Earlier this month, I attended this year’s NTEN Nonprofit Technology Conference with my colleagues Amy Padre and TJ Hillinger. We fanned out to cover as many presentations as we could, and pooled our notes for some interesting takeaways:
1. A sneak peek of the M+R eNonprofit Benchmarks showed a 13% open rate, a 0.18% unsubscribe rate, a 2% return rate on advocacy, and a 0.07% online fundraising response rate. This session’s presenters also mentioned that for many organizations email revenue is flat, but revenue from email lists is growing. They posited that this could be due to people reading their emails on mobile, but giving via web/generic URL or via search. This is an interesting thought and worth checking out for your organization. The full benchmark study will be released April 9.
2. Nonprofits are testing Facebook custom audiences and lookalike models, as well as email link cookie-based retargeting. These are interesting new ways to leverage ads to complement other marketing efforts and measure their impact on online and direct mail giving.
3. Testing session: bottom line – test wisely. A presenter/former ACS staffer said that even with a $20 million fundraising budget (and likely the quantities and resources that go along with such a large budget), she would only test two variables a year. She would choose two tests at the beginning of the year that they were curious about, test one repeatedly for the first half of the year, and test the other throughout the second half of the year.
4. Regarding holiday giving, it’s important for organizations to distinguish themselves from the crowd. But decide what the core sentiment of the holiday is and how it relates to your mission, instead of the “Hey, it’s a holiday, so give us money!” approach. You can consult a Cause Awareness Day Calendar here – so you can give your donors a more compelling reason to give on certain days.
I attended the DMFA’s Successful Membership Cultivation and Stewardship Strategies Seminar last week and came away with a lot of good ideas and reminders for keeping donors happy. The overall message was the importance of donor stewardship – quickly responding to donors’ questions or concerns and ensuring that your organization makes quality customer service a priority instead of an afterthought.
It’s a question of training your staff to respond promptly, thoughtfully, and helpfully to all queries – by phone, email, or snail mail. Because unhappy donors are unlikely to renew their support.
Dana Campbell, Senior Member Services Manager at the Human Rights Campaign spoke about HRC’s member services goals when handling donor issues. In short, her staff finds that quick response times and thorough, quality answers have helped HRC keep and renew member support. Here are the basics that work for HRC:
Vice President for Marketing Jenn Vanderveld of the Marine Corps Heritage Foundation had some interesting insights on donor upgrading and making sure donors get the personal touch.
She says it’s critical that, as much as possible, you know and understand your donors. In her case, everyone who works at the National Museum of the Marine Corps is considered a development officer, since anyone who comes into contact with the Museum may be, or could become, a donor.
This is a crucial mindset for organizations with physical locations that donors visit – staff must be carefully trained to answer questions and help as necessary. Jenn gave the example that since most donors and many visitors to the Marine Corps Museum are retired or current Marines, it is imperative that the staff understand rank and Marine Corps history. So whenever possible, Jenn’s staff welcomes their donors to the Museum in person. Also:
We have arrived at Part II of our Donor Acquisition blog series.
So we’re all on the donor retention bandwagon, right? Treat your donors well; use their personal information to show that you know what interests them; thank them promptly and frequently; describe the impactful results of their support, etc.
But what about the acquisition variable in the retention equation?
While the above techniques are important, they all happen after the donor comes in the door – but retention potential comes into play long before that moment. And if donors don’t join your organization for the right reasons – namely, passion about your mission and a desire to make a real difference – then no amount of engagement and retention activities will keep them on board.
And here’s why: we often talk about "dating" (educating, cultivating) our donor prospects before asking them to "marry" us (donate) – but when we're “marrying” incompatible people, it's no wonder our relationship often ends in divorce!
So as I see it, the retention discussion needs to include the answers to these critical questions:
Where is the focus on first gift? Avalon’s analysis has shown a clear break in donor value at $25. Start with a first gift below $25, and the donor value doesn't change much over the lifetime of the donor. Start with a first gift above $25 and the donor value takes off – resulting in a stronger, more productive relationship with that donor. Bottom line: yes, you'll always get a stronger response rate when you ask for $10 instead of $25 – but at what price?
Where is the focus on message and package ROI? Have you been bringing in donors with a single issue that’s rarely addressed in your ongoing mission work? Then don't expect those donors to stick around. Trying to acquire donors with just a one-paragraph case for support? Good luck. Donors need to know what your organization does and how they can help make the world a better place by supporting it – you cannot possibly say that convincingly in four sentences. Giving away lots of premiums? Who wants to be in a long-term relationship where someone only stays if the gifts are good enough? Renewal strategy must be a part of every acquisition messaging discussion.
Where is the talk of list ROI? Some lists have incredible up-front results, but then those donors never give again. Other lists might have a lower response, but the donors acquired are engaged from Day One and return the investment in less than a year. A good acquisition mail plan balances solid up-front returns with even stronger list ROI. Don't be afraid to pay a little more for a donor who will double his or her giving in a year – instead of throwing money at donors who are waiting around for the next big discount or premium offer.
But wait, there’s more:
Blackbaud’s annual report – the 2013 Charitable Giving Index – is out with some interesting facts and figures.
This comprehensive report includes overall giving data from 4,129 nonprofit organizations representing $12.5 billion in total fundraising in 2013. It also reports on online giving data from 3,359 nonprofits representing $1.7 billion in online fundraising in 2013. This year’s report features the addition of overall charitable giving data from 985 organizations and online giving data from 778 organizations.
Here are some highlights:
DMAW’s annual meeting included a timely and important discussion of charity evaluators, impact strategy and that controversial measure of nonprofit effectiveness—the overhead ratio. The panel, “Charity Watchdogs, Donor Perceptions and the Overhead Myth” featured an impressive lineup, including:
Three conclusions stood out to and, frankly, inspired me that evening: an alignment of interests among the parties represented, a call for strategic responsibility, and a related call for better and braver messaging.
Alignment of Interests
Contrary to popular belief, charity evaluators, nonprofits and impact prophets don’t need to duke it out. While nuanced arguments remain, the big players in this debate share some important commitments. Most importantly, they are committed to the work that nonprofits do—maximizing benefits to their constituents and local communities.
Each perspective is exactly that—a perspective on how nonprofits can best go about their work. The so-called “watchdogs” are evaluating nonprofits in order to safeguard the public trust and donors’ commitment to philanthropy writ large. Nonprofits are doing the work they do best—addressing the needs of their constituents and executing their missions. And those who prioritize impact are urging nonprofits to think bigger and do more.
They offer different angles on a shared concern—strengthening and scaling the missions of nonprofits around the world. A hostile or oppositional posture does nothing to further that purpose. To that end, Dan Pallotta rightly suggests that we stop using the word “watchdog,” favoring instead a collaborative framework.
Smart nonprofit leaders understand the root causes of an organization’s overhead, as well as the high-altitude decisions that have led there. They also understand the decisions that can either change that result or maintain it. And they own the responsibility to make those decisions purposefully on behalf of their nonprofits’ missions and stakeholders.
Steven Nardizzi offers Wounded Warrior Project as a compelling case for choosing one’s overhead ratio. For example, Wounded Warrior does not accept government funds, a commitment that increases the nonprofit’s overhead ratio, yet gives it a stronger position when advocating for injured service members on the Hill. They have likewise refused sponsorship from companies selling alcohol, again choosing to accept a higher overhead rate on behalf of Wounded Warrior’s constituents, who suffer from higher than average rates of substance abuse. This example teaches us that overhead ratios aren’t a circumstance happening to nonprofits—certainly not the strategic ones. Like Nardizzi, nonprofit leaders should put their strategy first and stop managing to rigid overhead thresholds.
The thresholds are counterproductive when they cause nonprofits to underreport costs or spend inadequately. They generate bad decisions that result in withering donor files and stunted potential. We agree with Dan Pallotta that, in order to grow, nonprofits must increase their investment dramatically—and we agree that most are not investing sufficiently. Nonprofit leaders are too often afraid to authorize the very growth strategies that will enable them to do more for their constituents. Stanford Social Innovation Review has called this the “Nonprofit Starvation Cycle.”
The tough reality here is that nonprofit leaders must get comfortable discussing these matters. They have a responsibility to morph stakeholders’ concern for overhead ratios into more substantive conversations about an organization’s strategic mission. Peter Kramer recently made a complementary case for candidness in The Chronicle, addressing the need for complete and specific financial discussions between nonprofit leaders and funders.
Last week, Andrew Watt urged the DMAW audience to “change the tide” on this discourse, reprimanding us all for failing to communicate what we do and why. This is a tough, but vital, call to action. Nonprofits need institutional communications strategies and marketing strategies, not just fundraising strategies—and they should be prepared to invest there too.
Fundraising professionals who get this—both within nonprofits and in counsel to them—should lead the charge to clarify message across departments and throughout hierarchies. We must advocate for our nonprofits to invest as required. And we must coach our colleagues through this process. Why us? Because we are experts at messaging—it is the cornerstone of our impact as fundraisers.
The Integrated Marketing Advisory Board (IMAB) just held its first annual The IMAB Virtual Marketing Conference for Nonprofits – a one-day, conference call conference with seven sessions and as IMAB put it, “A wealth of insights for nonprofits.”
The Conference was a huge success and IMAB has received terrific feedback from participants. So did you miss part or all of this inaugural Conference? Don’t worry – we’ll get you caught up. Click here for a full wrap-up (by IMAB guest bloggers) or view the session recordings at your convenience and share them with your colleagues.
This just in! Avalon Analytics'® most recent round of updates from our 4th quarter VitalStatsTM Dashboard reports are up and ready to use. So what’s a dashboard anyway, and how can it help your organization?
Simply put, a dashboard is a user interface that organizes and presents information in a way that’s easy to read. Our VitalStatsTM Dashboard is a Key Performance Indicator (KPI) Dashboard that tracks important metrics on the health of your file on a rolling 12-month basis, and with a four-year comparison.
When you need critical information on trends – like first-year retention, income per member, rolling 12-month donor counts, and top-level revenue comparisons – Avalon’s KPI Dashboard delivers quarterly information in an easy-to-digest format. With the Dashboard, you can spend your time analyzing and acting on your data, instead of trying to figure out how to access the KPIs you need.
Interested in seeing what our Dashboard can do for you? Please read more on our website and talk with your Avalon team for more details.
Now that we’ve got some perspective on nonprofits’ 2013 year-end online strategies, here are a few trends I noticed:
• Matching gift offers still rule the day – providing a compelling reason to give NOW.
• As usual, everyone seemed to be sending multiple emails on 12/31, but this year they were more targeted (i.e., re-send only to openers or those who clicked through).
• Giving Tuesday has become more of a deliberate marketing strategy. Overall, more revenue was raised this Giving Tuesday than last year, but organizations that incorporated it into their year-end strategies and case for support had more success than nonprofits that asked you to give just because it was Giving Tuesday. It was like 12/31 with all the email that was flying around – some organizations sent two or three emails that day!
• Year-end emails featured more attention-grabbing, personal stories.
• Groups used infographics to show impact, but also continued to use the “postcard” format in later efforts.
• Recycling is always in – some groups reused their same campaign art and theme from previous year-end campaigns.
• I saw a rise in the use of video – for New Year’s messages, especially.
• Nonprofits are adopting simpler, more mobile-friendly designs, particularly in later efforts.
• Was it just me, or were there many more political end-of-quarter emails than usual for a non-election year?
• Most Avalon clients’ campaigns raised more than last year, with average gifts hitting budget, and response rates lagging slightly.
As we begin the new year, Avalon is encouraging our clients to share in some simple resolutions for nonprofits that we think you can actually keep. It’s all about a fresh start and forward thinking:
1. Trim the fat. Are inactive email subscribers weighing you down? Clean up your file by merging duplicates, attempting to re-engage subscribers and selectively suppressing unproductive segments to target your core list more effectively. You may be surprised to see the true performance metrics of your email subscriber list after dropping the dead wood.
2. Learn something new by digging into your data. Identify those donors who are most likely to give right now by finally developing that regression model to help predict which deep lapsed donors will re-engage.
3. Keep in better touch with friends. Communicate more meaningfully with your donors and supporters – implement low-cost cultivation ideas like email status updates and newsletters. Share stories about your work and how donor support impacts it. Call your donors just to say thank you. Systematically find ways to engage your supporters to make them feel more connected to your organization.
4. Save more money. Plan ahead by testing some tried-and-true strategies: try testing four-color versus one color; reduce the personalization and resulting matching costs by testing a window carrier instead of a closed-face envelope; design appeals and acquisition packages at the same time and take advantage of gang-printing cost savings; and research how to save money on postage costs.
5. Get organized and plan ahead. Take the time now to determine the health of your file, and organize your goals and priorities around it. Compile the reams of past performance data into useable benchmarks and “metrics for success” – how can past results inform future strategies?
6. Give back. Avalon gives its employees one work day per quarter to volunteer – consider how you can give back to your community with new initiatives like this simple donation of time.
Ready for 2014? Mike Haskell at SourceLink.com surveyed 10 professionals for their takes on where marketing will go in 2014 – he’ll devote a blog post to each in the coming weeks. For a preview, visit SourceLink, but in the meantime, below are some highlights we think are relevant to the nonprofit fundraising market: