Pareto Fundraising » Benchmarking

What does 2011 tax time hold in store for Australian charities?

admin — Tue, 19 Apr 2011 02:57:41 +0000

In Australia any charity that conducts cash appeals (and predominantly the data shows us these are run by direct mail) will be conducting an annual tax appeal sometime between April and June this year (ref. 1). This has been the peak period for cash appealing to our current donors for at least the past 10 years. The next peak is at Christmas time.

Whilst the generation of cash income in the industry has flattened over the past three years (ref. 2) we have become more successful during the tax period. This is being driven by income generated from retained donors, as well tax time being the peak period for Australian charities to recruit new cash donors. Chart 1 shows us when Australian charities are recruiting their cash donors – and tax time (May / June) is the peak, followed by Christmas (November / December).

Chart 1

Chart 2 from our recent 2011 Pareto Fundraising Benchmarking program depicts the growth in cash income by quarter from Australian charities.

Chart 2

Tax time continues to generate the most high value ($1,000+) gifts by volume and value. Chart 3 depicts by value and volume when these high value cash gifts are generated in Australia. It’s worth noting that more value and volume is generated outside of tax time throughout the year, yet tax is where the focus is for both donors and charities.

Chart 3

As reported in Pareto Talk, last year many tax appeals struggled with a suppression in response and value, in particular value from high value segments. Chart 2 shows the impact of this with limited growth between 2009 and 2010 (Q2).

Christmas appeals (Q4) show (Chart 2) a similar trend with flat income between 2009 and 2010 (the slight decline presented is the outcome of one charity, and when removed shows flat growth).

What does this all mean for the upcoming Australian tax appeal season? Will we see returns stablise?

We conducted a review of 13 Australian charities’ 2010 Christmas cash appeals and saw some ground recovered in response rates with 12 posting higher response rates than 2009. A positive outcome reflecting the current market place.

Is the Christmas rebound in response rates an indicator we are aiming for improved response rates this tax time? I would expect that outcomes in this area should rebound from last year, though the level of recruitment you have done, how well you have treated your donors and how recently you recruited will have an impact.

Whilst response appears to be rebounding, average gifts did not fare as well for Christmas 2010 appeals, with all but three charities posting decreased or the same average gift as 2009. This is not surprising:

with average gifts showing some decline through 2010; and
charities either using ask strategies that rely on asking for a donors last gift, or using value bands that in many cases see a donor asked for below last gift; and
recruitment usually diluting overall average gifts due to entry price points

The decline in value generated from high value ($1,000+ gifts) donors seen at tax time in 2010 has also continued with fewer high value gifts received at Christmas 2010 than in the previous year (though many of these higher value donors continued to give, just not at previous gift levels).

Can we expect high value donors to continue responding? I believe so. Will the value of their giving rebound? I think factors such as how you ask and what you ask for will be critical, but there is much ground to be made up in this area.

In situations of declining returns, acquisition can play a critical role in stablising current and future income. Whilst around 20% of cash donors who did not give last year (2010) but the year before (2009) can be expected to give again (ref. 3), the value these and other more deeply lapsed donors returns to our appeals is not enough to replace lost value from active (gave last year) donors who do not give again.

Clearly an ongoing tactic has been to recruit new donors at tax time (and Christmas) to help sustain (or grow) our appeal pools. And I expect this approach to continue this year, and this will help tax appeals in terms of gross income. But its worth considering how much you weight your recruitment to tax time.

Benchmarking has shown us that less than 50% (it’s down to 40%) of new cash donors will give again. Of those who do 70% will do so in the first 12 months. If you recruit a donor at tax time when will they get their next ask?

How quickly you make the second ask impacts on your second gift rates – wait 6 months and you are unlikely to convert these donors to a second gift, wait 12 months and they are lost. So if you are recruiting this tax time when will these donors be asked again?

What if you undertook recruitment in February or March? These donors will now be asked, with likely your strongest appeal for the year, at tax time. And they are being asked within 4 to 8 weeks of their recruitment – an optimum time for a second gift ask and a strong strategy for managing cash donor attrition.

Tax is clearly the most competitive time for cash appealing and cash recruitment in Australia. With many appeals about to hit the letter box July will only tell if we are seeing a recovery from what has been a tough 2 years in cash giving programs.

(Ref. 1) – In some cases Phone Cash activity may run to a different cycle making renewal calls every, say, 80 days but even in these instances it is unusual for a call cycle not to be run around tax time.
(Ref. 2) – Pareto Fundraising Benchmarking 2011
(Ref. 3) – Pareto Fundraising Benchmarking 2011

Regular giving growth continues in Australia & NZ

admin — Wed, 13 Apr 2011 02:02:49 +0000

By Jonathon Grapsas

Last week we released our latest benchmarking results from Australia and NZ.

Thank you firstly to the 41 organisations involved. Hats off to you all.

Some snippets from the latest report:

- Regular giving continues to be the key driver of income growth from individuals. Income growth of around 12% in 2010.

- 3 out of 4 of the charities involved in the study grew their income from individuals in the two years between 2008 and 2010, despite the recession.

- Investment in new donor acquisition continued as volumes of new supporters continued to grow.

- On average, 0.9% of active cash donors have indicated they have left a bequest to that organisation. The benchmark for one charity was 6.3% of all active donors having confirmed.

- Recency, Frequency, Value, plus tenure all correlate with propensity to indicate leaving a bequest.

- Income from onetime cash gifts grew less than 1% over the two years between 2008 and 2010, in line with the continued shift toward investment in regular, monthly giving.

If you’re interested in knowing more about our benchmarking program please get in touch with our man on the ground, Clarke Vincent.

How looking outside can provide impetus for growth

admin — Tue, 11 Jan 2011 00:37:47 +0000

By Jonathon Grapsas, Fundraising Development Director for Pareto Fundraising

It’s easy to spend a lot of time naval gazing as fundraisers. Digging deep within our own data to understand what’s going on. Speculating, hypothesizing and staring at reports you’ve looked at 100 times before, trying to make sense of it.

Sound familiar?

And whilst I’m not one dissuade you from looking at your own data, I would implore you to look beyond the confines of your four walls a little more.

Benchmarking, or comparing your performance to that of others, is one of the most powerful fundraising tools in our armory.

And not simply for the reasons you might expect….

For most, benchmarking evokes thoughts of geeky slides with charts too small to read. In actual fact the real power of benchmarking is more than just data.

It’s about people and sharing.

Benchmarking studies come in various shapes and sizes. I’m going to focus on what I believe to be the most useful of those, data benchmarking (as opposed to benchmarking surveys that ask you a series of questions rather than look at your real data). In other words, charities looking at the actual data of theirs and other organisations with the intention of learning more about others in order to further their cause.

Here are some of the reasons why looking at others is a must for any ambitious fundraising organisation.

1. It helps you identify trends

When charities share information and look at performance, both on a big picture scale and in minute detail, it provides fundraisers with information about what’s happening in the marketplace.

What’s working. What’s not. What’s driving growth.

This allows you to then make informed decisions about your own efforts, including reaffirming decisions you have made about areas to invest in. Or conversely giving you evidence that an area you have chosen not to bother with was indeed the right call to make.

Graphs and charts from benchmarking are regularly used as a reference by fundraising managers in presentations to their Boards and Committees.

2. Gives you a sense of your performance vs. the industry

How do you really know whether your fundraising is up to scratch or not? What on earth does 30 per cent retention of cash donors actually mean? Are you sure that having only 0.2 per cent of your file telling you they have left a bequest is low?

Questions we ask ourselves daily.

Benchmarking helps answers these and many other fundraising questions. It gives you a real sense of how you are doing.

The best way to do this is by looking at your data versus the data of other organisations. Of course there is always context. But where the names of the charities are shared and programs, size and budget are put in perspective, this gives fundraisers a true sense of how they are tracking.

3. You meet people, you share knowledge

Benchmarking introduces you to people that you wouldn’t have met otherwise. The old adage, ‘the more you put in, the more you put’ certainly applies here.

In fact having spent a lot of time, here in Australia, and in Canada, running benchmarking programs, I have to say this is the thing that excited me most.

More importantly it excites those involved. Like Rebecca Davies, Director of Fundraising at Médecins Sans Frontières, Canada who says that… “the participation in discussions with other leading Canadian organisations has been invaluable. We really appreciate the candor and sharing of best practices in the group sessions, and getting some context to the data provided.”

Benchmarking forces fundraisers to talk to each other. Because let’s face it, when we go to conferences and attend workshops, we’re a polite bunch and we also tend to keep to ourselves.

But when you’re looking at Charity A whose retention rate on new regular giving recruits is miles ahead of yours, you simply HAVE to talk to them. Find out how they’re doing it, what they’re doing differently and what they’ve tested.

Really clever people coming together to share not only data, but brilliant ideas. This can only result in great things happening.

4. Provides a forum to learn about new, and old frontiers

If you’re not using face to face recruitment to recruit new donors, then how are you going to learn more about the channel? Of course you could talk to an agency; you may even talk to a colleague who did it once, back in 1998.

And what about digital fundraising, it’s all the rage now, right? Where do you turn to for the lowdown on what’s happening out there?

Benchmarking programs particularly those that are all encompassing and study each area of fundraising allow you to learn, and do so looking at real, live data and not textbooks.

5. Helps you raise more money

The biggest barrier to measuring yourself is the cost of doing it. The second biggest barrier is a fear or reluctance to share.

Benchmarking is about value, not cost. If you commit to comparing yourselves with others, then you will not only recoup the upfront outlay, but the information it arms you with will allow you to make more informed and strategic decisions. And that can only mean two things: more dollars raised, more beneficiaries helped.

There are a heap of other benefits to sharing data and insights with others including keeping us more accountable and reducing any possible complacency.

If you’re interested in getting together with some of the best fundraisers in the country and finding out how to raise more money for your organisation, then please go to the Benchmarking section of out website before registration closes on 21st January, or get in touch with Clarke Vincent: clarke.vincent@paretofundraising.com or 07 3015 4021

Don’t forget direct mail cash donors

Justine Mathieson — Tue, 17 Aug 2010 23:47:24 +0000

By Sean Triner
This article was first published in Fundraising and Philanthropy E-bulletinin July 2010

Are you focusing on regular giving so much that you may actually miss out on significant funds from good old fashioned cash donors?

After years of banging on about regular giving, I think it is fair to say that many charities now get it – regular giving is the thing to do.

In collaboration with 33 charities in our benchmarking cooperative, we analysed the donations of 127,583 people recruited in 2005 and found that after four years, the average mail appeal ‘cash’ donor, or direct mail (labelled DM cash in the chart), has given $163. A regular giver recruited through mail at the same time (DM RG in the chart) gave $597 and a regular giver recruited through face-to-face (F2F RG in the chart) had given $569. The chart below compares these three types of donors, and extrapolates over ten years – but does not include bequest potential.

Huge growth in regular giving

Yes, the big growth is in regular giving. So is the consistent, safe money. And non F2F RG often contributes new donors to the appeal pool.

According to our analysis it would appear that more money is raised from regular giving than cash appeals. Whilst this data is across a specific pool of charities, a quick look at the annual reports of top fundraisers World Vision (who raise about the same as the 33 charities added together), Oxfam and Compassion backs this up.

Are you missing out on a pool of donors?

Many smaller charities have yet to take on regular giving, but applying the Pareto principle (less than 20% of charities raise over 80% of money) we can safely say the Australian fundraising sector- and Australian public – have embraced automatic debits as a great way to donate.

But, it still only accounts for half of donors. A few years ago the British fundraising press was full of stories about the reliance on regular giving (especially recruiting by face to face), leaving UK charities without a bequest pool. It also cited research that a greater proportion of donors wanted to give sporadically rather than through regular giving. This meant that regular giving focused programs were missing out on a huge donor pool. And I mean huge. Whilst all the spotlights have been on regular giving, the fact is that regular giving and cash together just manage to raise slightly more than bequests from our 33 benchmarked charities’ $1.5 billion income over the last ten years.

The bottom line?

The final piece in this puzzle is all in this bit of data from my genius colleague, Andy Tidy. He looked at all non-F2F recruited donors who had made a transaction (that is, donated in some way) in 2009, and had supplied their date of birth. With 83,326 people fitting this criteria he then looked at how likely they were to be a regular giver (42,374) and how likely they were to be a confirmed bequestor (2,716).

The bottom line is that older people are more likely to be confirmed bequestors and less likely to be regular givers.

So older people are slightly less likely to choose to be regular givers than younger people (which depends on lots of other factors as well, but it is a trend). Of course older people are, ahem, more likely to die and therefore good bequest prospects.

Ignore cash at your own peril!

Regular giving is brilliant – the best thing to happen to charities in the past decade by a long shot. But charities ignore cash at their own peril. Nonprofits which include cash donations as part of their fundraising strategy will build up a great pool of older donors. Provided nonprofits have a good bequest program, this will likely go on to raise much more through the tiny proportion that leave bequests than all their collective cash donations. And it is generally cheaper to recruit cash donors.

Have a balanced portfolio

All this conflicting information! What are we to do? We have spent so much energy and time trying to persuade boards and bosses to invest in regular giving, why should we go backwards.

The answer, of course, is a balanced portfolio. Don’t panic, no big rush. It’s just about making sure your regular giving program is up and running and that you are acquiring more new regular givers than you are losing.

But if you have got that going, then dust off the old rules of direct marketing and start thinking how you are going to recruit some of those older donors not willing to give you an automatic debit.

For more information about the Pareto Fundraising Benchmarking program please click here

A look at how disaster organizations responded to donors in the wake of the Haiti earthquake

Justine Mathieson — Thu, 10 Jun 2010 21:37:56 +0000

Released 11 June 2010

Global fundraising agencies Pareto Fundraising and Pell & Bales have released the key findings from their most recent charity ‘mystery shopping’ exercise. The study, conducted from the end of January through to the end of April 2010, looked at the performance of several organizations fundraising for Haiti, and specifically how they responded following donations made online.

What we did

On the back of the tragedy that struck Haiti in January, 2010 Pareto Fundraising and Pell & Bales decided to look at how charities were responding to donors who made donations in the wake of the disaster.

Here’s how we did it

Made an online gift around two weeks after the Haiti disaster. The gift made was for the equivalent of $25 USD, to 52 organizations in the US, Canada, the UK, Australia and Spain.
Sat back and watched what happened after the donation was made. We monitored the organizations subsequent efforts for the next two months (up till the end of April).
Analyzed the results, based on five key criteria:
1. Initial contact experience. What was the experience like as a donor making the donation?

What we found

Overall, the initial response to our gifts was very good. Most organizations responded to our donation immediately and were genuinely thankful for the donation made.

Whilst the ongoing frequency of communications was regular, and the feedback detailed, the element missing was the link to individual stories, and how our donation was having a direct impact. Most of the feedback was operationally focused.

We were asked for another financial contribution several times by some organizations in the subsequent two months, although the huge area of opportunity moving forward definitely lies within regular/monthly giving. Very few asked us to consider changing the way we support and commence an ongoing, monthly gift.

Below are some of the key insights. It is worth noting that the results were analyzed up until the end of April, and therefore some organizations may have subsequently engaged in the follow up activity referred to below from May onwards.

83% of charities responded to our donation the same day (with an email confirmation). In the US, Canada and Australia the response came on the same day in 100% of occasions. In the UK 85% of the time, whereas only 30% of Spanish charities responded the same day of the gift. However it is worth noting that 4 of the 10 charities in Spain did not actually process our donation, at all.
If all charities that processed our donation (92%), all but three said the words ‘thank you’ within the email received after making the gift. However 10 organizations did not personalize the thank you email (I.e. it did not reference our name personally in the salutation or the body of the email).
Only 29% of charities initially promoted regular/monthly giving. The highest of the countries was the US where 55% of charities mystery shopped asked for an ongoing commitment.
In the follow up activity, after our first gift, 21% of organizations used vehicles other than email to communicate with us. Of the 52 charities we surveyed, only 2 (both in the UK) used a combination of email, mail and telephone to keep in touch and communicate with us. 31% of charities across the countries did not reach out to us at all after the initial thank you process.

What we’d recommend

Below we’ve provided some recommendations for organizations responding to disasters, related to both the initial period after a disaster, and in the weeks and months following.

Initial contact

Charities need to ensure that initial donations receive a speedy response either by auto
response or within a short space of time (response in hours, not days).
Initial responses should be personalized and should contain the words ’thank you’.
When landing on a charities website, the disaster should be prominently displayed, with its own separate landing page. All email communications should provide a link straight to that landing page (or micro site).
If the organization is strategically focusing on regular/monthly gifts, the initial response should promote this and keep it singularly focused.

Subsequent contact

Subsequent communications need to be relevant and timely, providing useful and important updates and information demonstrating the impact the donor’s money is having on the ground. That means telling real, human stories.
Real feedback from the field should be provided on a regular basis, in a coherent manner. We should foster opportunities for deeper engagement and understanding of the issues at hand.
Stand out from the crowd. Some of the best examples from this exercise on how to feedback involved inviting donors to teleconferences and webinars to share stories from the field.

Conversion to Regular/Monthly Giving

Charities should develop and execute a follow up communication plan as part of an integrated strategy to convert onetime cash supporters onto regular/monthly giving.
All communications should focus on capturing details to make conversion to monthly giving easier e.g. Name, address, phone number and email. Offer opt outs rather than opt in to follow up contact.
Constant reinforcement in all communications of the importance and need for regular/monthly giving (linked to the need for long term, sustainable support to the people affected).
Develop integrated channel plan for conversion to monthly giving including email promotion/reinforcement, telephone conversion and mail mop up activity.
Aim to make direct approach to conversion onto regular/monthly giving within 2 months of first cash gift. Speed is key. We know that 2 months is better than 4 months, and so on.
Evaluate the impact of developing a specific regular/monthly giving product for the emergency situation (I.e. sign up for 365 days) along with a well thought out plan for future relationship management and donor care.
Once signed up to a regular/monthly gift, focus on the honeymoon period: the first 30 days after sign up. This is critical to arresting attrition.

Long term strategy

Develop a plan for communicating with non-responders to your regular/monthly giving conversion efforts. Consider how to feed these individuals into the ongoing cash program and look at ways to engage with non financial support. Test using as a prospect file for future conversion activity.
Ensure your organization is well equipped to for the next emergency response. For example, mail and email templates in place, thanking and conversion process agreed.

For more information on how to implement an effective emergency response plan please contact Jonathon Grapsas of Pareto Fundraising at jonathon.grapsas@paretofundraising.com, or Karl Holweger of Pell and Bales at karlholweger@aol.com

-Ends-

Leading Canadian charities come together in the spirit of sharing and best practice

Justine Mathieson — Tue, 04 May 2010 00:32:57 +0000

Released 4 May 2010

Pareto Fundraising has released the results of their 2010 benchmarking study looking at trends in the Canadian charitable sector.

The latest analysis looks at data through to the end of December 2009 from the participating 14 Canadian charities including: Amnesty International Canada, BC Cancer Foundation, Canadian Diabetes Association, Canadian Red Cross (Western Canada), CARE Canada, The Children’s Wish Foundation Canada, cbm Canada, Canadian Feed The Children, David Suzuki Foundation, Médecins Sans Frontières Canada, The Nature Conservancy of Canada, Ontario Nature, the SickKids Foundation and WWF-Canada.

In the wake of the global financial crisis, the results were mixed as to how charities in Canada have fared. Whilst income overall fell in 2009, there were certainly some positive signs for the sector, again reinforcing that those organizations that have taken a long term view to growth have come through the financial downturn relatively unscathed and in a strong position heading into and beyond 2010.

Specifically, the latest analysis, which looked at historical data from 4.7m donors and more than $2.2b worth of gifts, found that:

Income from individuals fell in 2009, down 10% to $158m. The key driver of that was a drop in onetime cash gifts donated, which decreased $17m last year (this is due to a decline in the number of cash gifts – the average cash gift actually rose).
As reported in the previous round of analysis, monthly giving continues to provide a tremendous stream of ongoing income for charities. At the height of the recession, monthly giving grew 9% in 2009, now providing $48m annually for the 14 organizations involved in the cooperative. Based on the current growth trajectory, monthly giving looks set to overtake cash giving in the next year as the major source of individual funding for Canadian charities.
Income from planned gifts increased last year (8%) despite the average value of realized
bequests falling from $35k to $32k (though it still remained well above the 2007 level of $27K). This represents a huge area of growth for Canadian organizations. Despite the fact that the number of bequests left each year is on the rise, these levels are still lagging behind other developed fundraising nations.
The level of income and number of new cash donors from direct mail fell in 2009 by 15% and 22% respectively. This decrease in income was despite the increase in average gift levels via direct mail overall (a bigger increase than in the previous year). This decline in income was offset partly by the shift in focus for many organizations to recruiting monthly donors. The fall in new donors being recruited is both a reflection of less prospecting activity being undertaken overall, as well as a fall in the number of new
recruits coming on board.
Online giving continues to grow, an increase in income of 17% from 2008. However giving online remains a relatively small chunk of the pie, accounting for just 2% of all individual income versus more traditional means like direct mail which represents closer to 20%.

According to Rebecca Davies, Director of Fundraising at Médecins Sans Frontières, participation in the benchmarking study over the past two years has helped Médecins Sans Frontières make responsible choices about which areas to invest in, particularly during turbulent times.

Davies says “The involvement in the benchmarking group has not only helped reassure us that the decisions we’ve made to invest heavily in monthly giving and bequests have strategically been the rights ones for us but the participation in discussions with other leading Canadian
organizations has been invaluable. We really appreciate the candour and sharing of best practices in the group sessions, and getting some context to the data provided.”

Ends

For information on how you can be involved in Pareto Fundraisings Benchmarking Study please contact Jonathon Grapsas at 647-347-0157 or by email at jonathon.grapsas@paretofundraising.com.

To love or not to love

Justine Mathieson — Thu, 04 Mar 2010 04:42:19 +0000

By Fiona Paterson

I love working on appeals, particularly the integrated campaigns we run. These appeals utilise digital and the phone alongside traditional direct mail. It gives me a chance to get absorbed by a great story, to remind myself why the charity we are helping exists. It also helps me connect with beneficiaries and remember that there are hundreds and thousands of wonderful Australians and New Zealanders out there who give their hard earned dollars to help others, even when their own financial situations may not be brilliant.

On the flip side sometimes I don’t love working on appeals. Because fundraisers are held to some pretty unrealistic expectations when it comes to their individual campaign outcomes.

For most the need to grow appeal income year-on-year is standard. But what happens when your audience is being asked to do more than just support your appeals? What happens when there is no acquisition to develop the base? What happens when market forces, like the Global Financial Crisis (GFC), threaten our audience’s capacity to give?

The context of an appeal

Christmas 2009 turned out to be a pretty tough one for lots of charities. At the start of 2010 I was in a ‘not loving appeal objectives’ frame of mind as more and more fundraisers began to ask me how had others Christmas appeals faired and set about trying to get a clear picture of the marketplace.

As a strategy director it’s hard for me to just look at individual appeals in isolation. I always want to know what the context is in which they are executed. Has there been much acquisition in the past year? Has the communications program/donor journey changed this year? Were new activities targeted at the audience preceding the appeal? Is a segmentation model used to target the activity? Has one been newly introduced? Was the messaging part of an ongoing, planned communication with donors? Was it an emergency message? And more…

But living in the real world means, as fundraisers, we mostly have to work to individual campaign targets.

I love, love, love, organisations that have the flexibility to look at their programs as whole – judging performance across the year, looking at combined returns across the gamut of activity being directed at the donor audience, but this is not the common practice.

So what happened with Christmas appeals to warm (previous) donors? I had a good dig around in the results of our clients, and spoke with a range of friends in other Charities.

What I found was that there was no one defining trend. A few organisations saw growth over their 2008 Christmas income; others found it harder and were seeing below or on par returns compared to 2008. On the whole however it appears that more appeals struggled than those that didn’t.

How did we do?

Increasing appeal income is not an unreasonable request. And for 2009 many organisations had this goal. In order to grow your appeal income you need to either increase average gift increase number of responses, increase your conversion of new donors to multi givers, increase your donor pool or a combination of these.

Most organisations maintained or grew their response rates. The contributing factors included:

(Better) targeting;
Focused efforts on high value/top 20 percent of donors;
Channel integration (eg using phone and/or email);
Utilising additional ‘waves’ of communication (follow up or chaser communications).

Many organisations saw average gifts plateau, and in some cases drop. The contributing factors here were:

Depressed high value giving. Just a few high value donors not giving or reducing their giving amounts can have a big impact;
Acquisition (in particular lower value cash recruitment). Recruiting more donors, at a lower value will see more lower value gifts, suppressing overall average gift; and
Anecdotally donors indicating they simply could not give at their previous levels.

For those not making specific asks to donors and/or using their individual, prior giving levels as the basis for your ask, depression of average gifts may have been even larger.

Across the year I have had feedback from major donor fundraisers that their usual suspects were indicating they were not able to give in 2009 or only able to give at a lower levels than in previous years. This has extended through to cash appeals with high value donors tending to maintain response (with a couple of exceptions) but give less.

Those organisations that focused their efforts on this group reaped the rewards. Strong business cases presented justifying higher value giving, follow up communications and person-to-person asking (via face-to-face and phone) and personalised touches helped to encourage this valued group of donors to continue their support.

Context is so important.

Did you change your program in 2009? Maybe you felt the GFC required a change in tack? Did you increase your focus on regular giving conversion? Maybe you had learnings and insights from 2008 that saw you adjust you communications mix or the way you asked your donors?

An organisation I work with changed their 2009 donor communication program. Through the introduction of new tactics in their Spring appeal they saw a significant increase in income from increased response and average gifts. They also introduced an additional communication before Christmas, the purpose of which was donor care and information gathering but unexpectedly generated significant income (lovely donors). And they have increased their active asking (via phone and mail) of cash donors to convert to regular giving throughout 2009.

When it came to their Christmas appeal, major growth in comparison to their appeal in 2008 the previous year was not generated. On the face of it their 2009 Christmas appeal was deemed unsuccessful. Viewed in isolation this is a reasonable conclusion. However on closer inspection we can see over the course of 2009 many of their donors had:

already given more than their previous annual value through increased average gifts and response rates in other appeals;
converted to regular giving cash gifts but the value and/or frequency of these gift can reduce)

Also to note was the volume and value of high value gifts had not matched those received in 2008.

Just taking a direct comparison between 2008 and 2009, their Christmas appeal doesn’t look impressive. Looking at 2008 versus 2009 as a whole we can see that growth has been impressive (even without expectations that the GFC had the potential to suppress growth).

In fact, just in the last quarter, nearly twice as many people gave as compared to 2008.

To summarise, what we did observe with the Christmas appeals 2009 were:

1. Response rates were maintained or increased;
2. Average gifts decreased or were static;
3. Fewer people gave over $1,000

Emerging Trends

There are some other emerging trends to watch out for; most are reflective of or are driving, changing donor giving behaviours.

More donors who used to only give through the post are now using our websites as a response channel
The increasing use of email to support direct mail appeals is helping to improving response
Below are three approaches showing encouraging returns:
- Integrating email, supporting direct mail approaches & driving online to give
- Using email drivers to reactivate lapsed donors
- Using email drivers to convert tepid* supporters to cash donors
More opportunities/ways to give are being offered to our donors. Many organisations are increasing their approaches for regular giving conversion and upgrades, virtual gift campaigns are on the rise, and advocacy and campaigning approaches are increasing
Charities are asking more often

On this last point I often get asked “How many times should I ask my donors for a donation each year?” To quote Jeff Brooks “this is the wrong question – the question should be; How can we be relevant in the lives of our donors?” There is no magic formula. It critical to understand that for many donors it takes more than one ask to solicit a gift but they do not want to be treated like ATMs.

The importance of relevance.

If your Christmas campaign, or any campaign for that matter, did not at least match your 2008 returns (and you haven’t lost a whole pile of your active donor base in some freak database accident) then I recommend you consider the relevance of the communication you sent to your donors.

And consider the stage in the relationship journey each donor is with you. There are many questions you should be asking yourself including key ones such as:

Is this donor relatively new and do they know little about the topic?
Has this donor heard it all before?
How did they respond?
Would they be expecting you to communicate with them at this time, about this issues with this ask?

To paraphrase Jeff Brooks in his Future Fundraising blog: ‘You can’t just raise funds for anything you want. If you go to your donors with a need, topic or ask they don’t associate you with, they just might ignore you in droves. No matter how great your work is.’

Tips for keeping your appeals on track

Make sure your communications consider your audience and are relevant to them
Ensure you are presenting a clear need and solution
Connect donors to beneficiaries (not you, your brand or organisations)
Tell a story your audience can connect with
Plan your second gift conversion journey
Focus your efforts on the top 20 percent (its where your income is coming form)
Review your online donation real estate (Is it easy to find? Is it easy to fill in? Can it be adapted to reflect your appeal ask?)
Explore channel integration (Email, Phone) – if you have low email or phone number penetration make 2010 your year to actively collect these. (Analysis shows us that even the presence of an email address or phone number on a donor record increases their retention likelihood)
Segment and target – don’t mass mail

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* Tepid Supporter – non-financial supporters such as activists, campaigners, e-news sign ups and non-cash donors such as event participants, lottery players and merchandise buyers

Jeff Brooks writes the best blog in fundraising, and we look forward to seeing him at the F&P Australasian Fundraising conference later this year click here and subscribe to his excellent, short updates

About Fiona Paterson

Fiona is a Fundraising and Direct Marketing professional with over ten years experience helping to find, keep and grow donors through the expert management of strategic fundraising and database marketing programs. Enthusiastic and passionate about data, Fiona has a solid background delivering successful fundraising programs globally for clients including ChildFund Australia, Children’s Cancer Institute of Australia, MSF Hong Kong, Leprosy Mission New Zealand and WWF-Australia.

Canadian Charities come together to look at latest trends in sector

Justine Mathieson — Fri, 06 Nov 2009 00:05:14 +0000

Released 5 November 2009

Pareto Fundraising has released the results of their 2009 mid-year benchmarking study looking at trends in the Canadian charitable sector.

The latest analysis looks at data through to the end of June 2009 from the participating 10 Canadian charities including: BC Cancer Foundation, Canadian Red Cross (Western Canada), CARE Canada, The Children’s Wish Foundation Canada, cbm Canada, Canadian Feed The Children, Médecins Sans Frontières Canada, the Nature Conservancy of Canada, SickKids Foundation and WWF Canada.

Despite the global financial decline, the organizations included in the project are holding up well, and one of the key messages delivered overall was that those who have invested heavily in monthly giving in the past are the ones most likely to enter 2010 in the best shape.

Specifically, the latest analysis found that:

Overall income from the group was down in 2008 (just $1m), however individual income was up significantly on 2008
Monthly giving remains resilient, in fact continues to grow on all measures including total income generated. In 2008 the ten members generated over $35m from monthly donors
Cash recruitment overall has slowed the 1st half of 2009 after a strong 2008
Major gifts (gifts over $1k) have rebounded, in fact grown the first half of 2009 after a poor 2nd half of 2008

According to Moses Gabriel, Direct Response Manager at the BC Cancer Foundation, the insights uncovered from the latest round of analysis give his team greater confidence during difficult times, particularly about the acquisition landscape.

Gabriel says “One of the key findings in the latest benchmarking analysis is that new donor acquisition in 2009 has slowed down somewhat in comparison to 2007 and 2008. Whether this is caused by the recent economic downturn, or other factors, it is tough to say for sure; however, it does highlight the ever growing need to build stronger relationships with donors. Our goal now is to find ways to recruit donors that are more likely to make a second or third gift or switch to monthly giving, by testing new acquisition materials and techniques.

In previous years, the decision to change our approach would be based on a mix of internal data and really some ‘gut feeling’ based on past experiences of our staff. Today, however, we are able to pursue these strategies with a greater level of confidence knowing that it isn’t just our experience, but something that affects a large portion of the charitable sector.”

The next round of 2009 reporting will take place in early 2010.

Ends

For information on how you can be involved in Pareto Fundraisings Benchmarking Study please contact Jonathon Grapsas at 647-347-0157 or by email at jonathon.grapsas@paretofundraising.com.

How looking around at others can raise you shed loads more money for your cause

Justine Mathieson — Wed, 26 Aug 2009 04:59:00 +0000

By Jonathan Grapsas
This article was first published in Canadian Fundraiser Magazine and is part two of a four part series

I introduced last time the notion of arming yourself with three types of data (environmental, analytical and personal data) to make informed decisions to grow your fundraising programme.

The first I’m going to touch on in detail is the use of environmental data, in other words scanning what’s happening in the marketplace and how you can learn from others to raise more money.

There is a lot of environmental data out there to access.

You can look at annual reports from other charities to see how individual organizations are performing or look at information produced from bodies like Imagine Canada to see where money is coming from across the sector.

All free and publically available data, which is incredibly useful to get a sense of what is and isn’t working for different charities across the country.

Then there is benchmarking.

I’m sure that for many, the notion of benchmarking conjures up thoughts of meaningless, dull data and reams of paper full of graphs and charts.

And whilst there is some element of truth to this, I see benchmarking as one of the most powerful fundraising tools in our armory and anything but dull.

The way I look at it benchmarking is about looking at what others are doing and using this information to raise more money for the causes you work for.

Benchmarking studies come in various shapes and sizes. I’m going to focus on what I believe to be the most useful of those, data benchmarking (as opposed to benchmarking surveys that ask you a series of questions rather than look at your real data). In other words, charities looking at the actual data of theirs and other organizations with the intention of learning more about others in order to further their cause.

There are six key reasons why benchmarking is a must for any successful or ambitious fundraising organization.

1. It helps you identify industry trends

When charities share information and look at performance, both on a big picture scale and in minute detail, it arms fundraisers with information about what’s happening in the marketplace.

What’s working, what’s not. What’s driving growth.

2. Gives you a sense of your performance vs. the industry

How do you really know whether your fundraising is up to scratch or not? What on earth does 30% retention of cash donors actually mean? Are you sure that having only 0.2% of your file telling you they have left a bequest is low?

Questions we ask ourselves daily.

Benchmarking helps answers these and many other fundraising questions. It gives you a real sense of how you are doing.

The best way to do this is by looking at your data versus the data of other organizations. Of course there is always context. But where the names of the charities are shared and programs, size and budget are put in perspective, this gives fundraisers a true sense of how they are tracking.

3. You share knowledge

As Sara Campbell Mates from WWF Canada says‘… It opens up a dialogue between us as one organization and our colleagues at other organizations about how we can work together to do better and make the sector stronger. The experience in benchmarking has been priceless from that perspective.’

Sara is spot on.

Benchmarking forces fundraisers to talk to each other. Because let’s face it, when we go to conferences and attend workshops, we’re a polite bunch and we also tend to keep to ourselves.

But when you’re looking at Charity A whose retention rate on new monthly giving recruits in miles ahead of yours, you simply HAVE to talk to them. Find out how they’re doing it, what they’re doing differently, what they’ve tested.

This is debatably the most potent feature of any benchmarking project. Really clever people coming together to share not only data, but brilliant ideas. Can only result in great things happening.

4. Provides a better understanding of fundraising

If you’re not using street recruitment to recruit new donors, then how are you going to learn more about the channel? Of course you could talk to an agency; you may even talk to a colleague who did it once, back in 1998.

But what better way of digging deeper and getting the real lowdown on areas you’re not familiar with than to see firsthand organizations who are doing it? And doing it now.

Benchmarking programs, particularly those that are all encompassing and study each area of fundraising allow you to learn, and do so looking at real, live data and not textbooks.

5. Saves you money and helps you get MORE of it

The biggest barrier to measuring yourself is the cost of doing it. The second biggest barrier is a fear or reluctance to share.

6. Reduces complacency

Often overlooked as a reason to measure one’s self, yet incredibly important. Benchmarking makes us more accountable. And by accountable, I don’t mean justifying “how much of the donors dollar goes to the cause”.

I mean it makes you accountable. It reduces any possible complacency. It pushes you to become a better fundraiser. You sure won’t allow yourself to have the worst monthly giving attrition next year, nor will you allow Charity X (who frankly you find quite smug) to knock you off your bequest perch. Not a chance in hell.

About the writer

Jonathon Grapsas is the Regional Director for Pareto Fundraising in North America. This is the second in a series of articles where Jonathon will look in detail at how you can use different sources of data to help grow your fundraising program and raise shed loads more money for your cause.

Have donors reduced their giving?

Justine Mathieson — Sun, 09 Aug 2009 23:35:50 +0000

Fiona Paterson, Fundraising Strategy & Data Consultant from Pareto Fundraising takes a look at results from tax time appeals run in Australia looking for trends that can inform our understanding of the current marketplace.

Tax time is the biggest time for cash gift giving in Australia. It’s usually a time to celebrate our biggest appeal of the year. It is also the time of year I am most often asked ‘How are other charity’s appeals doing?’

This year, as a result of low consumer confidence and concern over the impact of the GFC on our donor’s decision making, many fundraisers felt increased anxiety as the end of June and the end of financial year approached.

With Tax appeals often contributing a large proportion of an organisations annual cash income and recent insights from the Pareto Fundraising Benchmarking cooperative showing us high value gifts (those in excess of $1,000) are given predominantly during May and June, we were keen to see what trends could be observed this Tax time.

This year at Pareto Fundraising we worked on, or supported, over 20 tax appeals. Strategies employed, channels utilised and lodge dates varied across charities. This week I have taken a look at preliminary results across our partners hoping to answer the question ‘How are we faring as a sector’?

So what did I see?

Around half of charities chose to set targets at or below 2008 actuals. The other half set their targets above 2008 actuals, aiming for growth.
Across the charities we collaborated with, income per thousand donors mailed has increased over 2008 levels for one third of the appeals and two thirds have decreased. Increases were between 6 per cent and 69 per cent and decreases were not as extreme, between -4 per cent and -24 percent^. This is reflected in the results of the Pareto Fundraising Benchmarking members, where 14 charities have participated in a comparison of appeal results and one third saw an increase (13 per cent to 233 per cent) in income per thousand over 2008 and two thirds were down (-1per cent to -38 per cent).
Response rates have varied widely. The impact of a change in targeting strategy (usually decreasing mailing volumes), a change in ask strategy (usually from soft to specific) and the maturity of the data file (in particular files where the cash giving base is not being refreshed with new donors) has seen many go up and some go down but no discernable trends, or difference from 2008.

Average gifts presented no clear trends either, from a -28 per cent decrease to an impressive top increase of 77 per cent. The majority of increases can be arbitrarily attributed to a change in ask strategy and many of the larger decreases are the result of a decline in the number of high value gifts (with a handful of lower value gifts or non-responses from this group of donors having a big impact on overall average gift compared to 2008. Overall, there were two distinct groups of donor bases with two distinctly different outcomes.

The two groups

Group One – predominantly cash donor bases, first tax appeal working in collaboration with Pareto Fundraising.

The experience with these appeals shows us that despite the GFC there is room in many donor bases to grow. Across the board these appeals have exceeded results from 2008, increasing income substantially, by an average of 104 per cent, over 2008 income (i.e. they doubled their tax income in 2009!).

This outcome was reflected across the benchmarking group as well where all predominantly cash based charities saw increases in their income over 2008.

Why?

The implementation of a combination of the following strategies has allowed these charities to maximise response rates, increase average gifts and minimise contact volumes.

Applying a segmentation model based on previous giving behaviours
Using this segmentation model to identify those most likely to respond to a cash ask at Tax time
Using individual, previous gift levels to make personalised ask s (as opposed to a one size fits all strategy)
Repeatedly asking donors directly for a cash gift (and nothing else)
Using a strong case study to represent the need and telling a clear story presenting the solution and how the donor can be part of this
Presenting an income target required to implement the presented solution and using a deadline to encourage prompt response
Employing a follow up approach to non-responders, asking again against the target
Focusing effort on the top 20 per cent of donors (with a variety of high touch, personalised approaches)

The next challenge for these organisations will be to ensure continued commitment from their cash donors – with regular giving conversion being explored by most as a reliable strategy for identifying more committed donors. Our experience has seen that strong cash response provides the best prospecting ground for regular giving conversion (i.e. active cash donors are your best regular giving prospects).

Group Two – programs focused on regular giving, donor base a mix of regular givers and (declining) cash donor volumes.

Many of our charity partners, and the benchmarking group, have focused their fundraising strategy on the recruitment and conversion of regular givers (as this is the number one growth funding stream in the marketplace today and is delivering substantially higher income than the majority of cash only giving programs).

The result of this strategy is a diverging base of committed regular givers and left over cash donors (people who have chosen not to convert to regular giving). The majority of regular giving recruitment strategies see limited new cash donor recruitment and the outcome of regular giving conversion strategies sees the most committed cash donors convert to a regular gift.

The outcome is that the most engaged cash donors convert to regular giving, more regular givers are recruited in addition and the cash only donor pool starts to dwindle through natural attrition and donor resistance to commit.

A good proportion of cash donors who convert to regular giving will continue making cash gifts when asked and regular givers recruited through direct mail, phone and online can be approached for cash gifts successfully^^.

The outcome this tax time has been stability, and in many cases, growth in the cash giving from these donors (regular givers with previous cash giving behaviours).

It is the cash only donors that present a concern. Response rates and/or average gifts are not hitting targets for many charities. Lower response or average gifts from middle and low value donors coupled with lower response or decreased gift value from high value donors has seen income from some charities dip below 2008 levels and for others simply maintain, due to improved performance from cash gifts given by their committed regular givers.

In all cases the strategies described above for Group One have been employed by these causes for several years, indicating the opportunities described for the first group have already been taken advantage of.

For charities in this group, those that saw growth over 2008 were able to maintain their cash pool giving (usually through the behaviour of new cash recruits) whilst maximising income from regular givers who also give cash.

If you aren’t acquiring new cash donors and are therefore reliant on a shrinking pool of cash donors you may well be feeling the effects of less committed giving from these donors this tax time. If you have increased the giving opportunities for donors this year it would be worth looking to see if your donor’s normal giving has simply been transferred to another method of giving. For example, have some given online at tax time when they normally give via direct mail because you sent email reminders or promoted online as a response channel?

Understanding the impact that regular giving conversion has on the makeup of your donor base is key to predicting future behaviour of your left over cash donors. If you have a regular giving program and aren’t asking your regular givers for cash, then^^^ considering this approach is an opportunity for growth.

Armed with these insights, my focus now is on ensuring future appeal targeting takes these observations into account, that strategies and income expectations for cash donor pools within regular giving focused strategies are refined, that strategies are reflective of the need for high value donors being given the most effort, and lastly helping those charities yet to venture in to regular giving, to get their programs going.

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^ I have used income per thousand donors mailed as a way to address the variation between volumes mailed between charities and I have compared against 2008 levels because each charity employs a different approach for setting targets.

^^I have seen limited success in asking face-to-face recruited regular givers for cash through the mail (though using a considered test approach can help you uncover those face-to-face recruits who may be responsive through the mail) but don’t discount the opportunity to test using other channels to approach for additional cash gifts. Proposition is key as is appropriateness of how, when and what you ask for.

^^^Asking regular givers for additional cash gifts will not impact on your attrition if handled appropriately. Using a long-term approach to developing a relationship with your regular givers, and respecting their regular gift as the most important way they support you is essential.

About Fiona Paterson