28

Mar

Five Signs Your Organization Is Under Asking Its Donors


help boxDonor development is a daily exercise in balance, particularly when it comes to solicitation frequency. How often should you ask? Are you asking too often? Or not often enough? Fortunately, your donors answer these questions by how they respond to your communications and solicitations. Here are five ways to tell if you’re not soliciting your donors as often as you should, and some suggestions for how you can optimize your solicitation calendars based on what your donors are telling you.

1. Your newsletter raises a lot of money. Your organization’s newsletter is a tool for donor cultivation, not solicitation. So if your donors give enthusiastically to your newsletter, where you don’t directly ask, imagine how they might respond when you do ask. As a rule of thumb, if your newsletter raises more than 25% of what you raise through a typical appeal, that’s probably a sign that you’re not asking often enough, and you should consider adding an appeal to your solicitation schedule.

2. Your mailing list is 10+ times the size of your actual donor file. It’s important for organizations to create and value varied ways for individuals to be involved in their missions, whether by making a financial contribution, staying apprised of the issues by reading the organization’s communications, or by taking an action like signing a petition. But when an organization has a really big mailing list (i.e. non-donor addresses) relative to its donor list, in all likelihood it’s not offering its non-donor constituents enough opportunities to participate by making a financial contribution. After all, the individuals who read your organization’s newsletter and/or take action on behalf of your organization are already invested in your work and should be more willing than the average citizen to make a small financial investment. For good tips on converting online activists to donors, be sure to check out this post from Frogloop.

3. Your average gift is very high. Organizations that solicit their donors once or twice a year almost always have donor files with a high average gift. But the higher average gift, while nice, is also associated with a smaller donor file. Not only does a smaller donor file translate to less revenue for your organization, but it also means a smaller major and planned gift donor prospect pool. If your average gift seems high relative to other organizations like yours, this too is a sign that you are probably under asking. When you increase the number of solicitations, your average gift will decline but your overall revenue and number of donors will increase.

4. Your attrition rates are high. Donors stop giving to organizations for many reasons. Message, offer and medium, for example, all play a role in how long a donor stays with an organization but they can be very difficult to measure. There’s one highly quantifiable reason however that donors stop giving: they’re not asked often enough. If your organization’s attrition rates seem higher than that of your peers, don’t just look at how you’re asking; take a hard look at how often you’re asking. You can find some good ideas on curbing donor attrition by the way right here on Guidestar.

5. Your final membership renewal notice nets revenue. The vast majority of organizations acquire new donors at a net loss, which is recovered over time through subsequent cultivation and solicitation. So when soliciting a donor’s renewed support, organizations should weigh the per donor cost in renewal/reinstatement against the per donor cost in acquisition. If your organization’s final membership renewal notice nets revenue, or even just breaks even, you should consider adding at least one more renewal effort. Not only will your additional renewal effort probably yield renewed donors at a lower cost than a new donor acquisition would, but it may also result in more revenue over the long term, as reinstated donors are known to have higher lifetime value than first-time donors.

Have you observed any other signs of under asking in your organization? As always, we want to hear from you, so mkdm-2010-idea-bookpost your experiences here.

On another note, we’ll be releasing our 2010 Idea Book in just a couple of weeks!

To request your free copy in advance, email us at ideabook@mkdmc.com with your name and address, and anything else you’d like to share.

By , 03/28/10 • Posted in Direct Response Fundraising • Tags: , , ,



21

Mar

Things We Think We Know


The most successful membership programs excel, in large part, because they know how to strike up the conversation with prospective donors.

donor-engagement

Instead of would you like to make a gift? great membership programs approach us with questions like: what concerns you more: drilling in the Arctic, or deforestation in the Amazon? They ask our opinions: Where do you stand on health care? They pique our curiosity: How well do you know your rights? They even stop us in our tracks sometimes: Do you think this child deserves to eat dinner tonight?

We all know this as good membership and marketing people.

Or do we?

We strike up all these great dialogues via our emails, newsletters, blogs and Facebook pages. But more often than not, our offer to engage our donors through these channels happens via one conversation-killer:

Join our mailing list.

It’s good to question our strategies every once and a while. Often, we validate the way we do things. But sometimes, we find better ways to do them.

What do you think? Is there a better way than “join our mailing list?”

By , 03/21/10 • Posted in Donor Communications • Tags: , , ,



17

Mar

Your March Strategic Planning Checklist: Part Two


By now you’ve wrapped up your State of the Donor File analysis. You still have just a few tasks though from your Annual Strategic Planning Calendar to complete this month:

Draft your campaign plan for the new (7/1) fiscal year. Because you’ve spent the last several months analyzing your donor file and identifying your key priorities for the new fiscal year, you’ve already done the hard work. Now focus on the details: the specific campaigns, media mix, calendar, goals and expense budgets. Get a solid draft hammered out this month, and you’ll work on fine tuning it next month.

Assess your allocation of staff resources to your campaign plan. Do you have enough resources to implement your new plan? Do you need to bring on additional resources to implement the plan successfully? This is the month to answer these questions and start thinking about identifying additional resources if needed.

Discuss updates to vendor contracts and/or distribute RFP’s for new vendor services. If your program relies on annually contracted services, you should begin renegotiating contracts or, if applicable, soliciting proposals from potential new vendors this month.

Monitor progress toward your fiscal year end goals and adjust strategies if necessary. With all this looking ahead to the new fiscal year, don’t forget to keep close tabs on the one you’re in now. Are you going to make goal? If it looks like you might not, you should begin rapid planning for and implementation of corrective strategies.

We’ll be back in touch with your April strategic planning priorities soon. And if you have questions or comments in the meantime, post them here!

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By , 03/17/10 • Posted in Development Planning • Tags: , ,



15

Mar

Desert Island Blogroll


rss-imageThere are many important online resources for membership development, but probably only just a few that we feel we couldn’t do without. Today, I’m highlighting some of the essential blogs, Twitter feeds, and resources that I look to for top-notch information, insight and inspiration on donor action and philanthropy:

NTEN, aka the Nonprofit Technology Network. NTEN offers extremely valuable information and insights for anyone – and definitely not just techies – interested in donor action and philanthropy today. There are many ways to be connected with NTEN (blog, Twitter, Facebook, conference, etc.), but start with the NTEN website to learn more about the organization and ways to be connected.

Beth’s Blog: How Nonprofit Organizations Can Use Social Media to Power Social Networks for Change. Beth Kanter is another essential voice you should listen to (the Huffington Post named her one of the 10 pioneering women in tech).

The Agitator. A must-read from seasoned direct response fundraisers. Be sure to check out The Agitator’s own blogroll.

Rosetta Thurman’s blog. Another must-read for insights on nonprofits, leadership, social change and diversity in philanthropy. In addition to the great content, you’ll find an excellent blogroll here as well, including a list of nonprofit and philanthropy blogs written by people of color.

Seth Godin’s Blog. Although not focused specifically on nonprofits, Seth Godin’s insights are required reading for anyone involved in any form of marketing –which means all of us in nonprofit membership development.

Mashable. Mashable’s focus is social media but it’s extremely valuable to anyone interested in communicating online, which means all of us in membership development too.

These are just some of the resources I find myself returning to regularly for information and inspiration. So if you haven’t already, bookmark and/or subscribe to these blogs and sites.

But there are many other blogs out there offering excellent information for nonprofits on donor action and philanthropy. What are your favorites?

By , 03/15/10 • Posted in Membership Development • Tags: ,



7

Mar

Your March Strategic Planning Checklist: Part One


photo-for-march-calendar

This month comes in like a lion in more ways than one. For organizations with July-June fiscal years, March is the most intensive month of the annual strategic planning calendar because, among other things, it’s when you’ll complete the analysis portion of your annual State of the Donor File evaluation. This means distilling the hundreds of pieces of data you’ve been collecting over the past two months into a dozen or so key observations about your organization’s donor giving trends, deciding what the trends mean and, more importantly, what you’re going to do about it.

Some of the basic donor and file characteristics your analysis should address are:

The number of donors giving to your organization. Is your donor file growing, shrinking or staying the same?

The number of donors that have lapsed in their giving to your organization. We know that donors lapse but how many did your organization lose in the last 12 months? Are your donors lapsing at a lower or higher rate than they did last year?

Donor loyalty. How frequently are donors giving to your organization? What’s the breakdown of first-time donors to multi-donors, and what trends do you see from year to year?

Donor generosity. Are your donors giving more, less or the same? Is it a matter of more donors giving smaller individual amounts, or fewer donors giving more?

Upgrading and downgrading. What percentage of donors are increasing or decreasing their giving to your organization? How many donors upgraded to major gift levels?

New donor conversion. How long does it take a new donor to make a second gift to your organization? What percentage of first-time donors never make a second gift?

Giving channels. What giving channels (i.e. direct mail, email, web, canvassing, telemarketing, etc.) yield the most donors? The most contributions? The highest gifts? How does donor loyalty differ by channel?

Acquisition cost recovery rate. Most organizations acquire new donors via direct response channels at a cost which is recovered over time. How long does it take your organization to recover its initial acquisition investment in a new donor?

New donor sources. What are your primary, emerging, and waning sources of new donors? How does initial and subsequent giving vary by source?

Special programs. What are the acquisition, attrition and giving patterns for monthly donors, major gift club donors, etc.?

In addition to studying these and other file characteristics, you should examine the reasons for all of your findings. For instance, if your donor file is shrinking, you need to determine why. Don’t just probe your disappointing findings though. If you find that something is doing well or better than expected, ask why too – perhaps you can expand on that success. You should also address how your findings track with the strategic priorities you established last year for your current program. If one of your organization’s strategic priorities was, for example, to retain a higher percentage of donors, did you?

Finally, with your newly acquired knowledge and understanding of your donor giving trends, it’s time to make a list of strategic goals for the new fiscal year. What problem areas did you find that you want to address? What’s working well that you want to keep doing? Your strategic priorities will be unique to your organization, but no matter what is on your list be sure to keep it realistic and keep it short – 3-5 major priorities maximum.

You still have a few more important strategic planning tasks this month. But seeing as you’ve just completed a major donor file analysis and strategic priorities for the new fiscal year, I think you deserve to take the rest of the day off. So check back next week for the rest of your March strategic planning to-do’s.

And if you have an idea to share for Fundraising Day in New York, don’t forget to email it to me directly or submit it via the comments section. Looking forward to hearing your thoughts!

By , 03/07/10 • Posted in Development Planning • Tags: , , ,

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28

Feb

Do You Have an Idea to Share?


fundraisingdayny

Fundraising Day in New York 2010 is June 11. If you haven’t registered yet, I hope you will. Not only because it’s the largest one-day conference on philanthropy in the country and chock-full of valuable fundraising information for nonprofits, but because I’ll be doing a rapid-fire session in the direct response track with Dennis Lonergan of Eidolon Communications and Jeff Brooks of TrueSense Marketing and the Future Fundraising Now blog.

It’s a session called 30 Ideas in 60 minutes in which we’ll share our most innovative, results-generating direct response fundraising ideas, with a special focus on recession- and clutter-busting tactics. No abstract philosophies, no fluff, and definitely no sales pitches. Just highly concrete strategies that you can test right away in your own program.

I didn’t just bring this up as a shameless plug for FRDNY though. You see, my contribution to the 3-person panel, as the name implies, will be 10 ideas in 20 minutes. I have 9 pretty good ones. But I need one more.

So, I’m extending an open invitation to my nonprofit constituency-building friends to contribute the 10th idea. If you have a direct response fundraising idea, something you did in direct mail, email, on the web, via text, or any other direct response vehicle that really moved the dial – and results to back it up – email me directly or better yet post it here for consideration and the benefit of your colleagues.

If I choose yours as the 10th idea, I’ll credit you at the conference (of course), and on this blog. You’ll get the satisfaction of helping worthy nonprofits who will benefit from your idea. And you’ll get to help demonstrate another important idea in membership development: the power of online community.

So I hope you’ll share your ideas. I’m looking forward to hearing them – and I’ll be sure to continue sharing mine.

By , 02/28/10 • Posted in Direct Response Fundraising • Tags: , ,

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14

Feb

Help! My Facebook Fans Are Ruining My Brand


mkdm-handlebarLast week I received a great question from a nonprofit that had recently set up a Facebook page. The organization was concerned about another page on Facebook for beneficiaries of its work because the page was run by a fan, and not the organization. Also, while the page didn’t purport to be the organization’s, it did incoporate its name. They explained:

“The creator of the other page was a beneficiary of our organization many years ago. She’s trying to connect with people who share the history and also start a conversation about our issues. The dialogue on her page so far is pretty benign but it’s headed toward opinions that are not reflective of our organization. I’ve drafted a letter explaining the confusion this creates and am asking her to create a page with a different name. Is that sufficient? What if she refuses? Is there a template legal reason that we can use?”

The organization definitely had a problem – but it wasn’t the existence of this page. 

The real problem was that the organization wasn’t on the same page (the bigger kind) with Facebook yet. They were approaching Facebook, logically enough, as an inexpensive publishing platform for the organization’s message. Which it is … as long as you take into consideration the other 350 million citizen publishers using the platform and that whole conversation thing with social media. So long logic.

For many of us getting started with Facebook, Twitter and other social media channels, it’s all good and well as long as we control the message. But when others start up conversations, don’t “get” our organizations, or say things we don’t like, we get uncomfortable.

But the reality is, social media for companies and brands is all about getting comfortable with this and letting go. Instead of pushing out a controlled message, it’s about people talking about you online, you talking with them, and not only accepting that, but embracing it. 

For those of us trained in pre-social media communications, this is a horrifying thought. What’s that pitch to your boss? “Great idea boss! We’re going to market our organization by letting anyone who wants to start a website about us. We’re going to let them say whatever they want about us all over the web. Not only are we not going to do anything about it, but we’re also going to encourage it.”

Pretty much. Transparency is the new spin.  

So what should an organization do about an “unauthorized” Facebook page? According to the code of social media, at the minimum leave it be. Better yet embrace it. Forget “cease and desist;” think “hug” instead. That’s what Coca-Cola did when it discovered its largest fan page on Facebook was not their own, as described in this post from Mashable.

While your organization’s fans may not be equipped with your corporate messaging guidelines, it’s important to recognize that even if they stray off message a tiny bit, they are fostering genuine dialogue about your organization and your issues – and that’s a good thing.

On the flip side if you don’t like what you’re hearing about yourself online, that can be a good thing too. Because it means that people care enough to talk about you and your issues. The question is, do you care enough to listen? While your fans may reveal to you that your brand isn’t what you thought it was, rest assured, only you can ruin it.

By , 02/14/10 • Posted in Social Media • Tags: , , , ,



7

Feb

Your February Strategic Planning Checklist


february-2010-calendar

Strategic planning isn’t a 3-week sprint before your budget is due. Done right, it’s a year-long cycle of self-evaluation and adaptation. If your organization’s new fiscal year begins in July, here are your strategic planning priorities this month:

1. Finish data collection for your State of the Donor File evaluation and start analyzing. You’ve given yourself a full month (January) to collect the raw data for your annual file analysis. Now take February to really study it and get a clear picture of what’s going on with your donors. Are fewer donors giving more to your organization or vice versa? Is your ratio of direct mail to online giving changing? What are the trends among your monthly donors? To what degree are donors lapsing and how successful are your reinstatement efforts?

Write down everything you see in the data. Next month you’ll decide what your observations all mean relative to your overall vision for membership and plan strategies accordingly for the new fiscal year.

2. Evaluate vendor partnerships and contracts. Sit down with your internal team and review your key vendor partnerships (agencies, analytics resources, freelancers, printers, etc.). Take a close look at how well your vendors are performing relative to your goals, and how well the relationships are working. Are you meeting timelines, budgets and goals? Are your communications and workflow processes running smoothly?

If there are any problem areas, explore possible causes, including the role you may be playing, and how improvements may be made. Just as importantly, examine what’s working well in your partnerships so that you can be sure to keep doing it.

If your review process points to a less-than-ideal vendor partnership, you will need to discuss the issues constructively with your vendor partner, and possibly even explore alternate partnerships. But we’ll talk about that in a future post, because ideally, you’ll find your partnerships on solid footing, in which case the main focus of your internal vendor review should be the relationship for the new fiscal year. Are there budget constraints you need the vendor to help you address? New services you want to explore? Modifications to existing processes you’d like to make? Special challenges you want the vendor to help you meet?

Once you have completed your internal reviews and have a clear vision for your vendor partnerships in the new fiscal year, schedule meetings with your key vendors to begin working on plans and budgets.

3. Forecast your year end results and plan course corrections if necessary. With all this looking ahead to the new fiscal year, don’t forget your current one. Are you going to meet goal? With year end gifts fully entered and reconciled, by now you should be able to answer this question. If it appears that the answer is no, the good news is you have 5 months to fix it.

By , 02/07/10 • Posted in Development Planning • Tags: , , ,



31

Jan

Integration Revisited


puzzle1“Integration” has been a buzz word in membership development for over a decade, and if last week’s DMA Nonprofit Conference is any indication, it shows no sign of going anywhere any time soon.

Ten, fifteen, years ago, integration was about coordinating the relatively limited range of constituency building instruments at our disposal to optimal effect. It meant bolstering a direct mail campaign with an advance telemarketing effort and vice versa. Or testing the placement of a TM effort in a multi-part DM membership renewal series. And when email arrived on the scene, it came to mean a much more multidimensional mix of DM-TM-EM direct response communications.

Today with social media a given, albeit evolving, part of our constituency building programs, and with the rapid rise of text as an important mobilization and fundraising tool (as of Friday, the American Red Cross had raised $30 million via mobile toward Haiti relief) “integration” has taken on a whole new meaning.

It’s no longer just about our Membership Department learning how to use the tools and get them to work together. Today, integration is about something even more complex: getting people to work together.

Gone are the days of Membership here, Marketing/Communications over there, Online down the hall, and Program on the fourth floor. As we’re all reaching into the same toolbox for instruments to enact our missions, where one department ends and another begins suddenly isn’t quite so clear any more. And so nonprofits – even the really big ones you’d think would have it all figured out – are left scratching their heads as to how to get Membership, MarComm, Online and Program to sit at the same table, not to mention puzzling where everyone should sit.

Who owns the database? Who owns the website? Who owns the communications calendar?

One VP of Online Services offered some possible answers at last week’s conference, by presenting several models for departmental integration. Not surprisingly, the speaker’s preferred model featured the Online Department as the spoke in the multi-departmental wheel, and the ultimate owner of the website.

Also no surprise: I couldn’t disagree more. Obviously, the hub should be Membership. And no doubt, there are dozens of Communications VP’s and Program Directors who will disagree just as vehemently with me.

While the debate will surely continue for at least a few more conference cycles, the good news, the real news – over text, social media, and whatever the next big thing may be – is that we understand now how critically important it is for our departments to come together. Real integration isn’t merely clever integration of our constituency building tools; it’s getting our departments and people to sit at the same table. It’s also fostering the imagination and open-mindedness to reach across it with “what if?”

So as we struggle with how to do that, what if … we stopped asking which department “owns” the website? Or who owns the Twitter account? What if we stopped asking who owns the Facebook page, or any of the tools we use to enact our missions for that matter?

What if we approached the puzzle of integrating our departments by challenging ourselves with a new, far more relevant, question: who owns our organization? And then let’s go from there.

By , 01/31/10 • Posted in Direct Response Fundraising • Tags: , , , ,



14

Jan

Measuring Statistical Validity in Direct Response Fundraising


istock_000001430671xsmall1Statisticians are equipped with a broad range of detailed tests and tightly controlled procedures to determine the probability of an outcome.

But direct response testing isn’t done in laboratory. Our lab is the messy, busy, ever-changing world … which means it’s difficult to design a perfect test.

In this climate, there are always variables beyond our control that affect our results, whether it’s the mood of our donors or the media attention our cause is attracting. We saw those external variables at work last spring, when one client was about to open a major new facility. In the months before the big day, this organization was the focus of much excitement, and nearly daily articles and blog posts. And the direct mail package this organization mailed to acquire new donors performed incredibly well. But was this an accurate test of how this package will perform over the long term? Probably not.

In the real world, we also face limitations on the resources we have available – including the quantity of names we have available for testing.

Although we can’t always create absolutely perfect tests, we can still design ones that generate practical, useful and actionable results – and statistics can help. Here are a few tips to keep in mind to improve the statistical validity of your testing:

1. It’s not how many people you solicit; it’s how many responses you receive. In order to have a statistically valid test, you’ll need 100 responses for each test cell – 200 gifts for a simple A/B test. For a donor renewal effort with a projected 5% response rate, this means soliciting 4,000 names (2,000 per cell) for a valid test. In a new donor acquisition effort with a 1% response rate, you’d need to solicit 20,000 names (10,000 per cell).

Does this mean you shouldn’t test if you can’t get 100 responses? Not at all. We often test smaller cells – when we’re testing a new list in acquisition, for example.

Just knowing when your test isn’t statistically valid can help ensure that you’re not relying on flawed data. When your quantities are too low to be valid …

Test fewer elements. Is your appeal only going to be getting 100 responses? Ditch the four-way test, and try a split test for more reliable results.

Don’t extrapolate. When you don’t test a statistically valid quantity, you can’t assume a larger group will behave the same way. Don’t make the mistake of ordering 50,000 of that new list just because your first order of 5,000 performed well.

Plan to retest. Always retest. More on this later.

2. Beware of anomalies. As you review your results, keep an eye out for outliers. Did you get a $5,000 gift to your regular membership appeal? A $1,000 gift to your new member acquisition? Large gifts will artificially increase your average gift and skew the results of your test.

To get a better sense of which results are repeatable, remove gifts from your analysis that fall outside of what is normal for your organization. As with all things statistics, there are fancy ways to identify outliers. But since we’re talking practical models for direct response, you can also look at your average gift and try to make some reasonable determinations. For an organization with average gift in acquisition of $75, we’d look carefully at all gifts above $200 to see if our test results changed when these gifts were excluded.

3. Mind the LARGE differences. Don’t just look at whether your test gets a higher response rate than your control. Pay attention to the magnitude of difference, as this can indicate how likely you are to get the same result again.

Small differences, such as a lift in response from 4% to 4.25%, are more likely to be caused by random variation. When we see a larger lift – a response rate increased from 4% to 5% – we can have more confidence that this result will be repeated if we were to repeat the test.

Even with a huge lift, we can’t assume we’ll always get the same result. When segment A generates a 4% response and segment B generates a 9% response, we can’t know that those response rates will stay the same. What we can say is that B is highly likely to outperform A if the test were repeated.

4. Test, Test and Retest. Testing often raises as many questions as it answers. Perhaps a new list looks promising, but doesn’t yield enough responses to make a statistically valid assessment. Or maybe a change to your package increases response by an amount that’s meaningful to the organization but small enough that you can’t be confident that it is repeatable.

That’s where retesting comes into play. If initial tests indicate a winner that’s not statistically valid, retesting can affirm – or make you rethink – testing results.

As you design and analyze your next test, keep these guidelines in mind to ensure you’re drawing the most accurate conclusions you can from your test results. And if you have any other tips you use, post your comments here or email us at nthfactor@nthfactor.com.

By , 01/14/10 • Posted in Direct Response Fundraising • Tags: , , ,



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