Bearing Down

Bearing Down

Many people that work in the numbers business, including us, have been saying for a while now that the stock market is overcooked, and a big correction is inevitable – so the major dive in the Dow Jones yesterday was not a huge surprise. No matter where we end up in the next few days, many finance gurus are still predicting a drop of 30% or more. This article by David Rosenberg, the chief economist at Gluskin Sheff, was reposted by Business Insider on January 11, 2018, explains the trends in an easy to absorb manner: http://www.businessinsider.com/markets-look-stretched-rosenberg-says-2018-1 Of course, Mr. Rosenberg is counseling private investors. At Analytical Ones, we are consulting with nonprofit organizations. And all of us that worked in fundraising through the market collapse of 2008 know that philanthropy is closely tied to market performance. So, what did we learn a decade ago that will help us prepare this time around? This is what you can expect it see: The recession of 2008 had a catastrophic effect on new donor acquisition. It has only been in the last couple of years that organizations have recovered in this area. In times of economic uncertainty, donors are unlikely to add organizations to support. Large donors dried up. Again, in times of economic uncertainty, its tougher for donors to write those big checks. Loyal donors continued to give – and they gave generously. Knowing these things, here’s what we recommend you should be doing now: Even with the drop yesterday, the market is still strong. Now is the time to be investing as much as you can in new donor...
Our Top 5 Most Popular Blogs of 2017

Our Top 5 Most Popular Blogs of 2017

Happy New Year! As we start 2018, we wanted to take a moment to thank for your reads, comments, and shares over the last year. We hope you were able to use a few of our analytical insights to grow your fundraising program. Last year, our most popular posts focused on major donors’ first channel of giving, gift size by generation, statistical significance in testing, acquisition strategies, and trends among successful nonprofits. In case you missed any of these posts, here are the links to our top 5 blogs of 2017: Major Donors – In the Beginning Granny’s $5 Birthday Surprise Won’t Cut It Any Longer Response Rate Testing and Statistical Significance More is Not Always More (Acquisition Strategy) Success Stories Thank you and here’s to a great...
Empathy is the New Black

Empathy is the New Black

This is the third in a series of blogs on 2018 trends. You can read about the first trend here and the second here. The fourth trend for 2018 stated in the Forbes article is: We are in an era of purposeful business driven by collaboration, inclusion, and the notion of leaving the world a better place. Empathy is the NEW BLACK. Now, don’t you feel good? Nonprofit organizations have ALWAYS been about leaving the world a better place. It’s about time! The commercial world wants to align with your good cause. But here’s the bad news: The commercial world is now competing in your space, and they have a lot more marketing money to throw at it. And this will distract your donors. Over the past decades, we’ve seen a slow but steady rise in the social enterprise movement. That blend of leveraging capitalism for a good cause. Think Newman’s Own or Ronald McDonald House Charities. This trend is only going to accelerate in the next few years, and companies with strong brands are going to hook up with nonprofit organizations with strong brands and both will benefit. We have a couple of recommendations for your organization to optimize this trend. First, start imagining what an ideal partnership with a commercial entity might look like. Second, begin researching companies and come up with a list of suitors that could be potential partners. Last but certainly not least, before initiating the conversation, it will be imperative that your organization create and sustain a strong nonprofit brand. A strong commercial brand will only join forces with a equally strong nonprofit...
Five Marketing Trends for 2018

Five Marketing Trends for 2018

Recently, Forbes published an article called “Top 5 Trends for Marketers and Entrepreneurs In 2018.” I find these trends to be very encouraging for nonprofits. The market is moving towards nonprofits, and – for a change – the nonprofit industry is well-positioned to leverage the trends that Forbes describes. Trend One: We are in an experience economy. Antiquated rules of engagement no longer apply. Nonprofit organizations have never been in the business of selling a product. So, the “antiquated rules of engagement” have never applied. Rather, nonprofit organizations have had to focus on the intangible of the giving experience. Chalk up a point in your favor. However, we don’t get off the hook that easily. Though nonprofits intrinsically understand the importance of the donor experience, they don’t typically budget funds towards understanding and improving the donor experience. That point goes to our friends in the commercial space. They are much more deliberate about understanding the customer experience. What should nonprofit organizations do? They need to go behind the donor analytics and tie those findings to the donor experience. It sounds hard, but it really isn’t. And with the technological research tools of today, it’s easier and more affordable than ever before. First, you need to commit some resources to understanding your donors’ experience. We suggest you begin by benchmarking your donors’ experience at every place you intersect with them. Only after you have benchmarked and understand the donor experience can you can improve on the donor experience and maximize engagement. Stay tuned for Trend 2: In the age of experience, EVERYONE is a...
Granny’s $5 birthday surprise won’t cut it any longer.

Granny’s $5 birthday surprise won’t cut it any longer.

I’m on the 3rd floor of a Michigan Avenue focus group facility with a group of healthcare donors. I’ve just finished describing the directions of one my go-to exercises. They’re being asked to allocate $100 how they please across the organization. A male baby-boomer, on the younger side of the boom, says something unexpected: “I can’t allocate $100… because I would be embarrassed to give this organization just $100.” What just happened? $100 is a decent gift for a direct mail donor right? $100 used to really mean something in this business! Not anymore. Not like it used to anyway. This particular focus group was 3 years ago. I’ve been following this trend through my other research since. In many settings we’ve validated that younger donors have higher first gift amounts in acquisition. But why? It’s the same reason granny sends $5 bills in birthday cards. Our perception of the value of a dollar is very different by generation. At least, that was my hypothesis. So, I tested this assumption on a survey of 300 donors. I asked, “What is the minimum gift you could make to an organization and actually make a difference?” This is an adaptation of the Van Westendorp’s Price Sensitivity Meter question: “At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good?” The results supported my hypothesis in a way a researchers only dreams about: Mean Response: Donors under 55: $171 Donors 55-70: $68 Donors 70+ $35 What does this mean? Well, in today’s world it means your low ask-strings in direct...
Fundraising Facts Over Fundraising Feelings

Fundraising Facts Over Fundraising Feelings

We have entered an interesting season in America. Seems like “facts” are being treated like just another opinion. And the consequence is that if facts and opinions are equals, then making your direct response fundraising decisions based on feelings is an equally valid approach. And that would be a mistake. A HUGE mistake. I was reminded of how feelings can misguide us. We completed one of our Offer Forecasting studies last month. Offer Forecasting leverages online surveys to predict whether donors will open a direct mail piece. It also measure donors’ likelihood to give to a certain offer. Before our latest Offer Forecasting study went into the field, everyone at Analytical Ones made friendly wagers on which of the nine offers we were testing would be rated the highest by the donors. Knowing the client and their donors as well as I do (I mean I’ve worked with the client for years, plus I have 20-more years of direct response experience) I was pretty confident that the offer I chose would win. And my pick came in dead last. In. Dead. Last. My business partner has a great saying when fundraising “experts” try to predict how donors will respond. She will say emphatically: “Repeat after me. YOU are not the target audience!” This why we at Analytical Ones always base our recommendations solidly on the facts. And though it may be trendy at the moment to go with your feelings, we implore you to use fundraising facts over fundraising feelings in...