The Pandemic of Development Turnover

The Pandemic of Development Turnover

You may have noticed a lot of Linked-In promotions for a new book by Jason Lewis titled The War for Fundraising Talent (you can read the Amazon reviews here https://www.amazon.com/War-Fundraising-Talent-Small-Shops/dp/1619848694). It’s great to see the author address the biggest problem in the nonprofit sector: Development staff turnover! Any of us on the consulting side of the nonprofit vertical have seen the struggle for nonprofit organizations to find and retain talented development staff. Two years is about the average tenure of a development professional. During the person’s first year, they are learning the job (and the insurmountable problems they are asked to solve without any resources) and then the second year they spend looking for a new job. Sadly, the consultants and agencies often end up being the “keeper” of institutional knowledge. And that’s just not right. Along with cutting new donor acquisition budgets, development turnover is the biggest problem in the nonprofit sector. Both of these problems suffer from the same root challenge: Shortsightedness. I’ve never worked on the nonprofit side, but I’d love to hear from those who have and what their ideas are for solving this pandemic. Share your thoughts...
The Correlation between Direct Response ROI & Net Revenue

The Correlation between Direct Response ROI & Net Revenue

Any of us that have been in the fundraising agency business have had the following meeting a least a dozen times: There are a bunch of somber looking board of director types from the nonprofit organization in the main conference room. They distrust agencies. Unlike development people who see how much money agencies bring into the organizations, the board only sees the checks that are sent to the agencies. The board’s one and only metric is ROI. Somewhere along the way, they tend to get this idea that the direct response fundraising ROI and net revenue have a 1:1 correlation. They don’t. Actually, the correlation looks more like this: We have found the optimal ROI for direct response fundraising is around 4.00. Sure it’s going to vary a bit by organization and which donors you are including in your appeal letters. But generally speaking, if your ROI is under 4.00, chances are that you are mailing too deep. Or in other words, you are spending too much on mailing and you need to be looking at your segmentation selection process. Conversely, if your ROI is above 4.00, you are likely leaving net revenue on the table because you aren’t mailing deep enough. Sure, your board might be happy with those ROIs (that GuideStar and Charity Navigator place far too much emphasis on IMHO) but the fact of the matter is, those high ROIs are hurting your ability to accomplish your mission. So please don’t manage to maximize your direct response ROI. Manage to maximize your net...
The first half of 2015 is already coming to a close

The first half of 2015 is already coming to a close

The first half of 2015 is already coming to a close. And for many of our clients, so is their fiscal year. Here is my review of the state of fundraising so far. Most clients are still living this narrative: their active donor counts continue to slip; however the donors staying active are giving more generously. So from a revenue perspective, most organizations are experiencing growing revenue. But this is the first year I have seen a few clients where the increased giving of their donors is not mitigating the file decline. We may be at a tipping point. Encouragingly, last fall’s acquisition was the strongest it’s been for a number of years. Those organizations that are employing multi-channel efforts to support their direct mail acquisition showed the best performance. Despite improved acquisition performance, the time it takes for a donor to break even continues to be a concern. This is primarily because fewer new donors hang around to make a second gift. In the good old days of direct response fundraising, about 40% of new donors gave a second gift. That percentage is now under 30%. It’s hard to grow donor files with such a metric. Digital continues to be a growing source of revenue for nonprofits, but its growth rate is slowing. This makes sense, as it’s hard to keep up double-digit growth rates indefinitely. However, original forecasts that digital revenue would surpass traditional revenue in 2018 don’t seem likely. Direct mail is still the king of channels. The trend of nonprofit organizations taking their fundraising in-house and not using agencies continues to pick up momentum. Though...
The Waiting Game of December

The Waiting Game of December

Here it is December again. I remember being a kid and counting down the days until Christmas Day. Waiting. Being impatient. Hoping the Christmas would be all that I dreamed it could be. Being in fundraising perpetuates these feelings. Working since March on year-end strategies for fundraising, all my front-end work is done. Now, its just the execution and counting the money. Fundraising appeals and donor newsletters litter mailboxes across the country. And your email in-box will be overflowing with year-end requests. These next four weeks will determine the mood for the rest of the fiscal year. A good December means our analyses in the first quarter will be peppered with smiles. A poor December always creates a panic and we will be desperately chasing the budget for the rest of the year. Let’s hope for a great December for your cause. But we will have to wait and...
Unsustainable Trends Part IV: Ad Spend Not in Equilibrium

Unsustainable Trends Part IV: Ad Spend Not in Equilibrium

Check out this graph from Atlantic Monthly. I’ts comparing attention paid to different media (in terms of percentage of our time using that medium) to ad dollar spend in 2013. Houston, we have an unsustainable trend.  Notice that the ad spend is out of balance in two places. First, a lot more money is being spent in Print compared to the amount of attention being given to that medium. Overall, the graph shows that there is a 400% overspend in Print advertising. Conversely, Mobile is just the opposite. Hardly any ad money is being spent in Mobile advertising (only 4% of total ad buys in 2013), yet Mobile earned a 20% time spend. This isn’t going to last. The ad dollars will find equilibrium (like all the other media). What you will see in short order is that print ad spend is going to migrate over to Mobile ad spend. Now for fundraisers, there is always the caveat that donors are older, and this graph doesn’t apply to them. Well, the Atlantic Monthly study says yes and no to this way of thinking. We as fundraisers do have a little more time. Emphasis on little. The study shows the big age divide in media usage is 59. Those older don’t follow these patterns as much. Those younger do follow these patterns. I know, not many nonprofits have the Internet optimized for fundraising yet, let alone Mobile. The good news is you have a little time. But best to get started...
Book Review: Jeff Brooks’ The Money Raising Nonprofit Brand

Book Review: Jeff Brooks’ The Money Raising Nonprofit Brand

Jeff Brooks has developed into one of the icons of modern fundraising. His blogs (first Donor Power and currently The Future of Fundraising Now) and his podcast (Fundraising is Beautiful with Steven Screen) are some of the most consumed resources in the nonprofit space. Brooks now has synthesized his years of experience into a wonderfully written book titled: The Money Raising Nonprofit Brand. Branding is a dirty word in the nonprofit space and Brooks entertainingly explains why. Techniques that work so powerfully in commercial advertising don’t fit for nonprofits. Brooks gives example after example of nonprofit re-branding gone bad. And why. The Money Raising Nonprofit Brand should be required reading for anyone who works with nonprofit organizations. That includes leadership, board members, volunteers, fundraisers and their agencies. It’s a concise easy to read book packed with insights and ready to use ideas. If I had any bone to pick with the book (and I wouldn’t be a good analyst if I didn’t ) is that I think he is too quick to discount the benefit of research. Just like in branding wrongly employed research approaches can yield more harm than benefit. But research methods that understand the nuances of nonprofit fundraising realities can accelerate an organization’s success. Still, do your organization a favor and pass this book out to your staff. And most importantly, to your Branding...