Now of course we wouldn’t be expecting Vinay to be championing direct mail or telemarketing! Nonetheless, he makes a well-articulated case for nonprofits to move aggressively to expand and refine their online fundraising and engagement efforts.

I would stress the "engagement" part, because a key aspect of his case is the well-documented decline in new donors … a decline that might be arrested by adroit use of online tactics, first, to attract and engage individuals who might be interested in your cause or mission and, subsequently, to convert them to donors. And because the new online donors are generally younger individuals, it’s a double payoff.

If you want a nice, tight case for online investment to pass along to your nonprofit’s executives and budgeteers, this is a pretty good one.

Tom

The #1 reason wealthy individuals stop giving to a charity they have supported is (pick one):

1. They can no longer afford to give
2. They were dissatisfied with the charity’s performance
3. They were being solicited too often
4. They developed different funding interests or priorities

If you picked any of these — any one of which would be somewhat understandable — you’re wrong!

The #1 reason, cited by almost 60% of respondents, is that they were "no longer feeling connected to the organization."

And how many stopped giving? 38% of wealthy donors stopped giving to one organization in 2007; 26% stopped giving to at least two organizations.

WOW! What a colossal failure of donor cultivation. Keep in mind that these are donors with either annual household income greater then $200,000 and/or net worth of at least $1 million. Not small fry.

Further, these are donors who say (46%) that their charitable contributions have a greater impact on their own personal fulfillment than on those who receive their gifts. Just less than 20% of these donors believe that their gifts have a major impact on the organizations they support, and only 6% believe they are making significant contributions to the improvement of society in general. Is this an affirmation of the emotional drive behind giving, or what?!

Tell me, how does a nonprofit fail to maintain an emotional connection with a current high value donor like this? If your nonprofit can’t manage to cultivate and bond with one of these folks, forget about your "rank-and-file" direct mail or online donors!

I’m speechless.

Tom

P.S. The study was done for Bank of America. More info on the study from the UI Center on Philanthropy here. Thanks to Philanthropy Journal for the tip.

Creative consultant and copywriter Bob Levy weighed in again over the Thanksgiving weekend with a piece titled Staying on Message. In it Bob sets forth ominous insights on structural barriers within many organizations that pose a real danger, especially in difficult times. This is an important sequel to Bob’s earlier Agitator piece, In Fundraising, The Words Count.

Bob warns: "Given these down times, a world spinning out of control and the desire of many people to turn inward in the face of it, there is some urgency to renewing the creative process of messaging if many non-profits hope to survive." In a nutshell, here are the elements of the problem:

• Creative consultants and copywriters once had access to the leaders of non-profits and were viewed as "channelers" for the organization’s message to key constituents.
• This is no longer the case. The ‘professionalization’ of non-profits has resulted in isolating fundraisers and copywriters from those who determine mission and message.
• The result is that the creation of the "Message," has fallen into the hands of divergent departments. And the copywriter has to rely increasingly on a "titled" employee who may not have a clue as to the direction their organization is taking.
• This is especially true in organizations that depend heavily on direct mail. According to Bob, direct mail fundraisers have become "country cousins" to in-house "communication" people and intimidated by the arrival of website gurus.
• Too often direct response managers, although charged with running a fundraising "campaign," are not informed of the organizational strategies and programs in play to win the frontline battle for donor loyalty and commitment.

The result? Donors are short changed on the information they receive. And ultimately the organization pays the price as its mission is lost or diluted somewhere down the organizational food chain.

Bob makes clear: "There are no villains here. Mid-level managers, particularly in a down economy, are charged with raising enormous budget numbers beyond any reasonable expectation. And these folks have to carry the water for many organizations that simply expect the money to be there when they need it."

Alas, I fear that Bob has hit the nail on the head where many organizations are concerned. It’s axiomatic in fundraising that "money follows program." Consequently, whatever barriers stand in the way of the effective positioning and communication of an organization’s vision and programs need to be eliminated. Tough times require every organization to take out the mirror and see if any of Bob’s points are reflected in it.

Bob, you deserve a raise!

Roger

With jobs shrinking, money and savings drying up, and with global economic horrors rising, it’s frankly a relief to have a moment to put all the worries in perspective and reflect on what we truly have. We have jobs, more than enough to eat, roofs over our heads. And while the doomsday headlines are troubling and shouldn’t be ignored, here at The Agitator we haven’t heard of any fundraisers who’ve had to change the route they drive to work or the life to which they’ve become accustomed.

Equally as commendable is that we haven’t come across a single fundraiser who’s ignoring the signs around her or him. That’s terrific, because many of us work in jobs where we can directly help the many who are suffering painfully from this economic turndown … and the millions more who are likely to be even more affected. Here in the States alone the number of people living below the federal poverty level will jump by millions — some estimates say 10 million or more. The Center for Budget and Policy Priorities, a Washington-based group, estimates that rising unemployment rates could see the number of poor in America reach 50 million. And just think how those numbers geometrically increase around the globe.

The good news is that, when it comes to helping each other, the human soul shines in times like these. Many agencies that help the neediest are reporting that giving is on an uptick. May that continue and increase. We fundraisers are blessed in times like these. Regardless of our day jobs we possess the skills and understanding to offer our help on a voluntary basis where in our communities it is most needed.

So today, while we put the ‘thanks’ in ‘Thanksgiving’, it’s also important to put the ‘giving’ there too. Each of us needs to do our part to help those who are suffering.

Counting our blessings,

Roger and Tom

Pew Research has released its detailed analysis of voters under age-30, based on exit polling from the recent election.

Here are some numbers that caught my attention:

9% of these "youngsters" donated money to a presidential candidate

[If Obama and other candidates could do it, why can’t your nonprofit excite this demographic enough to earn contributions?]

Just 62% of these voters identify as white, while 18% are black and 14% Hispanic. In 2004, this group was 68% white; in 2000, 74% white.

[Can your nonprofit appeal to a far more diverse population than it traditionally has? What would it take?]

69% of this group, compared to 46% of Boomers and 41% of those 65+, believe in activist government — "Government should do more to solve problems" versus leaving more things to businesses and individuals.

[How does your nonprofit and its strategies match up against this liberal worldview?]

And from a different Pew study, this one exploring internet use in the campaign, check out these generational differences …

Probably your organization is not dependent now on under-30s for its financial solvency. But what loyalties will these folks have developed by the time you are ready to woo them?!

Tom

Attesting to the level of concern out there, we had more attempted subscribers than "seats" for the call. Lesson learned!

So we’ve made the one-hour session available in this audio file audio file. It’s free for you to download and we hope you’ll share it with your colleagues. We welcome your feedback.

Also, to prepare for the call, Roger and I each prepared our own "top ten list" of steps we would recommend for fundraising in the tough times ahead. You can download our Tips for Fundraising in Tough Times for free right now. Since we talk to each other all the time, it’s not surprising that our lists are quite similar … perhaps more different in emphasis than in actions recommended. Again, we welcome feedback and reports on the strategies you are employing.

We hope you find our tele-briefing tele-briefing and tips helpful!

Tom

P.S. And watch for details on our next Editors’ Tele-briefing to be held December 12th. The topic will be generational differences in giving levels, attitudes toward charities, issue interests and preferred channels, issus addressed in the White Papers we recently released to our Premium Service subscribers (here and here), based upon data from our DonorTrends 2008 survey.

We released the results of the second of The Agitator’s Vital Signs Survey yesterday and sure enough the predictions were far gloomier than those of two weeks ago. 62% of the responding non-profits expect the last quarter of ’08 to be down by 10% or more compared with results a year ago. Only 19% of non-profits expect ’08 returns to be down less than 10%. All in all, this week 81% of the respondents expected a poorer year-end, whereas a few weeks ago the number stood at 58%.

Monday: DonorTrends Whitepaper #2: The Giving ProcessThe Agitator released the second in its new series of DonorTrends White Papers. These papers are available exclusively to subscribers to The Agitator’s new Premium service.The second paper is titled Giving Across Generations: The Giving Process. It explores the charitable giving attitudes and behavior of three segments of US donors – the Seniors, Boomers and Newbies.

Tuesday: You’re Not Alone!As reported here by the Washington Post, Obama plans to augment the traditional weekly national radio message from the President with a video-version distributed via YouTube. Other interactive online tactics are planned as well, drawing from communications experience gained during the campaign. Whether all this produces authentic participation, or just more sophisticated message management, time will tell.The first message from President–elect Obama was delivered a week ago and can be found on YouTube. As one of our readers contributes, “So far plain-vanilla (a talking head). It’ll be interesting to see if/how he really uses the medium to further understanding of the message.”

Wednesday: Motrin: A Lesson In Issue CampaigningThe recent controversy over a Motrin ad provides a great case study for issue advocacy of the future.

Thursday: The Video-Centric NonprofitAs Dave Dutch explains in his MediaPost article, “…Web video’s real potential is not in watching "Lost" or "The Office" online or even downloading those shows to your cell phone or iPod. It’s about giving consumers what they want in the most engaging medium available.” In the midst of a depressing economy — to retain and energize your best donors, harnessing the power of online video is an affordable and compelling way to put the CEO and other top program folks in front of the donorbase to re-affirm mission.

Friday: Fundraising Vital Signs - Response UpdateThe Agitator has now completed two cycles of our Fundraising Vital Signs surveys, in which we ask readers of The Agitator to share their prognostications regarding the fundraising outlook for the balance of 2008. Both Vital Signs Surveys and Key findings are a must read.

Your Weekend Bonus: Seldom have I seen as much discussion in our trade than is now taking place around the potential effects of the global recession on fundraising. Over the past several weeks I’ve recommended several pieces for your weekend review.This weekend’s ‘must read’ entry is the work of Tony Elischer of THINK Consulting Solutions in the U.K. Bottom line according to Tony, “Most of all we will need to change our behaviours and those of our organizations to stand the best chance of surviving and perhaps even thriving during this recession.”You can download Tony’s thought piece titled “Recession: Watching is Not an Option” by clicking here.

In addition to advice along the lines as that offered by others Tony makes a couple of points worth additional note:

• Recessions educate donors to act differently. Expect donors to be more demanding of the service their chosen charities give them. More donors will shop around before choosing non-profits “meeting my life choices/values.”

• Corporate fundraising is possibly the first are to decline. Obviously the impact of less consumer spending will have companies mainly focusing on the bottom line and survival. HOWEVER…some companies may find your brand helpful in meeting their corporate objectives in these troubled times.

• Foundation giving is likely to be little affected in the near-term. Foundations will focus on delivering on their current commitments and so little immediate effect. However, according to Tony, they’ll become more ‘hardened’ towards new approaches.• Individual giving will go through a ‘slow burn’ as the impact of the recession hits different aspects of people’s lives. Tony notes that each year has been getting more and more difficult over the last 3 years and the recession will accelerate fundraising difficulties. Of course charities can’t give up on either fundraising or recruitment but are going to have to work harder and smarter. Tony would spend his money in figuring out the “next significant surge in digital recruitment”.

• Events in hardest hit markets are already feeling the impact. Wealthy folks will not be willing to pay premium prices required for high-end events. Not only because of a squeeze on resources, but they won’t want to be seen ‘showing off’ when others are struggling.Tony’s favorite (favourite, sorry) mantra in these times: “Focus on donor share, not market share.”

Have a good weekend,Roger

P.S. In case it’s cold and rainy and you really want to be a star, look through your bookshelf and take out (or go online and order) Ken Burnett’s “Relationship Fundraising: A Donor-Based Approach to the Business of Raising Money, 2nd Edition and an E-Book.Given what we’re all up against, this book, filled with great case histories and more than 200 action points, should be in your quiver.

Our overall response profile remains the same: three-of-four respondents work in a nonprofit organization; the other respondents work for a fundraising agency or as independent fundraising consultants. Respondents are nicely representative of the full range of nonprofits, from advocacy groups, social/human services and arts & culture, to medical/health, education and humanitarian assistance. Thanks to respondents one and all.

Here is an overview of the latest responses. Keep in mind these responses are directional only.

Key findings

In every respect, the latest responses are gloomier in outlook than our first report.

• 62% of responding nonprofits (vs 32% in Survey 1) expect their last quarter 2008 returns to be down by 10% or more, compared to actual returns for the same period in 2007;
• 19% of nonprofits (vs 27% in Survey 1) expect their last quarter 2008 returns to be down by less than 10%;
• Thus, 81% now expect a poorer year-end than in 2007, whereas 58% so indicated a few weeks ago.
• This dour expectation has spread through all sectors … we detect no meaningful distinctions, whereas in Survey 1 animal welfare and faith-based groups were showing a bit more optimism.

For the entire year, 71% of nonprofits now see their overall returns being down from 2007, versus 48% expecting a downturn in Survey 1.

As for member/donor growth, 27% of responding nonprofits project that they will have fewer donors/members at the end of 2008 than they had at year-end 2007; 49% say about the same; and 25% say they will have more. Advisers are just a bit more cautious. These figures are unchanged from Survey 1.

Agencies/consultants continue to be more pessimistic than their nonprofit clients. Most striking is the fall-off they see in renewal programs and prospecting — 75% of advisers see a downturn in renewals (vs 47% on client side), and 88% see a downturn in prospecting (vs 74% on client side).

For all respondents, the most stable fundraising program continues to be monthly giving — 73% of nonprofits expect these programs to perform on par with or better than last year, whereas 53% would say this about their renewals (their 2nd best performing program).

Finally, we asked repeat respondents participating on our Vital Signs Panel whether they had become more optimistic or more pessimistic in the last few weeks — 38% said more pessimistic; 25% said more optimistic (I’d like to meet them!); 38% said about the same.

Here are some of their comments:

• I’m feeling about the same for the balance of 2008 but I am more pessimistic about 2009. I think we’re in for a long slow and probably bumpy climb out of this hole.
• Slightly more optimistic… renewal returns appear to be holding up.
• I am more concerned than I was two weeks ago. I think retail spending is more indicative of philanthropic activity than most other indicators. While market fluctuations can’t really prove anything about a donor’s personal outlook on their economic prospects, I believe that consumer spending does. From my perspective, the recent downturn in consumer spending translates to reduced giving.
• Slightly more optimistic - response rates seem to be recovering somewhat, though average gifts continue to be lower.

What to do?

Everyone has gotten the message about NOT backing away from asking current donors and members for contributions! Whereas 50% of nonprofits reported they were "soliciting our house file more aggressively" in Survey 1, by round two fully 70% are doing so. Both advisers (81%) and clients (76%) consistently report that they have adjusted messaging to reflect the economic environment. And more advisers (20%) and clients (24%) indicate that they are cutting back on prospecting.

To close, here is a flavoring of the verbatim comments offered by respondents:

• An unexpected windfall kept our donations on track to meet budgetary needs but concerns are for 2009.
• Most donors are telling us that they will give, but to wait until December.
• Adding friendraising and fundraising events.
• Following up with prior donors who have not given yet.
• One cultural organization sent an appeal on September 12 that seven weeks later on Nov, 4 had a response rate of 6.93% and a $53 average gift. They have had 5 returns since. The mailing just died. Based on their previous history and the first seven weeks, I would have expected at least an 8.5% response rate.
• Worsening conditions.

We plan to do another Vital Signs update or two in December. We hope you will participate.

Tom

P.S. These results and recommended action steps will be discussed TODAY Friday, November 21^st in a special Editors TeleBriefing at 2-3pm EST. Free registration here for the TeleBriefing.

"Video’s importance … can transform every aspect of an organization, from sales, marketing and communications to investor relations, employee training and education.

Externally, companies can better engage customers, partners and prospects with product demonstrations, presentations and how-to videos. Apple recently rolled out a 30-minute video - part guide, part advertisement - to accompany its new iPhone. Blendtec, the household appliance maker, attributes a 700% increase in revenue to its popular "Will it Blend?" webisodes.

Beyond the marketing examples, investors will be able to access corporate data in video form, whether it is an annual meeting, a message from the CEO or a video news release. Video archives will likely play a vital role in meeting federal compliance requirements.

Internally, video will become a primary form of communication. Think of a broadcast greeting embedded in a personal email or executive video memos — the latter of which is already being done by early video adopters such as British Telecom. Video libraries will usher in a new phase of knowledge sharing and best practices, as employees access huge repositories of education and training videos.

The most sophisticated online video practitioners will become a de facto corporate broadcast network constantly issuing its news and information to customers, employees and partners."

I think Dave is spot on. I know if I were looking — in the midst of a depressing economy — to retain and energize my nonprofit’s best donors, I’d want them to see and hear "face-to-face" from my CEO and top program folks (at least from our strongest communicators) a re-affirmation of our mission … an online video would be the affordable and compelling way to do it.

Tom

P.S. Three weeks ago, The Agitator began to take the pulse of nonprofit fundraisers regarding the fundraising outlook for the balance of the year and beyond, via our Vital Signs Surveys. Results and recommended action steps will be discussed tomorrow Friday, November 21^st in a special Editors TeleBriefing at 2-3pm EST. Free registration here for the TeleBriefing.

The ads were an attempt by Motrin to connect and show empathy with moms … but some moms were instead insulted and incensed. And a backlash that ignited via blogs and Twitter on last Friday caused J&J to pull down the campaign by the next Monday! That’s quite a result.

Here’s the apology they posted on the front page of the Motrin website …

But it’s not easy to "pull" an ad campaign these days. Try googling "Motrin" and you’ll see how much backlash was triggered … and still lingers!

To see what the fuss was about, go to the Ad Age piece to view the online video ad, which is accompanied by a print ad campaign. What’s your reaction?

This episode provides a great case study for issue advocacy of the future. If the right hot button gets hit, in an age of amazingly powerful and infectious social media, watch out!

Tom