Boomer Gloom Affecting Fundraising?

June 27, 2008

Have The Agitator and DonorTrends discovered the Fundraising Rosetta Stone … demystifing the real reason behind falling acquision and retention rates and other recent fundraising plagues? We think so.

In reporting our 2005 DonorTrends survey three years ago, we noted that Boomers had climbed to the top of the donor heap, surpassing Seniors (born before 1946) and Post-Boomers (born after 1964) in average annual contributions. In 2005, Boomers on average contributed $1361 over a 12 month period; Seniors — the traditional bedrock of giving — donated $1138, while the younger generations brought up the rear with $791.

Might this be the beginning of a "Golden Age" of Boomer giving we asked. Well, as it turns out … not quite.

In our recently completed and soon-to-be-released 2008 DonorTrends Survey, Boomers fell to the bottom of the heap — Seniors reclaimed first place, averaging $1542 in donations in the past 12 months, Newbies (our term for the Post-Boomers) jumped up to $1205 in donations (a percentage increase of 52%!), and Boomers fell to $1081.

What happened to the Boomers?

A new "must read" report by Pew Research, called The Gloomiest Generation, suggests the answer.

As it turns out, compared to both their predecessors and their successor generation, Boomers actually have the least optimistic view of both their current and future economic situation, even though in real terms they are the most prosperous. For example, Boomers give their overall quality of life a lower rating than other generations; they are more likely to worry that their incomes won’t keep up with inflation; they believe more than others that it is harder to get ahead now than it was 10 years ago; they are less likely to say their standard of living exceeds the one their parents had when their parents were the age Boomers are now; and not surprisingly then … Boomers are more anxious than other Americans that they will have to cut household spending in the coming year because money is tight.

This adds up to a pretty gloomy head trip! Might it cause a more conservative approach to donating — even a retrenchment? In our opinion…Absolutely.

Pew suggests a few possible reasons for Boomer gloom.They note that substantial percentages of Boomers are in a "sandwich" phase of life — many are financially supporting their parents, their own children in the home, as well as adult children outside the home — at the very time they are beginning to contemplate retirement and living on fixed incomes. Also, Pew finds seven-in-ten Boomers dissatisfied with the direction in which the country is going, a worse assessment than other generations. The DonorTrends 2008 Survey, to be reported fully soon, probes Boomers’ issue attitudes in detail and finds the same concerns.

But taking their gloom into account, and noting the fall-off in their average giving, we still need to remind ourselves that Boomers numerically dominate the donor universe … so target them we must!

Fundraising Implications Today and Tomorrow. Make no mistake. When the largest and most wealthy generation of donors is in a near-Prozac stage and scared to death of their financial future in a society they perceive is going to the dogs, it’s not good news for fundraisers.

Acquisition suffers because they’re reluctant to make new commitments. Retention suffers because the generally skeptical nature of Boomer generation is turbo charged by fear of the future … and perhaps the perception that the world’s problems are getting solved after all, despite Boomers’ original idealism. In short, they’re skittish, disappointed, and they bail far more quickly than either the Seniors or the Newbies. Is it any wonder acquisition and retention rates for many organizations hit the downward skids at the same time the Boomer generation succeeded the blindly-loyal Seniors as the majority of America’s donors?

And rising gas prices, food prices, and health care costs merely exacerbate the giving malaise.

In short, fasten your fundraising seat belts! This is about more than a temporary economic downturn.

Roger and Tom

P.S. In the DonorTrends 2008 Survey on Generational Giving, available shortly, we’ll set forth actionable recommendations on how to survive and thrive in this sea of depression afflicting America’s largest group of donors. Meanwhile, download the Pew report and stay tuned to The Agitator. Roger & Tom

Posted by tbelford | Filed Under Boomers, Don't Miss these Posts, DonorTrends, Hot Research, demographic trends, fundraising | Leave a Comment 

March To Online Video Continues

May 13, 2008

From ComScore, here are the latest figures re online video viewing. In the month of March:

  • 73.7 percent of the total U.S. Internet audience viewed online video, averaging 83 videos per viewer.
  • 84.8 million viewers watched 4.3 billion videos on YouTube.com (50.4 videos per viewer).
  • 47.7 million viewers watched 400 million videos on MySpace.com (8.4 videos per viewer).
  • The average online video duration was 2.8 minutes.
  • The average online video viewer watched 235 minutes of video.

According to The Agitator’s recent DonorTrends survey, 40% of post-Boomers, 32% of Boomers, and even 25% of pre-Boomers report having watched an online video from a charity or cause. What’s your nonprofit doing to capitalize upon this adoption trend?

Tom

Posted by tbelford | Filed Under Boomers, DonorTrends, Hot Research, online advocacy, online fundraising, online video | Leave a Comment 

More On Trust

May 7, 2008

In a lot of things I’m reading lately, the "trust" issue keeps popping up.

Here’s a piece on trust and brands.

Your nonprofit is a brand. If you’re fortunate, it’s a brand your target audience has heard of. The Agitator’s DonorTrends survey recently asked donors for their perceptions of 100+ national nonprofit brands. The results underscore how invisible most nonprofit brands are.

But while awareness is great, and hard to come by, it of course is just a foot in the door. A chance to attach a bit of meaning and affect. In fact, one could argue that awareness doesn’t really exist without some attached value connotation … however well- or ill-founded. And that brand meaning can be negative or positive.

What any brand must strive toward is earning the trust of its audience. Nothing is more precious. And nothing can be more fatal than losing that trust, once gained. Just consider the travails of the ACLU over the past few years.

How is your nonprofit going about earning trust? And what clumsy mistake might you make to lose it?

Tom

Posted by tbelford | Filed Under Don't Miss these Posts, DonorTrends, accountability, branding, nonprofit management | Leave a Comment 

Does Nonprofit Branding Matter?

April 24, 2008

Only if your nonprofit wants to survive in the online era, when there is absolutely NO barrier to entry. Anyone who can build a website can attract a constituency to support precisely what your organization is already doing.

Your protection? Your brand … clearly recognized, sharply defined, and positively regarded.

In The Agitator’s recent DonorTrends survey, we probed a bit the "established & familiar" versus "new kid on the block" issue. Which isn’t to say a newcomer can’t quickly establish a strong, recognized brand … indeed that’s part of the "problem" … or better, challenge, for established groups.

In our survey, 40% agreed with the statement: "I prefer to support well-established organizations rather than new ones." 23% disagreed and 38% were sitting in the middle … on the fence. Not comforting to existing brands.

Similarly, 40% also agreed with this statement: "If I haven’t already heard about a charity or cause in the media or by word of mouth, I won’t contribute." 27% disagreed and 33% sat on the fence. The message here … you’ve got to get into the "consideration set" … and that’s what a strong brand helps you do.

Our DonorTrends survey measured for the first time donors’ awareness of and regard for over 100 "leading" nonprofits. More on those results in the coming weeks.

Meantime, we urge you to read Nancy Schwartz’s tutorial on nonprofit branding. Excellent insights and practical advice. For this contribution, Nancy, you deserve a raise!

Tom

Posted by tbelford | Filed Under DonorTrends, You Deserve a Raise, branding, communications | 3 Comments 

Forget The Mistletoe, Concentrate on the Mistrust

January 8, 2008

OK, you've had plenty of time to revel in the year-end returns and swap stories about the holiday office party. Now it's time to turn over a new leaf for the New Year and pay serious attention to a problem we've been warning about over and over–the problem of donor loyalty and retention.

The current issue of Contribute, the glossy magazine that bills itself as “The People and Ideas of Giving”, should get you focused on the problem of retention for the year ahead. In an article entitled, Donor drain: As mistrusts grows, loyalty goes, writer Tracie McMillan leads with the plight of the National Wildlife Federation which has been losing 300,000 donors a year — nearly 1/3 of its close to 1 million members.

Of course, NWF isn't alone. The fact is that the 'donor drain' is endemic. A survey authored by Bill Levis of the Urban Institute points out that most non-profits lose 52% of their contributions each year which is then offset by a 62 percent gain in new or upgraded donations. In short, according to Levis non profits are losing almost as much as they're gaining, pouring a river of money into a nearly open drain.

Why? Well according to the most recent Harris Interactive Survey, cited also in the currernt issue of Contribute magazine, 56% of the 3,040 Americans surveyed said they are “more concerned about the misuse of funds than they were a decade ago. (For an interesting take whether donor trust can be restored see Contribute's Roundtable featuring , among others the irrascible and always insightful Pablo Eisenberg.

Frankly, I'm personally not convinced that the erosion of donor loyalty has much to do with fraud and misuse as it does with the failure of fundraisers and communicators to keep up with the changes in consumer/donor mindset. Tom Belford dealt with this in an earlier Agitator post titled “The Secret Sauce of Brand Loyalty” and his insights are worth re-reading.

So what's a fundraiser to do? Well for starters a good dose of courtesy and common sense won't hurt: Thank your donors immediately after they contribute and frequently recognize their importance and the impact they're having…give them details on how their contributions are being used and the difference they make…focus on keeping your donors fully informed and sincerely make them feel appreciated.

Beyond common sense and courtesy watch for signs of disaffection: changes in giving and involvement patterns –down-grading, less frequent contributions, less responsiveness to e-actions and e-appeals. Any fundraiser worth her or his salt should have a system in place for spotting and taking action on those donors whose giving behavior telegraphs the early warning signs that they are moving out of the zone of affection into the swamp of disaffection.

Finally, download your free copy of the CMS-DonorTrends White Paper on Donor_Loyalty.

Happy New Year!

Roger Craver

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

Five Trends to Heed and Benefit From in 2008

January 7, 2008

Tom and I aren't in the crystal ball business, but we do take some pride in spotting significant trends with the potential to help or harm our readers and the causes they serve.

Here are our top five trend picks for 2008:

1. Donor acquisition and retention will continue on a downward spiral.

An uncertain economy, diminishing consumer confidence, U.S. presidential election year fundraising and politics, and the inexorable exit of the World War II donor generation from the giving stage will all combine to make '08 a tough, tough year for acquisition and retention - particularly for those who continue doing the same/old, same/old hoping for a different result. Here at The Agitator we'll be watching and warning on this subject again this year as we did in 2007.

2. Active donors will give more but to fewer organizations.

This trend, underway for several years, will accelerate in '08:

… partly due to demographic changes (Boomers and Gen Xers more skeptical and demanding than WWII generation) [ Download your free copy of the CMS/DonorTrends Boomer White Paper to see why. ]

… partly to more readily accessible online information about causes (from organizations themselves, from rating and watchdog services, and greater involvement by donors themselves in rating and judging nonprofits. Click here to see the latest example of what the Chronicle of Philanthropy calls a “Zagat's for Charities”, a donor participation/evaluation site called Great Non-Profits.

…and partly because of increasing sophistication and skill of fundraisers and nonprofit executives who understand what it takes to build donor loyalty and commitment, and who have the guts and foresight to make the long-term investment required.

3. New media, until now mostly hype and buzz, will become increasingly bankable.

Not only is more and more money being raised online through social networking, e-appeals, and the conversion of advocacy activists into donors, the really important trend is that fundraisers, not webmasters and other assorted techies, are gaining more control of the online world successful organizations must master.

And most important of all is that realistic expectations and integrated plans are becoming increasingly apparent. Older donors (the best kind) have been online for years (often in the form of their online activism and advocacy), but few organizations have shown the skill or determination to discriminate in how they deal with different segments of their online audiences– something no competent off-line fundraiser would dream of.

In short, more and more organizations are becoming comfortable with marketing online WITHOUT expectations of immediate financial returns, understanding that platforms like You Tube, Second Life, Facebook and Flickr may help them to educate and attract the next generation of donors down the line.

At the same time, fundraisers are also beginning to understand the financial value of social network/peer-to-peer fundraising, realizing that “user generated content” also means “user generated money.” And, in what is likely to be the next and more sophisticated use of social network fundraising, some organizations have discovered that there can also be a “high dollar” or “middle donor” component in social network fundraising.

As an illustration of what's possible even with donors who are NOT regular netizens, look at a campaign developed by HJC New Media called “The NO GO GALA” of Canada's Crohn's and Colitis Foundation. Here, high dollar donors have their own personal pages and personal goals of $20,000, $40,000 and more. Not only did these high rollers make their own personal pages, but others, not feeling technically savvy enough, had the organization create pages for them and provided copy and addresses for the emails to their friends.

4. Back to the future.

The move to better integration, more fundraising-oriented thought, and less infatuation with techniques that glow in the dark that we're seeing in the online world is also occurring off-line as well. Of course there will always be the fashionable new, new thing of the moment - data mining, modeling, video emails, YouTube, My Space, you name it- but, mercifully, the year ahead will see more focus on the basics of good fundraising and donor communications.

And it's about time. With donor retention in big trouble, and donor skepticism and the desire to be involved on the rise, and with competition increasing at warp speed, we're long overdue for a back-to-basics correction.

“Basics” as in effective and prompt acknowledgement of gifts, detailed reporting on results and accomplishments to the donors, and real and effective ways to evolve them. In one of the early pieces on The Agitator I recalled the good manners and mighty effective communication skills of Helen Keller with her donors.

What was good in the first half of the last century it's even better -and more important - in 2008.

5. Transparency and Involvement: The new, new things you can bank.

Last but certainly not least is the trend toward more transparency and involvement for donors. I'm not talking about scandal and cover-ups (although there is likely to be more than the usual amount of those in '08). I'm focused on making clear to donors how their money is being effectively spent, the results you're getting for their contributions.

Just giving donors online access to your organization's Form 990 won't cut it. And pay particular attention to creating opportunities for involvement. Not just an occasional survey, but also perhaps an occasional conference call and briefing where they can ask questions and commune with other donors. Or, a visit to your office and a brown bag lunch with you and some program folks. Or better yet some meaningful and actual hands on involvement in your mission.

Survey after survey tells us that more and more potential and actual donors are “test driving” the organizations they intend to invest more in. Make sure your nonprofit gives the donor the opportunity to get behind the wheel.

So, jump on board these trends - and prosper. Ignore them at your peril.

And if you're wondering what trends I've left out you should also consider: the importance of focusing on women as donors and leaders…the importance and urgency of launching an aggressive legacy marketing campaign…the rise of new methods of giving like minimum contribution donor advised funds…the 1001 uses you can make of Google Maps…mergers and acquisitions in the non-profit sector and on and on.

Should be a fascinating 2008!

Roger Craver

Posted by admin | Filed Under Don't Miss these Posts, DonorTrends, donor retention, fundraising, nonprofit management | Leave a Comment 

Top 10 Things Fundraisers Should Monitor

December 23, 2006

From our archives. Happy Holidays!

For fundraisers managing reasonably complex fundraising programs, there's always a danger of missing the forest for the trees. You're awash in data and deadlines. Your messengers — CEO, program staff, board members — have lost your phone number. Your mail shop has just gone bankrupt and closed its doors with your inventory locked inside. And so, your planning horizon is this week …

• Are we ready for tomorrow's six-figure pitch to Ms. Big?
• Is the proposal ready for The Huge Grant Foundation's Friday deadline?
• Why is our latest prospecting package sucking eggs?

Fair enough … understandably, this week's agenda always presses to top of mind.

But if you're a fundraiser who doesn't like surprises (or you have a boss with this phobia), what is the most critical information you should be tracking if you want to stay ahead of the curve? We've prepared a DonorTrends White Paper discussing our recommended Top 10 List. The ten items are previewed below. Since fundraisers think numbers first, we've started with a few “hard data” items. But the “soft” items farther down are no less important … indeed they're probably more important in terms of fashioning long term strategy.

Top Ten Things Fundraisers Should Monitor

1. Renewal/retention rate for first year donors.
2. Lifetime value by source of donor.
3. Cost of funds raised.

Continue reading “Top 10 Things Fundraisers Should Monitor”

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

Boomers To Give $6000 Each in 2006!

December 15, 2006

That's a BIG number from a survey just completed by Fidelity Charity Gift Fund.

But then read the fine print and discover the sample was limited to those who indicated they planned to give at least $1000 during the year.

Headline hyperbole aside, The Agitator knows that Boomers are indeed ready to rock the charity universe. We've conducted our own in-depth study of Boomer giving attitudes and behavior, comparing them with both Pre- and Post-Boomers.

Called Navigating the Generational Divide in Fundraising and Advocacy, our DonorTrends study found that Boomers are currently giving on average $1361 per year, compared to $1138 for older Americans. The pace is set by “late” Boomer donors (born 1956-1964), who give 21% more than their “early” cousins. Moreover, while 33% of Boomers say they intend to donate even more in the future, more older pre-Boomers plan to reduce their giving (26%) than increase it (12%).

Like their elders, Boomers give about 75% of their donations to traditional charities working in the fields of health, education, social needs, disaster relief, arts and culture, with the remaining 25% devoted to issue advocacy and political campaigns.

Download our study for a ton of cross-generation data and analysis on donor loyalty, nonprofit performance expectations, issue interests, online giving, perceptions of charities and giving habits.

PS: Don't forget to take our “Transparency vs. Privacy” survey. Just go to the Survey box at top right of blog, or click here. Just takes 3 minutes!

Posted by admin | Filed Under Boomers, DonorTrends, General Post | Leave a Comment 

4 Reasons To Care About Under-40s, Now

September 18, 2006

We can't tell you how many times we've heard non-profit execs and marketers blow off the under-40 population.

Why? Because these “youngsters” are perceived not to donate. Because they're harder to reach and maintain contact with via conventional direct marketing (read: mail), especially in the younger age brackets. Because they are perceived by cause advocates to be less politically engaged and influential.

Is this wise? We think not. In fact, if you're not cultivating under-40s, you oughta be fired.

Here is a DonorTrends White Paper we've prepared discussing four reasons your organization should care now about the “Post-Boomers” born after 1964.

In a nutshell, GenX and Yers:

  1. Donate now.
  2. Have proven value now as activists and volunteers.
  3. You need them to refresh and renew your brand.
  4. And, if those three reasons aren't enough, if you want them later, you'd better get your brand on their radar now.

More on why and how to approach the under-40 crowd in our DonorTrends White Paper.

Posted by admin | Filed Under DonorTrends, You Oughta Be Fired | Leave a Comment 

Emptying Nests Might Be Good News

August 3, 2006

Yankelovich Research has released a study of the parenting attitudes of Gen Xers, who now represent the cohort most likely to have children under the age of 18 in their households. This was a distinction formerly held by Boomers.

In 1995, Boomers comprised 65% of parents who had children under 18 in their households. Today they represent 37%, while GenXers now commprise 46% of parents with children under 18 at home.

As children leave Boomer households, these homes become the “empty nests” that have accounted in the past for the preponderance of small donations to non-profits, particularly with respect to cause and political giving. History would suggest that giving will accelerate in these empty nest Boomer households.

As we reported in our DonorTrends study, Boomers: Navigating the Generational Divide in Fundraising and Advocacy, Boomers are already giving more than the pre-Boomer generation that previously fueled most non-profit direct marketing. Check out the free study to see where this money might flow.

Posted by admin | Filed Under Boomers, DonorTrends, Hot Research, fundraising | Leave a Comment 

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