A.I. and Fundraising

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...
The Most Common Analysis

The Most Common Analysis

This year, we have been interviewing (and hiring) new analysts for our growing company. One of the candidates we were talking with recently asked us a great question: What is your most common ad-hoc analysis? Anyone who has worked with nonprofit organizations is likely familiar with this one. And sadly, it’s killing nonprofits: The Stop Acquisition Analysis. A healthy donor database requires a significant investment in acquiring new donors each and every year to replace the inevitable lapsing of current donors. We all have seen the LTV on new donors. An investment in new donors generally breaks even some time in year 2, and then those donors are profitable from year 3 onward. The problem is that nonprofit boards of directors are oftentimes focused solely on the current fiscal year. When budgets are tight (when aren’t they?), the first place they look to cut their budget is new donor acquisition. And thus, begins a descent into nonprofit hell. With your data and our stats tools, we can put together an analysis of what the (bleak) revenue projection looks like when you stop acquisition. The lack of new donors will cause a decline in file size. A decline in file size results in a decline in revenue followed by a decline in the organization’s budget – which of course will lead to a cut in new donor acquisition the next year. And then, the descent into nonprofit hell accelerates. One of my career goals is to see the day when the Stop Acquisition Analysis is not so popular. Until then, if you are fighting for your acquisition budget from a...
Is Your BOD on Hopium?

Is Your BOD on Hopium?

I saw the term “hopium” for the first time in a recent blog by Victoria Christensen and immediately became fond of the term. As Ms. Christensen defines it: hopium is a false sense of positivity in the midst of dire, evidence-based scientific research. Now, while her context for using the term was not related to fundraising, I couldn’t help but think of all our nonprofit friends who are in the midst of finalizing their FY20 budgets. For our context, here’s an example of how to use the term “hopium”: If your BOD has asked you to increase revenue 10% next fiscal year without any increase in your development budget, they are on hopium. I don’t recall much from my Philosophy 100 class as a freshman in college, but I do remember the Latin term Ex Nilo Nil Fit coined by pre-Socratic Greek philosopher Parmenides: From Nothing, Nothing Comes. I believe there is a national hopium epidemic in our nonprofit board rooms today. Boards continue to ask development professionals to achieve lofty goals without adequately equipping them with the resources they need to get the job done. And we wonder why turnover in nonprofit development departments is so high… So, before you take your next development leadership role in a nonprofit organization, do some research to make sure the BOD isn’t on...
Mission Impossible

Mission Impossible

I recently visited with the Executive Director of a small nonprofit whose mission is mostly carried out by volunteers. And boy, was I impressed with all that they accomplish with such a lean staff. But I also wondered how much more they could do if they had just a little more budget to afford a few more paid staff. As any ED of a small nonprofit knows all too well, they end up diverting a lot of time on the important things that need attention today, rather than focusing on the big picture things that could take the organization to the next level. It leaves me conflicted honestly. On the one hand, this nonprofit organization is doing so many things right. It’s engaging its community of supporters, delivering on its mission and having a big impact on a small group of people. But on the other hand, because of its dependence on volunteers, it can’t scale its services to generate an impact on a bigger group of people. And to do that, the organization will have to change. But is bigger always...