Strategies to help you

win new donors, lift the performance of current donors and keep active donors longer

Fundraising’s Solid Ground

As I write this, we literally live in a world filled with uncertainty. While us analysts cannot predict the future of fundraising, we are pretty good at studying past donor behavior, and that can help us better understand how we should respond in times of uncertainty. In my career as a fundraising analyst, there have been numerous “hold your breath” moments: The dot.com bust, Y2K, 9/11, the anthrax scare, and the Great Recession. Each of these events did adversely affect fundraising. But after each event, donors and revenue rebounded. In the past days, I have gone back into some of our data vaults and have studied each of these events, and here’s what I learned that may help us in the months ahead: Overall, fundraising revenue declined in the year of these events. In the worse cases, by up to 20%. But most organizations were in the 3-5% range.There were fewer large gifts secured in the year of the crisis.New donor acquisition suffered the most, dropping as much as one-third.Multi-Year donors continued to give faithfully throughout the period of uncertainty. Multi-Year donors – those that have given to your organization year in and year out – typically generate two-thirds of a nonprofit’s revenue. They also provide the best return on investment. However, they can only do that if you continue to communicate to them and ask for their support. Your Multi-Year donors know you. They believe in you. It’s now time for you to believe in them and give them the opportunity to help your organization through this period of...

Fundraising in the Time of Coronavirus

As all of anxiously watch the spread of COVID-19 from China to the rest of the globe, we are all holding our breath on how this is going to affect donor behavior. Fortunately, December 2019 giving was particularly strong for most organizations. However, early data suggests that first quarter trends are soft. Anytime there is uncertainty, and the virus is contributing to stock market volatility, giving declines. It’s possible a recession, which is defined by lagging indicators, is already here. While there is no need to panic, it might be wise to start doing some contingency planning. If the virus continues to gain a foot hold in America, one of the first places nonprofit organizations are going to feel it is in their fundraising events. As big sporting events and large conferences, like SXSW, are cancelled this spring, you can expect that people are going to be hesitate to attend your galas and run/bike/walk events – even if they are not outright cancelled. Your organization may want to consider substituting in-person events with “virtual” online events. Of course, your organization will have to communicate potential changes to your events to your donors. And while e-mail is inexpensive, the medium is particularly crowded and easy to miss. In our view, more emphasis is going to be placed in direct mail both as a communication tool and as a fundraising tool. Many organizations still rely on this tried and true channel for a large chunk of their revenue. In these uncertain times, it likely that direct mail will become an even more important tool in your fundraising arsenal. Hopefully, we will...

The Hard Work of Volunteering

Seems like one of the constant topics in the nonprofit blogosphere is this idea of growing your donor base through providing volunteer opportunities. My personal experience has been quite the opposite really. Being an introverted analyst, I am always hesitant to volunteer for anything because that likely means some type of social interaction with strangers will be part of the experience. But last fall, I found a local organization that I was really interested in. I reached out to them, and they said they needed a long-term volunteer with a very particular skill set, one that I had and was excited to share. They were excited too. Three-times I followed up with them to set a time to get started. And each time I heard the same thing: Someone will get right back to you. And no one ever did. Sadly, I don’t think my experience is that unique. One has to be very persistent to become a volunteer. Now, I understand that people at nonprofits have a lot on their plates. I get that. But by not following through, I went from someone who was super interested in the organization to “forget them” in three short calls. So, rather than volunteering being a path to becoming a donor, if an organization is not careful, it will became a shortcut to becoming a lapsed...

More Blogs about Lift

Last week I talked about lift, increasing revenue by raising more from the donors you already have. There are two driving forces to “lift”, increasing gift size or increasing frequency. Is there a way to encourage donors to give smaller gifts more often, increasing frequency from once or twice a year to monthly, weekly, or even daily? One tried and true method is sustainer and monthly giving conversion. Everyone should be familiar with these types of programs. As it relates to single gift transactions, a que can be taken from the for-profit space. Many of us play video games or have people in our lives that do. There is a business model for free-to-play games that use micro-transactions to earn revenue. Games ranging from Fortnite to Call of Duty to Candy Crush offer in-app or in-game purchases, referred to as microtransactions. While microtransactions are somewhat controversial in the gaming world, I think the model and spirit of these offerings in the non-profit fundraising world could be effective. These purchases typically range in price from $0.99 to $100 and generate, for Fortnite specifically, hundreds of millions of dollars a month. What if we were to ask donors for small amounts more frequently with very specific offers? This idea seems to lend itself best to the digital sphere and non-direct mail channels. Think, for instance, if you had a list of donor phone numbers (with permission to text) you were able to text with a short message and link to a donation page with a specific need for something. For instance “We need 100 XYZ to do our work this week”...

Let’s Chat about Lift

Here at analytical ones we have identified three key ways to grow revenue: Win more donorsLift the performance of the donors you already haveKeep more of the donors you already have We talk a lot about winning, acquisition and reactivation, but we don’t often talk about lifting, increasing the value of donors already on the file. So, let’s talk about it! In some recent analyses I explored what impacted donor upgrades and downgrades for donors of various values. The analysis was limited to donors who had given in both fiscal years. My primary question: how do year over year changes in average gift and gift frequency differ for higher and lower value donors? What I found was quite interesting.  For higher value donors, an increase in gift amount was the most significant contributor to upgrades. For lower value donors, while average gift did tend to increase, an increase in gift frequency was more significant to their upgrade. The same was true, conversely, for downgrading donors. Decreased gift amount was more closely related to downgrading high value donors than it was for lower value donors. This may mean that, to prevent downgrades, getting a donor to give an additional gift in a given year may either 1) Prevent them from downgrading or 2) Lead to a donor upgrading in value. How might we offer donors of higher and lower values sufficient opportunities to upgrade? How might we combat declining gift frequency to decrease downgrade percentages? Come back next week, I have a few ideas to...

My Fall In-Box

I don’t know about you, but I received far fewer direct mail appeals this fall (between October 1st and December 31st.) Last year, I received an even 50 direct mail appeals. This year, I received only 30. That’s a 40% decrease in volume, which is significant. During the last week of the year, I received 99 e-mail appeals (this is the first year I have tracked this metric). Half of those came on the final two days of the year. Here is a recap of the direct mail I received this year, and the insights I noted: Of the 30 pieces of direct mail, 15 mailings were appeals from 8 organizations I have previously supported, while 15 pieces were new donor acquisition kits from 11 organizations. Once again, I received the most pieces from The Salvation Army (7) – though four of the mailings were duplicates. I have supported The Army in two different Divisions, both of which sent me identical appeals. I contacted one Division about this issue last year, but the message must not have reached the right people. World Vision and World Wild Life Found sent me the two catalogs I received I did not receive any newsletters.For acquisition, I received three premium packages. One was from St. Jude with address labels and a notepad, and I received two handbags from Doctors Without Borders. My team and I are looking forward to analyzing all the end of year data these fall appeals have generated. We’re looking forward to seeing your data,...

A Cautionary Tale of Stopping New Donor Acquisition

As I’ve shared before, one of our most common analyses, sadly, is projecting what happens to a donor file’s active counts if an organization decides to discontinue new donor acquisition – after all, new donor acquisition is just too expensive. Well, today’s graph is not a projection . . . but a real-life example of what happens to donor file when an organization stops acquiring new donors for just two years. Figure 1: Active Donor Counts Not sure I need to say anything else. What a total unmitigated disaster. In just two years of not acquiring new donors, this organization’s active donor counts were cut in half. This organization now faces the dim prospect of having to invest more in new donor acquisition over the next several years just to get back to where they were in FY17. So unnecessary. If you (or your client) is considering such a decision, please, please, show them this...

Fall Forecast

Not to be a Negative Nelly, but do y’all remember last December? Last December we had the triple-downer of: a sharp stock market decline;a government shutdown; andgeneral political divisiveness. The net effect was one of the poorest performing fundraising Decembers of the past decade. If you’ve read the news lately, among the headlines are topics such as: stock market nervousness over the China trade-war (and September/October historically tends to be a common month for crashes);concern of a government shutdown on September 30 over the Administration’s plan to cutoff of international aid; andgeneral political divisiveness. In times of economic uncertainty, donors are hesitant to add new organizations to their giving portfolios. This could mean a rough acquisition season. However, your most loyal donors tend to step up their giving during adverse economic environments. Hopefully I’m wrong and we’ll have a stellar fall acquisition season where the money just rolls in. But on the chance that my concerns are justified, it might be good to start planning for a CYE telemarketing campaign to your best donors to fill the potential gap. I know a lot of organizations (more correctly, their BODs) hate TM. But may I suggest one piece of advice: get over it. TM works. And in economic adverse times, your organization needs to utilize all the tools available to secure the funds you need to fulfill your...

O.I. = Success

In a blog last month, I challenged you peruse the A.I. articles in your LinkedIn account, and I predicted that the articles would fall into two categories: A.I. will save us!A.I. will doom us! Anyone who has read my blogs knows that I tend to Andy Rooney like on new technologies. I think it comes with age. During my career I have heard so many promises of how technologies will make our lives better, only to experience the disappointment of experiencing no improvement. Or in some cases, the horror of a new technology leaving us worse off. But here’s the thing, A.I. will rely on your organization’s O.I. (Organic Intelligence). Without the O.I., you will not be able to leverage the A.I. And really, you don’t need to be chasing A.I. yet. There is plenty of low-hanging fruit harnessing the data you already have on your database. That is, if you get your organization’s O.I. right. Start...

Same as it Ever Was?

Last week, I was revisiting some 10-year old analyses. It was both comforting and alarming at the same moment. Comforting in the fact that your Multi-Year donors today (those who have given to you in at least the last two consecutive years) perform very similarly to the way they did 10 to 15-years ago. Then as now, Multi-Year donors are just rock-solid performers. The metrics hadn’t meaningfully changed, other than their average gift is now a little higher. That means, acquiring donors who you can move to a Multi-Year relationship is still the name of the fundraising game. However, the decline in two trends over the past decade are alarming: New donor acquisition and Second-Year retention. This won’t surprise anyone. It’s getting harder to acquire New donors and even harder to retain them. Second-Year retention was still in the 40% range back then. Probably because most New donors were acquired via direct mail. Those donors still retain well even today. But with the transition of acquiring donors in multiple channels today comes this downside: these donors acquired in other channels just don’t stick as well as direct mail donors. The big consequence to lower acquisition and poorer second year retention of course, are declining file sizes. If an organization of 20,000 active donors lost 3% of their file every year, after 10-years the active donor counts will be under 15,000. That’s scary stuff. Our only saving grace is that for most organizations, the donors who are active are giving larger gifts. These larger gifts have mitigated the falling active donor counts. This trend will not last forever. The big...

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