Steven, Author at The Better Fundraising Company

Create & Relieve Tension

Steven | March 19, 2019March 19, 2019Ask

The most effective fundraising communications create and relieve tension throughout the year.

“Creating and relieving tension” is a way smart fundraisers can tap into how humans are wired, to increase your donors’ engagement with your organization.

You’ve seen this at work in movies, TV shows and plays. There’s a classic “three-act structure” where there’s an “inciting incident” that creates tension, then there’s drama, then resolution to relieve the tension.

This approach has been used for centuries because it works. But there’s a specific way to do it in fundraising…

What Works Best

If you look at the best-performing fundraising programs – in terms of net revenue and donor retention rates – you’ll notice the following approach. I’m sure you’ve seen it yourself:

They create tension with powerful appeals
The relieve tension with powerful newsletters

There are a few outliers. But when we started Better Fundraising and really dug into the data, we saw that some organizations drastically outperformed their peers.

The high-performing organizations tended to have a mix of appeals and printed donor-centric newsletters.

The Simple Explanation

Great appeals create tension by presenting unsolved problems to donors.

They remind donors that all is not right with something the donor cares about. They leave the donor hanging. The donor does not know what’s going to happen.

That’s why great newsletters relieve the tension by sharing stories of how the problem has been solved.

They “close the loop” for the donor. They show the donor, usually through a story of a beneficiary, that the problem was indeed solved.

This leaves the donor feeling satisfied. Pleased that her gift made a difference. Trusting the organization more.

I Don’t Know Why, but the Data is Clear…

You raise less money when you create and relieve tension in the same piece of fundraising.

The standard theory: when you relieve your donor’s tension, you remove some of her emotional momentum and reason to give.

But when you leave your donor with a little tension, she is more likely to take action. Because by taking action, she resolves the tension.

She can say to herself, “I know that I helped. I know that I did my part.”

Side note: note that in this scenario, the donor is giving to help someone and to “scratch her own itch” – to relieve the tension she feels. She is not giving to scratch the organization’s itch. My personal theory: if more organizations knew that donors gave mostly to scratch their own itches, organizations would make more donor-centric fundraising, and a LOT more money would be raised.

How Does This Help You?

Great question. This whole line of thinking is a bit conceptual. So here are your takeaways:

During your year, you should have a mix of printed appeals and printed newsletters
Your appeals should present current problems to donors – not share a story of someone you’ve already helped, or work you’ve already done (free tips here)
Your newsletters should be full of stories of people you’ve helped and work you’ve already done (just be sure to give credit for those things to your donor)
Don’t try to do both things (share a need and a “story of success”) in the same piece of fundraising. When you do that, you’re shooting yourself in the foot.

And Up Next…

Many organizations don’t like to share current problems, or unsolved problems with their donors.

I get it. It’s uncomfortable.

But it sure works better. And I think that the arguments that there’s something wrong with that approach fall apart when examined.

I believe Asking in this way is a form of donor love. Or #DonorLove.

I call it #DonorToughLove, and I’ll write about it next…

You Must Earn Your Donors’ Attention (they don’t read the whole thing)

Steven | March 12, 2019March 12, 2019Ask

Most nonprofits, without realizing it, make a big assumption when they write their fundraising.

They assume their donors will read the whole thing. The whole email. The whole letter.

That’s a really unhelpful assumption.

Here’s a heatmap of a 1-page direct mail letter. It shows what a donor’s eyes tend to look at, and in what order it happens:

We could spend a lot of time talking about what this means for your fundraising writing and design. But there’s one main lesson I want you to take away…

You Have to Earn and Keep a Donor’s Attention

You cannot assume your donor will read the whole thing.

Well, you can. But you’ll raise a lot less money.

So first you have to earn your donor’s attention. That’s having a great teaser on your envelope. Or a catchy subject line for your email. You need to get good at those things.

For your mass donor fundraising to excel, you need to be better at earning attention than you need to be at describing your organization or your programs.

That might feel like a “sad truth.” But it’s a really helpful truth if you want to raise more money and do more good.

How to Earn Donor Attention

There are three main ways to earn donor attention. You need to make your fundraising:

Interesting to donors. This almost always means talking about your beneficiaries and your cause more than your organization and your programs. Remember: your donor first got involved because of your beneficiaries or cause, not because of your programs.
Emotional. Emotions are what keep us reading. You want to constantly be using the emotional triggers: Anger, Exclusivity, Fear, Flattery, Greed, Guilt, Salvation.
Dramatic. You want your fundraising to be full of drama and conflict.

Here’s an example. You already know that your first sentence of any fundraising appeal is super important. Take a look at these two:

“[NAME] Theatre is dedicated to producing high-quality, daring productions that take on challenging topics.”

vs.

“I’m writing you today about something you care about – and it’s in danger.”

I can basically guarantee you that more people are going to keep reading the second example. It’s written directly to the donor, it’s about something she cares about; it’s emotional, and it’s dramatic.

The first example – from a real letter from my files – is a classic example of telling the donor something the donor probably already knows and doesn’t really care about.

Note: Arts organizations often say that their fundraising can’t be emotional or dramatic because they don’t have babies or puppies to raise money for. I think the first example above shows that Arts organizations can absolutely be dramatic and emotional in their fundraising – they just need to think about it differently. After all, if a Theatre can’t get dramatic, it’s probably not that great a Theatre!

The Big Lesson

Your donors are moving fast. They don’t read the whole thing, watch the whole thing, or listen to the whole thing.

You need to get great at getting and keeping their attention. Study it. Know what your donors care about and then borrow tactics from advertising and social media to get your donor’s attention. And remember; we have 70 years of best-practices for earning and keeping donor attention. Smart fundraisers have learned a LOT over the years. Tap into it!

Because if you can earn your donors’ attention, they are more likely to keep reading.

And if you can keep your donors’ attention, they are more likely to give you a gift.

When to Attempt to Innovate

Steven | March 7, 2019March 7, 2019Repeat

I wrote recently about how the vast majority of small nonprofits should not spend time and money attempting to innovate.

But there are times when attempting to innovate is the right thing to do:

You should attempt to innovate after you have stabilized your fundraising, optimized your fundraising, and expanded your fundraising.

Stabilize, Optimize, Expand, Innovate

Most small- to medium-sized nonprofits need to stabilize their fundraising.

That means getting your systems locked in so you know exactly what to do, when to start, how long it takes, and you get it done on time. (Most small nonprofits have work to do on this stage, in my experience.)

Then they need to optimize their fundraising.

That’s making each appeal or e-appeal work as well as possible. That’s using segmentation and talking to different groups of people with different messaging. That’s analyzing the results of each fundraising campaign and making the next one better.

Then organizations need to expand their fundraising. That’s trying a new channel, like radio or Facebook. Or beginning a scalable donor acquisition program. Or sending 6 appeals instead of 4.

Then, and only then in my opinion, should organizations be trying to innovate.

The three things above are hard. But our industry knows how to do them.

Don’t Skip a Stage!

Too many nonprofits skip over the steps above.

They skip things that we know will work to raise them more money. Instead, they try things that might work.

They waste tons of time and money. And they pay the opportunity cost of the money they could have raised – and the donor relationships they could have made deeper.

Because remember, innovation doesn’t always work. In fact it rarely works.

(Side note: this is why I’ve been saying “attempting to innovate.” Because when organizations attempt to innovate, they often come up with a) things other organizations have tried before that didn’t work, and b) new strategies and/or tactics that don’t work.)

To all you small nonprofits out there: let the big organizations, who have optimized their fundraising, spend the money to innovate. There will be some successes and some failures.

Then copy their successes.

The Real Trick

The real trick is knowing when to innovate.

In my experience, too many smaller nonprofits like the idea of innovating – of working on something exciting – more than they like the hard work of following best practices.

So they attempt to innovate when they should be following surer paths to success.

If a nonprofit follows best practices, it will raise more money.
If a nonprofit tries to innovate, it might raise more money.

And you want to know what’s really exciting? Raising more money with less work. That’s what happens when you follow best practices!

Why attempting to innovate is rarely the smart choice

Steven | March 5, 2019March 5, 2019Repeat

The vast majority of nonprofits should not spend time and money attempting to innovate.

Let’s keep this super brief.

The fastest, cheapest way to raise more money is almost always to follow fundraising best practices.

Especially when most small nonprofits can see growth of 15% to 20% per year when they start following best practices.

“But wait,” I can already hear people thinking, “we’re small, we have to innovate. And regular fundraising is boring.”

Please hear me out: that line of thinking is what keeps many small nonprofits small.

First of all, you do not have to innovate. Your organization was started to do one thing: make an impact for a cause or group of people who need help. Not to make an impact AND create innovative fundraising.

Having the impact your organization was started for and creating innovative fundraising are two completely different things that require completely different skillsets. It’s highly unlikely that a small nonprofit will be good at both.

Attempting to Innovate is a Bet

Organizations that attempt to innovate are betting time and money that the results will be better than the results they could get from best practices.

Sometimes you win. Most of the time you lose. Best practices are best practices for a reason: they are proven.

In my experience, attempting to innovate is a bad bet for most small nonprofits.

Let the “big guys” innovate. Let the big guys absorb the costs of all the testing and failures that lead to breakthroughs. Small nonprofits should be following the known paths to success.

Try Proven Tactics that are New to You

Most small nonprofits confuse “trying new things” with “attempting to innovate.”

Should small nonprofits should try new things? Of course.

For instance, you could try to acquire new donors using radio. That might be new for your organization, but it isn’t innovation. It’s a proven tactic. There are known Cost Per New Donor amounts (around $100). There are known ROIs (around 1.1 to 1.3). There are known ways to make it succeed (have a great offer, tell stories, long form is more effective than short form).

The thing I want smaller nonprofits to know is that the Fundraisers Who Came Before You have tried almost everything. If you look around, they’ve figured out what tends to work well and what doesn’t. Lean into that set of knowledge!

And here’s the amazing thing; those Fundraisers Who Came Before You will share their knowledge! They’ll tell you what they did and how they did it. They’ll share the results. You can apply what they learned to your organization, to grow faster.

You just have to take the initiative.

The Good News for Small Nonprofits

There are things you don’t have to do. Things you can take off your plate.

And one of them is attempting to innovate.

There’s an incredible body of knowledge that’s been built up over the last 70 years for how to raise money effectively. Lean into that body of knowledge – it’s what I do every day.

Every once in a great while, attempting to innovate is the right course. It’s fun (and usually expensive).

But the majority of the time there are huge gains to be made not from attempting to innovate, but from taking what’s worked for other organizations and applying it to your organization.

You’ll save yourself a lot of time and heartache. And you’ll do more good faster.

PS — Get some of our best practices from our free e-book, “Asks that Make Your Donors Take Action.”

How to Raise 15%-20% More This Year

Steven | February 28, 2019February 27, 2019Repeat

We’re doing a series of short posts called Mastermind Lessons.

The Fundraising Mastermind is transformational consulting for nonprofits that we do with Chris Davenport of Movie Mondays and The Nonprofit Storytelling Conference.

Today’s post is the fourth top-level lesson we’ve found that every organization in the Mastermind needs to learn…

It’s simple… but it’s not easy.

The Three Things You Should Focus On

I realized that every organization we worked with needs to get better at these three things. And all of them saw immediate gains from doing so.

Over my career, I’ve noticed that the organizations who focus on doing these well see a lift of 15% to 20% in net revenue over the first year they focus here.

So read on if you’d like to see that kind of growth…

#1 – Communicate to Your Donors More – About What Donors Care About

It’s a fact: most nonprofits under-communicate to their donors. (To be more nuanced, most nonprofits under-communicate to their donors about what their donors care about.)

Just one example: most small nonprofits who send four appeals per year are scared to death that they will drive their donors away if they send another appeal or two. What those small nonprofits don’t know is that their donors also give to other organizations who are mailing twelve, sixteen or even twenty-four times a year.

If you literally don’t have the human resource capacity to be communicating more, that’s a good reason. But if the fear of bothering/offending your donors is causing you to contact them less, you need to stop fearing and trust in a) best-practices and b) your donors’ willingness to help.

And of course, you have to communicate with donors about what they care about. Most smaller nonprofits have a hard time with this, which is why they should…

#2 – Use Specific Offers

To smaller organizations, it’s counter-intuitive that highlighting a specific part of one program will work better than Asking donors to fund your mission or all of your programs.

But it works almost every time.

Most of your donors, most of the time, don’t want to know the whole picture. They want an easy way to do something meaningful that they understand.

A great offer gives donors what they want: it highlights a specific part or step of one of your programs (so it’s easy to understand), and it shows your donors how meaningful and important that step is.

#3 – Manage Your Major Donor Relationships

About nine out of ten organizations we work with openly acknowledge that they could do a better job with their major donors.

And for the organizations where we can spend a year or two helping them improve their major donor systems – their revenue growth is remarkable.

Investing in your major donor systems is an easy win. It doesn’t happen overnight, but it will sure feel like it.

15% Growth is Simple, But It’s Not Easy

To the smaller nonprofits out there: if you do the three things above, and do them well, you’ll see significant revenue growth.

Because there is no magic bullet. Here’s how John Lepp of Agents Of Good said it on Twitter:

“Charities are looking for a magic (technologic and demographic) bullet to solve all of their problems, and I’m sorry… it doesn’t exist. It’s the 1000+ small boring things you need to do that make the big difference.”

The three things above are the three most important “1000+ small boring things you need to do.”

We’re helping several organizations do them right now. And we’ll continue to post about what they do as they grow and grow. If you want personalized, experienced help, visit this page to learn more and fill out an application.

How to Convince Your Boss to Invest in Planned Giving (warning: involves math)

Steven | February 26, 2019February 22, 2019Major Donor Fundraising

We’re doing a series of short posts called Mastermind Lessons.

The Fundraising Mastermind is transformational consulting for nonprofits that we do with Chris Davenport of Movie Mondays and The Nonprofit Storytelling Conference.

Today’s post is the third top-level lesson we’ve found that every organization in the Mastermind needs to learn…

Most Organizations Under-Invest in Planned Giving Because They Don’t Understand the Potential Windfall

For most nonprofit leaders, “Planned Giving” is a bit of a black box:

Your organization has some donors . . .

. . . you get some legacy gifts . . .

but you don’t really know how many legacy gifts you’ll receive or how large they will be.

Because leaders don’t really understand how planned giving works, they are loath to invest real money in it.

So they work on next month’s event, and then the appeal after that, and then the website needs to be updated… you get it.

Planned giving becomes an afterthought. Or underfunded. Or not thought about at all.

Here’s What to Show Your Boss

What I’m about to share comes directly from this blog post by Jeff Brooks at Moceanic. When I read it, I immediately added it to my toolkit of information to help nonprofits with. It’s powerful.

The formula to calculate your future planned giving income is:

It’s A x B x C = D.

A = The number of your donors who have given 2 or more gifts, and at least one of those gifts was made in the last 18 months.

B = Your successful pledge rate. This is the big variable, the number you can change by what you do or not do. It most likely is somewhere between 0.01% and 5%.

C = Your average bequest. For US charities, it’s around $35,000. If you don’t know your average, this is a good number to use.

Multiply those three numbers, and you’ll have the value of future bequests to your organization.

Let’s play it out with these assumptions. You can adjust these to your realities:

Here’s how it looks for an organization that has no bequest program or does almost nothing to cultivate bequests:

A = 10,000 donors who’ve given 2 or more gifts, and their last gift was within the last 18 months

B = 0.01% successful pledge rate (very low because you aren’t actively seeking bequests)

C = $35,000

D = $350,000 in future bequest income

Ok. Not bad for doing nothing. And a lot of charities skate along like that, seeing that $350,000 as a kind of random windfall. They’re happy with it. They’d be a little less happy if they thought about the opportunity cost they’re paying for doing nothing!

Here’s what it looks like for an organization that has a not-terribly-effective bequest program. They’re consistently doing something to encourage bequests, just not the most they could:

A = 10,000 donors (that meet the criteria I’ve listed above)

B = 1% successful pledge rate

C = $35,000

D = $3.5 million in future bequest income

The difference between $350,000 and $3.5 million is a big difference, no?

Two Big Lessons

There are two big lessons I’d love for your organization to take away from this.

First, the average value of bequests is really high. So you can (and should!) invest real time and money into landing legacy gifts. That can meaning hiring a Bequest Manager or a Planned Giving Officer. It can mean sending out mailings that are only about planned giving (instead of just mentioning planned giving in some other mailing or email).

Second, it’s just math. Calculate how much money your organization is projected to be receiving based on today’s numbers, and how much money you could be receiving if your organization ups its game. Then show your boss.

I did that for two “Bosses” last week, and it changed how both of them think about investing in planned giving.

It will take time to get great at identifying prospects and then landing legacy gifts. But it’s worth your time and investment!

Your Major Donors Are More Important Than You Think They Are

Steven | February 21, 2019February 14, 2019Major Donor Fundraising

We’re doing a series of short posts called Mastermind Lessons.

The Fundraising Mastermind is transformational consulting for nonprofits that we do with Chris Davenport of Movie Mondays and The Nonprofit Storytelling Conference.

Today’s post is the second top-level lesson we’ve found that every organization in the Mastermind needs to learn…

Your Major Donors are Remarkably Important and You aren’t Spending Enough Time or Money on Them

An organization usually knows that a small percentage of donors (your “major donors”) provide a significant percentage of your total revenue.

But an organization is usually shocked when they discover how small that number of donors is, and how large the percentage of income is.

In our experience, it’s usually around 85% of an organization’s revenue from individuals that comes from 10% of their donors.

And because the organization hasn’t sat with the numbers and really faced what they mean, the organization does not spend enough time and money on their major donors.

Here’s the example I use that helps organizations see:

Say you have a business that has 100 customers. And 10 of those customers are responsible for 90% of your revenue. You would give those customers the “white glove” treatment. They would be greeted by name at the door. They would have a special, shorter line to wait in. They would get a phone call the next day to see if their purchase worked out.

That’s common sense. But too many nonprofits don’t apply it to fundraising.

Your major donors should get the “white glove” treatment:

Hand-written thank you cards
Appeal letters written specifically to them, about what they care about
Newsletters sent in large envelopes, with a hand-signed cover letter
A call from the Executive Director after every gift

There are lots of possible treatments. You can and should be doing them.

That said…

To Keep Your Major Donors, and to Lift Them to Higher Giving, You Need a SYSTEM

Special treatment is great. Start doing it now.

But what you really need is a major donor fundraising system.

In a nutshell, here’s what your system should do:

Identify your major donors
Rank them so you know who to focus on first
Build relationships with them (with the ones who are open to this)
Make a revenue goal for each major donor
Make an annual plan to lead each major donor to reach the goa

It’s the organizations that have major donor systems in place, and then are disciplined about running the system, that see major revenue growth. They keep more of their major donors, and lift their major donors to higher and higher levels of giving.

Does Your Organization Need This?

The good thing about this is that almost every organization I’ve spoken with recently says they know they need to spend more time and money on their major donors.

The tough thing is that very few of them know what to do next.

My suggestion: take a class like this one from Jim Shapiro, the co-founder of Better Fundraising. (And if you can’t make those dates, apply anyway because there will be another class later this spring.) And follow the Veritus Group blog.

It will take time to get great at major donor fundraising. But it’s worth your time and investment!

Effective Fundraising Feels Aggressive to Insiders

Steven | February 19, 2019February 14, 2019Ask

We’re doing a series of short posts called Mastermind Lessons.

The Fundraising Mastermind is transformational consulting for nonprofits that we do with Chris Davenport of Movie Mondays and The Nonprofit Storytelling Conference.

Here’s the first of the top-level lessons that every nonprofit needs to be reminded of, more often than they think.

To internal experts – that’s you, your programs staff, your leadership – effective fundraising appears overly aggressive and simplistic

That’s not the way it appears to donors. But it often appears that way to internal experts.

This is a constant theme for organizations at the Mastermind. They get pushback like this from their internal audiences (and sometimes wonder this themselves):

“This is too aggressive, we’ll offend people.”
“But I would never talk like this.”
“But this doesn’t mention X and Y and Z; donors need to know those things!”
“This isn’t the language we use. The correct term is [INSERT JARGON].

I even wrote this story because it’s such an incredible example.

So what’s the reason this happens to almost every organization? Despite, you know, 70 years of fundraising best-practices that simple, direct fundraising works better?

It’s because of a truth that most organizations don’t know about or can’t fully wrap their minds around…

You Are Not Your Donors

The phrase “You Are Not Your Donors” should be written – in 100pt Courier – on the main door into every fundraising department.

Then everyone going in that door, everyone who creates your organization’s fundraising, will remember that:

Your donors are different than staff
Your donors don’t know as much as staff knows
Your donors don’t want to know as much as staff knows
Your donors care about different things than staff cares about
Your donors think about your cause less than staff does
Your donors only interact with your fundraising for a few seconds – you don’t have time to be complex!

I say this all the time, but of course there are a couple of donors and a board member who know as much and care about the same things that your staff does. And that very small group of donors should be talked to differently than when you are talking to everybody.

But when you are talking to everybody – your appeals, your newsletters, your emails, your e-news – then the truths above apply.

And by the way, if you wrote “You Are Not Your Donors” on the fundraising department’s door, it would remind your staff that the fundraising you create has a specific worldview that is different from your staff’s worldview.

Because as Fundraisers, it’s part of our job to teach this truth to everyone in our organization.

This part of our job doesn’t get talked about much. But it’s valuable. Because the organizations that embrace this truth tend to raise more money and keep their donors for longer!

To Get a Donor to Give, Remember WHY They Give…

Steven | February 7, 2019February 6, 2019Ask

Short post today with an important tip.

Which sentence do you think would raise more?

“Right now, our Uplifting Kids program needs your support.”

Or…

“Right now, a local child needs your help.”

I can basically guarantee that asking a donor to “help a local child” will raise more than asking a donor to “support a program that works with local children.”

Why?

What I’m trying to illustrate here is “asking for support of a program” versus “asking for help for a beneficiary or cause.”

This is important because most of your donors likely got involved with your organization because they cared about the beneficiaries your organization helps, or the cause your organization is working on.

They did not likely get involved with your organization because of your programs.

The Lesson

When you’re Asking donors (and non-donors) to give a gift, you need to remember why they give.

As a rule, most donors give first and foremost because they care about your beneficiaries or your cause, not because they care about your organization or your programs.

Are there exceptions to this rule? Of course. There’s always a major donor or a board member who loves your program. Or a Foundation that gave you a grant because of something specific about your programs.

To those segments of your audience, talk about the program itself.

But when you are talking to “everybody” – in your appeals, e-appeals, at events, on your website – talk about a beneficiary or your cause.

For Example…

The most helpful example I share of this is an appeal letter that said,

“Right now, programs like Uplifting Kids need your support!”

That is a perfect example of “asking for support of a program.” Just think about how much less power that has than something like, “Right now, a local child needs your help!”

The organization that wrote the “…programs like Uplifting Kids need your support” has been a client of ours for four years. We basically never talk about their programs any more. And their appeals and events raise between 2x and 8x of what they used to.

So focus your donor communications on why your donors gave in the first place, not on your programs!