Steven, Author at The Better Fundraising Company

Three Easy-to-Understand (but Hard-to-Do) Steps to Better Fundraising

Steven | December 5, 2023November 30, 2023Repeat

This post is meant to be a primer for how to use measurement to improve your fundraising.

The concepts are easy to understand, but it’s real work for smaller nonprofits to install the systems and track the results.

I’m sharing this because, at the beginning of the fundraising journey for a Fundraiser or nonprofit, these things are non-obvious. When you’re starting off in fundraising, it can feel like a situation where you “send a few things out and see which way the wind blows this year!”

But the more you know, the more you realize this fundraising life is a deeply-understood system.

OK. There are three main stages to this…

# 1 – Measure the Metrics

You want to measure the performance of each piece of fundraising you send out. This means tracking metrics like: gross revenue, net revenue, percent response, ROI, click-through rates, conversion rates, etc.

That list is not meant to be exhaustive. The idea is that there are standard metrics for email, direct mail, major donor proposals, radiothons, etc., and you want to figure out and track the standard metrics for the types of fundraising you do.

Organize your results. (We offer a free spreadsheet to help you get started.) You’ll quickly see that some fundraising activities are more effective than others.

#2 – Measure the Results Annually

If you think of each year’s-worth of fundraising as an experiment, you want to know the results of each year’s experiment.

Your results can be measured with metrics like: donor retention rate (overall and by segment), revenue retention rate, the “cost to raise $1” for each of your primary income streams, your total net revenue available for programs, etc.

Organize your results so you can see year-over-year trends.

#3 – Learn the Levers

The next step feels like magic: you look at the info from the first two steps and quickly notice which fundraising activities make the biggest difference.

You see things like, “When we do more of X, less money comes in.” Or, “When we do less Y, we keep more of our donors.”

Let me give you two real-life examples (both of which I’ve seen many times). I’ll share what the organization noticed when they looked at their results, and then what they found when they looked back at their year:

An organization noticed that they had raised about the same amount over the course of the year with what felt like less effort. The looked back and noticed that they had cancelled their e-news early in the year. Previously, they believed their e-news was a necessary part of their fundraising activities. Today they’ve realized that the time they were spending on their e-news could be better spent in other areas.
An organization was pleased to find that they had raised more year-over-year, and that their donor retention rate had increased from 55% to 60%. They looked back and saw that they had sent two more appeal letters, and four more e-appeals, than they’d sent in previous years. The organization realized they could be asking their donors to help more often, and that doing so would have a positive effect on their fundraising.

Once you track your fundraising activities, and review the effects of them each year, you see what works and what doesn’t. Do that for a lot of nonprofits, for a lot of years, and you build a depth of knowledge about what levers work best in different situations.

I realize it’s tough for people at the beginning of their fundraising journey to know what to do, let alone actually find the time to do all of it.

That’s exactly why this blog exists. We’re trying to share everything we’ve learned over the years about which levers to pull, and which levers to stop pulling, so that your fundraising journey is a little faster and a little smoother.

(Fun Fact: the original name for Better Fundraising was “Better Fundraising For All.” That’s because we believe that all of this information should be shared with all the small- and medium-sized nonprofits who can’t afford a big agency, instead of being kept as part of some “secret sauce.”)

For today, figure out which of these three steps your organization should be working on. And figure out the next actionable step you could take. Now, we’re all in the middle of year-end fundraising at the moment, so you might not get to it in the next couple of weeks. But write it down and set aside some time in your calendar to make it part of your plan for 2024.

Take just a few steps forward, and you’ll be surprised at how much more effective you’ll become.

The Antidote to Fundraising Fear Is…

Steven | November 30, 2023November 29, 2023Thank

So it turns out that the antidote to fundraising fear is a Swedish custom called “fika.”

Fika is pronounced “fee-kuh,” and it’s a custom of people getting together to have coffee and treats together.

One of our customers practices fika each day, and here’s their genius move: while they are together, they open the mail and have an intentional, shared moment of gratitude for each gift.

I love it. And, finding this out helped explain something I’d already noticed about this organization: the incredible grace and equanimity with which they handle complaints and pushback on their fundraising.

Now, fika and responding to complaints might not seem related, but they absolutely are…

Emotional Balance Sheet

You see, nonprofits tend not to emotionally acknowledge the generosity behind each gift that they receive.

Usually this happens for two reasons:

The sheer volume of gifts makes it easier to think about each day’s gifts as “revenue” instead of individual acts of generosity and sacrifice.
The people who receive and process the gifts are often different from the people who send out the fundraising. So the Fundraisers only experience the response to their work as a number on a spreadsheet.

For many people in nonprofits and in Fundraising, even if the balance sheet fills up, there’s little emotional experience of the gifts. The emotional balance sheet remains unfilled.

So when a complaint comes in, the organization is knocked sideways by the emotion. Suddenly they are dealing with a human with a complaint, not just “revenue” or a percentage point in the response rate.

You know what happens next – the complaint receives outsized reaction. There’s an immediate urge to change fundraising messaging or strategy to make sure this never happens again. Some staff members wrongly assume that the Complainer is speaking for more people than him or herself. Fears of the mythical “donor fatigue” are whispered. Flee! Run for the hills! (I’ve written extensively about this in our free eBook about complaints.)

But when an organization has more of an emotional connection with all of the gifts that have come in – and all the generosity and emotion and sacrifice they represent – then a complaint or pushback from an internal stakeholder is just one piece of negative data.

And it’s just one drop of negative data in an ocean of generosity and emotion and sacrifice.

In that case, the complaint is given the appropriate amount of attention. No more and no less. You’re so thankful for the 47 gifts that came in yesterday that you can easily respond to a complaint with warmth and compassion instead of fear.

December Goals

This is being posted on the last day of November. And you are going to receive a LOT of gifts in the next 31 days.

Each of us should spend time in gratitude for the gifts that come in. We should get a little emotionally closer to the generosity and sacrifice behind each gift.

I guarantee you that visiting the mail room each day (or even just scrolling through the names of online donors) will make the inevitable complaint or pushback easier to handle. Because somebody is going to say they don’t like one of your urgent year-end messages. Or a Board member is going to complain about how much fundraising you send out at year-end.

But if you and your organization emotionally feel all the gifts that have come in, those drops of negative feedback will dissolve in the ocean of generosity.

Emotionally acknowledging each gift will also bring you great joy at what you’re a part of.

Why I’m Bullish About Year-End Fundraising This Year

Steven | November 28, 2023November 30, 2023Ask

My mentor once said to me,

“I wish I would have noticed earlier in my career how closely overall fundraising results tend to mirror the economy.”

It’s such a simple idea. But knowing it helped me be a more effective Fundraiser.

There are four main lessons I took from his remark, and I hope they are helpful to you, too.

Takeaway #1 – When the Economy Is Good, Be Bullish

This is applicable right now, today. (As I write this, the S&P is up 19% since the beginning of October.)

“Being bullish” means adding another letter or email in your campaign, or even adding another campaign. It means expecting slightly higher results. It means asking Majors for a little more.

Because the economy seems to be rebounding, I am bullish on year-end fundraising this year.

Takeaway #2 – When the Economy Slows, Reset Your Expectations

When the economy slows, campaigns won’t perform quite as well. Response rates drop a bit, as do average gift sizes. Majors tend to give smaller gifts.

So when the economy slows, savvy organizations reset their expectations. If the goal and plan for the year was 5% growth, they think about reducing that to 3%. They let their Board know the revised expectations, and why.

Takeaway #3 – The World Affects Your Fundraising

If there’s a major natural disaster the week your appeal lands in homes, that appeal most likely isn’t going to do as well.

When Hurricane Katrina hit New Orleans in 2005, we knew two major campaigns that we’d just launched were going to underperform. A significant portion of Americans’ attention turned to New Orleans… which meant less mail was opened… which meant less money was raised by our campaigns.

You obviously can’t plan for natural disasters. But you can plan for times when you know in advance that the world is going to affect your fundraising. For instance, this coming fall is the 2024 Presidential election in the U.S. We recommend most organizations not launch an important campaign the week before or after the election.

Takeaway #4 – Always Keep Noticing

My Mentor was in his 70’s when he shared this observation with me. I love that, even in retirement, he was still noticing things about fundraising. It’s a good goal for all of us Fundraisers: keep noticing things about fundraising, keep trying to get a little bit better at this craft. It makes us a little bit more effective helping our beneficiaries, the organizations we serve, and our donors.

Thanks for Being a Fundraiser

Steven | November 23, 2023November 21, 2023Thank

Today we’d like to thank you for being a Fundraiser.

You help your beneficiaries or cause with the funds you raise.

You help your organization fund needed programs and incredible impact.

You help donors see what’s happening in the world, and you give them a way to get involved.

That’s a lot for one job!

If you’re celebrating Thanksgiving here in the U.S. like we are, I hope you get a moment to breathe deep, relax your shoulders, and appreciate all the good you’ve done this year.

The work you do matters, and it makes a difference.

Thanks for being a Fundraiser!

The Power of a Belief

Steven | November 21, 2023November 21, 2023Ask

Here’s a quick story about how an organization’s beliefs about donors unknowingly drove their fundraising strategy…

We serve an organization that has a large number of monthly donors.

I asked them if they had ever asked their monthly donors to give a little more each month. “No,” came the answer, “we’ve never done that.”

I suggested we run a short campaign to their monthly donors asking them if they’d like to upgrade their giving. It’s my belief that almost every organization has a lot of donors that are willing and able to give more.

But some folks around the table were nervous – they had a different belief. They agreed that some small number of their monthly donors would and could give more. But they believed that a greater number of their monthly donors would complain or completely cancel.

In other words, they believed that their monthly donors (as a group) were giving as much as they were willing and/or able to give.

I shared a couple of stories of campaigns like this I’d successfully run in the past. And we decided to go ahead with the campaign.

The results were spectacular. A thrilling number of monthly donors chose to give more each month. Plus, those donors increased their monthly gift by even more than we thought they would.

As far as I know, there were zero cancellations.

And the impact? The organization started raising an additional $60,000 every single month.

Lesson #1

An organization’s beliefs about donors drive its strategy, its annual plan, and even its copywriting.

If you believe your donors are willing and able to give more, you do things like ask monthly donors if they would give a little more each month. You send more appeals and e-appeals, and you ask major donors to give larger amounts.

If you believe your donors are willing and able to give more, you write things like, “Will you please send in a gift today” instead of the equivocating, “Will you please consider sending in a gift today?”

Should you be smart about which donors you include when you do this? Of course. If you have a monthly donor who has told you that she’s on a fixed income and can’t give any more each month, don’t ask her to upgrade. If you have major donor who has told you that they aren’t going to give any more this year, then don’t ask them.

Your organization has a set of beliefs about donors, and fundraising, and money. Often those beliefs are unstated. But they are driving your strategy, your annual plan, and even your copywriting.

Do you believe that your donors are willing and able to give more?

Lesson #2

There are real costs to believing your donors can’t or won’t give any more.

The organization above could have been raising that additional $60,000 every month the previous year. And the year before that. Think of the impact that was missed!

My goal in pointing this out is not to make all of us (myself included) feel bad for all the opportunities we’ve missed over the years.

My goal in pointing this out is for all of us to realize that our beliefs about donors and fundraising have real-world consequences.

In my experience, believing that “many of our donors are willing and able to give more” will have positive real-world consequences. Believing that “our donors are giving as much as they are willing and able” will have negative real-world consequences.

Try It On

So here’s what I want you to do. I want you, just for a moment, to “try on” the belief that your donors are willing and able to give more. Name one thing you would do differently.

Now, make a plan to do that thing. Your organization (and the additional people you’ll help) will be thankful that you did.

Bittersweet Moments of Clarity

Steven | November 16, 2023November 15, 2023Ask

When you get better at something, there’s that bittersweet moment where you’re thinking two things almost simultaneously:

Oh man, I’ve been doing it wrong all along… and
Hey, I know how to do that better now!

In those moments, it’s as if you see the world a little more clearly than you did before. You understand how things work a little better than you did a moment before.

I had one of those “moments of clarity” recently, thanks to the impressive and irrepressible Jen Love.

We were on a panel at the Storytelling conference talking about direct response fundraising. I shared one of my writing tools: starting the first draft of every appeal and e-appeal with the sentence, “I’m writing to you today because….”

(I’ve written about why that’s an effective tool here and here.)

Jen then said something like, “Yeah, I love that. I’ve taken it a little further and what I use is, ‘You’re hearing from me today because…’.”

Cue my moment of increased clarity.

Her version is better than mine! It starts with the magical word, “you.” It places the donor in a more active role with more control. It leads to more writing about the donor and what they care about, and less about the organization.

~~I share this with you today because~~… You’re reading this today because you know that the more moments of clarity you can have, the more effective a fundraiser you’ll be.

But there are Fundraisers and organizations who don’t really want those moments of clarity. They like their way of doing things. Or they can’t believe that your moment of clarity could apply to them, their communications, or their donors. For those organizations, getting better at fundraising is a challenge.

But if you seek out those moments – if you’re eager to find out that what you’ve been doing is a little wrong, and that there’s a better way to do it – getting better at fundraising and raising more money is delightful.

In my experience, the most effective fundraisers are having “moments of clarity” all the time. Because of those moments, they see the world a little more clearly. And they create fundraising that’s more effective.

Hey, about your envelope…

Steven | November 14, 2023November 13, 2023Ask

This blog post from Five Maples shares the results of a head-to-head test of the envelope on a direct mail appeal for a nonprofit.

Their donors were split into two equal groups. One group received a letter in an envelope that included the organization’s tagline. The other group received the exact same letter, but the envelope did not have the tagline on it.

The tagline on the envelope was the only difference.

The test showed that including the tagline on the envelope reduced the number of people who responded by 65%. Put another way, putting their tagline on the envelope reduced the number of people who sent in a gift by over half.

Let’s notice that this test isn’t about all taglines. It’s about that organization’s tagline, on that piece of direct mail.

But still, that is a massive impact.

You can take three lessons from this simple test that will make you a more effective fundraiser.

Lesson #1

If your organization is putting its tagline on your outer envelope, do you know if it’s helping or hurting?

If you don’t know, it’s time to ask questions instead of making assumptions.

(By the way, there is ZERO judgement here if you’ve been making assumptions. We all do it at the beginning of our fundraising journey.)

Lesson #2

A bigger lesson this data teaches is that what you put on your envelope matters. A lot.

There are very smart people who argue that what you put on the envelope matters more than what you put in the envelope. How’s that for a brain-breaker? Because if your recipient doesn’t open your envelope, what good does the incredible message inside do?

I don’t spend much time on that argument because I think it’s a chicken-or-egg situation – but it is fun to talk about with other Fundraising nerds over a drink.

Moving forward, you want your organization to be thoughtful about what’s on your envelopes and in your email subject lines (which are more-or-less equivalent). And if you want to know more about this right now, the blog post mentioned above is a great place to start.

Lesson #3

Data about fundraising will help you know what’s important and where to spend your time.

For instance, I spend a ton of time on outer envelopes, and on the description of what a donor’s gift will accomplish. I spend almost no time trying to make sure an appeal matches a nonprofit’s “voice.” I make those decisions because data shows how much envelopes and descriptions matter, and how using an organization’s voice in the mail usually causes them to raise less money, not more.

For what it’s worth, in my career I’ve tried to develop what I think of as an “evidence-based worldview” for how to be successful in fundraising. That worldview is made up of as many test results (like this one!) and facts that I can get my hands on.

If you can build a worldview like that, you’ll have a good idea of what path/tactic/approach will have the best chance of success, regardless of the situation.

And if you’re just beginning to build your worldview, this little test about a tagline on an envelope is a great place to start!

Response Rate Goals

Steven | November 9, 2023November 8, 2023Ask

At last week’s Storytelling Conference, I was asked a really good question:

“My organization is new to direct mail. What kind of response rates should I be getting?”

In case it’s helpful to you, here’s my answer:

For printed appeals my goal is a 4% response rate

For printed newsletters my goal is a 3% response rate

Those are helpful benchmarks, and I hope they help you judge how your mail is performing.

But I have to mention, things start to get interesting right away. Take a look at these variables:

The more donors you have, the lower your response rates tend to be. For an organization with 40,000 donors, achieving 3% for an appeal and 2% or 2.2% for a newsletter might be success.
The fewer donors you have, the higher your response rates tend to be. If you have 500 donors, you might be getting a 6% response rate on appeals, and a 4% response rate on newsletters.
Finally, who you include on the mailing list is another big variable. If you include your monthly donors, your response rates tend to go up. If you include lapsed donors who haven’t made a gift in 36 months, your response rate will go down.

I hope this helps you or your team have benchmarks and goals to aim for. And that there are variables that need to be taken into account. What “success” looks like varies quite a bit from organization to organization – even from mailing to mailing.

The important thing is to measure your results so you know what works best for your organization, and then do more of that!

Trust Your Donors

Steven | November 7, 2023November 6, 2023Ask

If you’re at an organization that has a hard time approving new ideas in fundraising, keep reading.

(And maybe you’ve just arrived home from last week’s Nonprofit Storytelling Conference with your head full of new ideas you’d like to try!)

To many people working in nonprofits, new fundraising messaging and tactics can feel deeply risky. And so, some of your team will push back against your new ideas.

To those people, when they push back, here’s what I want you to say…

“I want you to trust our donors. I want you to trust that they could be giving more, and that they are adults.”

“I want you to trust that their support is deeper than a new message, new tactic, or new appeal could shake.”

“Let’s trust that our fundraising right now is not the best it can ever be. And let’s trust that, like larger organizations, we can regularly try new things and improve over time.”

Will each donor say “yes” every time we try something new? Of course not.

Will every “something new” work better than the thing it replaces? Of course not.

But until you trust your donors enough to regularly try new things, to ask for support more often, and try new messages, you’ll never tap into all the giving available to you.

Don’t let internal worries and fears put boundaries around your donors’ generosity. It’s your donors’ job to set their boundaries, not yours.

Trust your donors. Their generosity will astound you.