Tag Archives: lifetime donor value

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!

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.

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.

HAHD Kick-off … and I’m already filching from other media …

I was asked to post a little bit about myself for a conference website.  It’s fitting, I think, to kick off my ‘hundred article in a hundred days’ with a note about fundraising worldview.  Here tis:

I worked in higher education fundraising and public affairs in some capacity for 16 years.  During that time, I had a bunch of snazzy titles.  I really enjoyed my work, traveled the world, asked for millions of dollars in person, and raised a hella lot of money, always making or beating my goals.  And I burned out.  *sizzle*

So in 2006, I started my own firm so I could take the best of the “old skool” fundraising techniques, add meaningful ROI-proven Web 2.0 (am I a dunderhead because I don’t know what that phrase is meant to represent?) strategies, and increase the number of retained donors and dollars for my clients. The company works with npos in the US and Europe – we’re small but happy, and we drink a lot of overpriced frou frou coffees.

Here’s my deal:  I am a member of the Fundraising Effectiveness Project (FEP) committee, an initiative started by the Urban Institute’s Center on Nonprofits and Philanthropy and the Association for Fundraising Professionals (AFP) …props to Bill Levis and Cathlene Williams…, and co-sponsored by the Council for Advancement and Support of Education (CASE), Council for Resource Development (CRD), Center on Philanthropy at Indiana University, and the National Committee on Planned Giving (NCPG).  My role thusfar has been to lead the creation of education programs to be used by organizations and chapters world-wide.

Here’s the goal:  Change the path of fundraising in a fundamental way.  In its 2008 report across 26 sub-segments of the nonprofit market, the FEP results demonstrate that, essentially, five out of every six dollars raised will be lost the subsequent year due to attrition.  This is Horrible ROI — it costs more to acquire donors than to retain them.

So I like to consider social network constructs for nonprofits with a clear mission — how will these approaches, in concert with more traditional methodologies, help us treat our donors well enough to increase loyalty and lifetime donor value, to think analytically to predict who of our present donors and prospective donors will likely give more and more often, and to change the fundamental appeal and retention strategies we use to keep the donors we add.”