Author: Steven

Steven Screen is Co-Founder of The Better Fundraising Company and lead author of its blog. With over 25 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.

The Danger of Focusing on One Metric

Steven  |  Report
Secret meeting.

A friend who’s a Fundraiser recently shared a story with me.  It was about a nonprofit who received a pitch from a consultant that he would increase their average gift size.

Sounds great, doesn’t it?  What nonprofit wouldn’t want all of their donors giving more?

So the nonprofit hired the consultant.  And their average gift size went up! 

Sounds great, doesn’t it?

Too bad what also happened is that their response rates went down.  And their retention rates went down.  So despite the increase in average gift, the organization is raising less total money than they used to be.  And they have fewer donors.

That doesn’t sound great.

This is a great illustration of the danger of focusing too much on one fundraising metric.  All the main metrics are important, but none of them exist in a vacuum.

It’s relatively easy to increase any one metric.  Need higher response rates to your direct mail?  Include a freemium!  (Your response rate will go up… but your package now costs more.)  Want to increase the ROI on your next campaign?  Don’t send direct mail, only send email!  (Your ROI will go up because you’ve lowered costs by so much, but you’ll raise less money overall.)

The trick is understanding the whole system and the tradeoffs made with every tactic.

Any time someone wants to optimize one metric, always be wary.  Ask what the consequences will be to the other metrics.

And always remember: the only metric you can use to pay for programs is Net Revenue.

Which story are you telling?

Steven  |  Ask
Storytelling.

Better Fundraising recently decided to sponsor the Nonprofit Storytelling Conference this fall.  (You should go!)  So lately I’ve been thinking a lot about storytelling.

I’ve noticed that when most nonprofits are thinking about “storytelling” in their fundraising, they are thinking about one of two stories:

  1. The story of a beneficiary.  You’ve seen loads of appeals like this: they focus on the story of one beneficiary who has already been helped, then ask the donor to support the work of the organization.  The storytelling focus is on the beneficiary.  Or…
  2. The story of the organization.  You’ve seen fundraising materials like this, too; they focus on what services the organization provides, what year the organization was founded, and what the organization believes.  The storytelling focus is on the organization itself. 

At Better Fundraising, we advise our clients not to tell either of those stories.

Instead, we help our clients tell “the story of the difference the donor’s gift will make.”  The storytelling focus is on the change that will happen when a donor gives a gift.

At its simplest, it looks like this; “Right now things are X, but if you give a gift they will be Y.”  Doing this well helps your donors to see and (more importantly) feel the difference their gift will help make.

Telling the story of “the difference that the donor’s gift will make” is a fundamentally different story than most organizations tell.  It results in fundamentally different appeals.

And those appeals raise significantly more money.

Ask yourself if the storytelling in your appeals is mostly about your beneficiaries or your organization.  If you’d like to raise more with your appeals, try an appeal that focuses on the difference a donor can make if they send in a gift.

How to Increase Your Email Open Rate by 14%

Steven  |  Report
Email Open Rates.

A client of ours started sending monthly “e-stories” last November. And since November, their average email open rate has increased from 24% to 38%.

Most organizations would sacrifice a Board member for a 14% increase in open rates!

So you might ask, “What’s an e-story?”

An e-story is a low-fi, simply-formatted email from your E.D. to your donors. It tells one “before and after” story.

Here’s the outline:

  1. Warm, personal greeting
  2. Directly tell the donor that you are going to tell them a story that’s a good example of how their gift made a difference
  3. Tell a “before and after” story from your organization’s work
  4. Reaffirm to the donor that they helped make that ‘before and after’ happen
  5. Let the donor know that they can give again if they’d like to
  6. Thank the donor for their generosity

You want your e-stories to look like they came from your E.D.’s personal email. No formatting, no header image, no photo, no links to social, you get it.

It should feel personal.

Why E-stories?

Most “reporting” to donors via email answers questions that nobody is asking.

Typical “e-news” or “e-newsletters” have abysmal open rates. No one was reading them.

So how can organizations fulfill the need to “report back on a donor’s gift” via email?

If they aren’t reading the e-newsletters, that means e-newsletters aren’t relevant for most donors.

So we asked ourselves, “What would be relevant to most donors?”

Telling and showing the donor that their gift made a difference.

The Results

Your e-stories will raise more money than your e-newsletter.

Your e-stories will have higher open rates than your e-newsletter.

Your e-stories will cause more engagement than your e-newsletter (you’ll know this because of the replies and feedback you’ll receive).

Some organizations have been able to cease their e-newsletter all together. (And there was much rejoicing!)

Relevance

It all comes down to relevance. The organization I mentioned found that e-stories contained information that was relevant to their donors. (After all, donors want to know what their gift did more than they want to know what your organization is up to.)

When the content of the email was more relevant, more people opened the emails. And now, because their donors are more likely to find relevant content in their emails, their donors open all of their emails at a higher rate.

You can guess what’s going to happen next:

More relevant emails → higher open rates

Higher open rates → more people reading their fundraising

More people reading their fundraising → more people giving

More people giving → more mission work done!

Go look at your organization’s email communications. Are you reporting in a powerful, relevant way? If not, add a few e-stories. You’ll be glad you did!

Note: if you want me to walk you through creating an e-story (or donor reporting letter) for your organization, there’s inexpensive training at Work Less Raise More.

The #1 Story that Raises the Most Money [VIDEO]

Steven  |  Videos
Money ideas.

I think this is the most helpful video I’ve ever made.

If you’d like to know how to:

  • Tell stories in your appeals, e-appeals and events so that more donors will respond
  • Tell stories so that your donors become more bonded to your organization
  • Tell stories so that you raise more money
  • Say what’s needed when sharing this thinking with the people in your organization who don’t like powerful fundraising

It’s all in there. Take a look!

You Don’t Need to Convince Your Donors

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Convince.

There’s an approach to fundraising that believes that your fundraising must convince the donor that what you’re working on is important before they will read your message or give a gift.

This is happening any time you see an appeal start out with a statistic.  “There are over 14,000 children in the LA area aging out of the foster care system each year” is one example.  “43% of the wetlands in Okanagan are currently unprotected” is another.

These stats are meant to communicate to the donor that what’s being written about is Important, that this is a Big Deal. 

The organization’s thinking goes something like, “If the donor only realized how important and what a big problem this is, they would give a gift.” 

In my experience, this approach does not work very well.

Here’s an approach that works better: believe that your donor already cares.

After all, each gift to your organization is a sign that the donor cares about the situation you’re working on and/or your organization.  Your donors have already put themselves on the hook for your cause. 

If you believe that your reader already cares, you skip the whole “try to convince them” part.  This leads to appeals that:

  1. Tell the donor what’s happening right now,
  2. Give an example (usually in the form of a story) of how what’s happening right now is affecting a person / the wetland / whatever you work on,
  3. Tells the donor specifically what their gift will do to help.

By skipping the whole “we have to convince them this is important” part, the letter or email is free to get right to what the donor is more likely to be interested in: what’s happening now, and what their gift will do about it.

Moving forward, trust that your donors don’t need to be convinced.  They’ve already told you with their attention and generosity.

Two Audiences = Two Approaches

Steven  |  Ask
2 approaches.

There’s a big difference between writing appeal letters and writing grant applications.

When you’re writing a grant application you know that it will be read.  In fact, someone is paid to read it.

When you’re writing an appeal letter (or an e-appeal) you know that it will arrive in a mailbox in competition with everything else the donor is receiving.  No one is paid to read it.

That’s a big difference.

The audiences for grant applications and appeals are completely different.  This explains why the writing style for an appeal is different than the writing style for a grant application. 

If your grant applications and your appeals sound the same, one of them is completely missing the mark.

8.25 Seconds

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8 seconds.

Let me share two numbers with you:

  • 8.25 seconds — the average length of time a human can focus on a single task.
  • 3 minutes — how long it takes to read the average appeal letter from a nonprofit.

Makes you realize why most fundraising appeal letters don’t work well, doesn’t it?

(By the way, you may read the “8 seconds” stat and think the same thing I thought: wait a minute, people concentrate for longer than 8 seconds all the time.  You and I have watched movies from beginning to end, and we’ve read entire books.  But movies and books are in a category called “preferred activities” – and it’s hard to argue that “reading an appeal letter” is a preferred activity for a donor with a full mailbox.)

So I’m not here to argue that your appeal letters should be 8 seconds long.  But I will argue that making your appeal letters understandable in 8 seconds makes your fundraising more inclusive and opens your organization up to gifts from far more people.

Here’s how to make your appeals “understandable” in just a few seconds:

  • Get to the point quickly.  Do NOT slowly build your case and then make your point (usually the Ask) at the end of the letter.  Save that approach for grant applications.
  • Use visual emphasis (underlining, bolding, arrows, etc.) to draw attention to the most important information.  The ideas you highlight should summarize the letter.

The most successful appeals are two letters in one: a person can glance through your letter and “get the gist” in just a few seconds, and then get the fuller picture if they choose to read the whole letter. 

Writing and designing your letters (and emails) this way is not what your English teacher taught you.  It’s probably not a style that’s preferred by important people in your organization.

But if you can write and design your appeals to remove the barrier of “a person must read the whole thing to get our point,” then you’ve opened up your organization to a new world full of supporters.

Net Revenue Available to Program

Steven  |  Repeat
Revenue.

Here’s a counter-intuitive truth to tuck away:

As a nonprofit’s donor file shrinks, their response rates for direct mail and email will tend to increase.

Wait, you might say… if a nonprofit is losing donors every year, why would their response rates be going up?

Response rates go up as an organization’s donor file is shrinking because the first donors to leave are the donors who are least engaged.  This means that the remaining donors are more engaged – and are more likely to respond to a piece of fundraising.

I saw this earlier today when I noticed that the year-end letter for one of our customers was sent to 18,000 donors this year, versus 23,000 donors last year. 

I thought to myself, “Well, at least their response rate probably went up.”

Lo and behold, their response rate went from 4.1% to 4.7%.

Their ROI went up, too: from 6.7:1 to 7.1:1

Hooray… right?

Nope.  They raised $20,000 LESS in net revenue.  (Remember, they sent the letter to 5,000 fewer donors.)

This is one of those times when two metrics that matter – ROI and Percent Response – went up.  But the metric that really matters – Net Revenue – went down.

The organization’s Board is happy that their ROI went up.  Weirdly, they are more proud of the increased ROI than they are worried about raising less money. 

Listen, I love to maximize ROI.  Probably more than the next guy.  But what matters most is Net Revenue.

I used to serve a brilliant fundraiser that always used the term “Net Revenue Available to Program.”  He’d never shorten it to “Net Revenue.” 

His insistence on using “Net Revenue Available to Program” was an outward sign of an inward focus that I took to heart: our primary job as Fundraisers is to end the year with as much money as possible to send to the programs in the field. 

Because you can maximize ROI and Response Rate all you want, but Net Revenue is the only thing you can send to the field.

Direct mail and… Kale?

Steven  |  Ask
Kale.

Direct mail is like kale – nobody likes it the first time they try it.

Kale is a tough, leafy vegetable that tastes like a hedge.

But over time, a person can come to see the benefits of eating kale.  You start to appreciate kale.  And with the right prep and dressings, even enjoy it.

Direct mail is a tough, counter-intuitive, expensive way to raise money.

But over time, an organization can come to see the revenue that direct mail brings in and the relationship it builds.  You start to appreciate direct mail.  And with the right approach and understanding, even enjoy it.

Kale will never be as enjoyable as a cheeseburger.  Direct mail will never be as enjoyable as a great conversation with a major donor, or the emotional high of a beneficiary’s story at an event.

You might not like direct mail or kale.  But both of them are still good for you.