Category Archives: donor retention

Predictive Analytics: a nice overview infographic

How nonprofits use analytics for fundraising.  An infographic on Twitpic
Thanks to the fine folks at Bentz Whaley Flessner (@BFW_Social) for this great infographic. Yay Donorcast!

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Really. Donors DO care about impact. If we tell them the impact is theirs to make.

“So what’s to be done? The good news is that I think ultimately increasing donors is a shitty reason to care about impact metrics.  To the extent that there can be a culture shift to focus on impact among foundations and “professionalized” change makers, great. But I think the real culture shift is to get nonprofit leaders to recognize the intense responsibility they have for constantly improving impact.”  So says Nathaniel Whittemore in a post on change.org.  He’s responding to study results that show that donors don’t necessarily do due diligence when deciding to give, that “[m]ost people give because they feel a longing to be a part of something bigger than themselves.”

I gotta say, the author’s use ‘donors’ to represent current, past and prospective donors made this post a tough read.  This distinction is not a pedantic one, and it changes the effectiveness of his message. The story a nonprofit would tell to any of them will vary constantly, and it should vary as long as segmenting is possible.  Because the issue here is NOT if donors care — the issue is if donors care enough to give again.

In a normal fundraising year, the story told to past and current donors deserves more time, money, resources, love than the story one would tell to prospective donors.  The donors’ message would lead them to believe that THEY themselves made the service impact, that the organization was just the tool used. These donors are more likely to allow for some use gifts for non-service functions like salaries and office space if they know the people who run their charity.  Nonprofits do a pretty crap job of making the case for operational expenses in general, and measurement groups who apply arbitrary percentages to define a respectable maximum allowable operational expense for all orgs don’t help, but a lot of donors are pretty pragmatic about these expenses.  Sustaining this pragmatism by demonstrating the success of impact is a path to giving success.  And a retained donor and a retained dollar is a critical projection method for future gift revenue streams.  In a 2009 study across all 26 segments of the US nonprofit organization types as determined by a consortium of trade groups (AFP, CASE, Urban Institute, and others …), researchers found that, for every $6 an organization raised in 2009, more than $6 was lost due to donor attrition. Ack!

So, acquiring donors by means of friendships and relationships is in no way new — I ask the same folks to donate to my son’s charity walk every year, and they do because my passion demonstrates that I understand the impact of giving.  I retain these donors.  None of these donors ask if the charity meets its mission because they think I believe it does.  I wouldn’t even mind if one would be a cynical pragmatist and ask why give to this organization, right now, because I have a passionate case to make in response.  Network for Good and sixdegree.org’s research in this phenomenon describes me as a “superactivist,” a trustworthy case-maker.

Does this the superactivist system work in a cataclysmic charity environment like post-Haiti or the Michael Vick cruelty story?  The typical superactivist model does not seem to be as important, and giving because of a network matters, but not to the same degree. And in this model, acquisition is easier and often faster — but often the technological limitations (and possibly corporate net neutrality villainousness) of giving mechanisms reduces retention options.  It’s hard for a charity to collect donor data from a text gift due to lack of shared data, for example.  To text ‘Haiti’ was perceived by the public to be a gift to a critical need via a trusted delivery method portrayed in the media as well as by friends.  Did the majority of those who sent that text trust that it would all be used for Haiti, and by a reputable organization? Did they know that their phone provider could charge a fee, that the phone company would not likely share their address info with that organization, or that they wouldn’t get a ping-back thanks or even a message other than the charge total on their bill?  I found it hard to discern the answers to these questions in the weeks that followed the hurricane.  In an informal poll in the week following the hurricane, 100% of the 45 people I asked who did text ‘Haiti’ were not sure if they would text ‘Haiti’ again in a month.  Most were not sure who got their gift!

Donor retention in religious organizations is a fascinating story.  Why do Catholics give to the Church when the Church’s use of funds has been so widely portrayed as questionable? A family member told me that she continues to give because, although there has been abuse and error, the overriding sense that the Church is performing a greater good overall is a strong case for support. And she gets that message every week, without fail.  The Church is a conduit to actually achieving the work, in some ways in spite of itself.  In this way, donors do care about the impact, enough to overlook conflicts in mission and performance.

The pitfalls of mindless acquisition are many, especially when the acquisition is made to appease the potential donor’s pet interest without a full understanding of the implicit costs of a service change or re-focus.  I once asked a prospective donor for a 7-figure gift, and he agreed to make it as long as it served to create a new professorship in a field that was not in line with the university’s mission.  It was so tempting to make that gift (7-figures!), to find a professor to do that job!  But program service would have failed in the long run – the professor would have been insufficiently supported in the pedagogical plan of his department, and if he left after a program was built around him, the students were shafted.  I like to think of that donor, and one who would give to create a scholarship for what amounted to an imaginary student with impossible award criteria, as the Consummate Objection Statement Makers.  They will give only if the mission is sure to fail!

High performance in service and in fundraising is critically dependent on donor retention, on those who demonstrated that they have bought in to the operational success only as much as is needed as long as the service goals are reached.  Retained donors will continue to feed the revenue stream long-term so the mission is met.  New donors are only retained if they self-assess or assess a trusted casemaker’s claim that it will, and are assured that they made it happen.

I want my two dollars!*

My friend Jonathan put this question up for discussion: “As a ‘development’ ploy, a charity sends a two dollar check, asking that the recipient not cash it and donate instead. Cash it or not?” 

One friend said, “I cash it and donate double.” 

Another said, “Stupid fundraising method. If I am the charity, I 1099 the people who cash the checks.”  

Yet another wrote, “I think that the fact that a charity is using any of their assets to send out checks to anyone other than the stated benefactor of the charity, calls into question their management practices and their ability to responsibly manage donated funds. Think twice before donating to them; find another charity to donate to & I wouldn’t cash the check.” 

My first answer?   I said cash it, keep the money, and make the gift that the direct mail piece was too silly to ask for outright. Send a note with the gift to comment on the concern he felt about this appeal type and ask that they exclude him from this type of scheme in the future.  All fundraising techniques work for somebody sometime, and my guess is that Jonathan had been micro-segmented based on prior giving or some other variable. (Or maybe they thought he’s a little old lady with church-based guilt issues. If he was a knitter or crochet-er or quilter, maybe the charity bought a stitch craft magazine mailing list, or maybe it’s just a big ol’ zip code drop…). 

The charity’s appeal might work.  The yield for investment might actually be pretty good, and they may end up putting more money into their programming to benefit their mission.  However, I doubt it is a well-thought-out endeavor since Jonathan received and questioned it. My suggestion that Jonathan give is based on a presumption that he cares about the mission of that particular charity, not because the solicitation warranted a response. 

I have never recommended this appeal technique.  My understanding of  the logic behind this type of appeal is that the check amount (or a $1.00 bill — I’ve received that appeal before) is of a size  that the donor will write a bigger check back — $2 barely pays for postage and printing from the charity and the effort of cutting a check and postage from the donor.  Regrettably, this sets the scale of the ask too low too.  But my main problem with this appeal is not that it doesn’t work — it does — or that the gift size is likely to be quite small, but guilt and trick giving is no way to build a relationship with a donor. For every $6 raised in a given year, non-profits typically retain only $5 the following year due to donor attrition.  Why create extra tension for the donor about deciding to give if there is likely already a problem with keeping donors engaged? Why lead the donor to wonder at all about the motive of the solicitation?

Regarding the comment about management practices and the charity’s ability to responsibly manage donated funds,  I am generally critical of the arbitrary measurement of 10-20% of budget maximum as an indicator of successful nonprofit fiscal management. Although it doesn’t happen nearly as often as it should, a critical look at a 990 is a better way to gauge the charity’s fiscal health against one’s own values. Tell a for-profit company that, in any given year, they shouldn’t invest more in sales if it’s warranted, and they’d likely consider the request to be uninformed and insulting. 

* quote from the 1985 movie “Better Off Dead,” one of my least favorite movies of all time and one with seemingly inexplicable cult appeal.

The Summer of Social Good, a thoughtful and thorough response, and my consideration

First I read:  http://philanthropy.com/news/prospecting/8739/an-expert-on-social-media-seeks-to-raise-money-for-charities

Then I clicked: http://summerofsocialgood.com/

And then I read: http://www.queerideas.co.uk/my_weblog/2009/06/whats-wrong-with-the-mashables-summer-of-social-good.html

I appreciate how carefully queerideas qualified his constructive criticism of this particular summer effort — I find the community of nonprofit tech-friendlies to be pretty kind-hearted and willing to engage in discourse instead of argument (hence Adam Hirsch’s nice reply to the post).

Those generous and patient readers of my blog know that I hold a truth to be self-evident:I think the two scariest people in the world are the 24-year-old social networking expert who doesn’t see the value in ‘old-skool’ fundraising efforts because of their lack of immediacy and efficiency, and the 57-year-old database administrator who doesn’t want to learn about social networking apps, let alone understand the ROI structures evolving around their use.

My dream, realized at neither traditional fundraising association conferences nor nonprofit technology conferences, is that these two groups talk to each other differently. Very few of the individuals I met at NTEN this spring have actually walked into someone’s home and asked for a gift, face to face. Very few of the individuals I met at AFP are integrating social media appeals in their solicitation arsenals (although there are bloggers and tweeters in the mix).

So, my thought about the Summer of Social Good, Twestival, Tweetsgiving, and other attempts at this on-line giving effort, is that they are necessary experiments. It appears to be the case that the donors likely know/respect the sponsoring individual(s)/entities and don’t really need to share the passion for the causes the espoused — they care that the individual/entity meets their goal. Quite frankly, the giving is terrific and seemingly in scale to the needs as represented, but these are not earth-shattering donation totals. 

I’m throwing my hat in with queerideas’ suggestions for improvement, which are so well-articulated that it’s really worth going directly to his post for his phrase-ology. 

I would add an additional suggestion: document the hell out of these efforts, because the scale of giving is not going to turn the heads of the ‘old-skool’ major gift and annual fund operators. Great reporting on ROI is increasingly critical for fundraising, not just for click-through.  Getting old-skoolers on board with investment in message-sharing and communication market saturation is one thing, but showing that the money is coming in larger amounts from the same returning donors is far more interesting than one-off small-gift donor acquisitions that cannot demonstrate ever-increasing income yield.  Look at measurement in this way:  how many donors this time vs. last time you made this appeal; how many donors returned and how many were first-time donors; how many returning donors gave less, the same or more than last time;  did the overall dollar totals decrease, stay the same or increase this time vs. last time; if designated uses were identified, did the percentages designated for each use shift; are the stratified gift levels showing increases at the higher dollar amounts, and are the lower levels sustained;… I gots a big list of fundraising effectiveness measures one could apply if one does not have anything else to do too.

So give Mashable love for the effort, and give queerideas an open-hearted listen, and accept my apology for my multipixel-cents .  It’s energizing to see movement and efforts continue and grow in the fundraising side of social media.

I got a call!

I got a call fundraising call yesterday.  Because I am a freak, this was an exciting moment for me, to chance to listen to someone solicit a gift from me!  How is the script constructed?  What are the rapport-building points and the objection statement responses?  What  primary ask amount did they establish, and how do they work a sliding scale?  What a buzz — Wheeeee!

The young woman asked for me by my maiden name, then said that she wanted the other adult in the home. My husband’s name is more commonly given to females in the US, so the caller said, ‘oh, she’s a man?’

I stopped the caller and said that she clearly did not know who we are, so who is she?  Darned if she wasn’t from an organization for which I’d played a leadership role nationally and to which I am an annual donor.   She pitch was to ask me to send solicitation letters to my rolodex to solicit gifts.  It was not a smooth call.  She fumbled around, tripped up with the name problems.

I told her that I was sorry that she was inadequately prepped for the call, and I asked that she relay my surprise to the call center and organization coordinators: they don’t know our salutations and whether my husband is a male?  Also, I should not be in the call segment because I’ve already asked that I be excluded from the program. I wished her luck and said goodbye.  And then I fumed.

The woman on the phone was set up to fail, and that is unkind. Prepping for phone calling involves one critical step: know who you are calling.  Whomever gave the call list to this woman did her an disservice by not confirming that our volunteer past, our giving history and our requested exclusions were factored into the list generation.  Moreover, when it’s all said and done, all we have are our names. A name may be mis-pronounced, but it should not be wrong.

Knowing that mistakes happen, I was sad — did the organization realize that it was sloppy in its treatment of a volunteer and a donor?  Because of my passion for improving donor retention, I am sensitive to the kinds of messages fundraisers give to their current donors, messages that reinforce the value of donors’ support and messages that devalue the donors’ engagement.  So often it is the poorly-trained or ill-prepared front line employee that gives a donor the organization’s perception of the donor’s value.  There is no bad intent by the organization, clearly, but a lack of attention to the interfaces that donors will encounter proactively and passively.

What do I recommend, besides the obvious database and segmentation clean-up?  Ask staffers to keep short-n-simple lists of their calls and e-mails in and out, with reasons for contact (a pre-printed checklist would suffice), for a selected period of time.  Ask the social media coordinator to generate a report on hit rates and click throughs.  Look over the compiled data — when and why do donors and prospects connect with your staff?  Who calls more constituents and who uses e-mail more frequently? Can you spot trends and patterns?  Do some staffers default to a certain type of communication when another method might be more appropriate?  Is someone picking up the phone more than you’d known?  Further questions and audits might include questions about how staffers record bio and volunteer data, and how data makes its way into and out of your CRM.

Data gives you an opportunity to review and adjust for better performance.  Whether it’s a phonathon caller or a student intern, an audit of interaction can identify the type of resources and support your staff needs to give your constituents the sense that they are valued and appreciated.

Why didn’t he give this year?

In response to a question posed about best practices for donor reclamation, I did not address appeal methodologies.  Instead, I addressed a common fundraiser response I see all the time. Sometimes fundraisers hesitate to contact a lybunt/sybunt personally to ask for a gift renewal — we wonder if the past donor is no longer interested in our mission, or is not satisfied with something, or doesn’t want to be contacted.  We use appeal methods that do not best match our intention, like direct mail or e-mail, methods that make it harder for donors to engage in an active dialogue about reasons for giving, or for not giving again.

It’s a big step to approach a lapsed donor with a clear perspective; it is very easy and natural to apply our own values to others’ actions. Is he not renewing his support because we addressed his envelope incorrectly, didn’t plan to include more racquetball courts in the new athletic facility, doesn’t like the organization’s alignment with a political initiative, etc., etc.? My advice is: Do not presume that the donor lapsed because of something your organization did or didn’t do. When it’s all said and done, very few of us have the psychic abilities needed to guess why he didn’t give.  Many donors lapse for reasons we might never know, like big purchases, lifestyle and work changes, and new priorities in their giving plans.

In my experience, nothing beats an in-person meeting for re-engaging a lapsed donor and further understanding donor motivation. My advice is to revel in the opportunity to ask ‘will you renew? why or why not?’  It is a chance to ask direct questions and get answers you can use to create the case statement that will help the donor, and other lapsed donors by extension, make a renewed commitment. If you can’t meet in person, try personal phone and personal mail — your response should reflect your ability to handle the scale and cost of the recapture program.

Crikey! Help us help ourselves!

Short rant-y bit.

Some of the methods we fundraisers use to get information out to our audiences are developed to showcase what we want the audiences to know.  Blergh.  We have to develop pathways that provide what the audience wants to know.  Big difference.

H-to-the-r is working on a project.  She’s on-line, looking for contacts and contacts’ names at a bunch of universities.  The contacts work in areas related to alumni activities.  H has worked in university environments for years.  She knows how to look for people on pages and directories.  H has a wonderful new computer.  H is way smart.

It’s bad enough that some of the universities’ pages won’t load quickly (do they think home and international computer users have the same university-speed load times?).  Some won’t load at all (ack!).  But if she gets on a site, and if she finds that the department site she needs exists, she is finding it a very difficult task to find Phone Numbers on these sites.  Phone Numbers.  Come on.

It’s fairly easy to find links to click or ‘contact us’ forms.  It’s harder to find actual names of individuals with certain responsibilities.  H can’t find basic phone numbers, or department phone numbers even!!

So props to the streamliner universities who don’t infest their pages with long download time gadgets, sound files (Peaches & Herb, really?), flashkibbles and moviebits.  Props to those that list alumni and development staff, that add photos of staff members, that have phone numbers and e-mail addresses for actual staff members.  Props to those who let the audience ask the questions it wants to ask, and ask directly.

Isn’t the point of relationship-building  to help prospects and donors know who we are, what we do and why we’re there?  Shouldn’t we be prepared to deliver the information the audience is going to need?  Aren’t we suppose to help them help us raise the ducats? 

So I am wondering if the distance that a poorly-messaged (is that phrase way wack?) website creates between the audience and the fundraiser is an institutionally acceptable way of telling the audience what we want them to know.  The acceptance of this delivery method gives us the freedom and distance to decide when we will talk to someone who needs an answer, or gives us the excuse of an increased response time to an e-mail message to a general mailbox.

You know I loves me some social technologies, even basic ones like a website.  I just don’t like them to serve as a barrier to real talkings.  Real talkings is the only time we get to provide an immediate answer to the questions the donor wants to ask, provide what the donor wants to know.

<<shaking it off>>