Steven Screen, Author at The Better Fundraising Company

Four Reasons to Have a Direct Response Fundraising Program

Steven Screen | January 4, 2024January 3, 2024Repeat

Do you ever wonder why your organization is doing all the dirty work of direct response fundraising – the briar patch that is direct mail letters and emails and landing pages and coding and tracking response rates?

You might especially be wondering this if you’ve done the math and seen that 80% to 90% of your revenue from individual donors comes in from a tiny percentage of your major donors.

If that’s you, here are four reasons smart nonprofits of all sizes still do this type of fundraising today…

Major Donor Identification System

Sending mail and email – and watching the results carefully – is one of the main ways organizations reliably identify new potential major donors.

That’s because many major donors will begin their relationship with you by making a small gift.

Organizations then use their direct response fundraising program to identify those potential major donors. They set up systems to:

Notice when gifts above a certain size come in
Use wealth-screening software (and occasionally good old-fashioned Google research) to determine which of their smaller donors has the capacity to give larger gifts

There are “hidden major donors” on your file right now, today. Are you using the mail and email to find them?

Anti-Fragile

One of the goals of mature nonprofits is to have multiple revenue streams. In other words, they don’t want their lifeblood coming from just events, or just grants, or just major donors, or just earned-revenue.

Because if you have just one main revenue stream, the organization is fragile.

A few months into the pandemic I talked to a national organization that was $15,000,000 (!!) behind their budget for the year. Their fundraising was overwhelmingly based on regular, small events with wealthy donors.

Because they had not developed a direct response fundraising program (they told me they thought fundraising through the mail was “icky”), they did not have a way to stay in relationship with their donors when they couldn’t meet in-person. Unfortunately, they and their beneficiaries suffered because of it.

The more income streams you have, the less fragile you are, and the more prepared you are to fundraise in uncertain times.

Stay In Touch

Most people reading this blog will have major donors that you’re not in relationship with. They make a gift or two every year, but they’ve resisted your attemps to build a personal relationship with them.

And you have people who receive your mail and email… but you’ve never met them.

Your direct response fundraising program is how you build relationship with those donors.

This becomes more important as you grow. If you have 500 donors, you likely know 30%-50% of them. But if you have 5,000 donors, you likely only know 10%-15% of them. That means your direct response fundraising IS the relationship for a large percentage of your donors.

Unless you’re an organization that has a natural source of publicity and a cause that people regularly think about, it’s extremely difficult to grow your donor file without a direct response fundraising program.

And Hey, You Can Raise Real Money!

Many of Better Fundraising’s clients raise the majority of their revenue through the mail and email. Maybe they haven’t spun up a grants department yet, or their major donor program is just getting off the ground.

But they are raising between $4 and $10 for every $1 they spend in the mail.

In addition to the three reasons above, they are raising serious revenue to power their nonprofit or ministry.

The Goal

The goal with your direct response fundraising program is to establish a system where your organization stays in relationship with donors as you grow… and identifies & cultivates more major donors… and becomes less fragile… and raises money while doing it.

That right there is why savvy organizations are investing in their direct response fundraising programs. And it’s why Better Fundraising loves helping organizations build the systems and repeatable processes that help them be successful in the mail and email.

An Appeal is a Promise

Steven Screen | December 28, 2023December 19, 2023Ask

An appeal letter is a promise.

The organization promises that if a donor gives a gift, something will happen.

As all the gifts are coming in this week, you’re seeing a lot of donors take you up on your organization’s promise.

The first half of fulfilling the promise is to do the work your organization does: feed the child, put on the play, add new books for the library, you get it.

The second half of fulfilling the promise is to show and tell donors that the appeal’s promise was kept. Show and tell your donors the child that was fed, the play that was performed, the new books snug in their shelves.

After all, if your organization doesn’t “report back” to donors, how will donors know that their gift made a difference?

So right now, while you’re on the emotional high from all the gifts coming in, make sure you have a plan to “report back” early next year: a print newsletter, a donor-reporting letter, or perhaps an email that shares one story of change.

If you do, your donors will be more likely to donate the next time you ask.

Why?

Because they’ll know that your organization keeps its promises.

Almsgiving

Steven Screen | December 26, 2023December 15, 2023Year-End

Today is Boxing Day, and also St. Stephen’s Day.

It’s traditionally a day of generosity:

In the Boxing Day tradition, in Britain, tradespeople received gifts from their employers.
For the Feast of St. Stephen, alms boxes in churches were opened and distributed to the poor.

In western culture, this time of the year is still a time of alms-giving: money is pouring in to nonprofits, and the biggest week of online giving of the year is just starting.

Almsgiving is known to foster a sense of community, empathy, and social responsibility. Perhaps that’s why many people feel just a little bit better during the holidays.

Yes, this week is also full of sales and conspicuous consumption. But it’s good to remember we Fundraisers are a part of a tradition with deep historical, religious, and cultural roots.

Remember those traditions this week. They drive this wave of giving; we just get to surf it.

Enjoy the week, and may your lockboxes and inboxes be full of gifts!

Helpful Assumptions for 2024

Steven Screen | December 21, 2023December 15, 2023Repeat

Let’s make some assumptions about your fundraising in 2024…

You can assume that your donors could be giving you more.

You can assume that not every donor opens up every piece of communication you send.

You can assume that your communications don’t arrive perfectly timed with when your donors feel like giving gifts.

You can assume that your donors are adults and they can handle a little more fundraising from you.

All reasonable assumptions.

Now, if you assumed all of those things, what would you do?

You’d send more fundraising than you did in 2023. And you’d raise more money.

Almost Done, My Friends

Steven Screen | December 19, 2023December 15, 2023Year-End

This is just a note of encouragement that you’re almost done with year-end fundraising.

All the sweat, and stress, and extra hours… they are almost over.

And they were worth it.

You created fundraising that inspired and encouraged your donors to give gifts. They did so joyfully. Your beneficiaries will be helped, your donors will feel more connected.

You didn’t manipulate anybody, you didn’t twist anybody’s arm.

Every gift that came in was an act of generosity. Some of them were acts of sacrifice.

And they all happened because you created and sent out your fundraising.

Well done, and good luck the next couple of weeks!

Fundraising to Individual Donors at Its Simplest

Steven Screen | December 14, 2023December 13, 2023Repeat

In our experience, effective fundraising to individual donors comes down to two things:

#1 — Sharing why the work of your organization is needed. What is it that’s going on in the world today that needs to be fixed? Who is hurting that needs help? What could we be doing better if only there were more support?

Share this and donors remember why your work is so important.

#2 — Sharing with donors the impact of their previous giving. What change did the donor help make? What’s better now because of their giving?

Do this and donors feel like their gift to your organization made a difference.

When an E.D. wonders why the fundraising isn’t working so well, the first thing to do is look to see whether the fundraising comms are effectively communicating these two ideas.

When a fundraising plan or fundraising communications are not working well, it’s usually because these two ideas have been crowded out by information about the organization itself.

But if you build your communications plan to share these ideas, multiple times per year, you’ll raise more money than you would ever expect.

The success of the simplicity will astound you.

Looks Like There’s One More Step

Steven Screen | December 12, 2023December 12, 2023Ask

Something happened to me pretty much as soon as we hit “publish” on last Tuesday’s post about “the 3 steps to using measurement to make you a better fundraiser.”

I was deluged with memories of people telling me that they’ve done all three steps and were now raising significantly more money… but somebody in the organization was requiring them to “change it back to the way it used to be” because the new way made them uncomfortable.

I even have a friend who two weeks ago was told, “I know we’re raising more money than we ever have, but as of today you need to go back to the way we used to do things.” (To add insult to injury, they were also told that a) they couldn’t send out the year-end appeal they’d prepared, and b) they were going to have to send out less fundraising next year.)

So it’s pretty clear that just the three steps I advocated for aren’t enough.

Here’s the 4^th step…

#4 – Trust That There’s No ‘Catch’

Maybe better said, “trust that the increased money coming in is not going to be followed by some ‘gotcha!’ in the future.”

Because here’s the thing – there’s no catch.

If the following three things are true:

The information in your fundraising is true,
You have consent to tell your beneficiaries’ stories,
You’re Asking, Thanking and Reporting during the year…

…then there are no hidden fees, no submerged rocks, no cliffs, no balloon payments. No mysterious “gotcha’s” are going to come due.

If you’ve developed new messaging that is driving more giving, it’s because you’re tapping into what motivates your donors better than you did in the past. Trust that the fundraising data (response rates, net revenue, average gift size, etc.) that led you to the new messaging will continue to lead your organization to greater and greater impact.

A Procrastinator’s Guide to Year-End Fundraising

Steven Screen | December 7, 2023December 6, 2023Year-End

Just getting started with your year-end fundraising?

Here’s a quick list – my best tips – for what to do with your remaining weeks before the end of the year.

Make a Plan to Start Earlier Next year

First, the hard news: if you’re just starting now, you’ve left money on the table. You could have raised more.

That is a harsh truth. Many people won’t like to hear it. But it’s true. And for the moment, don’t worry about it. But right now, go set a calendar reminder to start earlier next year.

Seriously, set a reminder.

I’ll wait.

It’s that important.

The organizations that start their year-end fundraising earlier tend to raise more money.

What to Do Now

Do as many of the following things if you can. And here’s the order I’d prioritize them in:

Identify and contact your major donors who have not yet given a gift this year.

Don’t do what most nonprofits do, which is hope that their majors give a gift before the end of the year.

If you haven’t already, identify exactly which of your major donors have not given gifts. Then reach out to each of them to ask for a special year-end gift to help your beneficiaries (not to help your organization). Do it in person if you can; phone is the next best way. Tell them their gift is needed now, and tell them their gift will make a difference!

Write and send your year-end letter.

Send out a direct letter that powerfully asks donors to give a special gift before the end of the year. Tell them their gift is needed now, and tell them their gift will make a difference!

If you use a mail house and it’s going to take too long to get a letter produced, here’s what to do:

Figure out how many letters you could print and send using your in-house process.
Start sending those letters to your top donors, starting at the top of your file and working down.

Write and prep your year-end emails.

Be sure to have at least three emails prepped for the last three days of the year. Remember that you do not have to reinvent the wheel: the emails should be VERY similar to your letter, and the emails should be very similar to each other. Repetition is the most effective tool you didn’t know you have!

Tell them their gift is needed now, and tell them their gift will make a difference!

Update your website to ask for a year-end gift.

Make an update so that the first thing users see on your home page is a clear call-to-action and a large “donate” button.

And… wait for it… tell them their gift is needed now, and tell them their gift will make a difference. You will raise more money than you expect.

That’s it! Do as many of those as you can, starting from the top of the list.

Do a great job on each one before doing anything else.

And if you can only do three things, do the top three. If you can only do two, do the top two. You get it.

Remember: year-end is the easiest time of the year to raise more money than you expect!

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

Steven Screen | 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.