All posts by Eliza Temeles

27

Oct

Integrate Your Year End Campaigns


Recently I attended the DMAW’s monthly luncheon where a packed house turned out to hear Roger Craver, Founder of DonorTrends and editor of The Agitator, share his insights on integrating year end campaigns.

For most, one big lesson had to be this: when Roger Craver’s speaking, you can’t afford to miss it. But in case you did, here are a few words of wisdom from Roger to keep in mind for your year-end campaigns that I shared in a guest post for the DMAW’s blog

Multichannel communications are critical to successful fundraising.

You’ve probably heard this one before. But Roger presented the data to prove why multichannel communications are essential to keeping your donors …

  1. Direct mail donors who have an email address on file are 150% more valuable than direct mail donors without an email on file.
  2. Email addresses shorten the time to achieving a second gift … and more than double the retention rates of one-time first year givers.
  3. An SMS message following a solicitation can increase renewal rates by 25%.
  4. Donors with email addresses give 50% more gifts per donor, and have an average gift that is 67% higher.

If you haven’t yet, it’s time to create a budget for acquiring your donors’ email addresses, mobile numbers and more. A little investment can have a huge impact on your retention rates.

Your donor has changed – and it’s your job to understand what they need.

Younger donors don’t behave like the generation that came before. Donors have changed from a “tell me” generation to a “show me” generation that expects organizations to show them the impact of their support with photos, stories, videos, conference calls and more.  And donors expect you to listen to them and to hear their advice, concerns and opinions on your organization and your issues.

Fortunately, new communication channels are perfectly suited to engaging donors in dialogue … and an organization’s ability to retain its donors will increasingly depend on its ability to do just that.

To create strong, multichannel efforts, organizations have to change how they work.

Good multichannel communications aren’t the sole responsibility of one department. Break down silos with interdepartmental teams empowered to create effective, multichannel campaigns. Also …

  1. Follow the 75% rule. New channels won’t wait around while you craft the perfect tweet. Accept communications that are 75% perfect and 100% on time.
  2. Understand the ROI of each channel. Even when creating a multichannel campaign, be sure that you focus most of your time and energy on channels that have the greatest return on investment.

New technology allows us to go back to old ways of fundraising.

Classic fundraising techniques still work better than anything else. 50% of donors say they were motivated to give because “a friend asked,” and fundraising emails sent by a friend have open rates of 90% (compare that to your last campaign!).

Use new channels to make your campaigns more personal, more timely, and more direct – all the elements that have always led to successful fundraising.

Do you have other great stats on the value of multichannel campaigns – or tips on smart, year-end strategies? We’d love to hear them!

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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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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.

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25

Aug

Activism, Slacktivism or Something Else?


ProtestRecently, there’s been some chatter in the press about the value of digital advocacy, including this article in the Washington Post, and this post by Foreign Policy blogger Evgeny Morozov.

The term that comes up frequently is “slacktivism.” Born of “slacker” and “activism,” the term refers to supporting a social cause by taking an action that is easy to do and feels good, but is unlikely to make a difference. It could be something like signing an online petition, like the one I got a few months ago petitioning North Korea to release journalists Euna Lee and Laura Ling. It could be joining a Facebook cause. Or it could be changing your Twitter avatar green, as many did in support of this summer’s Iranian protests.

Some worry that this so-called armchair activism might take the place of real activism. Rather than showing up at a local protest, or taking the time to personally call our senators, perhaps we will feel we have already done enough, just by signing this petition or joining that cause.

But those concerns seem to miss the point. Do we really think that North Korea, a government known for repressing its citizens, is going to respond to a petition? Do we think Iranian President Ahmadinejad will resign if we can get #iranelection to become a trending topic on Twitter? Would we call ourselves Activists?

Probably not. [If you disagree, check out this article from DigiActive, which contains comments from Twitter users about why they changed their avatars green.]

So why exactly are we inspired to take action? We suggest it is because — however effective or not — this type of action allows us to …

1) Respond to a situation that has triggered an emotional response — anger, sadness or hope

2) Publicly express our desires about the world we want to live in

3) Feel a sense of belonging in a larger movement

4) Get involved — in a simple way — in a hugely complicated issue

And that’s the encouraging message for fundraisers. People really do want to change the world, to be part of a movement that makes a difference.

But it is our responsibility to get people involved — through communicating the emotional impact of our work and creating easy ways for donors and prospective supporters to become engaged in our complicated causes.

As we enter the fall, think about what your year-end fundraising effort has in common with the last digital advocacy campaign you took part in. If the answer is nothing, you might want to think again.

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25

Jul

The Shape of Things to Come


half-full-glassIn June, Target Analytics released its Index of National Fundraising Performance for Q1 2009 indicating that direct response giving to nonprofits in the Target Index (35 million donors translating to nearly $2 billion in giving) was down in the first quarter of the year. This was not surprising on the heels of Giving USA’s report a couple of weeks earlier that giving in 2008 was down 2% from 2007. In fact 2008 represented the first decline in giving, in current dollars, since 1987.

I realize that all this sounds awful. But fortunately, as both Target and Giving USA will tell you, their data is only part of the story. There are two other important things you need to know:

1) The Target Index represents 79 nonprofits. Big ones, who lead the way in direct response fundraising for sure. But still, just 79 nonprofits. According to the Foundation Center, there are 1.5 million nonprofits in the United States.

2) Although it may have been 2% less than the previous year, Americans gave over $307 billion to charities in 2008. This represents the second year ever, and in a row, that charitable giving has exceeded $300 billion. And it occurred in the worst economic crisis since the Great Depression.

An informal polling of friends and colleagues has turned up a sense of cautious optimism for Year End ’09. In fact, we’re hearing quite a few reports of increased individual giving offsetting declines in foundation and corporate giving. So I’m viewing the glass as half full for the second half of 2009.

Do you have questions, opinions or predictions for Year End 2009 fundraising? Post them in the comments section below. We’ll keep an eye on things and report back.

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