Strategies to help you

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

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...

Face-to-Face

Recently, I attended the Bridge Conference in Washington, D.C. While there, I was struck by two simple things. First of all, it sure can rain in the capital… I was in a meeting at one of the restaurants on the lower level of my hotel when one of the fountains began to flood somehow from the afternoon thunderstorm. I flashed back to the scene in the film “Titanic” when all the well-dressed people were running up the stairs to escape the water. It was quite remarkable! But more importantly, it just re-enforced for me the importance of being face-to-face with people. As an introvert, I absolutely love technologies like Google Duo, Facetime and ZOOM which allow you to have client meetings without leaving the office. Anything that helps avoid the hassle and expense of going to the airport is okay with me. However, nothing beats having the opportunity to sit down with another human being over coffee or a meal and just have a real human conversation. That’s true with your donors, too. And while it may be more difficult for some organizations, I think it’s absolutely necessary that you have some real face time (not the Apple kind) whenever possible. We humans (even us introverted ones) need this kind of interaction every now and...

A.I. and Fundraising

A couple of months ago I blogged about the lack of digital disruption in fundraising. This blog is going to be about the future impact on AI on fundraising – or the lack of it. AI, or artificial intelligence, is one of the most popular topics if you peruse LinkedIn posts these days. Most the articles take one of two approaches: 1. Get ready, AI is going to be wonderful! OR 2. Look out, AI is going to be dreadful! For AI to work, a couple of key things need to be in place. First, AI works best with tasks that are routine and can be standardized. Fundraising is anything but routine and standard. While there are best practices approaches most fundraising professionals would agree on, for every rule there are a dozen exceptions. And the best “exception” for one nonprofit organization is generally not the same for another nonprofit. This is going to require that AI be super flexible. And as we know, complexity is the enemy of automation. This leads me to my second point. Because AI solutions will have to be complex and variable in the fundraising environment, it will likely be expensive. Like all innovations, business verticals with the most to gain are usually the first to adopt. So, between the general lack of money in the nonprofit space and the relatively low payroll threshold of fundraising professionals (I’m with you here) it is unlikely that AI will have much of a foothold in fundraising anytime...

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