Pareto Talk

Seven steps to generating donor response

Friday, January 7th, 2011

By Jan Chisholm
This article was first published in Charity Funding Report in November 2010

Being a fundraiser means being a storyteller. We tell stories with an important purpose: motivating another human being to take action on behalf of someone (or something) they care about.

For more than 20 years I’ve been trying to work out what makes a fundraising appeal connect with the donor and deliver the best response on behalf of my beneficiaries. Today, I’m sharing with you the seven steps I believe the best fundraising approaches (whether direct marketing or face to face) include. Does your next appeal have them all?

1. Express the need

I know this sounds really obvious, doesn’t it? But unfortunately I’ve lost count of the number of direct marketing approaches I’ve received that neglect to tell me exactly what my gift will make happen for the beneficiary group I care about. The need you must express to your donor isn’t about the stuff your organisation needs (more research, tents, homes.) It’s about what impact getting those things will have on the people, places or things the donor cares about. If your appeal doesn’t express this clearly; go back to the drawing board.

2. Tell compelling stories

If fundraisers are storytellers then it’s our job to find powerful stories to tell. Talking simply about someone you met on your most recent trip to the field will connect with the donor far more powerfully than impersonal statistics and facts. Give the donor a person, place or thing to connect with. Draw them a picture with words of who, what or where they are helping. Using personal stories will help you create a genuine connection between donors who care and those you are there to help.

3. Have a clear call to action

What exactly do you want the donor to do? Don’t assume they know. It’s your job to tell them exactly how they can help. Do it in the body of your appeal. Repeat it on the donation form. What is the single most important thing the donor can do to meet the needs of the beneficiary group you’re telling them about? Be clear, be upfront and be consistent.

4. Create a personal link

Step two is about telling real people’s stories with dignity and passion. Here I’m talking about the other important person in the equation. The donor. Does your appeal copy make your donor feel valued and respected? How much do you know about each donor? When did they begin to support your work? Have they supported similar projects in the past? Have they told you though conversations or surveys, just why they think your organisation’s work is so important? All this information, and more, should be on your records. If it isn’t, start finding it out. If it is, then use it cleverly to create personal conversations that acknowledge who the donor is and why you’ve chosen to ask them for their help again at this time.

5. Urgency

If you can’t tell the donor exactly why you’re telling them this story now and what you want to happen as result (and by when), then you’re probably wasting their time. I’m not talking about creating false urgency or raising the alarm unnecessarily. Urgency is about respecting the donor by only asking for help when there is a clear need that they can help us meet. Now. Not next week. Or next month.

6. Talk to the right audience

Data analysis shows me that the best people to ask for help are those who just helped you. Sounds counter-intuitive? But let’s think about it. Someone who has recently responded to a request from you (and has been promptly, warmly and informatively thanked) should be in a supportive frame of mind the next time you contact them. RFV – recency, frequency and value – is your friend here. Put simply, recency and frequency of past giving you allow you to find those most likely to respond next time you ask. Value of past giving simply allows you to work out how much you should ask for this time.

7. Make it easy for people to respond

Oh… the times I’ve been moved to action by an appeal, only to be flummoxed by a dense or confusing response form. Keep it simple. You know what you asked for in the letter or email. Make sure the donation form mirrors that. Give me boxes to tick. Give me enough space to fill in my details – particularly my email address, which is very long. Keep reminding me what impact my gift will have on the beneficiaries I care about (see step one). Importantly, try to fill in the form yourself before it’s published and if your pen hovers over the page or your fingers pause on the keyboard as you have to think about what you’re being asked for – redesign your form.

Next time you have a fundraising story to tell your donors, I sincerely hope my seven step checklist will help you create an appeal that delivers a positive outcome for both you and your donors.

Posted in Fundraising Appeals, Pareto Talk, Supporter Relationship Management | No Comments »

Brand Building can divert you from fundraising

Tuesday, January 4th, 2011

By Sean Triner
This article was first published in Fundraising and Philanthropy E-bulletin in November 2010

I saw this great article from Jeff Brooks of Future Fundraising Now: ‘You’re Not Nike – Get Over It.’ Jeff is much more of an agitator than me, and he starts the article with this quote from the marketing director of a nonprofit:

“Our fundraising results have dropped since we put our new brand standards in place, but that’s OK because the new brand so brilliantly articulates who we are as an organisation.”

The moment ‘branding’ is mentioned I often get worried. Luckily it rarely turns out as badly as in the quote above, but branding exercises do need to be carefully managed and fully integrated with fundraising.

Clearly, brand awareness is not a bad thing: the higher your overall brand awareness (providing it is positive), the easier it is to fundraise. If two nonprofits went head to head that were doing identical work and promoting it in the same way using almost identical language – the one with more brand awareness will likely have a lower cost per acquisition.

However.

This month, I am agitating that ‘brand awareness’ can damage your nonprofit. Here’s why: it’s not the brand awareness that causes the damage directly – it is what we do to ‘grow’ this awareness, such as misdirecting budget and effort from fundraising or services, reducing fundraising effectiveness and alienating donors.

Hope and solutions vs problems and need

Let’s say a nonprofit works with a brilliant branding agency to develop a new brand. New brand guidelines include a new font, look, feel and ‘voice’. The ‘voice’ reflects the fact that donors say in focus groups that they would be more likely to respond to positive images and stories of hope and solutions – not problems and need. Consequently, internet and direct mail appeals don’t work as well.

Donors really do say they prefer positive stuff, but test after test after test shows that donors respond better to need: how can I help!? And these tests show that this continues to work.

No nonprofit wants to ‘brand’ itself as negative or always needy. But … you are needy. Be honest; demonstrate why you need the money, and what will happen if you don’t get it. It might not be a pretty picture, but it is the truth.

Beware of abstractions

Another trap in brand development, particularly from agency people, is the introduction of abstractions and taglines.

Nonprofit work is really pretty simple to sell:

1. There is a problem.
2. Some good people want to solve it and set up a process to do so, but
3. they need money. So,
4. please give or the problem won’t be solved.

Taglines can be useful to underline points (provided they don’t become central to the campaign), but abstractions are never useful.

Budget distraction

Time for a bit of maths.

Effective, large-scale, public fundraising, such as face-to-face programs, direct mail, multimedia and phone programs, can raise money and awareness. Effective, large-scale public awareness programs (such as outdoor advertising, bus-backs, press launches and publicity events) only raise awareness. They don’t raise money.

But since awareness makes fundraising easier, and a public awareness campaign worked well – would it be best to do both?

The answer is “Yes, but …” and the ‘but’ is where the maths comes in.

There is a simple formula here: the cost of the awareness campaign needs to be less than the increase in income from the fundraising. It rarely is.

For example, take a fundraising acquisition campaign costing $100,000 which recruits 300 new regular donors. Then spend $50,000 on pure awareness. The effect is amazing, with donors now 10% more likely to respond. So the next $100,000 acquisition campaign will get 330 donors.

This would be an extremely fantastic result … until you think, ‘What would have happened if I spent $150,000 just on the acquisition campaign alone?’ In theory – you’d have got 450 donors.

Any spin about the long-term nature of brand awareness should not be ignored, but considered carefully. New donations also have a long-term nature, because a donation now is the best indicator of a future donation. Of course, I am simplifying this, but the theoretical formula still applies.

Full-on, integrated campaigns appear to work brilliantly – just look at The Smith Family’s integrated approach to their Christmas campaign, and World Vision with their 10,000 new sponsors campaign. But those campaigns are not awareness campaigns; they are clear fundraising-led campaigns with everything pointing towards transactions.

Hopefully, all media are being tracked against outcomes.

Too many cooks in the brand kitchen

Going through a rebranding process usually involves lots and lots of people. In my last job before setting up Pareto with Paul Roberts, I project managed the rebranding of UK mental health nonprofit, Mind. In that exercise I had to involve all stakeholders – which included national and regional staff, all regional Mind associations (Mind effectively franchised its brand to them), donors and more. As well as the direct costs, tens of thousands of pounds were effectively spent in staff time.

When it comes to branding, everyone wants a piece of it. Everyone gets especially worried about the logo – many confuse brand with logo. Consequently, everyone puts in a word, and the end product is a camel*.

Be well-known where it counts, not everywhere

Nonprofits often believe they have lots of target audiences, ultimately concluding with the ‘general public’. Let me tell you that short of having $20 million to invest in brand awareness, the general public is not your target audience. You really need to narrow it down. You may well have two key audiences: service users and donors.

Your service users should be easy to define (for example, deaf people or pet owners or your congregation). Your donors are older people. From there you can start breaking down by state, country v metro, suburbs, wealth indicators etc. Age is still by far and away the best indicator of a good donor, with only one exception – face-to-face (F2F) fundraising sign ups. F2F activities are also brilliant for brand awareness.

Back in 2005, managing director of Triumph Communications, Tim Matthews, wrote an article for Fundraising & Philanthropy Magazine entitled ‘Brand power – the hidden lever for fundraising success’. In it, he said that “… to develop a strong brand reputation, you don’t need to spend millions of dollars in television advertising. In fundraising, it is better to have a strong reputation amongst a few, than to have a weak reputation amongst many.”

Questions to ask before ‘the branding exercise’

In his article, Jeff Brooks says that “… nonprofits that have never been through the branding exercise often have stronger brands than those who have. They aren’t making high-flown, abstract statements about who they are – and promises they have no ability to fulfill. They just put out fundraising offers.”

I told you he is more of an agitator than me.

I do think that if you are going to go through that exercise, you should ask these questions:

1. Why? What would success look like?

2. Do I just need a new ‘look’? Maybe the logo is just tired?

3. How much am I willing to spend, and how can I justify that expenditure by increased income or better services?

4. Do I need external help? If so – you are better off paying for it. If someone is willing to do pro bono then ask them if you can pay them and they can donate the money back. This way you are still a customer, and shouldn’t slip down their priorities.

5. Who is our target audience?
a) For services
b) For fundraising

6. Could I achieve the same goal by stripping out all the fluff and just concentrating on what we do, why, and what you can do to help?

Making the right decision

The right decision for some organisations may be that you do need a re-brand exercise. You may well decide to use an agency. If you do, then all agencies will recommend qualitative and quantitative research including focus groups.

Make sure you sense check that research against actual donor behaviour. Ensure it is congruent with your own data analysis (if you have more than 3,000 donors). If research shows that donors say they like positive messages – check to see if your most successful campaigns were ‘needy’ or ‘positive’.

You need a level-headed project manager, someone who keeps it all real, avoids abstractions and doesn’t confuse awareness or brand voice with success. You only have one measure of success – helping your beneficiaries.

* A camel is a horse designed by committee.

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Are you having an impact? Show me!

Thursday, November 18th, 2010

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

The formula for success isn’t as simple as dollars in – dollars out = bottom line – particularly for nonprofits working in the area of advocacy or providing direct services.

If you’re the boss of an organisation whose only concern is fundraising, then measuring your success is easy. Pick up a pen, grab an old envelope, and write out the following simple equation: {spend x, raise y (over z years)}. Substitute your own figures for x, y and z, and bingo! You now know all you need to know about whether to reward or fire your fundraising manager.

But for organisations that conduct advocacy and/or provide direct services, the challenge of measuring success is very different and almost always much more complex. Perhaps that’s why some nonprofits make only the most cursory attempt to do so, whilst others dodge the issue all together.

Scoring election scorecards

I’ve been thinking about this a lot recently, ever since I received an ‘election scorecard’ through my post from a well-known environmental nonprofit. You’ve probably received one yourself – several nonprofits produced them in the run up to the general election.

As I held the scorecard in my hand, and read through the list of issues the nonprofit wanted me to consider when deciding who to vote for, I couldn’t help but wonder: as the various departments allocated precious dollars to this exercise, how many took the time to work out exactly how they would measure its success? And come to think of it, exactly what would constitute a successful scorecard campaign anyway? New supporters? A flood of donations? Or would a slight rise in the profile of the highlighted issues be deemed enough?

It’s a question I put directly to the manager who was directly responsible for the scorecard that arrived in my post that day. I asked him to imagine I was his boss, and that I had called him into my office to justify the expenditure on scorecards vs. other campaign devices.

He acknowledged it was a good, if tough, question. His response was to point out that the campaign wasn’t about translating the scorecard into votes; it was a service for members and would hopefully raise the profile of the issues highlighted.

“Yes”, I said, “that’s all very well. But I’m your boss and I need some proof that this was money that couldn’t have been spent more productively. So how are you going to measure the success of these two goals?” His answer was, in a nutshell, through anecdotal feedback and media mentions.
Measuring success might be tough – but it is necessary

I fully appreciate, of course, that environmental nonprofits will always face a tough job measuring the success of profile-raising campaigns. After all, we can’t know if a climate change campaign was successful until such time as climate change has been demonstrably arrested – or the last human on earth dies of its affects.

Yet as difficult as measuring success certainly is, I firmly believe that it’s part of every good fundraiser’s job to come up with ways to do just that. Especially when you are an environmental nonprofit, and your job is to save the planet. There is simply too little money around to waste a single cent on a campaign that doesn’t have a real, tangible and measurable impact.

Success for service providers

So it is hard for advocacy nonprofits. But what of service providers? On the face of it, measuring the success of what these organisations do must surely be far easier. For example, let’s say you run a helpline, and you’ve just launched a campaign to raise its profile. If the number of calls goes up in the wake of the campaign, all you have to do is divide the increase by the cost of the campaign, and you’ve got a figure to measure your success against, yes?

But hang on, what about the quality of the calls? What if the information was not relevant As soon as you go down this qualitative, rather than quantitative, avenue, you realise pretty soon that measuring the success of a service provider isn’t as simple as you might have thought.

A case study: Epilepsy Action

So how do you measure outcomes in terms of quality of life? To answer that question, I want to talk to you about Epilepsy Action, a fantastic nonprofit that is very close to my heart. Partly because they were my first client in Australia, partly because a very dear and close friend had a terrifying operation to treat his debilitating epilepsy (it worked by the way). And partly because they have a very thorough approach to quality control: they bend over backwards to measure outcomes.

Carol Welsh from Epilepsy Action told me that after each person is helped, e.g. at a camp or a memory workshop, participants complete surveys and mark how relevant and useful parts of the service were. She explained that: “our staff look at the surveys and then feed into the next activity. Also we use our phone room to call about a month later and ask [participants] questions specifically to see how the service is being delivered.“

Carol went on, explaining that at the moment they are “Trying to reach out to people in rural communities to promote services by video.“

Sounds sensible, but it gets better. As I write, Epilepsy Action is doing various marketing initiatives to build up a database of relevant people in welfare and health services and network through networking. But get this: “… we measure staff time on each task and evaluate whether it produces the outcome we are expecting.” Fantastic stuff – they actually measure staff time against marketing activities that are not just fundraising. Now, how many organisations can say they are doing that?

Measuring outcomes – not just output

I am not an expert on epilepsy, and I imagine there are conflicting approaches to value from services but at least Epilepsy Action is measuring its outcomes (not just outputs) clearly. They have a sound platform upon which to plan and improve their future campaigns and service provisions. What’s more, when potential donors ask them exactly what they have achieved for the quality of lives of their beneficiaries, they can give them a direct and demonstrable answer. Which prompts me to ask once again – how many other advocacy and service providing organisations are able to do that?

Reading this article, you are probably a fundraiser. But ask yourself – are you raising money that is having a good value impact? I am not talking about dollars in, dollars out. I am talking about impact.

One final piece of advice: a great structure to use and evaluate yourself against is Givewell’s Impact Analysis. This is not Givewell in Australia (fantastic data gatherers!) – it is Givewell.org in the USA. Check out what constitutes ‘impact’ on their website here.

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Net income is king…usually

Wednesday, September 1st, 2010

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

Cost of fundraising a dangerous measure for public consumption

Explaining cost of fundraising (COF) to the giving public is not only complicated – it is often not a real issue for donors until we nonprofit people make it so!

At a recent meeting with a small nonprofit, I was told that the chief executive officer of a very, very large nonprofit had been on TV talking about his organisation and how the public can support it.

Within his conversation I am told he mentioned that the cost of fundraising and administration at this organisation is incredibly low. The nonprofit is a client of mine; I have seen the figures, and their cost of fundraising (COF) is indeed very low.

However, COF is a really dangerous measure to be talking about in that context. It is really complicated and needs too much explaining. The COF for donor acquisition, for example, is usually more than the funds initially raised; it needs a lot more than a sound bite to explain that to the giving public.

I have written at length about cost of fundraising, including a useful exercise in my white paper ‘Ten Steps to Fundraising in a Recession’ which helps demonstrate why COF is not a real issue for donors until we nonprofit people make it so. As well as not being particularly useful for complexity reasons, it is also unfair and not even a useful internal measure.

Net income is the way to go

I would argue that net income is the single most important measure. It is the only financial measure on impact. Net income is what a nonprofit uses to ‘buy’ services to implement its mission. Other impact measures then kick in, for example, lives saved or improved, land protected or policy implemented. But for us fundraisers, net income is the driver.

Put simply, it is better to raise $500,000 at the cost of $200,000 (40% COF) than $100,000 at the cost of $10,000 (10% COF). You can do more than three times the ‘work’ with the $300,000 net raised in the first example, than the $90,000 in the second. And if a charity is growing, it will be experiencing much higher COF than when it is stable – so higher COF tends to hint towards growth.

While COF agitates me, I am more agitated about making sure we have a focus on the right net income. Like anything in maths, it really isn’t black and white.

Take this mail example. (The same lessons apply for email, phone or other media.)

A charity decides to take a new approach to its Christmas warm appeal. The new approach, B, costs much more to produce than the old style; A. Approach B has a bigger pack and includes telephone calls to top donors.

The charity does a 50/50 split test of the two approaches.

Approach A brings in $150,000 at a cost of $30,000 from 3,000 donors. However, approach B raises $180,000 at a cost of $60,000 from 3,600 donors. The average was about the same, the net was the same. The only differences are that approach A had a COF of 20%, while approach B had a COF of 30% and also received 600 more donations.

Which one won?

As always – it’s the long term that matters

The instinctive reaction, and the one the accountant will go for is A. But approach B is much better, and bodes better for the future. The reason for this comes down to thinking beyond this campaign.
We know that the two biggest variables that indicate whether someone will donate are the number of gifts they made in the past, and how recently they were made. Approach B got 600 people to donate another gift, which means 600 people donated more recently than before the campaign. That is 20% more viable donors for your next autumn or tax appeal.

The message of this agitator is not unusual: think long term. Think beyond the next campaign, balance net, COF, number of donors and even average donation. They all play a part; it isn’t as simple as it seems at first.

I wish that the chief executive officer of the big charity had been concentrating on the impact of his charity’s work, and the number of Australians motivated to give – not the COF. COF is a nearly irrelevant and confusing statistic that doesn’t demonstrate anything about the good that a donation and the donor is doing now and into the future.

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Don’t forget direct mail cash donors

Wednesday, August 18th, 2010

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

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Sweeping changes made to ‘Include a Charity’ initiative to benefit the sector

Thursday, June 17th, 2010

Include a Charity open to whole sector

Include a Charity is about undergo a strategic change in order to transform the landscape of bequest giving in Australia. Launched to the Australian public in 2006, Include a Charity (IAC) was originally funded by some of Australia’s leading charities, however this will now be opened up to the sector as a whole.

The new look IAC will be re-launched in November this year and will mirror that of the successful UK and Ireland model, whereby a large consortium of charities, of all sizes, help fund a social change campaign. This social change model has had great success having seen a 4% increase in the number of people leaving a gift in their Will.

In Australia, the number of people who leave a gift in their will to a charity is currently 8%. One of the goals of the new model is to double this number so that by 2020 the number of people leaving a bequest is 16%. This would equate to an additional $577m of income in today’s terms to the sector.

By being involved with IAC your organisation will be accessible to a whole new audience through a sizeable promotional budget that includes channels such as TV, Press, Solicitors and later Direct Mail activities.

There are not many initiatives that can deliver this kind of benefit to the sector and it can only happen by working together, making your support critical.

If you are interested in learning more please download a brochure here or contact Marcus Blease on 02 9479 7265 or email mblease@tscnsw.org.au

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Your Perfect Donor Communications Plan

Thursday, June 17th, 2010

By Sean Triner. This article is Part one in a two part series

Part I: The Big Picture

Traditional Communications

In the olden days it was easy. A typical donor communications calendar may have seen you send out a quarterly newsletter, a special appeal at Christmas and another at another special time, for example Chinese New Year in Hong Kong and tax time in Australia.

Such letters were relatively easy to get out and your donors were treated as being of one particular type, so everyone could get the same letter. There were few fundraising trained professionals in the industry – most people had ended up in fundraising by accident, or because they wanted to change the world; not by training.

Phone calls to donors were rare – maybe in response to a complaint or for some other unplanned purpose.

A good communications plan should consider many factors including external data, different audiences, brand and tone, resources, and much more.

Pulling together a donor communications plan

Most donor communication plans are pretty simple and revolve around ‘What we did last year.’

More advanced plans may include the line ‘But a bit better.’

Simple is good, but this is too simple. Donor communications are key – if you rely on individual donations they are your lifeblood. What you did last year, is probably what you did the year before and so on. At what point did someone work out what should be done?

In an article, it is hard to suggest what a perfect donor communications plan should be with so many diverse organisations, with different resources and donors but I am going to go out on a limb here and suggest some key aspects for pulling together comms plans for all organisations.

1. Audience

Audience can be split into various groups by channel of acquisition i.e. was this donor recruited by mail, phone, face-to-face or online and type of support i.e. are they a classic donor, regular giver, bequest or events donor.

The modern charity has diverse donors.

The ‘traditional’ donor (female, 55+, middle class suburb etc) still dominates for most, but those who have sensibly invested in face-to-face street and door-to-door recruitment of regular givers have a whole new audience of 30-50 year olds to deal with. Clearly these two groups should not get all of the same communications, all of the time – but they do share enough in common to get some of the same communications some of the time.

The essence of the communications are the same though. Thank the donor, ask them to please help more or keep giving. And deliver stories demonstrating the impact their donation is having.

2. Content

This is not rocket science. We call our approach to fundraising communications ‘The Pareto Way’ which really is another way of saying ‘making sure that we do everything that has been developed, tested and written about by marketing and fundraising experts from David Ogilvy to Mal Warwick’. Of course, we have tested and developed some tweaks and tactics, but the basics still work.

It is amazing what I see arrive in my letterbox and what I observe online from charities. Statistics, facts, ‘we are the largest blah blah’, ‘we have been around since 1982…’, ‘Australia’s leading blah blah’ etc which all the experts say not to do. Every good training course or book will tell you this.

Each and all of your communications should be story driven. Stories are what all marketers use to sell a product be it soap poweder, a new car or an ipod. One advantage we charities have over soap powder is that we have a plethora of stories at hand.

Content should be driven by stories about beneficiaries and enhanced with, ahem, more stories. All the material in a direct mail pack or newsletter, additional pieces (lifts), your response coupon – even reply envelopes should follow a theme and revolve around stories.

3. Tactics.

The old fashioned tactics still tend to work better. For appeals, Johnson boxes (the leader text above the ‘Dear Sean’ bit) still tend to lift response. Letters that look like letters, stories with a beginning, a middle and an end – just like direct mail from years ago tend to work. For newsletters, websites and emails, features linking donor and beneficiary (not pictures of CEOs getting big cheques) is what works best.

The key formula for appeal success is a letter, from one individual to another individual in first person singular that tells a story and makes a clear proposition. For non-ask communications like surveys, the same applies.

I think one reason that first person singular (I not we) makes for better reading is that it implies an acceptance of responsibility. Taking the time to explain the reason for why a gift is needed and what impact it will have, helps establish respect – I don’t expect you to give me money because I say so; I am willing to take the time to explain. This could go some way to explaining why longer copy and more inserts tend to lift response rates (despite donor focus groups leaning more towards ‘short and to the point’.

All the way through, I say ‘tend’. This is because it depends.

It depends on having a great, clear proposition, argument and case study. Sometimes these things are short, sometimes not. Sometimes they need lots of information, sometimes they do not. What is clear is that a good, personal communication linking donor and beneficiary always works better.

5. Media.

Whilst I have mostly spoken about mail examples, some rules apply across the board. Honesty, first person singular, one to one personal communication applies to email, phone and even face-to-face.

Deciding what media to use is important. It is easy to send only email appeals to donors recruited online, yet we see that emailing and mailing them will keep them closer, and get them giving more. Donors who generally respond to mail, should be emailed too. With phone recruited donors, we should generally also use mail and email.
Basically, all forms of communication should be used with careful testing working out the optimum expenditure.

The final aspects when looking at a donor communications plan are timing and the number of communications sent.

There are some things that are a given for example a Christmas appeal tends to work better towards the end of the year. But many things are not as straightforward. When do you send your survey? What emails should go out? When do we talk about bequests? And the big one, how many communications should we send? How many is too many?

Part two in this series will look specifically at these areas in greater depth.

ADMA Forum 2010

Sean Triner along with guest presenters Chris Washington-Sare of Greenpeace, Trudi Mitchell of Cancer Council NSW and Cameron Watson formerly of World Vision will present a pre-forum workshop titled ‘Fundraiser’s Guide to the Ideal Comms Plan: How to Make Direct Marketing Raise More’ at ADMA Forum 2010.
This exclusive workshop is all about pulling together a great communications strategy that takes into account your cause, your resources, your brand and your goals. Using real case studies and evidence Sean will show some counter-intuitive ideas, how to integrate new media, reduce time on newsletters and make donor communications ever more effective.
The workshop will also help you develop the right measures for a good communications plan so you can easily demonstrate your successes to the board.
Learning Outcomes Include:

Leave the session with a sketch of your revised communications plan
Understand budget and HR implications of your plan
Take away a communications checklist and examples of good communications

For more information about ADMA Forum 2010 visit www.admaforum.com/nfp

Posted in News, Pareto Talk, Supporter Relationship Management | No Comments »

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

Friday, June 11th, 2010

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-

Posted in Benchmarking, News, Pareto Fundraising North America, Pareto Talk, Press Release | 1 Comment »

Avoid common data pitfalls

Thursday, April 22nd, 2010

By Tertia Sanderson and Fiona Paterson. This article was first published in Fundraising and Phianthropy

Love it or hate it, donor data is the fuel that keeps your charity running. Raw data can be mined and transformed to provide insights and make any supporter communication compelling and personally relevant. But many charities stumble into common data pitfalls that make targeting the best people harder.

Pitfall #1: throwing away donors

It’s unlikely you have too many active donors, and yet it’s possible you have ‘thrown away’ a proportion of donors who may have been active if you had better understood and managed your donor data.

RTS (Return to Sender) donors are often flagged in a database as ‘Inactive’ or ‘Do Not Mail’. They should be marked as RTS. Source their new address and actively pursue them through other channels such as email and phone.
A donor who rings to complain about a communication received should not be marked as “never speak to me again”. If they have taken the time to ring up they are showing they care about your charity. Use the opportunity to get feedback from the donor – find out what has upset them and what action they would like to be taken. Address this through appropriate coding such as: they are to receive only limited communications and appeals without direct asks; they are not to be contacted by telephone; or they are to be contacted through email only. Don’t just cease communication.
The regular giver whose gift doesn’t go through is often ‘thrown away’. Not many charities have a formal process for following up dishonoured gifts and re-engaging the donor. These donors have not actively cancelled and are your best regular giving prospects; make an effort to recover them.
A large number of discarded donors are those who are automatically flagged as ‘inactive’ or archived because they meet certain criteria, such as ‘has not made a transaction in 24 months’. These may not be your hottest cash appeal targets, but any donor who has a transaction needs to remain in your contactable pool because they are more valuable than a cold prospect.

Ask yourself:
How do we mark a donor whose mail is returned and do we try to recover them?
What do we do when a regular gift is dishonoured?
Are we too quick to mark our donors as non-contactable?

Pitfall #2: limiting basic contact data collection

Don’t assume that one contact channel is enough. Australia post says at least 17% of people move house every year. By limiting your data to a street address, one in six of your records becomes invalid every 12 months.

Broaden your communication channels to more than just direct mail. Ask for and capture mobile numbers and email addresses. Analysis shows a donor who has provided an email address and a mobile phone number is less likely to stop giving and more likely to be responsive to streams of communication other than direct mail.

Ask donors to check and update their contact details at every opportunity – when you mail them, when they call to make a donation. Engaged, committed donors will do it; they want to hear from you in the future.
Information such as source of gift and date of birth is incredibly valuable, but is seldom actively sought or captured. Date of birth can be used as a form of verification, to assist acquisition profiling and as a life stage indicator useful for prospecting bequests.
Knowing what inspired a donor to first give to your cause provides valuable insight and an opportunity to understand the longer-term value of your acquisition activities.

Ask yourself:
Do we actively seek and revalidate contact information from our donors?
Do we use this to inform our understanding of the donor and communications with them?
Do we use the National Change of Address service at least once a year (at least for active donors and return to senders)?

Pitfall#3: Contradictory Codes

One of the most common problems that crops up is the misuse of codes and flags in databases. Codes or flags are often developed as a reaction to something and the context in which this new coding is placed is not considered. How it affects current process, entry protocols and how the code will be used alongside other data can be easily overlooked.

You want your donors IN for as many communication opportunities as possible. A ‘Do Not Contact’ flag might be a quick fix, but consider if this can be filtered by channel or timing so that it’s not ‘Do Not Contact’ ever.
Ensure your codes don’t contradict each other. For example, a donor should not be marked ‘email only’ in one section and ‘mail four times a year’ in another.
Fundraisers fundraise and database managers usually don’t. Help your database manager (and supporter services team) understand what you need and why.

Ask yourself:
Do we have a clear data management strategy?
Does our database manager understand the core functionality of the database and what fundraisers are trying to achieve?

About the writers

Tertia Sanderson is a data analyst who joined Pareto Fundraising in 2008 to use her data skills to improve lives, rather than profit. She brings to Pareto her Bachelor degree in data management, a love and passion for all things data plus 15 years experience in database design and manipulation.

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.

Posted in Data Insights, News, Pareto Talk | No Comments »

To love or not to love

Thursday, March 4th, 2010

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

______________________________________________________________________________________________

* 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

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

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