All seasoned marketers know the importance of securing that second gift as a clear measure of retention. That’s why the second-gift rate and related metrics are such an essential part of Avalon’s quarterly client dashboards. This is the rate of new joins giving a second gift in the first 12 months, reviewed in three-month increments. […]Read More
Avalon’s Vice President & Director of Analytical Services TJ Hillinger recently hosted a virtual roundtable on database conversions—seeking several industry experts’ best advice on how to make this challenging undertaking more efficient and successful.Read More
At Avalon, we strive to stay on top of trends to better understand our clients’ programs and maximize fundraising opportunities. We all know that fundraising for certain nonprofits has been through the roof since the 2016 election (e.g. the ACLU). But it’s clear that the election had an impact across the board.
We recently took a deep dive into some data, and our goal was to better quantify this impact, specific to client type and their current fundraising trajectory. Our pre- and post-election analysis reveals some interesting trends I’d like to share.
We compared the window prior to the elections (July to October) with the period after (November to January) for all our clients, year over year, for the past four years. We removed clients whose data are an anomaly due to specific events unrelated to the elections.
While each organization has its own particular story to tell based on its own goals and decisions, we have outlined some commonalities across the board below.
Unsurprisingly, Avalon’s political advocacy clients saw a clear boost in the timeframes before and after the election in 2016 compared to previous years, with the post-election window being the strongest.
But interestingly, our non-political advocacy clients also saw a boost during the same period.
And, remarkably, looking at two discrete years in our non-political advocacy clients’ fundraising, even those that were not experiencing growth got a slight bump post-election.Read More
We’re back with Part Two of our virtual roundtable discussion, in which we asked experts to weigh in on the complex process of database conversions. In Part One, our experts addressed reasons to undertake a database conversion, top tips to ensure success, and a realistic timeframe for a conversion.
Part Two covers lessons learned the hard way; pitfalls to look out for and avoid during the conversion; and how to ensure your post-conversion transition goes as smoothly as possible.
Meet the experts:
What is typically the biggest unknown/surprise/unexpected finding when it comes to a database conversion?
Steve: Database companies often boast that they can integrate with any tool—but it’s best to confirm and validate this well before the conversion happens. The worst surprise is to find out that your new system doesn’t actually integrate with your other tools. To avoid this, ask for references from other groups who have successfully integrated with the tools your organization uses. Also, tools and functionality referenced during demonstrations of the new database may turn out to be difficult or impossible to implement for your particular program. Make sure your contract includes complete itemization of every deliverable, and that the database company’s team is always available for questions and clarifications.
Also, to ensure the cost of conversion does not exceed plans and expectations, create a five-year cost estimate for all of your vendor options. Have each of your vendors validate your estimates—and integrate these estimates into your contract. This can help prevent cost overruns down the line.
Gina: Conversions are like a box of chocolates—each one is unique and every one comes with a surprise or two. We continue to learn from each conversion and continually strive to improve our implementation process.
Having smart people on the implementation team helps an organization understand what it has been doing well and how it might do things better, and unpack and fully document its new business rules. This makes for a smooth and even fun conversion. Most importantly, during a conversion, the company must be flexible and have a CRM application that can accommodate a variety of unique customization and integration needs.
John: Surprise: Post-conversion clean-up takes longer than you expect! Unknown: The new database impacts functionality in another part of your organization, which impacts your expenses (a good example is if the database is more difficult to use than anticipated, thus increasing gift-processing expenses). Unexpected finding: Customizations to the database were not fully scoped out because there was not enough money to build out the needed functionality. Thoroughly research all items when planning your conversion.
Rose: For me, the biggest surprise is always the tremendous amount of time a database conversion takes and the enormous number of details involved.
Can you share an example of big lesson learned through a conversion, and how to avoid missteps where possible?
John: Avoid customization, if you can, because it is a slippery slope—it is expensive and does not always work the way you expect it to.
Gina: We have learned that it is critical to document the decisions that are being made around business processes as the conversion is happening. It is so important to be able to look back after a conversion—in the short term and over the long term—to understand the business processes and any necessary customizations that have been made to the CRM application to accommodate those processes. If someone from the organization were to leave, these documents are critical in helping a new hire get up to speed on the decisions that were made during the conversion process.
As for avoiding missteps, the most important thing is constant and effective communication, with both the client and the company clearly defining and mutually agreeing upon the roles and responsibilities that each team member will have during the implementation.
Rose: The biggest lesson my team and I learned was that our timeline was unrealistic.
Steve: To me, the biggest lesson learned is that if ownership in the project—the good and challenging aspects alike—is not shared, conflict can arise as issues crop up, leaving your internal conversion team to complete the work in isolation. Most important to a successful conversion is true transparency and open communication. Engage all stakeholders at regular intervals to ensure expectations are in line with reality. When expectations fall out of step with current events, disappointments can follow, which can lead to a lack of confidence in the tool before the new system is even brought on line.Read More
“What we really need is more major donors.”
That’s where the conversation usually starts. Organizations with bold agendas and aggressive plans to change the world have to figure out how to fund those aspirations. They turn to their Philanthropy officers. “Create stretch goals! Expand your portfolios! Get Mrs. Bigbux to throw a party and invite her friends!”
Off they go, in search of new donors, building relationships, working their Moves Management Magic, meanwhile “protecting” those prospects that they’ll get to next month.
But the path that most major donors take to significant giving doesn’t usually begin where we might think it does. For many Avalon clients, most major donors’ philanthropic journeys start when they make a relatively modest contribution to a nonprofit whose mission moves them.
For one Avalon client, 71% of the major gift revenue in one year came from donors whose involvement began in the low-dollar program with a gift of $100 or less. And this example isn’t an outlier—our Master File Analysis research shows that creating an intentional, integrated direct marketing strategy for targeted low-dollar donors yields higher levels of giving.
The key is to identify, engage and cultivate a feeder track of people with the capacity to give more, who respond to educational, personalized campaigns with a compelling case for support, and are moved to systematically upgrade their giving.
Whose donor is it?
In our experience, there can be a somewhat siloed, territorial attitude within organizations about major donor solicitation and cultivation, so a good starting point is a discussion among fundraising colleagues about mutual goals for advancement. Often, Major Gift officers simply don’t have the time to develop relationships with every potential donor. A combination of direct marketing and personal touch points can serve to advance donor relationships by leveraging the strengths of each tactic.
Testing is key to reassure everyone that you’ve found the best strategy for your organization. Direct Marketing staff partnering with their Philanthropy or Development teams can create a series of integrated touch points—in person, on the phone, in the mail, online—to keep the donor engaged and informed, cultivate the relationship and move the donor along the continuum of giving. The Philanthropy experts continue to invest their time and talents in those who have already arrived at the major donor level while the Direct Marketing team ensures that they will have a ready pool of prospects to turn to when it’s time to build their portfolios or send out those party invitations.Read More
In our latest virtual round table discussion, we asked experts to weigh in on database conversions…a process that, like renovating a house, can cost more time, money, and heartache than you anticipate—if not planned correctly. Our panel described key areas to consider, potential challenges to anticipate, and how to make the process run more smoothly.
We received so much helpful feedback from the panel that we are dividing this feature into two parts. In this month’s post, we discuss reasons to undertake a database conversion; top tips to ensure success, and a realistic timeframe for conversion.
Meet the experts:
How do you recognize that it’s time to undertake a database conversion?
Steve: If your current system keeps you from executing your strongest fundraising program, it’s time to move to a new system. For example, if your organization is expanding into new fundraising channels, but your database system prevents you from maximizing revenue and donor engagement, it’s time to convert.
Sometimes the problem lies with users who have not been trained properly. If you have a system that can do what you require, but fundraisers do not understand how to do it, invest in training, not conversion. Also, consider how your current vendor may be able to meet new user demands before you convert. It may be more efficient to make the most of your existing system, instead of converting to a new one.
Gina: Necessity is the best and most compelling reason to convert a database—so if your current system is being sunsetted (more and more common these days!) or has reached its capacity to handle your data needs, then it’s time to convert. If your system is unable to easily integrate with the communications channels and systems you rely on to achieve your business goals and mission effectively, you must move on.
John: A good reason to convert is if you need a system with greater functionality specifically designed for direct response fundraising, with online CRM and an email platform integrated into the database.
Rose: When your current database system is prohibiting your organization from meeting its cash flow and/or business processes, you know it’s time to move on. But don’t move to a new system just for the shiny new stuff! You’ll regret it.
So you’ve decided to make the move—what comes next?
All four experts agreed that the significance of database conversion cannot be overstated.
Rose: Identify all of the key players/stakeholders who should be involved in the process—and get their commitment to see the project through to the end. Because of the time involved, staff can sometimes change midstream, so use both a managing company and an on-staff project manager to oversee the conversion.
Gina: Make sure that your organization’s leadership understands the vision behind choosing a new database system, and that they fully back the project and the time and effort that will need to be allocated to make the conversion a successful one. Your leadership needs to share that vision with the whole user community to ensure a smooth transition and enthusiastic user adoption. And make sure you prioritize the areas that drive the majority of your revenue now and will enable your future growth with a new database system.
Steve: Nail down your reasons for moving the database and create a prioritized list of must-haves to help choose a vendor. A mistake nonprofits often make in the database conversion process is to underestimate the investment of time and resources it requires. So build a project plan, including realistic estimates of human and financial resources required and contingency budgets for unexpected complications. Because they will happen. Without support, existing staff cannot oversee a conversion while maintaining day-to-day duties. Success is more likely if you make appropriate investments in the conversion. And that can only happen with everyone on board with the project.
John: When you’re ready to start looking for a new vendor, make sure you do a comprehensive needs assessment. Because identifying a database and platform that can most closely meet your long-term business needs will prevent the angst of buyer/user remorse. This is where you need to be a pragmatist—go in with realistic expectations about functionality, cost, and conversion.
In your experience, what is a realistic time frame for a database conversion?
Our experts—all veterans of database conversions—have differing experience on conversion time frames. But they all agree on one thing: It is important to have realistic expectations and to have a well-documented process to ensure your goals are met.
Gina: A conversion can be done in six months, but only with a solid and well-documented implementation plan to ensure that vendor and client have a laser focus on the conversion, so they can meet all of the critical milestones that are part of a successful conversion. Strong project managers with great communications skills are also a vital component to an on-time delivery. And as are well-set expectations. I feel strongly that the longer a conversion lasts, the more likelihood of unnecessary scope creep. An organization’s staff will lose focus, energy, and enthusiasm for the project (and potentially even quit).
Steve: A balance needs to be struck between finding the perfect solution and protracting the timeline of a conversion to the point that it becomes a pain point for your organization. Be thorough and careful with your decisions, but avoid procrastinating because decisions are difficult or because you’re not able to build 100% consensus.
John: Listen to the database vendor—they should be very detailed when scoping out the project and delivering a realistic timeline. Don’t try to cut the timeline short, or you will reap what you sow.
Rose: If you get the right combination of folks, my guesstimate would be that a conversion takes a minimum of two years—that’s from the moment you make the decision to convert, to the time when the new system is installed and implemented. After implementation, I’d say it takes another year for change management.
Steve: Anticipate delays and plan for them. For example, staff departures can create significant delays and increases in cost. But there’s a shelf life on patience for a conversion. The longer the process takes, the likelier stakeholders will lose confidence in the outcome and tire of waiting. A steady focus and dedication to completing the project in a reasonable amount of time will result in a better outcome.Read More
For the sixth piece in our Dispelling Myths series, we’ll tackle the directive often heard from board members, senior leadership, existing and new staff — all of whom are legitimately seeking ways to involve younger donors: “We need to target millennials.”
While there are occasionally exceptions to the rule, take a look at your file’s data and you’ll most likely see this is the case: younger donors (under 40) just don’t respond well to direct marketing. Typically, they need to “grow” into being a donor — and that usually happens when they have disposable income a few years (or decades!) from now.
Avalon’s analytics allow us to dig deeply into the ROI of various segments of our clients’ donor files. Time and again, we see that the long-term value of millennials does not compare to that of older donors — because the upfront cost to engage them is too high to be offset by future revenue.
We recommend running your own numbers to see if you too can dispel this myth. Check your appeal and acquisition performance by age, acquisition universe by age, and file composition by age.
We find that it is most effective to target direct-marketing-responsive donors (regardless of age) and fully optimize programs to our most valuable donors (acquisition, sustainers, planned giving). Beyond that, you should absolutely work to build relationships with young activists — moving them along a continuum of engagement — but know that it might not lead to a financial return anytime soon.
Another reason not to target millennials for direct marketing fundraising is that younger donors under 40 do not typically perform well. We’ve seen this clearly by using Avalon’s state-of-the-art suite of analytical tools, including age overlays, to analyze the productivity of various donor segments in appeals and acquisition—for our clients, this exercise illustrates the tremendous impact of older donors, and how younger donors fall short.Read More
Also known as “Over-contacting is damaging our donor relationships,” this myth is a long-standing one … but as a frequent concern of professionals across myriad nonprofit departments, it’s an important question to review.
As with most direct marketing myths, this one can largely be dispelled through analytics. Because while all organizations are different and have varying results, we’ve found that reducing contact based on gut reactions instead of data can lead to lost revenue and lower donor retention.
Instead, each organization has to find its own perfect number of touch points, which should be determined through testing—and analyzing income per donor by contact. But this also entails making sure fundraisers for the various donor levels are comfortable with the cadence and frequency of contact, because some levels may perform better with more or less contact than others.
And we can’t deny the anecdotal instances of donors who do express anger about how often they are contacted. Keeping these donors in the fold is a critical part of donor stewardship, and personalizing their contact volume—no matter what the data says—is obviously the way to go.
Additionally, actual contact volume may not be the same as perceived contact volume. For example, some in your organization may not realize that a heavy mail schedule doesn’t mean that every donor receives every mailing. Often, due to sophisticated segmentation or modeling, the number of actual contacts is not as high as the perceived total.
To recap: Testing is vital to establishing a data-driven strategy for how often you should mail. Remember that to determine the appropriate number of touch points for your organization, you must test across an equal universe of donors. This is a complex and time-consuming task, and the risks of revenue loss should be fully understood. But it’s worth doing to pinpoint the right mailing cadence for your organization.Read More
Avalon has been out in force at industry conferences this summer, presenting and attending sessions at the New York Nonprofit Conference and Bridge Conference.
Based on which sessions were overflowing with participants, it seems like many nonprofits are eager for more information on analytics, sustainer conversion, and perfecting mid-level bridge programs to systematically upgrade donors. We particularly loved the sessions that focused on the donor experience—cultivation strategies, storytelling, and how to best connect with donors.
We’ve compiled some of our impressions and takeaways below:
Sharing more data. Of course, we would have liked to have seen more actual data shared in many of the presentations. As always, there were so many terrific ideas presented, but in our industry, those ideas need to be backed up with how they have been tested and proven to improve results. We hope that more hard data—like long-term value, net revenue, and ROI—are shared at upcoming conferences to support all the great ideas we heard about.
Data visualization. We found that the most effective presentations leveraged data visualization and trend analysis—this separated the good presentations from the great ones.
Co-ops. Avalon has been leveraging co-op databases and modeling for our clients for many years—and they’re rapidly growing in popularity as more and more nonprofits develop ways to effectively expand their donor files.
The donor’s perspective. David Rubenstein’s Bridge keynote so perfectly captured his subject, Inside the Donor’s Mind—with excellent points for fundraisers, both major gifts officers and direct marketers alike: Do your homework before making the ask; be patient and have a long-term horizon; be confident, unapologetic, and driven by your cause; and…don’t forget to say thank you!
Donor stewardship. Building on Rubenstein’s points, we know how important it is to form a stronger bond with donors through specialized communications and personal contact. Many conference sessions covered those meaningful touches—personal stories, handwritten notes in mailings, thank you phone calls, specialized email updates—that can make all the difference in moving donors up the giving ladder.
Analytics. At Bridge, Amnesty International USA chronicled its substantial drop in revenue and donors over five years. Cut to the chase: They combined focus group research and analytics to correct course, echoing Avalon’s commitment to deep, forensic analytics and actually listening to your donors to help understand the next steps to creating positive results.Read More