Fundraising Detective

Successful fundraising needs excellent leadership

There's been a lot of buzz on Twitter this week about the Fundraising magazine story on Christian Aid deciding to dump the Head of Fundraising role.

It's an interesting and brave decision, with the consensus being that it is a bold plan, but one fraught with danger and a high risk of failure.

From my point of view, the best (and most successful) fundraising teams I have worked with and observed have all had a strong leader, who imparts their vision and fundraising philosophy on the team. 

They drive through the necessary changes, make tough decisions and enable people to do their job.  They inspire, cajole and lead the team to success.

For me the big danger in Christian Aid's decision is that no fundraising leadership will lead to no fundraising culture in the organisation.

At the crudest level (and with only limited information), it sounds like they have a fundraising and management team who don't actually like fundraising and asking for money!

I wish them well and would love to be proved wrong, but I can't help thinking that this tweet from Adrian Salmon sums up the situation perfectly:

"Ship dispenses with rudder - says crew can steer 'perfectly well with hands'"

I'd love to know your thoughts on Christian Aid's plan...

Data Insight + Relationship Building = Fundraising Gold

There's been an intense and fiery debate raging over on the SOFII group on Linked In over whether you should send an ask with your thank you letters.

The initial debate widened to a discussion on the merits of relationship fundraising and the need for data analysis - to me the two aren't mutually exclusive, though some people seemed to think so...

Fortunately the rhetoric and mudslinging has died down a bit and some insightful and thoughtful analysis has come out of the discussion.

The consensus seems to be that the best fundraising is a combination of relationship building and data insight. 

Anyway, the discussion has got me thinking how you can represent this graphically and I've come up with the following:

I've put intuition and data insight on one axis and taking a relational or transactional approach to donor care on the other.  By charting how you go about fundraising, you will fit into one of four categories.

I'll give you a quick overview of each one, starting with the worst:

 Bad Fundraising:  Unsurprisingly the worst type of fundraising.  I'd hope there weren't many charities operating here.  This organisation is likely to have an underutilised database, appalling attrition rates and a high turnover of fundraising staff.  Amazingly, some donors will still give to these organisations!

Amateur Fundraising:  I've seen a lot of charities in this space.  They are filled with good intentions and do create meaningful relationships with some donors and are generally well liked.  However, they let mailing dates move, don't have proper processes in place for capturing information and many opportunities slip through the net.  The worst extreme of this is when you get fundraisers who are scared to ask for money.

Churn and Burn Fundraising:  Treating donors as ATM's, constantly asking, using data insight to maximise short term income and the optimum number of 'asks' can be surprisingly effective (especially in the short term).  You 'churn' through your donors as quickly as possible and are constantly looking for new donors.  However, as response rates to cold mailings have decreased and the costs of recruiting donors has increased, this is increasingly hard to pull off.

Relationship Fundraising:  The best of both worlds.  You treat people with respect, listen to them and try to engage them for the long term.  However, you also use data insight to target donors appropriately, have a rigorous approach to testing to maximise your returns and monitor things like lifetime value.  This is the space I want to be and it is the combination that I believe will raise the most money. 

If anyone has any feedback on this or some better names for the segments then I would love to hear from you!

 

If you don't have a dream, how you gonna have a dream come true?

This post is my submission to the January edition of the Non-Profit Blog carnival. This month’s carnival is being hosted by Nancy Schwartz of the Getting Attention blog.

Most non-profits were built on a dream. An aspiration. A vision for the future.

Just take a second to think of the non-profits you support. What is the dream that you are buying into that makes you give?

Winning the fight against cancer.

Eradicating poverty.

Ending child abuse.

Whatever it is, it is likely to be aspirational and motivated by a desire to do good and help change the world for the better.

It’s all too easy to forget your dreams and get tied up in small details, endless meetings and trivia that distract from your effectiveness.

Have a think about the last time you visited a project, spoke to a beneficiary or went and chatted to your programme staff.

If it has been too long, why not make it a commitment in 2012 to take time to re-connect yourself to the dream that made you want to be a fundraiser in the first place…

Forget charities, I'm going to give directly...

I loved this story from the US about strangers randomly paying off the Christmas lay-away bills of struggling families.  The whole story just oozes feel good quotes and restores your faith in humanity.

Closer to home, my mother-in-law did something similar (with work colleagues) for families in her community.  She decided to go direct to families (via social services) after having a couple of bad experiences of donating directly to charities.  Overall, she found the whole experience much more rewarding than giving via a charity and it was something her whole company got involved in.

Elsewhere, the Oxfam blog reported on Give Directly, who are enabling donors to directly transfer cash via mobile phones to families in need in Africa.  It's a fascinating concept and completely cuts out charities by getting people to give straight to the individual family in need. 

I still think they need to think how they are going to report back to donors (it lacks some of the feelgood factor of the above examples), but it will be interesting to see if it proves popular.

It's a bit early to declare this a fundamental shift, but I do think there are some lessons we can learn from this as professional fundraisers.  Here are some of my takeaways...

1. One of your main jobs as a fundraiser is to connect the donor to the beneficiary through your communications.
2. You can do this by always trying to humanise what you do.  Put stories and emotion at the heart of what you do as a fundraiser.
3. Make your donors feel part of something important and that their giving is making a tangible difference.  Being made to feel that your donation is disappearing into a large, anonymous pot can be deeply unsatisfying.
4. Don't forget to report back to your donors on the difference their gift has made.

 

Does a personalised approach make a difference? Results from two tests

I wanted to share the results of two small experiments I've conducted in the last couple of months regarding personalised thank yous and appeals. 

I hope you'll find them of interest, though I need to say upfront that the sample sizes were (very) small and so the results aren't statistically significant.

Does a handwritten thank you card increase response to the next appeal?

For the first experiment we randomly split the responders to a previous appeal in two.  One half received our normal personalised thank you letter, the other half also received a hand written thank you card, which referenced their previous giving.

As well as being a nice thing to do for donors, I was also interested to see if those who received the extra thank you would also be more likely to give to the next appeal.

The results were as follows:

Normal Thank You: 28.1% gave to the next appeal.

Extra Thank You: 29.2% gave to the next appeal.

Interestingly, the normal thank yous gave more collectively than the previous appeal, whereas the extra thank yous gave slightly less!

So it appears not to have made any difference in the short term.  If I had the resources then I would love to monitor the long term effect on doing this to the lifetime value of a donor.

Does a personalised Christmas appeal increase response?

In the next test, we decided to send a personalised version of our Christmas appeal to our top 400 donors (they'd all given over £50 gifts in the past). 

We included a handwritten Christmas card featuring a poem from a beneficiary - you can read this lovely poem online.

Last year the response rate across all segments of the appeal was about the same.

So far the response rate is over 25% higher for the high value donors than all other donors.

With responses still coming in (I'd expect we have around 66-75% of responses now) then the top segment has responded at 13.2% compared with 11.7% last year, so by the end of the appeal I'd expect to see a 30-40% increase in response to sending the handwritten Christmas card to the top donors.

A pleasing result and one that we can look to utilise for future appeals as well...

 

 

 

Should we name and shame millionaires who don't give?

UK Fundraising have a great summary of the 2011 Coutts million pound donor report (you can download the full report here) and it shows that the number of million pound gifts in the UK fell from 201 to 174 last year.

At the same time, one of the Freakonomics podcasts reports on Australian Dick Smith who has publicly vowed to name and shame rich people who don't give.

Would such an approach work in the UK and has Dick's direct approach had an effect?

Sadly, I think the answer is no to both questions.

While I admire Dick's enthusiasm and directness, I think issuing threats and trying to embarrass people to give is not a viable long term solution to get people to give more.

In Australia his approach has attracted critics and he has been accused of being a bully.

If I was advising Dick, then I'd tell him that he might have more success by trying to show people the benefits of donating and the satisfaction that philanthropy can bring. 

I'd get him to encourage people to go on shows like Secret Millionaire and for him to  offer a matching challenge to millionaires who've never given before.

Finally, a public pledge (like the one from Warren Buffet and Bill Gates) that he will give most of his wealth away, might inspire others to join him.

In the UK I'd like to see more people celebrating their giving and publicising their philanthropy, but sadly our natural reserve means that even great initiatives like the Beacon Fellowship don't seem to attract the publicity and attention they deserve.

Rather than endless white papers and talks of tweaking the tax system to incentivise giving, I would rather see people celebrate the emotional joy of giving and encouraging others to join them.

Is fundraising income increasingly fragile?

A talk I attended at the RSA by Nassim Nicolas Taleb (the author of the Black Swan and Fooled by Randomness) has got me thinking whether fundraising is about to hit a crisis.

In his talk Taleb talked about nonlinearities, optimisation and fragility and the idea that when businesses, governments, projects etc reach a certain size then the consequences of any problems increase exponentially. 

To illustrate the point he gave the following example. 

With 10,000 cars on the streets of London it might take 30 minutes to drive across the city.  Increase that to 50,000 and even 75,000 and the journey time might hardly change, but at some point, lets say 90,000, the journey might suddenly take an hour as that is the point that saturation is reached and jams ensue.

The following graph illustrates the point:

Non-linearities and fundraising

Looking back at the results of the mystery shopping research I talked about last week and the evidence of increasing donor attrition, acquisition costs and fundraising fatigue*, then the point is approaching where it will become too expensive to continue to rely on badly applied fundraising methods and the impersonal, transactional approaches taken by the majority of our profession. 

Using Taleb's language, the point of over-optimisation (and the resulting chaos) may be closer than we think...

I live in hope that the result of this will be a paradigm shift - from rhetoric about relationship fundraising, loving our donors and listening to their needs etc, into action.

*Here are just a few anecdotal examples of fundraising in crisis:

Direct debit cancellations hit a record high in August 2011.

Some of my own recent research revealed that the cost of recruiting a regular giver door-to-door has doubled in the last 10 years, whilst attrition has increased by over a third.

CRUK  has seen it's fundraising income drop for the first time since it formed and has cut the number of Race for Life events in 2012.

Overall giving in the UK is static and it would be interesting to see if fundraising costs overall have increased.

 

 

 

 

Why do mystery shopping results always shame fundraisers?

Last week I had the pleasure of listening to Mark Phillips and Damian O'Broin present the results of a mystery shopping exercise they've recently undertaken in the UK, Ireland, U.S.A, Canada, Australia and New Zealand.

I'm sure they will be blogging about the results in due course and I don't want to steal their thunder, but if you've ever read any fundraising mystery shopping survey, then you can probably guess the results.

With a few notable exceptions most charities they tested are lousy at thanking, welcoming and keeping in touch with donors.

As a profession it simply isn't good enough and the end result is that it costs more and more to recruit new donors, people get fed up with giving and fundraisers get tarred with the same brush as banks and utility companies in the bad service stakes.

We owe it our beneficiaries and our profession to be better than that, so ask yourself - if my team was mystery shopped how would we do?  If it's anything less than first class, then you have a duty to make things better.  Starting now.

So while the bad practices of others gives an opportunity to impress donors with our competence and personalisation, it is only a small consolation. 

Wouldn't it be great if next time one of these mystery shopping exercises is completed people are wowed into saying what a good service we are providing as a profession... 

 07/12/11: Update

Mark and Damian have the following posts up about the research:

Online donors have letter boxes too

Who sends your emails?

Seeing what the donors sees

8 things you can learn from the $300,000 fundraising t-shirt

The $300,000 t-shirt - buy it and you'll pay for a cargo flight for UNICEF

I thought this fundraising campaign between UNICEF and Threadless was fantastic when I saw it last week and had it down to blog about it.  They've produced 12 t-shirts with various prices so people of all means can donate.

Before I got round to it, Andy Sernovitz has produced this great post on why the campaign is worth talking about.

He's come up with eight lessons you can learn from the campaign and apply in your organisation.

1. Make it outrageous
2. Make it easy to participate
3. Make it interesting for big talkers
4. Make it naturally viral
5. Make it match your core business
6. Make it fun
7. Make it forwardable
8. Make it 100%

Thanks for doing my work for me Andy!  It will be interesting to see if anyone buys the $300,000 t-shirt...

Fundraising Lessons From China

I'm just back from a thrilling couple of weeks in China on a belated honeymoon.  Whilst I was on the trip we visited Huiling School in Xian, which the Intrepid Foundation (the tour company we went with) helps to fund.

They gave us a textbook fundraising experience, that I wanted to share...

First of all we were introduced to the staff and made to feel welcome.  They then gave a brief talk about the ethos of care and the services they provide.

Next up was a performance by the drama group at the school, which we were asked to join in with.

We were then invited to tour the building and to ask any questions.

So after giving the rational case for support, the emotional performance, getting us talking with the children and finally inviting us to experience the work, I knew what was coming.  You guessed it - the ask, along with a promise that all donations made that day would be matched by Intrepid!

Textbook stuff and I'm sure it's something that has been honed after many such visits.

The wish list of some of the kids

What I particularly liked about the ask is the homemade shopping list that they'd made and put on the wall.

It featured some of the people we'd just met and gave a little story about why they wished for the item requested (these ranged from a trip to the cinema to expensive computer software) and then also promised to follow up with an e-mail when the item had been bought.

A close up of some of the shopping list items

You could see from looking at the wall, which items that had been bought in the past and the faded paper from where items had been removed.

As I left I had a wry smile on my face.  Every fundraising technique in the book had been used on me and you know what? I didn't care and was happy to donate to the ongoing work of the school, along with the rest of the tour group.

It simple asks like this that reminds me that sometimes we try and over complicate fundraising, when at it's heart it really isn't that difficult...