Pareto Talk

When a 90% Cost of Fundraising is a good thing

Wednesday, October 19th, 2011

Perhaps a 90% Cost of Fundraising ratio is a good thing when your fundraising provides a better ROI than your charity’s investment portfolio receives as a return on your financial reserves.

In the last issue of Pareto Talk, Sean Triner wrote an article called “How to convince your board it’s raining on a bright sunny day“. Sean outlined some of the arguments he uses to help some charity Boards recognise that significant financial reserves can occasionally be spent, and not indefinitely left for the future. Sean suggests that a strong fundraising program can offer as much stability and growth as classic investment strategies, property or shares. This led me to question – how much should a charity invest in growing their fundraising program? Here’s one approach to answering that question that is designed to help Fundraisers who take the question to their Board.

In my role at Pareto Fundraising I talk to quite a few senior fundraisers and charity Board members with one thing in common – they all want to raise more money. Most understand the concept that you need to invest money to make money and so enjoy a conversation about investment options and likely ROI. But, many then falter or even become paralysed by what that investment will do to their Cost of Fundraising (CoF) ratio. The media enjoy headlines berating charities for spending money to make money, and Australia regulates against it too, so it is a sensitive area. But it needs to be tackled head on by fundraisers, because in the wrong hands, managing by the CoF ratio will stop a charity from achieving its vision.

I think there is a lot to be gained from adopting a polar opposite approach to the concern expressed around CoF ratios, to help shake up conventional conservative caution. Doing so is a strong negotiation tactic, referred to by psychologists as anchoring, and just might help to set the tone for some future defining Board investment decisions.

How much money should charities invest in fundraising in order to grow? Tempered by a concern to keep CoF low, the typical response to that question is “as little as possible”. But perhaps the answer should be “as much as possible”.

Perhaps the answer is simply – Every dollar that offers a better return in a fundraising strategy than in a classic investment portfolio. What have typical Australian long term investments returned per year over the last 10-20yrs? About 10% it seems.

Perhaps the CoF should be pushed from the typical 15 – 25% up as high as this formula:

100% – (minus) your best investment return rate

In other words:

If $100 invested on the ASX returns 10% pa you have $110 after a year. If you accept a CoF of 90% then for every $110 you get at the end of the year, you needed to invest $99 in fundraising. So that’s a 1% better return than the ASX. So why wouldn’t a charity (and legislators) let charities be more like business (that’s the typical capitalist, paternalist criticism fired at charities within publications as eminent as The Economist) and make a decision to push UP the cost of fundraising as far as basic economics allows? To 90%.

Perhaps risk is all that is standing in their way. Or perceived risk, inertia and safety in numbers. Most people tell you that they invest in property and shares because everyone else does, or because the long term returns are good. But thanks to recent and ongoing global financial crises, we’re all starting to question this incumbent attitude. So, build in a buffer that reflects your perception of the variance in risk between your current investment portfolio and investing in a sustainable fundraising strategy.

So how risky is fundraising? Sure it has its risks – when you invest $250k in a single mail campaign, you risk a poorer than projected response rate. But professional fundraisers manage programs with a scientific test and learn ethos that gives them much steadier track records of investment return than many financial organisations. And some fundraising investment opportunities are phenomenally low risk. Many face to face fundraising agencies only charge for the new donors they acquire. So whilst the cost to a charity to start up face to face fundraising is significant, the risk is minimal because you don’t pay for donors who attrite early. Breakeven eventuates within approximately 10-15 months and then decades of donor growth (and much higher ROI on an individual donor basis) follow if donor stewardship communications are managed with common fundraising integrity.

So, next time your Board sets the goal of increasing income, I’d suggest asking if a 90% Cost of Fundraising ratio is acceptable (as a temporary measure, during donor acquisition) and see if that helps shift the conversation in your favour. I seriously doubt that many charities will make a radical shift to pushing their CoF to 90% (especially where legislation forbids it – so be sure to check on legislation and any exemptions that might be granted to you). But perhaps a few fundraising early adopters (the game changers) will question if CoF is not something to be minimised but to be managed somewhere in the middle ground as part of a sustainable, organisation-wide investment strategy.

Tags: Board, Cost of Fundraising, Fundraising, investment, ROI
Posted in Fundraising Strategy, Pareto Talk | No Comments »

Fundraising needs you! Help get a fair review

Wednesday, October 19th, 2011

By Sean Triner

First published by Fundraising and Philanthropy Magazine in September 2011

Fundraising transparency is to be put under the microscope by the Not-for-Profit Sector Reform Council. Sean Triner urges all fundraisers and nonprofit leaders to take action to ensure the council is well informed about the areas it is reviewing.

This is the most important agitator I have ever written. Our ability to fundraise using the most effective techniques available to us could be under threat. A group of 12 people have been appointed by the federal government to review the nonprofit sector and make far-reaching recommendations.

They are the Not-for-Profit Sector Reform Council. I assumed that fundraisers knew about this group, but at a recent meeting of fundraisers I realised how many people simply didn’t know about them.

Why do we fundraise? To help the poor, the disadvantaged, the environment, and the abused. We fundraise to make the world a better place. We fundraisers are facilitators. We give people who care the opportunity to create change.

I am sure that the members of the reform council believe in the same things. But we all need to act together to help make sure they know what is important in the world of fundraising, and to ensure that any changes to legislation do not hamper our ability to serve our beneficiaries.

Transparency on the agenda

Part of the group’s remit is “improved transparency and accountability of the sector.” Few would oppose improved transparency and accountability. But experience shows that when politicians or the media start talking about transparency and accountability, their own lack of understanding can lead to rules which can grind some highly effective fundraising methods to a halt.

Even many professional fundraisers still don’t grasp the complexity of fundraising from all techniques – it is nigh on impossible to understand them all. But the Not-for-Profit Sector Reform Council will have the power to recommend changes to legislation which could damage some of the most effective, but least understood, fundraising techniques such as face-to-face and telemarketing.

Can you imagine the impact on your organisation – now and into the future – if face-to-face, direct mail, telemarketing, lotteries and even online fundraising were restricted?

Within the group, only one, Anne Robinson, directly represents a nonprofit listed in the top 50 fundraising organisations (according to Givewell’s Top 50 report). Robinson is the chair of World Vision, which is great, but she is not a professional fundraiser and will need our help.

The reform council’s remit goes well beyond fundraising, but if these good people are about to review the sector, then we need to make sure that they have all the evidence and knowledge about fundraising that we can give them.

Problem with cost of fundraising ratios

The problem with transparency is in the complexity of fundraising, and in the end it always boils down to ‘cost of fundraising’ ratios, as this is the easiest thing for the layperson to understand. But even that is really difficult to explain, and it is hard to compare different nonprofits and different types of fundraising using this method.

Take face-to-face. It is constantly attacked by the media and politicians, yet is difficult to comprehend.

Ironically, face-to-face’s increased transparency makes it an easy target. Most programs work on a ‘pay per donor’ basis. This reduces risk to nonprofits and makes any face-to-face campaign incredibly transparent. With other forms of acquisition, this ‘cost per donor’ is hidden.

For example, with a direct mail acquisition campaign organisations must produce creative, buy print and lists, then pay for postage. One nonprofit may produce the creative in house, paying for the service within its salary and office overheads budget. Another may outsource to get professional copywriters to do the work. These two organisations’ costs are impossible to compare before they have even mailed the pack.

Once mailed, the nonprofit waits for results. It may then follow up all new, non-regular donors with a phone call or additional mailing to ask for a regular gift. It may use internal resources (again, paid by salary and overhead) or outsource to a specialist phone agency.

At the end of this process, the organisation will have some new regular givers. But trying to compare the performance of these two different processes is next to impossible. Usually, over five years, the direct mail and phone method will get a better return on investment.

But the face-to-face method will get more donors and therefore more net income. Of course, you should be able to do both.

It is not appropriate to judge a nonprofit raising $5 million at a cost of $2 million (delivering $3 million on services) as ‘worse’ than one raising $1 million at a cost of $100,000 ($900,000 on services). Yet, using cost of fundraising as a measure would do just that.

The next problem with measuring cost of fundraising is the unfairness of the measure. Large organisations have a natural advantage, and if they have an established bequest program, already have lots of donors or a nice endowment, then their cost of fundraising will look much better than many smaller organisations that have less resources and no economy of scale.

Finally, even nonprofits with similar resources are impossible to compare. It really is cheaper, for example, to acquire new donors for an animal or kids cause than an organisation dealing with a less ‘palatable’ mission like the rehabilitation of young offenders.

We need to make sure that the Not-for-Profit Sector Reform Council know about these complex issues.

So, what can we do about it?

A group of fundraisers from organisations that engage in face-to-face fundraising have a regular meeting every couple of months. They call themselves the F2F Working Group.

Nonprofits represented in this group include the Heart Foundation, Médecins Sans Frontières, Greenpeace, ACF, Amnesty International, Mission Australia, Childfund and dozens more. They are especially worried about potential legislation regarding face-to-face, but appreciate that the reform council will be looking at many other factors.

At the moment, we don’t even know what is or isn’t on the table as the purpose and remit of the council is very wide. That is why we fundraisers need to pull together.

Please, will you help?

The Fundraising Institute of Australia (FIA) is helping. FIA staff told us at a recent F2F Working Group that they are in touch with the council’s chair. As chairman of the FIA, Leo Orland is leading that liaison and met with the council in early September.

But the FIA can’t do this alone. It doesn’t have access to phone and face-to-face data, FIA staff are not in day-to-day contact with donors and measuring ROIs and CPAs. It has different pressures and needs our help. We are lucky that the FIA chairman is an accomplished fundraiser, but he will need our support.

Please keep abreast of FIA emails and updates and subscribe to updates from the F2F Working Group by emailing Paul Tavatgis (paul@cornucopia.com.au). Paul is currently coordinating the group’s communications and will add you to the circulation list.

Maybe there will be no new legislation. Maybe they will just harmonise the regulations – taking a national set of rules from what already exists across our states and territories. We all want harmonisation, so that is something we have in common. But if they pick the toughest rules on each area from the toughest legislation already in existence, then our ability to help our beneficiaries will be stunted.

We fundraisers need to make sure that the council has the facts. We need your help. We need to make sure that we are in dialogue with this influential group, whose recommendations will have such a dramatic effect on our lives.

As well as a potential threat to your organisation, your action or inaction could be the single most important career move you ever make. Please, help now.

What can you do?

There are six actions you can take right now:

Don’t leave it to someone else. These legislative things tend to be boring for fundraisers, so we are often guilty of leaving it all to people within our organisation who are not fundraisers. Don’t.
Make sure your boss, your chief executive officer, chief financial officer, chair and board understand the importance of the Not-for-Profit Sector Reform Council. It could be a brilliant government run initiative, but without action and understanding it will not produce what you need for the future of your beneficiaries. You, and your bosses, cannot ignore this.
Ask your suppliers if they know about this. What are they doing about it?
When submissions are requested make sure that you get them in.
Email Paul@cornucopia.com.au to make sure that you are on the mailing list. Although it was originally convened around face-to-face, the implications of inaction go much further.
Check out more information on the Not-for-Profit Sector Reform Council here:http://www.dpmc.gov.au/nonprofit_reform_council.cfm

Tags: Cost of Fundraising, direct mail, F2F, Face to Face, Fundraising, Not-for-Profit Sector, Reform Council, ROI, telemarketing
Posted in 'The Agitator' Articles, F&P Magazine, Face to Face, Pareto Talk | No Comments »

How to convince your board it’s raining on a bright sunny day

Wednesday, August 31st, 2011

By Sean Triner
First published by Fundraising and Philanthropy Magazine in July 2011

According to Givewell of those charities that declare their assets, 65 have more than $500,000 in their bank account, with a total of $3,722,530,136 between them.

Why do charities have these assets? $3.75bn is a lot of money. Much of it is tied up in property.

There is no doubt that owning a building outright is going to save money on an annual basis. Basically, no mortgage or rent.

Several reasons are given for why charities have large assets other than property. According to a recent article in the Age, the McGrath Foundation banks all three years salary for each nurse it takes on, ensuring that the service will be provided independent of the charities’ performance.

But often the reason many charities keep large reserves are for a ‘rainy day’. Reserves give a charity security.

What many boards don’t understand is that good fundraising can also offer stability. Of the top 50 charities by fundraised income, 26 have assets less than one year’s worth of fundraising income. These low asset charities are unsurprisingly dominated by INGOs (international non government organisations) – charities like Oxfam and World Vision whose work is carried out predominantly abroad.

Boards are usually populated by great volunteers with diverse backgrounds, but very rarely are they from a strategic fundraising background. Some may have been involved in fundraisers – balls, events or making donations themselves – but they are rarely acquainted with fundraising mathematics.

The bottom line is that the most stable, ongoing growth driver that outstrips property values, rent savings and classic investment strategies is a well managed individual fundraising strategy with classic direct mail and phone donors, regular givers (recruited by face to face and other means – don’t rely just on face to face donors) and bequest management.

Your classic donors, as well as providing income, are more important to you as a pool for bequests, major donations and regular givers. Your regular givers should be recruited using multiple techniques – at least face to face and mail/ phone conversion of classic donors.

Here is an index based on benchmarking data plus estimated returns over the past five years. It is easy for you to adjust the returns to reflect your own investments.

Your job as a fundraiser is not just to fundraise, it is also to give your bosses the tools they need to help your do your job. That main tool is data.

Seven steps to convince your board that releasing assets for fundraising investment – before a rainy day – is usually a good idea

1. Make sure that you know and understand what you want funds for – do you really want to have an income two or three times your current income in five years. What would you spend it on?

2. Think long term. More non-emergency money has been donated to charities in Australia through bequests than regular giving or appeals in the past. But the best bequest prospects come from your giving database.

3. Make a choice. Either fundraise, or don’t. But don’t meddle in the middle it is pointless.

4. Get the data. Look at Pareto benchmarking and research on asset bases and fundraising income from Givewell. Every time they have a query or barrier, answer it with data, not opinion. Demonstrate that solid, stable income growth comes from solid, stable investment in fundraising.

5. Show that during times of stress such as an economic crisis, corporate and events fundraising are very vulnerable, normal donor approaches are stable but regular giving keeps on growing.

6. Model your potential. Build proper models, based on real data and factored by how ‘sexy’ your organisation is; what is it’s appeal to the public?

7. Get someone from outside to speak with your board, someone from a charity that has taken the leap and gone for big investment or someone with access to the data – or both. I have spent a serious part of my life this year presenting alongside CEOs, CFOs and fundraising bosses to boards and finance committees. They really need to be informed with the truth.

Keep plugging away. It could take a year or two to convince them.

If you do want me to have a chat with your board, CEO or finance committee then of course I would love to, though it does need arranging well in advance – I am doing a lot of it at the moment.

Sean Triner

Posted in Fundraising Appeals, Pareto Talk | 1 Comment »

What makes a great telefundraiser?

Tuesday, August 30th, 2011

By Dan O’Shea

Telefundraisers have become a vital part of any Charities program.

What makes a great telefundraiser?

Passion and expertise. But they are not skills that we are simply born with – sure, we can be given a set of directions, a script and a subject to talk about, but that doesn’t necessarily mean we know how to inspire or encourage others to donate or help us with our cause or campaigns.

5 areas that I believe make the biggest impact

Effective Scripting – are your fundraising conversations interactive or are they lectures? Are you using your case study to your best advantage? Is the tone and feel of the wording ‘on brand’ and conversational?
Effective Objection handling – you must always acknowledge your supporter’s objection before you can try to address their issue and turn it around to a “win”. Know your 5 top objections and prepare your callers with ways to overcome each of them. This is vital to give them the confidence to achieve results.
Emotional Intelligence and good communication – if you don’t communicate your passion and the urgency of your proposition, you cannot expect your supporters to feel inspired and compassionate.
Listen, listen, and listen. There is no point asking donors questions if you do not listen to their answers! This is what builds rapport and lets your supporter know that you value them as individuals. Use your active listening skills to show the supporter you are giving them your complete attention.
Always include Donor Care elements regardless of the outcome of the call – this is critical in developing and retaining long term supporters, even if they don’t give this time.

I love to work with calling teams to help them enjoy their conversations and elicit the best results possible so that more money can go the organisation’s beneficiaries. Here at Pareto Phone I deliver training and motivation sessions all the time as I know that the more you invest in your callers, the more skills they will develop.

If these training programs sound like something you would be interested in, we would love to hear from you. Please contact my colleague Sara on (07) 3015 4044 or via email.

Dan O’Shea
Head of Call Centre, Pareto Phone

Posted in Pareto Phone, Pareto Talk | No Comments »

Encountering Grief

Wednesday, July 27th, 2011

By Sara Mansfield

I promised you last time that I would tackle another aspect of speaking with bequestors and prospects via the telephone – encountering grief. Many of us fundraisers encounter grief from bereavement or from a shocking diagnosis quite frequently. Although, this advice is not just limited to talking to bequestors or the bereaved parties of the bequestors, but can hopefully help with handling any conversation of this nature. I hope that this will help you as much as it has helped me and the callers in our dedicated fundraising call centre in Brisbane.

1. Grieving is a normal healing process

It is interesting that the one thing we are certain about in this life is that it will end, yet when that happens we are never prepared. Emotionally we just don’t seem to be well equipped to deal with such a loss, we either fall apart or head straight for denial. But, in reality, falling apart or going through denial is all part of the normal process of grieving. Grief is a normal, healthy response to loss and we need to understand how to best deal with it in order to provide comfort to someone who is grieving.
Regardless of the type of loss, there is a natural process of grieving. Understanding the nature of grief and bereavement gives you the insight that will enable you to help someone else cope. The more you understand about the basics of the grieving process, the more you may be able to help them:

It is normal and necessary to experience intense emotional sensations in order to heal properly
Feelings of guilt, embarrassment and anger are part of the restorative process.
Each person grieves differently.
There is no set timetable for bereavement.

As a matter of fact, loss can come in many forms. As devastating as the death of a loved one can be, any life altering experience can trigger a sense or feeling of loss that will trigger the same sense of grief and will send that person through the same stages of grief as experienced through the loss of a loved one.
Other losses might include the loss of one’s health or the health of someone you care about, or the end of a relationship, such as a marriage or even friendship. Healing from a loss involves coming to terms with the loss and the meaning of the loss in your life.

The most important thing you can do when you speak to someone who is recently bereaved or diagnosed with an incurable illness, is simply just be there for them.

You might not know exactly what to say or what to do, but that’s okay. Don’t let your discomfort get in the way when you want to reach out to a person who is grieving or upset. Be willing to push past the awkwardness and be honest and straightforward. Know that you don’t have to solve their problem; simply provide a listening ear.

Many of us have no idea what to say or how to handle the situation. It is difficult to know what words you should say to comfort someone grieving. I think it is natural to feel uncomfortable and unsure in this type of situation. We have so much fear wrapped up around death or any kind of loss in our society that it is difficult to know how to handle our own emotional response much less know how to support another person who is grieving. But, here are the ways that I have identified that can help us be there for a supporter who is coping with loss.

Do

Act Naturally – You may not feel comfortable but the more uncomfortable you let yourself be, the harder you are making it for the grieving or sick person. Let go of the discomfort and truly put yourself in the moment to listen to the caller.

Be prepared for and allow the caller to talk about their grief and how they are feeling. Try to listen without offering advice or interruption other than empathetic encouragers.

Show genuine concern if the caller seems open to it – your empathy and understanding is important to them.

Be mindful of how difficult holidays and weekends can be for the bereaved.

If you recognise that the grieving caller is very distressed and may be experiencing depression, gently ask them if they have considered bereavement counselling to help them work through their emotions.

Do say…

I am so sorry
I am so sorry for your loss
I don’t know how you feel and can only imagine how terrible it must be for you and you have my deepest sympathy.
It’s ok if you do not feel like talking right now. Just know that I am here to listen whenever you are ready. You can call again if you would like to talk
Talk openly and sensitively about the person who died if discussed

Don’t

Use probing questions – allow the conversation to be directed by the caller and for them to share what they choose to.

Ask questions about the circumstances of the death or loss – you can ask about the person who has passed on, but not how it happened.

Don’t say…

“I know how you feel.” Truthfully, you don’t know how they feel – no one does – whether you have been through a loss before or not. Don’t be surprised if they turn around and say, “YOU don’t know how I feel; no one knows how bad I feel!”
“You should.” or “Time heals all wounds.” “Oh, it’s not that bad.” Or “You’ll be ok.” Or “Things will go back to normal before you know it.” Or “It will get better.” Grieving people know this intellectually, but in their heart, they may feel so lost and alone. Offering trite advice or quick solutions can just end up frustrating and upsetting the grieving person. Also, these statements tend to minimize the loss and could upset the grieving person and they may even feel frustrated and angry with you in particular.
“Don’t cry.” It is uncomfortable and painful to hear someone cry, but they need to do it – telling him or her not to cry is embarrassing for them and probably impossible and does not support the natural grieving process that needs to occur.

Consider…

Having a list of accredited bereavement counsellors for referral

Having a list of accredited palliative care services, groups and information resources that you can direct people to.

Posted in Bequest/Legacies, Pareto Phone, Pareto Talk | No Comments »

Charity Challenge Case Study: New York City Marathon 2011

Tuesday, May 31st, 2011

In November 2010 five charities, with the help of Inspired Adventures, launched one of Australia’s most exciting international fundraising initiatives. After securing guaranteed spots in the coveted ING New York City Marathon, their objective was simple – find 50 runners to participate and raise $500,000.

To appreciate just how ambitious this initiative was, consider that the 2010 Sun Herald City2 Surf attracted 80,000 runners who raised $2.8 million for their chosen charities (source: www.city2surf.com.au). While this highly profitable model exemplifies the appeal and success of running events; the average raised per City2Surf participant was just $35. By comparison, the 50 participants of the New York City Marathon challenge were asked to raise $10,000 each.

BACKGROUND

The charity challenge emerged roughly 20 years ago in the United Kingdom. Over the past 6 years, the charity challenge concept has grown in Australia with many charities using an agency model. Inspired Adventures is the predominant charity challenge agency in Australia, and specialises in creating and managing charity challenges, working to raise funds for amazing Australian charities while offering participants incredible life changing adventures. Typically, each adventure consists of a well-known physically demanding challenge such as climbing Mount Kilimanjaro or cycling through Vietnam, and whereby all participants agree to raise a minimum amount via sponsorship for the charity or charities associated with their particular adventure.

Whether climbing mountains, running marathons or cycling across continents, charity challenges raise an average $50,000 to $150,000 per event, with each participant raising an average of $4,700. With a view to creating a challenge that would significantly increase the fundraising benefits for the involved charities, the New York City marathon project was created and less than 12 weeks later, all 50 marathon spots were filled and the program was on course to raise $500,000.

BUILDING A $500,000 CHALLENGE

Guaranteed spots

Prior to launching the challenge, it was crucial to secure places in the New York City Marathon. As general lottery entry into the marathon for Australians is highly competitive, the ability to offer exclusive guaranteed places was crucial to the success of the challenge. After negotiating the 50 guaranteed places, Inspired Adventures set about determining which charities would be the charity partners for the challenge.

Selecting and securing charity involvement

In determining the five charity partners, it was important to build a diverse cause portfolio. Supporting charities from different sectors creates a sense of choice and appeals to a wider range of donors. The five charities chosen were:

CHARITY	CHARITY’S OBJECTIVE
Amnesty International Australia	Defense and support of Human rights
Cure Cancer Australia Foundation	Cancer research
Kids Helpline	Provide telephone and online counseling for children
Variety, the Children’s Charity	Empower children who are sick, disadvantaged or have special needs
World Vision Australia – SEE Solutions	Carry out development work to address the causes and consequences of global poverty

The importance of a tangible outcome

Central to the success of the charity challenge model is the development of a clear, measurable and tangible outcome that directly relates to either the individual fundraising target or the group total fundraising target. This benchmark assists with the recruitment of participants, as well as the peer-to-peer community fundraising activities which participants complete over the course of 10-12 months.

As a participant, being able to tell your peers what you are doing and why you are doing it leads to greater success in raising significant funds for your chosen charity. The tangible outcomes for the New York Marathon Challenge charities are:

CHARITY	TANGIBLE OUTCOME
Amnesty International Australia	Defend human rights, whenever they are denied, forgotten, or abused
Cure Cancer Australia Foundation	Fund a young cancer researcher on a groundbreaking project for one year
Kids Helpline	Fund a counsellor for one year to speak with children and young people who are in desperate need
Variety, the Children’s Charity	Fund a piece of life-saving equipment to provide high definition vision to children’s and maternity wards in city, regional and remote hospitals
World Vision Australia – SEE Solutions	Fund SEE Solutions project in Africa which provides access to knowledge, capital, markets and skills training to the poor so that they can become independent in the long term

Rose Levien, National Events Manager of World Vision Australia, says, “It’s important to be able to clearly communicate where the funds are going and to be able to demonstrate the impact that the supporters are making. Raising $10,000 is no easy feat and the fundraiser needs to be inspired and motivated by the outcome of their hard work.”

Marketing and recruitment

The key target group for any charity challenge campaign begins with the existing supporters of that not-for-profit. Secondary to that are people compelled to participate in the particular event and people who want to benefit a good cause.

Each of the five charities launched a two-month marketing campaign to target their existing supporters and associated networks. Additionally Inspired Adventures launched a Google Adwords campaign and arranged print advertising in Runner’s World magazine.

The conversion rate of enquiry to registration was 46% across the whole campaign. Below is an overview of enquiries made from participants wanting to run for Cure Cancer Australia Foundation, who finished with 13 registered runners.

Cure Cancer Australia Foundation results:
22 enquiries generated which converted to 13 registrations

Participant Support

Inspired Adventures specialise in managing participant support, which is both cost and time-effective for their charity partners. Amanda Howle, Fundraising Coordinator of Amnesty International Australia, says, “Just because you don’t have the manpower in-house, you can still get involved with these challenges by working with a dedicated external agency like Inspired Adventures.”

Nadia Killeen, Account Manager at Inspired Adventures, says her participant support role extends far beyond fundraising support. Nadia says. “I arrange runs with those local to me, I meet with the runners, build friendships and relationships, online and in person.”

“For the ones who are already runners, this might not be such a physical challenge,” Nadia notes. “But everyone’s in the same boat when it comes to fundraising. Not many people have $15,000 in the bank, and few people have raised that much money for charity before. That’s where I come in. I provide fundraising support and training motivation every step of the way.”

Utilising an agency, frees up the charity to focus on acknowledging the runners and fostering long-term relationships.

CHARITY AND PARTICIPANT OUTCOMES AND BENEFITS

New markets

Offering marathon spots can attract runners who may not yet be dedicated supporters of the participating charity. Lorraine McNuff, Fundraising & Communications Manager for Cure Cancer Australia Foundation, said that she believed the marathon spots would be filled by Can Tooers who already run and train with Cure Cancer. “We have 13 people signed up and only four of these people are Can Too participants,” she said. “What is interesting is that the majority of [the runners] are not Can Too participants, and are new to us.”

Karen Dwyer is a seasoned marathon runner and has had her sights set on the New York Marathon for some time. Karen saw an advertisement to run for Kids Helpline and comments, “I felt like it gave the marathon a different perspective, like I’m doing something worthwhile.”

Karen has been surprised by the number of responses to her online fundraising page and hopes to surpass the $10,000 mark. She says, “I’ve never had to think about this approach before, but now I pay attention to the schools that my kids go to, ways I can make money through different events.”

Relationship strengthening

Rose Levien, National Events Manager of World Vision Australia, remarks, “It’s important to use this opportunity to build strong and lasting relationships with our runners. We are in regular communication with our runners, encouraging them to write blogs, video diarise their experience and learn more about SEE Solutions.”

Richard Keetly, running for Cure Cancer Australia Foundation, joined the cause after his mother was diagnosed with ovarian cancer ten years ago. She passed away last year, and Richard says, “Running and fundraising for Cure Cancer — it’s so much a part of who I am now.”

Fundraising diversification

Charity challenges and marathons diversify your fundraising portfolio and give supporters something in return for their donation. Amanda Howle, Fundraising Coordinator of Amnesty International Australia, says, “[Marathons] are a wonderful chance to offer our supporters a very different way to get active and involved. Supporters relish the opportunity to do something different, and the chance to combine a great personal challenge with a fundraising push for their favourite charity.”

Database building

Each participant averages 100-150 online donors, whose details can be captured by the charity, giving 1,500 new warm leads. This is especially useful for smaller charities with a limited database of supporters.

Peer-to-peer marketing

Empowering participants to fundraise for your charity exponentially expands your reach. Rose Levien, National Events Manager of World Vision Australia, says, “It’s estimated that marathon runners who are raising money for a charity will share their story with at least 40 people – considering they are raising funds for you, that’s an incredibly powerful and economical marketing tool!”

The ripple effect of peer-to-peer marketing

Major donors

When people opt in to fundraise for your charity, they become instant charity champions. For 10-12 months, each participant is completely engaged with your brand, message, and mission. They train physically, attend events and advertise the work of your organisation to their extended network.

Rose Levien from World Vision Australia, notes, “We don’t intend for the experience to end for our nine runners when they cross the finish line – essentially, it will have just begun. They will each be champions for World Vision, fully aware of how their fundraising efforts have changed lives and be in a position to share their knowledge with friends, family and their wider community. World Vision is in a position to share a unique journey with their supporters and not just be a cause that they donate money to, but become a part of their lives.”

Return on investment

The New York City Marathon event is on target to deliver a high net return for each of participating charities. Says Lorraine McNuff from Cure Cancer Australia Foundation, “Not including staff resource time the ROI is expected to be 11.7:1, and this is very high.”

Sector growth

The rate of growth in the Australian charity challenge sector is clearly demonstrated by the increase in the number of events managed by Inspired Adventures. From one adventure in 2005 which raised $55,000 to 40 adventures on target to raise at least $2 million in 2011/2012.

Charity challenge sector growth from 2005 – 2011

SUMMARY

The New York City Marathon challenge demonstrates the success of combining an adventure or a challenge directly with a major global sporting event. Such challenges have significant benefits, not just for the supported charities, but also for the participants who experience a great sense of accomplishment in the realisation of their fundraising and sporting goals. Many participants also find the completion of the challenge to have a cathartic effect, due to having a strong connection to their chosen charity though personal circumstance or experience.

With guaranteed marathon places in the forthcoming Paris, Dublin, and London marathons, as well as more places soon to be available to Australian charities, the charity challenge sector promises further expansion. Emerging as a powerful method of fundraising, charity challenges raise millions for beneficiaries while directly engaging donors in the adventure of a lifetime.

Inspired Adventures

Marathon’s are just one of the many challenges offered by Inspired Adventures. Other challenges include climbing Mt Kilimanjaro, trekking the Kokoda Track, walking the Great Wall of China, or trekking in Nepal. The variety of challenges mean there is something for everyone to participate in, and for every charity to benefit considerably from. For more information about the New York City Marathon challenge, or for other adventures, please contact Justine Curtis.

Justine Curtis, Director
Email: justine@inspiredadventures.com.au
Mobile: 0421 322 960
Website: www.inspiredadventures.com.au

Posted in Pareto Talk | No Comments »

I’m going to do direct mail acqusition – what do I need to know?

Thursday, May 26th, 2011

By Fiona McPhee

4 musts for direct mail acquisition

Last year in Australia & New Zealand direct mail activity recruited over 75% of new cash donors and 6% of new regular givers. Whether you love it, hate it, are bored of it or wish you could just use digital to save on costs, the fact is direct mail remains a key opportunity for your donor recruitment.

If you are trying it for the first time, have tested and want to roll out with further testing or are a seasoned campaigner, it is worth considering the following essentials of direct mail acquisition.

1. Proposition/offer – be focused

One of the most common fundraising challenges is to work out what we can say to people that will convince them to support us. In classic marketing it’s called the ‘offer’; some call it a ‘proposition’.

The challenge isn’t finding something to say, rather finding the most important thing to say. A single offer will always beat multiple offers, but more too often I see acquisition fail because an organisation tries to communicate everythng they do and offer a multitude of ways to support in the one communincation.

A strong proposition can mean the difference between a mediocre communication and something that connects with the hearts and minds of your potential supporters.

This is your acquisition challenge because different people have different perspectives on what is important. Looking at this from the perspective of the wants and needs of your target audience is the best place to start.

2. Audience selection (promote swaps, co-ops, tepids, lists with names)

Direct mail offers the opportunity to target – it’s important to consider what types of audiences actually respond to direct mail offers when crafting your targeting. I often get told ‘I need to attract a younger (lets define this as under 40) audience’. After I ask ‘why’ and ‘have you considered whether the ‘older (lets define this as over 55) audience you successfully have working has been explored to its greatest extent’, I then pose the question ‘is direct mail the best channel to find this audience?’ More often than not the answer is no. Direct mail works for audiences who open their mail.

Considering the most responsive audience direct mail generates for cash donations and regular gift sign-ups to charities is over 55 (once we reach the 75+ age group RG responsiveness starts to decline), there is a plethora of opportunity and the decisions you make here are critical (and can have a heavy influence on your proposition or how you vary your proposition).

My basic approach here is:

1. Explore your own data set (house file) – most organisations will have access to data that is currently not actively supporting but has shown some interest in your cause (in order to end up on your database). This data (which I call tepid data) is often the most responsive for direct mail acquisition (considered targeting and testing is required – how data was obtained, recency and quality will all impact returns).

2. Swap with another charity (yes you can do it, possibly you will have to adjust your current privacy statement and advise your donors giving them the opportunity to opt out, but it is not illegal). Hands down, list swaps with other charities are generating the highest response rates for direct mail acquisition. Even if the charity is not in the same sphere as you (e.g. animal welfare can swap with human right or environmental causes and get brilliant response rates). Just make sure you are swapping like-for-like.

3. Join a data co-op. These programs are generating strong response rates for direct mail acqusition and as more charities join the stronger the opportunities.

4. Profile your best donors and rent look-a-likes. Robust profiles are delivering strong results in today’s market. Many suppliers will run a profile for free which will not only give some good geo-demographic insight into who your best donors are, but will then allow you to rent names that match this profile. Make sure you are not sending in rubbish for profiling and consider how robust the profile is when making selection decisions. Remember you need to profile the type of donors you want to recruit more of. What you don’t want to profile and therefore target are low value or lapsed donors.

5. Rented names will generate a better response than unaddressed for direct mail. I would de-prioritise unaddressed mailings until you have a proposition and pack that are performing well – then you can test. Just because the data is ‘cheaper’ does not mean you will get a better return – the far lower repsonse rates from unaddressed will likely mean your ROI is unsustainable.

3. Focus on why me, why now & benefits (donor and beneficiary centric)

If the proposition is the most important thing you will say to engage with your prospective supporter, the story you tell to support this has to be crafted with the prospective donor in mind. It needs to focus on the ‘why me?’ (as in why me the prospective supporter), the ‘why now?’ (why is it critical I consider this offer now) and the ‘benefits’ of the solution to the need you are asking people to support offer the prospective donor and your beneficiaries.

Focusing on what the audience thinks and feels about the need/problem, beneficiaries and the solution is the best place to start. If the audience you have selected likely has no awareness of the need, no likely connection or compassion towards the beneficairies and the solution is not something they can likely connect with, you need to reconsider your audience or your proposition.

Notice I didn’t mention your organisation? That’s because who you are, your history, where you are located, how many staff you have, your long winded/broad mission, who is on your board and which celebrities think your brand is great are not what is going to get these prospective donors to repsond.

If someone is going to engage with your direct mail piece, you need to focus on your beneficiaries (the people/animals/cause) that your offer is going to help the prospective supporter impact on.

Yes being a well managed, trustworthy, financially competent organisation is important, but that is not what motivates hearts. It is needed in the background.

Ask yourself:

What is the specific (remember we are being focused) problem or issue you are addressing? Because as a prospective supporter I am going to know about this and care, not know about it but care because you’ve told me, or it won’t interest me (and we accept that not everyone you contact will care).
Where will the money go? How will it be spent? Because as a prospective supporter I need to know.
How/why does it actually help people/animals/the environment? Because as a prospective supporter this is who/what I care about – I want to know that by doing what you are asking me to do (e.g. make a cash donation or sign up for a regular gift) I am going to change a life / solve a problem and feel really great about myself as a result.
What about this work is appealing or interesting to this audience? Because not everyone will care about every aspect of the work.

What messages will work for attracting and, equally as important, maintaining relationships with potential donors? Whilst many budgets will separate acquisition from retention activity your plans should not. Acquisition is merely the first step in the conversation – if you are not considering what you will say next and how it relates to what you said first, take a step back and review your plan.

4. Cheaper is not always better

Yes ROI is an incredibly important measure – it’s the first measure I look at when assessing the outcomes of acqusition activity. Pushing costs down is one way you can improve your ROI – if you have a successful campaign. A low cost pack that doesn’t work isn’t going to help your ROI. Similarly, mailing a really low volume as a test might keep your costs down but it will ensure you can’t test much at all and run a high risk of results not providing any statistically valid insights and therefore you will have no idea if the outcomes were by chance.

I suggest developing the best execution you can, keeping in mind you can always test removing elements or trying cheaper versions of elements through testing, but if your initial test does not succeed its hard to justify adding pieces in to further test.

I also suggest mailing test cells be no smaller than 25,000 units – that means if you are running one test you need to mail at least 50,000 units so that each test cell has at least 25,000 units in it. And by one test I mean testing just one thing e.g. a list or the letter or an additional component in the pack, not a combination of these.

What to expect from direct mail acquisition (yes I know you know, but have you made sure your boss/board is aware?)

Do not expect to break even if you are making a cash ask

If your boss or board expects you to make a profit from your testing, take the time to re-set their expectations. In the absence of previous results on which to base your roll out projections the more than likely scenario is your cash donor acquisition will not breakeven. Some things will work and others won’t – so overall the campaign will deliver a bottom line that may be brilliant or mediocre but critical is taking what did work and working towards you desired ROI.
Sourcing free print, lists or creative can mean the difference between being able to run a camapign or not, BUT the likelyhood of these ‘free’ offers being sustained long-term are low and as a result important learnings never get applied. If you are fortunate enough to receive ‘freebies’ always ensure your roll-out budget assumes you have to pay for everything – this is your future reality. And also consider the control you have over ‘free’ offers – if the creative is free but is not strategy please consider the value of undertaking the activity.
This is not to say breakeven and positive ROI direct mail acqusition activity does not happen. We have seen some brilliant success over the past 18 months testing pack components and offers that are doubling response rates against control packs and deriving donors at break-even and in some cases, a profit. Consider the use of external support to inform your activity – there is a huge amount of learning out there that an organisation is unlikely to ever uncover on their own.

Complaints
Expect them and be prepared, but don’t stop just because you get them (in fact be concerned if you don’t, as you have not hit an emotional nerve). If there is a belief within your organisation that every communincation you send should be universally liked and well received, then your program will likely be hampered by blandness.

Follow Up
The need to be ready to thank, engage and convert your new donors – if you don’t have a plan and resources for this when you lodge your direct mail acquisition, then DON’T MAIL. With fewer than 45% of new cash donors going on to make a second gift your acquisition spend will be wasted.

If you need help developing your acquisition proposition, managing your targeting, developing the most effective pack execution or managing your testing or assessment of results, please don’t hesitate to give Clarke Vincent a bell on 07 3015 4021 or drop him email.

Posted in Acquisition, Pareto Talk | No Comments »

Test, test and test again!

Tuesday, May 24th, 2011

By Clarke Vincent
This article was first published by F&P Magazine in April 2011

Any strategy or tactic of your appeal program that causes contention or argument amongst your fundraising team is a great thing to test. “Ok, let’s test it” is the best way to move beyond many a heated debate!

Test results can offer significant insight into the best possible path forward, but to the chagrin of every veteran marketer, testing cannot claim to offer eternal marketing truths. What tests give us are measured snapshots in time that act as an indication of likely future outcomes. Previous test results should be viewed as a helpful guide rather than marketing lore, and be re-tested fairly regularly.

Ground strategy in science

Fundraising strategy is best grounded in the science of what has been observed previously, mutated with a creative flair to challenge assumptions and introduce new ideas. The more test results you have access to, the more confident you can be about the likely outcome of your chosen strategy and tactics, as well as the directions in which you push innovation.
Here are five relatively simple tactical tests for any charity with an appetite for running more tests and building their pool of donor insight.

1. Calculated vs default ask amounts
Should you ask each donor for amounts that are directly calculated from their previous gift(s)? Or should you simply prompt donors with the same default level of suggested gift (probably a low, medium and high gift amount)? Often, though not always, the effort of calculating gift amounts for each donor can help to uplift average gift and overall income significantly. You should test to see if it is worth the effort to you (note – we recommend excluding major donors from this test).

2. Include regular givers in cash appeal targeting
Should you ask your regular givers for an extra cash gift? Probably, for more important appeals (e.g. emergency, tax). If you do, set it up as a test to ensure it is financially viable (increases net income) to include them; but also measure over a longer time period to see if it has an impact on longer term value by measuring retention and upgrading along with additional contributions. Our testing suggests retention is normally unaffected, overall value is increased and additional cash giving from regular givers is also a good indicator of bequest potential.

3. Push online
Should you promote gift payment online in your mail appeals? One day the answer to that question will be an emphatic yes. But right now, for reasons such as habit, perceived safety and ease of online donation process, it is better tested on a regular basis to see if it is the right thing to offer your donors yet.

4. Repeating specific ask amounts through an appeal letter
Should you ask for a specific gift on the first page of a letter and repeat that ask through to your response device? It works well as a tactic more often than not, but be sure to choose the right amount and the right context for making the ask. (A complaint from one donor about a specific ask does not represent the feelings of your whole base; consider the overall impact on donor value.)

5. Provide a separate response device
Should you use a tear-off, or separate response device? We generally recommend a separate response device because we have never seen them perform worse than a tear-off device, making it the safe option. This is based on the donor insight that direct mail donors are generally older and using a separate response device aids the ease with which someone can respond – no tearing of paper is required, and more space means you can use larger font. If your budgets are tight, test it to see if it is financially worthwhile for you.

Test incremental improvements

These tests are designed for warm donor cash appeals. The absolute best place to test direct marketing tactics is in communications that are improved incrementally over time by only a small amount. Most warm donor appeals quite rightly change the focus of their appeal (often case study or need) greatly with each appeal, whereas an acquisition communication can use a ‘banker’ pack that has proven over time to provide the most effective returns.

Testing an acquisition banker pack is a purer science since less elements of the execution change over time – so you can be more confident in relying on the consistency of banker pack tests. But, since most organisations conduct more warm appeals than acquisition communications, any testing is better than none. Testing should be a part of all direct marketing appeals.

Re-test what you believe to be true

Many tests deliver apparently inconclusive results (essentially – the same result). This in itself can be a useful conclusion, because it’s an indication that it doesn’t really matter too much. Your focus can move onto testing more pressing strategic decisions. But do be sure to occasionally repeat tests, to revalidate what you believe to be true – as our Greek scientific forbears observed; the only constant is change.

Posted in Data Insights, F&P Magazine, Pareto Talk | No Comments »

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

Tuesday, April 19th, 2011

By Fiona McPhee

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

Posted in Benchmarking, Fundraising Appeals, Pareto Talk | No Comments »

Budgeting beyond spreadsheets

Friday, March 18th, 2011

By Jonathon Grapsas

It’s that time of the year again for Aussie fundraisers, when heads are down and doors are closed as we feverishly plan for next financial year. The budget cycle.

So what should be top of mind when sorting through a myriad of spreadsheets and detailed discussions about the future?

Think three years, not one

Whilst it’s easy to look at the immediacy of our decisions, we know as fundraisers that the real impact often comes a lot later than the toil involved. Regular giving is a great case in point.

So to overcome the potential blockages placed in front of us when we present our plans, ensure all budgets include the longer term payoff, through years 2 and 3 as a minimum. Even longer where necessary.

That may mean overlaying your income expectations with expected life time value and not just income in the coming year.

Start from scratch, the zero based approach

Whilst I’d agree with the old adage about not fixing what ain’t broken, stagnant programs or those looking for serious growth could do worse than start from scratch.

Consider this. You’re an organisation that generates $1m a year in income. You’ve been tasked with growing that fivefold in three years.

Doable? Most certainly.

Doable within the current program framework? Likely not.

Ambitious growth requires solid investment, informed risk taking and organisational commitment. If you’re planning to transform your program, looking at what you’ve done the last ten years and tweaking it isn’t going to help you make that leap.

Starting afresh and asking yourself and your colleagues “what do I need to do to generate $5m a year” is the question you need to be able to answer. Not, “how can I turn $1m into $5m?”

Balance your portfolio

Diversification and balance are key. A balanced program means investing in areas that will deliver:

Short term income (cash appeals, emergency appeals, events)
Medium term income (regular giving, major donors, donor care)
Long term income (bequest marketing, donor care)

Having a reliance on more than 80% in one income stream can put you in a precarious place should the landscape move.

If you take a look at those charities around you that have gone through massive growth, there’s no doubt most of it will be driven by one channel. In Australia over the past ten years that’s been F2F (street canvassing) recruiting regular, monthly donors.

But if you look closer, the charities that have harnessed this best have dipped their toe into other vehicles, including more traditional channels like the telephone, DM, direct response television and more recently digital.

When trying to decide how to allocate funds, applying Google’s 70/20/10 rule for investing in innovation is a great way of working to achieve both balance and diversification. This would see:

10% of funds dedicated to exploring new initiatives, with the expectation that almost all will fail but occasionally one or two will show potential and end up reshaping the future
20% of funds be given to those initiatives that showed promise from the previous year’s new trials, to see if they are sustainable as an income stream
70% of funds dedicated to roll-out and optimisation of what is proven to deliver the bulk of (fundraising) income

Invest in donor care

Don’t cut off your nose to spite your face. An acquisition budget with no real commitment to donor development and supporter care is flawed. It’s hard enough to hang onto donors and even hard to look after them without any investment.

That means donor care and stewardship pieces, training for supporter services staff, mystery shopping other charities and generally keeping this topic on your agenda. Acquisition needs to work hand in hand with great supporter development.

So whilst its heads down at the moment, take the time to see the forest for the trees to enable you to help your organisation change the world, now and down the track.