Steven, Author at The Better Fundraising Company

2.4 Gifts Per Donor Per Year

Steven | January 30, 2024January 29, 2024Major Donor Fundraising

At the Big Fundraising Agency I used to work at, we noticed a trend:

The individual donors who gave two or more gifts per year were the donors who were most likely to give again the following year.

Think of it like physics: a donor’s relationship with your organization has momentum. If a donor is giving often, they are more likely to keep giving. If a donor is giving infrequently, they are more likely to stop giving.

The data analysts further identified that if an organization’s individual donors averaged 2.4 gifts per donor per year, that seemed to be a “sweet spot” for revenue and donor retention.

I share this because many nonprofits have an unspoken belief that goes something like this: “most donors don’t want to give more than once a year.”

That belief then drives their fundraising strategy: they only send one or two appeals a year, they over-steward their donors, they constantly watch out for the mythical “donor fatigue,” they would never ask a Major to give more than once per year, etc.

Those strategies go against everything I’ve ever seen in data in 30+ years of fundraising. (Are there individual donors who are outliers? Of course. And when a particular donor says that they prefer something, honor that preference.)

My advice to you: follow the data. Create fundraising plans that actively give donors more chances to give.

A donor at rest tends to stay at rest, and a donor in motion tends to stay in motion.

The Squiggle

Steven | January 25, 2024January 24, 2024Repeat

What you’re looking at is called “the squiggle.” It was created by Damien Newman to describe the product design process.

I think the squiggle pretty well describes most people’s fundraising journey, too. Moving from left to right, all of us…

Start our journey careening wildly to figure out how fundraising works…

We begin to develop an understanding of how it all works…

We understand and refine our practice.

It’s good to remember that we all go through the beginning chaos.

For instance, ten years ago we had a client who had met their budget for the year by Thanksgiving. Their Board asked us, “Since we’ve already met budget, shouldn’t we stop fundraising for the year? And since we won’t be sending our year-end letter, could we mail it during next summer when we will need the money?”

After some internal snickers… we had a great conversation with the Board. Because of that conversation, the Board moved to the right on the squiggle. They’ve continued to learn and have become an incredible fundraising asset to the organization. (And they are still a client today.)

They just needed a little help from someone who was farther along on their fundraising journey.

In my own career, I’ve written about when my mentor asked me, “Why are you writing about the organization?” That was a moment of insight and I moved closer to the clarity and focus I have today.

I mention all this because we’re ALL somewhere on the squiggle. And the longer I’m on my fundraising journey, the more compassion I have for people at the start of theirs.

So in the spirit of passing it on…

If you’re in the Uncertainty / Patterns / Insights zone, what’s one thing you are doing this year that will help you move forward?

If you’re in the Clarity/Focus zone, what’s one thing you are doing to help another Fundraiser join you out there?

And wherever you are, are you compassionate towards the others on this journey with you?

_{The “Research,” “Concept” and “Design” labels on the bottom of the original graphic were removed to keep the point as simple as possible. Thank you to Damien Newman for allowing the graphic to be used on the Creative Commons license.}

The Work of Your Organization vs. The Need for Your Organization’s Work

Steven | January 23, 2024January 9, 2024Ask

Last week I wrote about how “generating attention” should be a bigger part of the nonprofit fundraising toolkit.

This is a quick post about how there’s a big difference between creating attention for the work of your organization versus the need for your organization’s work.

If you’re trying to get the attention of people who have expertise in what you do – think Foundations who focus on your cause, government agencies, partner organizations, and major donors who understand why your work is unique – then I would point people’s attention towards the work of your organization.

Those people are already planning on giving gifts / working with organizations like yours. They actively want to know how effective your programs are, why your work is unique and powerful, and hear stories about people you’ve already helped.

However, if you’re trying to get the attention of people who do not have expertise in what you do – think “the general public” or your individual donors – then I would point people’s attention to the need for your organization’s work.

Those people are not currently planning to give gifts to your organization. People are not interested in how effective your programs are until they know there’s a need for your programs.

So draw attention to the need for your work. Once they understand and feel the need, then they’ll be more interested in learning how their gift (and your programs) will help meet that need.

As you work to make an impact and get attention this year, know which kind of people you’re trying to get the attention of, and what you should be pointing their attention towards.

Attention Deficit

Steven | January 18, 2024January 9, 2024Report

When you’re starting out, you don’t have anyone’s attention.

That’s true whether you’re starting a nonprofit, starting a food truck, or starting a political career.

But when you’re starting a business or a YouTube channel or an advocacy campaign, you work hard to get people’s attention. Those folks wave their arms around. They say edgy things.

One of their driving principles is ”Without anyone’s attention, this venture will not succeed.”’ So they make a ruckus.

Why don’t more nonprofits make a ruckus like that? Why don’t more nonprofits say and do edgy things?

I think it’s because so many of us are nice. We want to be warm to people. We don’t want to make people uncomfortable. We want to convince people of our competency.

One of our driving principles is ”We want the power of our work to inspire people to give.” And that’s not even a principle – it’s just a desire.

But can’t we remain “nice” while making it a priority to earn more attention for our cause?

And as nonprofits, don’t we have the ultimate motivating reason to generate more attention? We know that that the more attention we earn, the more donors we’ll acquire, and the more of our mission we’ll accomplish.

The standard nonprofit toolkit does not have “generate a ton of attention” in it.

But shouldn’t it?

And as you look at your plan for this year, are you intentionally making at least one concerted effort to get more people to pay attention to what’s going on with your cause?

Yesterday’s Successes, Today’s Truths, Tomorrow’s Hopeful Futures

Steven | January 16, 2024January 9, 2024Ask

I just noticed that almost all of the fundraising our team helped create last year can be divided into three groups:

Yesterday’s Success. These are stories of people who have already been helped, and of things the organization has already accomplished.
Today’s Uncomfortable Truth. These are stories of what’s happening today, right now, that causes the work of the organization to be needed.
Tomorrow’s Hopeful Future. These are stories of what will happen if a donor gives a gift. For instance, “If you give a gift today, 1 square meter of wetland will be preserved from development” is a story about the positive future that will be created if a donor gives a gift.

Organizational insiders tend to think that sharing Yesterday’s Successes will motivate donors to give today. And it will, to a limited extent.

But consistently telling donors about things that happened yesterday means you’re not telling donors what’s happening today. And in our experience, the best way to motivate donors to give today is to talk about what’s happening today.

The fundraising programs that we see succeed wildly are programs that intentionally share what happened yesterday, and what’s happening today, and what could happen tomorrow with the donor’s support.

When you give your donors the full picture, they’re more likely to give you their full support.

Major Donor Fundraising For Small Nonprofits

Steven | January 11, 2024January 11, 2024Major Donor Fundraising

We recently surveyed a group of small- to medium-sized nonprofits. We analyzed their fundraising programs and arrived at a startling conclusion:

7 out of 10 of the smaller nonprofits did not have a system to manage their most valuable donors.

The donors who were driving most of their revenue were being treated just like everyone else.

This means these organizations were not maximizing the opportunity they had with those donors. And organizationally their behavior was risky because there was so much revenue at stake.

Believe me, I get how this happens. When you’re a small nonprofit or a 1-person fundraising/development shop, it’s impossible to get to everything.

So Jim and I decided to do something about it. Yesterday we launched Major Gifts Engine, a 6-month program to help small organizations install a major donor management system, based on best-practices but customized for the organization.

If you’re interested, you can read more about it here. And it includes a link to get in touch.

But not every organization will be able to afford it because it costs real money to have an experienced major donor fundraiser help a nonprofit set up a repeatable major donor fundraising program, determine portfolio sizes, choose which donors go in the portfolios, and create giving goals for each donor.

So if your organization needs this, but can’t join, I want to encourage you to intentionally invest time and whatever resources you have into your major donor fundraising. (Investing in your organization’s major donor fundraising is one of the highest ROI activities a small organization can invest in.)

Here’s a simple exercise you can do in about 90-minutes’ time:

Identify your top 10 donors by cumulative giving over the last three years.
Hand-write and mail each donor a card that thanks them for their extraordinary generosity.
Come up with 5 additional reasons to contact each donor between February and October. This could be things like forwarding them an exciting email with a note before the email goes to the rest of your donors, texting them a photo and short success story, hand-writing a note on their copy of your newsletter, you get it.
For those donors, write down (that’s important!) the amount you’d like them to give for this year. As the year goes along, you’ll find yourself noticing things they could be funding, and your ask(s) to them will be stronger because of it.

You know that much of this blog is about copywriting and fundraising offers and all the things I love to talk about. I started out as a copywriter so I tend to believe that a good idea and great copy will change the world.

And that’s true. But it’s pretty obvious that a good idea and great copy don’t usually out-raise a major donor you have a good relationship with. And they almost never out-raise a group of major donors that you’ve invested in, kept for years, and lifted to higher and higher levels of giving.

So as you start this year, invest in your major donor fundraising. Whether that’s investing in a system like ours or an activity like the one above, you’ll raise more money and have a greater impact.

Four Reasons to Have a Direct Response Fundraising Program

Steven | 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 | 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.