Author: Steven

Steven Screen is Co-Founder of The Better Fundraising Company and lead author of its blog. With over 30 years' fundraising experience, he gets energized by helping organizations understand how they can raise more money. He’s a second-generation fundraiser, a past winner of the Direct Mail Package of the Year, and data-driven.

Donor Acquisition Explained

Steven  |  Tips
Donor Acquisition.

Conventional Nonprofit Donor Acquisition “Wisdom”

Work to “build awareness” for your organization.

Always be sharing success stories.

Tell people how effective your organization is.

People will flock to your organization.

You’ll raise lots of money.

How It Actually Works

Work to create a great fundraising offer .

Identify groups of people who are likely to become donors.

Put your offer in front of those people.

Small (but knowable) percentages of those people will become donors.

Your organization will lose money on the front end. But if you get good at it, you’ll raise a LOT of money over time.

You Don’t Have to Thank and Report IF…

Steven  |  Report
thank and report.

We talk a lot around here about how the three core functions of Asking, Thanking, and Reporting are necessary for fundraising success.

But there’s an exception.

There are some organizations out there that can succeed without Thanking and Reporting.

Here’s what those organizations have in common:

  1. They’re working on a cause or with a beneficiary group that a LOT of people care about. Think “kids in poverty” or “pets with large cute eyes” or “diseases that touch everyone’s lives.”
  2. They’re skilled at Asking. They have great offers and great stories.
  3. They have donor acquisition down to a science.

Why is this true? If a lot of people care about what you’re working on, there are always more potential donors out there. And if you’re great at donor acquisition, you can replace all the donors you lose each year – and more. And if you’re skilled at Asking, you’ll raise a lot of money from your donors before they move on.

These organizations don’t need to Thank and Report because they don’t need to keep their donors.

These organizations don’t have to worry very much about keeping their donors because it’s so easy for them to get new donors.

Story Time

We did a website project years ago for an organization that worked on a “brand name” disease.

Something like 40,000 people each month are diagnosed with this disease – which affects not only the patient but all of their loved ones.

Each month, many of the 40,000 – plus untold numbers of concerned family members – would go online to research their disease.

Many of them would end up at this organization’s website. Thousands would give a gift.

This organization was acquiring several thousand new donors every single month just by having a semi-capable website.

Meanwhile, the rest of their fundraising was atrophying. Their Thanking was rote and organization-centric. Their Reporting was nonexistent (though they did brag occasionally). Their donor retention rates were abysmal.

But they worked on a disease that a lot of people care about. And they were good at donor acquisition. Even though they were only adequate at Asking, they still raised increasing amounts of money each year as more and more people came online and made donations.

They “succeeded.” But they sure could have raised a lot more money (and done a lot more good) if they knew what you and I know.

What You Should Do

If your organization is one of the lucky few, who don’t need to Thank and Report while still raising more money each year, congratulations! You’ve won the fundraising lottery.

But if your cause is smaller, if your Asking could improve, if new donor acquisition is a struggle – then keeping your existing donors is paramount.

You have to get great at Thanking. Not simply acknowledging a donor’s gift, but making her feel like a meaningful part of your organization. And you have to get great at Reporting. Show your donor the outcomes of her gift, and give her the credit.

Do those things well, and you’ll keep more of your current donors, and raise more money every time you Ask them!

Please Don’t Wait Too Long to Ask

Steven  |  Ask
Wait.

A word of advice to small- and medium-sized nonprofits: don’t “rest” your donors for too long after year-end.

I was taught – via stories and data – that the single biggest predictor of whether a donor would give a gift is how recently the donor had given a gift.

Put slightly differently – the more recently a donor has given a gift, the more likely that donor is to give you another gift. This is the “Recency” in classic RFM “Recency Frequency Motivation” modeling.

We had a client who didn’t believe this was possible. So we tested it.

We sent out an appeal in late January. (I should mention that they didn’t want to do this because they thought it would “bombard” their donors who had just been asked a lot at year-end. But everything we’d been doing for them was working great. So they trusted us enough to try it.)

The appeal did GREAT. Response rate and net revenue were huge wins.

Then we analyzed who gave to the appeal. Specifically, we looked at how recently each donor had given a gift.

  • The single largest group of people who gave were the people who had given the previous month (December).
  • The second largest group of people who gave were the people who had given two months prior (November).
  • The third largest group of people who gave were the people who had given three months prior (October).
  • The fourth-largest group of people who gave were the people who had given four months prior (September).
  • The fifth-largest group of people who gave were the people who had given five months prior (August).

Etc.

The test showed the organization that what I’d been saying was true.

Now, should you ask a Major Donor to give another gift the month after she gave a substantial gift? Nope. How about a Foundation who just gave you a grant? Also nope. And of course, there are additional and more sophisticated segmentation analyses.

But here’s what should happen for donor communications that you send to everyone…

Your Takeaways

What should you and your organization do with this information? I suggest three important takeaways:

  1. Realize (and share internally) what a big role recency plays in who gives to your fundraising. You’ll become a smarter organization immediately. Because will you mail all your appeals to donors who haven’t given a gift in 36 months? Nope. That means money saved.
  2. Don’t wait too long to ask your donors after they’ve given a gift. Every month you wait reduces the chance they will give.
  3. Ask more often. I love this part – when a woman at the organization reviewed the results of the test, she said something brilliant. She looked at me and said, “We should be giving our donors more chances to help, shouldn’t we? Because every time we’ve been ‘resting’ our donors, we’ve accidentally been lowering how much money we raise, right?” Exactly right. It was a joy to watch “the light go on” for her, and then to watch that organization raise more money that year as they started communicating with their donors more.

As I write this, It’s early January. And it’s important to Thank your donors in a meaningful way in January. But don’t wait too long to Ask your donors for support again. We Fundraisers should constantly be learning from the past by letting tests like the one above show you how to raise more money!

Thank Your 2019 Donors Meaningfully Right Away

Steven  |  Thank
Thank you.

We recommend to all our clients to send a meaningful Thank You to their donors in January.

It should be a non-normal Thank You. It should stand out from the rest of your donor communications.

We believe in this so much we invented “Thankuary” several years ago to help an organization do this. (That organization, by the way, just DOUBLED their year-end fundraising from 2018 to 2019.)

Because here’s the thing:

If you want to have the best chance of keeping your donors,

You have to Thank your donors well

Then later Report back to them on the effects of their gift.

Make It Meaningful

It’s January, which means you just Asked your donors quite a bit at the end of the year. (At least I hope you did). Which means it’s time to Thank your donors.

Here’s what to do:

  • Make it stand out in her mailbox. Send it in a larger envelope. Say “thank you” in audaciously large type on the envelope. Use a bold, exciting color.
  • Make it emotional. It should read like a personal note of incredible gratitude. Your ED might not like to sound emotional, but emotion is exactly what’s called for.
  • Do not initially thank your donor for supporting your organization. Instead, thank her for making a difference for your cause or beneficiaries. Thank her for her generosity. Thank her for her attention. Then, after you’ve done those things, you can thank her for supporting your organization.
  • Tell a couple short stories to illustrate donor impact. I’m talking two or three paragraphs each.
  • Send it only to donors who gave in the last twelve months.

This mailing doesn’t have to be fancy or expensive. You don’t need photos. You don’t need charts, graphs or graphics.

You just need a letter that makes your donor feel thanked, like an important, valued part of your organization.

If you can’t send out a letter, do as much of the above as possible via email. But know that fewer people will read it, and it will feel less meaningful to them.

Ideally, you can do both. And in a best-case scenario: we have clients send an email to their donors to let them know the letter is coming.

The Effects

Can you imagine a better way – from a donor’s point of view – that you could start the year?

She’ll feel meaningful to your organization. She’ll know she’s appreciated. She’ll know that her gift made a difference.

She’s then more likely to donate when you send your next appeal.

She’s then more likely to donate next year-end.

She’s then more likely to keep you as one of her charities.

Seems like a pretty good return for the investment of time to send this letter, doesn’t it?

Hindsight IN 2020

Steven  |  Repeat
Hindsight.

“They say a wise man learns from others’ mistakes. I learn from others’ successes, why pay attention to the mistakes?”
~Behdad Sami

Thousands of smart fundraisers have gone before you. The best advice we can give small-to-medium-sized nonprofits for 2020 is to find out what successful fundraisers have done in the past and apply it to your organization’s fundraising.

If You See a Tactic a Lot, It’s Probably Working

One thing to pay attention to: if you see a tactic a lot from professionally run organizations, the results from it are probably great.

For instance, here’s a list of things we see (and use) all the time because they work great. Many organizations don’t like these tactics, but they work great:

  •  Telemarketing
  • Printed gift receipts with reply cards and reply envelopes
  • Appeals that boldly share stories of Need
  • Direct mail
  • Letters and emails that are highly repetitive
  • Fundraising messaging that’s so simple it makes expert internal stakeholders uncomfortable
  • Having detailed plans and revenue goals for Major Gifts Officers, with high accountability
    We learned each of these (and many more) from the successes of fundraisers who have gone before us.

They taught them to us because, out of all the available options, they worked the best.

So rather than reinventing the wheel, always look first to hindsight.

And of course, hindsight shouldn’t be the only place you look. But it’s the only proven resource that small-to-medium-sized nonprofits have, because testing and innovating are expensive.

Two Powerful Things

Here are two powerful things that FAR too few organizations (particularly Boards and leadership) do:

  1. Take time to ask the question, “For organizations at our stage, who has been successful at this before, and how did they do it?”
  2. Then trust the results of successful fundraising done before, more than trusting what internal stakeholders think will work, or what they like or don’t like.

Because in our experience, the successes of others won’t look like what you’re doing now.

At first blush, you’ll probably think it won’t work for your donors.

You probably won’t even like it.

But it will likely work.

So go to sofii.org and browse the results. Pay attention to the results-based teaching we do on this blog. Follow people who have a ton of direct response fundraising experience – people like Lisa Sargent, Jeff Brooks, Tom Ahern, Agents of Good, Mark Phillips of Bluefrog, and Simon Scrivener.

If you have the budget and time to innovate, that’s great! Please do it and share!

And if you’re a cash-strapped smaller nonprofit, learn from the past successes that the experts above are constantly sharing!

All the Free Things

Steven  |  Resources
Free.

To help you raise more money in 2020 (stop that rhyming, I mean it!), we sent out a bunch of free resources during the week between Christmas and New Year’s.

You might have missed them.

It’s like you were on vacation or had other things going on.

So in case you missed them – and you still want to raise more money this year – here they are all in one spot for you.

Click the links to download, for free, all these resources:

It’s an incredible privilege to be part of your fundraising tribe. Your time and attention are a gift, and we don’t take it lightly.

Thank you. And may you raise more in 2020 than you ever have before!

Are You Learning from Your Experiments?

Steven  |  Repeat
experiments.

I tweeted this out last month, and it got a lot of love (well, for me anyway):

You ran a bunch of fundraising experiments in 2019 – have you learned everything you can learn from them?

And the appeals, e-appeals, and newsletters you sent out are not the only experiments you ran. Your whole fundraising program is an experiment. Your major donor program is an experiment. Your direct response program is an experiment.

Here are some example questions, and what they attempt to measure:

  1. What percentage of your donors did you retain in 2019 versus previous years? This will help you know, overall, how well your fundraising program performed last year.
  2. What percentage of your major donors did you retain in 2019 versus previous years? This will tell you how good your program is at retaining major donors – you know, your most important group of donors. Want to really get into the data? Measure the amount of major donor revenue you retained. That will show you if you’re retaining your highest value donors (which is best). Or if you’re just replacing lost revenue with new revenue each year. (H/T to Veritus Group for popularizing this idea.)
  3. Of your appeal letters, which one had the highest net revenue? Which one had the highest response rate? These will help you answer which appeals you should ‘repeat’ and do again this year – and which ones you should not do again this year.
  4. For each mailing, what’s your response rate by recency? For instance, if you send your appeals to all donors who have given a gift in the last 24 months, what’s the response rate and net revenue from the 18-24-month group? That will tell you whether you should continue to mail to those donors.

With the answers to questions like these, you can make the types of changes that smart organizations use to raise more money every year.

And if you make all the needed changes to the best of your ability, it’s like compound interest. 1 + 1 + 1 = 5. That’s where organizations see the big growth.

And it’s basically free money! It’s just measuring experiments that you’ve already run and using data to make your 2020 fundraising decisions.

Instead of “Hindsight is 2020,” I propose “Use hindsight in 2020!”

Merry Christmas!

Steven  |  Uncategorized
Christmas

Your work as a fundraiser is a very real gift to the organization you serve, and to your cause or beneficiaries.

Your work is also a gift to your donors! They can’t do the good they want to do in the world without you!

Thank you also for your time and attention this year – that’s a gift too. It’s an honor to be part of your fundraising journey.

So have a blessed day tomorrow. And tonight we’ll raise a glass to all the good you’ve done this year!

With gratitude for you and what you do,

Jim, Steven, and the entire Better Fundraising Team

Should You Mention Your Goal Amount?

Steven  |  Ask
Goal Amount.

Here’s a great question from a smart Fundraiser (and Free Review Friday watcher) named Jeff:

“I had a quick question: Is there an advantage to mentioning the overall goal in an Appeal? Yes, our offer may be $25 a week to help a kid in need, but what about telling our donors our overall appeal goal is $50,000? Have you found an advantage in telling this larger goal, or can it actually decrease giving from some donors?”

And here’s my answer:

Yes, I think it’s a good idea to mention the goal in the appeal.

However, what’s more important is to include multiple other reasons for the donor to give a gift today.

For instance, if you have five kids who are coming into your program next week, I’d mention that before I’d mention the goal.

Here’s why…

Your goal has far more meaning to internal audiences than it does to external audiences.

Insiders and stakeholders love mentioning goals because they know exactly what the goal means. They know the context, they know the scale of the amount, and they know how important it is.

But I’d wager that more than 95% of your donors don’t know if a particular amount is a lot or a little for your organization.

Note: there are times where a massive goal can get your donors’ attention and help motivate them to give. But those situations are outliers, in my experience.

Most of the time, your goal – by itself – is just not much of a motivator for your donors.

Give Your Goal Meaning

When mentioning a goal, I try to give it a meaning that a donor would value.

Here’s an example I gave Jeff: “We need to raise $50,000” is a LOT less impactful than “I need to raise $50,000 so that every child who comes to us can be welcomed, witnessed to, and see the love of Christ in action.”

In that example, I’ve turned a number with little meaning into a number that has a lot of meaning for Jeff’s donors.

The Context is More Important than the Amount

Here’s a data-driven finding that brings this whole idea home…

When an organization has a shortfall, the fact that they have a shortfall is more effective at getting donors to respond than the size of the shortfall.

That tells you something important: the context around an amount is more important than the amount itself.

So next time you have a goal, mention it!

  • A goal can be helpful, but you sure don’t need one (or need to mention one) to be successful.
  • What’s more important is to include multiple reasons to give today that have meaning to your donors.