me as near priceless information that should underpin everything for you and your fundraising colleagues.”

Amen!

Tom

Sadly, lots of folks pay lip service to the concept of donor commitment or loyalty, but few really grasp it, and even fewer in the nonprofit sector take any serious steps to do much about it.

The commercial sector long ago woke up to the economic importance of customer loyalty and commitment. A quick search of Amazon reveals more than 1000 books on ‘customer loyalty’ in the commercial world, but just 13 on ‘donor loyalty’ in the nonprofit space.

That’s why we welcome this month’s publication of a fascinating new book, 3D Philanthropy by Canadian fundraiser Fraser Green.

I’ve known and collaborated with Fraser over the years and he really understands the importance of commitment and how to build it. In fact, this book is really a donor commitment manual – full of practical tips and recipes to deepen donor connections and foster the loyalty that results.

Ken Burnett, who’s spent a long and distinguished career studying and preaching the importance of donor relationship management and commitment, says this about Fraser’s  unique book:

“Fundraisers, as Fraser Green rightly says, are better at understanding behaviours than motivations. This book sets out to rectify that, addressing the emotional and motivational dimensions of fundraising in more detail and better than any other I know. It contains more intimate pen-portraits of donors and more analysis not just of how they think and behave, but also of how they feel and why they respond as they do. It deserves a space on every fundraiser’s bookshelf.

“The author hopes this book will give you a new way to look at the good work you do and unlock some doors that you haven’t ventured through before. There’s a lot here for anyone serious about fundraising.”

And Tom Ahern, another of my heroes when it comes to understanding motvation and commitment, sums up Fraser’s insights:

“I’ve never seen a book like 3D Philanthropy. In this truly original work, Fraser takes you on a fascinating journey through the donor’s giving experience. You eavesdrop on the precise intellectual, emotional, and spiritual reasons behind the donor’s acts of philanthropy. This book will forever change your understanding of the donor’s mind — and your special role in helping donors reach their full philanthropic potential. If you’ve ever had second thoughts about your career in fundraising, read this book – and find your inspiration again.”

Building on a fascinating series of vignettes of individual donors, Fraser goes on to backup his theories with detailed survey research conducted by his fundraising firm, Goodworks with Canadian donors, then illustrates the importance of all this with easy-to-understand calculations of the value of donor loyalty and commitment.

The economics of fundraising is startlingly simple. Committed and loyal donors are the economic engine of any charity’s database. Donor loyalty must become the holy grail of fundraising. 3D Philanthropy is really a donor loyalty handbook. To understand ‘3D Philanthropy’ is to know how to build donor loyalty.

Fundraisers who do that right will be the ones who prosper.

Roger

P.S.  3D Philanthropy is available for $29 from Civil Sector Press. Fraser, until those royalties start piling up, you deserve a raise!

He’s talking about a sin I know I’ve committed in the past.

He warns that as a marketer you can become so focused on differentiating your offering from your competitors that you forget the need to address your prospect’s first option … which is to do nothing.

So, don’t forget. First things first … why does your cause need help in the first place … right now, today? Never take for granted that your potential donor has already crossed that bridge.

And one critical place to check whether you’re making the mistake is in your renewal series.

Tom

Their conclusion is signaled in the title: The Effects of the Recession on Brand Loyalty and ‘Buy Down’ Behavior: 2011 Update. (registration required to download study)

What they find is that since 2008 consumers have steadily been trending down on the the following shopping option: “I buy the brand I want most”.

The percentage indicating this as their shopping behavior has dropped from 54% in 2008 to 43% in 2011. More people choose “buy less expensive brands to save money” or “sometimes buy a different brand if it is on sale”.

Thus the term ‘buy down’.

I’m wondering … what’s the equivalent to shopping ‘buy down’ when it comes to donating money?

Arguably there’s not much relevance in the nonprofit to a concept of a cheaper brand — a ‘cheaper’ enviro group or a ‘bargain’ child sponsor agency doesn’t seem to be pertinent.

I would point to three ‘buy down’ effects in giving …

First is giving to fewer organizations — so if you’re a ‘survivor’ group that makes the cut, you’d say loyalty was the reason; if your group doesn’t make the cut, you’d probably say ‘loyalty is down’ in the nonprofit space!

Second is smaller average gifts, rather than outright abandonment, which definitely has been an observed pattern.

Third might be a preference to give locally, rather than to national or international groups. More of a ‘circle the wagons’ and ‘take care of our own’ mentality sets in as resources diminish. And local results are often much easier to see … a high priority for financially stressed donors.

Whichever of these recession effects is more likely for your organization, it seems very unlikely that ‘buy down’ behavior isn’t happening throughout the nonprofit sector.

Personally, I think I might prefer to work with a high profile local cause or charity if I were seeking a fundraising job today. Refer to yesterday’s Agitator post on the Humane Society for Southwest Washington!

Tom

Frankly, I’m exhausted from preparing this, but I really hope you’ll invest the  time to read the whole post. Believe me, it’s worth it if you care about the future of your organization.

Here’s why.

Blackbaud has just delivered a “must read” report on Growing Philanthropy in the U.S. Read and heed.

The report, a view of the future we all face, is a distillation of a ‘brainiacs’ session hosted by Blackbaud and moderated and summarized by Adrian Sargeant. They’ve addressed the fact that giving is flat and what to do about it.

You really have to read the whole thing, written by Adrian, a bright light in our universe. But, for the slothful who won’t take the time to read it all, here are the key takeaways:

• Redefine Relationships. Stop being selfish. Focus on giving for giving’s sake.

• Re-orient toward longer term measures of fundraising performance. Immediate measure of ‘success’ (response rates, immediate ROI, giving totals for the year) doom us. Look at long-term values.
  

• Enhance focus on retention and building supporter loyalty.  Listen up! With retention rates in the dumper too few nonprofits really understand that a 10% improvement in retention results in a 200% improvement in lifetime value.  Time to get real.

• Develop a more integrated approach to fundraising. It’s not the method, Stupid, it’s  the message. And the message must focus on the donor’s concerns, not yours.

• Break down organizational silos and encourage greater collaboration between teams. The authors are too kind to say it, but you should be ashamed of your territoriality.

• Give supporters greater control over the relationship. Ken Burnett, The Agitator, DonorVoice and scores more have been preaching this for years. This is the arena where you can quickly add the most value.

• Promote the development of shared back office facilities. Small organizations need to stop whining and get together and share in the development of good stuff in the back room.

• Tackle high turnover rates in the fundraising profession. Face it. It’s not the pay it’s the lack of respect from CEOs and board members that drives folks out of this trade. We have an identity crisis and have to deal with it.

• Educate all stakeholders about the necessity of a longer term and integrated approach. I know, I know, it’s like playing Mozart to a cow, but we have to do it. It’s a real challenge, but we must not allow Boards to be stupid about fundraising, stewardship and philanthropy.

• Empower the regulators to enforce 100 percent filing of Forms 990 to increase their utility. Hey, I know this seems picky, but the fact is that some organizations don’t file, some lie, some don’t.  Transparency is key to the future of philanthropy. Get with it.

• Blow the whistle on organizations claiming to have zero costs of fundraising. As long as watchdog organizations reward ‘zero’ costs, organizations will lie. It’s time to call out the phonies in the watchdog groups and blast the nonprofits that play this game. There simply ain’t no thing as ‘zero’ fundraising costs.

• Fund the development of a website in the U.S. to educate the public, boards, and other stakeholders. Philanthropy is a big business, a significant part of our GNP. Let’s make it as transparent as possible.

• Encourage nonprofits to develop complaints schemes. Anyone who knows anything about donor retention and commitment is familiar with the importance of feedback. (See http://thedonorvoice.com)  This report reminds us of the absolute necessity to provide multiple methods for donor feedback.

• Develop new and more appropriate measures of performance.  Efficiency and cost of fundraising sucks as a measurement of anything.  There are far more appropriate measures.

• Develop the self-regulation of fundraising. Ethics be damned.  There’s a whole host of scum bags out there. But, we can do something about them.

• Encourage the adoption of monthly giving. No shit! Serious Monthly Giving or Sustainer programs produce 600% – 800% more revenue. Get to it. Now!

• Improve the sector’s engagement with young people. This is a loser, from a fundraiser’s perspective. But the report does have some good suggestions. Check ‘em out.

• Encourage and promote best practices in social media.  Importance of social media isn’t $, it goes to building loyalty and commitment.

• Encourage asset-based giving. The Report claims that 93% of a person’s giving potential is realized with a bequest or other planned gift.  Get  at it!

• Develop expertise in broadening participation in giving. Pretty weak tea. Don’t spend much time on this unless you need a kumbaya moment.

• Improve the quality of bequest fundraising practice. Death is our friend. But, with at least 8% of our donors willing to make a bequest, this just has to be taken out of the incompetent (marketing-wise) hands of planned giving officers and placed in the hands of those capable of selling.

• Challenge the wealthy to plan their own philanthropy. Stop bitching. The rich are rich and they’re gonna do pretty much what they want. This section of the report seems to think that enlightened advisors to the rich will help. Not!

• Create a nonprofit mutual fund. Nothing new here given the prevalence of donor advised funds at virtually every fund manager like Fidelity or Vanguard. Not sure what new is recommended. Fuzzy at best.

• Leveraging companies to promote philanthropy. Not sure that this adds much to the body of knowledge re employer matching, cause related marketing, etc, but well to keep in mind for that afternoon you have nothing better to think about.

• Invest in fundraising research institute. Seems  a bit self-serving to me, but because we’re also in the donor research biz. I guess it can’t hurt.

• Redesign the system of professional development and certification for fundraisers. Important stuff here. Knowledge and understanding of donor behavior is key for the future, not the number of AFP merit badges.

• Encourage the development of academic qualifications in fundraising. Jesus! They want to put in a curriculum for fundraising. I couldn’t disagree more, but you may have other ideas. I would simply settle for the fact that more than 50% of all fundraisers understood math or even simple arithmetic..

• Appoint a “sales force’ for the fundraising body of knowledge.  Ignorance is bliss (as is the case for too many CEOs and fundraisers), but this recommendation to gather best practices and the knowledge within the trade is spot on.

• Call out institutions offering certificates purporting to be qualifications. “Hey Mom, I’m  now a certified fundraiser.” An interesting discussion on stopping faux degree or course offerings by some colleges and universities.

• Educate board members about the intricacies of fundraising.  Among all the barriers to successful fundraising and philanthropy, the ‘board’ is the mightiest barrier and pain in the ass. This report rightly targets the boards for education and improvement.

Thanks for reading all this.  And it’s just the summary. Do yourself, you CEO and Board, a big favor and download (and read) the full report.

Roger

P.S. By the way, Adrian Sargeant and Blackbaud, you both deserve a raise.

The call is out for UK charities who would like to participate in the study, which will be conducted in association with Ken Burnett and SOFII. Here is what Ken said about the US study, as well as an Executive Summary describing what that well-received work revealed.

There are two elements to this project. The first will study a representative sample of recent, frequent UK cause donors. This work provides the national benchmark.

The second element looks at the same issues using samples (with transaction histories) from house files provided by participating UK organizations. To ensure adequate sample sizes, the study is best suited to larger charities operating on a national scale.

UK participants will be charged a £1,000 fee each to cover direct costs of the work.

If you would like to consider participating, the DonorVoice information and sign-up page is here.

Tom

But I urge you to read it. Believe me, it does apply.

First, it argues that marketers need to adjust to a “new era of deep customer engagement” where ‘push’ advertising and promotion no longer work effectively.

It notes that consumers do not separate marketing of the product from the in-store or online experience or from the product itself, concluding … “marketing is the company” and everybody is responsible for marketing.

Says McKinsey: “To engage customers whenever and wherever they interact with a company—in a store; on the phone; responding to an e-mail, a blog post, or an online review—marketing must pervade the entire organization.”

Of course this leads to … if everybody is responsible, who is ultimately accountable?

And that leads to a discussion of breaking down traditional walls that might have some functional purpose but are meaningless to the customer.

So, what does this mean in fundraising terms?

Perhaps mots importantly, break down the division between ‘communications’ and ‘fundraising’. For example, as we’ve looked at donor retention, the path to improvement relates at least as much to what is communicated to donors via newsletters, blogs, websites, social media, etc outside the fundraising stream as it does to the fundraising stream itself.

But who is charged with making sure that ‘communications’ are effectively designed to support ‘fundraising’?

Even just looking at online communications versus direct mail … who holds the mandate to ensure message consistency?

The article notes a phenomenon that I’m sure most nonprofits are experiencing — the enormous demand for fresh, relevant content to fuel the accelerating, proliferating and intensifying digital interaction that consumer/donors expect from their brands/organizations.

Most nonprofits struggle to produce a compelling monthly print newsletter or core website. And yet now they feel obligated to offer Facebook pages and mobile apps in an extremely dynamic technical and usage environment.

As McKinsey notes, companies “have built publishing divisions to feed the ever-increasing demand for content required by company Web sites, social media, internal and external publications, multimedia sites, and coupons and other promotions. Many luxury-goods companies, for example, have built editorial teams to ‘socialize’ their brands: they are transforming the customer relationship by producing blogs, digital magazines, and other content that can dramatically intensify both the frequency and depth of interactions.”

Then there’s the issue of customer insight and data. Digital engagement yields customer data by the terabytes per day for some marketers. McKinsey gives this example, talking about data analytics and targeting:

“Some marketing organizations are already making their moves: to send targeted e-mails to customers, retailer Williams-Sonoma, for example, analyzes an integrated database that tracks some 60 million households on metrics including income, housing values, and number of children. These e-mails obtain response rates 10 to 18 times as high as those sent randomly.”

Wouldn’t you like to increase your email fundraising response 10 to 18 times?!

Like it or not, consumer marketers — with far more resources than most nonprofits — wind up ‘training’ consumers (i.e. your donors) to expect more and more content and interaction, faster and faster, slicker and slicker, more and more relevant.

That’s what nonprofit communicators/fundraisers are up against. Good luck!

The McKinsey article makes cogent recommendations about how consumer marketers can meet the demands of “deep customer engagement”. You won’t find everything in the article directly applicable to your nonprofit environment … but the principles surely apply.

Tom